POINT WEST CAPITAL CORPORATION

Incentive Stock Option Agreement
                   INCENTIVE STOCK OPTION AGREEMENT, dated as of November 7, 2000 (this"Agreement"), between __________ ("Optionee") and Point West CapitalCorporation, a Delaware corporation (the "Company").

W I T N E S S E T H:

                   WHEREAS, Optionee is an employee of the Company;

                   WHEREAS, the execution of an incentive stock option agreement in the form hereof has beenduly authorized by a resolution of the Compensation Committee (the "Committee")of the Board of Directors ("the Board") of the Company duly adopted (i) at aregular or special meeting of the Committee held on, or (ii) by the unanimous writtenconsent of the members of the Committee effective on, November 7, 2000 (the "Date ofGrant") and incorporated herein by reference; and

                   WHEREAS, the option granted hereunder is intended to be an "incentive stockoption" within the meaning of that term under Section 422 of the Internal RevenueCode of 1986, as amended (the "Code").

                   NOW, THEREFORE, in consideration of the foregoing and the mutual agreements hereincontained, the parties hereto hereby agree as follows:

                   1. (a) Option. Pursuant to the Company's Amended and Restated 1995 Stock OptionPlan (the "Plan"), the Company hereby grants to Optionee an option (the"Option") to purchase 75,000 shares (the "Option Shares") of theCompany's Common Stock, par value $.01 per share ("Common Shares"), at the priceof $2.13125 per share (the "Option Price"), which is 110% of the fair marketvalue of the Common Shares (as determined by the Committee) on the Date of Grant, andagrees to cause certificates for any Common Shares purchased hereunder to be delivered toOptionee upon payment in full of the Option Price, subject to the applicable terms andconditions of the Plan and the terms and conditions hereinafter set forth.

 

 

2. Vesting of Option Shares.

                   (a) Unless and until terminated as hereinafter provided, the Option shall becomeexercisable to the extent of 25% of the Option Shares on the first anniversary of the Dateof Grant and to the extent of an additional 25% on each of the second through the fourthanniversary of the Date of Grant so long as Optionee has remained in the continuous employof the Company or a Subsidiary from the date hereof through such date. For the purposes ofthis Agreement, the continuous employment of Optionee with the Company or a Subsidiaryshall not be deemed to have been interrupted, and Optionee shall not be deemed to haveceased to be an employee of the Company or a Subsidiary, by reason of (i) the transfer ofOptionee's employment among the Company and its Subsidiaries or (ii) a leave of absenceapproved by the Board of not more than 90 days, unless Optionee has a statutory orcontractual right to reemployment with the Company or a Subsidiary following an approvedleave of absence of more than 90 days. To the extent that the Option shall have so becomeexercisable, it may be exercised in whole or in part from time to time.

                   (b) Notwithstanding the provisions of paragraph 2(a) above, the Option shall becomeimmediately exercisable to the extent of 100% of the Option Shares upon the occurrence ofa Change in Control. If any event or series of events constituting a Change in Controlshall be abandoned, the effect thereof shall be null and of no further force and effectand the provisions of Section 2(a) shall be reinstated but without prejudice to anyexercise of the Option that may have occurred prior to such nullification. 

                   (c) Notwithstanding the provisions of paragraph 2(a) above, the Option shall becomeimmediately exercisable to the extent of 100% of the Option Shares upon the death orDisability of Optionee.

                   3. Exercises.

                   (a) This Option, to the extent exercisable as provided in Section 2, may be exercised byOptionee by delivery to the Company of (i) an Exercise Notice in the form attached to thisAgreement as Annex A, appropriately completed and duly executed and dated by Optionee,(ii) payment in full of the Option Price for the number of Option Shares which Optionee ispurchasing hereunder, and (iii) payment in full to the Company of any amounts required tobe paid pursuant to Section 3(c).

                   (b) The Option Price shall be payable (a) in cash or check acceptable to the Company, (b)by transfer to the Company of Common Shares that have been owned by Optionee for (i) morethan one year prior to the date of exercise and for more than two years from the date onwhich the option was granted, if they were originally acquired by Optionee pursuant to theexercise of an incentive stock option, or (ii) more than six months prior to the date ofexercise, if they were originally acquired by Optionee other than pursuant to the exerciseof an incentive stock option, or (c) by a combination of any of the foregoing methods ofpayment. The requirement of payment in cash shall be deemed satisfied if Optionee shallhave made arrangements satisfactory to the Company with a broker who is a member of theNational Association of Securities Dealers, Inc. to sell on the date of exercise asufficient number of the Common Shares being purchased so that the net proceeds of thesale transaction will at least equal the aggregate Option Price, plus interest at theapplicable federal rate for the period from the date of exercise to the date of payment,and pursuant to which the broker undertakes to deliver the aggregate Option Price, plussuch interest, to the Company not later than the date on which the sale transaction willsettle in the ordinary course of business.

                   (c) If the Company shall be required to withhold any federal, state, local or foreign taxin connection with an exercise of the Option, it shall be a condition to the exercise thatOptionee pay the tax or make provisions that are satisfactory to the Company for thepayment thereof.

                   4. Termination of Option.

                   The Option shall terminate on the earliest of the following dates:

(a) The date on which Optionee ceases to be an employee of the Company    or a Subsidiary unless he ceases to be such an employee in a manner described in (b) or    (c) below.

(b) 90 days after Optionee ceases to be an employee of the Company or    any Subsidiary if (A) Optionee retires from employment with the Company or any    Subsidiary after reaching the age of 65 years, or (B) Optionee's employment is    terminated under circumstances determined by the Committee to be for the convenience of    the Company.

(c) One year after the date on which Optionee's employment is    terminated as a result of Optionee's death or Disability (as hereinafter defined). 

(d) Five years from the Date of Grant.

In the event that Optionee commits an act that the Board determines tohave been intentionally committed and materially inimical to the interests of the Company,the Option shall terminate as of the time of the commission of that act, notwithstandingany other provision of this Agreement. In the event that Optionee's employment isterminated by the Company for Cause, the Option shall terminate as of the time Optionee'semployment is terminated, notwithstanding any other provision of this Agreement.

                   5. No Transfer of Option.

The Option may not be transferred except by will or the laws of descentand distribution and may not be exercised during the lifetime of Optionee except byOptionee or Optionee's guardian or legal representative acting on behalf of Optionee in afiduciary capacity under state law and court supervision.

                   6. Limitations on Exercise of Option.

Notwithstanding any other provision of this agreement, the Option shallnot be exercisable if the exercise would involve a violation of any applicable federal orstate securities law, and the Company shall make reasonable efforts to comply with allsuch laws.

                   7. Adjustments.

                   (a) The Committee may make or provide for such adjustments in the number and kind ofOption Shares (including shares of another issuer) and in the Option Price, as theCommittee may in good faith determine to be equitably required in order to preventdilution or expansion of the rights of Optionee that otherwise would result from(a) any stock dividend, stock split, combination of shares, recapitalization or otherchange in the capital structure of the Company, or (b) any merger, consolidation,spin-off, spin-out, split-off, split-up, reorganization, partial or complete liquidationor other distribution of assets, issuance of warrants or other rights to purchasesecurities or any other corporate transaction or event having an effect similar to theforegoing.

                   (b) In the event of any such transaction or event, the Committee may provide insubstitution for the Option such alternative consideration as it may in good faithdetermine to be equitable under the circumstances and may require in connection therewiththe surrender of the Option.

                   8. No Right to Employment.

                   No provision of this agreement shall limit in any way whatsoever any right that theCompany or a Subsidiary may otherwise have to terminate the employment of Optionee at anytime.

                   9. Rights as a Stockholder.

The holder of this Option shall not be, nor have any of the rights orprivileges of, a holder of Common Shares in respect of any Option Shares unless and untilcertificates representing such shares have been issued by the Company to such holder.

                   10. Limitation on Incentive Stock Options.

Notwithstanding the intent that the Option be an "incentive stockoption" within the meaning of that term under Section 422 of the Code, the optionwill be treated as a non-qualified stock option to the extent that the fair market valueof the shares with respect to which any incentive stock options are exercisable for thefirst time by Optionee during any calendar year (under all of the Company's plans andthose of any of its subsidiaries) exceed $100,000. This rule shall be applied by takingany options into account in the order in which they were granted.

11. Required Holding Period.

Notwithstanding the provisions of Section 2(b), to the extent necessaryfor the Option, its exercise or the sale of Option Shares acquired thereunder to be exemptfrom Section 16(b) of the Exchange Act of 1934, as amended, (i) except in the case ofOptionee's death or Disability, Optionee shall not be entitled to exercise the Optionuntil the expiration of the six-month period following the Date of Grant, or (ii) at leastsix months shall elapse from the Date of Grant to the date of disposition of the OptionShares acquired upon exercise of the Option.

                   12. Definitions.

For the purposes of this Agreement, the following terms have thefollowing meanings:

                   (a) "Cause" means (i) the commission by Optionee of an act of fraud orembezzlement against the Company or an act which the Optionee knew to be in grossviolation of Optionee's duties to the Company (including the unauthorized disclosure ofconfidential information), (ii) Optionee's continual failure to render services to theCompany, which failure (A) amounts to gross neglect of Optionee's duties to the Companyand (B) is not remedied within 10 days after notice thereof by the Company, or (iii)Optionee's conviction of a felony.

                   (b) "Change in Control" means the occurrence of any of the following events:

(i)  The execution by the Company of an agreement for the    merger, consolidation or reorganization into or with another corporation or other legal    person; provided, however, that no such merger, consolidation or    reorganization shall constitute a Change in Control if as a result of such merger,    consolidation or reorganization not less than a majority of the combined voting power of    the then-outstanding securities of such corporation or person immediately after such    transaction are held in the aggregate by the holders of securities of the Company entitled    to vote generally in the election of Directors ("Voting Stock") immediately    prior to such transaction; 

(ii)  The execution by the Company of an agreement for the    sale or other transfer of all or substantially all of its assets to another corporation or    other legal person; provided, however, that no such sale or other transfer    shall constitute a Change in Control if as a result of such sale or transfer not less than    a majority of the combined voting power of the then-outstanding securities of such    corporation or person immediately after such sale or transfer is held in the aggregate by    the holders of Voting Stock immediately prior to such sale or transfer.

(iii)  There is a report filed on Schedule 13D or    Schedule 14D-1 (or any successor schedule, form or report), each as promulgated    pursuant to the Exchange Act disclosing that any person (as the term "person" is    used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) (other than    any of Bradley N. Rotter, Alan B. Perper or John Ward Rotter or any of their respective    family members or affiliates) has or intends to become the beneficial owner (as the term    "beneficial owner" is defined under Rule 13d-3 or any successor rule or    regulation promulgated under the Exchange Act) of securities representing 20% or more of    the combined voting power of the then-outstanding Voting Stock, including, without    limitation, pursuant to a tender offer or exchange offer;

(iv)  If, during any period of two consecutive years,    individuals who at the beginning of any such period constitute the directors of the    Company cease for any reason to constitute at least a majority thereof; provided, however,    that for purposes of this subsection (iv) each director who is first elected, or    first nominated for election by the Company's stockholders, by a vote of at least    two-thirds of the directors of the Company (or a committee thereof) then still in office    who were directors of the Company at the beginning of any such period shall be deemed to    have been a director of the Company at the beginning of such period; or

(v)  except pursuant to a transaction described in the    proviso to subsection (i) of this Section 12(b), the Company adopts a plan for    the liquidation or dissolution of the Company.

                   (c) "Disability" means, as of any date, becoming disabled within the meaning ofsuch term in Section 22(e)(3) of the Code.

                   (d) "Subsidiary" means any corporation in which the Company directly orindirectly owns or controls more than 50 percent of the total combined voting power of allclasses of stock issued by the corporation.

                   13. Severability.

In the event that one or more of the provisions of this agreement shallbe invalidated for any reason by a court of competent jurisdiction, any provision soinvalidated shall be deemed to be separable from the other provisions hereof, and theremaining provisions hereof shall continue to be valid and fully enforceable.

                   14. Governing Law.
                   This agreement is made under, and shall be construed in accordance with, the laws of theState of Delaware.

                   This Agreement is executed by the Company as of the 7th day of November, 2000.

                          POINT WEST CAPITAL CORPORATION

                                                                 Name:_____________________________

                                           Title:_________________________________

                   The undersigned Optionee hereby acknowledges receipt of an executed original of thisIncentive Stock Option Agreement and the Plan and accepts the Option subject to theapplicable terms and conditions of the Plan and the terms and conditions hereinabove setforth.

                                                                                                                         _____________________________________ 

                                                                                                    Optionee (Signature)

                                                                                                    Name: __________________________

                                                                                                   Dated as of _______________________

 

ANNEX A

to

Incentive Stock Option Agreement

Form of Exercise Notice
 

 

                   Pursuant to the Incentive Stock Option Agreement dated as of November 7, 2000 between theundersigned and Point West Capital Corporation (the "Company"), the undersignedhereby elects to exercise his option as follows:

                   (a) Number of shares purchased: _______________________

                   (b) Total purchase price ((a) x Option Price): $ ____________

                   Please issue a single certificate for the shares being purchased in the name of theundersigned. The registered address on such certificate should be:

____________________________

 

____________________________

 

The undersigned's social security number is: _________________________.

 

 

Date:________________________                                                            ________________________            
Optionee