**EXHIBIT 10.25**

** **

**NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREMENT,NO SHARES OF WESTERN SIERRA BANCORP’S COMMON STOCK SHALL BE ISSUED PURSUANTHERETO UNLESS THE WESTERN SIERRA BANCORP 2004 STOCK OPTION PLAN SHALL HAVEFIRST BEEN APPROVED BY THE SHAREHOLDERS OF WESTERN SIERRA BANCORP.**

 

**WESTERN SIERRA BANCORP**

**NONQUALIFIED STOCK OPTION AGREEMENT**

 

This NonqualifiedStock Option Agreement (the “Agreement”) is made and entered into as of the             day of                            ,         , by and between WesternSierra Bancorp, a California corporation (the “Bancorp”), and                          ,(“Optionee”);

 

WHEREAS, pursuantto the Western Sierra Bancorp 2004 Stock Option Plan (the “Plan”), a copy ofwhich is attached hereto, the Administrator of the Plan has authorized grantingto Optionee a nonqualified stock option to purchase all or any part of                             (             )authorized but unissued shares of the Bancorp’s common stock at the price of                         Dollars and                Cents ($    .    ) per share, suchoption to be for the term and upon the terms and conditions hereinafter stated;

 

NOW, THEREFORE, itis hereby agreed:

 

**1.  Grant of Option.**  Pursuant to said action of the Administrator,the Bancorp hereby grants to Optionee the option to purchase, upon and subjectto the terms and conditions of the Plan which is incorporated in full herein bythis reference, all or any part of                             (             )shares of the Bancorp’s common stock (hereinafter called “stock”) at the priceof                Dollars and                   Cents ($     .   ) per share, whichprice is not less than one hundred percent (100%) of the fair market value ofthe stock as of the date of action of the Administrator granting this option.

** **

**2.  Exercisability.**  This option shall be exercisable as to:

 
| **Number of Shares** | ** ** | **Vesting Date** | ** ** |
|----------------------|------------|------------------|------------|
|                 |       |             |       |
|                 |       |             |       |
|                 |       |             |       |

 

This option shall remain exercisable as to all vested shares until                            ,           (but not later than ten (10) years from the date this option is granted) unlessthis option has expired or terminated earlier in accordance with the provisionshereof or in the Plan.  Subject toparagraphs 4 and 5, shares as to which this option becomes exercisable pursuantto the foregoing provision may be purchased at any time prior to expiration ofthis option.

** **

**3.  Exercise of Option.**  This option may be exercised by writtennotice (substantially in the form as that which is attached as Exhibit A)delivered to the Bancorp stating the number of shares with respect to whichthis option is being exercised, together with (a) cash in the amount of thepurchase price of such shares, or (b) subject to applicable law, with theBancorp’s stock previously acquired by Optionee and held by Optionee for aperiod of at least six months. Notwithstanding the foregoing, in the event Optionee does exercise theoption by utilizing (b) above, Optionee should obtain tax advice as to theconsequences of such action.  Not lessthan ten (10) shares may be purchased at any one time unless the numberpurchased is the total number which may be purchased under this option and inno event may the option be exercised with respect to fractional shares.  Upon exercise, Optionee shall makeappropriate arrangements and shall be responsible for the withholding of anyfederal and state taxes then due.

 

**4.  Cessation of Directorship or Employment.**  If Optionee shall cease to be a director oran employee of the Bancorp or a subsidiary corporation for any reason otherthan Optionee’s death or disability [as defined in Section 22(e)(3) of theInternal Revenue Code of 1986, as amended from time to time (the “Code”)], thisoption shall expire three (3) months thereafter, except (i) as provided inParagraphs 2 and 5 hereof in which case the option shall be exercisable asprovided in those respective sections and (ii) except when Optionee is both adirector and an employee in which case such Optionee’s nonqualified optionshall expire three (3) months after the later of the date of termination ofOptionee’s directorship or employment. During the three (3) month period this option shall be exercisable onlyas to those installments, if any, which had accrued as of the date whenOptionee ceased to be a director or an employee of the Bancorp or a subsidiarycorporation.

** **

**5.  Termination of Employment for Cause.**  If Optionee’s employment with the Bancorp ora subsidiary corporation is terminated for cause, this option shall expirethirty (30) days from the date of such termination.  Termination for cause shall include, but notbe limited to, termination for malfeasance or gross misfeasance in theperformance of duties or conviction of a crime involving moral turpitude, and,in any event, the determination of the Board of Directors with respect theretoshall be final and conclusive.

 

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**6.  Nontransferability; Death or Disability ofOptionee.**  Thisoption shall not be transferable except by will or by the laws of descent anddistribution and shall be exercisable during Optionee’s lifetime only byOptionee.  If Optionee dies while servingas a director or an employee of the Bancorp or a subsidiary corporation, orduring the three (3) month period referred to in Paragraph 4 hereof, this optionshall expire one (1) year after the date of Optionee’s death or on the dayspecified in Paragraph 2 hereof, whichever is earlier.  After Optionee’s death but before suchexpiration, the persons to whom Optionee’s rights under this option shall havepassed by will or by the laws of descent and distribution or the executor oradministrator of Optionee’s estate shall have the right to exercise this optionas to those shares for which installments had accrued under Paragraph 2 hereofas of the date on which Optionee ceased to be a director or an employee of theBancorp or a subsidiary corporation.

 

If Optioneeterminates his or her directorship or employment because of disability (asdefined in Section 22(e)(3) of the Code), Optionee may exercise this option tothe extent he or she is entitled to do so at the date of termination, at anytime within one (1) year of the date of termination, or before the expirationdate specified in Paragraph 2 hereof, whichever is earlier.

** **

**7.  Employment.**  This Agreement shall not obligate the Bancorpor a subsidiary corporation to employ Optionee for any period, nor shall itinterfere in any way with the right of the Bancorp or a subsidiary corporationto reduce Optionee’s compensation.

** **

**8.  Privileges of Stock Ownership.**  Optionee shall have no rights as ashareholder with respect to the Bancorp’s stock subject to this option untilthe date of issuance of stock certificates to Optionee.  Except as provided in the Plan, no adjustmentwill be made for dividends or other rights for which the record date is priorto the date such stock certificates are issued.

** **

**9.  Modification and Termination.**  The rights of Optionee are subject tomodification and termination upon the occurrence of certain events as providedin Sections 13 and 14 of the Plan.

** **

**10.  Notification of Sale.**  Optionee agrees that Optionee, or any personacquiring shares upon exercise of this option, will notify the Bancorp not morethan five (5) days after any sale or other disposition of such shares.

** **

**11.  Representations of Optionee.**  No shares issuable upon the exercise of thisoption shall be issued and delivered unless and until the Bancorp has compliedwith all applicable requirements of California and federal law and of theSecurities and Exchange Commission and the California Department ofCorporations, as applicable pertaining to the issuance and sale of such shares,and all applicable listing requirements of the securities exchanges, if any, onwhich shares of the Bancorp of the same class are then listed.  Optionee agrees to ascertain that suchrequirements shall have been complied with at the time of any exercise of thisoption.  In addition, if the Optionee isan “affiliate” for purposes of the Securities Act of 1933, there may beadditional restrictions on the resale of stock, and Optionee therefore agreesto ascertain what those restrictions are and to abide by the restrictions andother applicable federal and state securities laws.

 

Furthermore, theBancorp may, if it deems appropriate, issue stop transfer instructions againstany shares of stock purchased upon the exercise of this option and affix to anycertificate representing such shares the legends which the Bancorp deemsappropriate.

 

Optioneerepresents that the Bancorp, its directors, officers, employees and agents havenot and will not provide tax advice with respect to the option, and Optioneeagrees to consult with his or her own tax advisor as to the specific taxconsequences of the option, including the application and effect of federal,state, local and other tax laws.

** **

**12.  Notices.**  Any notice to the Bancorp provided for inthis Agreement shall be addressed to it in care of its President or ChiefFinancial Officer at its main office and any notice to Optionee shall beaddressed to Optionee’s address on file with the Bancorp or a subsidiarycorporation, or to such other address as either may designate to the other inwriting.  Any notice shall be deemed tobe duly given if and when enclosed in a properly sealed envelope and addressedas stated above and deposited, postage prepaid, with the United States PostalService.  In lieu of giving notice bymail as aforesaid, any written notice under this Agreement may be given toOptionee in person, and to the Bancorp by personal delivery to its President orChief Financial Officer.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement asof the day and year first above written.

 
| **OPTIONEE** |   |   | **WESTERN SIERRA BANCORP** |
|--------------|--------|--------|----------------------------|
|         |   |   |                       |
| By           |   |   | By                         |   |   |
|         |   |   |                       |
|         | By     |   |                       |
|              |        |        |                            |  |  |  |

 

2

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**EXHIBIT A**

 

**NOTICE OF STOCK OPTION EXERCISE**

 

 

Mr. Gary D. Gall

President

Western Sierra Bancorp

4080 Plaza Goldorado Circle

Cameron Park, California 95682

 

Dear Mr. Gall:

 

Pursuant to my nonqualified stock option agreement dated                               ,I am exercising my stock option to acquire                       shares of common stock of Western Sierra Bancorp.  I am also enclosing payment by means of (cashin the amount of $                ,or                 qualifying shares of Western Sierra Bancorp having a fair market value)equal to the sum of the option exercise price.

 

I further acknowledge that Western Sierra Bancorp makes norepresentations as to federal or state tax matters, and that I am to consultwith my own tax attorney or tax accountant for advice with respect to theexercise of my stock option and the effect of the sale of the optionshares.  [(For executive officers ofthe Bancorp or insiders of the Bancorp) I further acknowledge that I am anaffiliate or insider of Western Sierra Bancorp and that federal securities lawsare applicable to the exercise of the stock option and any subsequent sale ofthe option shares including the applicability of the Securities Act of 1933 andRule 144 (both dealing with the sale of shares by an affiliate).  I agree to comply with such securities lawsand rules.]

 
|   | Sincerely,       |
|--------|------------------|
|   |             |
|   |             |
|   | Name of Optionee |

 

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**NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT,NO SHARES OF WESTERN SIERRA BANCORP’S COMMON STOCK SHALL BE ISSUED PURSUANTHERETO UNLESS THE WESTERN SIERRA BANCORP 2004 STOCK OPTION PLAN SHALL HAVEFIRST BEEN APPROVED BY THE SHAREHOLDERS OF WESTERN SIERRA BANCORP.**

 

**WESTERN SIERRA BANCORP**

**INCENTIVE STOCK OPTION AGREEMENT**

 

This IncentiveStock Option Agreement (the “Agreement”) is made and entered into as of the          day of                 ,         , by and between WesternSierra Bancorp, a California corporation (the “Bancorp”), and                                  (“Optionee”);

 

WHEREAS, pursuantto the Western Sierra Bancorp 2004 Stock Option Plan (the “Plan”), a copy ofwhich is attached hereto, the Administrator of the Plan has authorized grantingto Optionee an incentive stock option to purchase all or any part of                               (        ) authorized but unissuedshares of the Bancorp’s common stock at the price of             Dollars and            Cents ($    .   ) per share, such option tobe for the term and upon the terms and conditions hereinafter stated;

 

NOW, THEREFORE, itis hereby agreed:

** **

**1.  Grant of Option.**  Pursuant to said action of the Administrator,the Bancorp hereby grants to Optionee the option to purchase, upon and subjectto the terms and conditions of the Plan which is incorporated in full herein bythis reference, all or any part of                                  (         ) shares of the Bancorp’scommon stock (hereinafter called “stock”) at the price of                    Dollars and                 Cents ($    .   ) per share, which price isnot less than one hundred percent (100%) of the fair market value of the stock(or not less than 110% of the fair market value of the stock forOptionee-shareholders who own securities possessing more than ten percent (10%)of the total combined voting power of all classes of securities of the Bancorp)as of the date of action of the Board of Directors granting this option.

** **

**2.  Exercisability.**  This option shall be exercisable as to:

 
| **Number of Shares** | ** ** | **Vesting Date** | ** ** |
|----------------------|------------|------------------|------------|
|                 |       |             |       |
|                 |       |             |       |
|                 |       |             |       |

 

This option shall remain exercisable as to all vested shares until                           ,         (butnot later than ten (10) years from the date this option is granted) unless thisoption has expired or terminated earlier in accordance with the provisionshereof or in the Plan.  Subject toparagraphs 4 and 5, shares as to which this option becomes exercisable pursuantto the foregoing provision may be purchased at any time prior to expiration ofthis option.

** **

**3.  Exercise of Option.**  This option may be exercised by writtennotice (substantially in the form as that which is attached as Exhibit A)delivered to the Bancorp stating the number of shares with respect to whichthis option is being exercised, together with (a) cash in the amount of thepurchase price of such shares, or (b) subject to applicable law, with theBancorp’s stock previously acquired by Optionee and held by Optionee for aperiod of at least six months. Notwithstanding the foregoing, in the event Optionee does exercise theoption by utilizing (b) above, Optionee should obtain tax advice as to theconsequences of such action.  Not lessthan ten (10) shares may be purchased at any one time unless the numberpurchased is the total number which may be purchased under this option and inno event may the option be exercised with respect to fractional shares.  Upon exercise, Optionee shall makeappropriate arrangements and shall be responsible for the withholding of anyfederal and state taxes then due.

** **

**4.  Cessation of Employment.**  If Optionee shall cease to be an employee ofthe Bancorp or a subsidiary corporation, this option shall expire three (3)months thereafter, except (i) as provided in Paragraphs 2, 5 and 6 hereof inwhich case the option shall expire as provided in those sections and (ii) whenthe Optionee is changing his or her status from employee or employee-directorto director, in which case such stock option shall be converted to anonqualified stock option three months and one day following such change instatus. During the aforementioned three (3) month period this optionshall be exercisable only as to those installments, if any, which had accruedas of the date when Optionee ceased to be an employee of the Bancorp or asubsidiary corporation.

** **

**5.  Termination of Employment for Cause.**  If Optionee’s employment with the Bancorp ora subsidiary corporation is terminated for cause, this option shall expirethirty (30) days from the date of such termination.  Termination for cause shall include, but notbe limited to, termination for malfeasance or gross misfeasance in theperformance of duties or conviction of a crime involving moral turpitude, and,in any event, the determination of the Board of Directors with respect theretoshall be final and conclusive.

** **

**6.  Nontransferability; Death or Disability ofOptionee.**  Thisoption shall not be transferable except by will or by the laws of descent anddistribution and shall be exercisable during Optionee’s lifetime only byOptionee.

 

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If Optionee dies whileserving as an employee of the Bancorp or a subsidiary corporation, or duringthe three (3) month period referred to in Paragraph 4 hereof, this option shallexpire one (1) year after the date of Optionee’s death or on the day specifiedin Paragraph 2 hereof, whichever is earlier. After Optionee’s death but before such expiration, the persons to whomOptionee’s rights under this option shall have passed by will or by the laws ofdescent and distribution or the executor or administrator of Optionee’s estateshall have the right to exercise this option as to those shares for whichinstallments had accrued under Paragraph 2 hereof as of the date on whichOptionee ceased to be an employee of the Bancorp or a subsidiary corporation.

 

If Optioneeterminates his or her employment because of disability (as defined in Section22(e)(3) of the Code), Optionee may exercise this option to the extent he orshe is entitled to do so at the date of termination, at any time within one (1)year of the date of termination, or before the expiration date specified inParagraph 2 hereof, whichever is earlier.

** **

**7.  Employment.**  This Agreement shall not obligate the Bancorpor a subsidiary corporation to employ Optionee for any period, nor shall itinterfere in any way with the right of the Bancorp or a subsidiary corporationto reduce Optionee’s compensation.

** **

**8.  Privileges of Stock Ownership.**  Optionee shall have no rights as ashareholder with respect to the Bancorp’s stock subject to this option untilthe date of issuance of stock certificates to Optionee.  Except as provided in the Plan, no adjustmentwill be made for dividends or other rights for which the record date is priorto the date such stock certificates are issued.

** **

**9.  Modification and Termination.**  The rights of Optionee are subject tomodification and termination upon the occurrence of certain events as providedin Sections 13 and 14 of the Plan.

** **

**10.  Notification of Sale.**  Optionee agrees that Optionee, or any personacquiring shares upon exercise of this option, will notify the Bancorp not morethan five (5) days after any sale or other disposition of such shares.

** **

**11.  Representations of Optionee.**  No shares issuable upon the exercise of thisoption shall be issued and delivered unless and until the Bancorp has compliedwith all applicable requirements of California and federal law and of theSecurities and Exchange Commission and the California Department ofCorporations, as necessary pertaining to the issuance and sale of such shares,and all applicable listing requirements of the securities exchanges, if any, onwhich shares of the Bancorp of the same class are then listed.  Optionee agrees to ascertain that suchrequirements shall have been complied with at the time of any exercise of thisoption.  In addition, if the Optionee isan “affiliate” for purposes of the Securities Act of 1933, there may beadditional restrictions on the resale of stock, and Optionee therefore agreesto ascertain what those restrictions are and to abide by the restrictions andother applicable federal and state securities laws.

 

Furthermore, theBancorp may, if it deems appropriate, issue stop transfer instructions againstany shares of stock purchased upon the exercise of this option and affix to anycertificate representing such shares the legends which the Bancorp deemsappropriate.

 

Optioneerepresents that the Bancorp, its directors, officers, employees and agents havenot and will not provide tax advice with respect to the option, and Optioneeagrees to consult with his or her own tax advisor as to the specific taxconsequences of the option, including the application and effect of federal,state, local and other tax laws.

** **

**12.  Notices.**  Any notice to the Bancorp provided for inthis Agreement shall be addressed to it in care of its President or ChiefFinancial Officer at its main office and any notice to Optionee shall beaddressed to Optionee’s address on file with the Bancorp or a subsidiarycorporation, or to such other address as either may designate to the other inwriting.  Any notice shall be deemed tobe duly given if and when enclosed in a properly sealed envelope and addressedas stated above and deposited, postage prepaid, with the United States PostalService.  In lieu of giving notice bymail as aforesaid, any written notice under this Agreement may be given toOptionee in person, and to the Bancorp by personal delivery to its President orChief Financial Officer.

** **

**13.  Incentive Stock Option.**  This Agreement is intended to be an incentivestock option agreement as defined in Section 422 of the Code; provided,however, that if the option shall fail to constitute an incentive stock optionfor any reason, the option shall thereafter be governed by the provisions ofthe Plan regarding nonqualified stock options.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement asof the day and year first above written.

 
| **OPTIONEE** | **WESTERN SIERRA BANCORP** |
|--------------|----------------------------|
|         |                       |   |   |
| By           |                       |   | By |   |   |
|         |                       |   |   |
|         | By                         |   |   |
|              |                            |  |  |  |  |

 

5

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**EXHIBITA**

 

**NOTICE OF STOCK OPTION EXERCISE**

 

 

Mr. Gary D. Gall

President

Western Sierra Bancorp

4080 Plaza Goldorado Circle

Cameron Park, California 95682

 

Dear Mr. Gall:

 

Pursuant to my incentive stock option agreement dated                           ,I am exercising my stock option to acquire                        shares of common stock of Western Sierra Bancorp.  I am also enclosing payment by means of (cashin the amount of $                ,or                  qualifying shares of Western Sierra Bancorp having a fair market value)equal to the sum of the option exercise price.

 

I further acknowledge that Western Sierra Bancorp makes norepresentations as to federal or state tax matters, and that I am to consultwith my own tax attorney or tax accountant for advice with respect to the exerciseof my stock option and the effect of the sale of the option shares.  [(For executive officers of the Bancorp orinsiders of the Bancorp) I further acknowledge that I am an affiliate orinsider of Western Sierra Bancorp and that federal securities laws areapplicable to the exercise of the stock option and any subsequent sale of theoption shares including the applicability of the Securities Act of 1933 andRule 144 (both dealing with the sale of shares by an affiliate).  I agree to comply with such securities lawsand rules.]

 
|   | Sincerely,       |
|--------|------------------|
|   |             |
|   |             |
|   | Name of Optionee |

 

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