Document:

Exhibit
10.37

 

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

INCENTIVE STOCK OPTION AGREEMENT

 

This Incentive Stock Option Agreement (the
“Agreement”) is made and entered into as of the 20th day of March, 2003, by and
between Western Sierra Bancorp, a California corporation (the “Bancorp”), and
Anthony Gould (“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 an incentive
stock option to purchase all or any part of Two Thousand (2,000) authorized but
unissued shares of the Bancorp’s common stock at the price of Twenty-Seven
Dollars and Seventy-Three Cents ($27.73) 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
Thousand (2,000) shares of the Bancorp’s common stock (hereinafter called
“stock”) at the price of Twenty-Seven Dollars and Seventy-Three Cents ($27.73)
per share, which price is not 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 for Optionee-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

  
	
  400

  	
   

  	
  immediate

  
	
  400

  	
   

  	
  03/20/04

  
	
  400

  	
   

  	
  03/20/05

  
	
  400

  	
   

  	
  03/20/06

  
	
  400

  	
   

  	
  03/20/07

  

 

This option shall remain exercisable as to all vested shares until
March 20, 2013 (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 Employment. Except
as provided in Paragraphs 2 and 5 hereof, if Optionee shall cease to be 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 an employee of the
Bancorp or a subsidiary corporation.

 

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 an employee of the Bancorp or a
subsidiary corporation, or during the three (3) month period referred to

 

1

 

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 an employee of the Bancorp or a subsidiary
corporation.

 

If Optionee terminates his or her 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.

 

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

 

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/ Anthony
  Gould

  	
   

  	
  By

  	
  /s/ Gary Gall

  	
   

  	 

	
   

  	
  Anthony Gould

  	
   

  	
   

  	
  Gary Gall, President & CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Chuck Bacchi

  	
   

  	 

	
   

  	
   

  	
   

  	
  Chuck
  Bacchi,Chairman

  	
   

  
								

 

2Exhibit
10.38

 

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

INCENTIVE STOCK OPTION AGREEMENT

 

This Incentive Stock Option Agreement (the
“Agreement”) is made and entered into as of the 20th day of March, 2003, by and
between Western Sierra Bancorp, a California corporation (the “Bancorp”), and
Douglas Nordell (“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 an incentive
stock option to purchase all or any part of Three Thousand (3,000) authorized
but unissued shares of the Bancorp’s common stock at the price of Twenty-Seven
Dollars and Seventy-Three Cents ($27.73) 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
Three Thousand (3,000) shares of the Bancorp’s common stock (hereinafter called
“stock”) at the price of Twenty-Seven Dollars and Seventy-Three Cents ($27.73)
per share, which price is not 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 for Optionee-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

  
	
  600

  	
   

  	
  immediate

  
	
  600

  	
   

  	
  03/20/04

  
	
  600

  	
   

  	
  03/20/05

  
	
  600

  	
   

  	
  03/20/06

  
	
  600

  	
   

  	
  03/20/07

  

 

This option shall remain exercisable as to all vested shares until
March 20, 2013 (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 Employment. Except
as provided in Paragraphs 2 and 5 hereof, if Optionee shall cease to be 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 an employee of the
Bancorp or a subsidiary corporation.

 

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 an employee of the Bancorp or a
subsidiary corporation, or during the three (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

 

1

 

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 an employee of the
Bancorp or a subsidiary corporation.

 

If Optionee terminates his or her 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.

 

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

 

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/ Douglas
  Nordell

  	
   

  	
  By

  	
  /s/ Gary Gall

  	
   

  	 

	
   

  	
  Douglas Nordell

  	
   

  	
   

  	
  Gary Gall,
  President & CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Chuck Bacchi

  	
   

  	 

	
   

  	
   

  	
   

  	
  Chuck
  Bacchi,Chairman

  
								

 

2

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