Exhibit 10.5
 
1ST CENTURY BANCSHARES, INC.
2013 EQUITY INCENTIVE PLAN

STOCK APPRECIATION RIGHTS GRANT AGREEMENT

This Stock Appreciation Rights Grant Agreement (“Agreement”) is effective as of
the Date of Grant stated in the accompanying Notice of Stock Appreciation Rights
Grant (“Notice”), between 1st Century Bancshares, Inc., a Delaware corporation
(“Company”) and the Grantee stated in the Notice (“Grantee”), who is an employee
of the Company or one of its subsidiaries.  The Notice is incorporated herein by
this reference and made a part of this Agreement.

1.
Grant of Stock Appreciation Rights. The Company hereby grants to Grantee stock
appreciation rights (“SARs”) with respect to the number of shares of common
stock stated in the Notice (“Shares”).  In addition to continuous status as an
employee of the Company, this grant may be conditioned on the achievement of
performance goals during the Performance Period as stated in the Notice
(“Performance Period”).  Except as provided in Section 8 below, the SARs shall
neither vest nor become exercisable unless Grantee is employed by the Company or
one of its subsidiaries continuously from the Date of Grant stated in the Notice
(“Date of Grant”) until the Vesting Date(s) stated in the Notice (“Vesting
Date”).  This grant is subject to the terms and conditions of this Agreement,
the Notice and the applicable terms and conditions of the 1st Century
Bancshares, Inc. 2013 Equity Incentive Plan (“Plan”).

2.
Grant Price. The Grant Price is stated in the Notice (“Grant Price”) and shall
be the fair market value per share of Company common stock on the Date of Grant.

4.
Value of the SARs; Payment in Whole Shares.  Upon exercise of the SARs, for each
Share with respect to which a SAR is exercised, Grantee shall be entitled to
receive value equal to the difference between the fair market value of a Share
on the date of exercise minus the Grant Price.  The Company shall pay the value
owing to Grantee upon exercise in whole Shares, rounded down.  No cash will be
awarded upon exercise, and no fractional shares will be issued or delivered.

5.
Vesting. Except as provided in Section 8, the SARs that are available for
exercise in accordance with Section 2 shall vest and become exercisable on the
Vesting Date.

6.
Term of SARs. The SARs shall terminate on the Expiration Date stated in the
Notice (“Expiration Date”).  Thereafter, the SARs shall not be exercisable.

7.
Method of Exercise. Grantee may exercise the SARs by written notice to the
Company in a form satisfactory to the Company stating that Grantee has elected
to exercise the SARs and stating the number of Shares as to which the SARs are
to be exercised.  The date of the Company’s actual receipt of the notice shall
be treated as the date of exercise of the SARs.

8. 
Termination of Employment.

 
a.
General Rule.  In consideration of this grant, Grantee agrees that, while the
Company or a subsidiary employs Grantee, Grantee shall devote Grantee’s entire
time, energy, and skills to the service of the Company or a subsidiary and for
the promotion of its interests and the achievement of the performance
goals.  Except as otherwise provided in this Section, if Grantee does not remain
continuously in the employ of the Company or a subsidiary until the Vesting Date
(e.g., voluntary or involuntary termination of employment or retirement), this
grant shall terminate immediately and become null and void, all rights hereunder
shall cease, and Grantee shall not be entitled to exercise the SARs with respect
to any Shares.

 
b.
Death or Disability after Performance Period.  In the event of Grantee’s
termination of employment due to death or “disability,” as defined in Section
409A(a)(2)(C) of the Code after the Performance Period, if any, the SARs shall
become immediately vested and exercisable for the number of Shares with respect
to which the SARs are exercisable.  The SARs shall be exercisable for the lesser
of twelve (12) months from the date of death or disability or until the
Expiration Date.

 
 
 

--------------------------------------------------------------------------------

 

 
c.
Termination of Employment after Vesting for Reasons other than Death or
Disability.  If Grantee’s employment terminates following vesting for any reason
other than those described in Sections 8.b. and 8.c. above, the SARs that are
vested and exercisable as of such termination date shall continue to be
exercisable for three (3) months after such termination.  Grantee’s employment
shall not be treated as terminated in the case of a transfer of employment
within or between the Company and its subsidiaries or in the case of sick leave
or other approved leave of absences.

9.
Issuance of Shares; Registration; Withholding Taxes. As soon as practicable
after the exercise date of the SARs, the Company shall cause to be issued and
delivered to Grantee, or for Grantee’s account, a certificate or certificates
for the Shares to which Grantee is entitled.  The Company may postpone the
issuance or delivery of the Shares until (a) the completion of registration or
other qualification of such Shares or transaction under any state or federal
law, rule or regulation, or any listing on any securities exchange, as the
Company shall determine to be necessary or desirable; (b) the receipt by the
Company of such written representations or other documentation as the Company
deems necessary to establish compliance with all applicable laws, rules, and
regulations, including applicable federal and state securities laws and listing
requirements, if any; and (c) the payment to the Company, upon its demand, of
any amount requested by the Company to satisfy any federal, state, or other
governmental withholding tax requirements related to the exercise of the
SARs.  The Company shall have the right to withhold with respect to the payment
of any Shares any taxes required to be withheld because of such payment,
including the withholding of Shares otherwise payable due to exercise of the
SARs.  Grantee shall comply with any and all legal requirements relating to
Grantee’s resale or other disposition of any Shares acquired under this
Agreement.  The certificates representing the Shares acquired pursuant to the
exercise of the SARs may bear such legend as described in Section 13 below or as
the Company otherwise deems appropriate to ensure compliance with applicable
law.

10.
Nontransferability of SARs. The SARs and this Agreement shall not be assignable
or transferable by Grantee other than by will or by the laws of descent and
distribution.  During Grantee’s lifetime, the SARs and all rights of Grantee
under this Agreement may be exercised only by Grantee (or by Grantee’s legal
guardian or legal representative).  If the SAR is exercised after Grantee’s
death, the Company may require evidence reasonably satisfactory to it of the
appointment and qualification of Grantee’s personal representatives or executors
and their authority and of the right of any heir or distributee to exercise the
SARs.  Any purported transfer or assignment of the SARs shall be void and of no
effect, and shall give the Company the right to terminate the SARs as of the
date of such purported transfer or assignment.  Notwithstanding the foregoing,
with the consent of the Compensation Committee of the Board of Directors of the
Company (“Committee”), Grantee may transfer the SARs to a revocable trust under
which Grantee is both the trustee and the beneficiary.

11.
SARs/Share Adjustments. The number of SARs/Shares and the Grant Price shall be
adjusted proportionately for any increase or decrease in the number of issued
shares of Company common stock by reason of a reorganization, merger,
recapitalization, reclassification, stock split, stock dividend, or other like
change in the capital structure of the Company.  The adjustment required shall
be made by the Committee, whose determination shall be conclusive.  In no event
shall the adjusted Grant Price be less than the fair market value of the
adjusted SARs/Shares on the Date of Grant.

12.
No Rights as Shareholder. Grantee shall acquire none of the rights of a
shareholder of the Company with respect to the SARs until a certificate for
Shares is issued to Grantee following the exercise of the SARs.

13.
Registration of Shares. If a registration statement under the Securities Act of
1933 (“Act”) with respect to Shares issuable upon exercise of the SARs is not in
effect at the time of exercise, or if a registration statement with respect to
the Shares is in effect but not with respect to Grantee’s resale thereof and
Grantee is an “affiliate” of the Company, then, in either such case, (a) as a
condition of the issuance of the Shares, the person exercising such SARs shall
give the Company a written statement, satisfactory in form and substance to the
Company, acknowledging that such Shares may be reoffered or resold by Grantee
only pursuant to Rule 144 or a separate registration statement under the Act,
and (b) the Company may place upon any stock certificate for Shares the
following legend or such other legend as the Company may prescribe to prevent
disposition of the Shares in violation of the Act:

 
 
 

--------------------------------------------------------------------------------

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THEM UNDER THE ACT OR THE AVAILABILITY OF
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS.  FURTHERMORE, NO OFFER, SALE,
TRANSFER, PLEDGE, OR HYPOTHECATION MAY BE MADE WITHOUT APPROVAL OF COUNSEL FOR
1ST CENTURY BANCSHARES, INC. AFFIXED TO THIS CERTIFICATE.  THE STOCK TRANSFER
AGENT HAS BEEN ORDERED TO EFFECTUATE TRANSFERS OF THIS CERTIFICATE ONLY IN
ACCORDANCE WITH THE ABOVE INSTRUCTIONS.

14.
Grantee Bound by Plan.  Grantee hereby acknowledges receipt of a copy of the
Plan and acknowledges that Grantee shall be bound by its terms, regardless of
whether such terms have been set forth in this Agreement.  If there is any
inconsistency between the terms of the Plan and the terms of this Agreement,
Grantee shall be bound by the terms of the Plan.

15.
Employment Rights. Neither the Plan nor the granting of the SARs shall be a
contract of employment with the Company or any of its subsidiaries.  Subject to
other applicable agreements with Grantee, the Company or a subsidiary may
discharge Grantee from employment at any time.

16.
Amendment. This Agreement may be amended by the Committee at any time based on
its determination that the amendment is necessary or advisable in light of any
addition to, or change in, the Code or regulations issued thereunder, or any
federal or state securities law or other law or regulation, or the Plan, or
based on any discretionary authority of the Committee under the Plan.  However,
unless necessary or advisable due to a change in law, any amendment to this
Agreement which has a material adverse effect on the interest of Grantee under
this Agreement shall be effective only with the consent of Grantee.

17.
No Advice, Warranties, or Representations. The Company is not providing Grantee
with advice, warranties, or representations regarding any of the legal or tax
effects to Grantee with respect to the SARs.  Grantee is encouraged to seek
legal and tax advice from Grantee’s own legal and tax advisors.

18.
Code Section 409A. This grant of SARs has been structured to meet the
requirements for a stock appreciation right that does not provide for a
“deferral of compensation” as defined in Section 1.409A-1(b) of the Treasury
Regulations.

19.
Miscellaneous.  This Agreement, the Notice and the Plan set forth the final and
entire agreement between the parties with respect to the subject matter hereof,
which shall be governed by and construed in accordance with the laws of the
State of California applicable to contracts made and to be performed in
California.  This Agreement shall bind and benefit Grantee, the heirs,
distributees, and personal representative of Grantee, and the Company and its
successors and assigns.

BY ACCEPTING THIS AGREEMENT AND THE SARS GRANTED PURSUANT TO THIS AGREEMENT,
GRANTEE AGREES TO ALL THE TERMS AND CONDITIONS DESCRIBED IN THIS AGREEMENT, IN
THE NOTICE AND IN THE PLAN.