-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HJwo5EovyXpaBbdDD0+VRfXMOVI5dRbuUcfPCjR+MAiNxXc1dSLOqwGySfdLvw/T zbBimIO9V4MiRqvF0PWtBA== 0000944209-97-001003.txt : 19970808 0000944209-97-001003.hdr.sgml : 19970808 ACCESSION NUMBER: 0000944209-97-001003 CONFORMED SUBMISSION TYPE: S-8 POS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19970807 EFFECTIVENESS DATE: 19970807 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL MERCANTILE BANCORP CENTRAL INDEX KEY: 0000714801 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 953819685 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 POS SEC ACT: 1933 Act SEC FILE NUMBER: 033-94828 FILM NUMBER: 97653372 BUSINESS ADDRESS: STREET 1: 1840 CENTURY PARK EAST CITY: LOS ANGELES STATE: CA ZIP: 90067 BUSINESS PHONE: 3102772265 MAIL ADDRESS: STREET 1: 1840 CENTURY PARK EAST CITY: LOS ANGELES STATE: CA ZIP: 90067 S-8 POS 1 FORM S-8 POS As filed with the Securities and Exchange Commission on August 7, 1997 Registration No. 33-94828 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- AMENDMENT NO. 1 TO FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------- NATIONAL MERCANTILE BANCORP (Exact name of registrant as specified in its charter) CALIFORNIA 95-3819685 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1840 CENTURY PARK EAST LOS ANGELES, CALIFORNIA 90067 (Address of Principal Executive Offices and Zip Code) ---------------------- NATIONAL MERCANTILE BANCORP 1994 STOCK OPTION PLAN (Full Title of Plan) ---------------------- SCOTT A. MONTGOMERY PRESIDENT AND CHIEF EXECUTIVE OFFICER NATIONAL MERCANTILE BANCORP 1840 CENTURY PARK EAST LOS ANGELES, CALIFORNIA 90067 (Name and address of agent for service) (310) 277-2265 (Telephone number, including area code, of agent for service) WITH A COPY TO: THOMAS D. PHELPS MANATT, PHELPS & PHILLIPS, LLP 11355 WEST OLYMPIC BOULEVARD LOS ANGELES, CALIFORNIA 90064 Calculation of Registration Fee
========================================================================================================= Proposed Maximum Proposed Maximum Title of Securities Amount to be Offering Price Aggregate Amount of to be Registered Registered(1) per Share(2) Offering Price(2) Registration Fee - --------------------------------------------------------------------------------------------------------- Common Stock, without 22,003(3) $31.815(3) $700,000 * par value =========================================================================================================
(1) This Registration Statement covers, in addition to the number of shares of Common Stock stated above, such indeterminate number of shares of Common Stock as may be issued upon exercise of options granted under the Registrant's 1994 Stock Option Plan as a result of adjustment provisions thereto. (2) Estimated solely for purposes of calculating the amount of the registration fee pursuant to Rule 457, based upon the average of the bid and asked prices of the Common Stock as reported on the Nasdaq National Market System on July 17, 1995. (3) Adjusted to reflect a 9.09 to 1 reverse stock split effected by the Company on June 20, 1997. * A registration fee of $241 was previously paid pursuant to the filing of the Registration Statement on Form S-8 (the "Registration Statement") for the Registrant's 1994 Stock Option Plan dated July 21, 1995 (No. 33-94828). The title and amount of securities indicated therein remains unchanged under this Registration Statement. An amendment to the Registration Statement is necessary to satisfy all of the requirements of Form S-8. ================================================================================ Unless otherwise indicated, all information contained in this Registration Statement reflects a 9.09 to 1 reverse stock split effected by the Company on June 20, 1997. PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS The following documents listed under this Part I and the documents incorporated by reference under Item 3 of Part II to this Form S-8, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act of 1933, as amended (the "Securities Act"), and are incorporated herein by reference. Item 1. Plan Information ---------------- (a) National Mercantile Bancorp 1994 Stock Option Plan (b) Prospectus for the 1994 Stock Option Plan (c) Form of Nonqualified Stock Option Agreement (d) Form of Incentive Stock Option Agreement Item 2. Registrant Information and Employee Plan Annual Information ----------------------------------------------------------- The written statement required to be provided to participants pursuant to this Item 2 is set forth in the Prospectus referred to in Item 1 above. I-1 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT National Mercantile Bancorp (the "Registrant") hereby files this Amendment No. 1 to the Registration Statement on Form S-8 (Registration No. 33-94828) filed with the Securities and Exchange Commission (the "Commission") on July 21, 1995 to register 22,003 shares of the Registrant's Common Stock for issuance pursuant to the Registrant's 1994 Stock Option Plan (the "Plan"), and such indeterminate number of shares as may become available under the Plan as a result of the adjustment provisions thereof. Item 3. Incorporation of Documents by Reference --------------------------------------- The following documents previously filed by the Registrant with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act") are incorporated herein by reference: (a) The Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996 filed pursuant to Section 13(a) or 15(d) of the Exchange Act; (b) All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the latest fiscal year covered by the Annual Report referred to in (a) above; and (c) The description of the Common Stock set forth on pages 7, 8 and 9 of the Company's Amendment No. 2 to its registration statement on Form S- 14 (Registration No. 2-82386) filed under the Securities Act, which description was incorporated by reference in the Company's Registration Statement on Form 8-A, dated June 15, 1987, filed under Section 12 of the Exchange Act, and including any amendments or reports filed for the purpose of updating such description. All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing of such documents. Any statement made in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which is also incorporated or deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. II-1 Item 4. Description of Securities ------------------------- Not applicable. Item 5. Interests of Named Experts and Counsel -------------------------------------- Not applicable. Item 6. Indemnification of Directors and Officers ----------------------------------------- Section 317 of the General Corporation Law of the State of California (the "GCL") and Article V of the Registrant's Bylaws provide for the indemnification of directors and officers under certain circumstances. The Registrant's Bylaws grant the Registrant the power to indemnify its directors and officers under certain circumstances to the extent permitted by the GCL against certain expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of such person's position as a director or officer of the Registrant. Pursuant to the GCL and the Registrant's Bylaws, the Registrant is required to indemnify directors and officers against expenses actually and reasonably incurred to the extent that such party is successful on the merits in the defense of certain proceedings. Section 204(a)(11) of the GCL provides for the indemnification, subject to certain limitations, of directors and officers for breach of their duty to a corporation and its stockholders in excess of that expressly permitted by Section 317 of the GCL. An amendment to the Articles of Incorporation of the Registrant adopted the implementation of Section 204(a)(11) of the GCL. In addition, the Registrant has entered into Indemnity Agreements with certain of its directors and certain officers which provide for, among other items and except to the extent prohibited by any limitations on indemnification under the GCL which cannot be waived, the mandatory indemnification by the Registrant of any amount which a director or officer is legally obligated to pay because of claims made against such person relating to his service as a director or officer of the Registrant. The Registrant also maintains a directors' and officers' liability insurance policy insuring the Registrant's directors and officers against certain liabilities and expenses incurred by them in their capacities as such, and insuring the Registrant under certain circumstances, in the event that indemnification payments are made by the Registrant to such directors and officers. Item 7. Exemption from Registration Claimed ----------------------------------- Not applicable. II-2 Item 8. Exhibits --------
Exhibit Number Description ------- ----------- 5.1 Opinion of Manatt, Phelps & Phillips, LLP 23.1 Consent of Manatt, Phelps & Phillips, LLP (see Exhibit 5.1) 23.2 Consent of Deloitte & Touche LLP 24.1 Power of Attorney (see page II-5) 99.1 National Mercantile Bancorp 1994 Stock Option Plan 99.2 Form of Nonqualified Stock Option Agreement 99.3 Form of Incentive Stock Option Agreement
Item 9. Undertakings ------------ (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement; (i) To include any Prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the Prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) of the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in the post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement. II-3 (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (d) The undersigned Registrant hereby undertakes to deliver or cause to be delivered with the Prospectus, to each person to whom the Prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the Prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the Prospectus, to deliver, or cause to be delivered to each person to whom the Prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the Prospectus to provide such interim financial information. II-4 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on this 7th day of August, 1997. NATIONAL MERCANTILE BANCORP By: /s/ Scott A. Montgomery ----------------------------- Scott A. Montgomery President and Chief Executive Officer By: /s/ Joseph W. Kiley III ----------------------------- Joseph W. Kiley III Executive Vice President, Chief Financial Officer and Director KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of Scott A. Montgomery and Joseph W. Kiley III, his true and lawful attorney-in-fact and agent, each with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this Registration Statement, and to file the same with all exhibits thereto, and all other documents in connection therewith, with the Commission, granting unto each said attorney-in-fact and agent with full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each said attorney-in-fact and agent, or his substitute, may lawfully do or cause to be done by virtue hereof. II-5 Pursuant to the requirements of the Securities Act, as amended, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the date indicated.
Signature Title Date - --------- ----- ---- /s/ Robert E. Gipson Chairman August 7, 1997 - -------------------- Robert E. Gipson /s/ Alan Grahm Secretary, Director August 7, 1997 - -------------- Alan Grahm /s/ Joseph W. Kiley III Executive Vice President, August 7, 1997 - ----------------------- Chief Financial Officer and Director Joseph W. Kiley III /s/ Scott A. Montgomery President, Chief August 7, 1997 - ----------------------- Executive Officer and Director Scott A. Montgomery /s/ Robert E. Thomson Vice Chair August 7, 1997 - --------------------- Robert E. Thomson
II-6 NATIONAL MERCANTILE BANCORP AMENDMENT NO. 1 TO FORM S-8 EXHIBIT INDEX
EXHIBIT NUMBER 5.1 Opinion of Manatt, Phelps & Phillips, LLP 23.1 Consent of Manatt, Phelps & Phillips, LLP (see Exhibit 5.1) 23.2 Consent of Deloitte & Touche LLP 24.1 Power of Attorney (see page II-5) 99.1 National Mercantile Bancorp 1994 Stock Option Plan 99.2 Form of Nonqualified Stock Option Agreement 99.3 Form of Incentive Stock Option Agreement
EX-5.1 2 OPINION OF MANATT, PHELPS & PHILLIPS, LLP EXHIBIT 5.1 [LETTERHEAD OF MANATT PHELPS PHILLIPS] August 7, 1997 National Mercantile Bancorp 1840 Century Park East Los Angeles, California 90067 RE: AMENDMENT NO. 1 TO REGISTRATION STATEMENT ON FORM S-8 Gentlemen: At your request, we have examined Amendment No. 1 to the Registration Statement on Form S-8 (the "Amended Registration Statement") to be filed by National Mercantile Bancorp, a California corporation and a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the "Company"), with the Securities and Exchange Commission (the "Commission") in connection with the registration under the Securities Act of 1933, as amended (the "Securities Act"), of 22,003 shares of the Company's common stock, no par value (the "Common Stock"), that may be issued in the aggregate upon the exercise of awards granted under the Company's 1994 Stock Option Plan (the "Plan"). In rendering this opinion, we have examined such documents and records as we deemed relevant, including, but not limited to, the following: 1. The Articles of Incorporation of the Company, as amended to date; 2. The Bylaws of the Company, as amended to date; 3. The Plan; 4. The Form of Nonqualified Stock Option Agreement and the Form of Incentive Stock Option Agreement (collectively the "Agreements") to be used in connection with the Plan; 5. Records of proceedings of the Company's Board of Directors and shareholders pertaining to the adoption or amendment of the Plan and the Agreements; and 6. The Amended Registration Statement. National Mercantile Bancorp August 7, 1997 Page 2 With respect to the foregoing documents, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as certified or reproduced copies. We also have obtained from the officers of the Company certificates as to such factual matters as we consider necessary for the purpose of this opinion, and insofar as this opinion is based on such matters of fact, we have relied on such certificates. On the basis of the foregoing, subject to the assumptions, limitations and exceptions set forth herein, we are of the opinion that the 22,003 shares of Common Stock issuable by the Company upon the exercise of awards granted pursuant to the Plan will be, when issued and delivered against payment therefor in accordance with the Plan, the Agreements and the Amended Registration Statement, duly authorized, validly issued, fully paid and non-assessable. For the purpose of rendering the opinions set forth herein, and with your consent, we have assumed, without investigation that: (i) all awards granted under the Plan to date have been, and all awards to be granted under the Plan will be, duly and validly granted in accordance with the terms of the Plan, (ii) the consideration for the shares of Common Stock to be issued pursuant to the exercise of such awards will be received prior to the issuance thereof, (iii) the shares of Common Stock to be issued pursuant to the exercise of such awards will be issued in accordance with the terms of the Plan and the Agreements, (iv) the Amended Registration Statement will become effective under the Securities Act prior to the issuance of any shares of Common Stock under the Plan and no stop order suspending the effectiveness of the Amended Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or be pending before the Commission, (v) a prospectus will be updated and delivered to participants in the Plan as required by the Securities Act and the rules and regulations promulgated by the Commission thereunder and (vi) the grant of such awards and the issuance of shares of Common Stock upon the exercise thereof will comply with the securities laws of each state or jurisdiction applicable thereto (other than the Securities Act). This opinion is limited to the current laws of the State of California and the Securities Act and the rules and regulations promulgated by the Commission thereunder, to present judicial interpretations thereof and to facts as they presently exist. In rendering this opinion, we have no obligation to revise or supplement it should the current laws of the State of California or the Securities Act or such rules and regulations be changed by legislative action, judicial decision or otherwise. This opinion is issued to you solely for use in connection with the Amended Registration Statement and is not to be quoted or otherwise referred to in any financial statements of the Company or related document, nor is it to be filed with or furnished to any government agency or other person, without the prior written consent of the undersigned in each instance. National Mercantile Bancorp August 7, 1997 Page 3 We hereby consent to the filing of this opinion as an exhibit to the Amended Registration Statement. Very truly yours, /s/ Manatt, Phelps & Phillips, LLP EX-23.2 3 CONSENT OF DELOITTE & TOUCHE, LLP EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Amendment No. 1 to Registration Statement No. 33-94828 of National Mercantile Bancorp on Form S-8 of our report dated March 7, 1997 (which expresses an unqualified opinion and includes an explanatory paragraph relating to National Mercantile Bancorp and Subsidiary's ability to continue as a going concern) appearing in the Annual Report on Form 10-K of National Mercantile Bancorp for the year ended December 31, 1996. Deloitte & Touche LLP August 1, 1997 EX-99.1 4 NATIONAL MERCANTILE BANCORP 1994 STOCK OPTION PLAN EXHIBIT 99.1 The date of this Stock Option Plan is ________________. NATIONAL MERCANTILE BANCORP --------------------------- 1994 STOCK OPTION PLAN ---------------------- 1. Purpose. -------- The purpose of this 1994 Stock Option Plan (the "1994 Plan") of NATIONAL MERCANTILE BANCORP, a California corporation (the "Company"), is to secure for the Company and its shareholders the benefits arising from stock ownership by selected executive and other key employees of the Company or its subsidiaries as the Board of Directors of the Company ("Board"), or any committee to which responsibility for administration of the 1994 Plan has been delegated pursuant to paragraph 2, may from time to time determine. The 1994 Plan will provide a means whereby such employees (i) may purchase shares of the Common Stock of the Company pursuant to options which will qualify as "incentive stock options" under Section 422 of the Internal Revenue Code of 1986, as from time to time amended, or any successor statute of similar purpose (the "Code"), (ii) may purchase shares of the Common Stock of the Company pursuant to "non-incentive" or "non-qualified" stock options and (iii) may receive shares of the Common Stock of the Company, or cash in lieu thereof, pursuant to stock appreciation rights granted in tandem with such options. 2. Administration. -------------- The 1994 Plan shall be administered by the Board, all of whom shall be "disinterested persons" (within the meaning of Rule 16b-3(c)(2)(i) of the Securities Exchange Act of 1934, as amended, (the "1934 Act") unless and until the Board delegates administration to a committee ("Committee"). Any action of the Board with respect to administration of the 1994 Plan shall be taken by a majority vote or unanimous written consent. Subject to the provisions of the 1994 Plan, the Board shall have authority (i) to construe and interpret the 1994 Plan and the options and stock appreciation rights granted under it, (ii) to define the terms used herein, (iii) to prescribe, amend and rescind rules and regulations relating to the 1994 Plan, (iv) to determine the individuals to whom and the time or times at which options shall be granted, whether such options will be incentive stock options or non-qualified stock options, whether to include a stock appreciation right with an option and the terms of such right, the terms and provisions of each option granted (which need not be identical) including, without limitation, the number of shares to be subject to each option, the option price, the number of installments, if any, in which each option may be exercised, and the duration of each option, (v) to approve and determine the duration of leaves of absence which may be granted to participants without constituting a termination of their employment for the purposes of the 1994 Plan, (vi) to cancel, at any time and from time to time, with the consent of the affected optionee or optionees, any or all outstanding options and stock appreciation rights granted under the 1994 Plan and the grant and substitution therefor of new options and stock appreciation rights under the 1994 Plan (subject to limitations hereof) covering the same or different number of shares of stock at an option price per share in all events not less than the fair market value on the new grant date, (vii) to determine any restriction, limitation or condition imposed on stock acquired pursuant to the exercise of an option or stock appreciation right (including, but not limited to, repurchase rights, forfeiture restrictions and restrictions on transferability), (viii) to correct any defect, omission or inconsistency in the 1994 Plan or in any agreement thereunder, in a manner and to the extent it shall deem necessary or expedient to make the 1994 Plan fully effective, and (ix) to make all other determinations necessary or advisable for the administration of the 1994 Plan. The Board may delegate administration of the 1994 Plan to a Committee composed of not fewer than three (3) members of the Board. All of the members of the Committee shall be "disinterested persons" as provided in Rule 16b- 3(c)(2)(i) promulgated pursuant to the 1934 Act. The Committee shall have, in connection with the administration of the 1994 Plan, the powers theretofore possessed by the Board as set forth in this 1994 Plan subject, however, to such resolutions, not inconsistent with the provisions of the 1994 Plan, as may be adopted from time to time by the Board. Any action of the Committee with respect to administration of the 1994 Plan shall be taken pursuant to a majority vote or unanimous written consent. The Committee shall report all action taken by it to the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the 1994 Plan. The Board or Committee, as applicable, shall comply with the provisions of Rule 16b-3 promulgated pursuant to the 1934 Act as in effect from time to time, to the extent applicable to the 1994 Plan or any options or stock appreciation rights granted thereunder. Notwithstanding anything in the 1994 Plan to the contrary, the Board or Committee, as applicable, in its absolute discretion, may bifurcate the 1994 Plan so as to restrict, limit or condition the use of any provision of the 1994 Plan to participants who are subject to Section 16(b) of the 1934 Act, without so restricting, limiting or conditioning the 1994 Plan with respect to other participants. All determinations and interpretations made by or action of the Board or the Committee shall be binding and conclusive on all participants in the 1994 Plan and their legal representatives and beneficiaries. 3. Shares Subject to the 1994 Plan. -------------------------------- Subject to adjustment as provided in paragraph 16 hereof, the shares to be offered under the 1994 Plan shall consist of the Company's authorized but unissued Common Stock, and the aggregate amount of such stock which may be issued upon exercise of all options under the 1994 Plan shall not exceed two hundred thousand (200,000) of such shares. If any option granted under the 1994 Plan shall expire or terminate for any reason (other than surrender at the time of exercise of a related stock appreciation right provided for in paragraph 8 hereof), without having been exercised in full, the unpurchased shares subject thereto shall again be available for options to be granted under the 1994 Plan. 2 4. Eligibility and Participation. ----------------------------- Except for Donald D. Thornburg, who is not eligible to participate in the 1994 Plan, all executive and other key employees of the Company or of any subsidiary corporation (as defined in Section 424(f) of the Code) and directors of the Company or of any subsidiary corporation who are regular employees of the Company or of any subsidiary corporation, shall be eligible for selection to participate in the 1994 Plan. An individual who has been granted an option may, if such individual is otherwise eligible, be granted an additional option or options if the Board shall so determine, subject to the other provisions of the 1994 Plan. No person shall be granted an incentive stock option under the 1994 Plan unless such person is an eligible employee as provided by the Code. No incentive stock option may be granted to any person who, at the time the incentive stock option is granted, owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company (or of its parent or any of its subsidiaries, if applicable), unless the exercise price of such option is at least one hundred ten percent (110%) of the fair market value of of the stock subject to the option and such option by its terms is not exercisable after the expiration of five years from the date such option is granted. The aggregate fair market value (determined at the time the incentive stock option is granted) of the stock with respect to which incentive stock options are exercisable for the first time by an optionee during any calendar year (under all incentive stock option plans of the Company and its subsidiaries) shall not exceed One Hundred Thousand Dollars ($100,000). Should it be determined that any incentive stock option granted pursuant to the 1994 Plan exceeds such maximum, such incentive stock option shall be considered to be a non-qualified option and not to qualify for treatment as an incentive stock option under Section 422 of the Code to the extent, but only to the extent, of such excess. All options granted under the 1994 Plan shall be granted within ten years from February 25, 1994. 5. Duration of Options. ------------------- Each option and all rights associated therewith shall expire on such date as the Board may determine, and shall be subject to earlier termination as provided herein; provided, however, that in the case of incentive stock options, each incentive stock option and all rights associated therewith shall expire in any event within ten (10) years of the date on which such incentive stock option is granted. 6. Purchase Price. -------------- The purchase price of the stock covered by each option shall be determined by the Board, but in the case of incentive stock options, shall not be less than one hundred percent (100%) of the fair market value of such stock on the date the incentive stock option is granted as determined 3 under paragraph 9. The purchase price of the shares upon exercise of an option shall be paid in full at the time of exercise (i) in cash or by check payable to the order of the Company, (ii) by delivery of whole shares of Common Stock of the Company already owned by, and in the possession of the option holder, or (iii) if authorized by the Board or, if specified in the option being exercised, by a promissory note made by option holder in favor of the Company, upon the terms and conditions determined by the Board and secured by the shares issuable upon exercise complying with applicable law (including, without limitation, state, corporate and federal margin requirements), or any combination thereof. Shares of Common Stock used to satisfy the exercise price of an option shall be valued at their fair market value determined (in accordance with paragraph 9 hereof) as of the close of business on the date of exercise (or if such date is not a business day, as of the close of the business day immediately preceding such date). 7. Exercise of Options. ------------------- Each option granted under this 1994 Plan shall be exercisable in such installments during the period prior to its expiration date as the Board shall determine, but in no event shall any option be exercisable for at least six months after grant except in the case of the death or disability of the option holder; provided that, unless otherwise determined by the Board, if the option holder shall not in any given installment period purchase all of the shares which the option holder is entitled to purchase in such installment period, then the option holder's right to purchase any shares not purchased in such installment period shall continue until the expiration date or sooner termination of the option holder's option. No option may be exercised for a fraction of a share and no partial exercise of any option may be for less than one hundred (100) shares. 8. Stock Appreciation Rights. ------------------------- If deemed appropriate by the Board, any stock option may be coupled with stock appreciation right at the time of the grant of the option, or, the Board may grant a stock appreciation right to any person at any time after granting an option to such person prior to the end of the term of such associated option. Such stock appreciation right shall be subject to such terms and conditions not inconsistent with the 1994 Plan as the Board shall impose, provided that: (1) A stock appreciation right shall be exercisable to the extent, and only to the extent, the associated option is exercisable and shall be exercisable only for such period as the Board may determine (which period may expire prior to the expiration date of the option); (2) A stock appreciation right shall entitle the option holder to surrender to the Company, unexercised, the option to which it is related, or any portion thereof, and to receive from the Company in exchange therefor that number of shares (rounded down to the nearest whole number) having an aggregate value equal to the excess of the fair market value of one share (determined as thereinafter provided) over the option price per share specified in such 4 option multiplied by the number of shares subject to the option, or portion thereof, which is so surrendered; and (3) The Board may elect to settle, or the stock appreciation right may permit the optionee to elect to receive (subject to approval by the Board), any part or all of the Company's obligation arising out of the exercise of a stock appreciation right by the payment of cash equal to the aggregate fair market value of that part or all of the shares it would otherwise be obligated to deliver, provided that in no event shall cash be payable to an officer or director of the Company upon exercise of a stock appreciation right (i) if the stock appreciation right was exercised during the first six months of its term; and (ii) unless the optionee elected to receive cash and the stock appreciation right was exercised during the period beginning on the third business day after the release to the public of a quarterly or annual summary statement of the Company's sales and earnings and ending on the twelfth business day following such release of information; or (iii) unless the transaction is otherwise exempt from the operation of Section 16(b) of the Securities Exchange Act of 1934. 9. Fair Market Value of Common Stock. --------------------------------- The fair market value of a share of Common Stock of the Company shall be determined for purposes of the 1994 Plan by reference to the closing price on the principal stock exchange on which such shares are then listed or, if such shares are not then listed on a stock exchange, by reference to the closing price (if a National Market Issue) or the mean between the bid and asked price (if other over-the-counter issue) of a share as supplied by the National Association of Securities Dealers through NASDAQ (or its successor in function), in each case as reported by The Wall Street Journal, for the date on which the ----------------------- option or stock appreciation right is granted or exercised, or if such date is not a business day, for the business day immediately preceding such date (or, if for any reason no such price is available, in such other manner as the Board may deem appropriate to reflect the then fair market value thereof). 10. Withholding Tax. --------------- Upon (i) the disposition by an employee or other person of shares of Common Stock acquired pursuant to the exercise of an incentive stock option granted pursuant to the 1994 Plan within two years of the granting of the incentive stock option or within one year after exercise of the incentive stock option, (ii) the exercise of "non-incentive" or "non-qualified" options, or (iii) the exercise of a stock appreciation right, the Company shall have the right to (a) require such employee or such other person to pay the Company the amount of any taxes which the Company may be required to withhold with respect to such shares or (b) deduct from all amounts paid in cash with respect to exercise of a stock appreciation right the amount of any taxes which the Company may be required to withhold with respect to such cash amounts. 11. Nontransferability. ------------------ An option (and any accompanying stock appreciation right) granted under the 1994 Plan shall, by its terms, be non-transferable by the option holder, either voluntarily or by operation of 5 law, otherwise than by will or the laws of descent and distribution, and shall be exercisable during option holder's lifetime only by the option holder, regardless of any community property interest therein of the spouse of the option holder, or such spouse's successors in interest. If the spouse of the option holder shall have acquired a community property interest in such option (or accompanying stock appreciation right), the option holder, or the option holder's permitted successors in interest, may exercise the option (or accompanying stock appreciation right) on behalf of the spouse of the option holder or such spouse's successors in interest. 12. Holding of Stock After Exercise of Option. ----------------------------------------- At the discretion of the Board, any option may provide that the option holder, by accepting such option, represents and agrees, for the option holder and the option holder's permitted transferees (by will or the laws of descent and distribution), that none of the shares purchased upon exercise of the option or any accompanying stock appreciation right will be acquired with a view to any sale, transfer or distribution of said shares in violation of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, or any applicable state "blue sky" laws, and the person entitled to exercise the same shall furnish evidence satisfactory to the Company (including a written and signed representation) to that effect in form and substance satisfactory to the Company, including an indemnification of the Company in the event of any violation of the Securities Act of 1933 or state "blue sky" laws by such person. 13. Termination of Employment. ------------------------- If a holder of an incentive stock option ceases to be employed by the Company or one of its subsidiaries for any reason other than the option holder's death or permanent disability, the option holder's incentive stock option (and any accompanying stock appreciation right) shall be exercisable for a period of three (3) months after the date option holder ceases to be an employee of the Company or such subsidiary (unless by its terms it sooner expires) to the extent exercisable on the date of such cessation of employment and shall thereafter expire and be void and of no further force or effect. A leave of absence approved in writing by the Board shall not be deemed a termination of employment for the purposes of this paragraph 13, but no option may be exercised during any such leave of absence, except during the first three (3) months thereof. Termination of employment or other relationship with the Company by the holder of a non-qualified stock option will have the effect specified in the individual option agreement, as determined by the Board. 14. Death or Permanent Disability of Option Holder. ---------------------------------------------- If the holder of an incentive stock option dies or becomes permanently disabled while option holder is employed by the Company or one of its subsidiaries, or dies within not more than three (3) months after termination of employment with the Company or one of its subsidiaries, option holder's option (and any accompanying stock appreciation right) shall expire one (1) year after the date of such death or permanent disability unless by its terms it sooner 6 expires. During such period after death, such option (and any accompanying stock appreciation right) may, to the extent that it remained unexercised (but exercisable by the option holder according to such option's terms) on the date of such death, be exercised by the person or persons to whom the option holder's rights under the option shall pass by option holder's will or by the laws of descent and distribution. The death or disability of a holder of a non-qualified stock option will have the effect specified in the individual option agreement as determined by the Board. 15. Privileges of Stock Ownership. ------------------------------ No person entitled to exercise any option or stock appreciation right granted under the 1994 Plan shall have any of the rights or privileges of a shareholder of the Company in respect of any shares of stock issuable upon exercise of such option or stock appreciation right until certificates representing such shares shall have been issued and delivered. No shares shall be issued and delivered upon the exercise of any option or accompanying stock appreciation rights unless and until there shall have been full compliance with all applicable requirements of the Securities Act 1933 (whether by registration or satisfaction of exemption conditions), all applicable listing requirements of any national securities exchange on which shares of the same class are then listed and any other requirements of law or of any regulatory bodies having jurisdiction over such issuance and delivery. Nothing herein shall be deemed to require the Company to apply for or to obtain listing, registration or qualification of any option or stock appreciation right granted or any stock issued or issuable under the 1994 Plan. 16. Adjustments. ------------ If the outstanding shares of the Common Stock of the Company are increased, decreased, changed into or exchanged for a different number or kind of shares or securities of the Company through reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, an appropriate and proportionate adjustment shall be made in the maximum number and kind of shares as to which options may be granted under this 1994 Plan. A corresponding adjustment changing the number or kind of shares allocated to unexercised options or portions thereof, which shall have been granted prior to any such change, shall likewise be made. Any such adjustment in the outstanding options shall be made without change in the aggregate purchase price applicable to the unexercised portion of the option but with a corresponding adjustment in the price for each share or other unit of any security covered by the option. Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale of substantially all the property or more than eighty percent (80%) of the then outstanding stock of the Company to another corporation, the 1994 Plan shall terminate, and all options and stock appreciation rights theretofore granted hereunder shall terminate; provided, however, that notwithstanding the foregoing, the Board shall provide in writing in connection with such transaction for any or all of the following alternatives 7 (separately or in combinations): (i) for the options and any accompanying stock appreciation rights theretofore granted more than six (6) months before such transaction to become immediately exercisable notwithstanding the provisions of paragraph 7 hereof, except the last sentence thereof; (ii) for the assumption by the successor corporation of the options and stock appreciation rights theretofore granted or the substitution by such corporation for such options and rights of new options and rights covering the stock of the successor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; (iii) for the continuance of the 1994 Plan by such successor corporation in which event the 1994 Plan and the options and any accompanying stock appreciation rights theretofore granted shall continue in the manner and under the terms so provided; or (iv) for the payment in cash or stock in lieu of and in complete satisfaction of such options and rights. Adjustments under this paragraph 16 shall be made by the Board, whose determination as to what adjustments shall be made, and the extent thereof, shall be final, binding and conclusive. No fractional shares of stock shall be issued under the 1994 Plan on any such adjustment. At the discretion of the Board, any option may contain provisions to the effect that upon the happening of certain events, including a change in control (as defined by the Board in the option) of the Company, any outstanding options and accompanying stock appreciation rights not theretofore exercisable shall immediately become exercisable in their entirety, notwithstanding any of the other provisions of the option. 17. Amendment and Termination of 1994 Plan. --------------------------------------- The Board may at any time suspend or terminate the 1994 Plan. Unless sooner terminated, the 1994 Plan shall terminate on February 24, 2004. No options may be granted under the 1994 Plan while the 1994 Plan is suspended or after it is terminated. The Board may also at any time amend or revise the terms of the 1994 Plan, provided that no such amendment or revision shall, unless appropriate shareholder approval of such amendment or revision is obtained, materially increase the number of share which may be issued under the 1994 Plan, except as permitted under the provisions of paragraph 16, or change the minimum purchase price of incentive stock options set forth in paragraph 6, or increase the maximum term of incentive stock options provided for in paragraph 5, or materially modify the requirements as to eligibility for participation in the 1994 Plan, or materially increase the benefits accruing to participants under the 1994 Plan. Notwithstanding the foregoing, no amendment, suspension or termination of the 1994 Plan shall, without specific action of the Board and the consent of the option holder, in any way modify, amend, alter or impair any rights or obligations under any option or accompanying stock appreciation right theretofore granted under the 1994 Plan. Furthermore, notwithstanding the foregoing, any 1994 Plan provision that is a "plan provision" within the meaning of Rule 16b-3(c)(2)(ii) under the 1934 Act or any successor provision thereto, shall not be amended more than once every six (6) months other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended (if applicable), or the rules thereunder. 18. Effective Date of the 1994 Plan. -------------------------------- Effectiveness of the 1994 Plan is subject to (i) the Common Stock being designated, or approved for designation, for inclusion in the NASDAQ National Market System and (ii) approval by the holders of the outstanding voting stock of the company as hereinafter provided within twelve (12) months from February 25, 1994 the date the 1994 Plan was adopted by the Board of Directors. The 1994 Plan shall be deemed approved by the holders of the outstanding voting stock of the Company by (i) the affirmative vote of the holders of a majority of the voting shares of the Company represented and voting at a duly held meeting at which a quorum is present or (ii) the written consent of the holders of a majority of the outstanding voting shares of the Company. Any options granted under the 1994 Plan prior to obtaining such shareholder approval or designation or approval for designation for inclusion of the Common Stock in the NASDAQ National Market System shall be granted under the conditions that the options so granted: (1) shall not be exercisable prior to such approval and designation or approval for designation for inclusion, (2) shall not be exercisable prior to appropriate permits or approvals, if required, having been issued by or obtained from the appropriate state and federal securities authorities, and (3) shall become null and void if such shareholder approval and designation or approval for designation for inclusion is not obtained. 19. Use of Proceeds --------------- Proceeds from the sale of stock pursuant to options granted under the 1994 Plan shall constitute general funds of the Company. 20. Compliance with Rule 16b-3 -------------------------- It is the intent of the Company that transactions under the 1994 Plan by persons subject to Section 16 of the 1934 Act generally be exempt under Rule 16b-3 under the 1934 Act. Accordingly, if any provision of the 1994 Plan or any agreement issued thereunder does not comply with the requirements of Rule 16b-3 as the applicable to such a transaction, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements with respect to such transaction. Unless an optionee could otherwise dispose of an option or other derivative security granted under the 1994 Plan, or shares of common stock issued upon exercise of an option, stock appreciation right or other derivative security granted under the 1994 Plan, without incurring liability under Section 16(b) of the 1934 Act, at least six months shall elapse from the date of acquisition of an option, stock appreciation right, or other derivative security under the 1994 Plan to the date of disposition of the option, stock appreciation right, or other derivative security (other than upon exercise or disposition of common stock) acquired upon exercise. 9 EX-99.2 5 FORM OF NONQUALIFIED STOCK OPTION AGREEMENT EXHIBIT 99.2 NATIONAL MERCANTILE BANCORP 1994 STOCK OPTION PLAN FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT This NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement") is made as of the ____ day of __________, 19__ between NATIONAL MERCANTILE BANCORP, a California corporation (the "Company"), and ___________________ (the "Optionee"). R E C I T A L S --------------- A. The Board of Directors of the Company adopted the 1994 Stock Option Plan (the "1994 Plan") on February 25, 1994 and the 1994 Plan was approved by the shareholders of the Company on May 20, 1994. B. The 1994 Plan provides for the granting to selected executives and other key employees of the Company or any subsidiary of the Company, as the Board of Directors or committee appointed by the Board of Directors may from time to time determine, of options to purchase shares of Common Stock of the Company. C. The Board of Directors has determined that it is in the best interests of the Company and its shareholders to grant, pursuant to the 1994 Plan, a non- qualified stock option to the Optionee to purchase ____________________ (_______) shares of the Company's Common Stock on the terms and conditions hereinafter set forth. D. The option granted hereby is not intended to qualify as an "incentive --- stock option" under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). NOW, THEREFORE, the parties hereto agree as follows: 1. GRANT OF OPTION. The Company hereby grants to the Optionee as of the --------------- date hereof (the "Date of Grant") a non-qualified stock option (the "Option") to purchase, on the terms and conditions hereinafter set forth, ____________________ (_______) shares of the Company's Common Stock, no par value (the "Option Shares"), at a purchase price of __________ per share. 2. VESTING. The Option shall vest and become exercisable in full ------- _____________________; provided, however, that no portion of the Option may be exercised by the Optionee to the extent that such exercise would cause an ownership change to occur pursuant to Section 382 of the Code. Section 382 of the Code provides, among other things, that utilization of net operating losses will be restricted if there is a change in ownership of the loss corporation. Changes in ownership are determined by reference to 5% shareholders. 1 3. EXPIRATION OF OPTION AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE. ----------------------------------------------------------------- (a) The Option shall expire on the _________ anniversary of the Date of Grant (the "Expiration Date"), except that (i) if the Optionee ceases, on or before the Expiration Date, for any reason other than death or permanent disability, to be employed by the Company or a subsidiary of the Company, the Option shall expire as provided in Section 6 below, and (ii) if the Optionee ceases, on or before the Expiration Date, to be employed by the Company or a subsidiary of the Company, by reason of death or permanent disability, the Option shall expire as provided in Section 7 below. The term "Employee" as used in this Option means an officer or other employee of the Company or any subsidiary (including an officer who is also a director of the Company or any subsidiary). (b) The Option may be exercised in whole or in part from time to time on or after _________________ until the Expiration Date (subject to the provisions hereof), except that not less than one hundred (100) shares may be purchased at any time unless the number of shares then purchasable hereunder shall be less than one hundred. (c) Except as provided in Sections 6 and 7 below, none of the Option Shares may be purchased hereunder unless the Optionee, at the time he exercises the Option, is employed by the Company or a subsidiary of the Company, since the date hereof. A leave of absence approved in writing by the Board of Directors shall not be deemed a termination of employment for any purpose of this Option. 4. METHOD OF EXERCISE OF OPTION. The Option may be exercised only by ---------------------------- delivery to the Company of a written notice of exercise specifying the number of Option Shares which the Optionee then elects to purchase, accompanied by payment in full of the aggregate exercise price for such shares (the "Exercise Price"), in cash or by check payable to the Company, or in shares of the Company's Common Stock, represented by a certificate duly endorsed, transferring to the Company good and valid title to such shares, such shares to be valued on the basis of the aggregate Fair Market Value (as defined in the 1994 Plan) thereof on the date of such exercise. 5. NON-TRANSFERABILITY OF OPTION. The Option shall not be transferable ----------------------------- by the Optionee otherwise than by will or the laws of descent and distribution, and it shall be exercisable, during the lifetime of the Optionee only by him or by his guardian or legal representative regardless of any community property interest therein of the spouse of the Optionee or such spouse's successors in interest. 6. TERMINATION OF EMPLOYMENT. ------------------------- (a) If the Optionee ceases to be employed by the Company or a subsidiary of the Company for any reason other than death or permanent disability, the Option shall expire three (3) months after the date the Optionee ceases to be so employed, unless by its terms it expires sooner. 2 The Option may be exercised by the Optionee within such three month period to the extent it was exercisable on the date of such cessation of employment. (b) The Option confers no right upon the Optionee with respect to the continuation of his employment with the Company or any of its subsidiaries, and shall not interfere with the right of the Company or a subsidiary, or of the Optionee, to terminate his employment at any time. 7. DEATH OR PERMANENT DISABILITY OF OPTIONEE. If the Optionee ceases to ----------------------------------------- be employed by the Company or a subsidiary of the Company by reason of death or permanent disability, the Option shall expire one (1) year after the date of such death or disability, unless by its terms it expires sooner. The Option may be exercised only by the Optionee within such one year period to the extent it was exercisable on the date of such death or disability. 8. ADJUSTMENTS UPON THE OCCURRENCE OF CERTAIN EVENTS. ------------------------------------------------- (a) If the outstanding shares of the Company's Common Stock are increased, decreased, changed into or exchanged for a different number or kind of shares or securities of the Company through reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, an appropriate and proportionate adjustment shall be made in the Option Shares pursuant to which the Options relate. Any such adjustment in the outstanding Options shall be made without change in the aggregate purchase price applicable to the unexercised portion of the Options but with a corresponding adjustment in the price for each Option Share. (b) Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale of substantially all the property or more than eighty percent (80%) of the then outstanding stock of the Company to another corporation, all Options shall terminate; provided, however, that notwithstanding the foregoing, the Company or the Board of Directors may provide to the Optionee in writing in connection with such transaction any or all of the following alternatives (separately or in combinations): (i) for the Options granted more than six months before such transaction to become immediately exercisable; (ii) for the assumption by the successor corporation of the Options or the substitution by such corporation for such Options of new options and rights covering the stock of the successor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; (iii) for the continuance of the Options in the matter and under the terms so provided; or (iv) for the payment in cash or stock in lieu of and in complete satisfaction of such Options. (c) No adjustment provided for in this Section 8 shall require the Company to sell a fractional share under the Options. 9. DELIVERY OF STOCK CERTIFICATES. Upon the exercise of all or a portion ------------------------------ of the Option, the Company, as promptly as practicable, shall mail or deliver to the Optionee a stock certificate or certificates representing the shares then purchased, and will pay all stamp taxes payable in connection therewith. The issuance of such shares and delivery of the certificate or certificates 3 therefor shall, however, be subject to any delay necessary to complete (a) the listing of such shares on any stock exchange upon which shares of the same class are then listed or quoted on the Nasdaq SmallCap Market, (b) such registration or other qualification of such shares under any state or federal law, rule, or regulation as the Company may determine to be necessary or advisable, and (c) the making of provision for the payment or withholding of any taxes required to be withheld pursuant to any applicable law, in respect of the exercise of the Option or the receipt of such shares. 10. NOTICES, ETC. ------------- (a) Any notice hereunder by the Optionee shall be given to the Company in writing and such notice and any payment by the Optionee hereunder shall be deemed duly given or made only upon receipt thereof at the Company's corporate offices at 1840 Century Park East, Los Angeles, California 90067, or at such other address as the Company may designate by notice to the Optionee. (b) Any notice or other communication to the Optionee shall be in writing and any such communication and any delivery to the Optionee hereunder shall be deemed duly given or made if mailed or delivered to the Optionee at such address as the Optionee shall have on file with the Company or in care of the Company at the address of its corporate offices indicated above. 11. WAIVER. The waiver by the Company of any provision of the Option ------ shall not operate as or be construed to be a waiver of the same provision or any other provision hereof at any subsequent time or for any other purpose. 12. IRREVOCABILITY. The Option shall be irrevocable until it expires as -------------- herein provided. 13. EFFECTIVE DATE. The Option shall be deemed granted and effective on -------------- the Date of Grant. 14. INTERPRETATION AND CONSTRUCTION. The interpretation and construction ------------------------------- of the Option by the Board of Directors shall be final, binding and conclusive. The section headings in this Agreement are for convenience of reference only and shall not be deemed part of, or germane to the interpretation or construction of, this Agreement. 4 NATIONAL MERCANTILE BANCORP By: _________________________________ ------------------------------ _________________, Optionee By his or her signature below, the spouse of the Optionee agrees to be bound by all of the terms and conditions of the foregoing Agreement. --------------------------- 5 EX-99.3 6 FORM OF INCENTIVE STOCK OPTION AGREEMENT EXHIBIT 99.3 NATIONAL MERCANTILE BANCORP 1994 STOCK OPTION PLAN FORM OF INCENTIVE STOCK OPTION AGREEMENT This INCENTIVE STOCK OPTION AGREEMENT (the "Agreement") is made as of the ____ day of __________, 19__ between NATIONAL MERCANTILE BANCORP, a California corporation (the "Company"), and ___________________ (the "Optionee"). R E C I T A L S --------------- A. The Board of Directors of the Company adopted the 1994 Stock Option Plan (the "1994 Plan") on February 25, 1994 and the 1994 Plan was approved by the shareholders of the Company on May 20, 1994. B. The 1994 Plan provides for the granting to selected executives and other key employees of the Company or any subsidiary of the Company, as the Board of Directors or a committee appointed by the Board of Directors may from time to time determine, of options to purchase shares of Common Stock of the Company. C. The Board of Directors has determined that it is in the best interests of the Company and its shareholders to grant, pursuant to the 1994 Plan, an incentive stock option to the Optionee to purchase ____________________ (_______) shares of the Company's Common Stock on the terms and conditions hereinafter set forth. D. The option granted hereby is intended to qualify as an "incentive stock option" under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), to the extent possible. NOW, THEREFORE, the parties hereto agree as follows: 1. GRANT OF OPTION. The Company hereby grants to the Optionee as of the --------------- date hereof (the "Date of Grant") an incentive stock option (the "Option") to purchase, on the terms and conditions hereinafter set forth, ____________________ (_______) shares of the Company's Common Stock, no par value (the "Option Shares"), at a purchase price of __________ per share. 2. VESTING. The Option shall vest and become exercisable in full ------- _____________________; provided, however, that no portion of the Option may be exercised by the Optionee to the extent that such exercise would cause an ownership change to occur pursuant to Section 382 of the Code. Section 382 of the Code provides, among other things, that utilization of net operating losses will be restricted if there is a change in ownership of the loss corporation. Changes in ownership are determined by reference to 5% shareholders. 1 3. EXPIRATION OF OPTION AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE. ----------------------------------------------------------------- (a) The Option shall expire on the tenth anniversary of the Date of Grant (the "Expiration Date"), except that (i) if the Optionee ceases, on or before the Expiration Date, for any reason other than death or permanent disability, to be employed by the Company or a subsidiary of the Company, the Option shall expire as provided in Section 6 below, and (ii) if the Optionee ceases, on or before the Expiration Date, to be employed by the Company or a subsidiary of the Company, by reason of death or permanent disability, the Option shall expire as provided in Section 7 below. The term "Employee" as used in this Option means an officer or other employee of the Company or any subsidiary (including an officer who is also a director of the Company or any subsidiary). (b) The Option may be exercised in whole or in part from time to time on or after _________________ until the Expiration Date (subject to the provisions hereof), except that not less than one hundred (100) shares may be purchased at any time unless the number of shares then purchasable hereunder shall be less than one hundred. (c) Except as provided in Sections 6 and 7 below, none of the Option Shares may be purchased hereunder unless the Optionee, at the time he exercises the Option, is employed by the Company or a subsidiary of the Company, since the date hereof. A leave of absence approved in writing by the Board of Directors shall not be deemed a termination of employment for any purpose of this Option. 4. METHOD OF EXERCISE OF OPTION. The Option may be exercised only by ---------------------------- delivery to the Company of a written notice of exercise specifying the number of Option Shares which the Optionee then elects to purchase, accompanied by payment in full of the aggregate exercise price for such shares (the "Exercise Price"), in cash or by check payable to the Company, or in shares of the Company's Common Stock, represented by a certificate duly endorsed, transferring to the Company good and valid title to such shares, such shares to be valued on the basis of the aggregate Fair Market Value (as defined in the 1994 Plan) thereof on the date of such exercise. 5. NON-TRANSFERABILITY OF OPTION. The Option shall not be transferable ----------------------------- by the Optionee otherwise than by will or the laws of descent and distribution, and it shall be exercisable, during the lifetime of the Optionee only by him or by his guardian or legal representative regardless of any community property interest therein of the spouse of the Optionee or such spouse's successors in interest. 6. TERMINATION OF EMPLOYMENT. ------------------------- (a) If the Optionee ceases to be employed by the Company or a subsidiary of the Company for any reason other than death or permanent disability, the Option shall expire three (3) months after the date the Optionee ceases to be so employed, unless by its terms it expires sooner. 2 The Option may be exercised by the Optionee within such three month period to the extent it was exercisable on the date of such cessation of employment. (b) The Option confers no right upon the Optionee with respect to the continuation of his employment with the Company or any of its subsidiaries, and shall not interfere with the right of the Company or a subsidiary, or of the Optionee, to terminate his employment at any time. 7. DEATH OR PERMANENT DISABILITY OF OPTIONEE. If the Optionee ceases to ----------------------------------------- be employed by the Company or a subsidiary of the Company by reason of death or permanent disability, the Option shall expire one (1) year after the date of such death or disability, unless by its terms it expires sooner. The Option may be exercised only by the Optionee within such one year period to the extent it was exercisable on the date of such death or disability. 8. ADJUSTMENTS UPON THE OCCURRENCE OF CERTAIN EVENTS. ------------------------------------------------- (a) If the outstanding shares of the Company's Common Stock are increased, decreased, changed into or exchanged for a different number or kind of shares or securities of the Company through reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction, an appropriate and proportionate adjustment shall be made in the Option Shares pursuant to which the Options relate. Any such adjustment in the outstanding Options shall be made without change in the aggregate purchase price applicable to the unexercised portion of the Options but with a corresponding adjustment in the price for each Option Share. (b) Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale of substantially all the property or more than eighty percent (80%) of the then outstanding stock of the Company to another corporation, all Options shall terminate; provided, however, that notwithstanding the foregoing, the Company or the Board of Directors may provide to the Optionee in writing in connection with such transaction any or all of the following alternatives (separately or in combinations): (i) for the Options granted more than six months before such transaction to become immediately exercisable; (ii) for the assumption by the successor corporation of the Options or the substitution by such corporation for such Options of new options and rights covering the stock of the successor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; (iii) for the continuance of the Options in the matter and under the terms so provided; or (iv) for the payment in cash or stock in lieu of and in complete satisfaction of such Options. (c) No adjustment provided for in this Section 8 shall require the Company to sell a fractional share under the Options. 9. DELIVERY OF STOCK CERTIFICATES. Upon the exercise of all or a portion ------------------------------ of the Option, the Company, as promptly as practicable, shall mail or deliver to the Optionee a stock certificate or certificates representing the shares then purchased, and will pay all stamp taxes payable in connection therewith. The issuance of such shares and delivery of the certificate or certificates 3 therefor shall, however, be subject to any delay necessary to complete (a) the listing of such shares on any stock exchange upon which shares of the same class are then listed or quoted on the Nasdaq SmallCap Market, (b) such registration or other qualification of such shares under any state or federal law, rule, or regulation as the Company may determine to be necessary or advisable, and (c) the making of provision for the payment or withholding of any taxes required to be withheld pursuant to any applicable law, in respect of the exercise of the Option or the receipt of such shares. 10. NOTICES, ETC. ------------- (a) Any notice hereunder by the Optionee shall be given to the Company in writing and such notice and any payment by the Optionee hereunder shall be deemed duly given or made only upon receipt thereof at the Company's corporate offices at 1840 Century Park East, Los Angeles, California 90067, or at such other address as the Company may designate by notice to the Optionee. (b) Any notice or other communication to the Optionee shall be in writing and any such communication and any delivery to the Optionee hereunder shall be deemed duly given or made if mailed or delivered to the Optionee at such address as the Optionee shall have on file with the Company or in care of the Company at the address of its corporate offices indicated above. 11. WAIVER. The waiver by the Company of any provision of the Option ------ shall not operate as or be construed to be a waiver of the same provision or any other provision hereof at any subsequent time or for any other purpose. 12. IRREVOCABILITY. The Option shall be irrevocable until it expires as -------------- herein provided. 13. EFFECTIVE DATE. The Option shall be deemed granted and effective on -------------- the Date of Grant. 14. INTERPRETATION AND CONSTRUCTION. The interpretation and construction ------------------------------- of the Option by the Board of Directors shall be final, binding and conclusive. The section headings in this Agreement are for convenience of reference only and shall not be deemed part of, or germane to the interpretation or construction of, this Agreement. 4 NATIONAL MERCANTILE BANCORP By: _____________________________ _____________________________ ___________________, Optionee By his or her signature below, the spouse of the Optionee agrees to be bound by all of the terms and conditions of the foregoing Agreement. _____________________________ 5 -----END PRIVACY-ENHANCED MESSAGE-----