<PAGE>
As filed with the Securities and Exchange Commission on July 23, 1998
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 (I.R.S. Employer
of incorporation or organization) Identification No.)
1840 Century Park East 90067
Los Angeles, California (Zip code)
(Address of principal executive offices)
-------------------
NATIONAL MERCANTILE BANCORP
1996 STOCK INCENTIVE PLAN
(Full title of the 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)
Copy to:
THOMAS D. PHELPS, ESQ.
Manatt, Phelps & Phillips, LLP
11355 West Olympic Boulevard
Los Angeles, California 90064
(310) 312-4000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Securities to be Offering Price Aggregate Registration
to be Registered Registered (1) Per Share(2) Offering Price Fee
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, without par value 173,500 $6.50 $1,127,750 $332.69
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</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 1996
Stock Incentive Plan as a result of the adjustment provisions thereof.
(2) Estimated solely for purposes of calculating the amount of the registration
fee pursuant to Rule 457 based upon the closing sales price of the Common
Stock as reported on the NASDAQ SmallCap Market System on July 17, 1998.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE AND INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
National Mercantile Bancorp (the "Registrant") hereby files this
Registration Statement on Form S-8 with the Securities and Exchange
Commission (the "Commission") to register 173,500 additional shares of the
Registrant's Common Stock, without par value, for issuance pursuant to the
Registrant's 1996 Stock Incentive Plan, as amended (the "Plan"), and such
indeterminate number of shares as may become available under the Plan as a
result of the adjustment provisions thereof. The contents of the
Registration Statement on Form S-8 (File No. 333-33095), filed by the
Registrant with the Commission on August 7, 1997, including exhibits thereto,
are incorporated herein by reference. On April 23, 1998, shareholders of the
Registrant approved an amendment to the Plan to increase from 110,010 to
283,510 the number of shares available for issuance pursuant to the Plan.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 8. EXHIBITS.
Exhibit
Number Description
- ------- -----------
4.1 Registrant's Amended and Restated Articles of Incorporation,
dated June 20, 1997, incorporated by reference from Exhibit
No. 3.1 on Form 10-K for the Registrant's fiscal year ended
December 31, 1997.
4.2 Registrant's Amended and Restated Bylaws, dated December 18,
1992, incorporated by reference from Exhibit 3.2 on Form
10-K for the Registrant's fiscal year ended December 31,
1992.
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 (included on signature page)
99.1 National Mercantile Bancorp 1996 Stock Incentive Plan, as
amended
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 22nd day of July, 1998.
NATIONAL MERCANTILE BANCORP
By /S/ SCOTT A. MONTGOMERY
-------------------------------------
Scott A. Montgomery
President and Chief Executive Officer
By /S/ JOSEPH W. KILEY III
-------------------------------------
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
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 Securities and Exchange 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
foregoing, 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 substitutes, may lawfully do or cause to be done by virtue hereof.
II-2
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Robert E. Gipson Chairman of the Board July 22, 1998
- -------------------------
Robert E. Gipson
/s/ Robert E. Thomson Vice Chair July 22, 1998
- -------------------------
Robert E. Thomson
/s/ Scott A. Montgomery Director, President and July 22, 1998
- ------------------------- Chief Executive Officer
Scott A. Montgomery (Principal Executive Officer)
/s/ Joseph W. Kiley III Director, Executive Vice President July 22, 1998
- ------------------------- and Chief Financial Officer
Joseph W. Kiley III (Principal Financial and
Accounting Officer)
/s/ Donald E. Benson Director July 22, 1998
- -------------------------
Donald E. Benson
/s/ Joseph N. Cohen Director July 22, 1998
- -------------------------
Joseph N. Cohen
/s/ Alan Grahm Director July 22, 1998
- -------------------------
Alan Grahm
/s/ Dion G. Morrow Director July 22, 1998
- -------------------------
Dion G. Morrow
II-3
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- --------
4.1 Registrant's Amended and Restated Articles of Incorporation, dated
June 20, 1997, incorporated by reference from Exhibit No. 3.1 on Form
10-K for the Registrant's fiscal year ended December 31, 1997.
4.2 Registrant's Amended and Restated Bylaws, dated December 18, 1992,
incorporated by reference from Exhibit 3.2 on Form 10-K for the
Registrant's fiscal year ended December 31, 1992.
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 (included on signature page)
99.1 National Mercantile Bancorp 1996 Stock Incentive Plan, as amended
II-4
<PAGE>
[LETTERHEAD]
July 22, 1998
National Mercantile Bancorp
1840 Century Park East
Los Angeles, California 90067
RE: REGISTRATION STATEMENT ON FORM S-8
Ladies and 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 (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
173,500 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 1996 Stock Incentive Plan, as Amended and Restated
(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 Registration Statement.
<PAGE>
National Mercantile Bancorp
July 22, 1998
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 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
173,500 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.
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.
<PAGE>
National Mercantile Bancorp
July 22, 1998
Page 3
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
DELOITTE & TOUCHE LLP
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 January 23,
1998 appearing in the Annual Report on Form 10-K of National Mercantile
Bancorp for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
Los Angeles, California
July 22, 1998
<PAGE>
EXHIBIT 99.1
NATIONAL MERCANTILE BANCORP
AMENDED 1996 STOCK INCENTIVE PLAN
Section 1. PURPOSE
The purpose of the 1996 Stock Incentive Plan (the "1996 Plan") of National
Mercantile Bancorp, a California corporation and a registered bank holding
company under the Bank Holding Company Act of 1956, as amended (the "Company"),
is to enable the Company to attract, retain and motivate its employees and
independent contractors by providing for or increasing the proprietary interests
of such employees and independent contractors in the Company, and to enable the
Company to attract, retain and motivate its nonemployee directors and further
align their interest with those of the shareholders of the Company by providing
for or increasing the proprietary interest of such directors in the Company.
2. PERSONS ELIGIBLE
Each of the following persons (each, a "Participant") shall be eligible to
be considered for the grant of an Award (as hereinafter defined) hereunder: (a)
any employee of the Company or any of its subsidiaries, including any director
who is also such an employee; and (b) any independent contractor of the Company
or any of its subsidiaries. Any director of the Company who is not also an
employee of the Company (a "Nonemployee Director") shall receive Nonemployee
Director Options (as hereinafter defined) pursuant to Section 10 hereof, but
shall not otherwise participate in the 1996 Plan.
3. AWARDS
(a) The Committee (as hereinafter defined) responsible for administration
of the 1996 Plan is authorized to enter into any type of arrangement on behalf
of the Company with a Participant that is not inconsistent with the provisions
of the 1996 Plan and that, by its terms, involves or might involve the issuance
of (i) shares of common stock of the Company ("Common Shares") or (ii)
Derivative Security (as such term is defined in Rule 16a-1 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as such rule
may be amended from time to time) with an exercise or conversion privilege at a
price related to the Common Shares or with a value derived from the value of the
Common Shares. The entering into of any such arrangement is referred to herein
as the grant of an "Award."
(b) Awards are not restricted to any specified form or structure and may
include, without limitation, sales or bonuses of stock, restricted stock, stock
options, reload stock options, stock purchase warrants, other rights to acquire
stock, securities convertible into or redeemable for stock, stock appreciation
rights, phantom stock, dividend equivalents, performance units or performance
1
<PAGE>
shares, and an Award may consist of one such security or benefit, or two or
more of them in tandem or in the alternative.
(c) Awards may be issued, and Common Shares may be issued pursuant to an
Award, for any lawful consideration as determined by the Committee, including,
without limitation, services rendered by the recipient of such Award.
(d) Subject to the provisions of the 1996 Plan, the Committee, in its sole
and absolute discretion, shall determine all of the terms and conditions of each
Award granted hereunder, which terms and conditions may include, among other
things:
(i) a provision permitting the recipient of such Award,
including any recipient who is a director or officer of the Company,
to pay the purchase price of the Common Shares or other property
issuable pursuant to such Award, or such recipient's tax withholding
obligation with respect to such issuance, in whole or in part, by any
one or more of the following:
(A) the delivery of cash;
(B) the delivery of other property deemed acceptable by the
Committee;
(C) the delivery of previously owned shares of capital stock
of the Company (including "pyramiding"); or
(D) a reduction in the amount of Common Shares or other
property otherwise issuable pursuant to such Award.
(ii) a provision conditioning or accelerating the receipt of
benefits pursuant to such Award, either automatically or in the
discretion of the Committee, upon the occurrence of specified events,
including, without limitation, a change of control of the Company (as
defined by the Committee), an acquisition of a specified percentage of
the voting power of the Company, the dissolution or liquidation of the
Company, a sale of substantially all of the property and assets of the
Company or an event of the type described in Section 7 hereof; or
(iii) a provision required in order for such Award to qualify as
an incentive stock option (an "Incentive Stock Option") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code");
PROVIDED, HOWEVER, that no Award issued to any Nonemployee Director or
any independent contractor of the Company shall qualify as an
Incentive Stock Option.
2
<PAGE>
Section 4. STOCK SUBJECT TO THE 1996 PLAN
(a) At any time, the aggregate number of Common Shares issued or issuable
pursuant to all Awards (including all Incentive Stock Options) granted under the
1996 Plan shall not exceed 283,510 shares subject to adjustment as provided in
Section 7 hereof.
(b) For purposes of Section 4(a) hereof, the aggregate number of Common
Shares issued or issuable pursuant to Awards granted under the 1996 Plan shall
at any time be deemed to be equal to the sum of the following:
(i) the number of Common Shares that were issued prior to such
time pursuant to Awards granted under the 1996 Plan, other than Common
Shares that were subsequently reacquired by the Company pursuant to
the terms and conditions of such Awards and with respect to which the
holder thereof received no benefits of ownership such as dividends;
plus
(ii) the number of Common Shares that were otherwise issuable
prior to such time pursuant to Awards granted under the 1996 Plan, but
that were withheld by the Company as payment of the purchase price of
the Common Shares issued pursuant to such Awards or as payment of the
recipient's tax withholding obligation with respect to such issuance;
plus
(iii) the maximum number of Common Shares that are or may be
issuable at or after such time pursuant to Awards granted under the
1996 Plan prior to such time.
Section 5. DURATION
Unless sooner terminated pursuant to Section 8 below, the 1996 Plan shall
terminate on March 28, 2006. No Awards shall be granted under the 1996 Plan
while the 1996 Plan is suspended or after it is terminated.
Section 6. ADMINISTRATION
(a) The 1996 Plan shall be administered by a committee (the "Committee")
of the Board of Directors of the Company (the "Board") consisting of two or more
directors, each of whom: (i) is a "disinterested person" (as such term is
defined in Rule 16b-3 promulgated under the Exchange Act, as such Rule may be
amended from time to time); and (ii) is an "outside director" within the meaning
of Section 162(m) of the Code. Members of the Committee shall serve at the
pleasure of the Board, and the Board may from time to time remove members from
or add members to, the Committee.
(b) Subject to the provisions of the 1996 Plan, the Committee shall be
authorized and empowered to do all things necessary or desirable in connection
with the administration of the 1996 Plan, including, without limitation, the
following:
3
<PAGE>
(i) adopt, amend and rescind rules and regulations relating to
the 1996 Plan;
(ii) determine which persons are Participants and to which of
such Participants, if any, Awards shall be granted hereunder;
(iii) grant Awards to Participants and determine the terms and
conditions thereof, including the number of Common Shares issuable
pursuant thereto;
(iv) determine the terms and conditions of the Nonemployee
Director Options that are automatically granted hereunder, other than
the terms and conditions specified in Section 10 hereof;
(v) determine whether, and the extent to which adjustments are
required pursuant to Section 7 hereof; and
(vi) interpret and construe the 1996 Plan and the terms and
conditions of any Award granted hereunder.
Section 7. ADJUSTMENTS
If the outstanding shares of the class of Company stock then subject to the
1996 Plan are increased, decreased or exchanged for or converted into cash,
property or a different number or kind of securities, or if cash, property or
securities are distributed in respect of such outstanding securities, in either
case as a result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular cash dividend)
or other distribution, stock split, reverse stock split or the like, or if
substantially all of the property and assets of the Company are sold, then,
unless the terms of such transaction shall provide otherwise, the Committee
shall make appropriate and proportionate adjustments in: (i) the number and
type of shares or other securities or cash or other property that may be
acquired pursuant to Awards theretofore granted under the 1996 Plan; and (ii)
the maximum number and type of shares or other securities that may be issued
pursuant to Awards thereafter granted under the 1996 Plan. The determination of
the Committee as to what adjustments shall be made pursuant to this section, and
the extent thereof, shall be final and conclusive. No fractional shares of
stock shall be issued under the 1996 Plan on account of any such adjustment.
Section 8. AMENDMENT AND TERMINATION
The Board may suspend or terminate the 1996 Plan at any time; PROVIDED,
HOWEVER, that no such suspension or termination shall deprive the recipient of
any Award theretofore granted under the 1996 Plan, without the consent of such
recipient, of any of his or her rights thereunder or with respect thereto.
4
<PAGE>
The Board may amend the 1996 Plan at any time and in any manner subject to
the following limitations:
(a) No such amendment shall deprive the recipient of any Award theretofore
granted under the 1996 Plan, without the consent of such recipient, of any of
his or her rights thereunder or with respect thereto;
(b) Except as otherwise provided in Section 7 relating to adjustments upon
changes in stock, no such amendment shall be effective unless approved by the
affirmative vote of the holders of a majority of the outstanding shares of the
Company present, represented and entitled to vote at a shareholders meeting or
by the written consent of a majority of the outstanding shares of the Company
where such shareholder approval is required by law or pursuant to the Articles
of Incorporation or Bylaws of the Company; and
(c) Section 10 hereof shall not be amended more than once every six (6)
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act, or the rules and regulations thereunder.
Section 9. EFFECTIVE DATE
The 1996 Plan shall be effective as of June 18, 1997, the date upon
which it was approved by the shareholders of the Company; PROVIDED, HOWEVER,
that no Common Shares may be issued under this Plan until it has been
approved, directly or indirectly, by the affirmative vote of the holders (the
"Shareholders") of a majority of the outstanding shares of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the laws of the State of California.
Section 10. NONEMPLOYEE DIRECTOR OPTIONS
(a) Any person elected or appointed to serve as a Nonemployee Director who
has not previously served as a Nonemployee Director of the Company on or prior
to October 1, 1996, shall be granted, on the first business day following the
later of the date of such election or appointment or the date the 1996 Plan is
approved by the Shareholders, an option to purchase 1,100 Common Shares without
the requirement of any further action by the Committee. On the first business
day following the date of the annual meeting of shareholders of the Company held
in 1998, or any adjournment thereof (the "1998 Meeting"), any person who was a
Nonemployee Director on or after the effective date of the 1996 Plan and who is
re-elected to the Board at the 1998 Meeting shall be granted an option to
purchase 550 Common Shares without the requirement of any further action by the
Committee. Options that may be granted to newly-elected Nonemployee Directors
or to re-elected Nonemployee Directors under this Section 10 shall be referred
to collectively as the "Nonemployee Director Options." The date on which a
Nonemployee Director Option is granted shall be the Date of Grant for such
option.
5
<PAGE>
(b) If, on any date upon which Nonemployee Director Options are to be
automatically granted pursuant to this Section 10, the number of Common Shares
remaining available for options under the 1996 Plan is insufficient for the
grant to each Nonemployee Director entitled thereto of a Nonemployee Director
Option to purchase the entire number of Common Shares specified in this Section
10, then a Nonemployee Director Option to purchase a proportionate amount of
such available number of Common Shares (rounded to the nearest whole share)
shall be granted to each Nonemployee Director entitled thereto on such date.
(c) Each Nonemployee Director Option granted under the 1996 Plan shall
become fully exercisable one year from the Date of Grant, provided that in the
event that a Change of Control (as defined below) shall occur, such granted
Nonemployee Director Option shall be immediately exercisable.
(d) Each Nonemployee Director Option granted under the 1996 Plan shall
expire upon the sixth anniversary of the Date of Grant.
(e) Each Nonemployee Director Option shall have an exercise price equal to
the aggregate Fair Market Value on the Date of Grant of the Common Shares
subject thereto.
(f) Payment of the exercise price of any Nonemployee Director Option
granted under the 1996 Plan shall be made in full in cash concurrently with the
exercise of such option; PROVIDED HOWEVER, that, in the discretion of the Board,
the payment of such exercise price may instead be made:
(i) in whole or in part, with Common Shares delivered
concurrently with such exercise (such shares to be valued on the basis
of the Fair Market Value of such shares on the date of such exercise),
provided that the Company is not then prohibited from purchasing or
acquiring Common Shares; or
(ii) in whole or in part, by the delivery, concurrently with
such exercise and in accordance with Section 220.3(e)(4) of Regulation
T promulgated under the Exchange Act, of a properly executed exercise
notice for such option and irrevocable instructions to a broker
promptly to deliver to the Company a specified dollar amount of the
proceeds of a sale of or a loan secured by the Common Shares issuable
upon exercise of such option.
(g) For purposes of this Section 10, the "Fair Market Value" of a Common
Share or other security on any date (the "Determination Date") shall be equal to
the average of the high bid and low asked prices per Common Share or unit of
such other security on the business day immediately preceding the Determination
Date in the market where the security is traded, or, if the Common shares or
such other security were not quoted by any such organization on such immediately
preceding business day, as determined by the Board. For purposes of this
Section 10, the term "Change of Control" shall mean the occurrence of either of
the following events: (a) the Company consolidates with or merges with or into
any person or conveys, transfers or leases all or substantially all of its
assets to any person, or any corporation consolidates with or merges into or
6
<PAGE>
with the Company in any event pursuant to a transaction in which the
outstanding voting stock or units of the Company is changed into or exchanged
for cash, securities or other property, other than any such transaction where
the outstanding voting stock or units of the Company is not changed or
exchanged at all (except to the extent necessary to reflect a change in the
jurisdiction of incorporation or organization of the Company) or where the
outstanding voting stock or units of the Company is changed into or exchanged
for voting stock or units of the surviving corporation or organization which
is not redeemable, or no "person" or "group" owns immediately after such
transaction, directly or indirectly, an amount of outstanding voting stock or
units necessary to effect the change of control of, or influence over, the
surviving corporation or organization, as the case may be, or (b) the Company
is liquidated or dissolved or adopts a plan of liquidation or dissolution.
(h) Each Nonemployee Director Option shall be nontransferable by the
optionee other than by will or the laws of descent and distribution, and shall
be exercisable during the optionee's lifetime only by the optionee or the
optionee's guardian or legal representative.
(i) Nonemployee Director Options are not intended to qualify as Incentive
Stock Options.
April 23, 1998
7
