0001104659-06-042887.txt : 20060621 0001104659-06-042887.hdr.sgml : 20060621 20060621141416 ACCESSION NUMBER: 0001104659-06-042887 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20060621 DATE AS OF CHANGE: 20060621 GROUP MEMBERS: FIRST CALIFORNIA FINANCIAL GROUP, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FCB Bancorp CENTRAL INDEX KEY: 0001331825 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 203074387 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 333-126401 FILM NUMBER: 06917119 BUSINESS ADDRESS: STREET 1: 1100 PASEO CAMARILLO CITY: CAMARILLO STATE: CA ZIP: 93010 BUSINESS PHONE: 805-484-0534 MAIL ADDRESS: STREET 1: 1100 PASEO CAMARILLO CITY: CAMARILLO STATE: CA ZIP: 93010 FILED BY: 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: 425 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 425 1 a06-14177_18k.htm CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): June 15, 2006

NATIONAL MERCANTILE BANCORP

(Exact Name of Registrant as Specified in its Charter)

California
(State or Other Jurisdiction
of Incorporation)

0-15982
(Commission File Number)

95-3819685
(I.R.S. Employer
Identification No.)

1880 Century Park East
Los Angeles, CA 90067
(Address of Principal Executive Offices)

(310) 277-2265
(Registrant’s Telephone Number)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Item 1.01. Entry into a Material Definitive Agreement

Agreement and Plan of Merger

On June 15, 2006, National Mercantile Bancorp (“NMB”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with FCB Bancorp, a California corporation (“FCB”), and First California Financial Group, Inc. (“FCFG”), a new Delaware corporation formed by NMB for the purpose of the transactions described herein. NMB is the parent corporation of Mercantile National Bank and South Bay Bank, and FCB is the parent corporation of First California Bank.

The Merger Agreement provides for the reincorporation merger of NMB into FCFG immediately followed by the merger of FCB into FCFG (together, the “Mergers”). The Mergers are intended to qualify as tax-free reorganizations under Section 368(a) of the Internal Revenue Code of 1986, as amended. In addition, the Merger Agreement contemplates that the three banks will be merged into a single bank following the Mergers.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the applicable Merger:

(i) each issued and outstanding share of NMB Series B Convertible Perpetual Preferred Stock will be converted into the right to receive one share of Series A Convertible Perpetual Preferred Stock of FCFG (which is substantially similar to the NMB Series B Preferred);

(ii) each outstanding share of common stock of NMB (other than dissenting shares) will be converted into the right to receive one share of FCFG common stock;

(iii) each outstanding share of common stock of FCB (other than dissenting shares) will be converted into the right to receive 1.7904 shares of FCFG common stock; and

(iv) FCFG will assume each outstanding option to purchase either FCB or NMB common stock (all of which outstanding options were granted under the companies’ respective employee stock plans), each of which will be converted into the right to purchase shares of FCFG common stock.

The effect of the exchange ratios in the Mergers is such that, on a fully-diluted basis (assuming the conversion of the NMB Series B Preferred Stock and exercise of all options to acquire either NMB or FCB common stock outstanding as of the date of the Merger Agreement), at the closing of the Mergers the equity holders of NMB as of immediately prior to the closing will own 50.5% of FCFG and the equity holders of FCB as of immediately prior to the closing will own 49.5% of FCFG.

The Boards of Directors of FCB and NMB have approved the Mergers.

The Merger Agreement provides, and the Amended and Restated Certificate of Incorporation of FCFG will provide, that until after the 2009 Annual Meeting of FCFG Stockholders, the Board of Directors of FCFG will, subject to exception as provided therein, consist of 10 directors, five of which shall have served as, or been approved by, persons who immediately prior to the effective time were directors of NMB and five of which will have served as, or been approved by, persons who immediately prior to the effective time were directors of FCB. Robert E. Gipson, the Chairman of the

Board of NMB, will become the Chairman of the Board of FCFG, and John W. Birchfield, Chairman of the Board of FCB, will become the Vice Chairman of the Board of FCFG.

The Merger Agreement contemplates that the executive officers of FCFG and the merged bank will include C.G. Kum, President and Chief Executive Officer, Romolo Santarosa, Executive Vice President and Chief Financial Officer, David R. Brown, Executive Vice President and Chief Strategy Officer, Robert W. Bartlett, Executive Vice President and Chief Credit Officer, and Thomas E. Anthony, Executive Vice President, Head of Commercial Banking.

Consummation of the Mergers is subject to a number of closing conditions, including approval by the shareholders of both NMB and FCB and regulatory approval. The Merger Agreement contains certain termination rights for both NMB and FCB and provides that in certain specified circumstances, one party must pay the other a termination fee of $4,000,000 (generally under specified circumstances in the event that such party’s Board of Directors does not submit approval of the Mergers and Merger Agreement to its shareholders for approval, changes its recommendation that its shareholders approve the principal terms of the Merger Agreement and the Mergers, or elects to pursue a superior acquisition proposal from a third party).

NMB has entered into voting agreements (the “Voting Agreements”) with each of John W. Birchfield, Richard D. Aldridge, Tenisha M. Fitzgerald, Syble R. Roberts, C.G. Kum, Thomas Tignino, James O. Birchfield and the Shane O. Birchfield Trust pursuant to which such persons have agreed to vote all of their shares of FCB common stock (representing approximately 40% of the shares of FCB common stock outstanding as of the date hereof) in favor of the approval of the principal terms of the Merger Agreement and the Mergers and against certain other actions, principally actions that would result in a breach of the Merger Agreement or interfere with the Mergers. Additionally, shareholders holding a majority of the outstanding common stock of NMB entered into substantially similar voting agreements with FCB to vote in favor of the principal terms of the Merger Agreement and the Mergers. The Voting Agreements provide that, if the Mergers are consummated, the shareholders party to the Voting Agreements shall be indemnified against all losses arising out of such agreements.

A copy of the Merger Agreement and the form of Voting Agreement entered into by NMB are attached hereto as Exhibits 2.1 and 99.1, respectively. The foregoing description of the Merger Agreement and the Voting Agreements is qualified in its entirety by reference to the full text of the Merger Agreement and the Voting Agreements.

Aside from the transactions contemplated by the Merger Agreement, there is no material relationship between FCB and NMB.

For Additional Information

This material is not a substitute for the joint proxy statement/prospectus FCFG, NMB and FCB will file with the Securities and Exchange Commission. Investors are urged to read the joint proxy statement/prospectus that will contain important information, including detailed risk factors, when it becomes available. The joint proxy statement/prospectus and other documents which will be filed with the Securities and Exchange Commission will be available free of charge at the SEC’s website, www.sec.gov, or by directing a request when such a filing is made to National Mercantile Bancorp, 1880 Century Park East, Los Angeles, CA 90067, Attention: Assistant Secretary.

NMB and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of NMB and FCB Bancorp in connection with the

proposed merger. Information about the directors and executive officers of NMB is set forth in the proxy statement for its 2006 annual meeting of shareholders, as filed with the SEC on April 20, 2006. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the joint proxy statement/prospectus regarding the proposed merger when it becomes available. You may obtain free copies of these documents as described above.

Amendment to Employment Agreement with Scott A. Montgomery

Scott A. Montgomery, the Chief Executive Officer and President of NMB, will retire after assisting in the transition through March 31, 2007. Concurrently with execution of the Merger Agreement, NMB and Mr. Montgomery amended Mr. Montgomery’s Employment Agreement. Under the Employment Agreement as amended, Mr. Montgomery will receive severance of $1,325,838 payable in 60 monthly installments of $22,097 commencing October 1, 2007. FCFG will also continue to provide medical and other insurance coverage for two years following termination of his employment and will provide him title to his company car. The amended Employment Agreement fixes Mr. Montgomery’s incentive compensation for 2006 at the amount of his salary for the year ($349,456) and he will receive his full salary through the end of 2006. His compensation for January 1, 2007 through March 31, 2007 will be $74,728.

A copy of this amendment is attached hereto as Exhibit 10.1. The foregoing description of the amendment to the Employment Agreement is qualified in its entirety by reference to the full text thereof.

Employment Agreement for C.G. Kum

Concurrently with execution of the Merger Agreement, FCFG and Mr. Kum entered into an employment agreement that provides that Mr. Kum will serve FCFG as Chief Executive Officer commencing with the closing. Pursuant to the employment agreement, Mr. Kum will receive an annual base salary of $375,000 (subject to review and increase commencing in 2008) and a bonus based on FCFG’s net earnings, with the total bonus not to exceed 150% of base salary. Additionally, Mr. Kum will be granted an option to purchase 100,000 shares of FCFG common stock on Mr. Kum’s start date with an exercise price equal to the fair market value on the date of grant. Either FCFG or Mr. Kum may terminate his employment at any time with or without “cause” (as defined). If FCFG terminates his employment without cause, Mr. Kum will be entitled to 18 months of health insurance coverage and severance, as follows: (i) if the termination is on or before March 1, 2009, the severance will be twice his then current salary: (ii) if the termination is after March 1, 2009, the severance will be 50% of his then current salary if at least 70% of the board members vote for such termination; if less than 70% of the Board members vote for termination, the severance will be 150% of his then current salary plus 150% of the average of his bonuses for the two preceding years. If within 18 months following a change in control Mr. Kum’s employment is terminated without cause or he terminates his employment for “good reason” (as defined), Mr. Kum will receive the greater of two times his then current salary or 2.99 times his average salary and bonus over the prior five years, provided that in no event can the payment exceed the golden parachute limitation under Section 280G of the Internal Revenue Code.

A copy of Mr. Kum’s Employment Agreement is attached hereto as Exhibit 10.4. The foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text thereof.

Second Amended and Restated Severance Agreements

Concurrently with execution of the Merger Agreement, NMB amended and restated the severance agreements of David R. Brown and Robert W. Bartlett. Under each of their prior agreements, if a change of control occurred and within one year thereafter NMB terminated the executive’s employment without cause or the executive terminated his employment, the executive would be entitled to a lump sum payment of 15 months’ base salary and twice his bonus for the prior year. The amendment to each of their severance agreements: (i) specifically provides that the consummation of the transactions contemplated by the Merger Agreement constitutes a change of control under the agreements; (ii) provides that the bonus component of the severance will be not less than twice the amount of the bonus they earned in fiscal 2005; and (iii) under certain limited circumstances in which a severance payment is made, subject the recipient to a one-year non-solicitation provision.

A copy of the Second Amended and Restated Severance Agreement entered into between NMB and each of Messrs. Bartlett and Brown is attached hereto as Exhibits 10.2 and 10.3, respectively. The foregoing description of the amendments to such agreements is qualified in its entirety by reference to the full text thereof.

Item 9.01. Financial Statements and Exhibits.

Exhibit No. Description

2.1 Agreement and Plan of Merger, dated as of June 15, 2006, among National Mercantile Bancorp, FCB Bancorp and First California Financial Group, Inc. (Incorporated by reference to the Current Report on Form 8-K filed by FCB Bancorp on June 21, 2006)

10.1 Letter dated June 15, 2006, between Scott A. Montgomery and National Mercantile Bancorp.

10.2 Second Amended and Restated Severance Agreement, dated as of June 15, 2006, between National Mercantile Bancorp and Robert W. Bartlett.

10.3 Second Amended and Restated Severance Agreement, dated as of June 15, 2006, between National Mercantile Bancorp and David R. Brown.

10.4 Employment Agreement, dated as of June 15, 2006, between C.G. Kum and First California Financial Group, Inc. (Incorporated by reference to the Current Report on Form 8-K filed by FCB Bancorp on June 21, 2006)

99.1 Form of Voting Agreement, dated as of June 15, 2006, between National Mercantile Bancorp and certain shareholders of FCB Bancorp.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: June 21, 2006	NATIONAL MERCANTILE BANCORP
	By:	/s/ Scott A. Montgomery
		Scott A. Montgomery
		Chief Executive Officer

EXHIBIT INDEX

Item 9.01. Financial Statements and Exhibits

Exhibit No. Description

2.1 Agreement and Plan of Merger, dated as of June 15, 2006, among National Mercantile Bancorp, FCB Bancorp, and First California Financial Group, Inc. (Incorporated by reference to the Current Report on Form 8-K filed by FCB Bancorp on June 21, 2006)

10.1 Letter dated June 15, 2006, between Scott A. Montgomery and National Mercantile Bancorp.

10.2 Second Amended and Restated Severance Agreement, dated as of June 15, 2006, between National Mercantile Bancorp and Robert W. Bartlett.

10.3 Second Amended and Restated Severance Agreement, dated as of June 15, 2006, between National Mercantile Bancorp and David R. Brown.

99.1 Form of Voting Agreement, dated as of June 15, 2006, between National Mercantile Bancorp and certain shareholders of FCB Bancorp.

EX-10.1 2 a06-14177_1ex10d1.htm EX-10

Exhibit 10.1

NATIONAL MERCANTILE BANCORP
1880 Century Park East, Suite 800
Los Angeles, CA 90067

June 15, 2006

Mr. Scott A. Montgomery
National Mercantile Bancorp
1880 Century Park East, Suite 800
Los Angeles, CA 90067

Re: Employment Agreement

Dear Scott:

Reference is made to your Employment Agreement dated as of January 1, 1999, as amended by that certain Assignment, Assumption and Amendment of Employment Agreement effective as of January 1, 2002 (the “Employment Agreement”). Capitalized terms used in this Letter Agreement and not otherwise defined in this Letter have the meanings ascribed to them in the Employment Agreement.

National Mercantile Bancorp (the “Company”) has concurrently herewith entered into that certain Agreement and Plan of Merger (the “Merger Agreement”) that provides that the Company will merge into a newly formed Delaware subsidiary corporation that will immediately thereafter merge (the “Merger”) with FCB Bancorp, a California corporation (“FCB”).

You and the Company agree as follows in connection with the Merger Agreement (which agreement shall, to the extent applicable, amend your Employment Agreement):

1. Your positions as an executive officer of the Company and its subsidiaries will terminate effective as of the closing of the Merger (the “Closing”). However, in light of the strong personal contacts you have with our borrowers and depositors on the Westside of Los Angeles and our Century City office, you and the Company agree that you will remain as a non-officer employee to consult and assist in the transition to the new executive management team. Your employment will terminate on March 31, 2007.

Your compensation from the Closing through March 31, 2007 will be as follows: Your Base Salary will be at the annual rate of $349,456 through December 31, 2006 and your incentive compensation for 2006 will be $349,456. For the period January 1, 2007 through March 31, 2007, you will receive total compensation of $74,728, payable in installments in accordance with the Company’s normal payroll practices.

(a) If the Closing occurs, the Company shall pay to you (or as you direct), as severance, a total of $1,325,838, payable in equal monthly installments of $22,097.30

commencing on October 1, 2007 and continuing on the first day of each of the following 59 months. No interest or earnings shall accrue on such amount. The Company shall have the right to withhold from any payment due the amount of income and any other tax required to be withheld by the Company as employer by applicable law or regulation.

At your request, upon termination of your employment at March 31, 2007, the amount of the severance will be deposited for your benefit in a Rabbi Trust (the “Trust”) with a mutually acceptable trustee. The amounts in the Trust will be invested in United States treasury obligations and/or government guaranteed obligations or other mutually acceptable obligations, with all income to be distributed to the Company. The trustee of the Trust will withhold all payroll taxes as payments are made to you and distribute the withheld amounts to the Company for remittance to the appropriate taxing authorities. The Company’s personnel will perform services required by the Trust. The cost and expense of the Trust shall be borne by the Company. The Company shall have the right to defer the funding of the Trust if, in its sole discretion, it does not have sufficient funds to fund the Trust and pay its anticipated operating expenses; provided, however, that in such event the Company shall obtain such funds from one or more of its subsidiary banks by means of dividend or capital distribution, subject to any necessary regulatory approvals (and the Company will use its reasonable best efforts to obtain any necessary regulatory approvals).

This Agreement also constitutes the notice of non-renewal of your Employment Agreement under Section 8.4 of the Employment Agreement.

You have no obligation to seek other employment, and any payments you are entitled to receive from the Company following the termination of your employment may not be offset by any payments you receive from any subsequent employer.

2. If the Closing occurs, for two years following the termination of your employment, the Company will continue to provide to you and your spouse all insurance benefits (including medical, dental, vision, life and long-term disability) that it provides to you and your spouse at the date of this Letter Agreement to the extent permitted under the terms of the respective plan and with premium and copayments by you to the extent currently required under the plans; provided that you shall monthly reimburse the Company for these costs for the first six months following termination of your employment, and at the end of such six month period, the Company will pay to you an amount equal to the amount of your reimbursement of the Company under this Section 2.

3. On April 1, 2007, the Company will lease to you on an arm’s length basis or sell to you (for the wholesale bluebook value) free and clear of all liens and encumbrances the automobile that the Company is providing to you; on October 1, 2007, the Company shall, as the case may be, transfer to you the automobile and reimburse you for the lease payments that you have made or return to you the amount that you paid for the automobile.

4. If the Closing occurs, and in lieu of your covenant under Section 9 of the Employment Agreement, you agree that until January 2, 2008, you shall not, alone or as a member, employee or agent of any partnership, or as an officer, agent, employee, director or stockholder of any other corporation, whether directly or indirectly, (a) solicit any then existing customer of the Company and its subsidiaries for the opportunity to provide any services of the kind offered to or provided to that customer by the Company or any of its subsidiaries, or (b) solicit for employment any person employed by the Company or any of its subsidiaries, or encourage or induce any such person to terminate his or her employment by the Company or any of its subsidiaries.

5. For and in consideration of the payments and benefits set out in this Letter Agreement (which benefits exceed those you would otherwise have received under your Employment Agreement), you agree that as of the date of termination of your employment, and on behalf of yourself and your heirs, successors and assigns, you hereby finally and unconditionally release and discharge the Company, and any and all of its subsidiaries, affiliates and other related companies, as well as any and all of their officers, directors, agents, employees, partners, shareholders, attorneys, predecessors, successors and assigns (the “Released Parties”) from any and all claims, demands, liabilities, damages, obligations, actions or causes of action of any kind, known or unknown, past or present, arising out of, relating to, or in connection with your employment and the termination of your employment, except as set forth below.

The claims released by you include, but are not limited to: (a) claims for defamation, libel, invasion of privacy, intentional or negligent infliction of emotional distress, wrongful termination, constructive discharge, breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and fraud; (b) claims under federal, state or local laws prohibiting employment discrimination and claims under federal and state labor statutes and regulations, including, but not limited to, the Age Discrimination in Employment Act, the California Fair Employment and Housing Act, the California Labor Code, Title VII of the Civil Rights Act of 1964, as amended, and the Fair Labor Standards Act, as well as any and all claims, demands, debts, and causes of action of whatsoever kind or nature, whether known or unknown, suspected or unsuspected, matured or unmatured, which you now have or claim to have or had at any time or claimed to have against the Released Parties in connection with your employment or termination of employment.

You agree, from and after the Closing, to forever refrain from instituting, initiating, prosecuting, maintaining or voluntarily participating in any lawsuit, claim or other proceeding in any jurisdiction or forum against any Released Party relating in any way to your employment or termination from employment.

This release does not, and the Company acknowledges that it does not, release the Company or its subsidiaries from any obligations: (i) under the Employment Agreement, except as expressly modified or terminated by this Letter Agreement (such as reimbursement of expenses and payments for accrued vacation); (ii) to indemnify you under the Employment Agreement, the Merger Agreement, the Bylaws of the Company or a subsidiary, or applicable law; or (iii) under this Letter Agreement. In addition, the Company agrees not to specifically exclude you from any policy of directors and officer’s liability insurance currently or hereafter maintained by the Company, provided that this covenant does not require the Company to maintain such insurance or to exclude certain c lasses of officers or directors as a group.

As a condition to its obligation to make any severance payments to you, the Company may require you to confirm that in writing that the release remains in full force and effect and covers all claims (other than the exceptions described in the preceding paragraph) through the date of termination of your employment.

6. The release contained herein is intended to be complete and final and to cover not only claims, demands, liabilities, damages, actions and causes of action which are known, but also claims, demands, liabilities, damages, actions and causes of action which are unknown or which you do not suspect to exist in your favor which, if known at the time of executing this Agreement, might have affected your actions, and therefore you expressly waive the benefit of the provision of Section 1542 of the California Civil Code, which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

You hereby waive and relinquish all rights and benefits which you have or may have had under Section 1542 of the California Civil Code or the law of any other state, country, or jurisdiction to the same or similar effect to the full extent that you may lawfully waive such rights.

7. If the Closing occurs, the payments made by the Company pursuant to this Letter Agreement upon Closing supersede any severance or other compensation to which you are entitled pursuant to the Employment Agreement upon termination of your employment or upon a change of control, or upon any other severance plan or policy of the Company and its subsidiaries, including without limitation the payments under Sections 8 and 11 of the Employment Agreement.

8. The agreements and obligations of the Company and you under Sections 2, 3, 4, 5, 6 and 7 of this Letter Agreement shall be conditioned upon your being an employee of the Company immediately prior to the Closing unless you are not an employee because either the Company terminated your employment without cause as permitted by Section 8.2.3 of the Employment Agreement or you resign for the reasons set forth in Section 8.3.3 of the Employment Agreement. If your employment terminates prior to the Closing for any other reason, your rights and obligations upon termination and/or change of control are those set forth in the Employment Agreement without modification by this Letter Agreement. If the Company terminates your employment prior to the Closing without cause, or if you resign for the reasons set forth in Section 8.3.3 of the Employment Agreement prior to the Closing, you shall be entitled to your benefits under the Employment Agreement and, if the Closing subsequently occurs: (i) the benefits under this Letter Agreement shall supersede the benefits under the Employment Agreement, and (ii) the Company shall be entitled to offset against payments owed under this Letter Agreement the amount of any severance payments paid to you under the Employment Agreement.

9. If the Merger Agreement shall terminate without the consummation of the Merger, upon such termination this Letter Agreement shall terminate without action of the parties and shall be of no force or effect.

10. The parties hereto understand that this agreement is a legally binding agreement that affects such party’s rights. You acknowledge that Troy & Gould P.C. served as counsel to the Company in connection with this agreement. You acknowledge and agree that you have received such advice of your own counsel as you have deemed necessary or desirable in connection with your decision to enter into this Letter Agreement.

11. You represent that you have carefully read this entire Letter Agreement and that you know and understand its contents. You have had the opportunity to receive independent legal advice from attorneys of your choice with respect to the preparation, review and advisability of executing this Agreement. You further represent and acknowledge that you have freely and voluntarily executed this Agreement after independent investigation and without fraud, duress, or undue influence, with a full understanding of the legal and binding effect of this Agreement. You specifically acknowledge that you has been advised he have had twenty-one (21) days to review this Agreement, have had the opportunity to make counterproposals to the Agreement, and have been advised that you have ten (10) days after signing this Agreement to revoke this Agreement.

12. This Letter Agreement and the Employment Agreement contains the sole and entire agreement and understanding of you and the Company with respect to the entire subject matter discussed herein, and any and all prior discussions, negotiations,

commitments and understandings, whether oral or otherwise, related to the subject matter of this Letter Agreement and the Employment Agreement are hereby merged herein. Without limiting the generality of the foregoing, this Letter Agreement and the Employment Agreement supersede all memos, drafts, correspondence, minutes and discussions relating to the termination of your employment and the severance and other benefits payable upon such termination and the timing of such payments.

13. Except as specifically modified herein, the Employment Agreement shall remain in full force and effect.

If the foregoing confirms your understanding, please sign where indicated below and return a copy of this Letter Agreement to the Company.

	Very truly yours,

	NATIONAL MERCANTILE BANCORP

	By	/s/ Robert E. Gipson
	Its	Robert E. Gipson, Chairman of the Board

Agreed and accepted:

/s/ Scott A. Montgomery
Scott A. Montgomery

EX-10.2 3 a06-14177_1ex10d2.htm EX-10

Exhibit 10.2

Execution Version

SECOND AMENDED AND RESTATED SEVERANCE AGREEMENT

THIS SECOND AMENDED AND RESTATED SEVERANCE AGREEMENT (this “Agreement”) is made and entered into as of June 15, 2006, by and between National Mercantile Bancorp, a California corporation (the “Company”), and Robert W. Bartlett (“Officer”) with reference to the following facts:

A. Officer is an officer of the Company and/or one or more subsidiaries of the Company; and

B. In order to induce Officer to remain employed by the Company and/or its subsidiaries, the Company is willing to agree to pay severance to Officer under certain circumstances.

C. This Agreement amends and restates in its entirety the Severance Agreement dated September 26, 2003 and the Amended and Restated Severance Agreement dated May 3, 2005, in each case, by and between the Company and Officer.

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein contained, it is agreed as follows:

1. Definitions. For purposes of this Agreement, the following terms when used in this Agreement shall have the meanings set forth below:

1.1 “Board” shall mean the Board of Directors of the Company.

1.2 “Cause” shall mean Officer, after the date of this Agreement, (i) has been convicted by a court of competent jurisdiction of any felony or any criminal offense involving dishonesty, breach of trust or misappropriation, or has entered a plea of nolo contendere to such an offense; or (ii) has committed an act of fraud, embezzlement, theft, dishonesty or any act which would cause termination of coverage under the Company’s Banker’s Blanket Bond as to Officer (as distinguished from termination of coverage as to the Company as a whole); or (iii) has committed a willful violation of the Code of Conduct of any member of the Company Group or any law, rule or regulation governing the operation of the Company Group which the Board determines in good faith will likely have or has had a material adverse effect on the business, interests or reputation of the Company Group or any Member thereof; or (iv) has willfully refused to perform the duties assigned to him; or (v) has committed a willful and unauthorized disclosure of material confidential information regarding the Company Group, which disclosure the Board determines in good faith will likely have or has had a material adverse effect on the Company Group or any member thereof.

1.3 “Change of Control” shall mean any transaction or series of related transactions as a result of which:

(i) the Company consummates a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of its assets (each a “Business Combination”), in each case unless immediately following the consummation of such Business Combination all of the following conditions are satisfied:

(A) Persons, who, immediately prior to such Business Combination, were the beneficial owners of the Outstanding Voting Securities of the Company, beneficially own (within the meaning of Rule 13d-3 promulgated under the Exchange Act, directly or indirectly, more than 50% of the combined voting power of the then Outstanding Voting Securities of the entity (the “Resulting Entity”) resulting from such Business Combination (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries);

(B) no Person, other than the Existing Shareholder Group, beneficially owns (within the meaning of Rule l3d-3), directly or indirectly, more than: (i) 20% of the then outstanding combined voting power of the Outstanding Voting Securities of the Resulting Entity, except to the extent that such Person’s beneficial ownership of the Company immediately prior to the Business Combination exceeded such threshold, and (ii) beneficially owns more the Existing Shareholder Group;

(C) at least one-half of the members of the board of directors of the Resulting Entity were members of the Board at the time the Board authorized the Company to enter into the definitive agreement providing for such Business Combination;

(ii) any Person acquires beneficial ownership (within the meaning of Rule 13d-3) of more than 20% of the combined voting power (calculated as provided in Rule l3d-3 in the case of rights to acquire securities) of the then Outstanding Voting Securities of the Company and has greater beneficial ownership than the Existing Shareholder Group; provided, however, that for purposes of this clause, the following acquisitions shall not constitute a Change of Control: (x) any acquisition directly from the Company, (y) any acquisition by the Company, (z) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company; or (zz) any acquisition by the Existing Shareholder Group; or

(iii) the Company consummates the transactions contemplated by that certain Agreement and Plan of Merger, dated as of the date hereof, among the Company, the Company’s wholly-owned subsidiary and FCB Bancorp, a California corporation.

1.4 “Company Group” shall mean at any time the Company and each subsidiary of the Company at such time which is consolidated with the Company for financial reporting purposes.

1.5 “Disability of Officer” shall mean if Officer is Disabled and such disability continues for a period of any six months out of a one-year period. “Disabled” shall mean Officer’s inability, through physical or mental illness or other cause, to perform normal and customary duties which Officer is required to perform for the Company. In determining

whether Officer is Disabled, the Company may rely upon the written statement provided by a licensed physician acceptable to the Company. Officer shall allow examination from time to time by any licensed physician selected by the Company and agreed to by Officer. All such examinations will be conducted within a reasonable time period.

1.6 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor statute.

1.7 “Existing Shareholder Group” shall mean Carl R. Pohlad, members of the immediate family of Carl R. Pohlad, and any affiliated Person of Carl R. Pohlad or any member of his immediate family.

1.8 “Outstanding Voting Securities” of any Person means the outstanding securities of such Person entitling the holders thereof to vote generally in the election of directors of such Person.

1.9 “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act, which definition shall include a “person” within the meaning of Section 13(d)(3) of the Exchange Act.

1.10 “Without Cause” shall mean any termination of Officer’s employment by the Company except for a termination (i) for Cause, (ii) as a result of the death of Officer, or (iii) as a result of the Disability of Officer.

2. Severance Payment.

2.1 Except as provided in Section 2.2, if within one year following a Change of Control, either Officer terminates employment with all members of the Company Group voluntarily or the Company terminates Officer’s employment Without Cause, the Company will pay Officer in a lump sum (except as provided below) an amount (the “Severance Payment”) equal to the sum of: (i) fifteen times Officer’s base monthly salary as in effect at the time of termination or, if greater, immediately prior to the effective date of the Change of Control; and (ii) twice the amount of the greater of (x) the bonus, if any, paid (or payable) to Officer for the fiscal year immediately preceding the fiscal year in which Officer’s employment terminates and (y) $95,000. The Severance Payment shall be reduced by required deductions for applicable taxes and other withholdings and for any outstanding obligations owed by Officer to the Company that are then due and payable, which deductions and withholdings are specifically authorized by Officer. The Severance Payment shall be in lieu of any other severance payments to which Officer would be entitled under the plans or policies of the Company and any of its subsidiaries. If Officer’s employment is terminated by the Company Without Cause, the Severance Payment shall be paid at the time of termination of the Officer’s employment with the Company. If Officer’s employment is terminated voluntarily by Officer, the Severance Payment shall be paid within 30 days following termination. Notwithstanding the foregoing, if as of the date the Severance Payment is due Officer’s bonus for the preceding fiscal year has not been determined, the Company shall defer payment of the bonus component of the Severance Payment until such time as Officer’s bonus shall have been determined, but in no event later than 90 days following the end of

such preceding fiscal year. Each Change of Control shall give Officer a separate right to give the notice set forth in the first sentence of this Section 2; provided that in no event shall Officer be entitled to more than one Severance Payment.

2.2 Notwithstanding any other provision of this Agreement, the Company shall have no obligation to make the Severance Payment if such Severance Payment is prohibited by applicable federal or state law, including without limitation Part 359 of the regulations of the Federal Deposit Insurance Corporation (12 CFR § 359 et seq.) or any successor provision.

2.3 As a condition to the obligation of the Company to pay the Severance Payment, the Officer must execute and deliver a release in form and substance satisfactory to the Company releasing the Company Group and its directors, officers, employees and agents (“Released Parties”) from any and all claims the Officer may have against the Released Parties, whether such claims are known or unknown, absolute or contingent, other than claims under this Agreement, claims for salary and other compensation and benefits accrued prior to termination, claims for indemnification under applicable law, the Bylaws of the Company or any Indemnification Agreement between the Officer and the Company, and rights of Officer under employee benefit plans.

2.4 As a condition to the obligation of the Company to pay the Severance Payment under circumstances where the Officer terminates employment voluntarily within a year following a Change of Control, the Officer shall not, for a period of one year subsequent to the date of termination, whether alone or as a member, employee or agent of any partnership, or as an officer, agent, employee, director or stockholder of any other corporation, whether directly or indirectly, (a) solicit any then existing customer of the Company and its subsidiaries for the opportunity to provide any services of the kind offered to or provided to that customer by the Company or any of its subsidiaries, or (b) solicit for employment any person employed by the Company or any of its subsidiaries, or encourage or induce any such person to terminate his or her employment with the Company or any of its subsidiaries.

3. IRC Provisions. Notwithstanding any other provision of this Agreement, if the Company reasonably determines that the payment of the Severance Payment to Officer would be nondeductible by the Company for federal income tax purposes because of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Severance Payment shall be reduced to an amount which maximizes the Severance Payment without causing any portion of the same to be nondeductible by the Company because of Section 280G of the Code. Any such reduction shall be applied to the Severance Payment or the other amounts due to Officer in such manner as Officer may reasonably specify within 30 days following notice from the Company of the need for such reduction or, if Officer fails to so specify timely, as determined by the Company.

4. Employee Benefits. All employee benefits provided by the Company shall cease upon termination of Officer’s employment for any reason, and the Company shall have no further responsibility with respect thereto after such termination; provided, however, that: (a) nothing contained in this Agreement shall affect any right Officer may have pursuant to

the federal entitlement to continued group health care coverage as provided in the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any successor legislation or comparable state law; (b) if Officer is entitled to receive a Severance Payment pursuant to Section 2 hereof, and if Officer elects under COBRA to continue to receive any benefits thereunder, the Company shall reimburse Officer for the amount of such Officer’s COBRA payments for the first fifteen months after such termination subject to a delay in the start of reimbursement until the first day after six months have elapsed from the date of termination; and (c) nothing shall alter or modify the post termination rights of Officer under any employee benefit plan (such as the right to exercise vested options for a specified period under the Stock Incentive Plan).

5. Term. The Agreement shall commence on the date set forth above and shall terminate upon 12 months prior written notice to the Officer.

6. Employment “At Will”. Neither this Agreement nor the Severance Payment payable hereunder shall be deemed to limit, replace or otherwise affect the “at will” nature of Officer’s employment with the Company Group. Officer’s employment with any member of the Company Group continues to be for an unspecified term and may be terminated at will at any time with or without cause or notice by such member of the Company Group or by Officer (but in the case of Officer, without the written consent of the Company Officer must terminate his employment with all members of the Company Group). This employment “at-will” relationship cannot be changed absent an express intent as set forth in an individualized written employment contract signed by both Officer and the Chief Executive Officer of the Company.

7. Mitigation. Officer shall have no obligation to mitigate damages based upon Officer’s termination pursuant to Section 2 of this Agreement, and the Severance Payment shall not be reduced as a result of Officer obtaining other employment within fifteen months of Officer’s termination.

8. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, together, shall constitute one and the same instrument.

9. Partial Invalidity. Any provision of this Agreement which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and such other provisions shall remain in full force and effect.

10. Governing Law. The terms and provisions of this Agreement shall be governed and construed pursuant to the laws of the State of California except to the extent governed by federal law.

11. Construction. Headings at the beginning of each section are solely for the convenience of the parties and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared

by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to sections are to this Agreement.

12. Integration. This Agreement represents the entire and integrated agreement between the Company and Officer regarding the subject matter hereof and supersedes all prior negotiations, representations or agreements, either written or oral.

13. Successors and Assigns. The terms, covenants and conditions herein contained shall be binding upon and shall inure to the benefit of the heirs, successors and assigns of the parties hereto.

14. Key Employee Payment Deferral. Notwithstanding the timing of payments set forth in this Agreement, if the Company determines that you are a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and that, as a result of such status, any portion of the payment under this Agreement would be subject to additional taxation, the Company will delay paying any portion of such payment until the earliest permissible date on which payments may commence without triggering such additional taxation (with such delay not to exceed six months), with the first such payment to include the amounts that would have been paid earlier but for the above delay.

15. No Waiver. No waiver by either party of any breach or default hereunder shall be deemed a waiver of any other breach or default, and no delay or forbearance by either party hereunder in enforcing any of its rights or remedies shall be deemed a waiver of any such rights or remedies, unless such waiver is embodied in a writing signed by the authorized representative of the party to be bound.

IN WITNESS WHEREOF, this Agreement has been executed effective on the day and year hereinabove set forth.

THE “COMPANY”	NATIONAL MERCANTILE BANCORP


	By:	/s/ Scott A. Montgomery
		Scott A. Montgomery
		Chief Executive Officer


“OFFICER”		/s/ Robert W. Bartlett
		Robert W. Bartlett

EX-10.3 4 a06-14177_1ex10d3.htm EX-10

Exhibit 10.3

Execution Version

SECOND AMENDED AND RESTATED SEVERANCE AGREEMENT

THIS SECOND AMENDED AND RESTATED SEVERANCE AGREEMENT (this “Agreement”) is made and entered into as of June 15, 2006, by and between National Mercantile Bancorp, a California corporation (the “Company”), and David R. Brown (“Officer”) with reference to the following facts:

A. Officer is an officer of the Company and/or one or more subsidiaries of the Company; and

B. In order to induce Officer to remain employed by the Company and/or its subsidiaries, the Company is willing to agree to pay severance to Officer under certain circumstances.

C. This Agreement amends and restates in its entirety the Severance Agreement dated November 14, 2002, and the Amended and Restated Severance Agreement dated May 3, 2005, in each case by and between the Company and Officer.

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein contained, it is agreed as follows:

1. Definitions. For purposes of this Agreement, the following terms when used in this Agreement shall have the meanings set forth below:

1.1 “Board” shall mean the Board of Directors of the Company.

1.2 “Cause” shall mean Officer, after the date of this Agreement, (i) has been convicted by a court of competent jurisdiction of any felony or any criminal offense involving dishonesty, breach of trust or misappropriation, or has entered a plea of nolo contendere to such an offense; or (ii) has committed an act of fraud, embezzlement, theft, dishonesty or any act which would cause termination of coverage under the Company’s Banker’s Blanket Bond as to Officer (as distinguished from termination of coverage as to the Company as a whole); or (iii) has committed a willful violation of the Code of Conduct of any member of the Company Group or any law, rule or regulation governing the operation of the Company Group which the Board determines in good faith will likely have or has had a material adverse effect on the business, interests or reputation of the Company Group or any Member thereof; or (iv) has willfully refused to perform the duties assigned to him; or (v) has committed a willful and unauthorized disclosure of material confidential information regarding the Company Group, which disclosure the Board determines in good faith will likely have or has had a material adverse effect on the Company Group or any member thereof.

1.3 “Change of Control” shall mean any transaction or series of related transactions as a result of which:

(i) the Company consummates a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of its assets (each a “Business Combination”), in each case unless immediately following the consummation of such Business Combination all of the following conditions are satisfied:

(ii) any Person acquires beneficial ownership (within the meaning of Rule 13d-3) of more than 20% of the combined voting power (calculated as provided in Rule l3d-3 in the case of rights to acquire securities) of the then Outstanding Voting Securities of the Company and has greater beneficial ownership than the Existing Shareholder Group; provided, however, that for purposes of this clause, the following acquisitions shall not constitute a Change of Control: (x) any acquisition directly from the Company, (y) any acquisition by the Company, (z) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company; or (zz) any acquisition by the Existing Shareholder Group; or

(iii) the Company consummates the transactions contemplated by that certain Agreement and Plan of Merger, dated as of the date hereof, among the Company, the Company’s wholly-owned subsidiary and FCB Bancorp, a California corporation.

1.4 “Company Group” shall mean at any time the Company and each subsidiary of the Company at such time which is consolidated with the Company for financial reporting purposes.

1.5 “Disability of Officer” shall mean if Officer is Disabled and such disability continues for a period of any six months out of a one-year period. “Disabled” shall mean Officer’s inability, through physical or mental illness or other cause, to perform normal and customary duties which Officer is required to perform for the Company. In determining

1.6 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor statute.

1.7 “Existing Shareholder Group” shall mean Carl R. Pohlad, members of the immediate family of Carl R. Pohlad, and any affiliated Person of Carl R. Pohlad or any member of his immediate family.

1.8 “Outstanding Voting Securities” of any Person means the outstanding securities of such Person entitling the holders thereof to vote generally in the election of directors of such Person.

1.9 “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act, which definition shall include a “person” within the meaning of Section 13(d)(3) of the Exchange Act.

1.10 “Without Cause” shall mean any termination of Officer’s employment by the Company except for a termination (i) for Cause, (ii) as a result of the death of Officer, or (iii) as a result of the Disability of Officer.

2. Severance Payment.

2.1 Except as provided in Section 2.2, if within one year following a Change of Control, either Officer terminates employment with all members of the Company Group voluntarily or the Company terminates Officer’s employment Without Cause, the Company will pay Officer in a lump sum (except as provided below) an amount (the “Severance Payment”) equal to the sum of: (i) fifteen times Officer’s base monthly salary as in effect at the time of termination or, if greater, immediately prior to the effective date of the Change of Control; and (ii) twice the amount of the greater of (x) the bonus, if any, paid (or payable) to Officer for the fiscal year immediately preceding the fiscal year in which Officer’s employment terminates and (y) $85,000. The Severance Payment shall be reduced by required deductions for applicable taxes and other withholdings and for any outstanding obligations owed by Officer to the Company that are then due and payable, which deductions and withholdings are specifically authorized by Officer. The Severance Payment shall be in lieu of any other severance payments to which Officer would be entitled under the plans or policies of the Company and any of its subsidiaries. If Officer’s employment is terminated by the Company Without Cause, the Severance Payment shall be paid at the time of termination of the Officer’s employment with the Company. If Officer’s employment is terminated voluntarily by Officer, the Severance Payment shall be paid within 30 days following termination. Notwithstanding the foregoing, if as of the date the Severance Payment is due Officer’s bonus for the preceding fiscal year has not been determined, the Company shall defer payment of the bonus component of the Severance Payment until such time as Officer’s bonus shall have been determined, but in no event later than 90 days following the end of

2.2 Notwithstanding any other provision of this Agreement, the Company shall have no obligation to make the Severance Payment if such Severance Payment is prohibited by applicable federal or state law, including without limitation Part 359 of the regulations of the Federal Deposit Insurance Corporation (12 CFR § 359 et seq.) or any successor provision.

2.3 As a condition to the obligation of the Company to pay the Severance Payment, the Officer must execute and deliver a release in form and substance satisfactory to the Company releasing the Company Group and its directors, officers, employees and agents (“Released Parties”) from any and all claims the Officer may have against the Released Parties, whether such claims are known or unknown, absolute or contingent, other than claims under this Agreement, claims for salary and other compensation and benefits accrued prior to termination, claims for indemnification under applicable law, the Bylaws of the Company or any Indemnification Agreement between the Officer and the Company, and rights of Officer under employee benefit plans.

2.4 As a condition to the obligation of the Company to pay the Severance Payment under circumstances where the Officer terminates employment voluntarily within a year following a Change of Control, the Officer shall not, for a period of one year subsequent to the date of termination, whether alone or as a member, employee or agent of any partnership, or as an officer, agent, employee, director or stockholder of any other corporation, whether directly or indirectly, (a) solicit any then existing customer of the Company and its subsidiaries for the opportunity to provide any services of the kind offered to or provided to that customer by the Company or any of its subsidiaries, or (b) solicit for employment any person employed by the Company or any of its subsidiaries, or encourage or induce any such person to terminate his or her employment with the Company or any of its subsidiaries.

3. IRC Provisions. Notwithstanding any other provision of this Agreement, if the Company reasonably determines that the payment of the Severance Payment to Officer would be nondeductible by the Company for federal income tax purposes because of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Severance Payment shall be reduced to an amount which maximizes the Severance Payment without causing any portion of the same to be nondeductible by the Company because of Section 280G of the Code. Any such reduction shall be applied to the Severance Payment or the other amounts due to Officer in such manner as Officer may reasonably specify within 30 days following notice from the Company of the need for such reduction or, if Officer fails to so specify timely, as determined by the Company.

4. Employee Benefits. All employee benefits provided by the Company shall cease upon termination of Officer’s employment for any reason, and the Company shall have no further responsibility with respect thereto after such termination; provided, however, that: (a) nothing contained in this Agreement shall affect any right Officer may have pursuant to

the federal entitlement to continued group health care coverage as provided in the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or any successor legislation or comparable state law; (b) if Officer is entitled to receive a Severance Payment pursuant to Section 2 hereof, and if Officer elects under COBRA to continue to receive any benefits thereunder, the Company shall reimburse Officer for the amount of such Officer’s COBRA payments for the first fifteen months after such termination subject to a delay in the start of reimbursement until the first day after six months have elapsed from the date of termination; and (c) nothing shall alter or modify the post termination rights of Officer under the Executive Deferred Compensation Plan (except for amendments to conform to Section 409A of the Code) or any employee benefit plan (such as the right to exercise vested options for a specified period under the Stock Incentive Plan).

5. Term. The Agreement shall commence on the date set forth above and shall terminate upon 12 months prior written notice to the Officer.

6. Employment “At Will”. Neither this Agreement nor the Severance Payment payable hereunder shall be deemed to limit, replace or otherwise affect the “at will” nature of Officer’s employment with the Company Group. Officer’s employment with any member of the Company Group continues to be for an unspecified term and may be terminated at will at any time with or without cause or notice by such member of the Company Group or by Officer (but in the case of Officer, without the written consent of the Company Officer must terminate his employment with all members of the Company Group). This employment “at-will” relationship cannot be changed absent an express intent as set forth in an individualized written employment contract signed by both Officer and the Chief Executive Officer of the Company.

7. Mitigation. Officer shall have no obligation to mitigate damages based upon Officer’s termination pursuant to Section 2 of this Agreement, and the Severance Payment shall not be reduced as a result of Officer obtaining other employment within fifteen months of Officer’s termination.

8. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which, together, shall constitute one and the same instrument.

9. Partial Invalidity. Any provision of this Agreement which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and such other provisions shall remain in full force and effect.

10. Governing Law. The terms and provisions of this Agreement shall be governed and construed pursuant to the laws of the State of California except to the extent governed by federal law.

11. Construction. Headings at the beginning of each section are solely for the convenience of the parties and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine shall include the feminine and vice versa. This Agreement shall not be construed as if it had been prepared

by one of the parties, but rather as if both parties had prepared the same. Unless otherwise indicated, all references to sections are to this Agreement.

12. Integration. This Agreement represents the entire and integrated agreement between the Company and Officer regarding the subject matter hereof and supersedes all prior negotiations, representations or agreements, either written or oral.

13. Successors and Assigns. The terms, covenants and conditions herein contained shall be binding upon and shall inure to the benefit of the heirs, successors and assigns of the parties hereto.

14. Key Employee Payment Deferral. Notwithstanding the timing of payments set forth in this Agreement, if the Company determines that you are a “specified employee” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and that, as a result of such status, any portion of the payment under this Agreement would be subject to additional taxation, the Company will delay paying any portion of such payment until the earliest permissible date on which payments may commence without triggering such additional taxation (with such delay not to exceed six months), with the first such payment to include the amounts that would have been paid earlier but for the above delay.

15. No Waiver. No waiver by either party of any breach or default hereunder shall be deemed a waiver of any other breach or default, and no delay or forbearance by either party hereunder in enforcing any of its rights or remedies shall be deemed a waiver of any such rights or remedies, unless such waiver is embodied in a writing signed by the authorized representative of the party to be bound.

IN WITNESS WHEREOF, this Agreement has been executed effective on the day and year hereinabove set forth.

THE “COMPANY”		NATIONAL MERCANTILE BANCORP


	By:	/s/ Scott A. Montgomery
		Scott A. Montgomer
		Chief Executive Officer


“OFFICER”		/s/ David R. Brown
		David R. Brown

EX-99.1 5 a06-14177_1ex99d1.htm EX-99

Exhibit 99.1

FORM OF

SHAREHOLDER AGREEMENT (FCB Version)

This SHAREHOLDER AGREEMENT (this “Shareholder Agreement”) is made and entered into as of June 15, 2006 by and between National Mercantile Bancorp, a California corporation (“Bancorp”), and the signatory hereto (the “Shareholder”).

WHEREAS, Bancorp, FCB Bancorp, a California corporation (the “Company”), and First California Financial Group, Inc. have entered into that certain Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”).

WHEREAS, as a condition to entering into the Merger Agreement the parties thereto have required that the Shareholder, solely in the Shareholder’s capacity as a holder of FCB Common Stock, enter into, and the Shareholder has agreed to enter into, this Shareholder Agreement.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Representations and Warranties of the Shareholder. The Shareholder hereby represents and warrants to Bancorp as follows:

(a) Authority; Binding Obligation. The Shareholder has all necessary power and authority to enter into this Shareholder Agreement and perform all of the Shareholder’s obligations hereunder. This Shareholder Agreement has been duly and validly executed and delivered by the Shareholder (and the Shareholder’s spouse, if the Shares (as defined below) constitute community property under applicable law) and constitutes a valid and legally binding obligation of the Shareholder and such spouse, enforceable against the Shareholder and such spouse, as the case may be, in accordance with its terms.

(b) Ownership of Shares. The Shareholder is the beneficial owner or record holder of the number of shares of FCB Common Stock listed under the Shareholder’s name on the signature page hereto (the “Existing Shares” and, together with any shares of FCB Common Stock the record or beneficial ownership of which is acquired by the Shareholder after the date hereof, the “Shares”) and, as of the date hereof, the Existing Shares constitute all the shares of FCB Common Stock owned of record or beneficially by the Shareholder. With respect to the Existing Shares, the Shareholder has sole voting power and sole power to issue instructions with respect to or otherwise engage in the actions set forth in Section 2 hereof, sole power of disposition and sole power to demand appraisal rights, with no restrictions on the voting rights, rights of disposition or otherwise, subject to applicable laws and the terms of this Shareholder Agreement.

(c) No Conflicts. Neither the execution, delivery and performance of this Shareholder Agreement nor the consummation of the transactions contemplated hereby will conflict with or constitute a violation of or a default under (with or without notice, lapse of time, or both) any contract, agreement, voting agreement, shareholders’ agreement, trust agreement, voting trust, proxy, power of attorney, pooling arrangement, note, mortgage, indenture,

instrument, arrangement or other obligation or restriction of any kind to which the Shareholder is a party or which the Shareholder or the Shareholder’s Shares are subject to or bound.

2. Voting Agreement and Agreement Not to Transfer.

(a) The Shareholder hereby agrees to vote or caused to be voted all of the Shareholder’s Shares (i) in favor of the approval of the principal terms of the Merger Agreement as well as any other matters required to be approved by the shareholders of the Company for consummation of the Mergers; (ii) against any action or agreement that would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement; and (iii) except with the prior written consent of Bancorp, against the following actions (other than the Mergers or the consummation of any actions contemplated by the Merger Agreement): (A) any extraordinary corporate transactions, such as a merger, consolidation or other business combination involving the Company; (B) any sale, lease, transfer or disposition of a material amount of the assets of the Company; (C) any change in the majority of the board of directors of the Company; (D) any material change in the present capitalization of the Company; (E) any amendment of the Company’s articles of incorporation or bylaws; (F) any other change in the corporate structure, business, assets or ownership of the Company; or (G) any other action which is intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage or adversely affect the contemplated economic benefits to Bancorp of the Mergers and the transactions contemplated by the Merger Agreement. Notwithstanding the foregoing, Shareholder shall not be obligated to vote or cause to be voted all of the Shareholder’s Shares in accordance with the provisions of Section 2(a)(i)-(iii) hereof, if there has been a material modification or amendment of the terms of the Merger Agreement or a waiver of any material condition to the Merger Agreement.

(b) The Shareholder hereby agrees not to (i) sell, transfer, convey, assign or otherwise dispose of any of his or her Shares without the prior written consent of Bancorp which shall not be unreasonably withheld, other than Shares sold or surrendered to pay the exercise price of any FCB Options or to satisfy the Company’s withholding obligations with respect to any taxes resulting from such exercise, or (ii) pledge, mortgage or otherwise encumber such Shares. Any permitted transferee of the Shareholder’s Shares must become a party to this Shareholder Agreement and any purported transfer of the Shareholder’s Shares to a Person that does not become a party hereto shall be null and void ab initio.

3. Cooperation. The Shareholder agrees that he or she will not (directly or indirectly) initiate, solicit, encourage or facilitate any Acquisition Proposal from any Person.

4. Shareholder Capacity. The Shareholder is entering this Shareholder Agreement in his or her capacity as the record or beneficial owner of the Shares, and not in his or her capacity as a director or officer of the Company. Nothing in this Shareholder Agreement shall be deemed in any manner to limit the discretion of any Shareholder to take any action, or fail to take any action, in his or her capacity as a director or officer of the Company that may be either (a) required of the Shareholder under applicable law or (b) is otherwise permitted by the Merger Agreement.

5. Termination. The obligations of the Shareholder hereunder shall terminate upon the consummation of the Mergers. If the Mergers are not consummated, the obligations of the Shareholder hereunder shall terminate upon the termination of the Merger Agreement in accordance with its terms.

6. Specific Performance. The Shareholder acknowledges that it would be impossible to determine the amount of damages that would result from any breach of any of its obligations under this Shareholder Agreement and that the remedy at law for any breach, or threatened breach, would likely be inadequate and, accordingly, agrees that Bancorp shall, in addition to any other rights or remedies which it may have at law or in equity, be entitled to seek such equitable and injunctive relief as may be available from any court of competent jurisdiction to restrain the Shareholder from violating any of its obligations under this Shareholder Agreement. In connection with any action or proceeding for such equitable or injunctive relief, the Shareholder hereby waives any claim or defense that a remedy at law alone is adequate and agrees, to the maximum extent permitted by law, to have the obligations of the Shareholder under this Shareholder Agreement specifically enforced against him, without the necessity of posting bond or other security, and consents to the entry of equitable or injunctive relief against the Shareholder enjoining or restraining any breach or threatened breach of this Shareholder Agreement.

7. Indemnification.

(a) If and only if the Mergers are consummated in accordance with the terms of the Merger Agreement, Bancorp and its successors and assigns, including but not limited to the Surviving Corporation (collectively the “Indemnifying Party”), shall, to the fullest extent permitted by law, indemnify, defend and hold harmless Shareholder (as incurred to the extent incurred subsequent to the Primary Merger Effective Time) against all costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities incurred by Shareholder, regardless of whether incurred prior to or after the Primary Merger Effective Time (collectively, “Costs”) in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of this Shareholder Agreement other than an action for specific performance under Section 6 hereof. A Shareholder wishing to claim indemnification under this Section 7, upon learning of any claim, action, suit, proceeding or investigation described above, shall promptly notify Indemnifying Party thereof; provided that the failure so to notify shall not affect the obligations of Indemnifying Party under this Section 7 unless and to the extent that Indemnifying Party is

actually and materially prejudiced as a result of such failure. In case any such action shall be brought against Shareholder, it shall promptly notify the Indemnifying Party of the commencement thereof, and the Indemnifying Party shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to Shareholder, and after notice from the Indemnifying Party to Shareholder of its election to so assume the defense thereof, the Indemnifying Party shall not be liable to Shareholder for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party.

(b) If Bancorp or any of its successors or assigns shall consolidate with or merge into any other entity and shall not be the continuing or surviving entity of such consolidation or merger or shall transfer all or substantially all of its assets to any other entity, then and in each case, Bancorp shall cause proper provision to be made so that the successors and assigns of Bancorp shall assume the obligations set forth in this Section 7.

8. Miscellaneous.

(a) Definitional Matters.

(i) For purposes of this Agreement, beneficial ownership shall be determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

(ii) All capitalized terms used but not defined in this Shareholder Agreement shall have the respective meanings that the Merger Agreement ascribes to such terms.

(iii) The section and paragraph captions herein are for convenience of reference only, do not constitute part of this Shareholder Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.

(b) Entire Agreement. This Shareholder Agreement constitutes the entire agreement of the parties hereto with reference to the transactions contemplated hereby and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, between the parties or their respective representatives, agents or attorneys, with respect to the subject matter hereof.

(c) Parties in Interest. This Shareholder Agreement shall be binding upon and inure solely to the benefit of each party hereto and the other parties to the Merger Agreement and their respective successors, assigns, estate, heirs, executors, administrators and other legal representatives, as the case may be. Nothing in this Shareholder Agreement, express or implied, is intended to confer upon any other Person, other than parties hereto or their respective successors, assigns, estate, heirs, executors, administrators and other legal representatives, as the case may be, any rights, remedies, obligations or liabilities under or by reason of this Shareholder Agreement.

(d) Assignment. This Shareholder Agreement shall not be assignable by law or otherwise without the prior written consent of the other party hereto; provided, however, that Bancorp may assign any of its rights and obligations hereunder to any of its affiliates or to any other entity which may acquire all or substantially all of the assets, shares or business of Bancorp or any of its subsidiaries or any entity with or into which Bancorp or any of its subsidiaries may be consolidated or merged.

(e) Modifications; Waivers. This Shareholder Agreement shall not be amended, altered or modified in any manner whatsoever, except by a written instrument executed by the parties hereto. No waiver of any breach or default hereunder shall be considered valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach of the same or similar nature.

(f) Severability. Any term or provision of this Shareholder Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity and unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Shareholder Agreement in any other jurisdiction. If any provision of this Shareholder Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

(g) Governing Law. This Shareholder Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the laws of the State of California, without regard to the conflict of law principles thereof.

(h) Jurisdiction and Venue. Any legal action or proceeding with respect to this Shareholder Agreement may be brought in the courts of the State of California in the County of Los Angeles or of the United States of America for the Central District of California and, by execution and delivery of this Agreement, each of the Shareholder and Bancorp hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of and venue in the aforesaid courts, notwithstanding any objections it may otherwise have. Each of the Shareholder and Bancorp irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the delivery of notice as provided in Section 8(k) below, such service to become effective thirty (30) days after such delivery.

(i) Attorney’s Fees. The prevailing party in any litigation, arbitration, mediation, bankruptcy, insolvency or other proceeding (“Proceeding”) relating to the enforcement or interpretation of this Shareholder Agreement may recover from the unsuccessful party all fees and disbursements of counsel (including expert witness and other consultants’ fees and costs) relating to or arising out of (a) the Proceeding (whether or not the Proceeding results in a judgment) and (b) any post-judgment or post-award Proceeding including, without limitation, one to enforce or collect any judgment or award resulting from any Proceeding. All such judgments and awards shall contain a specific provision for the recovery of all such subsequently incurred costs, expenses, fees and disbursements of counsel.

(j) Counterparts. This Shareholder Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

(k) Notices. All notices, requests, instructions and other communications to be given hereunder by any party to the other shall be in writing and shall be deemed given if personally delivered, telecopied (with confirmation) or mailed by registered or certified mail, postage prepaid (return receipt requested), to such party at its address set forth below or such other address as such party may specify to the other party by notice provided in accordance with this Section 8(k).

If to Bancorp, to:

(1)
National Mercantile Bancorp
1880 Century Park East
Los Angeles, CA 90067
Telephone: (310) 277-2265
Facsimile: (310) 201-0629
Attention: Scott A. Montgomery

and

(2)
FCB Bancorp
1150 Paseo Camarillo
Camarillo, CA 93010
Telephone: (805) 322-9308
Facsimile: (805) 445-1388
Attention: C. G. Kum

If to the Shareholder, to the address noted on the signature page hereto.

(l) Advice of Counsel. SHAREHOLDER ACKNOWLEDGES THAT, IN EXECUTING THIS SHAREHOLDER AGREEMENT, SHAREHOLDER HAS HAD THE OPPOERTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

IN WITNESS WHEREOF, the parties hereto have executed this Shareholder Agreement as of the date first above written.

			NATIONAL MERCANTILE BANCORP

			By:
			Name:
			Title:


SHAREHOLDER:



Name:
Number of Shares:
Number of Stock Options:

Address for Notices:



SHAREHOLDER’S SPOUSE:


Name: