<PAGE>
As filed with the Securities and Exchange Commission on August 7, 1997
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
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 1990 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
<TABLE>
<CAPTION>
========================================================================================================
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
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Common Stock, no par 22,003(3) $ 13.00 $ 286,039 $ 87.00
value
========================================================================================================
</TABLE>
(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 1990 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
high and low prices of the Common Stock as reported on the Nasdaq
SmallCap Market System on July 31, 1997.
(3) Adjusted to reflect a 9.09 to 1 reverse stock split effected by the
Company on June 20, 1997.
================================================================================
<PAGE>
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 1990 Stock Option Plan
(b) Prospectus for the 1990 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
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
National Mercantile Bancorp (the "Registrant") hereby files this
Registration Statement on Form S-8 with the Securities and Exchange Commission
(the "Commission") to register 22,003 shares of the Registrant's common stock,
no par value (the "Common Stock") for issuance pursuant to the Registrant's 1990
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
<PAGE>
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
<PAGE>
Item 8. Exhibits
--------
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
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 1990 Stock Option Plan
99.2 Form of Nonqualified Stock Option Agreement
99.3 Form of Incentive Stock Option Agreement
</TABLE>
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
<PAGE>
(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
<PAGE>
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 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 and Chief Financial Officer
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.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/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
Joseph W. Kiley III Director
/s/ Scott A. Montgomery President, Chief Executive August 7, 1997
- -------------------------- Officer and Director
Scott A. Montgomery
/s/ Robert E. Thomson Vice Chair August 7, 1997
- --------------------------
Robert E. Thomson
</TABLE>
II-5
<PAGE>
NATIONAL MERCANTILE BANCORP
FORM S-8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<C> <S>
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 1990 Stock Option Plan
99.2 Form of Nonqualified Stock Option Agreement
99.3 Form of Incentive Stock Option Agreement
</TABLE>
II-6
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF MANATT PHELPS PHILLIPS]
August 7, 1997
National Mercantile Bancorp
1840 Century Park East
Los Angeles, California 90067
RE: REGISTRATION STATEMENT ON FORM S-8
Gentlemen:
At your request, we have examined the Registration Statement on Form
S-8 (the "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
1990 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
<PAGE>
National Mercantile Bancorp
August 7, 1997
Page 2
6. The Registration Statement.
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
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 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 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.
<PAGE>
National Mercantile Bancorp
August 7, 1997
Page 3
This opinion is issued to you solely for use in connection with the
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.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Manatt, Phelps & Phillips, LLP
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement 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
<PAGE>
1990 STOCK OPTION PLAN
1. PURPOSE. The purpose of the 1990 Stock Option Plan (the "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 Stock Option Committee may from time to time determine. The
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 422A of the Internal Revenue Code of 1986, as
amended (the "Code"), (ii) may purchase shares of 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 Plan shall be administered by a Stock Option Committee
(the "Committee") appointed by the Board of Directors of the Company consisting
of three or more directors of the Company, all of whom shall be "disinterested
persons" (within the meaning of Rule 16b-3 of the Securities Exchange Act of
1934, as amended), to whom administration of the Plan has been duly delegated.
No member of the Committee shall be eligible for grants or allocations to
acquire equity securities of the Company under the Plan or any other plan of the
Company or its affiliates for a period of one year before or for one year after
membership on the Committee (or for such other period as may be required from
time to time by Rule 16b-3 for the Securities Exchange Act of 1934, as amended).
Any action of the Committee with respect to administration of the Plan shall be
taken by a majority vote or written consent of its members.
Subject to the provisions of the Plan, the Committee shall have authority
(i) to construe and interpret the Plan, (ii) to define the terms under herein,
(iii) to prescribe, amend and rescind rules and regulations relating to the
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 rights, 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 Plan, and (vi) to make all other determinations necessary or
advisable for the administration of the Plan. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
participants in the Plan and their legal representatives and beneficiaries.
3. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided in paragraph
16 hereof, the shares to be offered under the 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 plan shall not
exceed Two Hundred Thousand (200,000) of such shares. If any option granted
under the 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
<PAGE>
exercised in full, the unpurchased shares subject thereto shall again be
available for options to be granted under the plan.
4. ELIGIBILITY AND PARTICIPATION. All executive and other key employees of
the Company or of any subsidiary corporation (as defined in Section 425(f) of
the Code) and directors of the Company who are regular employees of the Company,
shall be eligible for selection to participate in the 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 Committee shall so determine,
subject to the other provisions of the Plan. No incentive stock option may be
granted to any person who, at the time of the incentive stock option is
granted, owns shares of the Company's outstanding Common Stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of the Company (and of its affiliates if applicable), unless the exercise
price of such option is at least 110 percent (110%) of the fair market value 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 Option is
granted) of the stock with respect to which incentive stock options (whenever
granted and including the Substitute 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 $100,000.
All options granted under the Plan shall be granted within ten years from
April 15, 1990.
5. DURATION OF OPTIONS. Each option and all rights associated therewith shall
expire on such date as the Committee 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 Committee, 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 under paragraph 9. The purchase price of the shares upon exercise of
an option shall be paid in full at the time of the exercise (i) in cash or by
check payable to the order of the Company, (ii) by delivery of shares of Common
Stock of the Company already owned by, and in the possession of the option
holder, or (iii) if authorized by the Committee 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 Committee 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).
2
<PAGE>
7. EXERCISE OF OPTIONS. Each option granted under this Plan shall be
exercisable in such installments during the period prior to its expiration date
as the Committee 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 Committee, 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 Committee, any
stock option may be coupled with a stock appreciation right at the time of the
grant of the option, or, the Committee 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 Plan as the
Committee 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 only for such
period as the Committee 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 option
multiplied by the number of shares subject to the option, or portion thereof,
which is so surrendered; and
(3) The Committee may elect to settle, or the stock appreciation
right may permit the optionee to elect to receive (subject to approval by the
Committee), any part of 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 stock appreciation right was exercised during a
period of ten business days beginning with the third business day after the
release to the public of a quarterly or annual summary of the Company's sales
and earnings; 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 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
3
<PAGE>
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 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 Committee 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 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 the
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. NONTRANSFERABILTY. An option (and any accompanying stock appreciation
right) granted under the Plan shall, by its terms, be non-transferable by the
option holder, either voluntarily or by operation 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
successor's 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
Committee, 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 the 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 law 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
4
<PAGE>
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 not further force or
effect. A leave of absence approved in writing by the Committee shall not be
deemed a termination of employment for the purposes of this paragraph 13, but no
option may be exercised during 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 Committee.
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, option holder's option
(and any accompanying stock appreciation right) shall expire (1) year after the
date of such death or permanent disability unless by its terms it sooner
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 options 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 Committee.
15. PRIVILEGES OF STOCK OWNERSHIP. No person entitled to exercise any option
or stock appreciation right granted under the 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 of 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.
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 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.
5
<PAGE>
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
Plan shall terminate, and all options and stock appreciation rights theretofore
granted hereunder shall terminate; provided, however, that notwithstanding the
foregoing, the Committee shall provide in writing in connection with such
transaction for any or all of the following alternatives (separately or in
combinations): (i) for the options and any accompanying stock appreciation
rights theretofore granted more than six 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 Plan by such
successor corporation in which event the Plan and the options and any
accompanying stock appreciation rights theretofore granted shall continue 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 and rights.
Adjustments under this paragraph 16 shall be made by the Committee, 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 Plan on any such adjustment.
At the discretion of the Committee, any option may contain provisions to
the effect that upon the happening of certain events, including a change in
control (as defined by the Committee 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 PLAN. The Committee may at any time suspend
or terminate the Plan. The Committee may also at any time amend or revise the
terms of the Plan, provided that no such amendment or revision shall, unless
appropriate shareholder approval of such amendment or revision is obtained,
increase the maximum number of shares in the aggregate which may be sold
pursuant to options granted under the 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 permit the granting of
options or stock appreciation rights to anyone other than as provided in
paragraph 4.
Notwithstanding the foregoing, no amendment, suspension or termination of
the Plan shall, without specific action of the Committee 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 plan.
6
<PAGE>
18. EFFECTIVE DATE OF PLAN. Effectiveness of the 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
months from the date of the Plan is adopted by the Board of Directors. The 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 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, and (2) shall become null and void if such
shareholder approval and designation or approval for designation for inclusion
is not obtained.
7
<PAGE>
NATIONAL MERCANTILE BANCORP
1990 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 1990 Stock Option
Plan (the "1990 Plan") on May 4, 1990 and the 1990 Plan was approved by the
shareholders of the Company on June 28, 1990.
B. The 1990 Plan provides for the granting to selected executives and
other key employees of the Company or any subsidiary of the Company, as the
Stock Option Committee (the "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 Committee has determined that it is in the best interests of the
Company and its shareholders to grant, pursuant to the 1990 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
<PAGE>
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 Committee 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 1990 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
<PAGE>
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 Committee 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 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
<PAGE>
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.
4
<PAGE>
14. INTERPRETATION AND CONSTRUCTION. The interpretation and construction
-------------------------------
of the Option by the Committee 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.
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
<PAGE>
NATIONAL MERCANTILE BANCORP
1990 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 1990 Stock Option
Plan (the "1990 Plan") on May 4, 1990 and the 1990 Plan was approved by the
shareholders of the Company on June 28, 1990.
B. The 1990 Plan provides for the granting to selected executives and
other key employees of the Company or any subsidiary of the Company, as the
Stock Option Committee (the "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 Committee has determined that it is in the best interests of the
Company and its shareholders to grant, pursuant to the 1990 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
<PAGE>
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 Committee 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 1990 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
<PAGE>
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 Committee 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
<PAGE>
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 Committee 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.
NATIONAL MERCANTILE BANCORP
By:
______________________________________
4
<PAGE>
---------------------------------
___________________, 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
