AutoCoded Document




MERCANTILE
BANCORP, INC.
2004
EQUITY INCENTIVE PLAN



     1.
Plan Purpose. The purpose of the Plan is to promote the  long-term
interests of the Company and its shareholders by providing a means for  attracting and
retaining officers, directors and key employees of the Company  and its Affiliates.



     2.
Definitions. The following definitions are applicable to  the Plan:



     “Affiliate”
means any “parent corporation” or “subsidiary corporation”
of the Company as such terms are defined in Code sections 424(e) and (f),
respectively.



     “Award”
means the grant by the Board of Directors of Incentive Stock Options,
Non-Qualified Stock Options, Restricted Shares, Stock Appreciation Rights, or
any combination thereof, as provided in the Plan.



     “Award
Agreement” means the written agreement setting forth the terms and
provisions applicable to each Award granted under the Plan.



     “Board”
means the Board of Directors of the Company.



     “Cause” means,
in connection with a Participant’s termination of service, theft or
embezzlement from the Company or any Affiliate, violation of a material term or
condition of employment, disclosure of confidential information of the Company
or any Affiliate, conviction of the Participant of a crime of moral turpitude,
stealing of trade secrets or intellectual property owned by the Company or any
Affiliate, any act by the Participant in competition with the Company or any
Affiliate, issuance of an order for removal of the Participant by the
Company’s banking regulator, or any other act, activity or conduct of a
Participant which in the opinion of the Board is adverse to the best interests
of the Company or any Affiliate.



     “Change
in Control” means each of the events set forth in any one of the
following paragraphs:



	 	     (a)
any “person” (as such term is used in Section 13(d) and 14(d) of the
Exchange Act as in effect as of the date of this Plan) other than (i) the
Company, (ii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of shares of the Company (any such person is
hereinafter referred to as a “Person”), is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 20%
of








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	 	the combined voting power of the Company’s then outstanding securities
(not including in the securities beneficially owned by such Person any
securities acquired directly from the Company);








	 	     (b)
there is consummated a merger or consolidation of the Company with or into any
other corporation, other than a merger or consolidation which would result in
the holders of the voting securities of the Company outstanding immediately
prior thereto holding securities which represent, in combination with the
ownership of any trustee or other fiduciary holding securities under an employee
benefit plan of the Company, immediately after such merger or consolidation,
more than 60% of the combined voting power of the voting securities of either
the Company or the other entity which survives such merger or consolidation or
the parent of the entity which survives such merger or consolidation;







	 	     (c)
the shareholders of the Company approve any plan or proposal for the liquidation
or dissolution of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company’s assets; or







	 	     (d)
during any period of two consecutive years (not including any period prior to
the date of this Agreement), individuals who at the beginning of such period
constitute the Board of Directors and any new director (other than a director
designated by a Person who has entered into an agreement with the Company to
effect a transaction described in (a), (b), or (c) above) whose election by the
Board or nomination for election by the Company’s shareholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof.







     For
purposes of this Plan, where a change in control of the Company results from a
series of related transactions, the change in control of the Company shall be
deemed to have occurred on the date of the consummation of the first such
transaction.



     For
purposes of paragraph (a) above, the shareholders of another corporation (other
than the Company or a corporation described in clause (iv) of paragraph (a))
shall be deemed to constitute a Person. Further, it is understood by the parties
that the sale, transfer, or other disposition of a subsidiary of the Company
other than Mercantile Bancorp, Inc. or its successor, shall not constitute a
change in control of the Company giving rise to payments or benefits under this
Plan.



     “Code”
means the Internal Revenue Code of 1986, as amended, and its interpretive
regulations.



     “Committee”
means the Compensation Committee appointed by the Board pursuant to Section 3 of
the Plan.



     “Company”
means MERCANTILE BANCORP, INC..



     “Continuous
Service” means, in the case of an Employee, the absence of any
interruption or termination of service as an Employee of the Company or an
Affiliate; and in the case of an individual who is not an Employee, the absence
of any interruption or termination of the service relationship between the
individual and the Company or an Affiliate. Service will not be considered
interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Company or in the case of a Participant’s transfer
between the Company and an Affiliate or any successor to the Company.



     “Director”
means any individual who is a member of the Board.



     “Disability”
means total and permanent disability as determined by the Board of Directors
pursuant to Code section 22(e)(3).



     “Employee”
means any person, including an officer, who is employed by the Company or any
Affiliate.




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     “Exchange
Act” means the Securities Exchange Act of 1934, as amended.



     “Exercise Price”
means the price per Share at which the Shares subject to an Option may be
purchased upon exercise of the Option.



     “Incentive
Stock Option” means an option to purchase Shares granted by the Board
of Directors pursuant to the terms of the Plan that is intended to qualify under
Code section 422.



     “Market
Value” means the last reported sale price on the trading date preceding
the date in question (or, if there is no reported sale on such date, on the last
preceding date on which any reported sale occurred) of one Share on the American
Stock Exchange, or, if the Shares are not listed on the American Stock Exchange,
on the principal exchange on which the Shares are listed for trading, or, if the
Shares are not then listed for trading on any exchange, the mean between the
closing high bid and low asked quotations of one Share on the date in question
as reported by the American Stock Exchange or any similar system then in use,
or, if no such quotations are available, the fair market value on such date of
one Share as the Board of Directors shall determine.



     “Non-Qualified
Stock Option” means an option to purchase Shares granted by the Board
of Directors pursuant to the terms of the Plan, which option is not intended to
qualify under Code section 422.



     “Option”
means an Incentive Stock Option or a Non-Qualified Stock Option.



     “Participant”
means any individual selected by the Board of Directors to receive an Award.



     “Plan”
means the MERCANTILE BANCORP, INC. 2004 Equity Incentive Plan.



     “Reorganization”
means the liquidation or dissolution of the Company, or any merger,
consolidation or combination of the Company (other than a merger, consolidation
or combination in which the Company is the continuing entity and which does not
result in the outstanding Shares being converted into or exchanged for different
securities, cash or other property or any combination thereof).



     “Restricted
Period” means the period of time selected by the Board of Directors for
the purpose of determining when restrictions are in effect under Section 12 of
the Plan with respect to Restricted Shares.



     “Restricted
Shares” means Shares that have been contingently awarded to a
Participant by the Board of Directors subject to the restrictions referred to in
Section 12 of the Plan, so long as such restrictions are in effect.



     “Retirement”
means, in the case of an Employee, a termination of Continuous Service by reason
of the Employee’s retirement on or after the Employee’s
65th birthday.



     “Securities
Act” means the Securities Act of 1933, as amended.



     “Shares”
means the shares of common stock, no par value, of the Company.



     3.
Administration. The Plan will be administered by the Board of  Directors
with input from the Compensation Committee. The Compensation Committee  will consist of
two or more members of the Board, each of whom will be  independent directors as a “non-employee
director” as provided under  Rule 16b-3 of the Exchange Act, an “outside
director” as provided  under Code section 162(m). The members of the Committee will
be appointed by the  Board. Except as limited by the express provisions of the Plan, the
Committee  will have sole and complete authority and discretion to (a) select
Participants  and grant Awards; (b) determine the number of Shares to be subject to types
of  Awards generally, as well as to individual Awards granted under the Plan; (c)
determine the terms and conditions upon which Awards will be granted under the  Plan
including the vesting requirements of such Awards made under the Plan; (d)  prescribe the
form and terms of Award Agreements; (e) establish procedures and  regulations for the
administration of




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the Plan; (f) interpret the Plan; and (g)  make all determinations
deemed necessary or advisable for the administration of  the Plan.



     A
majority of the Board of Directors will constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by all members of the Board of Directors without a
meeting, will be acts of the Board of Directors. All determinations and
decisions made by the Board of Directors pursuant to the provisions of the Plan
will be final, conclusive, and binding on all persons, and will be given the
maximum deference permitted by law.



     4.
Participants. The Board of Directors may select from time to time
Participants in the Plan from those officers, Directors, and Employees of the  Company or
its Affiliates who, in the opinion of the Board of Directors, have  the capacity for
contributing in a substantial measure to the successful  performance of the Company or
its Affiliates.



     5.
Substitute Options. In the event the Company or an  Affiliate
consummates a transaction described in Code Section 424(a), persons  who become Employees
or Directors on account of such transaction may be granted  Options in substitution for
Options granted by the former employer. The Board of  Directors, in its sole discretion
and consistent with Code Section 424(a) shall  determine the Exercise Price of the
substitute Options.



     6.
Shares Subject to Plan, Limitations on Grants and Exercise Price. Subject
to adjustment by the operation of Section 15 hereof:



	 	     (a) The
maximum number of Shares that may be issued with respect to Awards made  under the Plan
is 296,240 Shares, no more than 97,759 (one-third) of  which may be issued
pursuant to Awards granted in the form of Restricted Shares.  The number of Shares that
may be granted under the Plan to any Participant  during any year under all forms of
Awards will not exceed 30,000 Shares.







	 	     (b) The
Shares with respect to which Awards may be made under the Plan may either be  authorized
and unissued Shares or issued Shares heretofore or hereafter  reacquired and held as
treasury Shares. Any Award that expires, terminates or is  surrendered for cancellation,
or with respect to Restricted Shares, which is  forfeited (so long as any cash dividends
paid on such Shares are also  forfeited), may be subject to new Awards under the Plan
with respect to the  number of Shares as to which a termination or forfeiture has
occurred.  Additionally, Shares that are withheld by the Company or delivered by the
Participant to the Company in order to satisfy payment of the Exercise Price or  any tax
withholding obligation and Shares granted pursuant to an Award Agreement  which is
subsequently settled in cash rather than Shares, may be subject to new  Awards under the
Plan.







	 	     (c) Notwithstanding
any other provision under the Plan, the Exercise Price for any  Incentive Stock Option
awarded under the Plan may not be less than the Market  Value of the Shares.







     7.
General Terms and Conditions of Options.



	 	     (a) The
Board of Directors, with input from the Compensation Committee will have  full and
complete authority and discretion, except as expressly limited by the  Plan, to grant
Options and to prescribe the terms and conditions (which need not  be identical among
Participants) of the Options. Each Option will be evidenced  by an Award Agreement that
will specify: (i) the Exercise Price, (ii) the  number of Shares subject to the
Option, (iii) the expiration date of the Option,  (iv) the manner, time and rate
(cumulative or otherwise) of exercise of the  Option, (v) the restrictions, if any,
to be placed upon the Option or upon  Shares that may be issued upon exercise of the
Option, (vi) the conditions,  if any, under which a Participant may transfer or
assign Options, and (vii) any  other terms and conditions as the Board of Directors, in
its sole discretion,  may determine.









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	 	     (b) The
Board of Directors shall not, without the further approval of the  shareholders of the
Company, authorize the amendment of any outstanding Option  Award Agreement to reduce the
Exercise Price. Furthermore, no Option shall be  cancelled and replaced with an Option
having a lower Exercise Price without  further approval of the shareholders of the
Company.







     8.
Exercise of Options.



	 	     (a) Except
as provided in Section 17, an Option granted under the Plan will be  exercisable only by
the Participant, and except as provided in Section 9 of the  Plan, no Option may be
exercised unless at the time the Participant exercises  the Option, the Participant has
maintained Continuous Service since the date of  the grant of the Option.







	 	     (b) To
exercise an Option under the Plan, the Participant must give written notice  to the
Company specifying the number of Shares with respect to which the  Participant elects to
exercise the Option together with full payment of the  Exercise Price. The date of
exercise will be the date on which the notice is  received by the Company. Payment may be
made either (i) in cash (including  check, bank draft or money order), (ii) by
tendering Shares already  owned by the Participant for at least six (6) months prior
to the date of  exercise and having a Market Value on the date of exercise equal to the
Exercise  Price, or (iii) by any other means determined by the Board of Directors in its
sole discretion.







     9.
Termination of Options. Unless otherwise specifically provided  elsewhere
in the Plan or by the Board of Directors in the Award Agreement or any  amendment
thereto, Options will terminate as provided in this Section.



	 	     (a) Unless
sooner terminated under the provisions of this Section, Options will  expire on the
earlier of the date specified in the Award Agreement or the  expiration of ten (10) years
from the date of grant.







	 	     (b) If
the Continuous Service of a Participant is terminated for reason of  Retirement, the
Participant may exercise all Options that are vested or that  vest in full within the
period of thirty-six months (36) months immediately  succeeding the Participant’s
Retirement. Any unvested Options remaining at  the end of the 36-month post-retirement
period will be forfeited by the  Participant.







	 	     (c) If
the Continuous Service of a Participant is terminated for Cause, all rights  under any
Options granted to the Participant will terminate immediately upon the  Participant’s
cessation of Continuous Service, and the Participant will  (unless the Board of
Directors, in its sole discretion, waives this requirement)  repay to the Company within
ten (10) days the amount of any gain realized by the  Participant upon any exercise of an
Option, awarded under the Plan, within the  90-day period prior to the cessation of
Continuous Service.







	 	     (d) If
the Continuous Service of a Participant is terminated voluntarily by the  Participant for
any reason other than death, Disability, or Retirement, the  Participant may exercise
outstanding Options to the extent that the Participant  was entitled to exercise the
Options at the date of cessation of Continuous  Service, but only within the period of
three (3) months immediately  succeeding the Participant’s cessation of
Continuous Service, and in no  event after the applicable expiration dates of the Options.







	 	     (e) If
the Continuous Service of a Participant is terminated by the Company without  Cause, the
Participant may exercise outstanding Options to the extent that the  Participant was
entitled to exercise the Options at the date of cessation of  Continuous Service, but
only within the period of three (3) months immediately  succeeding the Participant’s
cessation of Continuous Service, and in no  event after the applicable expiration dates
of the Options; provided, however,  that if a Participant is terminated by the Company
without Cause within twelve  months after a Change in Control, such Participant may
exercise outstanding  Options to the extent he or she was entitled to exercise the
Options at the date  of cessation of Continuous Service, within the period of








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	 	one (1)
year  immediately succeeding the cessation of Continuous Service but in no event after
the applicable expiration dates of the Options.







	 	     (f) In
the event of the Participant’s death or Disability, all Options  heretofore granted
and not fully exercisable will become exercisable in full and  the Participant or the
Participant’s beneficiary, as the case may be, may  exercise such Options within the
period of one (1) year immediately succeeding  the Participant’s cessation of
Continuous Service by reason of death or  Disability, and in no event after the
applicable expiration date of the Options.







	 	     (g) Notwithstanding
the provisions of the foregoing paragraphs of this Section 9,  the Board of Directors
may, in its sole discretion, establish different terms  and conditions pertaining to the
effect of the cessation of Continuous Service,  to the extent permitted by applicable
federal and state law. Additionally,  notwithstanding the provisions of the foregoing
paragraphs of this Section 9,  the Board of Directors may, in its sole discretion, allow
the exercise of an  expired Option if the Board of Directors determines that: (i) the
expiration was  solely the result of the Company’s inability to execute the exercise
of an  Option due to conditions beyond the Company’s control, and (ii) the
Participant made valid and reasonable efforts to exercise the Award. In the  event the
Board of Directors makes such a determination, the Company shall allow  the exercise to
occur as promptly as possible following its receipt of exercise  instructions subsequent
to such determination.







     10.
Restrictive Covenants. In its discretion, the Board of Directors  may
condition the grant of any Award under the Plan upon the Participant  agreeing to
reasonable covenants in favor of the Company and/or any Affiliate  (including, without
limitation, covenants not to compete, not to solicit  employees and customers, and not to
disclose confidential information) that may  have effect following the termination of
employment with the Company or any  Affiliate.



     11.
Incentive and Non-Qualified Stock Options.



	 	     (a) Incentive
Stock Options may be granted only to Participants who are Employees.  Any provisions of
the Plan to the contrary notwithstanding, (i) no  Incentive Stock Option will be
granted more than ten (10) years from the earlier  of the date the Plan is adopted by the
Board of Directors of the Company or  approved by the Company’s shareholders, (ii)
no Incentive Stock Option will  be exercisable more than ten (10) years from the date the
Incentive Stock Option  is granted, (iii) the Exercise Price of any Incentive Stock
Option will not  be less than the Market Value per Share on the date such Incentive Stock
Option  is granted, (iv) any Incentive Stock Option will not be transferable by the
Participant to whom such Incentive Stock Option is granted other than by will or  the
laws of descent and distribution and will be exercisable during the  Participant’s
lifetime only by such Participant, (v) no Incentive  Stock Option will be granted
that would permit a Participant to acquire, through  the exercise of Incentive Stock
Options in any calendar year, under all plans of  the Company and its Affiliates, Shares
having an aggregate Market Value  (determined as of the time any Incentive Stock Option
is granted) in excess of  $100,000 (determined by assuming that the Participant will
exercise each  Incentive Stock Option on the date that such Option first becomes
exercisable),  and (vi) no Incentive Stock Option may be exercised more than three (3)
months  after the Participant’s cessation of Continuous Service (one (1) year in
the case of Disability) for any reason other than death. Notwithstanding the  foregoing,
in the case of any Participant who, at the date of grant, owns shares  possessing more
than 10% of the total combined voting power of all classes of  capital stock of the
Company or any Affiliate, the Exercise Price of any  Incentive Stock Option will not be
less than 110% of the Market Value per Share  on the date such Incentive Stock Option is
granted and such Incentive Stock  Option shall not be exercisable more than five years
from the date such  Incentive Stock Option is granted.







	 	     (b) Notwithstanding
any other provisions of the Plan, if for any reason an Option  granted under the Plan
that is intended to be an Incentive Stock Option fails to  qualify as an Incentive Stock
Option, such Option will be deemed to be a  Non-Qualified Stock Option, and such Option
will be deemed to be fully  authorized and validly issued under the Plan.







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     12.
Terms and Conditions of Restricted Shares. The Board of Directors  will
have full and complete authority, subject to the limitations of the Plan,  to grant
Awards of Restricted Shares and to prescribe the terms and conditions  (which need not be
identical among Participants) in respect of the Awards.  Unless the Board of Directors
otherwise specifically provides in the Award  Agreement, an Award of Restricted Shares
will be subject to the following  provisions:



	 	     (a) At
the time of an Award of Restricted Shares, the Board of Directors will  establish for
each Participant a Restricted Period during which, or at the  expiration of which, the
Restricted Shares will vest. Subject to paragraph (e)  of this Section, the Participant
will have all the rights of a shareholder with  respect to the Restricted Shares,
including, but not limited to, the right to  receive all dividends paid on the Restricted
Shares and the right to vote the  Restricted Shares. The Board of Directors will have the
authority, in its  discretion, to accelerate the time at which any or all of the
restrictions will  lapse with respect to any Restricted Shares prior to the expiration of
the  Restricted Period, or to remove any or all restrictions, whenever it may  determine
that such action is appropriate by reason of changes in applicable tax  or other laws or
other changes in circumstances occurring after the commencement  of the Restricted Period.







	 	     (b) Subject
to Section 16, if a Participant ceases Continuous Service for any reason  other than
death or disability, before the Restricted Shares have vested, a  Participant’s
rights with respect to the unvested portion of the Restricted  Shares will terminate and
be returned to the Company.







	 	     (c) Subject
to Section 16, if a Participant ceases Continuous Service by reason of  death or
Disability before any Restricted Period has expired, the Restricted  Shares will become
fully vested.







	 	     (d) Each
certificate issued in respect to Restricted Shares will be registered in  the name of the
Participant and deposited by the Participant, together with a  stock power endorsed in
blank, with the Company and will bear a legend referring  to the terms, conditions and
restrictions applicable to such shares.







	 	     (e) At
the time of an Award of Restricted Shares, the Participant will enter into an  Award
Agreement with the Company in a form specified by the Board of Directors  agreeing to the
terms and conditions of the Award.







	 	     (f) At
the expiration of the restrictions imposed by this Section, the Company will  redeliver
to the Participant the certificate(s) and stock powers, deposited with  the Company
pursuant to paragraph (d) of this Section and the Shares represented  by the
certificate(s) will be free of all restrictions.







	 	     (g) No
Award of Restricted Shares may be assigned, transferred or encumbered.







     13.
Terms and Conditions of Stock Appreciation Rights. The  Board of
Directors will have full and complete authority, subject to the  limitations of the Plan,
to grant Awards of Stock Appreciation Rights and to  prescribe the terms and conditions
(which need not be identical among  Participants) in respect of the Awards. Unless the
Board of Directors otherwise  specifically provides in the Award Agreement, an Award of
Stock Appreciation  Rights will be subject to the following provisions:



	 	     (a) The
Board of Directors may grant a Stock Appreciation Right or “SAR” under this
Plan. A SAR shall provide a Participant with the right to receive a  payment, in cash
and/or Common Stock, equal to the excess of the Fair Market  Value of a specified number
of shares of Common Stock on the date the SAR is  exercised over the Fair Market Value of
a share of Common Stock on the date the  SAR was granted (the “base price”) as
set forth in the applicable  Award Agreement.







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	 	     (b) In
the case of a SAR granted retroactively in tandem with or as a substitution  for another
Award, the base price may be no lower than the Fair Market Value of  a share of Common
Stock on the date such other Award was granted.







	 	     (c) The
maximum term of a SAR shall be ten (10) years. The Board of Directors may  also grant
limited SARs, which are exercisable only upon a Change in Control or  other specified
event and may be payable based on the spread between the base  price of the SAR and the
Fair Market Value of a share of Common Stock during a  specified period or at a specified
time within a specified period before, after  or including the date of the Change in
Control or other specified event.







	 	     (d) If
the Continuous Service of a Participant is terminated for reason of  Retirement, the
Participant may exercise any SAR that is vested or that vest in  full within the period
of thirty-six months (36) months immediately succeeding  the Participant’s
Retirement. Any unvested SAR remaining at the end of the  36-month post-retirement period
will be forfeited by the Participant.







	 	     (e) If
the Continuous Service of a Participant is terminated for Cause, all rights  under any
SAR granted to the Participant will terminate immediately upon the  Participant’s
cessation of Continuous Service, and the Participant will  (unless the Board of
Directors, in its sole discretion, waives this requirement)  repay to the Company within
ten (10) days the amount of any gain realized by the  Participant upon any exercise of an
SAR awarded under the Plan, within the  90-day period prior to the cessation of
Continuous Service.







	 	     (f) If
the Continuous Service of a Participant is terminated voluntarily by the  Participant for
any reason other than death, Disability, or Retirement, the  Participant may exercise any
outstanding SAR to the extent that the Participant  was entitled to exercise the SAR at
the date of cessation of Continuous Service,  but only within the period of three (3)
months immediately succeeding the  Participant’s cessation of Continuous Service,
and in no event after the  applicable expiration dates of the SAR.







	 	     (g) If
the Continuous Service of a Participant is terminated by the Company without  Cause, the
Participant may exercise any outstanding SAR to the extent that the  Participant was
entitled to exercise the SAR at the date of cessation of  Continuous Service, but only
within the period of three (3) months immediately  succeeding the Participant’s
cessation of Continuous Service, and in no  event after the applicable expiration dates
of the SAR; provided, however, that  if a Participant is terminated by the Company
without Cause within twelve months  after a Change in Control, such Participant may
exercise any outstanding SAR to  the extent he or she was entitled to exercise the SAR at
the date of cessation  of Continuous Service, within the period of one (1) year
immediately succeeding  the cessation of Continuous Service but in no event after the
applicable  expiration dates of the SAR.







	 	     (h) In
the event of the Participant’s death or Disability, any SAR heretofore  granted and
not fully exercisable will become exercisable in full and the  Participant or the
Participant’s beneficiary, as the case may be, may  exercise such SAR within the
period of one (1) year immediately succeeding the  Participant’s cessation of
Continuous Service by reason of death or  Disability, and in no event after the
applicable expiration date of the SAR.







	 	     (i) Notwithstanding
the provisions of the foregoing paragraphs of this Section 13,  the Board of Directors
may, in its sole discretion, establish different terms  and conditions pertaining to the
effect of the cessation of Continuous Service,  to the extent permitted by applicable
federal and state law. Additionally,  notwithstanding the provisions of the foregoing
paragraphs of this Section 13,  the Board of Directors may, in its sole discretion, allow
the exercise of an  expired SAR if the Board of Directors determines that: (i) the
expiration was  solely the result of the Company’s inability to execute the exercise
of an  SAR due to conditions beyond the Company’s control, and (ii) the  Participant
made valid and reasonable efforts to exercise the Award. In the  event the Board of
Directors makes such a determination, the Company shall allow  the exercise to occur as
promptly as possible following its receipt of exercise  instructions subsequent to such
determination.








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     14.
Adjustments Upon Changes in Capitalization. In the event of  any
change in the outstanding Shares subsequent to the effective date of the  Plan by reason
of any reorganization, recapitalization, stock split, stock  dividend, combination or
exchange of shares, merger, consolidation or any change  in the corporate structure or
Shares of the Company, the maximum aggregate  number and class of Shares as to which
Awards may be granted under the Plan and  the number and class of Shares, and the
exercise price of Options, with respect  to which Awards theretofore have been granted
under the Plan will be  appropriately adjusted by the Board of Directors to prevent the
dilution or  diminution of Awards. The Board of Director’s determination with
respect to  any adjustments will be conclusive. Any Shares or other securities received,
as  a result of any of the foregoing, by a Participant with respect to Restricted  Shares
will be subject to the same restrictions and the certificate(s) or other  instruments
representing or evidencing the Shares or other securities will be  legended and deposited
with the Company in the manner provided in Section 12 of  this Agreement.



     15.
Effect of Reorganization. Unless otherwise provided by the  Board of
Directors in the Award Agreement, Awards will be affected by a  Reorganization as follows:



	 	     (a) If
the Reorganization is a dissolution or liquidation of the Company then  (i) the
restrictions on Restricted Shares will lapse and (ii) each  outstanding Option Award
will terminate, but each Participant to whom the Option  was granted will have the right,
immediately prior to the dissolution or  liquidation, to exercise the Option in full,
notwithstanding the provisions of  Section 11, and the Company will notify each
Participant of such right  within a reasonable period of time prior to any dissolution or
liquidation.







	 	     (b) If
the Reorganization is a merger or consolidation, upon the effective date of  the
Reorganization (i) each Participant will be entitled, upon exercise of  an Option in
accordance with all of the terms and conditions of the Plan, to  receive in lieu of
Shares, shares or other securities or consideration as the  holders of Shares are
entitled to receive pursuant to the terms of the  Reorganization; and (ii) each
holder of Restricted Shares will be entitled  to receive shares or other securities as
the holders of Shares received which  will be subject to the restrictions set forth in
Section 12 (unless the  Board of Directors accelerates the lapse of such
restrictions) and the  certificate(s) or other instruments representing or evidencing the
shares or  other securities shall be legended and deposited with the Company in the
manner  provided in Section 12 of this Plan.







     The
adjustments contained in this Section and the manner of application of such
provisions will be determined solely by the Board of Directors.



     16.
Effect of Change of Control.



	 	     (a) If
the Continuous Service of any Participant of the Company or any Affiliate is
involuntarily terminated, for whatever reason, at any time within twelve (12)  months
after a Change in Control, unless the Board of Directors has otherwise  provided in the
Award Agreement, (i) any Restricted Period with respect to an  Award of Restricted Shares
will lapse upon the Participant’s termination of  Continuous Service and all
Restricted Shares will become fully vested in the  Participant to whom the Award was made.







	 	     (b) If
a tender offer or exchange offer for Shares (other than such an offer by the  Company) is
commenced, or if a Change in Control occurs, unless the Board of  Directors has otherwise
provided in the Award Agreement, all Option Awards  theretofore granted and not fully
exercisable will become exercisable in full  upon the happening of such event and will
remain exercisable in accordance with  their terms; provided, however, that no Option
which has previously been  exercised or otherwise terminated will become exercisable.







     17.
Assignments and Transfers. No Award nor any right or  interest of a
Participant in any Award under the Plan may be assigned,  encumbered or transferred
otherwise than by will or the laws of descent and  distribution. Notwithstanding the
foregoing, the Board of Directors may, in its  sole discretion, set forth in an Award
Agreement at the time of grant or  thereafter, that the Award (other than Incentive Stock
Options) may be  transferred to members of the Participant’s immediate family, to
one or  more trusts solely for the benefit of such immediate family members and to
partnerships in which such family members or trusts are the only partners. For  this
purpose, immediate family means the Participant’s spouse, parents,  children,
step-children, grandchildren and legal dependents. Any transfer of an  Award under this
provision will not be effective until notice of such transfer  is delivered to the
Company.



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     18.
Employee Rights Under the Plan. No officer, Director,  Employee or
other person will have a right to be selected as a Participant nor,  having been so
selected, to be selected again as a Participant, and no officer,  Director, Employee or
other person will have any claim or right to be granted an  Award under the Plan or under
any other incentive or similar plan of the Company  or any Affiliate. Neither the Plan
nor any action taken under the Plan will be  construed as giving any Employee any right
to be retained in the employ of the  Company or any Affiliate.



     19.
Delivery and Registration of Shares. The Company’s  obligation
to deliver Shares with respect to an Award will, if the Board of  Directors requests, be
conditioned upon the receipt of a representation as to  the investment intention of the
Participant to whom such Shares are to be  delivered, in such form as the Board of
Directors will determine to be necessary  or advisable to comply with the provisions of
the Securities Act or any other  applicable federal or state securities laws. It may be
provided that any  representation requirement will become inoperative upon a registration
of the  Shares or other action eliminating the necessity of the representation under the
Securities Act or other state securities laws. The Company will not be required  to
deliver any Shares under the Plan prior to (a) the admission of such  Shares to
listing on any stock exchange or system on which Shares may then be  listed, and (b) the
completion of any registration or other qualification  of the Shares under any state or
federal law, rule or regulation, as the Company  determines to be necessary or advisable.



     20.
Withholding Tax. Prior to the delivery of any Shares or  cash
pursuant to an Award, the Company has the right and power to deduct or  withhold, or
require the Participant to remit to the Company, an amount  sufficient to satisfy all
applicable tax withholding requirements. The Board of  Directors, in its sole discretion
and pursuant to such procedures as it may  specify from time to time, may permit or
require a Participant to satisfy all or  part of the tax withholding obligations in
connection with an Award by (a)  having the Company withhold otherwise deliverable
Shares, or (b) delivering  to the Company Shares already owned for a period of at
least six months and  having a value equal to the amount required to be withheld. The
amount of the  withholding requirement will be deemed to include any amount that the
Board of  Directors determines, not to exceed the amount determined by using the maximum
federal, state or local marginal income tax rates applicable to the Participant  with
respect to the Award on the date that the amount of tax to be withheld is  to be
determined for these purposes. For these purposes, the value of the Shares  to be
withheld or delivered will be equal to the Market Value as of the date  that the taxes
are required to be withheld.



     21.
Termination, Amendment and Modification of Plan. The Board  may at
any time terminate, and may at any time and from time to time and in any  respect amend
or modify the Plan; provided, however, that to the extent  necessary and desirable to
comply with Rule 16b-3 under the Exchange Act or  Code section 422 (or any
other applicable law or regulation, including  requirements of any stock exchange or
quotation system on which the  Company’s common stock is listed or quoted),
shareholder approval of any  Plan amendment will be obtained in the manner and to the
degree as is required  by the applicable law or regulation; and provided further, that no
termination,  amendment or modification of the Plan will in any manner affect any Award
theretofore granted pursuant to the Plan without the consent of the Participant  to whom
the Award was granted or the transferee of the Award.



     22.
Effective Date and Term of Plan.  The Plan will become effective  upon its
adoption by the Board of Directors of the Company. Unless sooner  terminated pursuant to
Section 21, no further Awards may be made under the Plan  after ten (10) years from the
effective date of the Plan.



     23.
Governing Law. The Plan and Award Agreements will be construed in
accordance with and governed by the internal laws of the State of Delaware.



     25.
Re-pricing of Options.  Nothing in this Plan shall  permit
the re-pricing of any outstanding options other than (a) with the prior  approval of the
Company’s shareholders, or (b) pursuant to Sections 14 and  15. The foregoing
restriction shall also apply to any other transaction which  would be treated as a
re-pricing of outstanding options under generally accepted  accounting principles.



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	 	 	Adopted by
the Board of Directors of
Mercantile Bancorp, Inc.
as of April 26, 2004







	 	 	Incentive Stock
Options portion of the Plan Approved by
the Shareholders of Mercantile Bancorp, Inc.
as of __________________







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