EXHIBIT
10.81


 


NOTWITHSTANDING
ANY OTHER PROVISION OF THIS AGREEMENT, NO SHARES OF WESTERN SIERRA BANCORP’S
COMMON STOCK SHALL BE ISSUED PURSUANT HERETO UNLESS THE WESTERN SIERRA BANCORP
1999 STOCK OPTION PLAN SHALL HAVE FIRST BEEN APPROVED BY THE SHAREHOLDERS OF
WESTERN SIERRA BANCORP.


 


WESTERN SIERRA BANCORP


NONQUALIFIED
STOCK OPTION AGREEMENT


 


This
Nonqualified Stock Option Agreement (the “Agreement”) is made and entered into
as of the 1st day of January, 2004, by and between Western Sierra
Bancorp, a California corporation (the “Bancorp”), and Lary Davis
(“Optionee”);


 


WHEREAS,
pursuant to the Western Sierra Bancorp 1999 Stock Option Plan (the “Plan”), a
copy of which is attached hereto, the Board of Directors of the Bancorp has
authorized granting to Optionee a nonqualified stock option  to purchase all or any part of two-hundred
(200) authorized but unissued shares of the Bancorp’s common stock at
the price of fourty-seven Dollars and zero Cents ($47.00)
per share, such option to be for the term and upon the terms and conditions
hereinafter stated;


 


NOW,
THEREFORE, it is hereby agreed:


 


1.  Grant of Option.  Pursuant to said action of the Board of
Directors, the Bancorp hereby grants to Optionee the option to purchase, upon
and subject to the terms and conditions of the Plan which is incorporated in
full herein by this reference, all or any part of two-hundred (200)
shares of the Bancorp’s common stock (hereinafter called “stock”) at the price
of  fourty-seven  Dollars and zero Cents ($47.00)
per share, which price is not less than one hundred percent (100%) of the fair
market value of the stock 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

  	
   

  
	
  200

  	
   

  	
  immediate

  	
   

  



 


This option shall remain
exercisable as to all vested shares until January 1,2014 (but not later
than ten (10) years from the date this option is granted) unless this option
has expired or terminated earlier in accordance with the provisions hereof or
in the Plan.  Subject to paragraphs 4
and 5, shares as to which this option becomes exercisable pursuant to the
foregoing provision may be purchased at any time prior to expiration of this
option.


 


3.  Exercise of Option.  This option may be exercised by written
notice (substantially in the form as that which is attached as Exhibit A)
delivered to the Bancorp stating the number of shares with respect to which
this option is being exercised, together with (a) cash in the amount of the purchase
price of such shares, or (b) subject to applicable law, with the Bancorp’s
stock previously acquired by Optionee and held by Optionee for a period of at
least six months.  Notwithstanding the
foregoing, in the event Optionee does exercise the option by utilizing (b)
above, Optionee should obtain tax advice as to the consequences of such
action.  Not less than ten (10) shares
may be purchased at any one time unless the number purchased is the total
number which may be purchased under this option and in no event may the option
be exercised with respect to fractional shares.  Upon exercise, Optionee shall make appropriate arrangements and
shall be responsible for the withholding of any federal and state taxes then due.


 


4.  Cessation of Directorship or Employment.  Except as provided in Paragraphs 2 and 5
hereof, if Optionee shall cease to be a director or an employee of the Bancorp
or a subsidiary corporation for any reason other than Optionee’s death or
disability [as defined in Section 22(e)(3) of the Internal Revenue Code of
1986, as amended from time to time (the “Code”)], this option shall expire
three (3) months thereafter.  During the
three (3) month period this option shall be exercisable only as to those installments,
if any, which had accrued as of the date when Optionee ceased to be a director
or an employee of the Bancorp or a subsidiary corporation.  If Optionee is both a director and an
employee, then such option shall expire three (3) months after the latter of
the date of termination of Optionee’s directorship or employment.


 


5.  Termination of Employment for Cause.  If Optionee’s employment with the Bancorp or
a subsidiary corporation is terminated for cause, this option shall expire
thirty (30) days from the date of such termination.  Termination for cause shall include, but not be limited to,
termination for malfeasance or gross misfeasance in the performance of duties
or conviction of a crime involving moral turpitude, and, in any event, the
determination of the Board of Directors with respect thereto shall be final and
conclusive.


 


6.  Nontransferability; Death or Disability
of Optionee. 
This option shall not be transferable except by will or by the laws of
descent and distribution and shall be exercisable during Optionee’s lifetime
only by Optionee.  If Optionee dies
while serving as a director or an employee of the Bancorp or a subsidiary
corporation, or during the three


 


1

















 


(3) month period referred to in
Paragraph 4 hereof, this option shall expire one (1) year after the date of
Optionee’s death or on the day specified in Paragraph 2 hereof, whichever is
earlier.  After Optionee’s death but
before such expiration, the persons to whom Optionee’s rights under this option
shall have passed by will or by the laws of descent and distribution or the
executor or administrator of Optionee’s estate shall have the right to exercise
this option as to those shares for which installments had accrued under
Paragraph 2 hereof as of the date on which Optionee ceased to be a director or
an employee of the Bancorp or a subsidiary corporation.


 


If Optionee
terminates his or her directorship or employment because of disability (as
defined in Section 22(e)(3) of the Code), Optionee may exercise this option to
the extent he or she 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 in Paragraph 2 hereof, whichever is earlier.


 


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


 


8.  Privileges of Stock Ownership.  Optionee shall have no rights as a
shareholder with respect to the Bancorp’s stock subject to this option until
the date of issuance of stock certificates to Optionee.  Except as provided in the Plan, no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such stock certificates are issued.


 


9.  Modification and Termination.  The rights of Optionee are subject to
modification and termination upon the occurrence of certain events as provided
in Sections 13 and 14 of the Plan.


 


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


 


11.  Representations of Optionee.  No shares issuable upon the exercise of this
option shall be issued and delivered unless and until the Bancorp has complied
with all applicable requirements of California and federal law and of the
Securities and Exchange Commission and the California Department of
Corporations pertaining to the issuance and sale of such shares, and all
applicable listing requirements of the securities exchanges, if any, on which
shares of the Bancorp of the same class are then listed.  Optionee agrees to ascertain that such
requirements shall have been complied with at the time of any exercise of this
option.  In addition, if the Optionee is
an “affiliate” for purposes of the Securities Act of 1933, there may be additional
restrictions on the resale of stock, and Optionee therefore agrees to ascertain
what those restrictions are and to abide by the restrictions and other
applicable federal and state securities laws.


 


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


 


Optionee
represents that the Bancorp, its directors, officers, employees and agents have
not and will not provide tax advice with respect to the option, and Optionee
agrees to consult with his or her own tax advisor as to the specific tax
consequences 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 in
this Agreement shall be addressed to it in care of its President or Chief
Financial Officer at its main office and any notice to Optionee shall be
addressed to Optionee’s address on file with the Bancorp or a subsidiary
corporation, or to such other address as either may designate to the other in
writing.  Any notice shall be deemed to
be duly given if and when enclosed in a properly sealed envelope and addressed
as stated above and deposited, postage prepaid, with the United States Postal
Service.  In lieu of giving notice by
mail as aforesaid, any written notice under this Agreement may be given to
Optionee in person, and to the Bancorp by personal delivery to its President or
Chief Financial Officer.


 


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


 


	
  OPTIONEE

  	
  WESTERN SIERRA BANCORP

  
	
   

  	
   

  
	
  By

  	
  / s/ Lary Davis

  	
   

  	
  By

  	
  / s/ Chuck Bacchi

  	
   

  
	
  Lary Davis,
  Optionee

  	
   

  	
  Chuck Bacchi, Chairman

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  / s/ Gary Gall

  	
   

  
	
   

  	
   

  	
  Gary Gall, Pres/CEO

  	
   

  
						



 


2