NATIONALMERCANTILE BANCORPAMENDED 1996 STOCK INCENTIVE PLANAMENDED AS OF APRIL 26, 2001

**Section 1.         PURPOSE**

             Thepurpose of the 1996 Stock Incentive Plan (the "1996 Plan") ofNational Mercantile Bancorp, a California corporation and a registered bank holdingcompany under the Bank Holding Company Act of 1956, as amended (the"Company"), is to enable the Company to attract, retain and motivateits employees and independent contractors by providing for or increasing theproprietary interests of such employees and independent contractors in theCompany, and to enable the Company to attract, retain and motivate itsnonemployee directors and further align their interest with those of theshareholders of the Company by providing for or increasing the proprietaryinterest of such directors in the Company.

**2.          PERSONSELIGIBLE**

             Eachdirector, officer, employee or independent contractor of the Company or any ofits subsidiaries (each, a "Participant") shall be eligible to beconsidered for the grant of an Award (as hereinafter defined) under the 1996Plan. Directors who are not employees ("Nonemployee Directors") mayreceive awards in addition to those described under Section 10 of the 1996Plan.

**3.          AWARDS**

(a)              The Committee (as hereinafterdefined) responsible for administration of the 1996 Plan is authorized to enterinto any type of arrangement on behalf of the Company with a Participant thatis not inconsistent with the provisions of the 1996 Plan and that, by itsterms, involves or might involve the issuance of (i) shares of common stock ofthe Company ("Common Shares") or (ii) Derivative Security (as suchterm is defined in Rule 16a-1 promulgated under the Securities Exchange Act of1934, as amended (the "Exchange Act"), as such rule may be amendedfrom time to time) with an exercise or conversion privilege at a price relatedto the Common Shares or with a value derived from the value of the CommonShares. The entering into of any such arrangement is referred to herein as thegrant of an "Award."

(b)              Awards are not restricted to anyspecified form or structure and may include, without limitation, sales orbonuses of stock, restricted stock, stock options, reload stock options, stockpurchase warrants, other rights to acquire stock, securities convertible intoor redeemable for stock, stock appreciation rights, phantom stock, dividendequivalents, performance units or performance shares, and an Award may consistof one such security or benefit, or two or more of them in tandem or in thealternative.

(c)              Awards may be issued, and CommonShares may be issued pursuant to an Award, for any lawful consideration asdetermined by the Committee, including, without limitation, services renderedby the recipient of such Award.

(d)              Subject to the provisions of the1996 Plan, the Committee, in its sole and absolute discretion, shall determineall of the terms and conditions of each Award granted hereunder, which termsand conditions may include, among other things:

(i)       a provision permitting the recipient ofsuch Award, including any recipient who is a director or officer of theCompany, to pay the purchase price of the Common Shares or other propertyissuable pursuant to such Award, or such recipient's tax withholding obligationwith respect to such issuance, in whole or in part, by any one or more of thefollowing:

(A)     the delivery of cash;

(B)     the delivery of other property deemedacceptable by the Committee;

(C)     the delivery of previously owned shares ofcapital stock of the Company (including "pyramiding"); or

(D)     a reduction in the amount of Common Sharesor other property otherwise issuable pursuant to such Award.

(ii)      a provision conditioning or acceleratingthe receipt of benefits pursuant to such Award, either automatically or in thediscretion of the Committee, upon the occurrence of specified events,including, without limitation, a change of control of the Company (as definedby the Committee), an acquisition of a specified percentage of the voting powerof the Company, the dissolution or liquidation of the Company, a sale ofsubstantially all of the property and assets of the Company or an event of thetype described in Section 7 hereof; or

(iii)     a provision required in order for suchAward to qualify as an incentive stock option (an "Incentive StockOption") under Section 422 of the Internal Revenue Code of 1986, asamended (the "Code"); PROVIDED, HOWEVER, that no Award issued to anyNonemployee Director or any independent contractor of the Company shall qualifyas an Incentive Stock Option.

**Section 4.         STOCKSUBJECT TO THE 1996 PLAN**

(a)              At any time, the aggregate numberof Common Shares issued or issuable pursuant to all Awards (including allIncentive Stock Options) granted under the 1996 Plan shall not exceed 448,510shares subject to adjustment as provided in Section 7 hereof.

(b)              For purposes of Section 4(a)hereof, the aggregate number of Common Shares issued or issuable pursuant toAwards granted under the 1996 Plan shall at any time be deemed to be equal tothe sum of the following:

(i)       the number of Common Shares that wereissued prior to such time pursuant to Awards granted under the 1996 Plan, otherthan Common Shares that were subsequently reacquired by the Company pursuant tothe terms and conditions of such Awards and with respect to which the holderthereof received no benefits of ownership such as dividends; plus

(ii)      the number of Common Shares that wereotherwise issuable prior to such time pursuant to Awards granted under the 1996Plan, but that were withheld by the Company as payment of the purchase price ofthe Common Shares issued pursuant to such Awards or as payment of therecipient's tax withholding obligation with respect to such issuance; plus

(iii)     the maximum number of Common Shares thatare or may be issuable at or after such time pursuant to Awards granted underthe 1996 Plan prior to such time.

**Section 5.         DURATION**

             Unlesssooner terminated pursuant to Section 8 below, the 1996 Plan shall terminate onMarch 28, 2006. No Awards shall be granted under the 1996 Plan while the 1996Plan is suspended or after it is terminated.

**Section 6.         ADMINISTRATION**

(a)              The 1996 Plan shall beadministered by a committee (the "Committee") of the Board ofDirectors of the Company (the "Board") consisting of two or moredirectors, each of whom: (i) is a "disinterested person" (as suchterm is defined in Rule 16b-3 promulgated under the Exchange Act, as such Rulemay be amended from time to time); and (ii) is an "outside director"within the meaning of Section 162(m) of the Code. Members of the Committeeshall serve at the pleasure of the Board, and the Board may from time to timeremove members from or add members to, the Committee.

(b)              Subject to the provisions of the1996 Plan, the Committee shall be authorized and empowered to do all thingsnecessary or desirable in connection with the administration of the 1996 Plan,including, without limitation, the following:

(i)       adopt, amend and rescind rules andregulations relating to the 1996 Plan;

(ii)      determine which persons are Participantsand to which of such Participants, if any, Awards shall be granted hereunder;

(iii)     grant Awards to Participants and determinethe terms and conditions thereof, including the number of Common Sharesissuable pursuant thereto;

(iv)     determine the terms and conditions of theNonemployee Director Options that are automatically granted hereunder, otherthan the terms and conditions specified in Section 10 hereof;

(v)      determine whether, and the extent to whichadjustments are required pursuant to Section 7 hereof; and

(vi)     interpret and construe the 1996 Plan andthe terms and conditions of any Award granted hereunder.

**Section 7.         ADJUSTMENTS**

             Ifthe outstanding shares of the class of Company stock then subject to the 1996Plan are increased, decreased or exchanged for or converted into cash, propertyor a different number or kind of securities, or if cash, property or securitiesare distributed in respect of such outstanding securities, in either case as aresult of a reorganization, merger, consolidation, recapitalization,restructuring, reclassification, dividend (other than a regular cash dividend)or other distribution, stock split, reverse stock split or the like, or ifsubstantially all of the property and assets of the Company are sold, then,unless the terms of such transaction shall provide otherwise, the Committeeshall make appropriate and proportionate adjustments in: (i) the number andtype of shares or other securities or cash or other property that may beacquired pursuant to Awards theretofore granted under the 1996 Plan; and (ii) themaximum number and type of shares or other securities that may be issuedpursuant to Awards thereafter granted under the 1996 Plan. The determination ofthe Committee as to what adjustments shall be made pursuant to this section,and the extent thereof, shall be final and conclusive. No fractional shares ofstock shall be issued under the 1996 Plan on account of any such adjustment.

**Section 8.         AMENDMENTAND TERMINATION**

             TheBoard may suspend or terminate the 1996 Plan at any time; PROVIDED, HOWEVER,that no such suspension or termination shall deprive the recipient of any Awardtheretofore granted under the 1996 Plan, without the consent of such recipient,of any of his or her rights thereunder or with respect thereto.

             The Board may amend the 1996 Plan at any time and in anymanner subject to the following limitations:

(a)              No such amendment shall deprivethe recipient of any Award theretofore granted under the 1996 Plan, without theconsent of such recipient, of any of his or her rights thereunder or withrespect thereto;

(b)              Except as otherwise provided inSection 7 relating to adjustments upon changes in stock, no such amendmentshall be effective unless approved by the affirmative vote of the holders of amajority of the outstanding shares of the Company present, represented andentitled to vote at a shareholders meeting or by the written consent of amajority of the outstanding shares of the Company where such shareholderapproval is required by law or pursuant to the Articles of Incorporation or Bylawsof the Company; and

(c)              Section 10 hereof shall not beamended more than once every six (6) months, other than to comport with changesin the Code, the Employee Retirement Income Security Act, or the rules andregulations thereunder.

**Section 9.         EFFECTIVEDATE**

             The1996 Plan shall be effective as of June 18, 1997, the date upon which it wasapproved by the shareholders of the Company; PROVIDED, HOWEVER, that no CommonShares may be issued under this Plan until it has been approved, director orindirectly, by the affirmative vote of the holders (the"Shareholders") of a majority of the outstanding shares of theCompany present, or represented, and entitled to vote at a meeting duly held inaccordance with the laws of the State of California.

**Section 10.      NONEMPLOYEEDIRECTOR OPTIONS**

(a)              Any person elected or appointed toserve as a Nonemployee Director who has not previously served as a NonemployeeDirector of the Company on or prior to October 1, 1996, shall be granted, onthe first business day following the later of the date of such election orappointment or the date the 1996 Plan is approved by the Shareholders, anoption to purchase 1,100 Common Shares without the requirement of any furtheraction by the Committee. On the first business day following the date of theannual meeting of shareholders of the Company held in 1998, or any adjournmentthereof (the "1998 Meeting"), any person who was a NonemployeeDirector on or after the effective date of the 1996 Plan and who is re-electedto the Board at the 1998 Meeting shall be granted an option to purchase 550Common Shares without the requirement of any further action by the Committee.Options that may be granted to newly-elected Nonemployee Directors or tore-elected Nonemployee Directors under this Section 10 shall be referred tocollectively as the "Nonemployee Director Options." The date on whicha Nonemployee Director Option is granted shall be the Date of Grant for suchoption.

(b)              If, on any date upon whichNonemployee Director Options are to be automatically granted pursuant to thisSection 10, the number of Common Shares remaining available for options underthe 1996 Plan is insufficient for the grant to each Nonemployee Directorentitled thereto of a Nonemployee Director Option to purchase the entire numberof Common Shares specified in this Section 10, then a Nonemployee DirectorOption to purchase a proportionate amount of such available number of CommonShares (rounded to the nearest whole share) shall be granted to eachNonemployee Director entitled thereto on such date.

(c)              Each Nonemployee Director Optiongranted under the 1996 Plan shall become fully exercisable one year from theDate of Grant, provided that in the event that a Change of Control (as definedbelow) shall occur, such granted Nonemployee Director Option shall beimmediately exercisable.

(d)              Each Nonemployee Director Optiongranted under the 1996 Plan shall expire upon the sixth anniversary of the Dateof Grant.

(e)              Each Nonemployee Director Optionshall have an exercise price equal to the aggregate Fair Market Value on theDate of Grant of the Common Shares subject thereto.

(f)               Payment of the exercise price ofany Nonemployee Director Option granted under the 1996 Plan shall be made infull in cash concurrently with the exercise of such option; PROVIDED HOWEVER,that, in the discretion of the Board, the payment of such exercise price mayinstead be made:

(i)       in whole or in part, with Common Sharesdelivered concurrently with such exercise (such shares to be valued on thebasis of the Fair Market Value of such shares on the date of such exercise),provided that the Company is not then prohibited from purchasing or acquiringCommon Shares; or

(ii)      in whole or in part, by the delivery,concurrently with such exercise and in accordance with Section 220.3(e)(4) ofRegulation T promulgated under the Exchange Act, of a properly executedexercise notice for such option and irrevocable instructions to a brokerpromptly to deliver to the Company a specified dollar amount of the proceeds ofa sale of or a loan secured by the Common Shares issuable upon exercise of suchoption.

(g)              For purposes of this Section 10,the "Fair Market Value" of a Common Share or other security on anydate (the "Determination Date") shall be equal to the average of thehigh bid and low asked prices per Common Share or unit of such other securityon the business day immediately preceding the Determination Date in the marketwhere the security is traded, or, if the Common shares or such other securitywere not quoted by any such organization on such immediately preceding businessday, as determined by the Board. for purposes of this Section 10, the term"Change of Control" shall mean the occurrence of either of thefollowing events: (a) the Company consolidates with or merges with or into anyperson or conveys, transfers or leases all or substantially all of its assetsto any person, or any corporation consolidates with or merges into or with theCompany in any event pursuant to a transaction in which the outstanding votingstock or units of the Company is changed into or exchanged for cash, securitiesor other property, other than any such transaction where the outstanding votingstock or units of the Company is not changed or exchanged at all (except to theextent necessary to reflect a change in the jurisdiction of incorporation ororganization of the Company) or where the outstanding voting stock or units ofthe Company is changed into or exchanged for voting stock or units of thesurviving corporation or organization which is not redeemable, or no"person" or "group" owns immediately after suchtransaction, directly or indirectly, an amount of outstanding voting stock orunits necessary to effect the change of control of, or influence over, the survivingcorporation or organization, as the case may be, or (b) the Company isliquidated or dissolved or adopts a plan of liquidation or dissolution.

(h)              Each Nonemployee Director Optionshall be nontransferable by the optionee other than by will or the laws ofdescent and distribution, and shall be exercisable during the optionee'slifetime only by the optionee or the optionee's guardian or legalrepresentative.

(i)               Nonemployee Director Options arenot intended to qualify as Incentive Stock Options.

(j)               Any options granted toNonemployee Directors in addition to the automatic options granted underSection 10(a) shall be considered "Nonemployee Director Options" forpurposes of this Section 10.