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As filed with the Securities and Exchange Commission on May 31, 2000
Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-2
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
(310) 277-2265
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
-------------------
SCOTT A. MONTGOMERY
CHIEF EXECUTIVE OFFICER
NATIONAL MERCANTILE BANCORP
1840 CENTURY PARK EAST
LOS ANGELES, CALIFORNIA 90067
(310) 277-2265
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
--------------------
Copies to:
ALAN B. SPATZ, ESQ.
TROOP STEUBER PASICH REDDICK & TOBEY, LLP
2029 CENTURY PARK EAST, 24TH FLOOR
LOS ANGELES, CALIFORNIA 90067
(310) 728-3200
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / X /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
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If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE (1) REGISTRATION FEE
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COMMON STOCK, WITHOUT PAR VALUE PER SHARE $11,000,000 $2,904
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(1) Estimated solely for purpose of calculating the registration fee pursuant to
Rule 457(a).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE TIME UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
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SUBJECT TO COMPLETION - May 31, 2000
Up to ________ Shares PROSPECTUS
NATIONAL MERCANTILE BANCORP
Common Stock
$____________ per share
We are offering _____ shares of common stock. Our common stock is
quoted on the Nasdaq SmallCap Market under the symbol "MBLA." On _________,
2000, the last reported sales price of the common stock on the Nasdaq SmallCap
Market was $_______.
AN INVESTMENT IN OUR COMMON STOCK IS RISKY. YOU SHOULD ONLY PURCHASE
THESE SHARES IF YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. SEE "RISK
FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD
CONSIDER BEFORE YOU INVEST IN THE COMMON STOCK BEING SOLD WITH THIS PROSPECTUS.
This prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
Our executive offices are located at 1840 Century Park East, Los
Angeles, California 90067, and our telephone number is (310) 277-2265.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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This prospectus is dated ___, 2000
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You can read and
copy these documents at the SEC's Public Reference Room, located at 450 Fifth
Street, NW, Room 1024, Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Our SEC
filings are also available on the SEC's Website at "http://www.sec.gov."
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" in this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring to the documents containing that information.
The information incorporated by reference is an important part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below, copies of which are being mailed together with this prospectus or
are available upon request, and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), until the expiration of the offering made by this prospectus:
- Our Annual Report on Form 10-KSB for the year ended December 31, 1999.
- Our Quarterly Report on Form 10-QSB for the quarter ended March 31,
2000.
- Our Proxy Statement dated March 26, 2000.
This prospectus is part of a registration statement we filed with the
SEC. You may request a copy of the above information incorporated by reference,
at no cost, by writing to or calling:
Rita Melchor
Assistant Secretary
National Mercantile Bancorp
1840 Century Park East
Los Angeles, California 90067
(310) 277-2265
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement to this prospectus. We have not
authorized anyone else to provide you with different information. We will not
offer to sell the common stock in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any supplement
to this prospectus is accurate as of any date other than the date on the cover
page of this prospectus or any supplement.
TABLE OF CONTENTS
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Page
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RISK FACTORS................................................................................................................7
A WARNING ABOUT FORWARD-LOOKING STATEMENTS..................................................................................9
USE OF PROCEEDS.............................................................................................................9
THE OFFERING................................................................................................................9
DESCRIPTION OF COMMON STOCK................................................................................................13
LEGAL MATTERS..............................................................................................................13
EXPERTS....................................................................................................................13
</TABLE>
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this
prospectus. This summary is not complete and does not contain all of the
important information that you should consider before purchasing shares of our
common stock. You should carefully read the entire prospectus.
NATIONAL MERCANTILE BANCORP
National Mercantile Bancorp is a bank holding company conducting
business through its sole subsidiary Mercantile National Bank. Our primary
business is to generate loans and deposits through our office located in the
Century City area of Los Angeles, California. Generally the terms "we," "us," or
"our," when used in this prospectus, are referring to National Mercantile
Bancorp and Mercantile National Bank.
Our business strategy is to attract banking and investment
relationships from individuals and small to mid-sized businesses in specific
market niches located in our primary service area by offering a variety of loan,
deposit and investment products coupled with highly personalized service
delivered by experienced relationship managers. Our niche banking strategy
enables us to hire and retain relationship managers who are experienced in our
clients' lines of business. Our lending products include revolving lines of
credit, term loans, equipment loans, personal and home equity loans, which often
contain terms and conditions tailored to the client's industry and their
repayment sources. Consistent with our clients' high level of service
expectations, we utilize a team approach to enhance client service by combining
an experienced relationship manager with operations support personnel.
During the past several years our targeted market niches have included
the entertainment industry, business banking and professional services
providers. Entertainment industry customers include television, music and film
production companies, talent agencies, entertainers, directors and producers
(whom we attract by establishing relationships with business management firms)
and others affiliated with the entertainment industry. Business Banking tailors
its lending and deposit products to serve the needs of manufacturers,
wholesalers, distributors and real estate companies. While not a part of the
business banking department, we also provide specialized deposit services to the
escrow industry. Professional service customers include legal, accounting,
insurance, advertising firms and their individual directors, officers, partners
and shareholders.
In the beginning of 2000 we expanded our targeted market niches by
adding two new departments, namely healthcare and community-based non-profit
organizations. Healthcare organizations include primarily outpatient healthcare
providers such as physician medical groups, independent practice associations
and surgery centers. The community-based non-profit organizations department
targets all such organizations that are based in the Company's primary service
area. Both of these new departments enabled us to expand our deposit, investment
and loan products to meet the needs of these niche markets.
In order to grow and to expand our array of products and services, we
may from time to time acquire other financial service-related companies
including "in-market" acquisitions with banks of similar size and market
presence. We have no current arrangements, understandings or agreements
regarding any such acquisition. We cannot predict whether we will identify an
acquisition target which we can acquire on terms and conditions acceptable to us
or that we could obtain the necessary regulatory approvals for an acquisition.
After suffering material losses in the early to mid 1990s, in 1995 and
1996 we hired a new management team which developed and implemented our revised
business strategy which complemented our existing strengths and opportunities,
while adopting new tactics to effectively compete in the business environment in
which we operate. Under this new strategy, we have generated net income of
$132,000, $645,000 and $1,014,000 in 1997, 1998 and 1999, respectively, and
$375,000 in the quarter ended March 31, 2000. In addition, our total assets have
increased from $119.4 million at December 31, 1997 to $169.4 million at March
31, 2000.
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During the past three years, although we have had taxable income, we
have not paid state or federal income taxes, other than alternative minimum
taxes, because of our net operating loss carryforwards created by losses in
earlier periods. As of December 31, 1999, we had net operating loss
carryforwards of $20.3 million and $4.7 million for federal and state tax
purposes, respectively. Our federal net operating loss carryforward is available
through 2012 and begins to expire in 2007. Our state net operating loss
carryforwards continue to expire but remain available in reducing amounts
through 2002.
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3
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THE OFFERING
SHARES OFFERED ____ shares of common stock.
PROCEDURE FOR PURCHASING Subject to our right to accept or reject a
SHARES OF COMMON STOCK IN subscription in whole or in part, there is no
THIS OFFERING limit to the number of shares for which any
person may subscribe. You may purchase shares
of common stock by properly completing and
signing the subscription agreement and
returning your completed subscription
agreement and payment for the shares
subscribed to U.S. Stock Transfer
Corporation, the subscription agent for this
offering, prior to the expiration date. If
you use the United States mail to send these
documents, we recommend that you use insured,
registered mail.
Funds paid by uncertified personal checks may
take five business days or more to clear. If
you wish to pay by uncertified personal
check, we suggest that you make payment
sufficiently in advance of the expiration
date to ensure that your payment is received
and clears before this offering expires. We
urge you to consider using a certified or
cashier's check, money order or wire transfer
of funds.
EXPIRATION DATE; This offering will expire at 5:00 p.m.,
AMENDMENT Pacific Standard Time, on ______, 2000. We
AND TERMINATION may extend the expiration date for any
reason. We may amend or terminate the
offering for any reason.
RIGHT TO REDUCE OR REJECT All subscriptions are subject to acceptance
SUBSCRIPTIONS by us. We may accept or reject a subscription
in whole or in part. If we do not accept a
subscription in whole, we will return the
funds tendered for the purchase price for the
shares not accepted without interest.
As part of our efforts to avoid having the
use of our net operating loss
carryforwards limited by a change of
ownership, our Articles of Incorporation
prohibit the transfer of any capital stock
prior to July 1, 2003 to any person if
such person is or would become by reason
of such transfer a 4.5% holder of our
"stock" (as that term is defined, and such
ownership is determined, under Section 382
of the Internal Revenue Code). As of the
date of this prospectus, 4.5%of our stock
was 111,484 shares (counting each share of
our Series A Preferred Stock as two
shares). Our Board of Directors may waive
this limitation on a case-by-case basis.
USE OF PROCEEDS We will contribute a portion of the proceeds
from this offering to Mercantile National
Bank to facilitate growth and to increase its
lending limit. The remaining proceeds may be
used to fund acquisitions, expand products
and services, offer services to new niche
markets and for general working capital.
We anticipate that with the new powers
granted to the banking, insurance and
brokerage industries through the "Financial
Modernization Bill," signed into law in
November of 1999, increasing our capital will
position the Company to consider acquisitions
of other financial services firms, add loan
production/branch offices and enhance our
product delivery technology.
RISK FACTORS An investment in our common stock is
risky. Among other things, you should
consider the risks described under the
heading "Risk Factors" beginning on page 7.
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SUBSCRIPTION AGENT U.S. Stock Transfer Corporation is acting as
the subscription agent in connection with the
offering.
INFORMATION AGENT Kissel-Blake, Inc. is acting as information
agent in connection with the offering.
Kissel-Blake's telephone number is (800)
554-7733. You should contact [Contact Name or
Dept.] at Kissel-Blake if you have any
questions concerning this offering.
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5
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SUMMARY FINANCIAL DATA
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<CAPTION>
FOR THE QUARTER ENDED
MARCH 31, FOR THE YEAR ENDED DECEMBER 31,
-------------------------- ------------------------------------------
2000 1999 1999 1998 1997
------------ ------------ ------------ ------------- -------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATE DATA:
Interest income.............................. $ 3,091 $ 2,429 $ 10,545 $ 10,081 $ 8,600
Interest expense............................. 1,047 815 3,558 3,485 2,856
------------ ------------ ------------ ------------- -------------
Net interest income.......................... 2,044 1,614 6,987 6,596 5,744
Provision for credit losses.................. - - - -
------------ ------------ ------------ ------------- -------------
Net interest income after provision for
credit losses................................ 2,044 1,614 6,987 6,596 5,744
Other operating income....................... 194 159 698 855 486
Other operating expense...................... 1,856 1,692 6,624 6,798 6,098
------------ ------------ ------------ ------------- -------------
Income before income tax provision........... 382 81 1,061 653 132
Income tax provision......................... 7 5 47 8 -
------------ ------------ ------------ ------------- -------------
Net income................................... $ 375 $ 76 $ 1,014 $ 645 $ 132
============ ============ ============ ============= =============
PER SHARE DATA:
Net income basic............................. $ 0.47 $ 0.11 $ 1.50 $ 0.95 $ 0.20
Net income diluted (1)....................... 0.15 0.03 0.41 0.25 0.08
Book value (period end) (2).................. 4.85 5.38 4.68 5.35 5.02
Weighted average common shares outstanding... 798,318 677,048 677,137 677,061 677,202
BALANCE SHEET DATA - AT PERIOD END:
Assets....................................... $ 169,432 $ 141,503 $ 156,153 $ 141,623 $ 119,405
Securities................................... 70,346 70,332 71,235 71,849 40,478
Loans receivable............................. 79,134 57,374 73,843 56,972 61,252
Interest-earning assets...................... 158,260 134,306 149,528 135,621 113,880
Deposits..................................... 133,946 103,188 116,984 106,972 97,388
Shareholders' equity......................... 11,596 13,327 11,587 13,258 12,440
SELECTED PERFORMANCE RATIOS:
Return on average assets..................... 0.92% 0.22% 0.69% 0.48% 0.12%
Return on average shareholders' equity....... 13.15% 2.32% 8.08% 4.96% 1.55%
Average shareholders' equity to average
assets....................................... 7.03% 9.68% 8.57% 9.64% 7.92%
Net yield on interest-earning assets......... 5.26% 5.05% 5.01% 5.19% 5.63%
CAPITAL RATIOS:
National Mercantile Bancorp:
Tier 1 risk-based.......................... 15.32% 17.07% 16.21% 17.38% 16.98%
Total risk-based........................... 16.57% 18.34% 17.47% 18.65% 18.25%
Leverage................................... 8.70% 9.56% 8.98% 8.78% 10.43%
Mercantile National Bank:
Tier 1 risk-based.......................... 14.23% 13.13% 15.03% 13.48% 10.36%
Total risk-based........................... 15.49% 14.40% 16.29% 14.75% 11.63%
Leverage................................... 8.07% 7.27% 8.32% 6.69% 6.48%
ASSET QUALITY:
Nonaccrual loans............................. $ 580 $ 1,335 $ 932 $ 1,505 $ 1,201
Troubled debt restructurings (3)............. - - - - 5,422
------------ ------------ ------------ ------------- -------------
Total nonperforming loans.................. 580 1,335 932 1,505 6,623
Other real estate owned (4).................. 241 417 382 593 777
Other assets-SBA guaranteed loan............. 200 176 150 - -
------------ ------------ ------------ ------------- -------------
Total nonperforming assets................... $ 1,021 $ 1,928 $ 1,464 $ 2,098 $ 7,400
============ ============ ============ ============= =============
ASSETS QUALITY RATIO:
Nonaccrual loans to loans receivable......... 0.7% 2.3% 1.3% 2.6% 2.0%
Allowance for credit losses to loans
receivable................................... 2.4% 3.5% 2.6% 3.8% 3.3%
Allowance for credit losses to nonaccrual
loans........................................ 330.5% 151.4% 203.4% 142.5% 168.4%
</TABLE>
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(1) The weighted average number of shares used to compute diluted earnings
per share for the quarters ended March 31, 2000 and 1999 was 2,482,406 and
2,477,048 respectively and for the years ended December 31, 1999, 1998 and 1997
was 2,477,614, 2,537,280 and 1,629,796, respectively.
(2) Book value per share numbers are based on the number of shares
outstanding at period end (including the assumed conversion of 785,425 shares of
Preferred Stock into 1,570,850 shares of common stock at March 31, 2000 and
900,000 shares of Preferred Stock into 1,800,000 shares common stock at March
31, 1999 and December 31, 1999, 1998 and 1997) and does not give effect to
outstanding options and warrants to purchase common stock.
(3) Includes one loan, a trouble debt restructuring with a principal
balance of $5.4 million at December 31, 1997 which was collected in full during
the fourth quarter of 1998.
(4) Includes OREO acquired by the Bank through legal foreclosure and/or
deed-in-lieu of foreclosure.
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RISK FACTORS
You should carefully consider the following risks before you decide to
buy our common stock. The risks and uncertainties described below are the
material ones facing our company. If any of the following risks actually occur,
our business, revenues, financial condition or results of operations may be
adversely affected. If this occurs, the trading price of our common stock could
decline, and you may lose all or part of the money you paid to buy our common
stock.
WE FACE RISK FROM CHANGES IN INTEREST RATES.
The success of our business depends, to a large extent, on our net
interest income. Changes in market interest rates can affect our net interest
income by affecting the spread between our interest-earning assets and
interest-bearing liabilities. This may be due to the different maturities of our
interest-earning assets and interest-bearing liabilities, as well as an increase
in the general level of interest rates. Changes in market interest rates also
affect, among other things:
- Our ability to originate loans;
- The ability of our borrowers to make payments on their loans;
- The value of our interest-earning assets and our ability to realize
gains from the sale of these assets;
- The average life of our interest-earning assets;
- Our ability to generate deposits instead of other available funding
alternatives; and
- Our ability to access the wholesale funding market.
Interest rates are highly sensitive to many factors, including
governmental monetary policies, domestic and international economic and
political conditions and other factors beyond our control.
WE FACE RISK FROM POSSIBLE DECLINES IN THE QUALITY OF OUR ASSETS.
Our financial condition depends significantly on the quality of our
assets. While we have developed and implemented underwriting policies and
procedures to guide us in the making of loans, compliance with these policies
and procedures in making loans does not guarantee repayment of the loans. If the
level of our non-performing assets rises, our results of operations and
financial condition will be affected. Our borrower's ability to pay their loan
in accordance with its terms can be adversely affected by a number of factors,
such as a decrease in the borrower's revenues and cash flows due to adverse
changes in economic conditions or a decline in the demand for the borrower's
products and/or services.
OUR ALLOWANCES FOR CREDIT LOSSES MAY BE INADEQUATE.
We establish allowances for credit losses against each segment of our
loan portfolio. At March 31, 2000, our allowance for credit losses equaled 2.42%
of loans receivable and 187.76% of non-performing assets. Although we believed
that we had established adequate allowances for credit losses as of March 31,
2000, the credit quality or our assets is affected by many factors beyond our
control, including local and national economic conditions, and the possible
existence of facts which are not known to us which adversely affect the
likelihood of repayment of various loans in our loan portfolio and realization
of the collateral upon a default. Accordingly, we can give no assurance that we
will not sustain loan losses materially in excess of the allowance for credit
losses. In addition, the Office of the Comptroller of the Currency, as an
integral part of its examination process, periodically reviews our allowance for
credit losses and could require additional provisions for credit losses.
Material future additions to the allowance for credit losses may also be
necessary due to increases in the size and changes in the composition of our
loan portfolio. Increases in our provisions for credit losses would adversely
affect our results of operations.
ECONOMIC CONDITIONS MAY WORSEN.
Our business is strongly influenced by economic conditions in our
market area (principally, the Greater Los Angeles metropolitan area) as well as
regional and national economic conditions and in our niche markets, including
the entertainment industry in Southern California. During the past several years
economic conditions in these areas have been favorable. Should the economic
condition in these areas deteriorate, the financial condition of our borrowers
could
7
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weaken, which could lead to higher levels of loan defaults or a decline in the
value of collateral for our loans. In addition, an unfavorable economy could
reduce the demand for our loans and other products and services.
BECAUSE A SIGNIFICANT AMOUNT OF THE LOANS WE MAKE ARE TO BORROWERS IN
CALIFORNIA, OUR OPERATIONS COULD SUFFER AS A RESULT OF LOCAL RECESSION OR
NATURAL DISASTERS IN CALIFORNIA.
At March 31, 2000, 52.7% of our loans outstanding were collateralized
by properties located in California. Because of this concentration in
California, our financial position and results of operations have been and are
expected to continue to be influenced by general trends in the California
economy and its real estate market. Real estate market declines may adversely
affect the values of the properties collateralizing loans. If the principal
balances of our loans, together with any primary financing on the mortgaged
properties, equal or exceed the value of the mortgaged properties, we could
incur higher losses on sales of properties collateralizing foreclosed loans. In
addition, California historically has been vulnerable to certain natural
disaster risks, such as earthquakes and erosion-caused mudslides, which are not
typically covered by the standard hazard insurance policies maintained by
borrowers. Uninsured disasters may adversely impact our ability to recover
losses on properties affected by such disasters and adversely impact our results
of operations.
OUR BUSINESS IS VERY COMPETITIVE.
There is intense competition in Southern California and elsewhere in
the United States for banking customers. We experience competition for deposits
from many sources, including credit unions, insurance companies and money market
and other mutual funds, as well as other commercial banks and savings
institutions. We compete for loans and leases primarily with other commercial
banks, mortgage companies, commercial finance companies and savings
institutions. Recently, certain out-of-state financial institutions have entered
the California market, which has also increased competition. Many of our
competitors have greater financial strength, marketing capability and name
recognition than we do, and operate on a statewide or nationwide basis. In
addition, recent developments in technology and mass marketing have permitted
larger companies to market loans more aggressively to our small business
customers. Such advantages may give our competitors opportunities to realize
greater efficiencies and economies of scale than we can. We can provide no
assurance that we will be able to compete effectively against our competition.
OUR BUSINESS IS HEAVILY REGULATED.
Both National Mercantile Bancorp, as a bank holding company, and
Mercantile National Bank, as a national bank, are subject to significant
governmental supervision and regulation, which is intended primarily for the
protection of depositors. Statutes and regulations affecting us may be changed
at any time, and the interpretation of these statutes and regulations by
examining authorities also may change. We cannot assure you that future changes
in applicable statutes and regulations or in their interpretation will not
adversely affect our business.
OUR ABILITY TO USE OUR NET OPERATING LOSSES MAY BE LIMITED.
During the past three years, although we have had taxable income, we
have not paid any income taxes other than alternative minimum taxes because of
our net operating loss carryforwards. As of December 31, 1999, we had net
operating loss carryforwards of $20.3 million and $4.7 million for federal and
state tax purposes, respectively. Our federal net operating loss carryforward is
available through 2012 and begins to expire in 2007. Our state net operating
loss carryforwards continue to expire but remain available in reducing amounts
through 2002. Our ability to use these carryforwards in the future would be
significantly limited if we experience an "ownership change" within the meaning
of Section 382 of the Internal Revenue Code. We do not believe that the issuance
of common stock in this offering will cause an ownership change that will
restrict our use of net operating loss carryforwards. However, future issuances
of common stock, when combined with the shares issued in this offering and
transfers of our capital stock could have that effect. If our use of these
carryforwards is limited, we would be required to pay taxes on our taxable
income to the extent our taxable income exceeded the limited amounts which could
be offset, and our net income would be lower.
THERE ARE CERTAIN RESTRICTIONS ON YOUR ABILITY TO TRANSFER THE SHARES YOU
ACQUIRE IN THE OFFERING.
As part of our efforts to avoid having the use of our net operating
loss carryforwards limited by a change of ownership, our Articles of
Incorporation prohibit the transfer of any capital stock to any person if such
person is or
8
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would become by reason of such transfer a 4.5% holder of our common stock (as
the term "stock" is defined, and such ownership is determined, under Section 382
of the Internal Revenue Code). Our Board of Directors may waive this limitation
on a case-by-case basis. This provision in our Articles of Incorporation will
limit the ability of our current and future shareholders to transfer shares to
persons whose beneficial ownership would consequently exceed the limit. This may
result in our capital stock being less liquid than stock without such a transfer
restriction.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This prospectus contains or may incorporate by reference statements
that constitute "forward-looking statements" within the meaning of Section 21E
of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of
1933. The words "expect," "estimate," "anticipate," "predict," "believe," and
similar expressions and variations of such words are intended to identify
forward-looking statements. Such statements appear in a number of places in this
prospectus and include statements regarding our intent, belief or current
expectations with respect to, among other things:
- market conditions and economic conditions in the geographic region
within which we operate;
- our plans to develop a presence in certain niche markets;
- our intended use of the proceeds from this offering;
- our on-going efforts to improve the quality of our assets;
- trends affecting our financial condition and results of operations; and
- our business and liquidity strategies.
We caution you not to put undue reliance on such forward-looking
statements. These forward-looking statements are not guarantees of our future
performance and involve risks and uncertainties. Our actual results may differ
materially from those discussed in this prospectus, for the reasons, among
others, discussed in this prospectus under the caption "Risk Factors." We
undertake no obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date of this prospectus. In
addition to the risks and uncertainties discussed below, our filings with the
Securities and Exchange Commission contain additional information concerning
risks and uncertainties that would cause actual results to differ materially
from those projected or suggested in our forward-looking statements. You should
carefully review the risk factors discussed in this prospectus and the documents
that are incorporated by reference into this prospectus.
USE OF PROCEEDS
Before deducting expenses, we will receive up to $11 million from the
offering. We will contribute a portion of the proceeds from this offering to
Mercantile National Bank to facilitate growth and to increase its lending limit.
The remaining proceeds may be used to fund acquisitions, expand products and
services, offer services to new niche markets, and for general working capital.
We have no current arrangements, understandings or agreements, are not presently
negotiating with respect to any acquisitions.
We anticipate that with the new powers granted to the banking,
insurance and brokerage industries through the "Financial Modernization Bill,"
signed into law in November of 1999, increasing our capital will position us to
consider acquisitions of other financial services firms, add loan
production/branch offices and enhance our product delivery technology.
THE OFFERING
SHARES OFFERED
We are offering ____ shares of common stock.
HOW TO SUBSCRIBE
You may subscribe for shares of common stock by delivering to the
Subscription Agent, at the address specified below, prior to 5:00 p.m., Pacific
Standard Time, on ______, a properly completed and executed Subscription
Agreement, together with payment in full of the subscription price for the
shares of common stock subscribed.
9
<PAGE>
RIGHT TO ACCEPT SUBSCRIPTIONS
All subscriptions are subject to our acceptance or rejection. We
reserve the right to reduce the number of shares for which you subscribe in this
offering or to reject your subscription for any reason in our sole discretion.
As part of our efforts to avoid having the use of our net operating
loss carryforwards limited by a change of ownership, our Articles of
Incorporation prohibit the transfer of any capital stock prior to July 1,
2003 to any person if such person is or would become by reason of such
transfer a 4.5% holder of our stock (as the term "stock" is defined, and such
ownership is determined, under Section 382 of the Internal Revenue Code). As
of the date of this prospectus, 4.5% of our stock was 111,484 shares
(counting each share of our Series A Preferred Stock as two shares). Our
Board of Directors may waive this limitation on a case-by-case basis.
In connection with each subscription agreement, we require the
subscriber to represent how many shares of our common stock and Series A
Preferred Stock the subscriber beneficially owns. We will rely on this
representation in determining whether to accept your subscription if you own or
would own as a result of your subscription in excess of 4.5% of our stock if we
accept your subscription.
Our acceptance of your subscription which permits you to acquire shares
when you own or would own as a result of your subscription in excess of 4.5% of
our stock will constititute a one-time waiver of the limitation in our Articles
of Incorporation solely for the number of shares which we issue to you in the
offering BASED ON THE NUMBER OF SHARES YOU REPRESENT YOU BENEFICIALLY OWN. If
your representation is inaccurate, the waiver will not apply to such additional
shares. In addition, even if your representation is accurate when made, the
waiver will not apply to any shares you may purchase thereafter. In both such
circumstances, the shares acquired will be in excess of the amounts permitted in
our Articles of Incorporation, AND WE MAY EXERCISE THE RIGHTS SET FORTH IN THE
ARTICLES. In particular, we can require you to deliver the excess shares to an
agent designated by us who will sell the shares.
NO RECOMMENDATION
You must make your own evaluation of an investment in the common stock
offered in this offering. We make no recommendation to you regarding whether you
should subscribe for shares of our common stock.
EXPIRATION DATE
The offering will expire at 5:00 p.m., Pacific Standard Time, on
________________, subject to extension in our sole discretion. We will not
accept any subscriptions received by the Subscription Agent after 5:00 p.m.,
Pacific Standard Time, on ____________, regardless of when the documents
relating to that subscription were sent.
METHOD OF PAYMENT
You must pay by one of the following methods:
- You may pay by check or bank draft drawn upon a U.S. bank, or
postal, telegraphic or express money order, payable to U.S.
Stock Transfer Corporation, as Subscription Agent; or
- You may pay by wire transfer of funds to the escrow account
maintained by the Subscription Agent for the purpose of
accepting subscriptions at ________________ (with Subscriber's
name, for further credit to National Mercantile Bancorp
Account).
We will only consider the subscription price to have been received by
the Subscription Agent when:
- any uncertified check clears;
- the Subscription Agent has received a certified check or
bank draft drawn upon a U.S. bank or any postal, telegraphic
or express money order; or
10
<PAGE>
- the Subscription Agent has received notice of collected funds
in the Subscription Agent's account designated above.
Funds paid by uncertified personal check may take up to five business
days to clear. Accordingly, if you wish to pay by means of uncertified personal
check, you are urged to make payment sufficiently in advance of the expiration
date to ensure that such payment is received and clears prior to the expiration
of the offering. We urge you to consider payment by means of certified check,
bank draft, money order or wire transfer of funds. The Subscription Agent will
hold all funds received in payment of the subscription price and will invest the
funds at our direction in short-term certificates of deposit, short-term
obligations of the United States or any state or any agency thereof or money
market mutual funds investing in the foregoing instruments. The account in which
such funds will be held will not be insured by the FDIC. We will retain any
interest earned on such funds.
The Subscription Agreements and payment of the subscription price must
be delivered to the Subscription Agent, by mail, hand delivery, overnight or
other courier service, at the following address:
NATIONAL MERCANTILE BANCORP ACCOUNT
U.S. STOCK TRANSFER CORPORATION
1745 GARDENA AVENUE, SUITE 200
GLENDALE, CALIFORNIA 91204
TELEPHONE NUMBER: (800) 835-8775
FACSIMILE NUMBER: (818) 502-0674
The Instructions accompanying the Subscription Agreement should be read
carefully and followed in detail. SUBSCRIPTION AGREEMENTS SHOULD BE SENT WITH
PAYMENT TO THE SUBSCRIPTION AGENT. DO NOT SEND SUBSCRIPTION AGREEMENTS DIRECTLY
TO NATIONAL MERCANTILE BANCORP.
NO REVOCATION
You may not revoke your subscription to purchase shares of common stock
in this offering after you have sent your Subscription Agreement to the
Subscription Agent.
DELIVERY OF CERTIFICATES
We will deliver certificates evidencing the shares of common stock
purchased in the offering after the expiration of the offering.
RIGHT TO AMEND OR TERMINATE OFFERING
We reserve the right, in our sole discretion, at any time prior to
delivery of any shares of common stock to amend or terminate the offering. If we
terminate the offering, we will refund promptly all subscription funds received
for subscriptions which are not accepted, without interest.
SUBSCRIPTION AGENT
We have appointed U.S. Stock Transfer as Subscription Agent. We will
pay the fees and expenses of the Subscription Agent and have agreed to indemnify
the Subscription Agent from certain liabilities which it may incur in connection
with the offering.
INFORMATION AGENT
We have appointed Kissel-Blake Inc. as Information Agent for the
offering. Any questions or requests for assistance concerning the method of
subscribing for shares of common stock or for additional copies of this
prospectus, the Instructions, or the Subscription Agreement may be directed
to the Information Agent at the address and telephone number below:
11
<PAGE>
[Contact Name or Dept.]
Kissel-Blake Inc.
110 Wall Street
New York, New York 10005
Telephone No.: (800) 554-7733 or
(212) 344-6733 (call collect)
Banks and Brokers call: (212) 344-6733
We will pay the fees and expenses of the Information Agent and have
agreed to indemnify the Information Agent from certain liabilities which it may
incur in connection with the offering.
OTHER MATTERS
We are not conducting this offering in any state or other jurisdiction
in which it is unlawful to do so. We will not sell or accept an offer to
purchase common stock from you if you are a resident of any such state or other
jurisdiction. We may delay the commencement of the offering in certain states or
other jurisdictions in order to comply with the laws of such states or other
jurisdictions. We do not expect that there will be any changes in the terms of
the offering. However, we may decide, in our sole discretion, not to modify the
terms of the offering as may be requested by certain states or other
jurisdictions. If that happens and you are a resident of that state, you will
not be eligible to participate in the offering.
PLAN OF DISTRIBUTION
We plan to offer the common stock to our existing shareholders, other
than to shareholders residing in any state where the offer is not permitted. In
our discretion, we may also offer shares of common stock in the offering to
persons other than existing shareholders if we determine such offers are
permitted under applicable state law. Certain of our directors and officers will
assist us in the offering by, among other things, participating in informational
meetings regarding the offering and generally being available to answer
questions of potential subscribers. None of such directors and officers will
receive additional compensation for these services.
In connection with our 1997 recapitalization, The Conrad Company
("Conrad"), our largest shareholder, received a right of first refusal to
purchase its pro rata share of the common stock offered hereby. Accordingly, we
will offer to sell to Conrad a minimum of 37.71% of the shares of common stock
offered hereby.
DESCRIPTION OF COMMON STOCK
Holders of our common stock are entitled to cast one vote for each
share held of record and to cumulate votes for the election of directors.
Subject to the preferential rights of any outstanding class of preferred stock,
holders of our common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of legally available funds and to share
ratably in any distribution of our assets after payment of all debts and other
liabilities, upon our liquidation, dissolution or winding up. Common
shareholders do not have preemptive rights or other rights to subscribe for
additional shares, and the common stock is not subject to conversion or
redemption.
Our Articles of Incorporation provide that the affirmative vote of not
less than two thirds of the total voting power of all outstanding shares of our
voting stock shall be required to approve any proposal (1) that we merge or
consolidate with any other corporation if such corporation and its affiliates
singly or in the aggregate are directly or indirectly the beneficial owners of
more than 20% of the total voting power of all our outstanding shares of voting
stock, (2) that we sell or exchange all or substantially all of our assets or
business to or with any other corporation if such corporation and its affiliates
singly or in the aggregate are directly or indirectly the beneficial owners of
more than 20% of the total voting power of all our outstanding shares of voting
stock, or (3) that we issue or deliver any stock or other securities in exchange
or payment for any properties or assets of any other corporation if such
corporation and its affiliates singly or in the aggregate are directly or
indirectly the beneficial owners of more than 20% of the total voting power of
all our outstanding shares of voting stock. This requirement will not apply to
any merger, consolidation, sale or exchange, or issuance or delivery of stock or
other securities which was (a) approved by resolution of our Board of
12
<PAGE>
Directors adopted by the affirmative vote of not less than two thirds of the
then authorized number of directors or (b) approved by resolution of our Board
of Directors prior to such other corporation's or its affiliates' singly or in
the aggregate, directly or indirectly acquiring beneficial ownership of more
than 20% of the total voting power of all our outstanding shares of voting
stock.
Our Articles of Incorporation further prohibit the transfer prior to
July 1, 2003 of any capital stock to any person if such person is or would
become by reason of such transfer a 4.5% holder of our common stock (as the
term "stock" is defined, and such ownership is determined, under Section 382
of the Internal Revenue Code). Our Board of Directors may waive this
limitation on a case-by-case basis.
Our Articles of Incorporation also provide that we may issue preferred
stock with such rights, preferences, privileges and restrictions fixed from time
to time by our Board of Directors. Each of the foregoing may serve to delay,
defer or prevent a change in control.
LEGAL MATTERS
Troop Steuber Pasich Reddick & Tobey, LLP, Los Angeles, California, has
rendered to us a legal opinion as to the validity of the common stock covered by
this prospectus.
EXPERTS
The consolidated financial statements incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons, we have
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 us of expenses incurred or paid by a
director, officer or controlling person 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, we will, unless in the
opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of the appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
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<PAGE>
--------------------
NATIONAL MERCANTILE BANCORP
PROSPECTUS
COMMON STOCK
_____________, 2000
--------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the offering are as
follows:
<TABLE>
<CAPTION>
Amount
--------------------
<S> <C>
Registration Fee Under Securities Act of 1933.............................. $ 2,904.00
Nasdaq Listing Fee ........................................................ $ _________
Legal Fees and Expenses.................................................... $ 60,000.00
Subscription Agent Fee .................................................... $ _________
Information Agent Fee...................................................... $ _________
Accounting Fees and Expenses............................................... $ _________
Miscellaneous Expenses..................................................... $ _________
TOTAL...................................................................... $ =================
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Each of the Registrant's directors and executive officers have entered
into agreements with the Registrant to provide for indemnification to the
maximum extent available under California law.
Article X of the Registrant's Articles of Incorporation, as amended,
provides that the liability of the directors of the Registrant for monetary
damages shall be eliminated to the fullest extent permissible under California
law. Article XI of the Registrant's Articles of Incorporation, as amended,
provides that the Registrant is authorized to provide for the indemnification of
agents (as defined in Section 317 of the California General Corporation Law) in
excess of that expressly permitted by such Section 317, subject to the
limitations set forth in the General Corporation Law of California, for breach
of duty to the corporation and its stockholders through bylaw provisions or
through agreements, or both.
Article V of the Registrant's amended Bylaws provides as follows:
ARTICLE V
INDEMNIFICATION
Section 5.01. Definitions. For the purposes of this Article, "agent"
includes any person who is or was a director, officer, employee, or other agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of a
foreign or domestic corporation, partnership, joint venture, trust or other
enterprise, or was a director, officer, employee or agent of a foreign or
domestic corporation which was a predecessor corporation of the Corporation or
of another enterprise at the request of such predecessor corporation;
"proceeding" includes any threatened, pending or completed action or proceeding,
whether civil, criminal, administrative or investigative; and "expenses"
includes
II-1
<PAGE>
attorneys' fees and any expenses of establishing a right to indemnification
under Section 5.04 or Section 5.05(c) of these Bylaws.
Section 5.02. Indemnification in Actions by Third Parties. The
Corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any proceeding (other than an action by,
or in the right of, the Corporation) by reason of the fact that such person is
or was an agent of the Corporation, against expenses, judgments, fines,
settlements, and other amounts actually and reasonably incurred in connection
with such proceeding if he acted in good faith and in a manner he reasonably
believed to be in the best interests of the Corporation and, in the case of a
criminal proceeding, had no reasonable cause to believe the conduct of such
person was unlawful. The termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner he reasonably believed to be in the best interests of the
Corporation or that he had reasonable cause to believe that his conduct was
unlawful.
Section 5.03. Indemnification in Actions by or in the Right of the
Corporation. The Corporation shall have the power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending, or completed action by, or in the right of, the Corporation to procure
a judgment in its favor by reason of the fact that such person is or was an
agent of the Corporation against expenses actually and reasonably incurred in
connection with the defense or settlement of such action if he acted in good
faith, in a manner he believed to be in the best interests of the Corporation,
and with such care, including reasonable inquiry, as an ordinarily prudent
person in a like position would use under similar circumstances. No
indemnification shall be made under this Section:
(A) in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable to the Corporation in the performance of
his duty to the Corporation, unless and only to the extent that the court in
which such action was brought shall determine upon application that, in view of
all the circumstances of the case, he is fairly and reasonably entitled to
indemnity for the expenses which such court shall determine;
(B) of amounts paid in settling or otherwise disposing of a threatened
or pending action, with or without court approval; or
(C) of expenses incurred in defending a threatened or pending action
which is settled or otherwise disposed of without court approval.
Section 5.04. Indemnification Against Expenses. To the extent that an
agent of the Corporation has been successful on the merits in defense of any
proceeding referred to in Section 5.02 or 5.03 of these Bylaws or in defense of
any claim, issue or matter therein, he shall be indemnified against his expenses
actually and reasonably incurred in connection therewith.
Section 5.05. Required Determinations. Except as provided in Section
5.04 of these Bylaws, any indemnification under this Article shall be made by
the Corporation only if authorized in the specific case, upon a determination
that indemnification of the agent is proper under the circumstances because the
agent has met the applicable standard of conduct set forth in Section 5.02 or
5.03 of these Bylaws by:
(A) a majority vote of a quorum consisting of directors who are not
parties to such proceeding;
(B) approval of the shareholders, with the shares owned by the person
to be indemnified not being entitled to vote thereon; or
(C) the court in which such proceeding is or was pending upon
application made by the Corporation or the agent or the attorney or other person
rendering services in connection with the defense, whether or not such
application by the agent, attorney or other person is opposed by the
Corporation.
Section 5.06. Advance of Expenses. Expenses incurred in defending any
proceeding may be advanced by the Corporation before the final disposition of
such proceeding upon receipt of an undertaking by or on behalf of the agent or
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<PAGE>
repay such amount unless it shall be determined ultimately that the agent is not
entitled to be indemnified as authorized in this Article.
Section 5.07. Other Indemnification. No provision made by the
Corporation to indemnify the directors or officers of the Corporation, or a
subsidiary of the Corporation for the defense of any proceeding, whether
contained in the Articles of Incorporation, Bylaws, a resolution of the
shareholders or directors, an agreement or otherwise, shall be valid unless
consistent with Section 317 of the California General Corporation Law. Nothing
contained in this Article shall affect any right to indemnification to which
persons other than such directors and officers may be entitled by contract or
otherwise.
Section 5.08. Forms of Indemnification Not Permitted. No
indemnification or advance shall be made under this Article, except as provided
in Section 5.04 or Section 5.05(c) of these Bylaws in any circumstance where it
appears:
(A) that it would be inconsistent with a provision of the Articles of
Incorporation, Bylaws, a resolution of the shareholders or an agreement in
effect at the time of the accrual of the alleged cause of action asserted in the
proceeding in which the expenses were incurred or other amounts were paid, which
prohibits or otherwise limits indemnification; or
(B) that it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.
Section 5.09. Insurance. The Corporation shall have the power to buy
and maintain insurance on behalf of any agent of the Corporation against any
liability asserted against or incurred by the agent in such capacity or arising
out of the agent's status as such whether or not the Corporation would have the
power to indemnify the agent against such liability under the provisions of this
Article.
Section 5.10. Nonapplicability to Fiduciaries of Employee Benefit
Plans. This Article does not apply to any proceeding against any trustee,
investment manager or other fiduciary of an employee benefit plan in his
capacity as such, even though he may also be an agent of the Corporation as
defined in Section 5.01 of these Bylaws. Nothing contained in this Article shall
limit any right to indemnification to which such trustee, investment manager or
other fiduciary may be entitled by contract or otherwise which shall be
enforceable to the extent permitted by applicable law other than Section 317 of
the California General Corporation Law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Company pursuant to the above statutory provisions or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
No. Item
--- ----
<S> <C>
3.1 Certificate of Amendment of the Articles of Incorporation of the
Registrant
5.1 Opinion of Troop Steuber Pasich Reddick & Tobey, LLP*
10.1 Employment Agreement dated January 1, 1999 between Mercantile National
Bank and Scott A. Montgomery (3)
10.2 Letter Agreement dated July 17, 1996 between Mercantile National Bank
and Joseph W. Kiley III (4)
10.3 Form of Indemnity Agreement between the Company and its directors (5)
10.4 First Floor Lease at 1840 Century Park East, Los Angeles, California,
dated as of December 21, 1982 between Northrop Corporation and
Mercantile National Bank (2)
10.5 Second Floor Lease at 1840 Century Park East, Los Angeles, California,
dated as of December 21, 1982 between Northrop Corporation and
Mercantile National Bank for space at 1840 Century Park East, Los
Angeles, California, as amended by Amendment to Second Floor Lease
dated as of June 7, 1986, and as amended by Second Amendment to Second
Floor Lease dated as of December 18, 1992 between California State
Teachers'Retirement System and Mercantile National Bank (2)
II-3
<PAGE>
10.6 Lease Restructure Agreement dated December 31, 1995 by and between
California State Teachers' Retirement System and Mercantile National
Bank (6)
10.7 Warrant Agreement dated December 31, 1995 by and between the Company
and California State Teachers' Retirement System (6)
10.8 Registration Rights Agreement dated December 31, 1995 by and between
the Company and California State Teachers' Retirement System (6)
10.9 National Mercantile Bancorp amended 1996 Stock Incentive Plan (7)
10.10 Registration Rights Agreement between the Company and Conrad Company
(8)
10.11 Registration Rights Agreement between the Company and Wildwood
Enterprises Inc. Profit Sharing Plan and Trust (8)
10.12 Bank Service Agreement dated April 21, 1997 between RH Investment
Corporation and Mercantile National Bank (1)
10.13 Investment Management Agreement dated December 1, 1997 between
Mercantile National Bank and Windsor Financial Group, Inc (1)
11. Statement regarding computation of per share earnings (see "Note
2--Earnings Per Share"--of the "Notes to the Consolidated Financial
Statements" in "Item 1. Financial Statements" of the Registrant's
Quarterly Report on Form 10-QSB for the quarter ended March 31, 2000)
21. Subsidiaries of the Registrant
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Troop Steuber Pasich Reddick & Tobey, LLP (included as part
of Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
99.1 Form of Subscription Agreement for Record and Beneficial Holders
99.2 Form of Subscription Agreement for Nominee Holders
99.3 Form of Instructions to Stockholders
99.4 Form of Letter to Stockholders who are record holders
99.5 Form of Letter to Stockholders who are beneficial holders
</TABLE>
--------------------
*To be filed by amendment.
(1) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 and incorporated herein by reference.
(3) Filed as an exhibit to the Company's Report on Form 10-Q for the quarter
ended March 31, 1999 and incorporated herein by reference.
II-4
<PAGE>
(4) Filed as an exhibit to the Company's Report on Form 10-Q for the quarter
ended September 30, 1996 and incorporated herein by reference.
(5) Filed as an exhibit to Company's Annual Report on Form 10-K for the year
ended December 31, 1990 and incorporated herein by reference.
(6) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 and incorporated herein by reference.
(7) Filed as an exhibit to the Company's Report on Form 10-Q for the quarter
ended March 31, 1998 and incorporated herein by reference.
(8) Filed as an exhibit to the Company's Registration Statement on Form S-2
dated February 10, 1997 and amendments thereto and incorporated herein by
reference.
ITEM 17. UNDERTAKINGS
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 to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining 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; and
(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.
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 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 the 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.
II-5
<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-2 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 May 31, 2000.
NATIONAL MERCANTILE BANCORP
(Registrant)
By: /s/ Scott A. Montgomery
--------------------------------------
Scott A. Montgomery
Chief Executive 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.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-2 has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert E. Gipson Chair of the Board of Directors May 31, 2000
---------------------------------------------------
Robert E. Gipson
Vice Chair of the Board of
/s/ Robert E. Thomson Directors May 31, 2000
---------------------------------------------------
Robert E. Thomson
Director and Chief Executive
Officer (Principal Executive
/s/ Scott A. Montgomery Officer) May 31, 2000
---------------------------------------------------
Scott A. Montgomery
Director and Chief Financial
Officer (Principal Accounting
/s/ Joseph W. Kiley, III Officer) May 31, 2000
---------------------------------------------------
Joseph W. Kiley, III
/s/ Donald E. Benson Director May 31, 2000
---------------------------------------------------
Donald E. Benson
/s/ Joseph N. Cohen Director May 31, 2000
---------------------------------------------------
Joseph N. Cohen
II-6
<PAGE>
/s/ Alan Grahm Director May 31, 2000
---------------------------------------------------
Alan Grahm
/s/ Antoniette Hubenette, M.D. Director May 31, 2000
---------------------------------------------------
Antoinette Hubenette, M.D.
/s/ Dion G. Morrow Director May 31, 2000
---------------------------------------------------
Dion G. Morrow
/s/ Carl R. Terzian Director May 31, 2000
---------------------------------------------------
Carl R. Terzian
</TABLE>
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Item
--- ----
<S> <C>
3.1 Certificate of Amendment of the Articles of Incorporation of the
Registrant
5.1 Opinion of Troop Steuber Pasich Reddick & Tobey, LLP*
10.1 Employment Agreement dated January 1, 1999 between Mercantile National
Bank and Scott A. Montgomery (3)
10.2 Letter Agreement dated July 17, 1996 between Mercantile National Bank
and Joseph W. Kiley III (4)
10.3 Form of Indemnity Agreement between the Company and its directors (5)
10.4 First Floor Lease at 1840 Century Park East, Los Angeles, California,
dated as of December 21, 1982 between Northrop Corporation and
Mercantile National Bank (2)
10.5 Second Floor Lease at 1840 Century Park East, Los Angeles, California,
dated as of December 21, 1982 between Northrop Corporation and
Mercantile National Bank for space at 1840 Century Park East, Los
Angeles, California, as amended by Amendment to Second Floor Lease
dated as of June 7, 1986, and as amended by Second Amendment to Second
Floor Lease dated as of December 18, 1992 between California State
Teachers'Retirement System and Mercantile National Bank (2)
10.6 Lease Restructure Agreement dated December 31, 1995 by and between
California State Teachers' Retirement System and Mercantile National
Bank (6)
10.7 Warrant Agreement dated December 31, 1995 by and between the Company
and California State Teachers' Retirement System (6)
10.8 Registration Rights Agreement dated December 31, 1995 by and between
the Company and California State Teachers' Retirement System (6)
10.9 National Mercantile Bancorp amended 1996 Stock Incentive Plan (7)
10.10 Registration Rights Agreement between the Company and Conrad Company
(8)
10.11 Registration Rights Agreement between the Company and Wildwood
Enterprises Inc. Profit Sharing Plan and Trust (8)
10.12 Bank Service Agreement dated April 21, 1997 between RH Investment
Corporation and Mercantile National Bank (1)
10.13 Investment Management Agreement dated December 1, 1997 between
Mercantile National Bank and Windsor Financial Group, Inc (1)
11. Statement regarding computation of per share earnings (see "Note
2--Earnings Per Share"--of the "Notes to the Consolidated Financial
Statements" in "Item 1. Financial Statements" of the Registrant's
Quarterly Report on Form 10-QSB for the quarter ended March 31, 2000)
21. Subsidiaries of the Registrant
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Troop Steuber Pasich Reddick & Tobey, LLP (included as part
of Exhibit 5.1)
<PAGE>
24.1 Power of Attorney (included on signature page)
99.1 Form of Subscription Agreement for Record and Beneficial Holders
99.2 Form of Subscription Agreement for Nominee Holders
99.3 Form of Instructions to Stockholders
99.4 Form of Letter to Stockholders who are record holders
99.5 Form of Letter to Stockholders who are beneficial holders
</TABLE>
--------------------
*To be filed by amendment.
(1) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 and incorporated herein by reference.
(2) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 and incorporated herein by reference.
(3) Filed as an exhibit to the Company's Report on Form 10-Q for the quarter
ended March 31, 1999 and incorporated herein by reference.
(4) Filed as an exhibit to the Company's Report on Form 10-Q for the quarter
ended September 30, 1996 and incorporated herein by reference.
(5) Filed as an exhibit to Company's Annual Report on Form 10-K for the year
ended December 31, 1990 and incorporated herein by reference.
(6) Filed as an exhibit to the Company's Annual Report on Form 10-K for the year
ended December 31, 1995 and incorporated herein by reference.
(7) Filed as an exhibit to the Company's Report on Form 10-Q for the quarter
ended March 31, 1998 and incorporated herein by reference.
(8) Filed as an exhibit to the Company's Registration Statement on Form S-2
dated February 10, 1997 and amendments thereto and incorporated herein by
reference.
