POINT WEST CAPITAL CORPORATION

Incentive Stock Option Agreement
                   INCENTIVE STOCK OPTION AGREEMENT, dated as of April 26, 2001 (this "Agreement"),between Joanna Zesiger ("Optionee") and Point West Capital Corporation, aDelaware 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, April 26, 2001 (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. Option.

                   Pursuant to the Company's Amended and Restated 1995 Stock Option Plan (the"Plan"), the Company hereby grants to Optionee an option (the"Option") to purchase 21,205 shares (the "Option Shares") of theCompany's Common Stock, par value $.01 per share ("Common Shares"), at the priceof $0.10 per share (the "Option Price"), which is the fair market value of theCommon Shares (as determined by the Committee) on the Date of Grant, and agrees to causecertificates for any Common Shares purchased hereunder to be delivered to Optionee uponpayment in full of the Option Price, subject to the applicable terms and conditions of thePlan 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 20% of the Option Shares on the first anniversary date of theDate of Grant and to the extent of an additional 20% on each of the second through thefifth anniversary of the Date of Grant so long as Optionee has remained in the continuousemploy of the Company or a Subsidiary from the date hereof through such date. For thepurposes of this Agreement, the continuous employment of Optionee with the Company or aSubsidiary shall not be deemed to have been interrupted, and Optionee shall not be deemedto have ceased to be an employee of the Company or a Subsidiary, by reason of (i) thetransfer of Optionee's employment among the Company and its Subsidiaries or (ii) a leaveof absence approved by the Board of not more than 90 days, unless Optionee has a statutoryor contractual right to reemployment with the Company or a Subsidiary following anapproved leave of absence of more than 90 days. To the extent that the Option shall haveso become exercisable, 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.

                   (d) Notwithstanding the provisions of paragraph 2(a), the unvested option grants are inconsideration of future services.

 

                   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 Subsidiaryunless 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 afterreaching the age of 65 years, or (B) Optionee's employment is terminated undercircumstances 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 ofOptionee's death or Disability (as hereinafter defined). 

(d) The tenth anniversary of the Date of Grant.

                   In the event that Optionee commits an act that the Board determines to have beenintentionally committed and materially inimical to the interests of the Company, theOption shall terminate as of the time of the commission of that act, notwithstanding anyother provision of this Agreement. In the event that Optionee's employment is terminatedby the Company for Cause, the Option shall terminate as of the time Optionee's employmentis 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 descent and distributionand may not be exercised during the lifetime of Optionee except by Optionee or Optionee'sguardian or legal representative acting on behalf of Optionee in a fiduciary capacityunder state law and court supervision.

                   6. Limitations on Exercise of Option.

                   Notwithstanding any other provision of this agreement, the Option shall not be exercisableif the exercise would involve a violation of any applicable federal or state securitieslaw, and the Company shall make reasonable efforts to comply with all such laws.Notwithstanding any other provision of this Agreement, the Option shall not be exercisableuntil: (i) the Option Shares have been registered by the Company, on an appropriate formof registration statement, under the Securities Act of 1933; and (ii) the Company hasprovided to any exchange or automated quotation service on which the common stock may thenbe listed all forms required to be provided in connection with the listing of the OptionShares.

                   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 or privileges of, aholder of Common Shares in respect of any Option Shares unless and until certificatesrepresenting 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 stock option" withinthe meaning of that term under Section 422 of the Code, the option will be treated as anon-qualified stock option to the extent that the fair market value of the shares withrespect to which any incentive stock options are exercisable for the first time byOptionee during any calendar year (under all of the Company's plans and those of any ofits subsidiaries) exceed $100,000. This rule shall be applied by taking any options intoaccount in the order in which they were granted.

11. Required Holding Period.

                   Notwithstanding the provisions of Section 2(b), to the extent necessary for the Option,its exercise or the sale of Option Shares acquired thereunder to be exempt from Section16(b) of the Exchange Act of 1934, as amended, (i) except in the case of Optionee's deathor Disability, Optionee shall not be entitled to exercise the Option until the expirationof the six-month period following the Date of Grant, or (ii) at least six months shallelapse from the Date of Grant to the date of disposition of the Option Shares acquiredupon exercise of the Option.

                   12. Definitions.

                   For the purposes of this Agreement, the following terms have the following 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 TO (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.

                   12. Severability.

                   In the event that one or more of the provisions of this agreement shall be invalidated forany reason by a court of competent jurisdiction, any provision so invalidated shall bedeemed to be separable from the other provisions hereof, and the remaining provisionshereof 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 April 26, 2001.

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 Ato

Incentive Stock Option Agreement

Form of Exercise Notice
 

 

                   Pursuant to the Incentive Stock Option Agreement dated as of       between the undersigned and Point West CapitalCorporation (the "Company"), the undersigned hereby elects to exercise hisoption 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