As filed with the Securities and Exchange Commission on July 11, 2000.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20005
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CVB FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
California 95-3629339
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
701 North Haven Avenue
Ontario, California 91764
(Address of principal executive offices) (Zip Code)
CVB FINANCIAL CORP. 2000 STOCK OPTION PLAN
(Full title of plans)
D. Linn Wiley
President and Chief Executive Officer
701 North Haven Avenue
Ontario, California 91764
(Name and address of agent for service)
Telephone number, including area code, of agent for service: (909) 980-4030
WITH A COPY TO:
William T. Quicksilver
Manatt, Phelps & Phillips, LLP
11355 West Olympic Boulevard
Los Angeles, California 90064
Calculation of Registration Fee
- -------------- ------------- ---------------- ---------------- ----------------
Title of Amount Amount
Securities to to be Offering price Aggregate of
be registered registered Per unit Offering price registration fee
- -------------- ------------- ---------------- ---------------- ----------------
- -------------- ------------- ---------------- ---------------- ----------------
Common stock,
no par value 1 2,000,000 $15.718752 $31,437,5002 $8,316
- -------------- ------------- ---------------- ---------------- ----------------
1 This Registration Statement covers, in addition to the number of shares of
Common Stock stated above, such indeterminate number of shares as may become
available under the Plans as a result of the adjustment provisions thereof.
Includes one attached Preferred Share Purchase Right per share.
2 Calculated pursuant to Rule 457(h) based on the average of the high and low
trading prices of the Company's common stock on July 5, 2000.
1
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
INCORPORATION OF DOCUMENTS BY REFERENCE
Item 3. Incorporation of Documents by Reference
The following documents filed by CVB Financial Corp. (the
"Registrant" or the "Company") with the Securities and Exchange Commission (the
"Commission") are incorporated in this Registration Statement by reference:
(a)The Registrant's latest annual report filed pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or the latest prospectus filed by the Registrant as part of an
effective registration statement filed pursuant to Rule 424(b) promulgated under
the Securities Act of 1933, as amended (the "Securities Act") or (c) under the
Exchange Act, which contains, either directly or by incorporation by reference,
audited financial statements for the Registrant's latest fiscal year for which
such statements have been filed.
(b)All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the annual reports or the prospectus referred to in (a) above.
(c)The description of the Company's common stock which is
contained in a registration statement filed under the Exchange Act, including
any amendment or report filed for the purpose of updating such description, and
a Registration Statement on Form 8-A12G dated June 22, 2000, setting forth a
description of the Registrant's preferred share purchase rights, including any
amendment or report filed for the purpose of updating such description, filed
under the Exchange Act, including any amendment or report filed for the purpose
of updating such descriptions.
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
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
2
Item 6. Indemnification of Directors and Officers
Section 317 of the California General Corporation Las ("Section 317")
provides a statutory framework covering indemnification of any officer or
director who has been or is threatened to be made a party to any legal
proceeding by reason of his or her service on behalf of the Company. Section 317
provides that indemnification against expenses actually and reasonably incurred
shall be made to any officer or director who has been successful on the merits
with respect to the defense of any proceeding but does not require
indemnification in other circumstances.
Section 317 provides that a corporation may indemnify any agent of the
Company including officers and directors against expenses, judgments, fines,
settlements and other amount actually and reasonably incurred in a third party
proceedings against such person by reason of that person's service on behalf of
the Company, provided the person acted in good faith and in a manner that the
person reasonably believed to be in the best interests of the Company.
Section 317 further provides that the Company may indemnify any agent
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action by or in the right of the Company against expenses
actually and reasonably incurred by the agent in connection with the defense or
settlement of such action, provided that the person acted in good faith and in a
manner the person believed to be in the best interests of the Company and its
shareholders. However, in actions brought by or in the right of the Company,
indemnification is not available without court approval for amounts paid in
settling or otherwise disposing of a pending action or expenses incurred in
defending a pending action which is disposed of by settlement or otherwise.
Further, with respect to matters for which the agent shall have been adjudged to
be liable to the Company, indemnification for expenses is permissible only to
the extent the court shall determine that the agent is fairly and reasonably
entitled to indemnification.
In addition, Section 317 provides that the indemnification provided by
the statute is not exclusive of other rights to which those seeking
indemnification may be entitled under any bylaw, agreement, vote of shareholders
or disinterested directors or otherwise, to the extent additional rights are
authorized in the Company's Articles of Incorporation. Section 317 permits the
advancing of expenses incurred in defending any proceeding against an agent of
the Company by reason of that person's service on behalf of the Company upon the
giving of an undertaking, or promise, by the indemnified person to repay those
sums in the event it is later determined that the person is not entitled to be
indemnified. Finally, Section317 permits the Company to procure insurance on
behalf of its directors, officers, and other corporate agents against liability
asserted against or incurred by these individuals even if the Company would not
otherwise have the power under applicable law to indemnify them for their
expenses. The Company's Articles of Incorporation and Bylaws, as amended
respectively, authorize the Company to indemnify its agents to the fullest
extent permitted under California law. The Company has also adopted
indemnification agreements in order to implement the Articles of Incorporation
and Bylaws.
Item 7. Exemption from Registration Claimed
Item 8. Exhibits
3
EXHIBITS
3.1 Articles of Incorporation of CVB Financial Corp., as amended.(1)
3.2 Bylaws of CVB Financial Corp. as amended(2)
4.1 Preferred Shares Rights Agreement, dated as of June 21, 2000,
between CVB Financial Corp. and U.S. Stock Transfer Corp.,
including the Certificate of Determination, the form of Rights
Certificate and the Summary of Rights attached thereto as
Exhibits A, B and C, respectively. (3)
4.2 Certificate of Determination of Participating Preferred Stock of
Registrant (attached as Exhibit A to Exhibit 4.1) (3).
4.3 Form of Rights Certificate (attached as Exhibit B to Exhibit 4.1)
(3).
4.4 Summary of Rights (attached as Exhibit C to Exhibit 4.1) (3).
5.1 Opinion of Manatt, Phelps & Phillips.
23.1 Consent of Manatt, Phelps & Phillips (see Exhibit 5.1).
23.2 Consent of Deloitte & Touche, LLP.
24.1 Power of Attorney (contained on signature page)
99.1 CVB Financial Corp. 2000 Stock Option Plan
99.2 Form of Option Agreement
- ---------------
(1) Exhibit incorporated by reference from Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1998, File No.1-10394.
(2) Exhibit incorporated by reference from Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, File No.1-10394.
(3) Exhibit incorporated by reference from Registrant's Registration
Statement on Form 8A-12G filed on June 22, 2000, File No. 1-10394.
4
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 Section 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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(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
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.
5
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 Ontario, State of California on July 5, 2000.
CVB FINANCIAL CORP.
By /s/ D. Linn Wiley
D. Linn Wiley,
President
and Chief Executive Officer
6
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints D. Linn Wiley and Edward J. Biebrich, Jr. 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.
7
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 and on the date indicated.
Signature Title Date
/s/ D. Linn Wiley President July 5, 2000
D. Linn Wiley and Chief Executive
Officer (Principal
Executive Officer),
Director
/s/ Edward J. Biebrich, Jr. Executive Vice President and July 5, 2000
Edward J. Biebrich, Jr. Chief Financial Officer
(Principal Financial
Officer, Principal
Accounting Officer)
/s/ George A. Borba Chairman of the Board July 5, 2000
George A. Borba
John A. Borba Director July 5, 2000
/s/ Ronald O. Kruse Director July 5, 2000
Ronald O. Kruse
/s/ John J. LoPorto Director July 5, 2000
John J. LoPorto
/s/ James C. Seley Director July 5, 2000
James C. Seley
/s/ San Vaccaro Director July 5, 2000
San Vaccaro
8
July 5, 2000
CVB Financial Corp.
701 North Haven Avenue
Ontario, California 91764
Re: CVB Financial Corp. 2000 Stock Option Plan (the "Plan")
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-8 (the "Registration Statement") being filed by CVB Financial Corp. (the
"Company") with the Securities and Exchange Commission in connection with the
registration under the Securities Act of 1933, as amended, of up to two million
(2,000,000) shares of the Company's Common Stock, no par value (the "Shares"),
that may be issued in the aggregate under the Plan.
In rendering this opinion, we have examined and reviewed only such
questions of law as we have deemed necessary or appropriate for the purpose of
rendering the opinions set forth herein. For the purpose of rendering the
opinions set forth herein, we have been furnished with and examined only the
following documents:
1. The Articles of Incorporation of the Company, as
amended.
2. The Bylaws of the Company, as amended.
3. This Registration Statement.
4. Records of proceedings of the Board of Directors of
CVB pertaining to the Plan.
5. Records of proceedings of the shareholders of CVB
pertaining to the Plan.
With respect to all of the foregoing documents, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to originals of all documents submitted to us as
certified or reproduced copies. We also have obtained from the officers of the
Company certificates as to such factual matters as we consider necessary for the
purpose of this opinion, and insofar as this opinion is based on such matters of
fact, we have relied on such certificates.
9
Based upon the foregoing and such further review of fact and law as we
have deemed necessary or appropriate under the circumstances, and assuming,
without further inquiry other than such certificates of officers, that (i) all
options granted under the Plan will be granted by the Company pursuant to the
terms of the Plan, (ii) the consideration for the shares of Common Stock issued
pursuant to the exercise of such options will be received prior to the issuance
thereof, (iii) the Common Stock issued pursuant to the exercise of options will
be issued in accordance with the terms of the Plan and the various agreements
and (iv) the grant of such options and the issuance of Shares upon the exercise
thereof will comply with the securities laws of each state or jurisdiction
applicable thereto (other than the Securities Act of 1933, as amended, as to
which this opinion is addressed), upon which assumptions the opinions contained
herein are expressly conditioned, we are of the opinion that:
If, as and when the Shares are issued and sold pursuant to exercise of
options granted under the terms of the Plan, the Shares will be duly authorized,
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.
This opinion is limited to the current laws of the State of California
and the United States of America, to present judicial interpretations thereof
and to facts as they presently exist. In rendering this opinion, we have no
obligation to revise or supplement it should the current laws of the State of
California or the United States of America be changed by legislative action,
judicial decision or otherwise.
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 under the
Securities Act of 1933, as amended.
Very truly yours,
Manatt, Phelps & Phillips, LLP
10
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
CVB Financial Corp. on Form S-8 of our report, dated February 2, 2000, on the
consolidated balance sheets of CVB Financial Corp. and subsidiaries as of
December 31, 1999 and 1998, and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1999, appearing in the Annual Report on Form 10-K of CVB
Financial Corp. for the year ended December 31 ,1999.
/s/ Deloitte & Touche, LLP
July 5, 2000
Los Angeles, California
11
Exhibit 99.1
CVB FINANCIAL CORP. 2000 STOCK OPTION PLAN
As Adopted by the Board of Directors on March 15, 2000
As Approved by the Shareholders on May 25, 2000
Section 1. Purpose; Definitions.
The name of the plan is the CVB Financial Corp. 2000 Stock Option Plan
(the "Plan"). The purpose of the Plan is to encourage and enable employees
(including officers and Directors) of CVB Financial Corp., a California
corporation (the "Company") and its Subsidiaries, non-employee members of the
Board of Directors of the Company, and those consultants and other independent
contractors who provide services to the Company and its Subsidiaries and upon
whose judgment, initiative and efforts the Company and its Subsidiaries depend
for the successful conduct of their business to acquire proprietary interests in
the Company. It is anticipated that providing such persons with a direct stake
in the Company's welfare will assure a closer identification of their interests
with those of the Company, thereby stimulating their efforts on behalf of the
Company and its Subsidiaries and strengthening their desire to remain with the
Company and its Subsidiaries.
The following terms shall be defined as set forth below:
(a) "Act" means the Securities Act of 1933, as amended.
(b) "Administrator" means the Board or the Committee.
(c) "Award" or "Awards," except where referring to a particular
category of grant under the Plan, shall include Incentive Stock Options and
Nonstatutory Stock Options.
(d) "Board" means the Board of Directors of the Company.
(e) "Cause," as such term relates to the termination of any person's
status as an employee or other service provider of the Company, means the
occurrence of one or more of the following: (i) such person is convicted of,
pleads guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement which has an immediate and materially adverse
effect on the Company or any Subsidiary, as determined by the Board in good
faith in its sole discretion, (ii) such person engages in a fraudulent act to
the material damage or prejudice of the Company or any Subsidiary or in conduct
or activities materially damaging to the property, business or reputation of the
Company or any Subsidiary, all as determined by the Board in good faith in its
sole discretion, (iii) any material act or omission by such person involving
malfeasance or negligence in the performance of such person's duties to the
Company or any Subsidiary to the material detriment of the Company or any
Subsidiary, as determined by the Board in good faith in its sole discretion,
which has not been corrected by such person to the satisfaction of the Board
within 30 days after written notice from the Company of any such act or
omission, (iv) failure by such person to comply in any material respect with the
terms of his employment agreement, if any, or any written policies or directives
of the Board as determined by the Board in good faith in its sole discretion,
which has not been corrected by such person to the satisfaction of the Board
within 30 days after written notice from the Company of such failure, or (v)
material breach by such person of any other agreement with the Company, as
determined by the Board in good faith in its sole discretion.
12
(f) "Code" means the Internal Revenue Code of 1986, as amended, and any
successor tax laws, and related rules, regulations and interpretations.
(g) "Committee" means a committee of two or more Independent Directors
appointed by the Board to administer the Plan.
(h) "Director" means a member of the Board.
(i) "Disability" means such individual's total and permanent disability
within the meaning of Section 22(e)(3) of the Code. However, in no event will a
participant be considered to be disabled for purposes of this Plan if the
individual's incapacity is a result of an intentionally self-inflicted injury
(while sane or insane), alcohol or drug abuse, or a criminal act for which the
individual is convicted or to which the individual pleads guilty or nolo
contendre.
(j) "Fair Market Value" of the Stock on any given date under the Plan
shall be determined as follows:
(i) If the Stock is at the time listed or admitted to trading
on any national stock exchange, then the fair market value shall be the
closing selling price per share of the Stock on the day of
determination on the stock exchange determined by the Administrator to
be the primary market for the Common Stock, as such price is officially
quoted in the composite tape transactions on such exchange. If there is
no reported sale of the Stock on such exchange on the day of
determination, then the fair market value shall be the closing price on
the exchange on the last preceding date for which such quotation
exists.
(ii) If the Stock is not at the time listed or admitted to
trading on any national exchange but is traded on the NASDAQ National
Market or Small Cap Market System, the fair market value shall be the
closing selling price per share of the Stock on the day of
determination, as such price is reported by the National Association of
Securities Dealers, Inc. through the NASDAQ National Market or SmallCap
System, as the case may be, or through any successor system. If there
is no reported closing selling price for the Stock on the day of of
determination, then the fair market value shall be the closing selling
price on the last preceding date for which such quotation exists.
(iii) If the Stock is regularly quoted by a recognized
securities dealer, but selling prices are not reported (and the Stock
is otherwise not listed or admitted as described in (i) and (ii)
above), the fair market value shall be the mean between the high and
low bid prices for the Common Stock on the day of determination, or, if
there is no reported mean between the high and low bid prices on the
day of determination, on such last market trading day prior to the day
of determination on which such mean exists; or
13
(iv) If the Stock is at the time neither listed nor admitted
to trading on any stock exchange nor traded in the over-the-counter
market nor otherwise regularly quoted by recognized securities dealer,
then the fair market value shall be determined by the Administrator
after taking into account such factors as the Administrator shall deem
appropriate.
(k) "Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.
(l) "Independent Director" means persons who qualify as "nonemployee
directors" as such term is defined in Securities and Exchange Commission Rule
16b-3 under the 1934 Act ("Nonemployee Directors") and who qualify as "outside
directors" within the meaning of Section 162(m)(4)(C)(i) of the Code and
Treasury Regulations 1.162-27(c)(3) ("Outside Director"). The Board shall have
the authority to appoint and remove members of the Committee, provided, however,
that any attempted appointment to the Committee of a person who does not qualify
as an Outside Director and Nonemployee Director shall be null and void. Any
Committee member who loses the status of an Outside Director and Nonemployee
Director shall automatically and without further action cease to be a member of
the Committee as soon as such status is lost.
(m) "Nonstatutory Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(m) "Option" or "Stock Option" means any option to purchase shares of
Stock granted pursuant to Section 5.
(n) "Retirement" means an employee's termination of employment with
the Company and its Subsidiaries after attainment of age 65 or attainment
of age 55 and completion of 10 years of employment.
(o) "Stock" means the Common Stock, no par value, of the Company,
subject to adjustments pursuant to Section 3.
(p) "Subsidiary" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities, beginning with
the Company if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
14
Section 2. Administration of Plan; Authority to Select Participants
and Determine Awards
(a) Powers of Administrator. The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select those employees (including officers and
Directors) of the Company and its Subsidiaries, non-employee Directors,
and consultants and other independent contractors in service to the
Company and its Subsidiaries to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the extent,
if any, of Incentive Stock Options and Nonstatutory Stock Options or
any combination of the foregoing, granted to any one or more
participants;
(iii) to determine the number of shares of Stock to be covered by
any Award;
(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of
the Plan, of any Award, which terms and conditions may differ among
individual Awards and participants, and to approve the form of written
instruments evidencing the Awards;
(v) to accelerate at any time the exercisability or vesting of
all or any portion of any Award;
(vi) subject to the provisions of Section 5(a)(ii), to extend at
any time the period in which Stock Options may be exercised;
(vii) to determine at any time whether, to what extent, and
under what circumstances Stock and other amounts payable with respect
to an Award shall be deferred either automatically or at the election
of the participant and whether and to what extent the Company shall pay
or credit amounts constituting interest (at rates determined by the
Administrator) or dividends or deemed dividends on such deferrals; and
(viii) at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the Plan and for its own
acts and proceedings as it shall deem advisable; to interpret the terms
and provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in
connection with the Plan; and otherwise to supervise the administration
of the Plan.
All decisions and interpretations of the Administrator shall be binding
on all persons, including the Company and Plan participants.
15
Section 3. Stock Issuable Under the Plan; Mergers; Substitution
(a) Stock Issuable. The maximum number of shares of Stock reserved and
available for the grant of Awards under the Plan shall be the sum of two million
(2,000,000) shares, subject to adjustment as described in Section 3(b). For
purposes of this limitation, the shares of Stock underlying any Awards which
expire or which are forfeited, canceled, reacquired by the Company, satisfied
without the issuance of Stock or otherwise terminated (other than by exercise)
shall be added back to the shares of Stock available for issuance under the
Plan. Subject to such overall limitation, shares of Stock may be issued up to
such maximum number pursuant to any type or types of Award; provided, however,
that Stock Options with respect to no more than one hundred thousand (100,000)
shares of Stock may be granted to any one individual participant during any one
calendar year period, subject to adjustment as described in Section 3(b) below.
The shares available for issuance under the Plan may be authorized but unissued
shares of Stock or shares of Stock reacquired by the Company.
(b) 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 Stock Option, and the number of shares of Common Stock which
have been authorized for issuance under the Plan (including the maximum number
of shares of Common Stock which can be subject to any Stock Option for any
particular person) but as to which no Stock Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of a Stock
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, combination or reclassification of the Common
Stock, merger, consolidation, reorganization, any partial or complete
liquidation, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company. Such
adjustment shall be made by the Board of Directors, whose determination in that
respect shall be final, binding and conclusive. No fractional shares of Stock
shall be issued under the Plan resulting from any such adjustment, but the Board
of Directors in its discretion may make a cash payment in lieu of fractional
shares.
(c) Mergers, etc. Not less than fifteen (15) days, or such shorter
period of time as the Administrator shall determine, prior to (i) the
dissolution or liquidation of the Company, (ii) a reorganization, merger, or
consolidation of the Company with one or more corporations as a result of which
the Company will not be the surviving or resulting corporation, or a sale of all
or substantially all the assets of the Company to another person, or (iii) a
reverse merger in which the Company is the surviving corporation but (a) the
shares of the Company's stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property or (b) the voting
securities of the Company outstanding immediately prior to such event represent
less than fifty percent (50%) of the total voting power represented by the
voting securities of the Company surviving such event (a "Terminating Event")
(other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the shareholders of the Company or
their relative stock holdings and the Stock Options granted under this Plan are
assumed, converted or replaced by the successor corporation, which assumption
will be binding on all optionees), the Administrator shall notify each optionee
of the pendency of the Terminating Event. Upon delivery of said notice, any
option granted prior to the Terminating Event shall be, notwithstanding the
provisions of paragraph 2 hereof, exercisable in full and not only as to those
shares with respect to which installments, if any, have then accrued, subject,
however, to earlier expiration or termination as provided elsewhere in the Plan.
Upon the consummation of the Terminating Event, the Plan and any option or
portion thereof not exercised shall terminate unless provision is made in
connection with the Terminating Event for assumption of the Plan and/or the
options theretofore granted, or substitution for such options of new options
covering stock of a successor employer corporation, or a parent or subsidiary
corporation thereof, solely at the option of such successor corporation or
parent or subsidiary corporation, with appropriate adjustments as to number and
kind of shares and prices.
16
(d) Substitute Awards. The Administrator may grant Awards under the
Plan in substitution for stock and stock based awards held by employees of
another corporation who become employees of the Company or a Subsidiary as the
result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Administrator may direct
that the substitute awards be granted on such terms and conditions as the
Administrator considers appropriate in the circumstances, including the grant of
Incentive Stock Options.
Section 4. Eligibility
Participants in the Plan shall be such full-time or part-time employees
(including officers and Directors) of the Company and its Subsidiaries,
non-employee Directors, and consultants and other independent contractors in
service to the Company and its Subsidiaries as the Administrator in its sole
discretion shall select from time to time.
Section 5. Stock Options
Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve. Stock Options granted under the
Plan may be either Incentive Stock Options or Nonstatutory Stock Options.
Incentive Stock Options may be granted only to employees of the Company or any
Subsidiary that is a "subsidiary corporation" within the meaning of Section
424(f) of the Code. To the extent that any Option does not qualify as an
Incentive Stock Option, it shall be a Nonstatutory Stock Option.
No Incentive Stock Option shall be granted under the Plan after ten
years from the date of adoption of the Plan by the Board of Directors.
(a) Terms and Conditions of Stock Options. The Administrator in its
discretion may grant Stock Options subject to the following terms and conditions
and such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Administrator shall deem desirable:
(i) Exercise Price. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5(a) shall
be determined by the Administrator at the time of grant, but shall not
be less than 100% of the Fair Market Value of a share of Stock on the
date of grant, except as provided in Section 3(d). If an employee owns
or is deemed to own (by reason of the attribution rules of Section
424(d) of the Code) more than 10% of the combined voting power of all
classes of stock of the Company or of any "parent or subsidiary
corporation" of the Company (within the meaning of Section 424(e) or
424(f) of the Code, as the case may be) and an Incentive Stock Option
is granted to such employee, the exercise price per share for the Stock
covered by such Incentive Stock Option shall be not less than 110% of
the Fair Market Value of a share of Stock on the grant date.
(ii) Option Term. The term of each Stock Option shall be fixed
by the Administrator, but no Option shall be exercisable more than ten
years after the date the Option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of
the Code) more than 10% of the combined voting power of all classes of
stock of the Company or of any "parent or subsidiary corporation" of
the Company (within the meaning of Section 424(e) or 424(f) of the
Code, as the case may be) and an Incentive Stock Option is granted to
such employee, the term of such Option shall expire no more than five
years after the date of grant.
17
(iii) Exercisability; Rights of a Shareholder. Stock Options
shall become exercisable at such time or times, whether or not in
installments, as shall be determined by the Administrator at the time
of grant. The Administrator may at any time accelerate the
exercisability of all or any portion of any Stock Option. An optionee
shall have the rights of a shareholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.
(iv) Method of Exercise. Stock Options may be exercised in
whole or in part, by giving written notice of exercise to the Company
specifying the number of shares to be purchased. Payment of the
purchase price shall be made in full concurrently with such exercise by
any one of the following methods: (A) in cash; (B) if, in the sole
discretion of the Administrator, and if the Company is not then
prohibited from purchasing or acquiring shares of Stock, with shares of
Stock that have been held by the optionee for the requisite period
necessary to avoid a charge to the Company's earnings for financial
reporting purposes, delivered in lieu of cash and valued at their Fair
Market Value on the date of exercise; (C) through a "same day sale"
commitment from the optionee and a broker-dealer that is a member of
the National Association of Securities Dealers, Inc. (the "NASD
Dealer") whereby the optionee irrevocably elects to exercise the Option
and to sell a portion of the shares so purchased to pay for the
exercise price, and whereby the NASD Dealer irrevocably commits upon
receipt of such shares to forward the exercise price directly to the
Company;; or (D) any combination of the foregoing. The delivery of
certificates representing the shares of Stock to be purchased pursuant
to the exercise of a Stock Option will be contingent upon receipt from
the optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Company of the full purchase
price for such shares and the fulfillment of any other requirements
contained in the Stock Option or applicable provisions of laws.
(v) Termination by Reason of Death. Any Stock Option held by
an optionee whose employment by (or other business relationship with)
the Company and its Subsidiaries is terminated by reason of the
optionee's death may thereafter be exercised, to the extent it was
exercisable by the optionee on the date of the optionee's death, by the
legal representative of the optionee's estate or by any other person
who acquires the right to exercise the option by reason of such death
under the optionee's will or the laws of intestate succession, for a
period of 12 months (or such other period as the Administrator shall
specify in the Stock Option) from the date of death, but not later than
the expiration of the stated term of the Option, if earlier.
(vi) Termination by Reason of Disability. Any Stock Option
held by an optionee whose employment by (or other business relationship
with) the Company and its Subsidiaries is terminated by reason of
Disability may thereafter be exercised, to the extent it was
exercisable on the date of such termination, for a period of 12 months
(or such other period as the Administrator shall specify in the Stock
Option) from the date of such termination of employment (or business
relationship), but not later than the expiration of the stated term of
the Option, if earlier. The Administrator shall have sole authority and
discretion to determine whether a participant's employment (or business
relationship) has been terminated by reason of Disability. The
Administrator may specify in any Stock Option that the death of an
optionee during the period provided in this Section 5(a)(vi) for the
exercise of the Option shall extend such period for a period ending not
later than 12 months following the date of the optionee's death,
subject to termination on the expiration of the stated term of the
Option, if earlier.
18
(vii) Termination by Reason of Retirement. Any Stock Option
held by an optionee whose employment by the Company and its
Subsidiaries is terminated by reason of Retirement may thereafter be
exercised, to the extent it was exercisable on the date of such
termination, for a period of 12 months (or such other period as the
Administrator shall specify) from the date of such termination of
employment, but not later than the expiration of the stated term of the
Option, if earlier. The Administrator may specify in any Stock Option
that the death of an optionee during the period provided in this
Section 5(a)(vii) for the exercise of the Option shall extend such
period for a period ending not later than 12 months following the date
of the optionee's death, subject to termination on the expiration of
the stated term of the Option, if earlier.
(viii) Termination for Cause. If any optionee's employment by
(or business relationship with) the Company and its Subsidiaries is
terminated for Cause, any Stock Option held by such optionee, including
any Stock Option that is exercisable at the time of such termination,
shall immediately terminate and be of no further force and effect;
provided, however, that the Administrator may, in its sole discretion,
provide in any Stock Option that such Stock Option can be exercised, to
the extent it was exercisable on the date of such termination, for a
period of up to 30 days from the date of termination of employment (or
business relationship), but not later than the expiration of the stated
term of the Option, if earlier.
(ix) Other Termination. Unless otherwise determined by the
Administrator, if an optionee's employment by (or business relationship
with) the Company and its Subsidiaries terminates for any reason other
than death, Disability, Retirement, or for Cause, any Stock Option held
by such optionee may thereafter be exercised, to the extent it was
exercisable on the date of such termination, for 90 days (or such other
period not to exceed 60 months as the Administrator shall specify) from
the date of termination of employment (or business relationship), but
not later than the expiration of the stated term of the Option, if
earlier.
(x) Annual Limit on Incentive Stock Options. Section 422 of
the Code requires for "incentive stock option" treatment that the
aggregate Fair Market Value (determined as of the time of grant) of the
shares of Stock with respect to which Incentive Stock Options granted
under this Plan and any other plan of the Company or its parent and
subsidiary corporations become exercisable for the first time by an
optionee during any calendar year shall not exceed $100,000. To the
extent that any Stock Option exceeds this limit, it shall constitute a
Nonstatutory Stock Option. In the event the $100,000 limit is exceeded,
the optionee may designate in writing to the Administrator whether this
optionee is exercising the Incentive Stock Option portion or the
Nonstatutory Stock Option portion. In the absence of such written
designation, the Incentive Stock Option portion shall be deemed
exercised first to the extent thereof.
19
(b) Non-Transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee, provided, however, Non-Statutory
Stock Options may be transferred to any inter vivos or testamentary trust, which
shall agree in writing to be bound by the terms of this Plan, established for
estate planning purposes for the sole and exclusive benefit of such owner, one
(1) or more members of such owner's family that are related to such owner by
blood (which members shall include, without limitation, the spouse, adopted
children, and stepchildren of such owner) and/or any other lineal descendants of
such owners and in which such owner is a trustee thereof, or such other trust
established for estate planning purposes as the Board of Directors or Committee
shall approve in writing and which complies with applicable law.
(c) Form of Settlement. Shares of Stock issued upon exercise of a Stock
Option shall be free of all restrictions under the Plan, except as otherwise
provided in the Plan.
Section 6. Tax Withholding
(a) Payment By Participant. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant.
(b) Payment in Stock. Subject to approval by the Administrator, a
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.
Section 7. Transfer, Leave of Absence, Etc.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.
20
Section 8. Amendments and Termination
The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award (or
provide substitute Awards at the same or reduced exercise or purchase price or
with no exercise or purchase price in a manner not inconsistent with the terms
of the Plan, but such price, if any, must satisfy the requirements which would
apply to the substitute or amended Award if it were then initially granted under
this Plan) for the purpose of satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Award without the holder's consent. If and to the extent determined by the
Administrator to be required to ensure that Incentive Stock Options granted
under the Plan are qualified under Section 422 of the Code, Plan amendments
shall be subject to approval by the Company's shareholders entitled to vote at a
meeting of shareholders. Unless sooner terminated, the Plan shall terminate ten
years from the date the Board of Directors approves the Plan.
Section 9. Status of Plan
With respect to the portion of any Award which has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Administrator may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the foregoing sentence.
Section 10. General Provisions
(a) No Distribution; Compliance With Legal Requirements. The
Administrator may require each person acquiring Stock pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof. No shares of Stock shall be
issued pursuant to an Award until all applicable securities law and other legal
and stock exchange or similar requirements have been satisfied. The
Administrator may require the placing of such stop-orders and restrictive
legends on certificates for Stock and Awards as it considers appropriate.
(b) Delivery Of Stock Certificates. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
(d) Performance-Based Compensation. For purposes of Section
162(m)(4)(c) of the Code and Treasury Regulation Section 1.162-27(e)(2)(vi), the
amount of compensation an optionee may receive under a Stock Option is based
solely on an increase in the value of the Stock after the edate of the grant or
award of a Stock Option.
(e) Incorporation by Reference. Every written instrument evidencing an
Award shall incorporate the terms of this Plan by reference as governing
the Award.
21
Section 11. Effective Date of Plan
This Plan shall become effective upon the later to occur of (i)
approval by the Company's Board of Directors and (ii) approval by the Company's
shareholders.
Section 12. Governing Law
This Plan shall be governed by California law except to the extent such
law is preempted by federal law.
22
Exhibit 99.2
CVB FINANCIAL CORP.
FORM 2000 STOCK OPTION AGREEMENT
EMPLOYEES and DIRECTORS
This Stock Option Agreement ("Agreement") is made and entered
into as of the Date of Grant indicated below by and between CVB Financial Corp,
a California corporation (the "Company"), and the person named below
("Optionee").
WHEREAS, Optionee is a full or part-time employee of the Company
or any of its Subsidiaries or a non-employee director of the Company or any
of its Subsidiaries; and
WHEREAS, pursuant to the Company's 2000 Stock Option Plan (the
"Plan"), the Committee of the Board of Directors of the Company administering
the Plan (the "Committee") has approved the grant to Optionee of an option to
purchase shares of the Company's common stock, (the "Common Stock"), on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and
the covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant Of Option; Certain Terms and Conditions. The Company
hereby grants to Optionee, and Optionee hereby accepts, as of the Date of Grant,
an option to purchase the number of shares of Common Stock indicated below (the
"Option Shares") at the Exercise Price per share indicated below, which option
shall expire at 5:00 p.m. on the Expiration Date indicated below or as earlier
provided in this Agreement and shall be subject to all of the terms and
conditions set forth in this Agreement (the "Option"). On each anniversary of
the Date of Grant, the option shall become exercisable to purchase, and shall
vest with respect to, the number of the Option Shares (rounded to the nearest
whole share) equal to the total number of Option Shares multiplied by the Annual
Vesting Rate indicated below.
Optionee: ______________________
Date of Grant: __________
Number of shares purchasable ("Option Shares"): __________
Exercise Price per share: __________
Expiration Date: __________
Annual Vesting Rate: __________
Type of Option (Incentive or Non-Qualified) __________
23
2. Acceleration and Termination of Option
(a) Termination of Employment.
(i) Retirement. If Optionee's service as an Employee ("Employment") of
Company or any of its Subsidiaries is terminated by reason of Optionee's
retirement with the approval of the Committee or in accordance with the
Company's or Subsidiary's then current retirement policy ("Retirement"), then
Optionee's Option may thereafter be exercised, to the extent it was exercisable
on the date of such termination, until the earlier of 12 months from the date of
such termination of Employment and the Expiration Date, but not later than the
expiration of the stated term of the Option, if earlier.
(ii) Death. If Optionee's Employment by (or other business relationship
with) the Company or any of its Subsidiaries is terminated by reason of the
death of Optionee, any Option held by such Optionee may thereafter be exercised,
to the extent it was exercisable by the Optionee on the date of the Optionee's
death, by the legal representative of the Optionee's estate or by any other
person who acquires the right to exercise the Option by reason of such death
under the Optionee's will or the laws of intestate succession, until the earlier
of 12 months from the date of death and the Expiration Date.
(iii) Disability. If Optionee's Employment by (or other business
relationship with) the Company or any of its Subsidiaries is terminated by
reason of Optionee's total and permanent disability within the meaning of
Section 22(e)(3) of the Code ("Disability"), any Option held by such Optionee
may thereafter be exercised, to the extent it was exercisable on the date of
such termination, until the earlier of 12 months from the date of such
termination of Employment (or other business relationship) and the Expiration
Date. The Committee shall have sole authority and discretion to determine
whether a Optionee's Employment (or other business relationship) has been
terminated by reason of Disability.
(iv) Termination for Cause. If Optionee's Employment by (or other business
relationship with) the Company or any of its Subsidiaries is terminated for
Cause, as hereinafter defined, any Option held by such Optionee, including any
Option that is exercisable at the time of such termination, shall immediately
terminate and be of no further force and effect. "Cause" shall mean the
occurrence of one or more of the following: (i) Optionee is convicted of, pleads
guilty to, or confesses to any felony or any act of fraud, misappropriation or
embezzlement which has an immediate and materially adverse effect on the Company
or any of its Subsidiaries, as determined by the Board of Directors of the
Company ("Board") in good faith in its sole discretion, (ii) Optionee engages in
a fraudulent act to the material damage or prejudice of the Company or any of
its Subsidiaries or in conduct or activities materially damaging to the
property, business or reputation of the Company or any of its Subsidiaries, all
as determined by the Board in good faith in its sole discretion, (iii) any
material act or omission by Optionee involving malfeasance or negligence in the
performance of Optionee's duties to the Company or any of its Subsidiaries to
the material detriment of the Company or any of its Subsidiaries, as determined
by the Board in good faith in its sole discretion, which has not been corrected
by such person to the satisfaction of the Board within 30 days after written
notice from the Company of any such act or omission, (iv) failure by Optionee to
comply in any material respect with the terms of his employment agreement, if
any, or any written policies or directives of the Board as determined by the
Board in good faith in its sole discretion, which has not been corrected by such
person to the satisfaction of the Board within 30 days after written notice from
the Company of such failure, or (v) material breach by Optionee of any other
agreement with the Company, as determined by the Board in good faith in its sole
discretion.
24
(v) Other Termination. If Optionee's Employment by (or other business
relationship with) Company or any of its Subsidiaries is terminated for any
reason other than Retirement, death, Disability or Cause, then any Option held
by Optionee may thereafter be exercised, to the extent it was exercisable on the
date of such termination, until the earlier of three (3) months (or, for
Non-Qualified Stock Options, twelve months) from the date of termination of
Employment (or other business relationship) and the Expiration Date.
(vi) Transfer, Leave of Absence. For purposes of the Plan, the following
events shall not be deemed a termination of Employment:
(A) a transfer to the Employment of the Company from
any of its Subsidiaries or from the Company to any of its Subsidiaries, or
from one Subsidiary to another; or
(B) an approved leave of absence for military service
or sickness, or for any other purpose approved by the Company, if the
employee's right to re-employment is guaranteed either by a statute or by
contract or under the policy pursuant to which the leave of absence was granted
or if the Committee otherwise so provides in writing.
(b) Death Following Termination of Employment.
Notwithstanding anything to the contrary contained in this
Agreement, if Optionee shall die at any time after the
termination of his or her Employment and prior to the
Expiration Date of the Option, then the remaining vested
portion, if any, of the Option, as of the date of
termination of Employment shall terminate on the earlier of
the Expiration Date, the first anniversary of the date of
such death or the .
(c) Other Events Causing Acceleration of Option. The
Committee, in its sole discretion, may at any time
accelerate the exercisability of all or any portion of any
Option for any reason.
(d) Rights of Shareholder. Optionee shall have the
rights of a shareholder only as to shares acquired upon the
exercise of an Option and not as to unexercised Options.
Shares of Common Stock issued upon exercise of an Option
shall be free of all restrictions under the Plan, except as
otherwise provided in the Plan or applicable law and
regulation.
(e) Mergers, etc. Not less than fifteen (15) days, or
such shorter period of time as the Committee shall
determine, prior to the dissolution or liquidation of the
Company, or a reorganization, merger, or consolidation of
the Company with one or more corporations as a result of
which the Company will not be the surviving or resulting
corporation, or a sale of all or substantially all the
assets of the Company to another person, or a reverse merger
in which the Company is the surviving corporation but the
shares of the Company's stock outstanding immediately
preceding the merger are converted by virtue of the merger
into other property (a "Terminating Event") (other than a
formation of a holding company, merger or consolidation with
a wholly-owned Subsidiary, a reincorporation of the Company
in a different jurisdiction, or other transaction in which
there is no substantial change in the direct or indirect
shareholders of the Company or their relative stock holdings
and the Options granted under this Plan are assumed,
converted or replaced by the successor corporation, which
assumption will be binding on all Optionees), the Committee
shall notify each Optionee of the pendency of the
Terminating Event. Upon delivery of said notice, any Option
granted prior to the Terminating Event shall be,
notwithstanding the provisions of Section 2 of the Plan,
exercisable in full and not only as to those Option Shares
with respect to which installments, if any, have then
accrued, subject, however, to earlier expiration or
termination as provided elsewhere in the Plan or this
Agreement. Upon the consummation of the Terminating Event,
the Plan, this Agreement and any Option or portion thereof
not exercised shall terminate unless provision is made in
connection with the Terminating Event for assumption of the
Plan and/or the Options theretofore granted, or substitution
for such Options of new Options covering stock of a
successor employer corporation, or a parent or Subsidiary
corporation thereof, solely at the option of such successor
corporation or parent or Subsidiary corporation, with
appropriate adjustments as to number and kind of shares and
prices.
25
3. Adjustments. In the event that the outstanding securities
of the class then subject to the Option are increased, decreased or exchanged
for or converted into cash, property or a different number or kind of
securities, or cash, property or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, separation, any partial or
complete liquidation, dividend (other than a regular cash dividend) or other
distribution, stock split, reverse stock split or the like, or in the event that
substantially all of the property and assets of the Company are sold, then,
unless the terms of such transactions shall provide otherwise or such event
shall cause the Option to terminate pursuant to Section 2(e) hereof, the
Committee shall make appropriate and proportionate adjustments in the number and
type of shares or other securities or cash or other property that may thereafter
be acquired upon the exercise of the Option and the Exercise Price per share
specified herein; provided, however, that any such adjustments in the Option
shall be made without changing the aggregate Exercise Price of the then
unexercised portion of the Option. No fractional shares of Common Stock shall be
issued under the Plan and this Agreement resulting from any such adjustment, but
the Board in its discretion may make a cash payment in lieu of fractional
shares.
4. Exercise. The Option shall be exercisable during Optionee's
lifetime only by Optionee or by his or her guardian or legal representative, and
after Optionee's death only by the person or entity entitled to do so under
Optionee's last will and testament or applicable intestate law. Options may be
exercised in whole or in part, by giving written notice of exercise to the
Company specifying the number of shares to be purchased. Payment of the purchase
price shall be made in full concurrently with such exercise by (i) cash or
certified check payable to the Company, (ii) if the Company is not then
prohibited from purchasing or acquiring shares of Common Stock, with shares of
Common Stock. that have been held by the Optionee for the requisite period
necessary to avoid a charge to the Company's earnings for financial reporting
purposes, delivered in lieu of cash and valued at their Fair Market Value on the
date of exercise; (c) through a "same day sale" commitment from the Optionee and
a broker-dealer that is a member of the National Association of Securities
Dealers, Inc. (the "NASD Dealer") whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the shares so purchased to pay for
the exercise price, and whereby the NASD Dealer irrevocably commits upon receipt
of such shares to forward the exercise price directly to the Company or (d) any
combination of the foregoing. The delivery of certificates representing the
shares of Common Stock to be purchased pursuant to the exercise of an Option
will be contingent upon receipt from the Optionee (or a purchaser acting in his
stead in accordance with the provisions of the Option) by the Company of the
full purchase price for such shares and the fulfillment of any other
requirements contained in the Option or applicable provisions of laws.
5. Annual Limit on Incentive Stock Options. Section 422 of the
Code requires for "incentive stock option" treatment that the aggregate fair
market value, as defined hereinafter, of the shares of Common Stock with respect
to which Incentive Stock Options granted under this Plan and any other plan of
the Company or any of its Subsidiaries become exercisable for the first time by
a Optionee during any calendar year shall not exceed $100,000. To the extent
that any Option exceeds this limit, it shall constitute a Non-Qualified Stock
Option. In the event the $100,000 limit is exceeded, the Optionee may designate
in writing to the Committee whether Optionee is exercising the Incentive Stock
Option portion or the Non-Qualified Stock Option portion. In the absence of such
written designation, the Incentive Stock Option portion shall be deemed
exercised first to the extent thereof. "Fair Market Value" shall mean the market
price of the Common Stock on the applicable date, determined by the Committee in
good faith using any reasonable method.
6. Payment of Withholding Taxes. As a condition to the
exercise of an Option, Optionee shall, no later than the date as of which the
value of an Option or of any Common Stock or other amounts received thereunder
first becomes includable in the gross income of the Optionee for federal income
tax purposes, pay to the Company, or make such arrangements as the Committee may
require for the satisfaction of any federal, state, local or foreign withholding
taxes of any kind required by law to be withheld. The Committee may permit the
Optionee to satisfy all or part of his or her tax obligations related to the
Option or Option Shares by having the Company withhold a portion of any Option
Shares that otherwise would be issued to him or her. Such shares of Common Stock
or Option Shares shall be valued at their Fair Market Value on the date when
taxes otherwise would be withheld in cash.
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7. Tax Consequences. Optionee shall rely solely on his or her
own tax advisors concerning the Option and its tax consequences.
8. Notices. All notices and other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company at
535 East First Street, Tustin, California 92780, Attention: President, or to
Optionee at the address set forth beneath his or her signature on the signature
page hereto, or at such other addresses as they may designate by written notice
in the manner aforesaid.
9. Notice of Disqualifying Disposition of Incentive Stock
Option Shares. To the extent this Option is an Incentive Stock Option, if
Optionee sells or otherwise disposes of any of the Option Shares acquired
pursuant to the Incentive Stock Option on or before the later of (a) the date
two (2) years after the Date of Grant, and (b) the date one (1) year after
transfer of such Shares to Optionee upon exercise of this Option, then Optionee
shall immediately notify the Company in writing of such disposition.
10. Compliance with Other Laws and Regulations.
Notwithstanding anything to the contrary in this Agreement, the grant and
exercise of Options hereunder, and the obligation of the Company to sell and
deliver shares under such Options, shall be subject to all applicable federal
and state laws, rules and regulations and to such approvals by any governmental
or regulatory agency as may be required including the rules and regulations of
the Securities and Exchange Commission and the rules of any exchange or any
quotation system on which the Company's Common Stock may then be listed. The
Company shall not be required to issue or deliver any certificates for shares of
Common Stock prior to the completion of any registration or qualification of
such shares under any federal or state law or issuance of any ruling or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
11. Limited Liability. The Company and any of its
Subsidiaries or affiliates which is in existence or hereafter comes into
existence shall not be liable to a Optionee or other persons as to:
(a) The Non-Issuance of Shares. The non-issuance or
sale of shares as to which the Company has been unable to
obtain from any regulatory body having jurisdiction the
authority deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected, but
not realized, by any Optionee or other person due to the
issuance, exercise, settlement, cancellation or other
transaction involving any Options granted hereunder.
12. Nontransferability. No Option shall be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution and
all Options shall be exercisable, during the Optionee's lifetime, only by the
Optionee, provided, however, Non-Statutory Stock Options may be transferred to
any inter vivos trust, which shall agree in writing to be bound by the terms of
this Agreement and the Plan, established for estate planning purposes for the
sole and exclusive benefit of such owner, one (1) or more members of such
owner's family that are related to such owner by blood (which members shall
include, without limitation, the spouse, adopted children, and stepchildren of
such owner) and/or any other lineal descendants of such owner and in which such
owner is a trustee thereof.
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13. Plan.
(a) Amendments, Terms and Conditions. The Option is
granted pursuant to the Plan, as in effect on the Date of
Grant, and is subject to all the terms and conditions of the
Plan, as the same may be amended from time to time;
provided, however, that no such amendment shall deprive
Optionee, without his or her consent, of the Option or of
any of Optionee's rights under this Agreement. The
interpretation and construction by the Committee of the
Plan, this Agreement, the Option and such rules and
regulations as may be adopted by the Committee for the
purpose of administering the Plan shall be final and binding
upon Optionee. Until the Option shall expire, terminate or
be exercised in full, the Company shall, upon written
request therefor, send a copy of the Plan, in its
then-current form, to Optionee or any other person or entity
then entitled to exercise the Option.
(b) Capitalized Terms. Capitalized terms not otherwise
defined herein shall have the meaning assigned to these
terms in the Plan.
(c) Conflict with Plan. This Option is granted pursuant
to the Plan, the provisions of which are incorporated into
this Agreement by reference, and, in the event any conflict
between this Agreement and the Plan exists, the terms of the
Plan shall govern.
14. Amendments and Termination. The Board may, at any time,
amend or discontinue the Plan and the Committee may, at any time, amend or
cancel any outstanding Option (or provide substitute Options at the same or
reduced exercise or purchase price or with no exercise or purchase price in a
manner not inconsistent with the terms of the Plan, but such price, if any, must
satisfy the requirements which would apply to the substitute or amended Option
if it were then initially granted under this Plan) for the purpose of satisfying
changes in law or for any other lawful purpose, but no such action shall
adversely affect rights under any outstanding Option without the holder's
consent. If and to the extent determined by the Committee to be required to
ensure that Incentive Stock Options granted under the Plan are qualified under
Section 422 of the Code, Plan amendments shall be subject to approval by the
Company's shareholders entitled to vote at a meeting of shareholders.
15. Stockholder Rights. No person or entity shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of any Option
Shares until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement. With respect to the
portion of any Option which has not been exercised and any payments in cash,
Common Stock or other consideration not received by a Optionee, a Optionee shall
have no rights greater than those of a general creditor of the Company unless
the Committee shall otherwise expressly determine in connection with any Option
or Options. In its sole discretion, the Committee may authorize the creation of
trusts or other arrangements to meet the Company's obligations to deliver Common
Stock or make payments with respect to Options hereunder, provided that the
existence of such trusts or other arrangements is consistent with the foregoing
sentence.
16. Employment or Contract Rights. No provision of this
Agreement or of the Option granted hereunder shall (i) confer upon Optionee any
right to continue in the employ of or contract with the Company or any of its
Subsidiaries, (ii) affect the right of the Company and any of its Subsidiaries
to terminate the Employment or contract of Optionee, with or without cause, or
(iii) confer upon Optionee any right to participate in any employee welfare or
benefit plan or other program of the Company or any of its Subsidiaries other
than the Plan. Optionee hereby acknowledges and agrees that the Company and any
of its Subsidiaries may terminate the Employment or contract of Optionee at any
time and for any reason, or for no reason, unless Optionee and the Company or
such Subsidiary are parties to a written employment agreement that expressly
provides otherwise.
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17. General Provisions.
(a) Delivery Of Stock Certificates. Delivery of stock
certificates to Optionee under this Agreement shall be
deemed effected for all purposes when the Company or a stock
transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the
Optionee, at the Optionee's last known address on file with
the Company.
(b) Other Compensation Arrangements. Nothing contained
in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, including trusts, and
such arrangements may be either generally applicable or
applicable only in specific cases.
(c) Performance-Based Compensation. For purposes of
Section 162(m)(4)(c) of the Code and Treasury Regulation
Section 1.162-27(e)(2)(vi), the amount of compensation a
Optionee may receive under an Option is based solely on an
increase in the value of the Common Stock after the date of
the grant or award of an Option.
(d) Entire Agreement. The Plan is incorporated herein
by reference. This Agreement and the Plan constitute the
entire agreement and understanding of the parties hereto
with respect to the subject matter hereof and supersede all
prior understandings and agreements with respect to such
subject matter.
(e) Successors and Assigns. The Company may assign any
of its rights under this Agreement. This Agreement shall be
binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on
transfer set forth herein, this Agreement shall be binding
upon Optionee and Optionee's heirs, executors,
administrators, legal representatives, successors and
assigns.
18. Governing Law. This Agreement and the Option
granted hereunder shall be interpreted and construed in accordance with the
laws of the State of California and applicable federal law.
19. Acceptance. Optionee hereby acknowledges receipt of a copy
of the Plan and this Agreement. Optionee has read and understands the terms and
provisions thereof, and accepts this Option subject to all the terms and
conditions of the Plan and this Agreement. Optionee acknowledges that there may
be adverse tax consequences upon exercise of this Option or disposition of the
Option Shares and that the Company has advised Optionee to consult a tax advisor
prior to such exercise or disposition.
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IN WITNESS WHEREOF, the Company and Optionee have duly
executed this Agreement as of the Date of Grant.
CVB FINANCIAL CORP.
By____________________________
Authorized Representative
OPTIONEE
______________________________
Signature
______________________________
Printed Name
______________________________
Street Address
______________________________
City, State and Zip Code
______________________________
Social Security Number