EXHIBIT 10.85.1
UNITED AUTO CREDIT CORP.
1998 EMPLOYEE STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
This Stock Option Agreement ("AGREEMENT") is made and entered into as
of the Date of Grant indicated below by and between United Auto Credit Corp., a
California corporation (the "COMPANY"), and the person named below ("EMPLOYEE").
WHEREAS, Employee is an employee of the Company or one or more of its
subsidiaries; and
WHEREAS, pursuant to the Company's 1998 Employee Stock Incentive Plan
(the "PLAN"), the committee of the Board of Directors of the Company
administering the Plan (the "COMMITTEE") has approved the grant to Employee of
an option to purchase shares of the common stock of the Company (the "COMMON
STOCK"), on the terms and conditions set forth herein; and
WHEREAS, the amount of compensation the recipient of the Option (as
defined below) could receive hereunder is based solely on an increase in the
value of the stock of the Company after the date of the grant;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant of Option; Certain Terms and Conditions. The Company
---------------------------------------------
hereby grants to Employee, and Employee hereby accepts, as of the Date of Grant,
an option to purchase the number of shares of Common Stock indicated below (the
"OPTION SHARES") at the Exercise Price per share indicated below, which option
shall expire at 5:00 p.m., California time, on the Expiration Date indicated
below and shall be subject to all of the terms and conditions set forth in this
Agreement (the "OPTION"). On each anniversary of the Date of Grant, the Option
shall become exercisable to purchase, and shall vest with respect to, that
number of Option Shares (rounded to the nearest whole share) equal to the total
number of Option Shares multiplied by the Annual Vesting Rate indicated below.
Employee: __________________________
Date of Grant: March 25, 1998
Number of shares purchasable: See Exhibit "A" hereto
Exercise Price per share: See Exhibit "A" hereto
Expiration Date: March 25, 2008
Annual Vesting Rate: See Exhibit "A" hereto
The Option is intended to qualify as an incentive stock option under
Section 422 of the Internal Revenue Code of 1986, as amended (an "INCENTIVE
STOCK OPTION"), and consequently:
(i) the Expiration Date shall not be more than ten years
after the Date of Grant and the Exercise Price per share shall not be less than
the Fair Market Value (as defined for purposes of the Plan) per share on the
Date of Grant; provided, however, that if, on the Date of Grant, Employee owns
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(after application of the family and other attribution rules of Section 425(d)
of the Internal Revenue Code of 1986, as amended) more than 10% of the total
combined voting power of all classes of stock of the Company or of its parent or
subsidiary corporations, then the Expiration Date shall not be more than five
years after the Date of Grant and the Exercise Price per share shall not be less
than 110% of the Fair Market Value per share on the Date of Grant; and
(ii) the aggregate Fair Market Value (determined as of the
date such options are granted) of the shares of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by Employee
during any calendar year (under the Plan and all other stock option plans of the
Company and its parent and subsidiary corporations) shall not exceed $100,000.
2. Acceleration and Termination of Option.
--------------------------------------
(a) Change of Control. In the event of a Change of Control (as
-----------------
hereinafter defined), any portion of the Option that is first scheduled to vest
on or after the date of such Change of Control shall fully vest on such date.
"CHANGE OF CONTROL" shall mean the first to occur of the following:
(A) Pan American Bank, FSB (the "BANK"), its parent Company,
United PanAm Financial Corp. ("UPFC") and entities controlled, directly or
indirectly, by the Bank or UPFC ("AFFILIATES") no longer own in the
aggregate, securities representing 50% or more of the beneficial ownership
of the Company or an entity controlling, directly or indirectly, the
Company other than by reason of the completion of an initial public
offering by the Company of shares of its common stock to the public
pursuant to a Registration Statement filed under the Securities Act of 1933
(an "INITIAL PUBLIC OFFERING") or a subsequent offering; or
(B) A sale of all or substantially all the property and
assets of the Company to any party other than a sale to the Bank, UACC or
an Affiliate unless arrangements are made to grant the Employee options or
equivalent equity interests in the party acquiring such assets in lieu of
the Option granted hereunder.
2
(i) Retirement. If Employee shall cease to be an
----------
employee, director or independent contractor of the Company (such event shall be
referred to herein as the "TERMINATION" of Employee's "EMPLOYMENT") by reason of
Employee's retirement in accordance with the Company's then current retirement
policy ("RETIREMENT"), then (A) the portion of the Option that has not vested on
or prior to the date of such Retirement shall terminate on such date, and (B)
the remaining vested portion of the Option shall terminate on the earlier of the
Expiration Date or one year after Retirement.
(ii) Death or Permanent Disability. If Employee's
-----------------------------
Employment is Terminated by reason of the death or Permanent Disability (as
hereinafter defined) of Employee, then (A) the portion of the Option that has
not vested on or prior to the date of such Termination of Employment shall
terminate on such date, and (B) the remaining vested portion of the Option shall
terminate upon the earlier of the Expiration Date or the first anniversary of
the date of such Termination of Employment. "PERMANENT DISABILITY" shall mean
the inability to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than 12 months. Employee shall not be deemed to have a
Permanent Disability until proof of the existence thereof shall have been
furnished to the Board in such form and manner, and at such times, as the Board
may require. Any determination by the Board that Employee does or does not have
a Permanent Disability shall be final and binding upon the Company and Employee.
(iii) Other Termination. If Employee's Employment
-----------------
is Terminated for no reason, or for any reason other than Retirement, death or
Permanent Disability, then the Option shall terminate 30 days following the date
of such Termination of Employment; provided, that if Employee's employment is
--------
terminated "FOR CAUSE," including personal dishonesty, incompetence, breach of
fiduciary duty involving personal profit, failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or of any agreement with any regulatory agency, then the
Option shall terminate in its entirety as of the date of Termination of
Employment.
(b) Death Following Termination of Employment. Notwithstanding
-----------------------------------------
anything to the contrary contained in this Agreement, if Employee shall die at
any time after the Termination of his or her Employment and prior to the
Expiration Date, then (i) the portion of the Option that has not vested on or
prior to the date of such death shall terminate on such date, and (ii) the
remaining vested portion of the Option shall terminate on the earlier of the
Expiration Date or the first anniversary of the date of such death.
(c) Other Events Causing Acceleration of Option. The Committee,
-------------------------------------------
in its sole discretion, may accelerate the exercisability of the Option at any
time and for any reason.
(d) Other Events Causing Termination of Option. Notwithstanding
------------------------------------------
anything to the contrary contained in this Agreement, the Option shall terminate
upon the consummation of any of the following events, or, if later, the
thirtieth day following the first date upon which such event shall have been
approved by both the Board and the shareholders of the Company:
3
(i) the dissolution or liquidation of the Company; or
(ii) a sale of substantially all of the property and
assets of the Company which would not be deemed a Change of Control under
Section 2(a) above, unless the terms of such sale shall provide otherwise.
3. Adjustments. In the event that the outstanding securities of the
-----------
class then subject to the Option are increased, decreased or exchanged for or
converted into cash, property or a different number or kind of securities, or
cash, property or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a
regular cash dividend) or other distribution, stock split, reverse stock split
or the like, or in the event that substantially all of the property and assets
of the Company are sold, then, unless such event shall cause the Option to
terminate pursuant to Section 2(d) hereof, the Committee shall make appropriate
and proportionate adjustments in the number and type of shares or other
securities or cash or other property that may thereafter be acquired upon the
exercise of the Option; provided, however, that any such adjustments in the
-------- -------
Option shall be made without changing the aggregate Exercise Price of the then
unexercised portion of the Option.
4. Exercise. The Option shall be exercisable during Employee's
--------
lifetime only by Employee or by his or her guardian or legal representative, and
after Employee's death only by the person or entity entitled to do so under
Employee's last will and testament or applicable intestate law. The Option may
only be exercised by the delivery to the Company of a written notice of such
exercise, which notice shall specify the number of Option Shares to be purchased
(the "PURCHASED SHARES") and the aggregate Exercise Price for such shares (the
"EXERCISE NOTICE"), together with payment in full of such aggregate Exercise
Price in cash or by check payable to the Company.
5. Payment of Withholding Taxes. If the Company becomes obligated
----------------------------
to withhold an amount on account of any tax imposed as a result of the exercise
of the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then Employee shall, on the first day upon which the Company becomes
obligated to pay such amount to the appropriate taxing authority, pay such
amount to the Company in cash or by check payable to the Company.
6. Notices. All notices and other communications required or
-------
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company at
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer, or to Employee at the address set forth beneath his or her
signature on the signature page hereto, or at such other addresses as they may
designate by written notice in the manner aforesaid.
7. Stock Exchange Requirements; Applicable Laws. Notwithstanding
--------------------------------------------
any thing to the contrary in this Agreement, no shares of stock purchased upon
exercise of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (i) such
4
shares have not been admitted to listing upon official notice of issuance on
each stock exchange upon which shares of that class are then listed or (ii) in
the opinion of counsel to the Company, such issuance or delivery would cause the
Company to be in violation of or to incur liability under any federal, state or
other securities law, or any requirement of any stock exchange listing agreement
to which the Company is a party, or any other requirement of law or of any
administrative or regulatory body having jurisdiction over the Company.
8. Nontransferability. Neither the Option nor any interest therein
------------------
may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
9. Plan. The Option is granted pursuant to the Plan, as in effect
----
on the Date of Grant, and is subject to all the terms and conditions of the
Plan, as the same may be amended from time to time; provided, however, that no
-------- -------
such amendment shall deprive Employee, without his or her consent, of the Option
or of any of Employee's rights under this Agreement. The interpretation and
construction by the Committee of the Plan, this Agreement, the Option and such
rules and regulations as may be adopted by the Committee for the purpose of
administering the Plan shall be final and binding upon Employee. Until the
Option shall expire, terminate or be exercised in full, the Company shall, upon
written request therefor, send a copy of the Plan, in its then-current form, to
Employee or any other person or entity then entitled to exercise the Option.
10. Shareholder Rights. No person or entity shall be entitled to
------------------
vote, receive dividends or be deemed for any purpose the holder of any Option
Shares until the Option shall have been duly exercised to purchase such option
Shares in accordance with the provisions of this Agreement.
11. Employment Rights. No provision of this Agreement or of the
-----------------
Option granted hereunder shall (i) confer upon Employee any right to continue in
the employ of the Company or any of its subsidiaries, (ii) affect the right of
the Company and each of its subsidiaries to terminate the employment of
Employee, with or without cause, or (iii) confer upon Employee any right to
participate in any employee welfare or benefit plan or other program of the
Company or any of its subsidiaries other than the Plan. Employee hereby
acknowledges and agrees that the Company and each of its subsidiaries may
terminate the employment of Employee at any time and for any reason, or for no
reason, unless Employee and the Company or such subsidiary are parties to a
written employment agreement that expressly provides otherwise.
12. Governing Law. This Agreement and the option granted hereunder
-------------
shall be governed by and construed and enforced in accordance with the laws of
the State of California without reference to choice or conflict of law
principles.
13. Additional Matters Affecting Shares.
-----------------------------------
(a) Right of First Refusal. If Employee desires to sell any
----------------------
shares of Common Stock acquired upon the exercise of this Option prior to
completion of an Initial Public Offering, the Employee shall give written notice
(the "SALE NOTICE") to the Company and the Bank setting forth the number of
Shares proposed to be disposed of (the "OFFERED
5
SHARES"), the name and address of the transferee or transferees, if known, and
the price and other material terms of the proposed sale. The Sale Notice shall
constitute an irrevocable offer to sell to the Bank, or such other person or
persons as may be designated by the Bank to acquire such Offered Shares (a
"DESIGNATED PURCHASER"), all, but not less than all of the Offered Shares for
cash on the terms specified in the Sale Notice. The Bank shall have a period of
90 days from its receipt of the Sale Notice to purchase or arrange for the sale
of the Offered Shares to one or more Designated Purchasers at the price and on
the terms specified in the Sale Notice. In the event, the Bank shall fail to
arrange for the sale of such shares and to complete such sale prior to the end
of such 90 day period, the Employee shall be free to dispose of the Offered
Shares to any purchaser it may choose at a price and on terms no more favorable
to the purchaser of the Offered Shares and those proposed in the Sale Notice;
provided, that the purchaser and the Employee provide to the Company such
--------
assurances as may be required by the Company to the effect that the proposed
sale or disposition of such Shares shall be in compliance with the applicable
requirements of all state and federal securities law; and provided further that
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the sale of such shares is completed within 6 months from the date of the Sale
Notice.
(b) Drag Along Rights. In the event the Bank, UPFC or their
-----------------
Affiliates elect to sell any Shares of the Company owned by them to any
purchaser prior to the completion of an Initial Public Offering, the Employee
agrees that such shareholder may cause Employee to include a proportionate share
of all of the Shares of Employee within the shares to be sold by such selling
shareholder on the same terms and conditions applicable to the sale of the
shares by the selling shareholder as set forth in a notice delivered to the
Employee not later than 15 days prior to the date proposed for completion of the
sale of the shares proposed to be sold by the selling shareholder. The
"PROPORTIONATE SHARE" of the Employee shall be equal to the total number of
shares to be sold to the purchaser multiplied by the percentage of the total of
the then issued and outstanding shares and all shares subject to vested options
of the Company represented by the shares owned by the Employee or covered by
vested options of the Employee. The sale by the Employee shall close
concurrently with the sale of the shares by the selling shareholder.
14. Legend. Prior to the completion of an Initial Public Offering,
------
all certificates representing shares shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN A STOCK OPTION AGREEMENT DATED
___________________, 1998, A COPY OF WHICH HAS BEEN FILED WITH THE
SECRETARY OF THE CORPORATION."
The foregoing legend shall be in addition to any other legends
required under state or federal securities laws.
6
IN WITNESS WHEREOF, the Company and Employee have duly executed this
Agreement as of the Date of ▇▇▇▇▇.
UNITED AUTO CREDIT CORP.
By____________________________
Authorized Representative
EMPLOYEE
______________________________
Signature
______________________________
Printed Name
______________________________
Street Address
______________________________
City, State and Zip Code
______________________________
Social Security Number
7
UNITED AUTO CREDIT CORP.
1998 EMPLOYEE STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------
This Stock option Agreement ("AGREEMENT") is made and entered into as
of the Date of Grant indicated below by and between United Auto Credit Corp., a
California corporation (the "COMPANY"), and the person named below
("PARTICIPANT").
WHEREAS, Participant is an employee, director or independent
contractor of the Company or one or more of its subsidiaries; and
WHEREAS, pursuant to the Company's 1998 Employee Stock Incentive Plan
(the "PLAN"), the committee of the Board of Directors of the Company
administering the Plan (the "COMMITTEE") has approved the grant to Participant
of an option to purchase shares of the common stock of the Company (the "COMMON
STOCK"), on the terms and conditions set forth herein; and
WHEREAS, the amount of compensation the recipient of the Option (as
defined below) could receive hereunder is based solely on an increase in the
value of the stock of the Company after the date of the grant;
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants set forth herein, the parties hereto hereby agree as follows:
1. Grant Of Option; Certain Terms and Conditions. The Company
---------------------------------------------
hereby grants to Participant, and Participant hereby accepts, as of the Date of
Grant, an option to purchase the number of shares of Common Stock indicated
below (the "OPTION SHARES") at the Exercise Price per share indicated below,
which option shall expire at 5:00 p.m., California time, on the Expiration Date
indicated below and shall be subject to all of the terms and conditions set
forth in this Agreement (the "OPTION"). On each anniversary of the Date of
Grant, the option shall become exercisable to purchase, and shall vest with
respect to, that number of Option Shares (rounded to the nearest whole share)
equal to the total number of Option Shares multiplied by the Annual Vesting Rate
indicated below.
Participant: ___________________________
Date of Grant: March 25, 1998
Number of shares purchasable: See Exhibit "A" hereto
Exercise Price per share: See Exhibit "A" hereto
Expiration Date: March 25, 2008
Annual Vesting Rate: See Exhibit "A" hereto
The Option is not intended to qualify as an incentive stock option
under Section 422 of the Internal Revenue Code of 1986, as amended (an
"INCENTIVE STOCK OPTION").
2. Acceleration and Termination of Option.
--------------------------------------
(a) Change of Control. In the event of a Change of
-----------------
Control (as hereinafter defined), then the portion of
the Option that is first scheduled to vest on or after
the date of such Change of Control shall fully vest on
such date. "CHANGE OF CONTROL" shall mean the first to
occur of the following:
(A) Pan American Bank, FSB (the "BANK"), its parent
Company, United PanAm Financial Corp. ("UPFC") and entities
controlled, directly or indirectly, by the Bank or UPFC ("AFFILIATES")
no longer own in the aggregate, securities representing 50% or more of
the beneficial ownership of the Company or an entity controlling,
directly or indirectly, the Company other than by reason of the
completion of an initial public offering by the Company of shares of
its common stock to the public pursuant to a Registration Statement
filed under the Securities Act of 1933 (an "INITIAL PUBLIC OFFERING");
or
(B) A sale of all or substantially all the property and
assets of the Company to any party other than a sale to the Bank, UACC
or an Affiliate unless arrangements are made to grant the Employee
options or equivalent equity interests in the party acquiring such
assets in lieu of the Option granted hereunder.
(i) Retirement. If Employee shall cease to be an
----------
employee, director or independent contractor of the Company (such event shall be
referred to herein as the "TERMINATION" of Employee's "EMPLOYMENT") by reason of
Employee's retirement in accordance with the Company's then current retirement
policy ("RETIREMENT"), then (A) the portion of the Option that has not vested on
or prior to the date of such Retirement shall terminate on such date, and (B)
the remaining vested portion of the Option shall terminate on the earlier of the
Expiration Date or one year after Retirement.
(ii) Death or Permanent Disability. If Employee's
-----------------------------
Employment is Terminated by reason of the death or Permanent Disability (as
hereinafter defined) of Employee, then (A) the portion of the Option that has
not vested on or prior to the date of such Termination of Employment shall
terminate on such date, and (B) the remaining vested portion of the Option shall
terminate upon the earlier of the Expiration Date or the first anniversary of
the date of such Termination of Employment. "PERMANENT DISABILITY" shall mean
the inability to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than 12 months. Employee shall not be deemed to have a
Permanent Disability until proof of the existence thereof shall have been
2
furnished to the Board in such form and manner, and at such times, as the Board
may require. Any determination by the Board that Employee does or does not have
a Permanent Disability shall be final and binding upon the Company and Employee.
(iii) Other Termination. If Employee's Employment
-----------------
is Terminated for no reason, or for any reason other than Retirement, death or
Permanent Disability, then the Option shall terminate 30 days following the date
of such Termination of Employment; provided, that if Employee's employment is
--------
terminated "for cause," including personal dishonesty, incompetence, breach of
fiduciary duty involving personal profit, failure to perform stated duties,
willful violation of any law, rule or regulation (other than traffic violations
or similar offenses) or of any agreement with any regulatory agency, then the
Option shall terminate in its entirety as of the date of Termination of
Employment.
(b) Death Following Termination of Employment.
-----------------------------------------
Notwithstanding anything to the contrary contained in
this Agreement, if Employee shall die at any time after
the Termination of his or her Employment and prior to
the Expiration Date, then (i) the portion of the Option
that has not vested on or prior to the date of such
death shall terminate on such date, and (ii) the
remaining vested portion of the Option shall terminate
on the earlier of the Expiration Date or the first
anniversary of the date of such death.
(c) Other Events Causing Acceleration of Option.
-------------------------------------------
The Committee, in its sole discretion, may accelerate
the exercisability of the Option at any time and for
any reason.
(d) Other Events Causing Termination of Option.
------------------------------------------
Notwithstanding anything to the contrary contained in
this Agreement, the Option shall terminate upon the
consummation of any of the following events, or, if
later, the thirtieth day following the first date upon
which such event shall have been approved by both the
Board and the shareholders of the Company:
(i) the dissolution or liquidation of the Company;
or
(ii) a sale of substantially all of the property and
assets of the Company which would not be deemed a Change of Control under
Section 2(a) above, unless the terms of such sale shall provide otherwise.
3. Adjustments. In the event that the outstanding securities of the
-----------
class then subject to the Option are increased, decreased or exchanged for or
converted into cash, property or a different number or kind of securities, or
cash, property or securities are distributed in respect of such outstanding
securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, reclassification, dividend (other than a
regular cash dividend) or other
3
distribution, stock split, reverse stock split or the like, or in the event that
substantially all of the property and assets of the Company are sold, then,
unless such event shall cause the Option to terminate pursuant to Section 2(d)
hereof, the Committee shall make appropriate and proportionate adjustments in
the number and type of shares or other securities or cash or other property that
may thereafter be acquired upon the exercise of the Option; provided, however,
-------- -------
that any such adjustments in the Option shall be made without changing the
aggregate Exercise Price of the then unexercised portion of the Option.
4. Exercise. The Option shall be exercisable during Employee's
--------
lifetime only by Employee or by his or her guardian or legal representative, and
after Employee's death only by the person or entity entitled to do so under
Employee's last will and testament or applicable intestate law. The Option may
only be exercised by the delivery to the Company of a written notice of such
exercise, which notice shall specify the number of Option Shares to be purchased
(the "PURCHASED SHARES") and the aggregate Exercise Price for such shares (the
"EXERCISE NOTICE"), together with payment in full of such aggregate Exercise
Price in cash or by check payable to the Company.
5. Payment of Withholding Taxes. If the Company becomes obligated
----------------------------
to withhold an amount on account of any tax imposed as a result of the exercise
of the Option, including, without limitation, any federal, state, local or other
income tax, or any F.I.C.A., state disability insurance tax or other employment
tax, then Participant shall, on the first day upon which the Company becomes
obligated to pay such amount to the appropriate taxing authority, pay such
amount to the Company in cash or by check payable to the Company.
6. Notices. All notices and other communications required or
-------
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company at
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer, or to Participant at the address set forth beneath his or her
signature on the signature page hereto, or at such other addresses as they may
designate by written notice in the manner aforesaid.
7. Stock Exchange Requirements; Applicable Laws. Notwithstanding
--------------------------------------------
anything to the contrary in this Agreement, no shares of stock purchased upon
exercise of the Option, and no certificate representing all or any part of such
shares, shall be issued or delivered if (i) such shares have not been admitted
to listing upon official notice of issuance on each stock exchange upon which
shares of that class are then listed or (ii) in the opinion of counsel to the
Company, such issuance or delivery would cause the Company to be in violation of
or to incur liability under any federal, state or other securities law, or any
requirement of any stock exchange listing agreement to which the Company is a
party, or any other requirement of law or of any administrative or regulatory
body having jurisdiction over the Company.
8. Nontransferability. Neither the Option nor any interest therein
------------------
may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
4
9. Plan. The Option is granted pursuant to the Plan, as in effect
----
on the Date of Grant, and is subject to all the terms and conditions of the
Plan, as the same may be amended from time to time; provided, however, that no
-------- -------
such amendment shall deprive Participant, without his or her consent, of the
Option or of any of Participant's rights under this Agreement. The
interpretation and construction by the Committee of the Plan, this Agreement,
the Option and such rules and regulations as may be adopted by the Committee for
the purpose of administering the Plan shall be final and binding upon
Participant. Until the Option shall expire, terminate or be exercised in full,
the Company shall, upon written request therefor, send a copy of the Plan, in
its then-current form, to Participant or any other person or entity then
entitled to exercise the Option.
10. Shareholder Rights. No person or entity shall be entitled to
------------------
vote, receive dividends or be deemed for any purpose the holder of any Option
Shares until the Option shall have been duly exercised to purchase such Option
Shares in accordance with the provisions of this Agreement.
11. Employment or Contract Rights. No provision of this Agreement or
-----------------------------
of the Option granted hereunder shall (i) confer upon Participant any right to
continue in the employ of or contract with the Company or any of its
subsidiaries, (ii) affect the right of the Company and each of its subsidiaries
to terminate the employment or contract of Participant, with or without cause,
or (iii) confer upon Participant any right to participate in any employee
welfare or benefit plan or other program of the Company or any of its
subsidiaries other than the Plan. Participant hereby acknowledges and agrees
that the Company and each of its subsidiaries may terminate the employment or
contract of Participant at any time and for any reason, or for no reason, unless
Participant and the Company or such subsidiary are parties to a written
employment or independent contractor agreement that expressly provides
otherwise.
12. Governing Law. This Agreement and the Option granted hereunder
-------------
shall be governed by and construed and enforced in accordance with the laws of
the State of California without reference to choice or conflict of law
principles.
13. Additional Matters Affecting Shares.
-----------------------------------
(a) Right of First Refusal. If Employee desires to sell any
----------------------
shares of Common Stock acquired upon the exercise of this Option prior to
completion of an Initial Public Offering, the Employee shall give written notice
(the "SALE NOTICE") to the Company and the Bank setting forth the number of
Shares proposed to be disposed of (the "OFFERED SHARES"), the name and address
of the transferee or transferees, if known, and the price and other material
terms of the proposed sale. The Sale Notice shall constitute an irrevocable
offer to sell to the Bank, or such other person or persons as may be designated
by the Bank to acquire such Offered Shares (a "DESIGNATED PURCHASER"), all, but
not less than all of the Offered Shares for cash on the terms specified in the
Sale Notice. The Bank shall have a period of 90 days from its receipt of the
Sale Notice to purchase or arrange for the sale of the Offered Shares to one or
more Designated Purchasers at the price and on the terms specified in the Sale
Notice. In the event, the Bank shall fail to arrange for the sale of such shares
and to complete such sale prior to the end of such 90 day period, the Employee
shall be free to dispose of the Offered Shares to any purchaser it may choose at
a price and on terms no more favorable to the purchaser of the Offered Shares
and those proposed in the Sale Notice;
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provided, that the purchaser and the Employee provide to the Company such
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assurances as may be required by the Company to the effect that the proposed
sale or disposition of such Shares shall be in compliance with the applicable
requirements of all state and federal securities law; and provided further that
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the sale of such shares is completed within 6 months from the date of the Sale
Notice.
(b) Drag Along Rights. In the event the Bank, UPFC or their
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Affiliates elect to sell any Shares of the Company owned by them to any
purchaser prior to the completion of an Initial Public Offering, the Employee
agrees that such shareholder may cause Employee to include a "proportionate
share" of all of the Shares of Employee within the shares to be sold by such
selling shareholder on the same terms and conditions applicable to the sale of
the shares by the selling shareholder as set forth in a notice delivered to the
Employee not later than 15 days prior to the date proposed for completion of the
sale of the shares proposed to be sold by the selling shareholder. The
proportionate share of the Employee shall be equal to the total number of shares
to be sold to the purchaser multiplied by the percentage of the total of the
then issued and outstanding shares and all shares subject to vested options of
the Company represented by the shares owned by the Employee or covered by vested
options of the Employee. The sale by the Employee shall close concurrently with
the sale of the shares by the selling shareholder.
14. Legend. Prior to the completion of an Initial Public Offering,
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all certificates representing shares shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN A STOCK OPTION AGREEMENT DATED
___________________, 1998, A COPY OF WHICH HAS BEEN FILED WITH THE
SECRETARY OF THE CORPORATION."
The foregoing legend shall be in addition to any other legends
required under state or federal securities laws.
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IN WITNESS WHEREOF, the Company and Participant have duly executed
this Agreement as of the Date of ▇▇▇▇▇.
UNITED AUTO CREDIT CORP.
By____________________________
Authorized Representative
PARTICIPANT
______________________________
Signature
______________________________
Printed Name
______________________________
Street Address
______________________________
City, State and Zip Code
______________________________
Social Security Number
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EXHIBIT "A"