AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
NATIONAL MERCANTILE BANCORP
A CALIFORNIA CORPORATION
The undersigned certify that:
1. They are the president and chief executive officer and chief financial
officer, respectively, of National Mercantile Bancorp, a California
Corporation.
2. The Articles of Incorporation of this corporation are amended and restated
to read as set forth in EXHIBIT A attached hereto.
3. The attached amendment and restatement of the Articles of Incorporation has
been duly approved by the board of directors.
4. The attached amendment and restatement of the Articles of Incorporation has
been duly approved by the required vote of shareholders in accordance with
Section 902, California Corporation Code. The total number of outstanding
shares of the class of common stock entitled to vote with respect to the
amendment was 3,078,146. There are no other amendment equaled or exceeded
the vote required. The percentage vote required was more than 50%.
Articles IV, V, VI, VII, VII and IX have not been amended or repealed,
which amendment or repeal would have required the affirmative vote of the
holders of not less than two-thirds (2/3) of the total voting power of all
outstanding shares of the voting stock of National Mercantile Bancorp.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
DATE: June 24, 1997 By /s/ SCOTT A. MONTGOMERY
----------------------------- -------------------------------------
Scott A. Montgomery
President and Chief Executive Officer
By /s/ JOSEPH W. KILEY, III
-------------------------------------
Joseph W. Kiley, III
Executive Vice President & CFO
EXHIBIT A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
NATIONAL MERCANTILE BANCORP
A CALIFORNIA CORPORATION
I
The name of the Corporation shall be:
NATIONAL MERCANTILE BANCORP
II
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
III
The liability of the directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
IV
The Corporation is authorized to issue two (2) classes of shares to
be designated respectively common and preferred. The number of common shares
authorized is Ten Million (10,000,000). The number of preferred shares
authorized is One Million (1,000,000). The preferred shares may be issued in
one or more series. The Board of Directors is authorized to fix the number of
any such series of preferred shares and to determine the designation of any
such series. The Board of Directors is further authorized to determine or
alter the rights, preferences, privileges, and restrictions granted to or
imposed upon any wholly unissued series of preferred shares and, within the
limits and restrictions stated in any resolution or resolutions of the Board
of Directors originally fixing the number of shares constituting any series,
to increase or decrease (but not below the number of shares of such series
then outstanding) the number of shares of any such series subsequent to the
issuance of shares of that series.
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V
Elections shall be by written ballot.
VI
The affirmative vote of the holders of not less than two-thirds (2/3)
of the total voting power of all outstanding shares of voting stock of this
Corporation shall be required for the approval of any proposal (1) that this
Corporation merge or consolidate with any other corporation if such other
corporation and its affiliates singly or in the aggregate are directly or
indirectly the beneficial owners of more than twenty percent (20%) of the total
voting power of all outstanding shares of the voting stock of this Corporation
(such other corporation being herein referred to as a "Related Corporation"), or
(2) that this Corporation sell or exchange all or substantially all of its
assets or business to or with such Related Corporation, or (3) that this
Corporation issue or deliver any stock or other securities of its issue in
exchange or payment for any properties or assets of such Related Corporation or
securities issued by such Related Corporation or in a merger of any affiliate of
this Corporation with or into such Related Corporation or any of its affiliates,
if to effect such transaction the approval of shareholders of this Corporation
is required by law; provided, however, that the foregoing shall not apply to any
such merger, consolidation, sale or exchange, or issuance or delivery of stock
or other securities which was (i) approved by resolution of the Board of
Directors adopted by the affirmative vote of not less than two-thirds (2/3) of
the then authorized number of directors, or (ii) approved by resolution of the
Board of Directors prior to the acquisition of the beneficial ownership of more
than twenty percent (20%) of the total voting power of all outstanding shares of
the voting stock of this Corporation by such Related Corporation and its
affiliates, nor shall it apply to any such transaction solely between this
Corporation and another corporation fifty percent (50%) or more of the voting
stock of which is owned by this Corporation. For the purposes hereof, an
"affiliate" is any person (including a corporation, partnership, trust, estate
or individual) who directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with the person
specified; "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract, or otherwise;
and in computing the percentage of outstanding voting stock beneficially owned
by any person the shares outstanding and the shares owned shall be determined as
of the record date fixed to determine the shareholders entitled to vote with
respect to such proposal. The shareholder vote, if any, required for mergers,
consolidations, sales or exchanges of assets or issuances of stock or other
securities not expressly provided for in this Article, shall be such as may be
required by applicable law.
VII
No action shall be taken by the shareholders except at an annual or
special meeting of shareholders.
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VIII
If at any time the Corporation has a variable board, the shareholders
of the Corporation may not change the exact number of directors within the
limits specified in the bylaws, except by the vote of the holders of not less
than two-thirds (2/3) of the total voting power of all outstanding shares of
voting stock of the Corporation.
After the issuance of shares, any action by the shareholders to
specify or change the fixed number of directors (if the Corporation does not
have a variable board) or the maximum or minimum number of directors (if the
Corporation has a variable board) or to change from a fixed to a variable board
or vice versa shall not be made, repealed, altered, amended or rescinded except
by the vote of the holders of not less than two-thirds (2/3) of the total voting
power of all outstanding shares of voting stock of the Corporation; provided,
however, that a bylaw reducing the fixed number or the minimum number of
directors to a number less than five (5) cannot be adopted if the votes cast
against its adoption at a meeting are equal to more than sixteen and two-thirds
percent (16-2/3%) of the outstanding shares entitled to vote.
IX
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred on shareholders herein
are granted subject to this reservation. Notwithstanding the foregoing, the
provisions set forth in Articles IV, V, VI, VII, VIII and this Article IX may
not be repealed or amended in any respect unless such repeal or amendment is
approved by the affirmative vote of the holders of not less than two-thirds
(2/3) of the total voting power of all outstanding shares of voting stock of
this Corporation.
X
Upon filing with the Secretary of State of the State of California of
these Amended and Restated Articles of Incorporation, every 9.09 outstanding
shares of common shares prior to the filing of these Articles shall be combined
and converted into one (1) share of newly issued common shares (the "Reverse
Stock Split"). The number of authorized shares of common shares ("Common
Stock") shall remain as 10,000,000.
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XI
Pursuant to the authority conferred upon the Board of Directors by
Article IV of these Amended and Restated Articles of Incorporation (and with the
approval of more than a majority of the outstanding shares of Common Stock), the
preferred shares (the "Preferred Stock") shall consist of 990,000 shares of
Series A Noncumulative Convertible Perpetual Preferred Stock (the "Series A
Preferred Stock") and 10,000 shares undesignated as to series. The shares of
Common Stock and Preferred Stock are referred to herein collectively as the
"capital stock".
(A) VOTING PRIVILEGES OF SERIES A PREFERRED STOCK.
(1) GENERAL. Each holder of Series A Preferred Stock shall have that
number of votes on all matters submitted to the shareholders that is equal to
the number of shares of Common Stock into which such holder's shares of Series A
Preferred Stock are then convertible, as hereinafter provided.
(2) ADDITIONAL CLASS VOTES BY SERIES A PREFERRED STOCK. In addition to
any class votes required by the California General Corporation Law, without the
affirmative vote or written consent of the holders (acting together as a class)
of a majority of the shares of Series A Preferred Stock at the time outstanding,
the Corporation shall not:
(a) authorize any additional shares of Series A Preferred Stock, or
authorize or issue any shares of capital stock having priority over Series
A Preferred Stock or ranking on a parity therewith as to the payment or
distribution of (i) assets upon the liquidation or dissolution, voluntary
or involuntary, of the Corporation, or (ii) dividends; or
(b) amend, alter or repeal any of the provisions of the Amended and
Restated Articles of Incorporation of the Corporation or adopt any
Certificate of Determination of Rights and Preferences with respect to any
class or series of capital stock so as to adversely affect the rights,
preferences and privileges relating to Series A Preferred Stock or the
holders thereof or waive any of the rights granted to the holders of the
Series A Preferred Stock by the Amended and Restated Articles of
Incorporation of the Corporation; or
(c) amend, alter or repeal any of the provisions of the Amended and
Restated Articles of Incorporation, or the bylaws, of the Corporation
with respect to the election of directors by cumulative voting; or
(d) issue any authorized shares of Series A Preferred Stock except in
connection with (i) an offering of rights to holders of Common Stock
to purchase shares of the Series A Preferred Stock (the "Rights
Offering") consummated on or before June 30, 1997, (ii) an offering of
shares of the Series A Preferred Stock to certain institutional
investors for purchase (the "Standby Purchaser Offering") consummated
on or before June 30, 1997, (iii) a sale of shares of Series A Preferred
Stock to certain private purchasers (the "Private Purchaser Offering")
consummated on or before June 30,
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1997, and (iv) the exercise of a warrant to purchase shares of the
Series A Preferred Stock pursuant to a certain Warrant Agreement dated
December 31, 1995, between the Corporation and California State Teachers'
Retirement System. The Rights Offering, the Private Purchasers Offering
and the Standby Purchasers Offering are referred to collectively as the
"Offerings."
(B) DIVIDENDS.
(1) Unless otherwise prohibited by law, the Series A Preferred Stock shall
be entitled to receive non-cumulative cash dividends at the annual rate of 6.5%
of the Liquidation Amount (as defined in Paragraph C below) per share, payable
quarterly on the first day of January, April, July and October in each year,
commencing October 1, 1999, with respect to the three months then ending, before
any distribution by way of dividend or otherwise shall be declared or paid upon,
or set apart for, the shares of Common Stock or any other class of shares of the
Corporation ranking junior to the Series A Preferred Stock with respect to the
payment of dividends or upon liquidation, dissolution or winding up of the
Corporation (the "Junior Stock"). Each such dividend will be payable to holders
of record as they appear on the books of the Corporation on or about the
fifteenth day of the month preceding the payment dates thereof, as shall be
fixed by the Board of Directors of the Corporation. The amount of dividends
payable for each quarterly dividend period shall be computed by dividing by four
the dividend due on the basis of the 6.5% annual rate. Dividends payable on the
Series A Preferred Stock for any period shorter than a full three months shall
be computed on the basis of 30-day months and a 360-day year.
(2) No dividend (other than dividends or distributions paid in shares of,
or options, warrants or rights to subscribe for or purchase shares of, such
class or series of stock ranking on parity with the Series A Preferred Stock as
to dividends) may be paid upon, or declared or set apart for, any class or
series of stock ranking on a parity with the Series A Preferred Stock as to
dividends, for any dividend period, prior to October 1, 1999, and thereafter,
unless there shall be or have been declared on the Series A Preferred Stock
dividends for the then current quarterly period coinciding with or ending before
such quarterly period, ratably in proportion to the respective annual dividend
rates fixed therefor.
(3) No dividend (other than dividends or distributions paid in shares of,
or options, warrants or rights to subscribe for or purchase shares of, Junior
Stock and other than as provided in subparagraph (2) of this paragraph (B))
shall be declared or paid or set aside for payment or other distribution
declared or made upon any Junior Stock or any capital stock ranking on a parity
with the Series A Preferred Stock as to dividends or upon liquidation or
dissolution (the "Parity Stock"), nor shall any Junior Stock or Parity Stock be
redeemed, purchased or otherwise be acquired for any consideration (or any
monies to be paid to or made available for a sinking fund for the redemption of
any shares of Junior Stock or Parity Stock) by the Corporation (except by
conversion into or exchange for Junior Stock or Parity Stock), in each case,
prior to October 1, 1999, and thereafter, unless full dividends on all
outstanding shares of Series A Preferred Stock shall have been paid for
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the then current dividend period or declared and a sum sufficient for the
payment thereof set aside for such payment.
(C) OTHER TERMS OF THE SERIES A PREFERRED STOCK.
(1) LIQUIDATION PREFERENCE. In the event of an involuntary or voluntary
liquidation or dissolution of the Corporation at any time, the holders of shares
of Series A Preferred Stock shall be entitled to receive out of the assets of
the Corporation an amount equal to $10.00 per share (appropriately adjusted to
reflect stock splits, stock dividends, reorganizations, consolidations and
similar changes hereafter effected) (the "Liquidation Amount"), plus dividends
declared and unpaid thereon, if any. In the event of either an involuntary or a
voluntary liquidation or dissolution of the Corporation payment shall be made to
the holders of shares of Series A Preferred Stock in the amounts herein fixed
before any payment shall be made or any assets distributed to the holders of the
Common Stock or any other class or series of capital stock of the Corporation
ranking junior to the Series A Preferred Stock with respect to payment upon
dissolution or liquidation of the Corporation. If upon any liquidation or
dissolution of the Corporation the assets available for distribution shall be
insufficient to pay the holders of all outstanding shares of Series A Preferred
Stock and any other class or series of capital stock ranking on a parity with
the Series A Preferred Stock as to payments upon dissolution or liquidation of
the Corporation the full amounts to which they respectively shall be entitled,
then such assets or the proceeds thereof shall be distributed among such holders
ratably in accordance with the respective amounts which would be payable on such
shares if all amounts payable thereon were paid in full.
At any time, in the event of the merger or consolidation of the Corporation
into or with another Corporation or the merger or consolidation of any other
Corporation into or with the Corporation or a plan of exchange between the
Corporation and any other Corporation (in which consolidation or merger or plan
of exchange any shareholders of the Corporation receive distributions of cash or
securities or other property) or the sale, transfer or other disposition of all
or substantially all of the assets of the Corporation, then, such transaction
shall be deemed, solely for purposes of determining the amounts to be received
by the holders of the Series A Preferred Stock in such merger, consolidation,
plan of exchange, sale, transfer or other disposition, and for purposes of
determining the priority of receipt of such amounts as between the holders of
the Series A Preferred Stock and the holders of other classes or series of
capital stock, to be a liquidation or dissolution of the Corporation.
Nothing hereinabove set forth shall affect in any way the right of each
holder of shares of Series A Preferred Stock to convert such shares at any time
and from time to time in accordance with subparagraph (3) below.
(2) REDEMPTION.
(a) The shares of Series A Preferred Stock shall not be redeemable by the
Corporation prior to July 1, 2000. On and after July 1, 2000, the
Corporation, at its sole option,
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may redeem shares of Series A Preferred Stock, in whole or in part, at
any time or from time to time, to the extent the Corporation has funds
legally available therefor, at the redemption prices set forth below
(expressed as a percentage of the Liquidation Amount) and upon the
approval of the Board of Governors of the Federal Reserve System. If
less than all of the outstanding shares of Series A Preferred Stock
are to be redeemed, the Corporation will select the shares to be
redeemed by lot, pro rata (as nearly may be), or in such other
equitable manner as the Board of Directors of the Corporation may
determine.
If redeemed during the twelve-month period beginning July 1
Year Price Per Share
---- ---------------
2000 ....................... 105%
2001 ....................... 104%
2002 ....................... 103%
2003 ....................... 102%
2004 ....................... 101%
at the price indicated above, and from and after July 1, 2005, at the
price per share of 100% of the Liquidation Amount, plus in each case
declared and unpaid dividends thereon to the date fixed for redemption
(the total sum so payable on any such redemption being herein referred
to as the "redemption price").
(b) In no event shall the Corporation redeem less than all the outstanding
shares of Series A Preferred Stock, unless dividends for the
then-current dividend period (without accumulation of any accrued and
unpaid dividends for prior dividend periods unless previously declared
and without interest) to the date fixed for redemption shall have been
declared and paid or set apart for payment on all outstanding shares
of Series A Preferred Stock; provided, however, that the foregoing
shall not prevent, if otherwise permitted, the purchase or acquisition
by the Corporation of shares of Series A Preferred Stock pursuant to a
tender or exchange offer made on the same terms to holders of all the
outstanding shares of Series A Preferred Stock and mailed to the
holders of record of all such outstanding shares at such holders'
addresses as the same appear on the books of the Corporation; and
provided further that if some, but less than all, of the shares of
Series A Preferred Stock are to be purchased or otherwise acquired
pursuant to such a tender or exchange offer and the number of such
shares so tendered exceeds the number of shares so to be purchased or
otherwise acquired by the Corporation, the shares of Series A
Preferred Stock so tendered shall be purchased or otherwise acquired
by the Corporation on a pro rata basis (with adjustments to eliminate
fractions) according to the number of such shares duly
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tendered by each holder so tendering shares of Series A Preferred
Stock for such purchase or exchange.
(c) Notice of any redemption pursuant to this subparagraph (2) shall be
mailed at least 30, but not more than 60, days in advance of the date
designated for such redemption (herein called the "redemption date")
to the holders of record of shares of Series A Preferred Stock so to
be redeemed at their respective addresses as the same shall appear on
the books of the Corporation. To facilitate the redemption of shares
of Series A Preferred Stock, the Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred
Stock to be redeemed not more than 60 days prior to the redemption
date. Each such notice shall state: (i) the redemption date; (ii) the
number of shares of Series A Preferred Stock to be redeemed and, if
less than all the shares held by such holder are to be redeemed, the
number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) that the shares of Series A Preferred Stock
called for redemption may be converted at any time prior to the date
fixed for redemption; (v) the applicable conversion price or rate;
(vi) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price; and (vii) that
dividends on the shares to be redeemed will cease to accrue on such
redemption date. If less than all the shares represented by any such
surrendered certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares.
(d) The Corporation shall, on or prior to the date fixed for redemption of
any shares, but not earlier than 45 days prior to the date fixed for
redemption, deposit with its transfer agent or other redemption agent
selected by the Board of Directors, as a trust fund, a sum sufficient
to redeem the shares called for redemption, with irrevocable
instructions and authority to such transfer agent or other redemption
agent to give or complete the notice of redemption thereof and to pay
to the respective holders of such shares, as evidenced by a list of
such holders certified by an officer of the Corporation, the
redemption price upon surrender of their respective share
certificates. Such deposit shall be deemed to constitute full payment
of such shares to their holders; and from and after the date of such
deposit, notwithstanding that any certificates for such shares shall
not have been surrendered for cancellation, the shares represented
thereby shall no longer be deemed outstanding, rights to receive
dividends and distributions shall cease to accrue from and after the
redemption date, and all rights of the holders of the Series A
Preferred Stock called for redemption, as shareholders of the
Corporation with respect to such shares, shall cease and terminate,
except the right to receive the redemption price, without interest,
upon the surrender of their respective certificates, and except the
right to convert their shares into Common Stock as provided in
subparagraph (3) of this paragraph (C), until the close of business on
the redemption date. In case the holders of any shares shall not,
within six years after such deposit, claim the amount deposited for
redemption thereof, such transfer agent or other redemption agent
shall, upon demand, pay over
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to the Corporation the balance of such amount so deposited. Thereupon,
such transfer agent or other redemption agent shall be relieved of all
responsibility to the holders thereof and the sole right of such
holders shall be as general creditors of the Corporation. To the
extent that shares of Series A Preferred Stock called for redemption
are converted into Common Stock prior to the date fixed for
redemption, the amount deposited by the Corporation to redeem such
shares shall immediately be returned to the Corporation. Any interest
accrued on any funds so deposited shall belong to the Corporation, and
shall be paid to it from time to time on demand.
(e) Redemption of any shares of Series A Preferred Stock is subject to the
prior approval of any federal regulatory agency with jurisdiction over
such matters.
(3) CONVERSION RIGHT. At the option of the holders thereof, the shares of
Series A Preferred Stock shall be convertible, at the office of the Corporation
(or at such other office or offices, if any, as the Board of Directors may
designate), into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of Common Stock of the
Corporation, at the conversion price, determined as hereinafter provided, in
effect at the time of conversion, each share of Series A Preferred Stock being
deemed to have a value of $10.00 for the purpose of such conversion. The price
at which shares of Common Stock shall be delivered upon conversion (herein
called the "conversion price") shall be initially $10.00 per share of Common
Stock (I.E., at an initial conversion rate of one share of Common Stock for each
share of Series A Preferred Stock); PROVIDED, HOWEVER, that such initial
conversion price shall be subject to adjustment from time to time in certain
instances as hereinafter provided. In the case of the call for redemption of
any shares of Series A Preferred Stock, such right of conversion shall cease and
terminate as to the shares designated for redemption on the day such shares are
actually redeemed by the Corporation. The following provisions shall govern
such right of conversion:
(a) To convert shares of Series A Preferred Stock into shares of Common
Stock of the Corporation, the holder thereof shall surrender at any
office hereinabove mentioned the certificate or certificates therefor,
duly endorsed to the Corporation or in blank, and give written notice
to the Corporation at such office that such holder elects to convert
such shares. Shares of Series A Preferred Stock shall be deemed to
have been converted immediately prior to the close of business on the
day of the surrender of such shares for conversion as herein provided,
and the person entitled to receive the shares of Common Stock of the
Corporation issuable upon such conversion shall be treated for all
purposes as the record holder of such shares of Common Stock at such
time. As promptly as practicable on or after the conversion date, the
Corporation shall issue and deliver or cause to be issued and
delivered at such office a certificate or certificates for the number
of shares of Common Stock of the Corporation issuable upon such
conversion.
(b) The conversion price shall be subject to adjustment from time to time
as hereinafter provided. Upon each adjustment of the conversion price
each holder of shares of
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Series A Preferred Stock shall thereafter be entitled to receive the
number of shares of Common Stock of the Corporation obtained by
multiplying the conversion price in effect immediately prior to such
adjustment by the number of shares issuable pursuant to conversion
immediately prior to such adjustment and dividing the product thereof
by the conversion price resulting from such adjustment.
(c) In case the Corporation shall (i) declare a dividend upon the Common
Stock payable in Common Stock (other than a dividend declared to
effect a subdivision of the outstanding shares of Common Stock, as
described in subparagraph (d) below) or Convertible Securities, or in
any rights or options to purchase Common Stock or Convertible
Securities, or (ii) declare any other dividend or make any other
distribution upon the Common Stock payable otherwise than out of
earnings or earned surplus, then thereafter each holder of shares of
Series A Preferred Stock upon the conversion thereof will be entitled
to receive the number of shares of Common Stock into which such shares
of Series A Preferred Stock have been converted, and, in addition and
without payment therefor, each dividend described in clause (i) above
and each dividend or distribution described in clause (ii) above which
such holder would have received by way of dividends or distributions
if continuously since such holder became the record holder of such
shares of Series A Preferred Stock such holder (i) had been the record
holder of the number of shares of Common Stock then received, and (ii)
had retained all dividends or distributions in stock or securities
(including Common Stock or Convertible Securities, and any rights or
options to purchase any Common Stock or Convertible Securities)
payable in respect of such Common Stock or in respect to any stock or
securities paid as dividends or distributions and originating directly
or indirectly from such Common Stock. For the purposes of the
foregoing a dividend or distribution other than in cash shall be
considered payable out of earnings or earned surplus only to the
extent that such earnings or earned surplus are charged an amount
equal to the fair value of such dividend or distribution as determined
by the Board of Directors of the Corporation.
(d) In case the Corporation shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the conversion
price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding
shares of Common Stock of the Corporation shall be combined into a
smaller number of shares (other than the Reverse Stock Split), the
conversion price in effect immediately prior to such combination shall
be proportionately increased.
(e) If any capital reorganization or reclassification of the capital stock
of the Corporation, or consolidation or merger of the Corporation with
another Corporation, or the sale of all or substantially all of its
assets to another Corporation shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities
or assets with respect to or in exchange for Common Stock, then, as a
condition of such reorganization, reclassification, consolidation,
merger or sale, and subject to
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subparagraph (1) above, lawful and adequate provision shall be made
whereby the holders of Series A Preferred Stock shall thereafter have
the right to receive upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of the Common Stock of the
Corporation immediately theretofore receivable upon the conversion of
Series A Preferred Stock, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a
number of outstanding shares of such Common Stock equal to the number
of shares of such stock immediately theretofore receivable upon the
conversion of Series A Preferred Stock had such reorganization,
reclassification, consolidation, merger or sale not taken place, plus
all declared dividends unpaid and accumulated or accrued thereon to
the date of such reorganization, reclassification, consolidation,
merger or sale, and in any such case appropriate provision shall be
made with respect to the rights and interests of the holders of Series
A Preferred Stock to the end that the provisions hereof (including
without limitation provisions for adjustments of the conversion price
and of the number of shares receivable upon the conversion of Series A
Preferred Stock) shall thereafter be applicable, as nearly as may be
in relation to any shares of stock, securities or assets thereafter
receivable upon the conversion of Series A Preferred Stock. The
Corporation shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor Corporation (if
other than the Corporation) resulting from such consolidation or
merger or the Corporation purchasing such assets shall assume by
written instrument executed and mailed to the registered holders of
Series A Preferred Stock, at the last addresses of such holders
appearing on the books of the Corporation, the obligation to deliver
to such holders such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such holders may be entitled
to receive.
(f) Upon any adjustment of the conversion price, then and in each case the
Corporation shall give written notice thereof, by first-class mail,
postage prepaid, addressed to the registered holders of Series A
Preferred Stock, at the addresses of such holders as shown on the
books of the Corporation, which notice shall state the conversion
price resulting from such adjustment and the increase or decrease, if
any, in the number of shares receivable at such price upon the
conversion of Series A Preferred Stock, setting forth in reasonable
detail the method of calculation and the facts upon which such
calculation is based.
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(g) In case at any time:
(i) the Corporation shall pay any dividend payable in stock upon
its Common Stock or make any distribution (other than regular
cash dividends) to the holders of its Common Stock;
(ii) the Corporation shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of
any class or other rights;
(iii) there shall be any capital reorganization, or reclassification
of the capital stock of the Corporation, or consolidation or
merger of the Corporation with, or sale of all or substantially
all of its assets to, another Corporation; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give
written notice, by first-class mail, postage prepaid, addressed to the
registered holders of Series A Preferred Stock at the addresses of
such holders as shown on the books of the Corporation, of the date on
which (i) the books of the Corporation shall close or a record shall
be taken for such dividend, distribution or subscription rights, or
(ii) such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up shall take place, as the
case may be. Such notice also shall specify the date as of which the
holders of Common Stock of record shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange
their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation, or winding up, as the case may be. Such
written notice shall be given at least 20 days prior to the action in
question and not less than 20 days prior to the record date or the
date on which the Corporation's transfer books are closed in respect
thereto.
(h) As used in this paragraph (3) the term "Common Stock" shall mean and
include the Corporation's presently authorized Common Stock and also
shall include any capital stock of any class of the Corporation
hereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to
participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, provided that the shares receivable pursuant to
conversion of shares of Series A Preferred Stock shall include shares
designated as Common Stock of the Corporation as of the date of
issuance of such shares of Series A Preferred Stock, or, in case of
any reclassification of the outstanding shares thereof, the stock,
securities or assets provided for in subparagraph (e) above.
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(i) No fractional shares of Common Stock shall be issued upon conversion,
but, instead of any fraction of a share which would otherwise be
issuable, the Corporation shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of the market
price per share of Common Stock as of the close of business on the day
of conversion. "Market price" shall mean if the Common Stock is
traded on a securities exchange or on the Nasdaq Stock Market, the
closing price of the Common Stock on such exchange or the Nasdaq Stock
Market, or, if the Common Stock is otherwise traded in the
over-the-counter market, the closing bid price, in each case averaged
over a period of 20 consecutive business days prior to the date as of
which "market price" is being determined. If at any time the Common
Stock is not traded on an exchange or the Nasdaq Stock Market, or
otherwise traded in the over-the-counter market, the "market price"
shall be deemed to be the higher of (i) the book value thereof as
determined by any firm of independent public accountants of recognized
standing selected by the Board of Directors of the Corporation as of
the last day of any month ending within 60 days preceding the date as
of which the determination is to be made, or (ii) the fair value
thereof determined in good faith by the Board of Directors of the
Corporation as of a date which is within 15 days of the date as of
which the determination it to be made.
XII
Each holder of Common Stock shall have one vote on all matters
submitted to the shareholders for each share of Common Stock standing in the
name of such holder on the books of the Corporation. Except as otherwise
provided herein, and except as otherwise required by law, the shares of capital
stock of the Corporation shall vote as a single class on all matters submitted
to the shareholders.
XIII
TRANSFER RESTRICTIONS
(A) GENERAL. The shares of capital stock may not be transferred by any
person (the "Initial Transferor") in any manner to any extent to any other
person (other than persons to whom the Corporation is contractually obligated on
or before the date of issuance of the Series A Preferred Stock in the Offerings
to transfer up to 4.9% of the Corporation's stock) if such other person is or
would become by reason of the transfer a beneficial owner of more than 4.5% (or
4.9% as described above) of the Corporation's stock (a "Prohibited Transferee"),
as the term "stock" is defined and such ownership is determined under Section
382 of the Internal Revenue Code of 1986, as amended, and regulations thereunder
(collectively "Section 382"). For purposes of this provision, transfers to a
Prohibited Transferee shall include transfers directly with or through trusts,
estates, corporations, partnerships or other entities as defined under Internal
Revenue Code Regulation Section 1.382-3(a), and attribution through such
entities shall be determined pursuant to Section 382.
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(B) PROHIBITED STOCK. Transfers made in violation of paragraph (A) of
this Article XIII shall not be effective to transfer ownership of the shares of
Preferred Stock or Common Stock subject thereto ("Prohibited Stock").
(1) Upon the transfer of Prohibited Stock, the Corporation shall have
thirty (30) days from discovery of such prohibited transfer to demand
the transfer of the Prohibited Stock from the Prohibited Transferee to
the agent designated by the Board of Directors (the "Agent").
Further, the Agent shall demand the transfer of any distributions
received on such Prohibited Stock by the Prohibited Transferee.
Discovery shall be deemed to have been made pursuant to provisions of
Section 382 regarding discovery of ownership changes. If a Prohibited
Transferee shall refuse or fail upon demand by the Corporation to
transfer such Prohibited Stock and distributions received thereon, the
Corporation shall take all necessary action at law or equity to compel
such transfer as soon as possible.
(2) Upon transfer by the Prohibited Transferee of the Prohibited Stock,
together with distributions received thereon, the Agent shall sell
such Prohibited Stock as soon as practicable thereafter in an arm's
length transaction and in a manner consistent with the restriction set
forth in this paragraph upon the refusal by the Prohibited Transferee.
Proceeds from such sale shall not inure to the benefit of the
Corporation or the Agent but shall be remitted to the Prohibited
Transferee in an amount not to exceed the amount paid by the
Prohibited Transferee for such Prohibited Stock, or, if the transfer
made in violation of this paragraph was by gift, inheritance or
similar transfer, the fair market value of such shares at the time of
receipt of such shares by the Prohibited Transferee. For purposes of
the foregoing, the fair market value per share of the Prohibited Stock
shall not be less than: (i) the average of the highest and lowest
selling price at the time of receipt of such shares by the Prohibited
Transferee or if there were no sales on such date, then not less than
the mean between the bid and asked price on such date, if the
Prohibited Stock was listed on a national securities exchange or
quoted on the Nasdaq Stock Market on such date; (ii) the mean between
the bid and asked price on such date or, if there was no bid and asked
price on such date, then on the next prior business day on which there
was a bid and asked price if the Prohibited Stock was traded
otherwise than on a national securities exchange or the Nasdaq Stock
Market on such date; or (iii) as determined by the Board of Directors.
(3) Any sale of Prohibited Stock by a Prohibited Transferee received in
violation of this Article XIII shall be deemed to have been made
solely by the Agent, and the Agent shall demand of the Prohibited
Transferee the proceeds from such sale together with distributions
received from such Prohibited Stock. Such demand shall be made within
thirty (30) days of discovery (as that term is described in paragraph
(B) of this Article XIII) by the Agent of the transfer of the
Prohibited Stock to the Prohibited Transferee. If the Prohibited
Transferee shall refuse or fail upon demand by the
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Agent to surrender such proceeds and distributions, the Agent shall
take all necessary action at law or in equity to compel the transfer
of such proceeds and distributions. The Agent, at its discretion, may
make demand of such proceeds in the amount net of the amount which the
Prohibited Transferee would have received from the Agent had the Agent
rather than the Prohibited Transferee sold such Prohibited Stock.
(4) Any proceeds received by the Agent as a result of the sale of the
Prohibited Stock, whether by the Agent or by the Prohibited
Transferee, and the distributions received on such Prohibited Stock,
shall be transferred to the Initial Transferor, less any amounts
remitted to or retained by the Prohibited Transferee as otherwise
described in Article XIII. If such Initial Transferor cannot be
determined by the Agent within ninety (90) days after receipt by the
Agent of such proceeds and distributions, the Agent may pay any such
amounts due the Initial Transferor into a court or governmental
agency, if applicable law permits, and otherwise must irrevocably
transfer such amounts to a charity designated by the Agent. In no
event shall amounts due to such Initial Transferor inure to the
benefit of the Agent, but such amounts may be used to reimburse the
Agent, if any, for reasonable expenses incurred in attempting to
identify the Initial Transferor.
(5) The Board of Directors is expressly empowered to waive application of
this Article XIII to any specific transaction, provided that such
waiver is by resolution of the Board of Directors duly considered and
approved by at least a majority of the Board of Directors prior to any
such transfer of stock described within this Article XIII.
(C) LEGEND. Certificates representing shares of the capital stock shall,
upon issuance, bear the following legend:
THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF NATIONAL
MERCANTILE BANCORP (THE "COMPANY") PROHIBIT THE TRANSFER OF THE SHARES
OR INTERESTS REPRESENTED BY THIS CERTIFICATE TO ANY PERSON IF SUCH
PERSON IS OR WOULD BECOME BY REASON OF SUCH TRANSFER THE BENEFICIAL
OWNER OF MORE THAN 4.5% (OR 4.9% IF THE TRANSFEREE IS A PERSON TO WHOM
THE COMPANY IS CONTRACTUALLY OBLIGATED ON OR BEFORE THE DATE OF
ISSUANCE OF THESE SHARES OR INTERESTS TO TRANSFER UP TO 4.9% OF THE
COMPANY'S STOCK) OF THE COMPANY'S STOCK, AS THE TERM "STOCK" IS
DEFINED, AND SUCH OWNERSHIP IS DETERMINED, UNDER SECTION 382 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED.
(D) TERMINATION. This Article XIII shall have no applicability and shall
be of no force and effect, notwithstanding notations to the contrary on any
certificates evidencing ownership of any
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securities of the Corporation, (i) on or after July 1, 2000 or (ii) upon the
occurrence of any transaction in which holders of all outstanding shares of
capital stock receive, or are offered the opportunity to receive, cash, stock or
other property for all such shares and upon the consummation of which the
acquiror will own at least a majority of the outstanding shares of capital
stock.
XIV
This corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the General Corporation Law of California) for
breach of duty to the corporation and its shareholders through bylaw provisions
or through agreements with the agents, or both, in excess of the
indemnification otherwise permitted by Section 317 of the General Corporation
Law of California, subject to any limitations on indemnification under the
General Corporation Law of California which cannot be waived.
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