NATIONAL MERCANTILE BANCORP
1996 STOCK OPTION PLAN
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
This INCENTIVE STOCK OPTION AGREEMENT (the "Agreement") is made as of the
____ day of __________, 19__ between NATIONAL MERCANTILE BANCORP, a California
corporation (the "Company"), and ___________________ (the "Optionee").
R E C I T A L S
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A. The Board of Directors of the Company adopted the 1996 Stock Incentive
Plan (the "1996 Plan") on March 28, 1997 and April 25, 1997, and the 1996 Plan
was approved by the shareholders of the Company on June 18, 1997.
B. The 1996 Plan provides for the granting of options to purchase shares
of Common Stock of the Company to selected employees of the Company or any
subsidiary of the Company, as the Stock Option Committee (the "Committee")
appointed by the Board of Directors may from time to time determine, and,
pursuant to Section 10 of the 1996 Plan, to directors of the Company who are not
also employees of the Company.
C. Pursuant to the 1996 Plan, the Optionee is automatically entitled to a
non-qualified stock option to purchase ___________________ (___________) shares
of the Company's Common Stock on the terms and conditions hereinafter set forth.
D. The option granted hereby is not intended to qualify as an "incentive
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stock option" under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), to the extent possible.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee as of the
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date hereof (the "Date of Grant") a non-qualified stock option (the "Option") to
purchase, on the terms and conditions hereinafter set forth,
____________________ (_______) shares of the Company's Common Stock, no par
value (the "Option Shares"), at a purchase price of __________ per share.
2. VESTING. The Option shall vest and become exercisable in full [one
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year from Date of Grant]; provided, however, that in the event that a Change of
Control as defined in the 1996 Plan shall occur, the Option shall be immediately
exercisable; provided, further, that no portion of the Option may be exercised
by the Optionee to the extent that such exercise would cause an ownership change
to occur pursuant to Section 382 of the Code. Section 382 of the Code provides,
among other things, that utilization of net operating losses will be restricted
if there is a change in ownership of the loss corporation. Changes in ownership
are determined by reference to 5% shareholders.
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3. EXPIRATION OF OPTION AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE.
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(a) The Option shall expire on the sixth anniversary of the Date of Grant
(the "Expiration Date").
(b) The Option may be exercised in whole or in part from time to time on or
after _________________ until the Expiration Date (subject to the provisions
hereof), except that not less than one hundred (100) shares may be purchased at
any time unless the number of shares then purchasable hereunder shall be less
than one hundred.
4. METHOD OF EXERCISE OF OPTION. The Option may be exercised only by
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delivery to the Company of a written notice of exercise specifying the number of
Option Shares which the Optionee then elects to purchase, accompanied by payment
in full of the aggregate exercise price for such shares (the "Exercise Price"),
in cash or by check payable to the Company, or in shares of the Company's Common
Stock, represented by a certificate duly endorsed, transferring to the Company
good and valid title to such shares, such shares to be valued on the basis of
the aggregate Fair Market Value (as defined in the 1996 Plan) thereof on the
date of such exercise.
5. NON-TRANSFERABILITY OF OPTION. The Option shall not be transferable by
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the Optionee otherwise than by will or the laws of descent and distribution, and
it shall be exercisable, during the lifetime of the Optionee only by him or by
his guardian or legal representative regardless of any community property
interest therein of the spouse of the Optionee or such spouse's successors in
interest.
6. ADJUSTMENTS UPON THE OCCURRENCE OF CERTAIN EVENTS.
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(a) If the outstanding shares of the Company's Common Stock are increased,
decreased, or exchanged for or converted into cash, property or a different
number or kind of shares or securities of the Company through reorganization,
recapitalization, reclassification, merger, consolidation, restructuring, stock
dividend, stock split, reverse stock split or other similar transaction, or if
substantially all of the property and assets of the Company are sold, then,
unless the terms of such transaction provide otherwise, an appropriate and
proportionate adjustment shall be made in the Option Shares pursuant to which
the Options relate. Any such adjustment in the outstanding Options shall be made
without change in the aggregate purchase price applicable to the unexercised
portion of the Options but with a corresponding adjustment in the price for each
Option Share.
(b) No adjustment provided for in this Section 6 shall require the Company
to sell a fractional share under the Options.
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7. DELIVERY OF STOCK CERTIFICATES. Upon the exercise of all or a portion
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of the Option, the Company, as promptly as practicable, shall mail or deliver to
the Optionee a stock certificate or certificates representing the shares then
purchased, and will pay all stamp taxes payable in connection therewith. The
issuance of such shares and delivery of the certificate or certificates therefor
shall, however, be subject to any delay necessary to complete (a) the listing of
such shares on any stock exchange upon which shares of the same class are then
listed or quoted on the Nasdaq SmallCap Market, (b) such registration or other
qualification of such shares under any state or federal law, rule, or regulation
as the Company may determine to be necessary or advisable, and (c) the making of
provision for the payment or withholding of any taxes required to be withheld
pursuant to any applicable law, in respect of the exercise of the Option or the
receipt of such shares.
8. NOTICES, ETC.
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(a) Any notice hereunder by the Optionee shall be given to the Company in
writing and such notice and any payment by the Optionee hereunder shall be
deemed duly given or made only upon receipt thereof at the Company's corporate
offices at 0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or at such
other address as the Company may designate by notice to the Optionee.
(b) Any notice or other communication to the Optionee shall be in writing
and any such communication and any delivery to the Optionee hereunder shall be
deemed duly given or made if mailed or delivered to the Optionee at such address
as the Optionee shall have on file with the Company or in care of the Company at
the address of its corporation offices indicated above.
9. WAIVER. The waiver by the Company of any provision of the Option shall
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not operate as or be construed to be a waiver of the same provision or any other
provision hereof at any subsequent time or for any other purpose.
10. IRREVOCABILITY. The Option shall be irrevocable until it expires as
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herein provided.
11. EFFECTIVE DATE. The Option shall be deemed granted and effective on
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the Date of Grant.
12. INTERPRETATION AND CONSTRUCTION. The interpretation and construction
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of the Option by the Committee shall be final, binding and conclusive. The
section headings in this
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Agreement are for convenience of reference only and shall not be deemed part of,
or germane to the interpretation or construction of, this Agreement.
NATIONAL MERCANTILE BANCORP
By: _______________________________________
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___________________, Optionee
By his or her signature below, the spouse of the Optionee agrees to be
bound by all of the terms and conditions of the foregoing Agreement.
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