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