Document:

Employment Offer Letter Between Pacific Capital Bancorp and Joyce Clinton

 Exhibit 10.1.18 
  
 February 21, 2006 
  
 Joyce Clinton 
  
 Dear Joyce, 
  
 I am pleased to confirm our offer and your acceptance to commence employment on March 16, 2006. You will be employed as the Executive Vice President-Chief Financial
Officer of both Pacific Capital Bancorp (the “Company”) and its subsidiary Pacific Capital Bank, N.A. (the “Bank”). You will be reporting to William S. Thomas, Jr., CEO and President. You will be compensated at a bi-weekly rate
of $9,230.77. Additionally, you will receive a $50,000.00 sign-on bonus subject to the normal payroll deductions in four installments. The first $20,000.00 will be paid to you upon hire (on the first payroll following your start date), or you may
elect to take this portion of your bonus after 90 days of employment, to take advantage of participation in the Bank’s 401(k) plan; $10,000.00 will be paid upon completion of 6 months of employment, $10,000.00 will be paid upon completion of 12
months of employment, and $10,000.00 will be paid upon 18 months of employment. This bonus will be paid only if you are still employed on these dates. You may also elect to have these amounts contributed to your Deferred Compensation Plan if you are
a participant. 
  
 To support your interim relocation, you will be reimbursed for
travel expenses up to $10,000.00. Additionally, we will work with you regarding your interim housing needs (Bank’s corporate apartment/other lodging). To support your relocation to the Santa Barbara area, the Bank will provide you with a
non-preferential loan of $100,000.00, secured by your new residence, on terms that comply with Federal Reserve Regulation O. At the time of your permanent relocation, the Bank will provide reasonable relocation with a reputable moving company.

  
 For each year you remain with the Bank, up to ten years, you will receive a
retention bonus of $10,000.00, subject to normal payroll deductions, on the anniversary date of your employment. 
  
 At the next meeting of the Compensation Committee of the Board of Directors after you have commenced employment, you will be granted a Non-Qualified Stock Option for
10,000 shares of the Company’s stock, which is exercisable over the next ten years, per the terms and conditions of the Stock Option Grant. These options will be at the current market price on the date of the Grant. You will also be granted a
Restricted Stock grant of 5,000 shares of the Company’s stock, which has a staggered vesting period, per the terms and conditions of the Restricted Stock Agreement. These options will be at the current market price on the date of the Grant. You
will also be eligible to participate in the Management Retention Plan (Change in Control) at 200%, and our Deferred Compensation program. You will receive separate documents related to these plans. As a member of the Senior Leadership Council, you
will also be eligible to participate in our Retiree Health Program. 
  
 You will
be eligible to participate in the Bank’s 2006 High Performance Incentive Program (HPIP) prorated to your date of employment. The HPIP will likely be paid in late February, 2007, based upon 2006 performance. Mr. Thomas will discuss with you
the Incentive Award Guidelines and help you to establish your individual goals. 
  
 You will be eligible for four weeks of vacation per year, prorated according to your date of hire. Your eligibility for other benefit programs, such as our flexible Benefits Plan and 401(k) Salary Savings Plan will commence on the first of
the month following completion of 90 days of employment. 
  
 Employment at Pacific
Capital Bancorp and Pacific Capital Bank, N. A. is at will. Employees are not hired for any specified term. The Company and Bank hope that the working relationship will be mutually satisfactory and challenging. However we recognize that this is not
always the case, and as such you may wish to resign your position with or without cause upon oral or written notice. Similarly, the Company or Bank may end or change the employment relationship or status at any time with or without cause, upon oral
or written notice. All of the terms and conditions of the employment offer from the Company and the Bank are fully and completely set forth in this letter. Unless specifically set forth herein, no other term or condition of employment shall be
included in this offer of employment. 
  
 Joyce, we are so pleased that you are
joining us and feel you will make an important contribution to the growth of the Company. To confirm your acceptance of this offer, please sign and return this copy to me. 
  
 Sincerely, 
  
 Sherrell E. Reefer 
 Senior Vice President 
 Director of Human Resources 
  
 I hereby accept the offer of employment as outlined above: 
  

					
			
	  	 	 	 	  
	Joyce Clinton	 	 	 	 (Date)Employment Offer Letter Between Pacific Capital Bancorp and George Leis

 Exhibit 10.1.19 
  
 March 3, 2006 
  
 George Leis 
  
 Dear George, 
  
 I am pleased to confirm our offer and your acceptance to commence employment March 13, 2006.
You will be employed as the Executive Vice President-Wealth Management/Enterprise Sales at both Pacific Capital Bancorp (the Company) and its subsidiary Pacific Capital Bank, N.A. You will be reporting to Tom Thomas, CEO and President. You will be
compensated at a bi-weekly rate of $7692.31. Additionally, you will receive a $100,000.00 sign on bonus subject to the normal payroll deductions to be paid upon hire or you may elect to take this portion of your bonus after 90 days of employment, to
take advantage of participation in the Bank’s 401(k) plan. You may also elect to have these amounts contributed to your Deferred Compensation Plan if you are a participant. 
  
 To support your relocation to the Santa Barbara area, the Bank will provide you with a non-preferential loan of $100,000.00, to be secured
by your new residence on terms that comply with Federal Reserve Regulation O. Upon your relocation, you will also receive a relocation allowance (moving costs, meals, gas, motel, etc.) of up to $10,000.00. You will be reimbursed after you provide
appropriate receipts. If your employment is terminated within the first year after relocation, a prorated amount of the relocation bonus will be due to Pacific Capital Bank, N.A. You will also have the opportunity to utilize the company apartment
for one month to assist with your transition. 
  
 For each year you remain with
the Bank, up to 10 years, you will receive a retention bonus of $10,000.00, subject to normal payroll deductions, on the anniversary date of your employment. 
  
 At the next meeting of the Compensation Committee of the Board of Directors after you have commenced employment, you will be granted a Non-Qualified Stock Option for
10,000 shares of the Company’s stock, which is exercisable over the next ten years, per the terms and conditions of the Stock Option Grant. These options will be at the current market price on the date of the Grant. You will also be granted a
Restricted Stock grant of 5,000 shares of the Company’s stock, which has a staggered vesting period, per the terms and conditions of the Restricted Stock Agreement. These shares will be current market price on the date of the Grant. You will
also be eligible to participate in the Management Retention Plan (Change in Control) at 200%, and our Deferred Compensation program. You will receive separate documents related to these plans. As a member of the Senior Leadership Council, you will
also be eligible to participate in our Retiree Health Program. 
  
 You will be
eligible to participate in the Bank’s 2006 High Performance Incentive Program (HPIP) prorated to your date of employment. The HPIP is normally paid in late February, 2007, based upon 2006 performance. Mr. Thomas will discuss with you the
Incentive Award Guidelines and help you to establish your individual goals. 
  
 You will be eligible for four weeks of vacation per year, prorated according to your date of hire. Your eligibility for other benefit programs, such as our flexible Benefits Plan and 401(k) Salary Savings Plan will commence on the
first of the month following completion of 90 days of employment. 
  
 Employment at Pacific Capital Bancorp and Pacific Capital Bank, N. A. is at will. Employees are not hired for any specified term. The Company and Bank hope that the working relationship will be mutually satisfactory and challenging.
However we recognize that this is not always the case, and as such you may wish to resign your position with or without cause upon oral or written notice. Similarly, the Company or Bank may end or change the employment relationship or status at any
time with or without cause, upon oral or written notice. All of the terms and conditions of the employment offer from the Company and Pacific Capital Bank, N. A. are fully and completely set forth in this letter. Unless specifically set forth
herein, no other term or condition of employment shall be included in this offer of employment. 
  
 George, we are so pleased that you are joining us and feel you will make an important contribution to the growth of the Company. To confirm your acceptance of this offer, please sign and return this copy to me.

  
 Sincerely, 
  
 Sherrell E. Reefer 
 Senior Vice President

 Director of Human Resources 
  
 I hereby accept the offer of employment as outlined above: 
  

					
			
	  	 	 	 	  
	George Leis	 	 	 	 (Date)FIRST AMENDMENT AND RESTATEMENT OF THE
                       FIRST NIAGARA FINANCIAL GROUP, INC.
                                STOCK OPTION PLAN

1.    Purpose

      The purpose of the First Niagara Financial Group, Inc. ("Company") Stock
Option Plan (the "Plan") is to advance the interests of the Company and its
stockholders by providing Key Employees and Outside Directors of the Company and
its Affiliates, including First Niagara Bank ("Bank") and First Niagara
Financial Group MHC, the mutual holding company of the Bank, upon whose
judgment, initiative and efforts the successful conduct of the business of the
Company and its Affiliates largely depends, with an additional incentive to
perform in a superior manner as well as to attract people of experience and
ability.

2.    Definitions

      "Affiliate" means any "parent corporation" or "subsidiary corporation" of
the Bank or the Company, as such terms are defined in Section 424(e) or 424(f),
respectively, of the Code, or a successor to a parent corporation or subsidiary
corporation.

      "Award" means an Award of Non-Statutory Stock Options, Incentive Stock
Options, Reload Options, Limited Rights, and/or Dividend Equivalent Rights
granted under the provisions of the Plan.

      "Beneficiary" means the person or persons designated by a Participant to
receive any benefits payable under the Plan in the event of such Participant's
death. Such person or persons shall be designated in writing on forms provided
for this purpose by the Committee and may be changed from time to time by
similar written notice to the Committee. In the absence of a written
designation, the Beneficiary shall be the Participant's surviving spouse, if
any, or if none, his estate.

      "Board" or "Board of Directors" means the board of directors of the
Company or its Affiliate, as applicable.

      "Cause" means personal dishonesty, willful misconduct, any breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, or the willful violation of any law, rule or regulation (other than
traffic violations or similar offenses) or a final cease-and-desist order, any
of which results in a material loss to the Company or an Affiliate.

      "Change in Control" of the Bank or the Company shall mean:

      (1) a reorganization, merger, merger conversion, consolidation or sale of
all or substantially all of the assets of the Bank or the Company, or a similar
transaction in which the Bank or the Company is not the resulting entity and
that is not approved by a majority of the Board of Directors of the Bank or the
Company;

      (2) individuals who constitute the Incumbent Board cease for any reason to
constitute a majority thereof; provided that any person becoming a director
subsequent to the date hereof whose election was approved by a vote of at least
three-fourths of the directors composing the Incumbent Board or whose nomination
for election by the Company's stockholders or members was approved by the same
nominating committee serving under the Incumbent Board shall be, for purposes of
this Section, considered as though he were a member of the Incumbent Board; or

      (3) an acquisition of "control" of the Bank or the Company as defined in
the Bank Holding Company Act of 1956, as amended and applicable rules and
regulations promulgated thereunder as in effect at the time of the Change in
Control (collectively, the "BHCA"), as determined by the Board of Directors of
the Bank or the Company; or

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      (4) an acquisition of the Company's stock requiring submission of notice
under the change in Bank Control Act; provided, however, that a Change in
Control shall not be deemed to have occurred under (1), (3) or (4) of this
section if the transaction(s) constituting a Change in Control is approved by a
majority of the Board of Directors of the Bank or the Company, as the case may
be.

      (5) an event of a nature that would be required to be reported in response
to Item 1(a) of the current report on Form 8-K, as in effect on the date hereof,
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), or results in a Change in Control of the Bank or the Company
within the meaning of the BHCA; or (b) without limitation shall be deemed to
have occurred at such time as (i) any "person" (as the term is used in Section
13(d) and 14(d) of the Exchange Act) is or becomes a "beneficial owner" (as
defined in Rule 13-d under the Exchange Act) directly or indirectly, of
securities of the Company representing 25% or more of the Company's outstanding
securities ordinarily having the right to vote at the election of directors
except for any securities purchased by the Bank's employee stock ownership plan
and trust, (ii) a proxy statement soliciting proxies from stockholders of the
Company, by someone other than the current management of the Company, seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Company or similar transaction with one or more corporations as a result of
which the outstanding shares of the class of securities then subject to the plan
or transaction are exchanged or converted into cash or property or securities
not issued by the Company, or (iii) a tender offer is made for 25% or more of
the voting securities of the Company and the shareholders owning beneficially or
of record 25% or more of the outstanding securities of the Company have tendered
or offered to sell their shares pursuant to such tender offer and such tendered
shares have been accepted by the tender offeror.

      "Code" means the Internal Revenue Code of 1986, as amended.

      "Committee" means a Committee elected by the Board consisting of either
(i) at least two Non-Employee Directors, or (ii) the entire Board of the
Company.

      "Common Stock" means shares of the common stock of the Company, par value
$.01 per share.

      "Continuous Service" means employment as a Key Employee and/or service as
an Outside Director without any interruption or termination of such employment
and/or service with the Company, the Bank or an Affiliate and shall include
employment or service with the Bank in mutual form. Continuous Service shall
also mean a continuation as a member of the Board of Directors following a
cessation of employment as a Key Employee. In the case of a Key Employee,
employment shall not be considered interrupted in the case of sick leave,
military leave or any other leave of absence approved by the Bank or in the case
of transfers between payroll locations of the Bank or between the Bank, its
parent, its subsidiaries or its successor.

      "Date of Grant" means the actual date on which an Award is granted by the
Committee.

      "Director" means a member of the Board.

      "Disability" means the permanent and total inability by reason of mental
or physical infirmity, or both, of an employee to perform the work customarily
assigned to him, or of a Director to serve as such. Additionally, in the case of
an employee, a medical doctor selected or approved by the Board must advise the
Committee that it is either not possible to determine when such Disability will
terminate or that it appears probable that such Disability will be permanent
during the remainder of said employee's lifetime.

      "Dividend Equivalent Rights" means the right to receive an amount of cash
based upon the terms set forth in Section 10 hereof.

      "Effective Date" means the date of, or a date determined by the Board
following, approval of the Plan by the Company's stockholders.

                                       2
<PAGE>

      "Fair Market Value" means, when used in connection with the Common Stock
on a certain date, the reported closing price of the Common Stock as reported by
the Nasdaq stock market (as published by The Wall Street Journal, if published)
on such date, or if the Common Stock was not traded on the day prior to such
date, on the next preceding day on which the Common Stock was traded; provided,
however, that if the Common Stock is not reported on the Nasdaq stock market,
Fair Market Value shall mean the average sale price of all shares of Common
Stock sold during the 30-day period immediately preceding the date on which such
stock option was granted, and if no shares of stock have been sold within such
30-day period, the average sale price of the last three sales of Common Stock
sold during the 90-day period immediately preceding the date on which such stock
option was granted. In the event Fair Market Value cannot be determined in the
manner described above, then Fair Market Value shall be determined by the
Committee. The Committee is authorized, but is not required, to obtain an
independent appraisal to determine the Fair Market Value of the Common Stock.

      "Incentive Stock Option" means an Option granted by the Committee to a
Participant, which Option is designated as an Incentive Stock Option pursuant to
Section 8.

      "Key Employee" means any person who is currently employed by the Company
or an Affiliate who is chosen by the Committee to participate in the Plan.

      "Limited Right" means the right to receive an amount of cash based upon
the terms set forth in Section 9.

      "Non-Statutory Stock Option" means an Option granted by the Committee to
(i) an Outside Director or (ii) to any other Participant and such Option is
either (A) not designated by the Committee as an Incentive Stock Option, or (B)
fails to satisfy the requirements of an Incentive Stock Option as set forth in
Section 422 of the Code and the regulations thereunder.

      "Non-Employee Director" means, for purposes of the Plan, a Director who
(a) is not employed by the Company or an Affiliate; (b) does not receive
compensation directly or indirectly as a consultant (or in any other capacity
than as a Director) greater than $60,000; (c) does not have an interest in a
transaction requiring disclosure under Item 404(a) of Regulation S-K; or (d) is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K.

      "Normal Retirement" means for a Key Employee, retirement at the normal or
early retirement date set forth in the Bank's Employee Stock Ownership Plan, or
any successor plan. Normal Retirement for an Outside Director means a cessation
of service on the Board of Directors for any reason other than removal for
Cause, after reaching 60 years of age and maintaining at least 10 years of
Continuous Service or after attaining age 70.

      "Outside Director" means a Director of the Company or an Affiliate who is
not an employee of the Company or an Affiliate.

      "Option" means an Award granted under Section 7 or Section 8.

      "Participant" means a Key Employee or Outside Director of the Company or
its Affiliates who receives or has received an award under the Plan.

      "Reload Option" means an option to acquire shares of Common Stock
equivalent to the shares (i) used by a Participant to pay for an Option, or (ii)
deducted from any distribution in order to satisfy income tax required to be
withheld, based upon the terms set forth in Section 19.

                                       3
<PAGE>

      "Termination for Cause" means the termination of employment or termination
of service on the Board caused by the individual's personal dishonesty, willful
misconduct, any breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, or the willful violation of any law, rule or
regulation (other than traffic violations or similar offenses), or a final
cease-and-desist order, any of which results in material loss to the Company or
one of its Affiliates.

3.    Plan Administration Restrictions

      The Plan shall be administered by the Committee. The Committee is
authorized, subject to the provisions of the Plan, to establish such rules and
regulations as it deems necessary for the proper administration of the Plan and
to make whatever determinations and interpretations in connection with the Plan
it deems necessary or advisable. All determinations and interpretations made by
the Committee shall be binding and conclusive on all Participants in the Plan
and on their legal representatives and beneficiaries.

      All transactions involving a grant, award or other acquisition from the
Company shall:

      (a) be approved by the Company's full Board or by the Committee; or

      (b) be approved, or ratified, in compliance with Section 14 of the
Exchange Act, by either: the affirmative vote of the holders of a majority of
the securities present, or represented and entitled to vote at a meeting duly
held in accordance with the laws of the state in which the Company is
incorporated; or the written consent of the holders of a majority of the
securities of the issuer entitled to vote provided that such ratification occurs
no later than the date of the next annual meeting of shareholders; or

      (c) result in the acquisition of an Option or Limited Right that is held
by the Participant for a period of six months following the date of such
acquisition.

4.    Types of Awards

      Awards under the Plan may be granted in any one or a combination of:

      (a) Incentive Stock Options;
      (b) Non-Statutory Stock Options;
      (c) Limited Rights;
      (d) Dividend Equivalent Rights and
      (e) Reload Options.

5.    Stock Subject to the Plan

      Subject to adjustment as provided in Section 17, the maximum number of
shares reserved for issuance under the Plan is 3,597,373 shares (adjusted in
accordance with the exchange ratio in the Company's second-step conversion). To
the extent that Options or rights granted under the Plan are exercised, the
shares covered will be unavailable for future grants under the Plan; to the
extent that Options together with any related rights granted under the Plan
terminate, expire or are canceled without having been exercised or, in the case
of Limited Rights exercised for cash, new Awards may be made with respect to
these shares.

6.    Eligibility

      Key Employees of the Company and its Affiliates shall be eligible to
receive Incentive Stock Options, Non-Statutory Stock Options, Limited Rights,
Dividend Equivalent Rights and/or Reload Options under the Plan. Outside
Directors shall be eligible to receive Non-Statutory Stock Options, Dividend
Equivalent Rights and Reload Options under the Plan.

                                       4
<PAGE>

7.    Non-Statutory Stock Options

      (a) Grants to Outside Directors and Key Employees. The Committee may, from
time to time, grant Non-Statutory Stock Options to eligible Key Employees and
Outside Directors, and, upon such terms and conditions as the Committee may
determine, grant Non-Statutory Stock Options in exchange for and upon surrender
of previously granted Awards under the Plan. Non-Statutory Stock Options granted
under the Plan, including Non-Statutory Stock Options granted in exchange for
and upon surrender of previously granted Awards, are subject to the terms and
conditions set forth in this Section 7.

      (b) Option Agreement. Each Option shall be evidenced by a written option
agreement between the Company and the Participant specifying the number of
shares of Common Stock that may be acquired through its exercise and containing
the terms and conditions of the option which shall not be inconsistent with the
terms of the Plan.

      (c) Price. The purchase price per share of Common Stock deliverable upon
the exercise of each Non-Statutory Stock Option shall be the Fair Market Value
of the Common Stock of the Company on the date the Option is granted. Shares may
be purchased only upon full payment of the purchase price in one or more of the
manners set forth in Section 13 hereof, as determined by the Committee.

      (d) Manner of Exercise and Vesting. A Non-Statutory Stock Option granted
under the Plan shall vest in a Participant at the rate or rates determined by
the Committee. A vested Option may be exercised from time to time, in whole or
in part, by delivering a written notice of exercise to the President or Chief
Executive Officer of the Company, or his designee. Such notice shall be
irrevocable and must be accompanied by full payment of the purchase price in
cash or shares of Common Stock at the Fair Market Value of such shares,
determined on the exercise date in the manner described in Section 2 hereof. If
previously acquired shares of Common Stock are tendered in payment of all or
part of the exercise price, the value of such shares shall be determined as of
the date of such exercise.

      (e) Terms of Options. The term during which each Non-Statutory Stock
Option may be exercised shall be determined by the Committee, but in no event
shall a Non-Statutory Stock Option be exercisable in whole or in part more than
10 years from the Date of Grant. No Options shall be earned by a Participant
unless the Participant maintains Continuous Service until the vesting date of
such Option, except as set forth herein. The shares comprising each installment
may be purchased in whole or in part at any time after such installment becomes
purchasable. The Committee may, in its sole discretion, accelerate or extend the
time at which any Non-Statutory Stock Option may be exercised in whole or in
part by Key Employees and/or Outside Directors. Notwithstanding any other
provision of this Plan, in the event of a Change in Control of the Company or
the Bank, all Non-Statutory Stock Options that have been awarded shall become
immediately exercisable for three years following such Change in Control.

      (f) Termination of Employment or Service. Upon the termination of a Key
Employee's employment or upon termination of an Outside Director's service for
any reason other than Normal Retirement, death, Disability, Change in Control or
Termination for Cause, the Participant's Non-Statutory Stock Options shall be
exercisable only as to those shares that were immediately purchasable on the
date of termination and only for three months following termination. In the
event of Termination for Cause, all rights under a Participant's Non-Statutory
Stock Options shall expire upon termination. In the event of termination of
service or employment due to the Normal Retirement, death or Disability of any
Participant, all Non-Statutory Stock Options held by the Participant, whether or
not exercisable at such time, shall be exercisable by the Participant or his
legal representative or beneficiaries for one year following the date of his
termination due to Normal Retirement, death or Disability, provided that in no
event shall the period extend beyond the expiration of the Non-Statutory Stock
Option term.

      (g) Transferability. In the discretion of the Board, all or any
Non-Statutory Stock Option granted hereunder may be transferable by the
Participant once the Option has vested in the Participant, provided, however,
that the Board may limit the transferability of such Option or Options to a
designated class or classes of persons.

                                       5
<PAGE>

8.    Incentive Stock Options

      The Committee may, from time to time, grant Incentive Stock Options to Key
Employees. Incentive Stock Options granted pursuant to the Plan shall be subject
to the following terms and conditions:

      (a) Option Agreement. Each Option shall be evidenced by a written option
agreement between the Company and the Key Employee specifying the number of
shares of Common Stock that may be acquired through its exercise and containing
such other terms and conditions that are not inconsistent with the terms of the
Plan.

      (b) Price. Subject to Section 17 of the Plan and Section 422 of the Code,
the purchase price per share of Common Stock deliverable upon the exercise of
each Incentive Stock Option shall be not less than 100% of the Fair Market Value
of the Common Stock on the date the Incentive Stock Option is granted. However,
if a Key Employee owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or its Affiliates (or under
Section 424(d) of the Code is deemed to own stock representing more than 10% of
the total combined voting power of all classes of stock of the Company or its
Affiliates by reason of the ownership of such classes of stock, directly or
indirectly, by or for any brother, sister, spouse, ancestor or lineal descendent
of such Key Employee, or by or for any corporation, partnership, estate or trust
of which such Key Employee is a shareholder, partner or Beneficiary), the
purchase price per share of Common Stock deliverable upon the exercise of each
Incentive Stock Option shall not be less than 110% of the Fair Market Value of
the Common Stock on the date the Incentive Stock Option is granted. Shares may
be purchased only upon payment of the full purchase price in one or more of the
manners set forth in Section 13 hereof, as determined by the Committee.

      (c) Manner of Exercise. Incentive Stock Options granted under the Plan
shall vest in a Participant at the rate or rates determined by the Committee.
The vested Options may be exercised from time to time, in whole or in part, by
delivering a written notice of exercise to the President or Chief Executive
Officer of the Company or his designee. Such notice is irrevocable and must be
accompanied by full payment of the purchase price in cash or shares of Common
Stock at the Fair Market Value of such shares determined on the exercise date by
the manner described in Section 2.

      The Committee may, in its sole discretion, accelerate the time at which
any Incentive Stock Option may be exercised in whole or in part, provided that
it is consistent with the terms of Section 422 of the Code. Notwithstanding the
above, in the event of a Change in Control, all Incentive Stock Options that
have been awarded shall become immediately exercisable, unless the aggregate
exercise price of the amount exercisable as a result of a Change in Control,
together with the aggregate exercise price of all other Incentive Stock Options
first exerciseable in the year in which the Change in Control occurs, shall
exceed $100,000 (determined as of the Date of Grant). In such event, the first
$100,000 of Incentive Stock Options (determined as of the Date of Grant) shall
be exercisable as Incentive Stock Options and any excess shall be exercisable as
Non-Statutory Stock Options but shall remain subject to the provisions of this
Section 8 to the extent permitted.

      (d) Amounts of Options. Incentive Stock Options may be granted to any
eligible Key Employee in such amounts as determined by the Committee; provided
that the amount granted is consistent with the terms of Section 422 of the Code.
Notwithstanding the above, the maximum number of shares that may be subject to
an Incentive Stock Option awarded under the Plan to any Key Employee shall be
700,000. In granting Incentive Stock Options, the Committee shall consider such
factors as it deems relevant, which factors may include, among others, the
position and responsibilities of the Key Employee, the length and value of his
or her service to the Bank, the Company, or the Affiliate, the compensation paid
to the Key Employee and the Committee's evaluation of the performance of the
Bank, the Company, or the Affiliate, according to measurements that may include,
among others, key financial ratios, levels of classified assets, and independent
audit findings. In the case of an Option intended to qualify as an Incentive
Stock Option, the aggregate Fair Market Value (determined as of the time the
Option is granted) of the Common Stock with respect to which Incentive Stock
Options granted are exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and its Affiliates) shall not
exceed $100,000. The provisions of this Section 8(d) shall be construed and
applied in accordance with Section 422(d) of the Code and the regulations, if
any, promulgated thereunder.

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      (e) Terms of Options. The term during which each Incentive Stock Option
may be exercised shall be determined by the Committee, but in no event shall an
Incentive Stock Option be exercisable in whole or in part more than 10 years
from the Date of Grant. If any Key Employee, at the time an Incentive Stock
Option is granted to him, owns stock representing more than 10% of the total
combined voting power of all classes of stock of the Company or its Affiliate
(or, under Section 424(d) of the Code, is deemed to own stock representing more
than 10% of the total combined voting power of all classes of stock, by reason
of the ownership of such classes of stock, directly or indirectly, by or for any
brother, sister, spouse, ancestor or lineal descendent of such Key Employee, or
by or for any corporation, partnership, estate or trust of which such Key
Employee is a shareholder, partner or Beneficiary), the Incentive Stock Option
granted to him shall not be exercisable after the expiration of five years from
the Date of Grant. Notwithstanding any other provision of this Plan, in the
event of a Change in Control of the Company or the Bank, all Incentive Stock
Options that have been awarded shall become immediately exercisable for three
years following such Change in Control.

      (f) Termination of Employment. Upon the termination of a Key Employee's
service for any reason other than Disability, Normal Retirement, Change in
Control, death or Termination for Cause, the Key Employee's Incentive Stock
Options shall be exercisable only as to those shares that were immediately
purchasable by such Key Employee at the date of termination and only for a
period of three months following termination. In the event of Termination for
Cause all rights under the Incentive Stock Options shall expire upon
termination.

      Upon termination of a Key Employee's employment due to Normal Retirement,
death or Disability, all Incentive Stock Options held by such Key Employee,
whether or not exercisable at such time, shall be exercisable for a period of
one year following the date of his cessation of employment, provided however,
that any such Option shall not be eligible for treatment as an Incentive Stock
Option in the event such Option is exercised more than three months following
the date of his Normal Retirement or termination of employment following a
Change in Control; and provided further, that no Option shall be eligible for
treatment as an Incentive Stock Option in the event such Option is exercised
more than one year following termination of employment due to Disability and
provided further, in order to obtain Incentive Stock Option treatment for
Options exercised by heirs or devisees of an Optionee, the Optionee's death must
have occurred while employed or within three (3) months of termination of
employment. In no event shall the exercise period extend beyond the expiration
of the Incentive Stock Option term.

      (g) Transferability. No Incentive Stock Option granted under the Plan is
transferable except by will or the laws of descent and distribution and is
exercisable during his lifetime only by the Key Employee to which it is granted.

      (h) Compliance with Code. The options granted under this Section 8 are
intended to qualify as Incentive Stock Options within the meaning of Section 422
of the Code, but the Company makes no warranty as to the qualification of any
Option as an Incentive Stock Option within the meaning of Section 422 of the
Code. If an Option granted hereunder fails for whatever reason to comply with
the provisions of Section 422 of the Code, and such failure is not or cannot be
cured, such Option shall be a Non-Statutory Stock Option.

9.    Limited Rights

      The Committee may grant a Limited Right simultaneously with the grant of
any Option to any Key Employee, with respect to all or some of the shares
covered by such Option. Limited Rights granted under the Plan are subject to the
following terms and conditions:

      (a) Terms of Rights. In no event shall a Limited Right be exercisable in
whole or in part before the expiration of six months from the date of grant of
the Limited Right. A Limited Right may be exercised only in the event of a
Change in Control.

                                       7
<PAGE>

      The Limited Right may be exercised only when the underlying Option is
eligible to be exercised, provided that the Fair Market Value of the underlying
shares on the day of exercise is greater than the exercise price of the related
Option.

      Upon exercise of a Limited Right, the related Option shall cease to be
exercisable. Upon exercise or termination of an Option, any related Limited
Rights shall terminate. The Limited Rights may be for no more than 100% of the
difference between the exercise price and the Fair Market Value of the Common
Stock subject to the underlying Option. The Limited Right is transferable only
when the underlying Option is transferable and under the same conditions.

      (b) Payment. Upon exercise of a Limited Right, the holder shall promptly
receive, in the discretion of the Company, either (i) an amount of cash equal to
the difference between the Fair Market Value on the Date of Grant of the related
Option and the Fair Market Value of the underlying shares on the date the
Limited Right is exercised, multiplied by the number of shares with respect to
which such Limited Right is being exercised, or (ii) shares of common stock of
the Company or the acquirer having a Fair Market Value equal to the difference
between the Fair Market Value on the Date of Grant of the related Option and the
Fair Market Value of the underlying shares on the date the Limited Right is
exercised, multiplied by the number of shares with respect to which such Limited
Right is being exercised.

10.   Dividend Equivalent Rights

      Simultaneously with the grant of any Option to a Participant, the
Committee may grant a Dividend Equivalent Right with respect to all or some of
the shares covered by such Option. Dividend Equivalent Rights granted under this
Plan are subject to the following terms and conditions:

      (a) Terms of Rights. The Dividend Equivalent Right provides the
Participant with a cash benefit per share for each share underlying the
unexercised portion of the related Option equal to the amount of any
extraordinary dividend (as defined in Section 10(c)) per share of Common Stock
declared by the Company. The terms and conditions of any Dividend Equivalent
Right shall be evidenced in the Option agreement entered into with the
Participant and shall be subject to the terms and conditions of the Plan. The
Dividend Equivalent Right is transferable only when the related Option is
transferable and under the same conditions.

      (b) Payment. Upon the payment of an extraordinary dividend, the
Participant holding a Dividend Equivalent Right with respect to Options or
portions thereof which have vested shall promptly receive from the Company the
amount of cash equal to the amount of the extraordinary dividend per share of
Common Stock, multiplied by the number of shares of Common Stock underlying the
unexercised portion of the related Option. With respect to options or portions
thereof which have not vested, the amount that would have been received pursuant
to the Dividend Equivalent Right with respect to the shares underlying such
unvested Option or portion thereof shall be paid to the Participant holding such
Dividend Equivalent Right together with earnings thereon, on such date as the
Option or portion thereof becomes vested. Payments shall be decreased by the
amount of any applicable tax withholding prior to distribution to the
Participant as set forth in Section 19.

      (c) Extraordinary Dividend. For purposes of this Section 10, an
extraordinary dividend is any dividend paid on shares of Common Stock where the
rate of the dividend exceeds the Bank's weighted average cost of funds on
interest-bearing liabilities for the current and preceding three quarters.

11.   Reload Option

      Simultaneously with the grant of any Option to a Participant, the
Committee may grant a Reload Option with respect to all or some of the shares
covered by such Option. A Reload Option may be granted to a Participant who
satisfies all or part of the exercise price of the Option with shares of Common
Stock (as described in Section 13(c) below). The Reload Option represents an
additional option to acquire the same number of shares of Common Stock as is
used by the Participant to pay for the original Option. Reload Options may also
be granted to replace Common Stock withheld by the Company for payment of a

                                       8
<PAGE>

Participant's withholding tax under Section 19. A Reload Option is subject to
all of the same terms and conditions as the original Option except that (i) the
exercise price of the shares of Common Stock subject to the Reload Option will
be determined at the time the original Option is exercised and (ii) such Reload
Option will conform to all provisions of the Plan at the time the original
Option is exercised.

12.   Surrender of Option

      In the event of a Participant's termination of employment or termination
of service as a result of death, Disability or Normal Retirement, the
Participant (or his or her personal representative(s), heir(s), or devisee(s))
may, in a form acceptable to the Committee make application to surrender all or
part of the Options held by such Participant in exchange for a cash payment from
the Company of an amount equal to the difference between the Fair Market Value
of the Common Stock on the date of termination of employment or the date of
termination of service on the Board and the exercise price per share of the
Option. Whether the Committee accepts such application or determines to make
payment, in whole or part, is within its absolute and sole discretion, it being
expressly understood that the Committee is under no obligation to any
Participant whatsoever to make such payments. In the event that the Committee
accepts such application and determines to make payment, such payment shall be
in lieu of the exercise of the underlying Option and such Option shall cease to
be exercisable.

13.   Alternate Option Payment Mechanism

      The Committee has sole discretion to determine what form of payment it
will accept for the exercise of an Option. The Committee may indicate acceptable
forms in the agreement with the Participant covering such Options or may reserve
its decision to the time of exercise. No Option is to be considered exercised
until payment in full is accepted by the Committee or its agent.

      (a) Cash Payment. The exercise price may be paid in cash or by certified
check. To the extent permitted by law, the Committee may permit all or a portion
of the exercise price of an Option to be paid through borrowed funds.

      (b) Cashless Exercise. Subject to vesting requirements, if applicable, a
Participant may engage in a "cashless exercise" of the Option. Upon a cashless
exercise, the Participant shall give the Company written notice of the exercise
of the Option together with an order to a registered broker-dealer or equivalent
third party, to sell part or all of the Common Stock subject to the Option and
to deliver enough of the proceeds to the Company to pay the Option exercise
price and any applicable withholding taxes. If the Participant does not sell the
Common Stock subject to the Option through a registered broker-dealer or
equivalent third party, the Optionee can give the Company written notice of the
exercise of the Option and the third party purchaser of the Common Stock subject
to the Option shall pay the Option exercise price plus applicable withholding
taxes to the Company.

      (c) Exchange of Common Stock. The Committee may permit payment of the
Option exercise price by the tendering of previously acquired shares of Common
Stock. All shares of Common Stock tendered in payment of the exercise price of
an Option shall be valued at the Fair Market Value of the Common Stock on the
date prior to the date of exercise. No tendered shares of Common Stock which
were acquired by the Participant upon the previous exercise of an Option or as
awards under a stock award plan (such as the Company's Recognition and Retention
Plan) shall be accepted for exchange unless the Participant has held such shares
(without restrictions imposed by said plan or award) for at least six months
prior to the exchange.

14.   Rights of a Stockholder

      A Participant shall have no rights as a stockholder with respect to any
shares covered by a Non-Statutory and/or Incentive Stock Option until the date
of issuance of a stock certificate for such shares. Nothing in the Plan or in
any Award granted confers on any person any right to continue in the employ of
the Company or its Affiliates or to continue to perform services for the Company
or its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate his services as an officer, director or employee at any
time.

                                       9
<PAGE>

15.   Agreement with Participants

      Each Award of Options, Reload Options, Limited Rights and/or Dividend
Equivalent Rights will be evidenced by a written agreement, executed by the
Participant and the Company or its Affiliates that describes the conditions for
receiving the Awards including the date of Award, the purchase price, applicable
periods, and any other terms and conditions as may be required by the Board or
applicable securities law. Notwithstanding any other provision of the Plan or
award agreement to the contrary, if any provision of the Plan permits a
Participant, at his or her election, to receive a cash settlement of Options or
other awards under the Plan, or requires the Company to pay a cash settlement of
Options or awards under the Plan, the Participant shall be entitled to receive
the cash settlement, and the Company shall be obligated to pay the cash
settlement, only if the Committee determines, in its sole discretion, to make
such payment.

16.   Designation of Beneficiary

      A Participant may, with the consent of the Committee, designate a person
or persons to receive, in the event of death, any Option, Reload Option, Limited
Rights Award or Dividend Equivalent Rights to which he would then be entitled.
Such designation will be made upon forms supplied by and delivered to the
Company and may be revoked in writing. If a Participant fails effectively to
designate a Beneficiary, then his estate will be deemed to be the Beneficiary.

17.   Dilution and Other Adjustments

      In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend or split, pro rata return of capital to all
shareholders, recapitalization, or any merger, consolidation, spin-off,
reorganization, combination or exchange of shares, or other corporate change, or
other increase or decrease in such shares, without receipt or payment of
consideration by the Company, the Committee shall make such adjustments to
previously granted Awards, to prevent dilution or enlargement of the rights of
the Participant, including any or all of the following:

      (a)   adjustments in the aggregate number of shares of Common Stock that
            may be awarded under the Plan;

      (b)   adjustments in the aggregate number of shares of Common Stock that
            may be awarded to any single individual under the Plan;

      (c)   adjustments in the aggregate number of shares of Common Stock
            covered by Awards already made under the Plan; or

      (d)   adjustments in the purchase price of outstanding Incentive and/or
            Non-Statutory Stock Options, or any Related Options or any Limited
            Rights attached to such Options.

      No such adjustments may, however, materially change the value of benefits
available to a Participant under a previously granted Award. With respect to
Incentive Stock Options, no such adjustment shall be made if it would be deemed
a "modification" of the Award under Section 424 of the Code.

18.   Effect of a Change in Control on Option Awards

      In the event of a Change in Control, the Committee and the Board of
Directors will take one or more of the following actions to be effective as of
the date of such Change in Control:

                                       10
<PAGE>

      (a) provide that such Options shall be assumed, or equivalent options
shall be substituted ("Substitute Options") by the acquiring or succeeding
corporation (or an affiliate thereof), provided that: (A) any such Substitute
Options exchanged for Incentive Stock Options shall meet the requirements of
Section 424(a) of the Code, and (B) the shares of stock issuable upon the
exercise of such Substitute Options shall constitute securities registered in
accordance with the Securities Act of 1933, as amended ("1933 Act") or such
securities shall be exempt from such registration in accordance with Sections
3(a)(2) or 3(a)(5) of the 1933 Act, (collectively, "Registered Securities") or

      (b) in the event of a transaction under the terms of which the holders of
Common Stock will receive upon consummation thereof a cash payment (the "Merger
Price") for each share of Common Stock exchanged in the Change in Control
transaction, make or provide for a cash payment to the Participants equal to the
difference between (A) the Merger Price times the number of shares of Common
Stock subject to such Options held by each Optionee (to the extent then
exercisable at prices not in excess of the Merger Price) and (B) the aggregate
exercise price of all such surrendered Options in exchange for such surrendered
Options.

19.   Withholding

      There may be deducted from each distribution of cash and/or Common Stock
under the Plan the amount of tax required by any governmental authority to be
withheld. Shares of Common Stock shall be withheld where required from any
distribution of Common Stock.

20.   Amendment of the Plan

      The Board may at any time, and from time to time, modify or amend the Plan
in any respect, or modify or amend an Award received by Key Employees and/or
Outside Directors; provided, however, that no such termination, modification or
amendment may affect the rights of a Participant, without his consent, under an
outstanding Award. Any amendment or modification of the Plan or an outstanding
Award under the Plan, including but not limited to the acceleration of vesting
of an outstanding Award for reasons other than death, Disability, Normal
Retirement, or a Change in Control, shall be approved by the Committee or the
full Board of the Company.

21.   Effective Date of Plan

      The Plan shall become effective upon the date of, or a date determined by
the Board of Directors following, approval of the Plan by the Company's
stockholders.

22.   Termination of the Plan

      The right to grant Awards under the Plan will terminate upon the earlier
of (i) 10 years after the Effective Date, or (ii) the date on which the exercise
of Options or related Rights equaling the maximum number of shares reserved
under the Plan occurs, as set forth in Section 5. The Board may suspend or
terminate the Plan at any time, provided that no such action will, without the
consent of a Participant, adversely affect his rights under a previously granted
Award.

23.   Applicable Law

      The Plan will be administered in accordance with the laws of the State of
Delaware.

                                       11

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