**EXHIBIT 10.1**

#  

# **YEAR2000 UNIONBANCAL CORPORATION**MANAGEMENTSTOCK PLANNON-QUALIFIED STOCK OPTION AGREEMENT

 

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

 

WITNESSETH:

 

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

 

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

 

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

 

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

 

(b)           Option Price.  The purchase price of the Stock subject tothis 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 thePlan of such Stock as of the Grant Date. The term “Option Price” as used inthis 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 suchOption Period, the exercisability of the option shall be subject to thelimitations of paragraph 3 and the vesting provisions of paragraph 4. TheOption Period shall commence on the Grant Date and except as provided inparagraph 3, shall end on the Terminal Date which shall be seven years from theGrant Date.

 

----

 

3.             Limits on OptionPeriod.  The Option Period may endbefore the Terminal Date, as follows:

 

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

 

(b)           If Optionee’semployment terminates by reason of retirement, the Option Period shall endthree (3) years after such termination or on the Terminal Date, whichever shallfirst occur, and Optionee may exercise the entire unexercised portion of thisoption (or any lesser amount), provided, however, that this sentence shall notapply to the option if the Grant Date is less than six (6) months prior to thedate of termination of employment as a result of such retirement. For thispurpose, “retire” means termination of employment with the Company or itsSubsidiaries after attaining age sixty (60) with ten (10) years of service orage sixty-two (62) with five (5) years of service with the Company or any ofits Subsidiaries.

 

(c)           If Optionee’semployment terminates by reason of death, or Optionee becomes entitled tolong-term disability benefits under the Union Bank of California Long TermDisability Plan while in the employ of the Company or its Subsidiary, theOption 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 underthis option shall pass by will or the applicable laws of descent anddistribution) may exercise the entire unexercised portion of this option (orany lesser amount), provided, however, that this sentence shall not apply tothe option if the Grant Date is less than six (6) months prior to the date oftermination of employment as a result of death or the date Optionee becomesentitled to such long-term disability benefits.

 

2

----

 

(d)           If Optionee is on aleave of absence from the Company or a Subsidiary because of disability, or forthe purpose of serving the government of the country in which the principalplace of employment of Optionee is located, either in a military or civiliancapacity, 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 ofsuch absence alone, to have terminated employment with the Company or aSubsidiary except as the Committee may otherwise expressly provide.

 

(e)           If Optionee’semployment with the Company or a Subsidiary terminates for cause during theOption Period, the Option Period shall terminate on the date of suchtermination 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 embezzlementby Optionee from, or common law fraud committed by Optionee against, theCompany or its Subsidiaries;

 

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

 

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

 

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

 

4.             Vesting of Rightto Exercise Options.  The sharescovered 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 sharesshall be fully vested after three (3) years from the Grant Date. Any portion ofthe option that is not exercised shall accumulate and may be exercised at anytime during the Option Period prior to the Terminal Date. No partial exerciseof this option may be for less than 5 percent (5%) of the total number ofshares then available under this option. In no event shall the Company berequired to issue fractional shares.

 

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

 

(a)           By giving the Companyor its designated representative written notice of such exercise, specifyingthe number of such shares as to which this option is exercised. Such noticeshall be accompanied by an amount equal to the Option Price of such shares, inthe form of: (i) cash; a certified check, bank draft, postal or express moneyorder 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

 

3

----

 

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

 

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

 

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

 

As soon aspracticable after receipt of the notice required in paragraph 5(a) andsatisfaction of the conditions set forth in paragraphs 5(b) and 5(c), ifapplicable, the Company or its designated representative shall, withouttransfer or issue tax and without other incidental expense to Optionee, deliverto Optionee at the office of the Company, at 400 California Street, SanFrancisco, California, attention of the Secretary, or such other place as maybe mutually acceptable to the Company and Optionee, a certificate or certificatesof such shares of Stock; provided, however, that the time of such delivery maybe postponed by the Company for such period as may be required for it withreasonable diligence to comply with applicable registration requirements underthe Securities Act of 1933, as amended, the Securities Exchange Act of 1934, asamended, any applicable listing requirements of any national securitiesexchange, and requirements under any other law or regulation applicable to theissuance or transfer of such shares.

 

6.             Withholding ofTaxes.  Optionee agrees to makeappropriate arrangements with the Company (or Subsidiary that employs theOptionee) or its designated representative for satisfaction of any applicablefederal, state or local income and employment tax withholding requirements. Thismay include the withholding of shares of Stock from the exercise of the optionpursuant to such rules and procedures as the Committee may

 

4

----

 

establish. Anyshares withheld to satisfy such withholding requirements shall not be availablefor subsequent grants under the Plan.

 

7.             CorporateTransactions.  (a) If there should beany 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 corporatestructure of the Company, the Board and the Committee shall make appropriateadjustments in order to preserve, but not to increase, the benefit to Optionee,including adjustments in the number of shares of such Stock subject to thisoption and in the price per share. (b) Upon the consummation of a “Change ofControl” (as defined in this paragraph 7(b)), this option shall vest and/orbecome immediately exercisable, without regard to the vesting provisions ofparagraph 4. For the purposes of this paragraph 7(b), “Change of Control”means: consummation of a reorganization, merger or consolidation or sale orother disposition of the stock or all or substantially all of the assets of theCompany or the acquisition of the assets or stock of another entity (“BusinessCombination”); excluding, however, such a Business Combination pursuant towhich a Permitted Holder (as defined in this paragraph 7(b)) will beneficiallyown, directly or indirectly, 30% or more of, respectively, the outstandingshares of common stock, and the combined voting power of the then outstandingvoting securities entitled to vote generally in the election of directors(together, the “Company Stock”), as the case may be, of the corporationresulting from such Business Combination (including, without limitation, acorporation which as a result of such transaction owns the Company or all orsubstantially all of the Company’s assets either directly or through one ormore subsidiaries), and no individual, entity or group (within the meaning ofSection 13(d) (3) or 14(d)(2) of the Securities Exchange Act of 1934, asamended), has a greater beneficial interest, directly or indirectly, in theCompany Stock than a Permitted Holder. For purposes of this definition, “PermittedHolder” shall mean (i) The Bank of Tokyo-Mitsubishi UFJ, Ltd. or any successorthereto (“BTMU”), (ii) an employee benefit plan of BTMU or (iii) a corporationcontrolled by BTMU.

 

8.             Limitations onTransfer.  In general, this optionshall, during Optionee’s lifetime, be exercisable only by Optionee, and neitherthis option nor any right hereunder shall be transferable by Optionee except asprovided by law, or with the consent of the Company, or by will or the laws ofdescent and distribution; provided, however, that the option may be transferredto a trust established by the Optionee for the primary benefit of the Optioneeand Optionee’s spouse, if married, provided that the trust is revocable duringthe lifetime of the Optionee and that the trustee on behalf of the trust agreesin writing to be bound by the terms and conditions of this Agreement. In theevent of any attempt by Optionee or the Optionee’s transferee to gift,transfer, alienate, assign, pledge, hypothecate, or otherwise dispose of thisoption or of any right hereunder, except as provided for in this Agreement, orin the event of the levy of any attachment, execution, or similar process uponthe rights or interest hereby conferred, the Company at its election mayterminate this option by notice to Optionee and this option shall thereuponbecome null and void.

 

5

----

 

9.             No ShareholderRights.  Neither Optionee nor anyperson entitled to exercise Optionee’s rights in the event of his death shallhave any of the rights of a shareholder with respect to the shares of Stocksubject to this option except to the extent the certificates for such sharesshall have been issued upon the exercise of this option.

 

10.           No Effect on Termsof Employment.  Nothing in thisAgreement shall affect the right of the Company (or Subsidiary which employsOptionee) to terminate or change the terms of employment of Optionee at anytime and for any reason, with or without cause.

 

11.           No Effect on OtherPlans.  In the year in which Optioneeexercises an option or disposes of his or her interest in shares of Stockacquired under an option, benefits received under this Plan shall not affectparticipation in, or the computation of benefits under any other employeebenefit plan of the Company or its Subsidiaries. For purposes of any bonus orincentive program for which the Optionee is eligible and for purposes of anyemployee benefit plans, to the extent permitted by applicable laws and bypertinent provisions of such plans, the Company or its Subsidiaries shalldisregard any options, shares of Stock and any other benefits received byOptionee under this Plan.

 

12.           Notice. Anynotice or other paper required to be given or sent pursuant to the terms ofthis Agreement shall be sufficiently given or served hereunder to any partywhen transmitted by registered or certified mail, postage prepaid, addressed tothe 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 maydesignate another address for receipt of notices so long as notice is given inaccordance with this paragraph.

 

13.           Committee DecisionsConclusive. All decisions, determinations and interpretations of theCommittee upon any question arising under the Plan or under this Agreementshall be conclusive and binding on all parties.

 

6

----

 

14.           MandatoryArbitration.  Any dispute arising outof or relating to this Agreement or the Grant Notice, including its meaning orinterpretation, shall be resolved solely by arbitration before an arbitratorselected in accordance with the rules of the American Arbitration Association. Thelocation for the arbitration shall be in San Francisco, Los Angeles or SanDiego as selected by the Company in good faith. Judgment on the award renderedmay be entered in any court having jurisdiction. The party the arbitratordetermines is the prevailing party shall be entitled to have the other partypay the expenses of the prevailing party, and in this regard the arbitratorshall have the power to award recovery to such prevailing party of all costsand fees (including attorneys fees and a reasonable allocation for the costs ofthe Company’s in-house counsel), administrative fees, arbitrator’s fees andcourt costs, all as determined by the arbitrator. Absent such award of thearbitrator, each party shall pay an equal share of the arbitrator’s fees. Allstatutes of limitation which would otherwise be applicable shall apply to anyarbitration proceeding under this paragraph. The provisions of this paragraphare intended by Optionee and the Company to be exclusive for all purposes andapplicable to any and all disputes arising out of or relating to this Agreementand the Grant Notice. The arbitrator who hears and decides any dispute shallhave jurisdiction and authority only to award compensatory damages to makewhole a person or entity sustaining foreseeable economic damages, and shall nothave jurisdiction and authority to make any other award of any type, includingwithout limitation, punitive damages, unforeseeable economic damages, damagesfor 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 exclusiveremedy for any dispute which is subject to arbitration under this paragraph.

 

15.           Successors.  This Agreement shall be binding upon and shallinure 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 whomOptionee’s rights pass by will or the applicable laws of descent anddistribution. Nothing contained in the Plan or this Agreement shall beinterpreted as imposing any liability on the Company or the Committee in favorof any Optionee or transferee of options with respect to any loss, cost orexpense which such Optionee or transferee may incur in connection with, orarising out of any transaction involving any options granted hereunder.

 

16.           Integration.  The terms of the Plan, this Agreement and theGrant Notice are intended by the Company and Optionee to be the finalexpression of their contract with respect to the options and other amountsreceived hereunder and may not be contradicted by evidence of any prior orcontemporaneous agreement. The Company and Optionee further intend that thePlan, this Agreement and the Grant Notice shall constitute the complete andexclusive statement of their terms and that no extrinsic evidence whatsoevermay be introduced in any arbitration, judicial, administrative or other legalproceeding involving the Plan, this Agreement or the Grant Notice. Accordingly,the Plan, this Agreement and the Grant Notice contain the entire understandingbetween the parties and supersede all

 

7

----

 

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

 

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

 

18.           Severability ofProvisions.  If any provision of thePlan, this Agreement or the Grant Notice shall be held invalid orunenforceable, such invalidity or unenforceability shall not affect any otherprovision thereof; and the Plan, this Agreement and the Grant Notice shall beconstrued and enforced as if none of them included such provision.

 

19.           California Law.  The Plan, this Agreement and the Grant Noticeshall be construed and enforced according to the laws of the State ofCalifornia to the extent not preempted by the federal laws of the United Statesof America. In the event of any arbitration proceedings, actions at law orsuits 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 thelosing party its attorneys’ fees and all other costs and expenses of suchproceeding, 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 thisNon-Qualified Stock Option Agreement. The Optionee also hereby acknowledgesreceipt of a copy of the Prospectus, the Management Stock Plan Stock OptionHighlights 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 |
|        |                         |  |  |  |  |

 

8

----