EXHIBIT 10.1

 

YEAR 2000 UNIONBANCAL CORPORATION
MANAGEMENT STOCK PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT

 

This Agreement is made between UnionBanCal Corporation (the “Company”) and the
Optionee as of the Grant Date, (the “Grant Date”) as set forth on the Stock
Option Grant Notice (the “Grant Notice”) available from the UBS Financial
Services Inc. website (www.ubs.com/onesource/ub).

 

WITNESSETH:

 

WHEREAS, the Company has adopted the Year 2000 UnionBanCal Corporation
Management Stock Plan (the “Plan”) as an amendment and restatement of the
predecessor UnionBanCal Corporation Management Stock Plan authorizing the
issuance of options to purchase the common stock of the Company (“Stock”) to
eligible individuals in connection with the performance of services for the
Company and its Subsidiaries (as defined in the Plan). The Plan is administered
by the Executive Compensation and Benefits Committee (“Committee”) of the
Company’s Board of Directors and is incorporated in this Agreement by reference
and made a part of it; and

 

WHEREAS, the Company regards Optionee as a valuable contributor to the Company,
and has determined that it would be to the advantage and interest of the Company
and its shareholders to grant the options provided for in this Agreement to
Optionee as an inducement to remain in the service of the Company and as an
incentive for increased efforts during such service;

 

NOW, THEREFORE, in consideration of the foregoing premises, and the mutual
covenants herein contained, the parties to this Agreement hereby agree as
follows:

 

1.             (a)           Option Grant.  The Company hereby grants to
Optionee the right and option to purchase from the Company on the terms and
conditions hereinafter set forth and in the applicable Grant Notice and the
Plan, all or any part of an aggregate number of Shares of Stock shown on the
Grant Notice. This option is not intended to satisfy the requirements of Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

(b)           Option Price.  The purchase price of the Stock subject to this
option shall be the Option Price per share, as shown on the Grant Notice, which
price is not less than the per share Fair Market Value as defined in the Plan of
such Stock as of the Grant Date. The term “Option Price” as used in this
Agreement refers to the purchase price of the Stock subject to option.

 

2.             Option Period. This option will be exercisable only during the
Option Period, and during such Option Period, the exercisability of the option
shall be subject to the limitations of paragraph 3 and the vesting provisions of
paragraph 4. The Option Period shall commence on the Grant Date and except as
provided in paragraph 3, shall end on the Terminal Date which shall be seven
years from the Grant Date.

 

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3.             Limits on Option Period.  The Option Period may end before the
Terminal Date, as follows:

 

(a)           If Optionee ceases to be a bona fide employee of the Company or
any of its Subsidiaries for any reason other than cause, retirement, death or
disability as each is defined in this section 3 during the Option Period, the
Option Period shall terminate three (3) months after the date of such cessation
of employment or on the Terminal Date, whichever shall first occur, and Optionee
may exercise the option only to the extent exercisable under paragraph 4 on the
date of Optionee’s cessation of employment. Notwithstanding the foregoing, if
the Optionee’s employment is terminated under the provisions of the Company’s
Separation Pay Plan, the Option Period shall end three (3) years after such
termination or on the Terminal Date, whichever shall first occur, and during
such extended Option Period, Optionee may exercise the entire unexercised
portion of the option, provided, however, that this sentence shall not apply to
the option if the Grant Date is less than six (6) months prior to the date of
such termination of employment.

 

(b)           If Optionee’s employment terminates by reason of retirement, the
Option Period shall end three (3) years after such termination or on the
Terminal Date, whichever shall first occur, and Optionee may exercise the entire
unexercised portion of this option (or any lesser amount), provided, however,
that this sentence shall not apply to the option if the Grant Date is less than
six (6) months prior to the date of termination of employment as a result of
such retirement. For this purpose, “retire” means termination of employment with
the Company or its Subsidiaries after attaining age sixty (60) with ten (10)
years of service or age sixty-two (62) with five (5) years of service with the
Company or any of its Subsidiaries.

 

(c)           If Optionee’s employment terminates by reason of death, or
Optionee becomes entitled to long-term disability benefits under the Union Bank
of California Long Term Disability Plan while in the employ of the Company or
its Subsidiary, the Option Period shall end one year after such event or on the
Terminal Date, whichever shall first occur, and Optionee (or Optionee’s
executor, administrator, trustee or the person or persons to whom Optionee’s
rights under this option shall pass by will or the applicable laws of descent
and distribution) may exercise the entire unexercised portion of this option (or
any lesser amount), provided, however, that this sentence shall not apply to the
option if the Grant Date is less than six (6) months prior to the date of
termination of employment as a result of death or the date Optionee becomes
entitled to such long-term disability benefits.

 

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(d)           If Optionee is on a leave of absence from the Company or a
Subsidiary because of disability, or for the purpose of serving the government
of the country in which the principal place of employment of Optionee is
located, either in a military or civilian capacity, or for such other purpose or
reason as the Committee may approve, Optionee shall not be deemed during the
period of such absence, by virtue of such absence alone, to have terminated
employment with the Company or a Subsidiary except as the Committee may
otherwise expressly provide.

 

(e)           If Optionee’s employment with the Company or a Subsidiary
terminates for cause during the Option Period, the Option Period shall terminate
on the date of such termination of employment and shall not thereafter be
exercisable to any extent. Optionee’s employment shall be terminated “for cause”
if it is because of:

 

(i)            theft or embezzlement by Optionee from, or common law fraud
committed by Optionee against, the Company or its Subsidiaries;

 

(ii)           conviction of Optionee of a felony involving moral turpitude;

 

(iii)          material breach by Optionee of any obligation he or she may have
as an employee of the Company (or its Subsidiaries) with respect to confidential
information, unfair competition, or the ownership of intellectual property; or

 

(iv)          material breach by Optionee of any other obligation he or she may
have as an employee of the Company or its Subsidiaries.

 

4.             Vesting of Right to Exercise Options.  The shares covered by this
option shall vest thirty-three and one-third percent (33 1/3%) on each one year
anniversary of the Grant Date such that all of the shares shall be fully vested
after three (3) years from the Grant Date. Any portion of the option that is not
exercised shall accumulate and may be exercised at any time during the Option
Period prior to the Terminal Date. No partial exercise of this option may be for
less than 5 percent (5%) of the total number of shares then available under this
option. In no event shall the Company be required to issue fractional shares.

 

5.             Method of Exercise. Optionee may exercise the option with respect
to all or any part of the shares of Stock then subject to such exercise as
follows:

 

(a)           By giving the Company or its designated representative written
notice of such exercise, specifying the number of such shares as to which this
option is exercised. Such notice shall be accompanied by an amount equal to the
Option Price of such shares, in the form of: (i) cash; a certified check, bank
draft, postal or express money order payable to the order of the Company in
lawful money of the United States; (ii) by delivery (on a form prescribed by the
Committee) of an

 

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irrevocable direction to a securities broker approved by the Committee to sell
shares and deliver all or a portion of the proceeds to the Company in payment
for the Common Stock; (iii) Common Stock; or (iv) in any combination of the
foregoing.

 

(b)           In the event that the shares are subject to any obligations or
restrictions, the Optionee (and Optionee’s spouse, if any) shall be required, as
a condition precedent to acquiring Stock through exercise of the option, to
execute one or more agreements relating to obligations in connection with
ownership of the Stock or restrictions on transfer of the Stock no less
restrictive than the obligations and restrictions to which the other
shareholders of the Company are subject at the time of such exercise.

 

(c)           If required by the Company, Optionee shall give the Company
satisfactory assurance in writing, signed by the Optionee or his legal
representative, as the case may be, that such shares are being purchased for
investment and not with a view to the distribution thereof, provided that such
assurance shall be deemed inapplicable to (i) any sale of such shares by such
Optionee made in accordance with the terms of a registration statement covering
such sale, which may hereafter be filed and become effective under the
Securities Act of 1933, as amended, and with respect to which no stop order
suspending the effectiveness thereof has been issued, and (ii) any other sale of
such shares with respect to which, in the opinion of counsel for the Company,
such assurance is not required to be given in order to comply with the
provisions of the Securities Act of 1933, as amended.

 

As soon as practicable after receipt of the notice required in paragraph 5(a)
and satisfaction of the conditions set forth in paragraphs 5(b) and 5(c), if
applicable, the Company or its designated representative shall, without transfer
or issue tax and without other incidental expense to Optionee, deliver to
Optionee at the office of the Company, at 400 California Street, San Francisco,
California, attention of the Secretary, or such other place as may be mutually
acceptable to the Company and Optionee, a certificate or certificates of such
shares of Stock; 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 applicable registration requirements under
the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, any applicable listing requirements of any national securities
exchange, and requirements under any other law or regulation applicable to the
issuance or transfer of such shares.

 

6.             Withholding of Taxes.  Optionee agrees to make appropriate
arrangements with the Company (or Subsidiary that employs the Optionee) or its
designated representative for satisfaction of any applicable federal, state or
local income and employment tax withholding requirements. This may include the
withholding of shares of Stock from the exercise of the option pursuant to such
rules and procedures as the Committee may

 

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establish. Any shares withheld to satisfy such withholding requirements shall
not be available for subsequent grants under the Plan.

 

7.             Corporate Transactions.  (a) If there should be any change in a
class of Stock subject to this option, through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock dividend
(in excess of 2 percent) or other change in the corporate structure of the
Company, the Board and the Committee shall make appropriate adjustments in order
to preserve, but not to increase, the benefit to Optionee, including adjustments
in the number of shares of such Stock subject to this option and in the price
per share. (b) Upon the consummation of a “Change of Control” (as defined in
this paragraph 7(b)), this option shall vest and/or become immediately
exercisable, without regard to the vesting provisions of paragraph 4. For the
purposes of this paragraph 7(b), “Change of Control” means: consummation of a
reorganization, merger or consolidation or sale or other disposition of the
stock or all or substantially all of the assets of the Company or the
acquisition of the assets or stock of another entity (“Business Combination”);
excluding, however, such a Business Combination pursuant to which a Permitted
Holder (as defined in this paragraph 7(b)) will beneficially own, directly or
indirectly, 30% or more of, respectively, the outstanding shares of common
stock, and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors (together, the “Company
Stock”), as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries), and no individual,
entity or group (within the meaning of Section 13(d) (3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended), has a greater beneficial interest,
directly or indirectly, in the Company Stock than a Permitted Holder. For
purposes of this definition, “Permitted Holder” shall mean (i) The Bank of
Tokyo-Mitsubishi UFJ, Ltd. or any successor thereto (“BTMU”), (ii) an employee
benefit plan of BTMU or (iii) a corporation controlled by BTMU.

 

8.             Limitations on Transfer.  In general, this option shall, during
Optionee’s lifetime, be exercisable only by Optionee, and neither this option
nor any right hereunder shall be transferable by Optionee except as provided by
law, or with the consent of the Company, or by will or the laws of descent and
distribution; provided, however, that the option may be transferred to a trust
established by the Optionee for the primary benefit of the Optionee and
Optionee’s spouse, if married, provided that the trust is revocable during the
lifetime of the Optionee and that the trustee on behalf of the trust agrees in
writing to be bound by the terms and conditions of this Agreement. In the event
of any attempt by Optionee or the Optionee’s transferee to gift, transfer,
alienate, assign, pledge, hypothecate, or otherwise dispose of this option or of
any right hereunder, except as provided for in this Agreement, or in the event
of the levy of any attachment, execution, or similar process upon the rights or
interest hereby conferred, the Company at its election may terminate this option
by notice to Optionee and this option shall thereupon become null and void.

 

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9.             No Shareholder Rights.  Neither Optionee nor any person entitled
to exercise Optionee’s rights in the event of his death shall have any of the
rights of a shareholder with respect to the shares of Stock subject to this
option except to the extent the certificates for such shares shall have been
issued upon the exercise of this option.

 

10.           No Effect on Terms of Employment.  Nothing in this Agreement shall
affect the right of the Company (or Subsidiary which employs Optionee) to
terminate or change the terms of employment of Optionee at any time and for any
reason, with or without cause.

 

11.           No Effect on Other Plans.  In the year in which Optionee exercises
an option or disposes of his or her interest in shares of Stock acquired under
an option, benefits received under this Plan shall not affect participation in,
or the computation of benefits under any other employee benefit plan of the
Company or its Subsidiaries. For purposes of any bonus or incentive program for
which the Optionee is eligible and for purposes of any employee benefit plans,
to the extent permitted by applicable laws and by pertinent provisions of such
plans, the Company or its Subsidiaries shall disregard any options, shares of
Stock and any other benefits received by Optionee under this Plan.

 

12.           Notice. Any notice or other paper required to be given or sent
pursuant to the terms of this Agreement shall be sufficiently given or served
hereunder to any party when transmitted by registered or certified mail, postage
prepaid, addressed to the party to be served as follows:

 

Company:

 

Executive Vice President and Director of Human Resources

 

 

UnionBanCal Corporation

 

 

400 California Street, 10th Floor

 

 

San Francisco, CA 94104

 

 

 

Optionee:

 

At Optionee’s address in the Company’s files, or to such other address as
Optionee may specify in writing to the Company.

 

 

 

Plan Administrator:

 

UBS Financial Services Inc.

 

 

300 Lighting Way

 

 

Secaucus, NJ 07094

 

 

www.ubs.com/onesource/ub

 

Any party may designate another address for receipt of notices so long as notice
is given in accordance with this paragraph.

 

13.           Committee Decisions Conclusive. All decisions, determinations and
interpretations of the Committee upon any question arising under the Plan or
under this Agreement shall be conclusive and binding on all parties.

 

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14.           Mandatory Arbitration.  Any dispute arising out of or relating to
this Agreement or the Grant Notice, including its meaning or interpretation,
shall be resolved solely by arbitration before an arbitrator selected in
accordance with the rules of the American Arbitration Association. The location
for the arbitration shall be in San Francisco, Los Angeles or San Diego as
selected by the Company in good faith. Judgment on the award rendered may be
entered in any court having jurisdiction. The party the arbitrator determines is
the prevailing party shall be entitled to have the other party pay the expenses
of the prevailing party, and in this regard the arbitrator shall have the power
to award recovery to such prevailing party of all costs and fees (including
attorneys fees and a reasonable allocation for the costs of the Company’s
in-house counsel), administrative fees, arbitrator’s fees and court costs, all
as determined by the arbitrator. Absent such award of the arbitrator, each party
shall pay an equal share of the arbitrator’s fees. All statutes of limitation
which would otherwise be applicable shall apply to any arbitration proceeding
under this paragraph. The provisions of this paragraph are intended by Optionee
and the Company to be exclusive for all purposes and applicable to any and all
disputes arising out of or relating to this Agreement and the Grant Notice. The
arbitrator who hears and decides any dispute shall have jurisdiction and
authority only to award compensatory damages to make whole a person or entity
sustaining foreseeable economic damages, and shall not have jurisdiction and
authority to make any other award of any type, including without limitation,
punitive damages, unforeseeable economic damages, damages for pain, suffering or
emotional distress, or any other kind or form of damages. The remedy, if any,
awarded by the arbitrator shall be the sole and exclusive remedy for any dispute
which is subject to arbitration under this paragraph.

 

15.           Successors.  This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns. Where the context permits, “Optionee” as
used in this Agreement shall include Optionee’s transferee or executor,
administrator or other legal representative or the person or persons to whom
Optionee’s rights pass by will or the applicable laws of descent and
distribution. Nothing contained in the Plan or this Agreement shall be
interpreted as imposing any liability on the Company or the Committee in favor
of any Optionee or transferee of options with respect to any loss, cost or
expense which such Optionee or transferee may incur in connection with, or
arising out of any transaction involving any options granted hereunder.

 

16.           Integration.  The terms of the Plan, this Agreement and the Grant
Notice are intended by the Company and Optionee to be the final expression of
their contract with respect to the options and other amounts received hereunder
and may not be contradicted by evidence of any prior or contemporaneous
agreement. The Company and Optionee further intend that the Plan, this Agreement
and the Grant Notice shall constitute the complete and exclusive statement of
their terms and that no extrinsic evidence whatsoever may be introduced in any
arbitration, judicial, administrative or other legal proceeding involving the
Plan, this Agreement or the Grant Notice. Accordingly, the Plan, this Agreement
and the Grant Notice contain the entire understanding between the parties and
supersede all

 

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prior oral, written and implied agreements, understandings, commitments and
practices among the parties. In the event of any conflict among the provisions
of the Plan document, this Agreement and the Grant Notice, the Plan document
shall prevail. The Company and Optionee shall have the right to amend this
Agreement in writing as they mutually agree.

 

17.           Waivers.  Any failure to enforce any terms or conditions of the
Plan, this Agreement or the Grant Notice by the Company or Optionee shall not be
deemed a waiver of that term or condition, nor shall any waiver or
relinquishment of any right or power at any one time or times be deemed a waiver
or relinquishment of that right or power for all or any other times.

 

18.           Severability of Provisions.  If any provision of the Plan, this
Agreement or the Grant Notice shall be held invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision thereof; and
the Plan, this Agreement and the Grant Notice shall be construed and enforced as
if none of them included such provision.

 

19.           California Law.  The Plan, this Agreement and the Grant Notice
shall be construed and enforced according to the laws of the State of California
to the extent not preempted by the federal laws of the United States of America.
In the event of any arbitration proceedings, actions at law or suits in equity
in relation to the Plan, this Agreement, or the Grant Notice, the prevailing
party in such proceeding, action or suit shall receive from the losing party its
attorneys’ fees and all other costs and expenses of such proceeding, action or
suit.

 

By accepting the Grant Notice on the UBS Financial Services Inc. website, the
Optionee accepts the terms of the Management Stock Plan and this Non-Qualified
Stock Option Agreement. The Optionee also hereby acknowledges receipt of a copy
of the Prospectus, the Management Stock Plan Stock Option Highlights and the
Year 2000 UnionBanCal Corporation Management Stock Plan, effective January 1,
2000.

 

 

UNIONBANCAL CORPORATION

 

 

 

 

 

By:

 

/s/ PAUL E. FEARER

 

 

 

Paul Fearer, Executive Vice President

 

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