AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of the 10th day of
November, 1998 (this Plan), is between UNITED SECURITY
BANCORPORATION (USBN), BANCWEST FINANCIAL CORPORATION (Bancwest),
and BANK OF THE WEST (the Bank).
RECITALS
(A) BANCWEST. Bancwest is a corporation duly organized and
existing in good standing under the laws of the State of
Washington, with its principal executive offices located in Walla
Walla, Washington. Bancwest is a registered bank holding company
under the Bank Holding Company Act of 1956, as amended. As of
the date of this Plan, Bancwest has 1,000,000 authorized shares
of common stock, no par value per share (Bancwest Common Stock)
(no other class of capital stock being authorized), of which
364,281 shares of Bancwest Common Stock are issued and
outstanding, no other class of capital stock being authorized.
As of the date of this Plan, Bancwest had 72,000 shares of
Bancwest Common Stock reserved for issuance under director and
employee stock option plans pursuant to which options covering
26,984 shares of Bancwest Common Stock are outstanding as of the
date of this Plan.
(B) BANK OF THE WEST. Bank of the West is a banking corporation
duly organized and existing in good standing under the laws of
the State of Washington. As of the date of this Plan, Bank of
the West has 500,000 authorized shares of common stock, no par
value per share (Bank of the West Common Stock) (no other class
of capital stock being authorized), of which 364,281 shares of
Bank of the West Common Stock are issued and outstanding. All of
the issued and outstanding shares of Bank of the West Common
Stock are owned by Bancwest, the sole shareholder of Bank of the
West. As of September 30, 1998, Bank of the West had capital of
$11,651,076 divided into common stock of $364,281 surplus of
$3,799,029 and undivided profits of $7,487,766.
(C) USBN. USBN is a corporation duly organized and existing in
good standing under the laws of the State of Washington, with its
principal executive offices located in Spokane, Washington. USBN
is a registered bank holding company under the Bank Holding
Company Act of 1956, as amended. As of the date of this Plan,
USBN has 15,000,000 authorized shares of common stock, no par
value per share (USBN Common Stock) (no other class of capital
stock being authorized), of which 4,546,722 shares of USBN Common
Stock are issued and outstanding. As of the date of this Plan,
USBN had 300,000 shares of USBN Common Stock reserved for
issuance under stock option plans pursuant to which options
covering 192,860 shares of USBN Common Stock are outstanding as
of the date of this Plan.
(D) VOTING AGREEMENT. As a condition and an inducement to USBN's
willingness to enter into this Plan, the directors and officers
of Bank of the West and Bancwest have entered into agreements in
the forms attached to this Plan as Exhibit A and Exhibit B,
pursuant to which, among other things, each such individual has
agreed to vote his or her shares of Bancwest Common Stock in
favor of approval of the actions contemplated by this Plan at the
Meetings (as defined below) and to refrain from competing with
USBN.
(E) STOCK OPTION AGREEMENT. Immediately after the execution and
delivery of this Plan, as a condition and an inducement to USBN's
willingness to enter into this Plan, Bancwest and USBN are
entering into a Stock Option Agreement (the "Stock Option
Agreement") in the form attached to this Plan as Exhibit C,
pursuant to which Bancwest is granting to USBN an option to
purchase, under certain circumstances, shares of Bancwest Common
Stock.
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(F) RIGHTS, ETC. Except as Previously Disclosed (as defined
below) in Schedule 4.1(C), Schedule 2.8, or paragraph (A) of the
Recitals to this Plan, or as authorized by this Plan: there are
no shares of capital stock of Bancwest or Bank of the West
authorized and reserved for issuance; neither Bancwest nor Bank
of the West has any Rights (as defined below) issued or
outstanding; and neither Bancwest nor Bank of the West has any
commitment to authorize, issue or sell any such shares or any
Rights. The term Rights means securities or obligations
convertible into or exchangeable for, or giving any Person any
right to subscribe for or acquire, or any options, calls or
commitments relating to, shares of capital stock. There are no
preemptive rights with respect to Bancwest Common Stock.
(G) APPROVALS. At meetings of the respective Boards of
Directors of Bancwest, Bank of the West, and USBN, each such
Board has approved and authorized the execution of this Plan in
counterparts.
In consideration of their mutual promises and obligations, the
Parties further agree as follows:
DEFINITIONS
(A) DEFINITIONS. Capitalized terms used in this Plan have the
following meanings:
Acquisition Proposals has the meaning assigned to such term in
Section 5.19.
Adjusted Loans means all loans and other extensions of credit by
Bank of the West other than (1) that portion of Small Business
Administration loans or the guaranteed portions of other loans
guaranteed by the U.S. Government or any of its agencies, and
(2) single-family residential loans in the process of being sold.
Additional Shares means the number equal to (1) Bancwest's net
income (determined in accordance with GAAP) during the period
commencing on January 1, 1999 and ending on the Effective Date,
divided by (2) the Average Closing Price.
Adjustment Factor means the number equal to the Additional Shares
divided by the number of outstanding shares of Bancwest Common
Stock on the Effective Date.
Appraisal Laws has the meaning assigned to such term in Section
1.2.
Asset Classification has the meaning assigned to such term in
Section 4.1(T).
Average Closing Price means the price equal to the average
(rounded to the nearest ▇▇▇▇▇) of each Daily Sales Price of USBN
Common Stock for the ten (10) consecutive trading days on which
at least 2,000 shares of USBN Common Stock are traded, with the
last such trading day being the fifth day preceding the Effective
Date.
Bancwest Directors has the meaning assigned to such term in
Section 5.18(A).
Bancwest Common Stock has the meaning assigned to such term in
paragraph (A) of the Recitals.
Bancwest Meeting has the meaning assigned to such term in Section
5.2.
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Bancwest Option has the meaning assigned to such term in Section
2.8.
Bank Financial Reports has the meaning assigned to such term in
Section 4.1(H).
Bank of the West has the meaning assigned to such term in the
first paragraph of this Plan.
Bank of the West Common Stock has the meaning assigned to such
term in paragraph (B) of the Recitals.
Business Day means any day other than a Saturday, Sunday, or
legal holiday in the State of Washington.
Capital means capital stock, surplus and retained earnings
determined in accordance with GAAP.
Code has the meaning assigned to such term in Section 4.1(Q)(2).
Company has the meaning assigned to such term in the first
paragraph to this Plan.
Compensation and Benefit Plans has the meaning assigned to such
term in Section 4.1(Q)(1).
Continuing Corporation has the meaning assigned to such term in
Section 1.1(A).
Control with respect to any Person means the possession, directly
or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through the
ownership of voting interests, by contract, or otherwise.
Daily Sales Price for any trading day shall be equal to the
average (rounded to four decimals) of the daily high and low
trading prices per share of USBN Common Stock on the NASDAQ Stock
Market reporting system, as reported in The Wall Street Journal.
Department means the Department of Financial Institutions of the
State of Washington.
Derivatives Contract means an exchange-traded or over-the-counter
swap, forward, future, option, cap, floor or collar financial
contract or any other contract that (1) is not included on the
balance sheet of the Holding Company Financial Reports or the
USBN Financial Reports, as the case may be, and (2) is a
derivative contract (including various combinations thereof).
Dissenting Shares means the shares of Bancwest Common Stock held
by those shareholders of Bancwest who have timely and properly
exercised their dissenters' rights in accordance with the
Appraisal Laws.
Effective Date has the meaning assigned to such term in Section
1.3.
Eligible Bancwest Common Stock means shares of Bancwest Common
Stock other than Exception Shares and Dissenting Shares.
Employment Agreement shall mean Exhibit D.
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Environmental Law means (1) any federal, state, and/or local law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, legal doctrine, order,
judgment, decree, injunction, requirement or agreement with any
governmental entity, relating to (a) the protection, preservation
or restoration of the environment (including air, water vapor,
surface water, groundwater, drinking water supply, surface land,
subsurface land, plant and animal life or any other natural
resource) or to human health or safety, or (b) the exposure to,
or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production,
release or disposal of Hazardous Material, in each case as
amended and as now in effect, including the Federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Air Act,
the Federal Clean Water Act, the Federal Resource Conservation
and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments thereto), the Federal Solid Waste Disposal and the
Federal Toxic Substances Control Act, and the Federal
Insecticide, Fungicide and Rodenticide Act, the Federal
Occupational Safety and Health Act of 1970, and (2) any common
law or equitable doctrine (including injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict
liability) that may impose liability or obligations for injuries
or damages due to, or threatened as a result of, the presence of
or exposure to any Hazardous Material.
ERISA has the meaning assigned to such term in Section 4.1(Q)(2).
ERISA Affiliate has the meaning assigned to such term in Section
4.1(Q)(3).
ERISA Plans has the meaning assigned to such term in Section
4.1(Q)(2).
Exception Shares means shares held by any of Bancwest's
Subsidiaries or by USBN or any of its Subsidiaries, in each case
other than in a fiduciary capacity or as a result of debts
previously contracted.
Exchange Act means the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated
under such statute.
Exchange Agent has the meaning assigned to such term in Section
2.4.
Exchange Ratio has the meaning assigned to such term in Section
2.1(B).
FDIC means the Federal Deposit Insurance Corporation.
Financial Reports has the meaning assigned to such term in
Section 4.1(H).
Federal Reserve Board means the Board of Governors of the Federal
Reserve System.
GAAP means generally accepted accounting principles consistently
applied.
Hazardous Material means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, under any Environmental Law,
whether by type or quantity, including any oil or other petroleum
product, toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste or
petroleum or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos containing material,
urea formaldehyde foam insulation, lead and polychlorinated
biphenyl.
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Holding Company Financial Reports has the meaning assigned to
such term in Section 4.1(H).
Indemnified Party has the meaning assigned to such term in
Section 5.17(A).
Loan/Fiduciary Property means any property owned or controlled by
Bancwest or any of its Subsidiaries or in which Bancwest or any
of its Subsidiaries holds a security or other interest, and,
where required by the context, includes any such property where
Bancwest or any of its Subsidiaries constitutes the owner or
operator of such property, but only with respect to such
property.
Material Adverse Effect means, with respect to any Party, an
event, occurrence or circumstance (including (i) the making of
any provisions for possible loan and lease losses, write-downs of
other real estate owned and taxes, and (ii) any breach of a
representation or warranty contained in this Plan by such Party)
that (a) has or is reasonably likely to have a material adverse
effect on the financial condition, results of operations,
business or prospects of such Party and its Subsidiaries, taken
as a whole, or (b) would materially impair such Party's ability
to perform its obligations under this Plan or the consummation of
any of the transactions contemplated by this Plan.
Meetings has the meaning assigned to such term in Section 5.3.
Merger has the meaning assigned to such term in Section 1.1(A).
Multiemployer Plans has the meaning assigned to such term in
Section 4.1(Q)(2).
NASDAQ means the National Association of Securities Dealers
Automated Quotations system.
Option has the meaning assigned to such term in the Stock Option
Agreement.
Option Shares has the meaning assigned to such term in the Stock
Option Agreement.
Participation Facility means any facility in which Bancwest or
any of its Subsidiaries participates in the management and, where
required by the context, includes the owner or operator of such
facility.
Party means a party to this Plan.
Pension Plan has the meaning assigned to such term in Section
4.1(Q)(2).
Person means any individual, corporation (including any non-
profit corporation), general or limited partnership, limited
liability company, joint venture, estate, trust, association,
organization, labor union, governmental body, or other entity.
Plan means this Agreement and Plan of Merger, together with all
Exhibits and Schedules to this Plan.
Previously Disclosed means information provided by a Party in a
Schedule that is delivered by that Party to the other Party
contemporaneously with the execution of this Plan.
Proxy Statement has the meaning assigned to such term in Section
5.2.
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Registration Statement has the meaning assigned to such term in
Section 5.2.
Regulatory Authorities means federal or state governmental
agencies, authorities or departments charged with the supervision
or regulation of depository institutions or engaged in the
insurance of deposits.
RCW means the Revised Code of Washington, as amended.
Rights has the meaning assigned to such term in paragraph (G) of
the Recitals to this Plan.
Securities Act means the Securities Act of 1933, as amended,
together with the rules and regulations promulgated under such
statute.
SEC means the Securities and Exchange Commission.
Subsidiary means, with respect to any entity, each partnership,
limited liability company, or corporation the majority of the
outstanding partnership interests, membership interests, capital
stock or voting power of which is (or upon the exercise of all
outstanding warrants, options and other rights would be) owned,
directly or indirectly, at the time in question by such entity.
Tax Returns has the meaning assigned to such term in Section
4.1(AA).
Taxes means federal, state, local or foreign income, gross
receipts, windfall profits, severance, property, production,
sales, use, license, excise, franchise, employment, withholding
or similar taxes imposed on the income, properties or operations
of the respective Party or its Subsidiaries, together with any
interest, additions, or penalties with respect thereto and any
interest in respect of such additions or penalties.
Termination Date has the meaning assigned to such term in Section
1.3.
Third Party means a person within the meaning of Sections 3(a)(9)
and 13(d)(3) of the Exchange Act, excluding (1) Bancwest or any
Subsidiary of Bancwest, and (2) USBN or any Subsidiary of USBN.
USBN has the meaning assigned to such term in the first paragraph
of this Plan.
USBN Common Stock has the meaning assigned to such term in
paragraph (C) of the Recitals.
USBN Meeting has the meaning assigned to such term in Section
5.2.
USBN Transaction means: (1) a merger, consolidation or similar
transaction involving USBN, where USBN is not the corporation
surviving such transaction or where a change of control of USBN
is otherwise effected, (2) the disposition, by sale, lease,
exchange or otherwise, of assets or deposits of USBN or any of
its significant subsidiaries representing in either case 25% or
more of the consolidated assets or deposits of USBN and its
subsidiaries, or (3) the issuance, sale or other disposition
(including by way of merger, consolidation, share exchange or any
similar transaction) of securities representing 25% or more of
the voting power of USBN or any of its significant subsidiaries
other than the issuance of USBN Common Stock upon the exercise of
outstanding options or the conversion of outstanding convertible
securities of USBN.
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(B) GENERAL INFORMATION. Except as otherwise expressly provided
in this Plan or unless the context clearly requires otherwise,
the terms defined in this Plan include the plural as well as the
singular; the words "hereof," "herein," "hereunder," "in this
Plan" and other words of similar import refer to this Plan as a
whole and not to any particular Article, Section or other
subdivision; and references in this Plan to Articles, Sections,
Schedules, and Exhibits refer to Articles and Sections of and
Schedules and Exhibits to this Plan. Unless otherwise stated,
references to Subsections refer to the Subsections of the Section
in which the reference appears. All pronouns used in this Plan
include the masculine, feminine and neuter gender, as the context
requires. All accounting terms used in this Plan that are not
expressly defined in this Plan have the respective meanings given
to them in accordance with GAAP.
I. Merger
1.1 The Merger. Subject to the provisions of this Plan, on the
Effective Date:
(A) CONTINUING CORPORATION. Bancwest shall be merged with and
into USBN pursuant to the terms and conditions set forth herein
(the "Merger"). Upon consummation of the Merger, the separate
existence of Bancwest shall cease and USBN shall continue as the
Continuing Corporation.
(B) CERTIFICATE OF INCORPORATION AND BYLAWS. The certificate of
incorporation and bylaws of USBN, in effect immediately prior to
the Effective Date, shall become the certificate of incorporation
and bylaws of the Continuing Corporation. The directors and
officers of USBN in office immediately prior to the Merger
becoming effective shall be the directors and officers of the
Continuing Corporation, together with such additional directors
and officers as may thereafter be elected, who shall hold office
until such time as their successors are elected and qualified;
provided, however, that three directors of Bancwest shall be
appointed to the Board of Directors of the Continuing Corporation
pursuant to Section 5.18.
(C) EFFECTS OF THE MERGER. The separate existence of Bancwest
shall cease, and Bancwest shall be merged with and into USBN
which, as the Continuing Corporation, shall thereupon and
thereafter possess all of the assets, rights, privileges,
appointments, powers, licenses, permits and franchises of the two
merged corporations, whether of a public or a private nature, and
shall be subject to all of the liabilities, restrictions and
duties of both USBN and Bancwest. Bank of the West shall
continue as a wholly owned subsidiary of the Continuing
Corporation for at least three (3) years following the Effective
Date.
(D) TRANSFER OF ASSETS. All rights, assets, licenses, permits,
franchises and interests of USBN and Bancwest in and to every
type of property, whether real, personal, or mixed, whether
tangible or intangible, shall be deemed to be vested in USBN as
the Continuing Corporation by virtue of the Merger becoming
effective and without any deed or other instrument or act of
transfer whatsoever.
(E) ASSUMPTION OF LIABILITIES. The Continuing Corporation shall
become and be liable for all debts, liabilities, obligations and
contracts of USBN as well as those of Bancwest, whether the same
shall be matured or unmatured; whether accrued, absolute,
contingent or otherwise; and whether or not reflected or reserved
against in the balance sheets, other financial
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statements, books of account or records of USBN or Bancwest.
1.2 DISSENTING SHARES. Notwithstanding anything to the contrary
in this Plan, each Dissenting Share whose holder, as of the
Effective Date of the Merger, has not effectively withdrawn or
lost his dissenters' rights under RCW 23B.13 (the Appraisal Laws)
shall not be converted into or represent a right to receive USBN
Common Stock, but the holder of such Dissenting Share shall be
entitled only to such rights as are granted by the Appraisal
Laws, unless and until such holder shall have failed to perfect
or shall have effectively withdrawn or lost the right to payment
under the Appraisal Laws, in which case each such share shall be
deemed to have been converted at the Effective Date into the
right to receive USBN Common Stock without any interest thereon.
Each holder of Dissenting Shares who becomes entitled to payment
for his Bancwest Common Stock pursuant to the provisions of the
Appraisal Laws shall receive payment for such Dissenting Shares
from USBN (but only after the amount thereof shall have been
agreed upon or finally determined pursuant to the Appraisal
Laws).
1.3 EFFECTIVE DATE Unless the Parties agree upon another date,
the "Effective Date" will be the tenth Business Day after the
fulfillment or waiver of each condition precedent set forth in,
and the granting of each approval (and expiration of any waiting
period) required by, Article VI. If the Merger is not
consummated in accordance with this Plan on or prior to June 30,
1999 (the Termination Date), Bancwest or USBN may terminate this
Plan in accordance with Article VII. On the Effective Date, USBN
and Bancwest shall execute and deliver to the Secretary of State
of the State of Washington articles of merger in accordance with
applicable law.
II. CONSIDERATION
2.1 EXCHANGE CONSIDERATION. Subject to the provisions of this
Plan, on the Effective Date:
(A) OUTSTANDING USBN COMMON STOCK. The shares of USBN Common
Stock issued and outstanding immediately prior to the Effective
Date shall, on and after the Effective Date, remain as issued and
outstanding shares of USBN Common Stock.
(B) OUTSTANDING BANCWEST COMMON STOCK. Each share of Eligible
Bancwest Common Stock issued and outstanding immediately prior to
the Effective Date shall, by virtue of the Merger, automatically
and without any action on the part of the holder of such share,
be exchanged for the right to receive a number of shares of USBN
Common Stock equal to the sum of 4.7038 plus the Adjustment
Factor (as adjusted, if applicable, pursuant to Section 2.5) (the
"Exchange Ratio").
2.2 SHAREHOLDER RIGHTS; STOCK TRANSFERS. On the Effective Date,
holders of Bancwest Common Stock shall cease to be, and shall
have no rights as, shareholders of Bancwest, other than to
receive the consideration provided under this Article II. After
the Effective Date, there shall be no transfers on the stock
transfer books of Bancwest or the Continuing Corporation of the
shares of Bancwest Common Stock that were issued and outstanding
immediately prior to the Effective Date.
2.3 FRACTIONAL SHARES. Notwithstanding any other provision of
this Plan, no fractional shares of USBN Common Stock and no
certificates or scrip therefor,
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or other evidence of ownership thereof, will be issued in the
Merger.
Any holder of Bancwest Common Stock who would otherwise be
entitled to a fractional share of USBN Common Stock will receive
an amount in cash determined by multiplying such fraction by the
Average Closing Price.
2.4 EXCHANGE PROCEDURES. As promptly as practicable after the
Effective Date, USBN shall send or cause to be sent to each
former shareholder of Bancwest of record immediately prior to the
Effective Date transmittal materials for use in exchanging such
shareholder's certificates for Bancwest Common Stock for the
consideration set forth in this Article II. The certificates
representing the shares of USBN Common Stock into which shares of
such shareholder's Bancwest Common Stock are converted on the
Effective Date, any fractional share checks that such shareholder
shall be entitled to receive, and any dividends paid on such
shares of USBN Common Stock for which the record date for
determination of shareholders entitled to such dividends is on or
after the Effective Date, will be delivered to such shareholder
only upon delivery to USBN's exchange agent (the "Exchange
Agent") of the certificates representing all of such shares of
Bancwest Common Stock (or indemnity satisfactory to USBN and the
Exchange Agent, in their judgment, if any of such certificates
are lost, stolen or destroyed). No interest will be paid on any
such fractional share checks or dividends to which the holder of
such shares shall be entitled to receive upon such delivery.
Certificates surrendered for exchange by any person constituting
an "affiliate" of Bancwest for purposes of Rule 145 of the
Securities Act shall not be exchanged for certificates
representing USBN Common Stock until USBN has received a written
agreement from such person as specified in Section 5.9.
2.5 EXCHANGE RATIO ADJUSTMENT. In the event that Bancwest or
USBN changes the number of shares of their common stock issued
and outstanding prior to the Effective Date as a result of a
stock split, stock dividend, recapitalization or similar
transaction with respect to outstanding common stock and the
record date therefor shall be prior to the Effective Date, the
Exchange Ratio shall be adjusted proportionately so as not to
dilute the shareholders of Bancwest or otherwise affect the
amount or kind of consideration provided for under this Plan.
2.6 EXCEPTION SHARES. Each of the Exception Shares of Bancwest
Common Stock shall be canceled and retired upon consummation of
the Merger, and no consideration shall be issued in exchange
therefor.
2.7 RESERVATION OF RIGHT TO RIVISE TRANSACTION. In its sole
discretion, and notwithstanding any other provision in this Plan
to the contrary, USBN may at any time change the method of
effecting its acquisition of Bancwest and Bank of the West;
provided, however, that (A) no such change shall alter or change
the amount or kind of consideration to be issued to holders of
Bancwest Common Stock as provided for in this Plan, (B) no such
change shall adversely affect the tax treatment to Bancwest
shareholders as a result of receiving such consideration, and (C)
no delay caused by such a change shall be the basis upon which
USBN terminates this Plan pursuant to Section 7.1(C). If USBN
elects to change the method of acquisition pursuant to this
section, and as a result the Merger will not be accounted for on
a pooling-of-interests basis, USBN and Bancwest must each first
waive their pooling condition in Section 6.1(H). If USBN elects
to change the method of acquisition and both USBN and Bancwest
have waived their pooling condition, if required, Bancwest and
Bank of the West will cooperate with and assist USBN with any
necessary amendment to this Plan, and with the preparation and
filing of such applications,
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documents, instruments and notices as may be necessary or
desirable, in the opinion of counsel for USBN, to obtain all
necessary shareholder approvals and approvals of any regulatory
agency, administrative body or other governmental entity.
2.8 OPTIONS. On the Effective Date, by virtue of the Merger, and
without any action on the part of any holder of an option, each
option granted by Bancwest to purchase shares of Bancwest Common
Stock ("Bancwest Option") that is then outstanding and
unexercised shall be converted into and become an option to
purchase USBN Common Stock ("USBN Option") on the same terms and
conditions as are in effect with respect to Bancwest Option
immediately prior to the Effective Date, except that (A) each
such USBN Option may be exercised solely for shares of USBN
Common Stock, (B) the number of shares of USBN Common Stock
subject to such USBN Option shall be equal to the number of
shares of Bancwest Common Stock subject to such Option
immediately prior to the Effective Date multiplied by the
Exchange Ratio, the product being rounded, if necessary, up or
down to the nearest whole share, and (C) the per share exercise
price under each such USBN Option shall be adjusted by dividing
the per share exercise price of Bancwest Option by the Exchange
Ratio, and rounding up or down to the nearest cent. The number
of shares of Bancwest Common Stock that are issuable upon
exercise of Options as of the date of this Plan are Previously
Disclosed in Schedule 2.8. Following the Effective Date, USBN
shall use its best efforts to ensure that the shares of USBN
Common Stock to be issued upon the exercise of USBN Options are
properly registered pursuant to the Securities Act.
III. ACTIONS PENDING CONSUMMATION
Unless otherwise agreed to in writing by USBN, each of Bancwest
and Bank of the West shall conduct its and each of its
Subsidiaries' business in the ordinary and usual course
consistent with past practice and shall use its best efforts to
maintain and preserve its and each of its Subsidiaries' business
organization, employees and advantageous business relationships
and retain the services of its and each of its Subsidiaries'
officers and key employees identified by USBN, and neither
Bancwest nor Bank of the West, without the prior written consent
of USBN, will (or cause or allow any of it Subsidiaries to):
3.1 CAPITAL STOCK. Except for or as otherwise expressly
permitted by this Plan, or Bancwest Options, or as Previously
Disclosed in Schedule 4.1(C), issue, sell or otherwise permit to
become outstanding any additional shares of capital stock of
Bancwest, Bank of the West or any of their Subsidiaries, or any
Rights with respect thereto, or enter into any agreement with
respect to the foregoing, or permit any additional shares of
Bancwest Common Stock to become subject to grants of employee
stock options, stock appreciation rights or similar stock-based
employee compensation rights.
3.2 DIVIDENDS, ETC. Make, declare or pay any dividend on or in
respect of, or declare or make any distribution on, or directly
or indirectly combine, redeem, reclassify, purchase or otherwise
acquire, any shares of its capital stock or, other than as
permitted in or contemplated by this Plan or the Stock Option
Agreement, authorize the creation or issuance of, or issue, any
additional shares of its capital stock or any Rights with respect
thereto.
3.3 INDEBTEDNESS; LIABILITIES; ETC. Other than in the ordinary
course of business consistent with past practice, incur any
indebtedness for borrowed
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money, assume, guarantee, endorse or otherwise as an
accommodation become responsible or liable for the obligations of
any other individual, corporation or other entity.
3.4 LINE OF BUSINESS; OPERATING PROCEDURES, ETC. Except as may
be directed by any regulatory agency, (A) change its lending,
investment, liability management or other material banking
policies in any material respect, except such changes as are in
accordance and in an effort to comply with Section 5.10, or (B)
commit to incur any further capital expenditures beyond those
Previously Disclosed in Schedule 3.4 other than in the ordinary
course of business and not exceeding $25,000 individually or
$75,000 in the aggregate.
3.5 LIENS AND ENCUMBRANCES. Impose, or suffer the imposition, on
any shares of stock of any of its Subsidiaries, any lien, charge
or encumbrance, or permit any such lien, charge or encumbrance to
exist.
3.6 COMPENSATION; EMPLOYMENT AGREEMENTS; ETC. Except as
Previously Disclosed in Schedule 3.6, enter into or amend any
employment, severance or similar agreement or arrangement with
any of its directors, officers or employees, or grant any salary
or wage increase, amend the terms of any Bancwest Option or
increase any employee benefit (including incentive or bonus
payments), except normal individual increases in regular
compensation to employees in the ordinary course of business
consistent with past practice.
3.7 BENEFITS PLANS. Except as Previously Disclosed in Schedule
3.7, enter into or modify (except as may be required by
applicable law) any pension, retirement, stock option, stock
purchase, savings, profit sharing, deferred compensation,
consulting, bonus, group insurance or other employee benefit,
incentive or welfare contract, plan or arrangement, or any trust
agreement related thereto, in respect of any of its directors,
officers or other employees, including taking any action that
accelerates the vesting or exercise of any benefits payable
thereunder.
3.8 CONTINUANCE OF BUSINESS. Dispose of or discontinue any
portion of its assets, business or properties, that is material
to Bancwest and its Subsidiaries taken as a whole, or merge or
consolidate with, or acquire all or any portion of, the business
or property of any other entity that is material to Bancwest and
its Subsidiaries taken as a whole (except foreclosures or
acquisitions by Bank of the West in its fiduciary capacity, in
each case in the ordinary course of business consistent with past
practice).
3.9 AMENDMENTS. Amend its articles of incorporation or bylaws.
3.10 CLAIMS. Settle any claim, litigation, action or proceeding
involving any liability for material money damages or
restrictions upon the operations of Bancwest or any of its
Subsidiaries.
3.11 CONTRACTS. Except as previously disclosed on Schedule 3.11,
enter into, renew, terminate or make any change in any material
contract, agreement or lease (excluding agreements and loans
permitted under Section 3.12), except in the ordinary course of
business consistent with past practice with respect to contracts,
agreements and leases that are terminable by it without penalty
on no more than 60 days prior written notice.
11
3.12 LOANS. Extend credit or account for loans and leases other
than in accordance with existing lending policies and accounting
practices, except that Bancwest shall not, without the prior
consent of USBN's Chief Executive Officer or chief credit
administrator: (a) modify, restructure or renew any existing
nonperforming loan (defined as on non-accrual status, or 90 days
or more past due) or make any new loan to any Person if the
amount of the resulting loan, when aggregated with all other
loans or extensions of credit to such Person whose loan is non-
performing (or which would be required to be aggregated for loans-
to-one-borrower limitations), would be in excess of $100,000; (b)
make any loan to an existing customer as of the date of this Plan
in excess of $1,000,000; or (c) make any loan to a new customer
in excess of $500,000, except that (i) single-family residential
loans may be made in amounts that would not exceed applicable
FHLMC and FNMA limits, and (ii) such limits shall not apply to
SBA or other governmental or governmental agency guaranteed
amounts.
3.13. TRANSACTION EXPENSES. Incur expenses in connection with
the transactions contemplated by this Plan that exceed $275,000
in the aggregate.
IV. REPRESENTATIONS AND WARRANTIES
4.1 BANCWEST AND BANK OF THE WEST REPRESENTATIONS AND
WARRANTIES. Each of Bancwest and Bank of the West hereby
represents and warrants to USBN as follows:
(A) RECITALS. The facts set forth in the Recitals of this Plan
with respect to Bancwest and its Subsidiaries are true and
correct.
(B) ORGANIZATION, STANDING AND AUTHORITY. Each of Bancwest and
its Subsidiaries is duly qualified to do business and is in good
standing in the States of the United States and foreign
jurisdictions where the failure to be duly qualified,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on it. Each of Bancwest and its
Subsidiaries has in effect all federal state, local and foreign
governmental authorizations necessary for it to own or lease its
properties and assets and to carry on its business as it is now
conducted, the absence of which, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect
on it. Bank of the West is an "insured depository institution"
as defined in the Federal Deposit Insurance Act, as amended, and
applicable regulations under such statute, and its deposits are
insured by the Bank Insurance Fund of the FDIC.
(C) SHARES. The outstanding shares of Bancwest and its
Subsidiaries' capital stock are validly issued and outstanding,
fully paid and nonassessable, and subject to no preemptive
rights. Except as Previously Disclosed in Schedule 4.1(C) and
paragraph (A) of the Recitals, and as provided under the Stock
Option Agreement, there are no shares of capital stock or other
equity securities of Bancwest or its Subsidiaries outstanding and
no outstanding Rights with respect thereto.
(D) BANCWEST SUBSIDIARIES. Bancwest has Previously Disclosed in
Schedule 4.1(D) a list of all of its Subsidiaries. Each of its
Subsidiaries that is a bank is an "insured depository
institution" as defined in the Federal Deposit Insurance Act, as
amended, and applicable regulations under such statute. No
equity securities of any of its Subsidiaries are or may become
required to be issued (other than to Bancwest or one of its
Subsidiaries) by reason of any
12
Rights with respect thereto. There are no contracts,
commitments, understandings or arrangements by which any of its
Subsidiaries is or may be bound to sell or otherwise issue any
shares of such Subsidiary's capital stock, and there are no
contracts, commitments, understandings or arrangements relating
to the rights of Bancwest or its Subsidiaries, as applicable, to
vote or to dispose of such shares. All of the shares of capital
stock of each of its Subsidiaries held by Bancwest or one of its
Subsidiaries are fully paid and nonassessable and are owned by
Bancwest or one of its Subsidiaries free and clear of any charge,
mortgage, pledge, security interest, restriction, claim, lien or
encumbrance. Each of its Subsidiaries is in good standing under
the laws of the jurisdiction in which it is incorporated or
organized, and is duly qualified to do business and in good
standing in the jurisdictions where the failure to be duly
qualified is reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect on it. Except as Previously
Disclosed in Schedule 4.1(D), it does not own beneficially,
directly or indirectly, any shares of any equity securities or
similar interests of any corporation, bank, partnership, joint
venture, business trust, association or other organization. In
the case of representations by Bancwest, the deposits of its
Subsidiaries that are banks are insured by the Bank Insurance
Fund of the FDIC.
(E) CORPORATE POWER. Each of Bancwest and its Subsidiaries has
the corporate power and authority to carry on its business as it
is now being conducted and to own all its material properties and
assets.
(F) CORPORATE AUTHORITY. Subject to any necessary receipt of
approval by its shareholders referred to in Section 6.1, this
Plan, the Stock Option Agreement, and the Employment Agreement
have been authorized by all necessary corporate action of
Bancwest and each of its Subsidiaries that is a Party, and each
such agreement is a valid and binding agreement of Bancwest and
such Subsidiaries, enforceable against Bancwest and such
Subsidiaries in accordance with its terms, subject to bankruptcy,
insolvency and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(G) NO DEFAULTS. Subject to the approval by its shareholders
referred to in Section 6.1, the required regulatory approvals
referred to in Section 6.1, and the required filings under
federal and state securities laws, and except as Previously
Disclosed in Schedule 4.1(G), the execution, delivery and
performance of this Plan and the Stock Option Agreement and the
consummation by Bancwest and each of its Subsidiaries that is a
Party to the transactions contemplated by this Plan and the Stock
Option Agreement do not and will not (1) constitute a breach or
violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of Bancwest or of any of its
Subsidiaries or to which Bancwest or any of its Subsidiaries or
its or their properties is subject or bound, which breach,
violation or default is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on it, (2)
constitute a breach or violation of, or a default under, the
articles of incorporation, charter or bylaws of it or any of its
Subsidiaries, or (3) require any consent or approval under any
such law, rule, regulation, judgment, decree, order, governmental
permit or license or the consent or approval of any other party
to any such agreement, indenture or instrument, other than any
such consent or approval that, if not obtained, would not be
reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect on it.
13
(H) FINANCIAL REPORTS. Except as Previously Disclosed in
Schedule 4.1(H), (1) as to Bancwest, its compiled consolidated
balance sheets as of December 31, 1997 and December 31, 1996, and
the related statements of income, changes in shareholders' equity
and cash flows for the fiscal years ended December 31, 1997 and
December 31, 1996 (collectively, the "Holding Company Financial
Reports"), and (2) as to each of Bancwest's Subsidiaries that is
a bank, its call report for the fiscal year ended December 31,
1997, and all other financial reports filed or to be filed
subsequent to December 31, 1997, in the form filed with the FDIC
and the Department (in each case, the "Bank Financial Reports"
and together with the Holding Company Financial Reports, the
"Financial Reports") did not and will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were
made, not misleading; and each of the balance sheets in or
incorporated by reference into the Financial Reports (including
the related notes and schedules thereto) fairly presents and will
fairly present the financial position of the entity or entities
to which it relates as of its date, and each of the statements of
income and changes in shareholders' equity and cash flows or
equivalent statements in the Bank Financial Reports (including
any related notes and schedules thereto) fairly presents and will
fairly present the results of operations, changes in
shareholders' equity and cash flows, as the case may be, of the
entity or entities to which it relates for the periods set forth
therein, in each case in accordance with GAAP during the periods
involved, except in each case as may be noted therein, subject to
normal and recurring year-end audit adjustments in the case of
unaudited statements.
(I) ABSENCE OF UNDISCLOSED LIABILITIES. Except as Previously
Disclosed on Schedule 4.1 (I), neither Bancwest nor any of its
Subsidiaries has any obligation or liability (contingent or
otherwise) that, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect on it, except (1) as
reflected in its Holding Company Financial Reports prior to the
date of this Plan, and (2) for commitments and obligations made,
or liabilities incurred, in the ordinary course of business
consistent with past practice since December 31, 1997. Except as
Previously Disclosed on Schedule 4.1 (I), since December 31,
1997, neither Bancwest nor any of its Subsidiaries has incurred
or paid any obligation or liability (including any obligation or
liability incurred in connection with any acquisitions in which
any form of direct financial assistance of the federal government
or any agency thereof has been provided to any Subsidiary) that,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on it.
(J) NO EVENTS. Except as Previously Disclosed on Schedule 4.1
(J), since December 31, 1997, no event has occurred that,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on it.
(K) PROPERTIES. Except as reserved against in its Holding
Company Financial Reports, Bancwest and each of its Subsidiaries
have good and marketable title, free and clear of all liens,
encumbrances, charges, defaults, or equities of any character, to
all of the properties and assets, tangible and intangible,
reflected in its Holding Company Financial Reports as being owned
by Bancwest or its Subsidiaries as of the dates thereof other
than those that, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect on
14
it, except those sold or otherwise disposed of in the ordinary
course of business. All buildings and all material fixtures,
equipment, and other property and assets that are held under
leases or subleases by Bancwest or any of its Subsidiaries are
held under valid leases or subleases enforceable in accordance
with their respective terms, other than any such exceptions to
validity or enforceability that, individually or in the
aggregate, are not reasonably likely to have a Material Adverse
Effect on it.
(L) LITIGATION; REGULATORY ACTION. Except as Previously
Disclosed in Schedule 4.1 (L), no litigation, proceeding or
controversy before any court or governmental agency is pending
that, individually or in the aggregate, is reasonably likely to
have a Material Adverse Effect on Bancwest or any of its
Subsidiaries or that alleges claims under any fair lending law or
other law relating to discrimination, including the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment
Act and the Home Mortgage Disclosure Act, and, to the best of its
knowledge, no such litigation, proceeding or controversy has been
threatened; and except as Previously Disclosed in Schedule
4.1(L), neither Bancwest nor any of its Subsidiaries or any of
its or their material properties or their officers, directors or
controlling persons is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission
to, any Regulatory Authority, and neither Bancwest nor any of its
Subsidiaries has been advised by any of such Regulatory
Authorities that such authority is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum or
understanding, commitment letter or similar submission.
(M) COMPLIANCE WITH LAWS. Except as Previously Disclosed in
Schedule 4.1(M), each of Bancwest and its Subsidiaries:
(1) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and
registrations with, all Regulatory Authorities that are required
in order to permit it to own its businesses presently conducted
and that are material to the business of it and its Subsidiaries
taken as a whole; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and,
to its best knowledge, no suspension or cancellation of any of
them is threatened; and all such filings, applications and
registrations are current;
(2) has received no notification or communication from any
Regulatory Authority or the staff thereof (a) asserting that
Bancwest or any of its Subsidiaries is not in compliance with any
of the statutes, regulations or ordinances which such Regulatory
Authority enforces, which, as a result of such noncompliance in
any such instance, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect on Bancwest
or its Subsidiaries, (b) threatening to revoke any license,
franchise, permit or governmental authorization, which
revocation, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect on Bancwest or its
Subsidiaries, or (c) requiring any of Bancwest or its
Subsidiaries (or any of its or their officers, directors or
controlling persons) to enter into a cease and desist order,
agreement or memorandum of understanding (or requiring the board
of directors thereof to adopt any resolution or policy);
(3) is not required to give prior notice to any federal banking
or thrift agency of the proposed addition of an individual to its
board of directors or
15
the employment of an individual as a senior executive; and
(4) is in compliance in all material respects with all fair
lending laws or other laws relating to discrimination, including
the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act and the Home Mortgage Disclosure Act.
(N) MATERIAL CONTRACTS. Except as Previously Disclosed in
Schedule 4.1(N), none of Bancwest or its Subsidiaries, nor any of
their respective assets, businesses or operations, is a party to,
or is bound or affected by, or receives benefits under, any
material contract or agreement or amendment thereto (excluding
extensions of credit made in the ordinary course of business).
Neither Bancwest nor any of its Subsidiaries is in default under
any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party, by
which its respective assets, business or operations may be bound
or affected or under which it or any of its respective assets,
business or operations receives benefits, which default,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on Bancwest or its Subsidiaries, and
there has not occurred any event that, with the lapse of time or
the giving of notice or both, would constitute such a default.
Except as Previously Disclosed in Schedule 4.1(N), neither
Bancwest nor any of its Subsidiaries is subject to or bound by
any contract containing covenants that limit the ability of
Bancwest or any of its Subsidiaries to compete in any line of
business or with any Person or that involve any restriction of
geographical area in which, or method by which, Bancwest or any
of its Subsidiaries may carry on its business (other than as may
be required by law or any applicable Regulatory Authority).
(O) REPORTS. Since January 1, 1993, each of Bancwest and its
Subsidiaries has filed all reports and statements, together with
any amendments required to be made with respect thereto, that it
was required to file with (1) the Department, (2) the FDIC, (3)
the Federal Reserve Board, and (4) any other Regulatory
Authorities having jurisdiction with respect to Bancwest and its
Subsidiaries. As of their respective dates (and without giving
effect to any amendments or modifications filed after the date of
this Plan with respect to reports and documents filed before the
date of this Plan), each of such reports and documents, including
the financial statements, exhibits and schedules thereto,
complied in all material respects with all of the statutes, rules
and regulations enforced or promulgated by the Regulatory
Authority with which they were filed and did not contain any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading.
(P) NO BROKERS. Except as Previously Disclosed in Schedule
4.1(P), all negotiations relative to this Plan and the
transactions contemplated by this Plan have been carried on by it
directly with the other Parties and no action has been taken by
it that would give rise to any valid claim against any Party for
a brokerage commission, finder's fee or other like payment.
(Q) EMPLOYEE BENEFIT PLANS.
(1) Schedule 4.1(Q)(1) contains a complete list of all bonus,
deferred compensation, pension, retirement, profit-sharing,
thrift savings, employee stock ownership, stock bonus, stock
purchase restricted stock and stock option plans, all employment
or severance contracts, all medical, dental, health and
16
life insurance plans, all other employee benefit plans, contracts
or arrangements and any applicable "change of control" or similar
provisions in any plan, contract or arrangement maintained or
contributed to by Bancwest or any of its Subsidiaries for the
benefit of employees, former employees, directors, former
directors or their beneficiaries (the "Compensation and Benefit
Plans"). True and complete copies of all Compensation and
Benefit Plans of Bancwest and its Subsidiaries, including any
trust instruments and/or insurance contracts, if any, forming a
part thereof, and all amendments thereto, have been supplied to
the other Parties.
(2) All "employee benefit plans" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), other
than "multiemployer plans" within the meaning of Section 3(37) of
ERISA ("Multiemployer Plans"), covering employees or former
employees of Bancwest and its Subsidiaries (the "ERISA Plans"),
to the extent subject to ERISA, are in substantial compliance
with ERISA. Except as Previously Disclosed in Schedule 4.1(Q)(2)
each ERISA Plan which is an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA ("Pension Plan") and
which is intended to be qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code") has
received a favorable determination letter from the Internal
Revenue Service, and it is not aware of any circumstances
reasonably likely to result in the revocation or denial of any
such favorable determination letter or the inability to receive
such a favorable determination letter. There is no material
pending or, to its knowledge, threatened litigation relating to
the ERISA Plans. Neither Bancwest nor any of its Subsidiaries
has engaged in a transaction with respect to any ERISA Plan that
could subject Bancwest or any of its Subsidiaries to a tax or
penalty imposed by either Section 4975 of the Code or Section
502(i) of ERISA in an amount which would be material.
(3) No liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by Bancwest or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan," within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by any of them, or the
single-employer plan of any entity which is considered one
employer with Bancwest under Section 4001(a)(15) of ERISA or
Section 414 of the Code (an "ERISA Affiliate"). Neither Bancwest
nor any of its Subsidiaries presently contributes to a
Multiemployer Plan, nor have they contributed to such a plan
within the past five calendar years. No notice of a "reportable
event," within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived, has been
required to be filed for any Pension Plan or by any ERISA
Affiliate within the past 12-month period.
(4) All contributions required to be made under the terms of any
ERISA Plan have been timely made. Neither any Pension Plan nor
any single-employer plan of an ERISA Affiliate has an
"accumulated funding deficiency"(whether or not waived) within
the meaning of Section 412 of the Code or Section 302 of ERISA.
Neither Bancwest nor any of its Subsidiaries has provided, or is
required to provide, security to any Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
(5) Under each Pension Plan which is a single-employer plan, as
of the last day of the most recent plan year, the actuarially
determined present value of all "benefit liabilities," within the
meaning of Section 4001(a)(16) of ERISA (as determined on the
basis of the actuarial assumptions contained in the plan's most
recent actuarial valuation) did not exceed the then current value
17
of the assets of such plan, and there has been no material change
in the financial condition of such plan since the last day of the
most recent plan year.
(6) Neither Bancwest nor any of its Subsidiaries has any
obligations for retiree health and life benefits under any plan,
except as set forth in Schedule 4.1(Q)(6). There are no
restrictions on the rights of Bancwest or any of its Subsidiaries
to amend or terminate any such plan without incurring any
liability thereunder.
(7) Except as Previously Disclosed in Schedule 4.l(Q)(7),
neither the execution and delivery of this Plan nor the
consummation of the transactions contemplated by this Plan will
(a) result in any payment (including severance, unemployment
compensation, golden parachute or otherwise) becoming due to any
director or any employee of Bancwest or any of its Subsidiaries
under any Compensation and Benefit Plan or otherwise from
Bancwest or any of its Subsidiaries, (b) increase any benefits
otherwise payable under any Compensation and Benefit Plan, or (c)
result in any acceleration of the time of payment or vesting of
any such benefit.
18
R) NO KNOWLEDGE. Bancwest and its Subsidiaries know of no
reason why the regulatory approvals referred to in Section 6.1(B)
should not be obtained.
(S) LABOR AGREEMENTS. Neither Bancwest nor any of its
Subsidiaries is a party to or is bound by any collective
bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization, nor is
Bancwest or any of its Subsidiaries the subject of a proceeding
asserting that it or any such Subsidiary has committed an unfair
labor practice (within the meaning of the National Labor
Relations Act) or seeking to compel it or such Subsidiary to
bargain with any labor organization as to wages and conditions of
employment, nor is there any strike or other labor dispute
involving it or any of its Subsidiaries pending or, to the best
of its knowledge, threatened, nor is it aware of any activity
involving its or any of the Subsidiaries' employees seeking to
certify a collective bargaining unit or engaging in any other
organization activity.
(T) ASSET CLASSIFICATION. Bancwest and its Subsidiaries have
Previously Disclosed in Schedule 4.1(T) a list, accurate and
complete in all material respects, of the aggregate amounts of
loans, extensions of credit or other assets of Bancwest and its
Subsidiaries that have been classified by it as of September 30,
1998 (the "Asset Classification"); and no amounts of loans,
extensions of credit or other assets that have been classified as
of September 30, 1998 by any regulatory examiner as "Other Loans
Specially Mentioned," 'Substandard," "Doubtful" "Loss," or words
of similar import are excluded from the amounts disclosed in the
Asset Classification, other than amounts of loans, extensions of
credit or other assets that were charged off by Bancwest or any
Subsidiary prior to September 30, 1998.
(U) ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES. The allowance
for possible loan losses shown on the consolidated balance sheets
in the December 31, 1997 Holding Company Financial Reports of
Bancwest and the September 30, 1998, Bank Regulatory Reports was,
and the allowance for possible loan losses to be shown on
subsequent Holding Company Financial Reports of Bancwest was and
will be, adequate under GAAP, in the reasonable opinion of
Bancwest's Board of Directors, to provide for possible losses,
net of recoveries relating to loans previously charged off, on
loans outstanding (including accrued interest receivable) as of
the date thereof.
(V) INSURANCE. Each of Bancwest and its Subsidiaries has taken
all requisite action (including the making of claims and the
giving of notices) pursuant to its directors' and officers'
liability insurance policy or policies in order to preserve all
rights thereunder with respect to all matters that are known to
Bancwest, except for such matters that, individually or in the
aggregate, are not reasonably likely to have a Material Adverse
Effect on Bancwest or its Subsidiaries. Set forth in Schedule
4.l(V) is a list of all insurance policies maintained by or for
the benefit of Bancwest or its Subsidiaries or their respective
directors, officers, employees or agents.
(W) AFFILIATES. Except as Previously Disclosed in Schedule
4.1(W), to the best of Bancwest's knowledge, there is no person
who, as of the date of this Plan, may be deemed to be an
"affiliate" of Bancwest as that term is used in Rule 145 under
the Securities Act.
(X) STATE TAKEOVER LAWS, ARTICLES OF INCORPORATION. Bancwest
and its Subsidiaries have taken all necessary action to exempt
this Plan and the Stock Option Agreement and the transactions
contemplated by this Plan and the Stock
19
Option Agreement from, and this Plan and the Stock Option
Agreement and such transactions are exempt from (1) any
applicable state takeover laws, including, but not limited to,
RCW Ch. 23B.19, as amended, and (2) any takeover-related
provisions of Bancwest's and its Subsidiaries' articles of
incorporation.
(Y) NO FURTHER ACTION. Bancwest and its Subsidiaries have taken
all action so that the entering into of this Plan and the Stock
Option Agreement and the consummation of the transactions
contemplated by this Plan and the Stock Option Agreement
(including the Merger and the exercise of the Option), or any
other action or combination of actions, or any other
transactions, contemplated by this Plan and the Stock Option
Agreement do not and will not (1) require a vote of shareholders
(other than as set forth in Section 6.1), or (2) result in the
grant of any rights to any Person under the articles of
incorporation, charter or bylaws of Bancwest or any of its
Subsidiaries or under any agreement to which Bancwest or any such
Subsidiaries is a party, or (iii) restrict or impair in any way
the ability of the other Parties to exercise the rights granted
under this Plan or the Stock Option Agreement.
(Z) ENVIRONMENTAL MATTERS.
(1) To Bancwest's knowledge, it and each of its Subsidiaries,
the Participation Facilities and the Loan/Fiduciary Properties
are, and have been, in compliance with all Environmental Laws,
except for instances of noncompliance that are not reasonably
likely, individually or in the aggregate, to have a Material
Adverse Effect on Bancwest or its Subsidiaries.
(2) There is no proceeding pending or, to Bancwest's knowledge,
threatened before any court, governmental agency or board or
other forum in which Bancwest or any of its Subsidiaries or any
Participation Facility has been, or with respect to threatened
proceedings, reasonably would be expected to be, named as a
defendant or potentially responsible party (a) for alleged
noncompliance (including by any predecessor) with any
Environmental Law, or (b) relating to the release or threatened
release into the environment of any Hazardous Material, whether
or not occurring at or on a site owned, leased or operated by
Bancwest or any of its Subsidiaries or any Participation
Facility, except for such proceedings pending or threatened that
are not reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on Bancwest or its Subsidiaries or
have been Previously Disclosed in Schedule 4.1(Z)(2).
(3) There is no proceeding pending or, to Bancwest's knowledge,
threatened before any court, governmental agency or board or
other forum in which any Loan/Fiduciary Property (or Bancwest or
any of its Subsidiaries in respect of any Loan/Fiduciary
Property) has been, or with respect to threatened proceedings,
reasonably would be expected to be, named as a defendant or
potentially responsible party (a) for alleged noncompliance
(including by any predecessor) with any Environmental Law, or (b)
relating to the release or threatened release into the
environment of any Hazardous Material, whether or not occurring
at or on a Loan/Fiduciary Property, except for such proceedings
pending or threatened that are not reasonably likely,
individually or in the aggregate, to have a Material Adverse
Effect on Bancwest or have been Previously Disclosed in Schedule
4.1(Z)(3).
(4) To Bancwest's knowledge, there is no reasonable basis for
any proceeding of a type described in subparagraph (2) or (3) of
this paragraph (Z), except
20
as has been Previously Disclosed in Schedule 4.1(Z)(4).
(5) To Bancwest's knowledge, during the period of (a) ownership
or operation by Bancwest or any of its Subsidiaries of any of
their respective current properties, (b) participation in the
management of any Participation Facility by Bancwest or any of
its Subsidiaries, or (c) holding of a security or other interest
in a Loan/Fiduciary Property by Bancwest or any of its
Subsidiaries, there have been no releases of Hazardous Material
in, on, under or affecting any such property, Participation
Facility or Loan/Fiduciary Property, except for such releases
that are not reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect on Bancwest or its Subsidiaries
or have been Previously Disclosed in Schedule 4.1(Z)(5).
(6) To Bancwest's knowledge, prior to the period of (a)
ownership or operation by Bancwest or any of its Subsidiaries of
any of their respective current properties, (b) participation in
the management of any Participation Facility by Bancwest or any
of its Subsidiaries, or (c) holding of a security or other
interest in a Loan/Fiduciary Property by Bancwest or any of its
Subsidiaries, there were no releases of Hazardous Material in,
on, under or affecting any such property, Participation Facility
or Loan) Fiduciary Property, except for such releases that are
not reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect on Bancwest or its Subsidiaries or have
been Previously Disclosed in Schedule 4.1(Z)(6).
(AA) TAX REPORTS. Except as Previously Disclosed in Schedule
4.1(AA), (1) all reports and returns with respect to Taxes that
are required to be filed by or with respect to Bancwest or its
Subsidiaries, including consolidated federal income tax returns
of Bancwest and its Subsidiaries (collectively, the "Tax
Returns"), have been duly filed, or requests for extensions have
been timely filed and have not expired, for periods ended on or
prior to the most recent fiscal year-end, except to the extent
all such failures to file, taken together, are not reasonably
likely to have a Material Adverse Effect on Bancwest or its
Subsidiaries, and such Tax Returns were true, complete and
accurate in all material respects, (2) all Taxes shown to be due
on the Tax Returns have been paid in full, (3) the Tax Returns
have been examined by the Internal Revenue Service or the
appropriate state, local or foreign taxing authority, or the
period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired, (4) all Taxes due
with respect to completed and settled examinations have been paid
in full, (5) no issues have been raised by the relevant taxing
authority in connection with the examination of any of the Tax
Returns which are reasonably likely, individually or in the
aggregate, to result in a determination that would have a
Material Adverse Effect on Bancwest or its Subsidiaries, except
as reserved against in the Holding Company Financial Reports of
Bancwest, and (6) no waivers of statutes of limitations
(excluding such statutes that relate to years under examination
by the Internal Revenue Service) have been given by or requested
with respect to any Taxes of Bancwest or its Subsidiaries.
(BB) ACCURACY OF INFORMATION. The statements with respect to
Bancwest and its Subsidiaries contained in this Plan and the
Stock Option Agreement, the Schedules and any other written
documents executed and delivered by or on behalf of Bancwest or
any other Party pursuant to the terms of or relating to this Plan
are true and correct in all material respects, and such
statements and documents do not omit any material fact necessary
to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
21
(CC) DERIVATIVES CONTRACTS. None of Bancwest or its
Subsidiaries is a party to or has agreed to enter into a
Derivatives Contract or owns securities that are referred to as
"structured notes" except for those Derivatives Contracts and
structured notes Previously Disclosed in Schedule 4.1(CC).
Schedule 4.1(CC) includes a list of any assets of Bancwest or its
Subsidiaries that are pledged as security for each such
Derivatives Contract.
(DD) ACCOUNTING CONTROLS. Each of Bancwest and its Subsidiaries
has devised and maintained systems of internal accounting
controls sufficient to provide reasonable assurances that (1) all
material transactions are executed in accordance with
management's general or specific authorization, (2) all material
transactions are recorded as necessary to permit the preparation
of financial statements in conformity with GAAP, and to maintain
proper accountability for items, (3) access to the material
property and assets of Bancwest and its Subsidiaries is permitted
only in accordance with management's general or specific
authorization, and (4) the recorded accountability for items is
compared with the actual levels at reasonable intervals and
appropriate action is taken with respect to any differences.
(EE) COMMITMENTS AND CONTRACTS. Neither Bancwest nor any of its
Subsidiaries is a party or subject to any of the following
(whether written or oral, express or implied):
(1) except for the Employment Agreement and as Previously
Disclosed in Schedule 4.1(EE)(1), any employment contract or
understanding (including any understandings or obligations with
respect to severance or termination pay liabilities or fringe
benefits) with any present or former officer, director or
employee (other than those which are terminable at will by
Bancwest or any such Subsidiary without any obligation on the
part of Bancwest or any such Subsidiary to make any payment in
connection with such termination);
(2) except as Previously Disclosed in Schedule 4.1(EE)(2), any
real or personal property lease with annual rental payments
aggregating $10,000 or more; or
(3) except as Previously Disclosed in Schedule 4.1(EE)(3), any
material contract with any affiliate.
(FF) OPTION SHARES. The Option Shares, if and when issued upon
exercise of the Option, will be validly issued, fully paid and
nonassessable and subject to no preemptive rights.
4.2 USBN REPRESENTATIONS AND WARRANTIES. USBN hereby represents
and warrants to Bancwest and Bank of the West as follows:
(A) RECITALS. The facts set forth in the Recitals of this Plan
with respect to USBN are true and correct.
(B) ORGANIZATION, STANDING AND AUTHORITY. USBN is duly
qualified to do business and is in good standing in the States of
the United States and foreign jurisdictions where the failure to
be duly qualified, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect on it. Each
of USBN and its Subsidiaries has in effect all federal state,
local, and foreign governmental authorizations necessary for it
to own or lease its properties and assets and to carry on its
business as it is now conducted, the absence of which,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect on USBN.
22
(C) SHARES. The outstanding shares of USBN's capital stock are
validly issued and outstanding, fully paid and nonassessable, and
subject to no preemptive rights. Except as Previously Disclosed
in Schedule 4.2(C), there are no shares of capital stock or other
equity securities of it or its Subsidiaries outstanding and no
outstanding Rights with respect thereto.
(D) CORPORATE POWER. USBN has the corporate power and authority
to carry on its business as it is now being conducted and to own
all its material properties and assets.
(E) CORPORATE AUTHORITY. This Plan and the Stock Option
Agreement have been authorized by all necessary corporate action
of USBN and such agreement is a valid and binding agreement of
USBN, enforceable against USBN in accordance with its terms,
subject to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles.
(F) NO DEFAULTS. Subject to receipt of the required regulatory
approvals referred to in Section 6.1, and the required filings
under federal and state securities laws, and except as Previously
Disclosed in Schedule 4.2(F), the execution, delivery and
performance of this Plan, Stock Option Agreement, and
the Employment Agreement and the consummation by USBN and each of
its Subsidiaries that is a Party of the transactions contemplated
by this Plan does not and will not (1) constitute a breach or
violation of, or a default under, any law, rule or regulation or
any judgment, decree, order, governmental permit or license, or
agreement, indenture or instrument of USBN or of any of its
Subsidiaries or to which USBN or any of its Subsidiaries or its
or their properties is subject or bound, which breach, violation
or default is reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect on USBN, (2)
constitute a breach or violation of, or a default under, the
articles of incorporation, charter or bylaws of USBN or any of
its Subsidiaries, or (3) require any consent or approval under
any such law, rule, regulation, judgment, decree, order,
governmental permit or license or the consent or approval of any
other party to any such agreement, indenture or instrument, other
than any such consent or approval that, if not obtained, would
not be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect on USBN.
(G) FINANCIAL REPORTS. Except as Previously Disclosed in
Schedule 4.2(G), its Annual Report on Form 10-K for the fiscal
year ended December 31, 1997, and all other documents filed or to
be filed subsequent to December 31, 1997 under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, in the form filed with
the SEC (in each such case, the "USBN Financial Reports"), did
not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; and
each of the balance sheets in or incorporated by reference into
the USBN Financial Reports (including the related notes and
schedules thereto) fairly presents and will fairly present the
financial position of the entity or entities to which it relates
as of its date, and each of the statements of income and changes
in shareholders' equity and cash flows or equivalent statements
in the USBN Financial Reports (including any related notes and
schedules thereto) fairly presents and will fairly present the
results of operations, changes in shareholders, equity and
changes in cash flows, as the case may be, of the entity or
entities to which it relates for the periods set forth therein,
in each case in accordance with GAAP, except as may be noted
therein, subject to normal and recurring year-end audit
23
adjustments in the case of unaudited statements.
(H) NO EVENTS. Except as Previously Disclosed on Schedule
4.2(H), since December 31, 1997, no event has occurred which is
reasonably likely to have a Material Adverse Effect on it.
(I) LITIGATION; REGULATORY ACTION. Except as Previously
Disclosed in Schedule 4.2(I) no litigation, proceeding or
controversy before any court or governmental agency is pending
that, individually or in the aggregate, is reasonably likely to
have a Material Adverse Effect on USBN or its Subsidiaries or
that alleges claims under any fair lending law or other law
relating to discrimination, including the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment
Act and the Home Mortgage Disclosure Act, and, to the best of its
knowledge, no such litigation, proceeding or controversy has been
threatened; and except as Previously Disclosed in
Schedule 4.2(I), neither USBN nor any of its Subsidiaries or any
of its or their material properties or their officers, directors
or controlling persons is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission
to, any Regulatory Authority, and neither USBN nor any of its
Subsidiaries has been advised by any of such Regulatory
Authorities that such authority is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum or
understanding, commitment letter or similar submission.
(J) REPORTS. Since January 1, 1996, each of USBN and its
Subsidiaries has filed all reports and statements, together with
any amendments required to be
made with respect thereto, that it was required to file with (1)
the FDIC, (2) the Department, (3) the Federal Reserve Board, and
(4) any other Regulatory Authorities having jurisdiction with
respect to USBN and its Subsidiaries. As of their respective
dates (and without giving effect to any amendments or
modifications filed after the date of this Plan with respect to
reports and documents filed before the date of this Plan), each
of such reports and documents, including the financial
statements, exhibits and schedules thereto, complied in all
material respects with all of the statutes, rules and regulations
enforced or promulgated by the Regulatory Authority with which
they were filed and did not contain any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(K) ACCURACY OF INFORMATION. The statements with respect to
USBN and its Subsidiaries contained in this Plan, the Schedules
and any other written documents executed and delivered by or on
behalf of USBN or any other Party pursuant to the terms of this
Plan are true and correct in all material respects, and such
statements and documents do not omit any material fact necessary
to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
(L) DERIVATIVES CONTRACTS. None of USBN or its Subsidiaries is
a party to or has agreed to enter into a Derivatives Contract or
owns securities that are referred to as "structured notes" except
for those Derivatives Contracts and structured notes Previously
Disclosed in Schedule 4.2(L). Schedule 4.2(L) includes a list of
any assets of USBN or its Subsidiaries that are pledged as
security for each such Derivatives Contract.
24
(M) ABSENCE OF UNDISCLOSED LIABILITIES. Neither USBN nor any of
its Subsidiaries has any obligation or liability (contingent or
otherwise) that, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect on it, except (1) as
reflected the USBN Financial Reports prior to the date of this
Plan, and (2) for commitments and obligations made, or
liabilities incurred, in the ordinary course of business
consistent with past practice since December 31, 1997. Since
December 31, 1997, neither USBN nor any of its Subsidiaries has
incurred or paid any obligation or liability (including any
obligation or liability incurred in connection with any
acquisitions in which any form of direct financial assistance of
the federal government or any agency thereof has been provided to
any Subsidiary) that, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect on it.
V. COVENANTS
Each of Bancwest and Bank of the West hereby covenants to USBN,
and USBN hereby covenants to Bancwest and Bank of the West, that:
5.1 BEST EFFORTS. Subject to the terms and conditions of this
Plan and, in the case of Bancwest and Bank of the West, to the
exercise by their respective Boards of Directors of such Boards'
fiduciary duties, each party shall use its best efforts in good
faith to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or desirable, or
advisable under applicable laws, so as to permit consummation of
the Merger by January 31, 1999, and to otherwise enable
consummation of the transactions contemplated by this Plan and
the Stock Option Agreement, and shall cooperate fully with the
other Parties to that end (it being understood that any
amendments to the Registration Statement or a resolicitation of
proxies as a consequence of a USBN Transaction shall not violate
this covenant).
5.2 THE PROXY. In the case of Bancwest: it shall promptly
assist USBN in the preparation of a joint proxy statement (the
"Proxy Statement") to be mailed to the holders of Bancwest Common
Stock and USBN Common Stock in connection with the transactions
contemplated by this Plan and to be filed by USBN in a
registration statement (the "Registration Statement") with the
SEC as provided in Section 5.7, which shall conform to all
applicable legal requirements. Bancwest shall call a meeting
(the "Bancwest Meeting") of the holders of Bancwest Common Stock
to be held as soon as practicable for purposes of voting upon the
transactions contemplated by this Plan and Bancwest shall use its
best efforts to solicit and obtain votes of the holders of
Bancwest Common Stock in favor of the transactions contemplated
by this Plan and, subject to the exercise of its fiduciary
duties, the Board of Directors of Bancwest shall recommend
approval of such transactions by such holders. USBN shall call a
meeting (the "USBN Meeting") of the holders of USBN Common Stock
to be held as soon as practicable for purposes of voting upon the
transactions contemplated by this Plan and USBN shall use its
best efforts to solicit and obtain votes of the holders of USBN
Common Stock in favor of the transactions contemplated by this
Plan and, subject to the exercise of its fiduciary duties, the
Board of Directors of USBN shall recommend approval of such
transactions by such holders.
5.3 REGISTRATION STATEMENT COMPLIANCE WITH SECURITIES LAWS. When
the Registration Statement or any post-effective amendment or
supplement thereto shall become effective, and at all times
subsequent to such effectiveness, up to and including the date of
the Bancwest Meeting and the USBN Meeting (collectively, the
"Meetings"), such Registration Statement, and all
25
amendments or supplements thereto, with respect to all
information set forth therein furnished or to be furnished by or
on behalf of Bancwest relating to Bancwest or its Subsidiaries
and by or on behalf of USBN relating to USBN or its Subsidiaries,
(A) will comply in all material respects with the provisions of
the Securities Act and any other applicable statutory or
regulatory requirements, and (B) will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
contained therein not misleading; provided, however, in no event
shall any Party be liable for any untrue statement of a material
fact or omission to state a material fact in the Registration
Statement made in reliance upon, and in conformity with, written
information concerning another Party furnished by or on behalf of
such other Party specifically for use in the Registration
Statement.
5.4 REGISTRATION STATEMENT EFFECTIVENESS. USBN will advise
Bancwest, promptly after USBN receives notice thereof, of the
time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any
stop order or the suspension of the qualification of the USBN
Common Stock for offering or sale in any jurisdiction, of the
initiation or threat of any proceeding for any such purpose, or
of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information.
5.5 PRESS RELEASES. Bancwest and Bank of the West will not,
without the prior approval of USBN, and USBN will not, without
the prior approval of Bancwest, issue any press release or
written statement for general circulation relating to the
transactions contemplated by this Plan, except as otherwise
required by law.
5.6 ACCESS; INFORMATION.
(A) Upon reasonable notice, Bancwest and Bank of the West shall
afford USBN and its officers, employees, counsel, accountants and
other authorized representatives, access, during normal business
hours throughout the period up
to the Effective Date, to all of the properties, books,
contracts, commitments
and records of Bancwest and its Subsidiaries and, during such
period, Bancwest and Bank of the West shall furnish promptly (and
cause its accountants and other agents to furnish promptly) to
USBN (1) a copy of each material report, schedule and other
document filed by Bancwest and its Subsidiaries with any
Regulatory Authority, (2) such representations and certifications
as are necessary for purposes of the pooling letter described in
Section 6.1(H), and (3) all other information concerning the
business, properties and personnel of Bancwest and its
Subsidiaries as USBN may reasonably request, provided that no
investigation pursuant to this Section 5.6 shall affect or be
deemed to modify or waive any representation or warranty made by
Bancwest or Bank of the West in this Plan or the conditions to
the obligations of Bancwest and Bank of the West to consummate
the transactions contemplated by this Plan; and
(B) USBN will not use any information obtained pursuant to this
Section 5.6 for any purpose unrelated to the consummation of the
transactions contemplated by this Plan and, if this Plan is
terminated, will hold all information and documents obtained
pursuant to this paragraph in confidence (as provided in Section
8.6) unless and until such time as such information or documents
become publicly available other than by reason of any action or
failure to act by USBN or as it is advised by counsel that any
such information or document is required by law or applicable
stock exchange rule to be disclosed, and in the event of the
termination of this Plan, USBN will, upon request by
26
Bancwest, deliver to Bancwest all documents so obtained by USBN
or destroy such documents and, in the case of destruction, will
certify such fact to Bancwest.
5.7 REGISTRATION STATEMENT PREPARATION; REGULATORY APPLICATIONS
PREPARATION. USBN shall, as promptly as practicable following the
date of this Plan, prepare and file the Registration Statement
with the SEC with respect to the shares of USBN Common Stock to
be issued to the holders of Bancwest Common Stock pursuant to
this Plan, and USBN shall use its best efforts to cause the
Registration Statement to be declared effective as soon as
practicable after the filing thereof. USBN shall, as promptly as
practicable following the date of this Plan, prepare and file all
necessary notices or applications with Regulatory Authorities
having jurisdiction with respect to the transactions contemplated
by this Plan.
5.8 BLUE-SKY FILINGS. USBN shall use its best efforts to
obtain, prior to the effective date of the Registration
Statement, any necessary state securities laws or "blue sky"
permits and approvals, provided that USBN shall not be required
by virtue thereof to submit to general jurisdiction in any state.
5.9 AFFILIATE AGREEMENTS. Bancwest will use its best efforts to
induce each person who may be deemed to be an "affiliate" of
Bancwest for purposes of Rule 145 under the Securities Act, to
execute and deliver to USBN on or before the mailing of the Proxy
Statement for the Bancwest Meeting, an agreement in the form
attached hereto as Exhibit E restricting the disposition of such
affiliate's shares of Bancwest Common Stock, and, in the case of
"affiliates" of Bancwest, the shares of USBN Common Stock to be
received by such person in exchange for such person's shares of
Bancwest Common Stock. USBN agrees to use its best efforts to
maintain the availability of Rule 145 for use by such
"affiliates".
5.10 CERTAIN POLICIES OF BANCWEST AND BANK OF THE WEST.
Bancwest and Bank of the West, each shall, at USBN's request,
modify and change its loan, litigation and other reserve and real
estate valuation policies and practices (including loan
classifications and levels of reserves), and generally conform
its operating, lending and compliance policies and procedures,
immediately prior to the Effective Date so as to be consistent on
a mutually satisfactory basis with those of USBN and GAAP;
provided, however, that prior to any such modification or change,
USBN shall certify that the conditions to the obligation of USBN
under Section 6.1 and 6.2 to consummate the transactions
contemplated by this Plan have been satisfied or waived.
Bancwest's and Bank of the West's representations, warranties,
covenants and conditions contained in this Plan shall not be
deemed to be untrue, breached or unsatisfied in any respect for
any purpose as a consequence of any modifications or changes
undertaken pursuant to this Section 5.10.
5.11 STATE TAKEOVER LAW. Bancwest shall not take any action
that would cause the transactions contemplated by this Plan to be
subject to any applicable state takeover statute, and Bancwest
shall take all necessary steps to exempt (or ensure the continued
exemption of) the transactions contemplated by this Plan and the
Stock Option Agreement from, or, if necessary, challenge the
validity or applicability of, any applicable state takeover law.
5.12 NO RIGHTS TRIGGERED. Except for those consents of Third
Parties Previously Disclosed on Schedule 4.1(G), Bancwest shall
take all necessary steps to ensure that the entering into of this
Plan and the Stock Option
27
Agreement and the consummation of the transactions contemplated
by this Plan and the Stock Option Agreement (including the
Merger) and any other action or combination of actions, or any
other transactions contemplated by this Plan, do not and will not
(A) result in the grant of any rights to any Person under the
articles of incorporation or bylaws of Bancwest or under any
agreement to which Bancwest or any of its Subsidiaries is a
party, or (B) restrict or impair in any way the ability of USBN
to exercise the rights granted under this Plan or the Stock
Option Agreement.
5.13 SHARES LISTED. USBN shall use its best efforts to cause to
be listed, prior to the Effective Date, on the NASDAQ National
Market upon official notice of issuance the shares of USBN Common
Stock to be issued to the holders of Bancwest Common Stock.
5.14 REGULATORY APPLICATIONS. USBN shall (A) promptly prepare
and submit applications to the appropriate Regulatory Authorities
for approval of the Merger, and (B) promptly make all other
appropriate filings to secure all other approvals, consents and
rulings that are necessary for the consummation of the Merger by
USBN.
5.15 REGULATORY DIVESTITURES. In the case of Bancwest: No later
than the Effective Date, Bancwest shall cease engaging in such
activities as USBN shall advise Bancwest in writing are not
permitted to be engaged in by USBN under applicable law following
the Effective Date and, to the extent required by any Regulatory
Authority as a condition of approval of the transactions
contemplated by this Plan, Bancwest shall divest any Subsidiary
engaged in activities or holding assets that are impermissible
for USBN, on terms and conditions agreed to by USBN; provided,
however, that prior to taking such action, USBN shall certify
that the conditions to the obligations of USBN under Sections 6.1
and 6.2 to consummate the transactions contemplated by this Plan,
other than the condition set forth in Section 6.2(G) (which shall
be adjusted to the extent that assets are divested at less than
book value), have been satisfied or waived.
5.16 CURRENT INFORMATION.
(A) During the period from the date of this Plan to the
Effective Date, each of Bancwest and USBN shall, and shall cause
its representatives to, confer on a regular and frequent basis
with representatives of the other.
(B) Each of Bancwest and USBN shall promptly notify the other of
(1) any material change in the business or operations of it or
its Subsidiaries, (2) any material complaints, investigations or
hearings (or communications indicating
28
that the same may be contemplated) of any Regulatory Authority
relating to it or its Subsidiaries, (3) the initiation or threat
of material litigation involving or relating to it or its
Subsidiaries, or (4) any event or condition that might reasonably
be expected to cause any of its representations or warranties set
forth in this Plan not to be true and correct in all material
respects as of the Effective Date or prevent it or its
Subsidiaries from fulfilling its or their obligations under this
Plan.
5.17 INDEMNIFICATION.
(A) For a period of four years from and after the Effective
Date, USBN will indemnify, defend and hold harmless the present
and former directors and officers of Bancwest and the Bank (each,
an "Indemnified Party") against all costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims,
damages or liabilities incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, and arising out of
matters existing or occurring at or prior to the Effective Date
(including the transactions contemplated by this Plan), whether
asserted or claimed prior to, at or after the Effective Date, to
the fullest extent that Bancwest and/or the Bank would have been
permitted under Washington and federal law and their respective
articles of incorporation or bylaws in effect on the date of this
Plan to indemnify such person (and USBN will also advance
expenses as incurred to the fullest extent permitted under
applicable law so long as the person to whom expenses are
advanced provides an undertaking to repay such advances within a
reasonable period of time if it is ultimately determined that
applicable law does not allow for such indemnification).
(B) Any Indemnified Party wishing to claim indemnification under
paragraph (A) of this Section 5.17, upon learning of such claim,
action, suit, proceeding or investigation, will promptly notify
USBN of the same, provided, however, that the failure so to
notify will not affect the obligations of USBN under paragraph
(A) of this Section 5.17 (unless such failure materially and
adversely increases USBN's liability under such paragraph (A)).
In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective
Date), (1) USBN will have the right to assume the defense and
USBN will pay all reasonable fees and expenses of such counsel
for the Indemnified Parties promptly as statements for payment
are received; provided, however, that USBN will be obligated
pursuant to this paragraph (B) to pay for only one firm of
counsel for all Indemnified Parties in any jurisdiction for any
single action, suit or proceeding, (2) the Indemnified Parties
will cooperate in the defense of any such matter, and (3) USBN
will not be liable for any settlement effected without its prior
written consent.
(C) If USBN or any of its successors or assigns will consolidate
with or merge into any other entity and will not be the
continuing or surviving entity of such consolidation or merger or
will transfer all or substantially all of its assets to any
entity, then and in each case, proper provision will be made so
that the successors and assigns of USBN will assume the
obligations set forth in this Section 5.17.
(D) USBN will pay all expenses, including attorneys' fees, that
may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section
5.17. The rights of each Indemnified Party under this Section
5.17 will be in addition to any other rights such Indemnified
Party may have under the articles of association or bylaws of
Bancwest or the Bank or under applicable Washington and federal
law.
29
5.18 BOARDS OF DIRECTORS OF USBN AND BANK OF THE WEST.
(A) USBN shall, prior to the Effective Date, make such
amendments to its Bylaws as may be necessary to facilitate the
appointment of three members of the Board of Directors of
Bancwest, selected by the Board of Bancwest and approved by the
Board of USBN (the "Bancwest Directors"), to serve on USBN's
Board of Directors following the Effective Date. Immediately
after the Effective Date, USBN shall appoint the Bancwest
Directors to the Board of Directors of USBN to serve in such
capacity until such time as their successors are elected and
qualified.
(B) Immediately after the Effective Date, the Board of Directors
of Bank of the West shall be comprised of the directors of Bank
of the West immediately prior to the Effective Date plus two
additional directors designated by USBN, all of whom shall serve
as directors until such time as their successors are elected and
qualified.
5.19 ACQUISITION PROPOSALS. Bancwest agrees that neither it nor
any of its Subsidiaries shall, and Bancwest shall direct and use
its best efforts to cause its directors, officers, employees,
agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any
of its Subsidiaries) not to, initiate, solicit, encourage or take
any other action to facilitate any inquiries or the making of any
proposal or offer (including, without limitation, any proposal or
offer to stockholders of Bancwest) with respect to a merger,
consolidation or similar transaction involving, or any purchase
of all or any significant portion of the assets or equity
securities of, Bancwest or any of its Subsidiaries (any such
proposal or offer being hereinafter referred to as an
"Acquisition Proposal") or, except to the extent legally required
for the discharge by the board of directors of its fiduciary
duties as advised in writing by such board's counsel, engage in
any negotiations concerning, or provide any confidential
information or data to any Person relating to, an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make
or implement an Acquisition Proposal. Bancwest will immediately
cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. Bancwest will take the
necessary steps to inform the appropriate individuals or entities
referred to in the first sentence hereof of the obligations
undertaken in this Section 5.19 of this Plan. Bancwest will
notify USBN immediately if any such inquiries or proposals are
received by, any such information is requested from, or any such
negotiations are sought to be initiated or continued with
Bancwest.
5.20 POST-MERGER ACTIONS. Following the Merger, neither USBN
nor any of its affiliates shall take any action that will
adversely affect the federal income tax treatment of the Merger
to the shareholders of Bancwest, including failing to continue at
least one historic business line of Bancwest or to use at least a
significant portion of Bancwest's historic assets in a business,
in each case within the meaning of Treas. Reg. 1.368-1(d).
VI. CONDITIONS TO CONSUMMATION OF THE MERGER
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each Party to consummate the transactions
contemplated by this Plan are subject to the written waiver by
such Party or the fulfillment on or prior to the Effective Date
of each of the following conditions:
(A) SHAREHOLDER VOTES. This Plan shall have been duly approved
by the requisite vote of the shareholders of Bancwest and USBN
under applicable law and the articles of incorporation and bylaws
of Bancwest and USBN, respectively.
30
(B) REGULATORY APPROVALS. The Parties shall have procured all
necessary regulatory consents and approvals by the appropriate
Regulatory Authorities, and any waiting periods relating thereto
shall have expired; provided, however, that no such approval or
consent shall have imposed any condition or requirement not
normally imposed in such transactions that, in the opinion of
USBN, would deprive USBN of the material economic or business
benefits of the transactions contemplated by this Plan.
(C) NO INJUNCTION. There shall not be in effect any order,
decree or injunction of any court or agency of competent
jurisdiction that enjoins or prohibits consummation of any of the
transactions contemplated by this Plan.
(D) EFFECTIVE REGISTRATION STATEMENT. The Registration
Statement shall have become effective and no stop order
suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have
been initiated or threatened by the SEC or any other Regulatory
Authority.
(E) BLUE-SKY PERMITS. USBN shall have received all state
securities laws and "blue sky" permits necessary to consummate
the Merger.
(F) TAX OPINION. USBN and Bancwest shall have received an
opinion from ▇▇▇▇▇▇ & ▇▇▇▇, P.C. to the effect that (1) the
Merger constitutes a reorganization under Section 368 of the
Code, and (2) no gain or loss will be recognized by shareholders
of Bancwest who receive shares of USBN Common Stock in exchange
for their shares of Bancwest Common Stock, except that gain or
loss may be recognized as to cash received in lieu of fractional
share interests, and, in rendering their opinion, ▇▇▇▇▇▇ & ▇▇▇▇,
P.C. may require and rely upon representations contained in
certificates of officers of USBN, Bancwest and others.
(G) NASDAQ LISTING. The shares of USBN Common Stock to be
issued pursuant to this Plan shall have been approved for listing
on the NASDAQ National Market subject only to official notice of
issuance.
(H) POOLING LETTER. USBN shall have received a letter from ▇▇▇▇
▇▇▇▇▇, LLP, dated as of the date of this Plan and as of the
Effective Date, in form and substance acceptable to USBN, to the
effect that the Merger will qualify for pooling of interests
accounting treatment.
6.2 CONDITIONS TO OBLIGATIONS OF USBN. The obligations of USBN
to consummate the transactions contemplated by this Plan also are
subject to the written waiver by USBN or the fulfillment on or
prior to the Effective Date of each of the following conditions:
(A) LEGAL OPINION. USBN shall have received an opinion, dated
the Effective Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P., counsel for
Bancwest and Bank of the West, in the form of Exhibit F.
(B) OFFICERS' CERTIFICATE. (1) Each of the representations and
warranties contained in this Plan of Bancwest and Bank of the
West shall be true and correct in all material respects as of the
date of this Plan and upon the Effective Date with the same
effect as though all such representations and warranties had been
made on the Effective Date, except for (a) any such
representations and warranties that specifically relate to an
earlier date, which shall be true and correct as of such earlier
date and except as otherwise provided in Section 5.10 and (b) any
such representations and
31
warranties that are qualified by reference to "Material Adverse
Effect", which representations and warranties shall be true in
all respects, and (2) each and all of the agreements and
covenants of Bancwest and Bank of the West to be performed and
complied with pursuant to this Plan on or prior to the Effective
Date shall have been duly performed and complied with in all
material respects, and USBN shall have received a certificate
signed by the chief executive officers, chief financial
officer/chief lending officer of Bancwest and Bank of the West
dated the Effective Date, to such effect.
(C) RECEIPT OF AFFILIATE AGREEMENTS. USBN shall have received
from each affiliate of Bancwest the agreement referred to in
Section 5.9.
(D) ADVERSE CHANGE. During the period from December 31, 1997 to
the Effective Date, there shall not have been any material
adverse change in the financial position or results of operations
of Bancwest or Bank of the West, nor shall Bancwest or Bank of
the West have sustained any loss or damage to its properties,
whether or not insured, nor shall there have been any other
event, occurrence or circumstance which would have a Material
Adverse Effect upon its ability to conduct its business; and USBN
shall have received a certificate dated the Effective Date signed
by the Chief Executive Officers of Bancwest and Bank of the West
to such effect.
(E) DISSENTERS' RIGHTS. The number of shares of Bancwest Common
Stock for which cash is to be paid because dissenters' rights of
appraisal under the Appraisal Laws shall have been effectively
preserved as of the Effective Date or because of the payment of
cash in lieu of fractional shares of USBN Common Stock shall not
exceed in the aggregate 10% of the outstanding shares of Bancwest
Common Stock.
(F) CAPITAL. Bancwest's Capital shall not be less than $11.9
million (not including capital contributions upon exercise of
outstanding Bancwest Options) on the Effective Date.
(G) ALLOWANCE FOR LOAN AND LEASE LOSSES. Bank of the West's
allowance for possible loan and lease losses shall not be less
than 1.00% of Bank of the West's total outstanding loans and
leases and will be adequate under GAAP (based on USBN's
reasonable analysis).
(H) EMPLOYMENT CONTRACT. The Employment Agreement attached as
Exhibit D shall have been duly executed and delivered by all
parties to such Employment Agreement.
(I) AUDIT. Bancwest shall have delivered to USBN the audited
consolidated balance sheet of Bancwest as at December 31, 1997,
and the related audited consolidated statements of income,
changes in stockholders' equity, and cash flow for the fiscal
year then ended, together with the unqualified report on such
financial statements of ▇▇▇▇ ▇▇▇▇▇ L.L.P., independent certified
public accountants, and such financial statements shall fairly
present the consolidated financial condition and the results of
operations, changes in stockholders' equity, and cash flow of
Bancwest as at the date of and for the period referred to in such
financial statements, all in accordance with GAAP and reflecting
the consistent application of such accounting principles
throughout the period involved.
(J) FAIRNESS OPINION. USBN shall have received, immediately
prior to the mailing of the Proxy Statement to Bancwest's
shareholders, an opinion of Pacific Crest Securities to the
effect that the financial terms of the Merger are fair from a
financial point of view to USBN's shareholders.
6.3 CONDITIONS TO OBLIGATIONS OF BANCWEST AND BANK OF THE WEST.
The obligations of Bancwest and Bank of the West to consummate
the transactions contemplated by this Plan also are subject to
the written waiver by Bancwest and Bank of the West or the
fulfillment on or prior to the Effective Date of each of the
following conditions:
32
(A) LEGAL OPINION. Bancwest and Bank of the West shall have
received an opinion, dated the Effective Date, of ▇▇▇▇▇▇ & ▇▇▇▇,
P.C., counsel for USBN, in the form of Exhibit G.
(B) OFFICER'S CERTIFICATE. (1) Each of the representations and
warranties of USBN contained in this Plan shall be true and
correct in all material respects as of the date of this Plan and
upon the Effective Date with the same effect as though all such
representations and warranties had been made on the Effective
Date, except for (a) any such representations and warranties that
specifically relate to an earlier date, which shall be true and
correct as of such earlier date and (b) any such representations
and warranties that are qualified by reference to "Material
Adverse Effect", which representations and warranties shall be
true in all respects, and (2) each and all of the agreements and
covenants of USBN to be performed and complied with pursuant to
this Plan on or prior to the Effective Date shall have been duly
performed and complied with in all material respects, and
Bancwest shall have received a certificate signed by an executive
officer of USBN dated the Effective Date, to such effect.
(C) ADVERSE CHANGE. During the period from December 31, 1997 to
the Effective Date, there shall not have been any material
adverse change in the financial position or results of operations
of USBN nor shall USBN have sustained any loss or damage to its
properties, whether or not insured, that materially affects its
ability to conduct its business; and Bancwest shall have received
a certificate dated the Effective Date signed by the Chief
Executive Officer of USBN to such effect.
(D) FAIRNESS OPINION. Bancwest shall have received, immediately
prior to the mailing of the Proxy Statement to Bancwest's
shareholders, an opinion of Columbia Financial Advisors, Inc., to
the effect that the financial terms of the Merger are fair from a
financial point of view to Bancwest's shareholders.
VII. TERMINATION
7.1 EVENTS OF TERMINATION. This Plan may be terminated prior to
the Effective Date, either before or after receipt of required
shareholder approvals:
(A) MUTUAL CONSENT. By the mutual consent of USBN and Bancwest,
if the Board of Directors of each so determines by vote of a
majority of the members of its entire board.
(B) BREACH. By USBN or Bancwest, if its Board of Directors so
determines by vote of a majority of the members of its entire
Board, in the event of (A) a material breach by the other Party
of any representation or warranty contained herein, which breach
cannot be or has not been cured within 30 days after the giving
of written notice to the breaching Party of such breach, or (B) a
breach by the other party of any of the material covenants or
agreements contained, which breach cannot be or has not been
cured within 30 days after the giving of written notice to the
breaching Party of such breach.
(C) DELAY. By USBN or Bancwest in the event the Merger is not
consummated by June 30, 1999, unless the failure of the
consummation of the transactions to occur shall be due to the
failure of the Party seeking to terminate this Merger Agreement
to perform its obligations hereunder in a timely manner;
provided, however, that USBN may not terminate the Merger
Agreement pursuant to this Section 7.1(C), if such delay results
solely from (a) amendments to the Registration Statement or a
resolicitation of proxies as a consequence of a USBN Transaction,
or any other acquisition or sale transaction, or any offering of
33
securities, in which USBN is involved, or (b) a change in the
method of acquisition pursuant to Section 2.7; and provided,
further, that a party may not terminate the Merger Agreement
pursuant to this Section 7.1(C) if it is in material breach of
any of the provisions of the Merger Agreement.
(D) NO SHAREHOLDER APPROVAL. By USBN or Bancwest, if its Board
of Directors so determines by a vote of a majority of the members
of its entire Board, in the event that the shareholder approvals
contemplated by Section 6.1 are not obtained at the Meetings,
including any adjournment or adjournments the Meetings.
(E) AVERAGE CLOSING PRICE BELOW $12.50. By Bancwest, on or
before the fifth day after the end of the trading period used to
determine the Average Closing Price, if the Average Closing
Price, subject to adjustment as provided in Section 2.5 hereof,
is less than $12.50 and USBN, in its sole discretion, does not
elect by written notice to Bancwest prior to such fifth day to
increase the Exchange Ratio (as so increased, the "Adjusted
Exchange Ratio") so that the Average Closing Price multiplied by
the Adjusted Exchange Ratio equals the product of the Exchange
Ratio multiplied by $12.50.
(F) FIDUCIARY DUTIES. By Bancwest, if its Board of Directors,
after receiving advice of counsel, determines in its good faith
that it is required to do so in order to discharge its fiduciary
duties, shall withdraw or modify or resolve to withdraw or modify
its recommendation that the shareholders vote in favor of the
Merger.
7.2 CONSEQUENCES OF TERMINATION.
(A) GENERAL CONSEQUENCES. Subject to Section 7.3 and Section
8.5, in the event of the termination or abandonment of this Plan
pursuant to the provisions of Section 7.1, this Plan shall become
void and have no force or effect, without any liability on the
part of the Parties or any of their respective directors or
officers or shareholders with respect to this Plan.
(B) ENFORCEMENT PROCEEDINGS. In any action or proceeding in
connection with the enforcement of this Plan, the prevailing
party will be entitled to reasonable attorneys' fees and
expenses.
7.3 TERMINATION FEE. The parties hereby acknowledge that, in
negotiating and executing this Plan and in taking the steps
necessary or appropriate to effect the transaction contemplated
hereby, USBN and Bancwest have each incurred and will incur
direct and indirect monetary and other costs (including without
limitation attorneys' fees and costs of their respective employee
and management time) and will forego discussions with respect to
other potential transactions.
(A) To compensate USBN for such costs and to induce it to forego
initiating discussions regarding other transactions and as
liquidated damages, if (i) this Plan terminates because Bancwest
does not use its best efforts to consummate the transactions
contemplated by this Plan in accordance with the terms of this
Plan (unless a condition set forth in Section 6.1 or Section 6.3
is not satisfied and such nonsatisfaction has not been the result
of the failure of Bancwest to use its best efforts to consummate
this Plan in accordance with the terms of this Plan), or (ii)
Bancwest terminates this Plan for any reason other than the
grounds for termination set out in Section 7.1(A), 7.1(B), or
7.1(C), then Bancwest shall be obligated to pay USBN on demand
(and in no event more than three days after such demand) in
immediately available funds $500,000. It is further understood
and agreed that the fee payable under this Section shall be due
and owing even though the event or condition which caused the fee
to be payable was the result (in part or in whole) of the
directors of Bancwest complying with their fiduciary duties.
34
(B) To compensate Bancwest for such costs and to induce it to
forego initiating discussions regarding other transactions and as
liquidated damages, if (i) this Plan terminates because USBN does
not use its best efforts to consummate the transactions
contemplated by this Plan in accordance with the terms of this
Plan (unless a condition set forth in Section 6.1 or 6.2 is not
satisfied and such nonsatisfaction has not been the result of the
failure of USBN to use its best efforts to consummate this Plan
in accordance to the terms of this Plan), or (ii) USBN terminates
this Plan for any reason other than the grounds for termination
set out in Section 7.1(A), 7.1(B), or 7.1(C), then USBN shall be
obligated to pay Bancwest on demand (and in no event more than
three days after such demand) in immediately available funds
$500,000.
VIII. OTHER MATTERS
8.1 SURVIVAL. Only those agreements and covenants in this Plan
that by their express terms apply in whole or in part after the
Effective Date shall survive the Effective Date. All other
representations, warranties, and covenants shall be deemed only
to be conditions of the Merger and shall not survive the
Effective Date. If the Merger is abandoned and this Plan is
terminated, the provisions of Article VII shall apply and the
agreements of the Parties in Sections 7.3, 8.5 and 8.6 shall
survive such abandonment and termination.
8.2 WAIVER; AMENDMENT. Prior to the Effective Date, any
provision of this Plan may be (A) waived in writing by the Party
benefited by the provision, or (B) amended or modified at any
time (including the structure of the transactions contemplated by
this Plan) by an agreement in writing among the Parties approved
by their respective Boards of Directors and executed in the same
manner as this Plan, except that, after the vote by the
shareholders of Bancwest and USBN, the consideration to be
received by the shareholders of Bancwest for each share of
Bancwest Common Stock shall not thereby be altered. Nothing
contained in this Section 8.2 is intended to modify USBN's rights
pursuant to Section 2.7.
8.3 COUNTERPARTS. This Plan may be executed in one or more
facsimile counterparts, each of which shall be deemed to
constitute an original. This Plan shall become effective when
one counterpart has been signed by each Party.
8.4 GOVERNING LAW. This Plan shall be governed by, and
interpreted in accordance with, the laws of the State of
Washington, except as federal law may be applicable.
8.5 EXPENSES. Each Party will bear all expenses incurred by it
in connection with this Plan and the transactions contemplated by
this Plan, except printing expenses which shall be shared equally
between Bancwest and USBN. In the event of termination of this
Plan pursuant to Section 7.1(A) or 7.1(D) or if Bancwest does not
consummate the Merger because one or more of the conditions set
forth in Section 6.3(A), 6.3(B) or 6.3(C) has not been satisfied,
Bancwest and USBN will share equally the expenses incurred by
Bancwest in obtaining audited financial statements for the
purposes of the Merger.
8.6 CONFIDENTIALITY. Except as otherwise provided in Section
5.6(B), each of the Parties and their respective agents,
attorneys and accountants will maintain the confidentiality of
all information provided in connection herewith which has not
been publicly disclosed.
8.7 NOTICES. All notices, requests and other communications
hereunder to a "Party" shall be in writing and shall be deemed to
have been duly given when delivered by hand, telegram, certified
or registered mail, overnight courier, telecopy or telex
(confirmed in writing) to such Party at its address set forth
below or such other address as such Party may specify by notice
to the Parties.
35
If to USBN, to:
United Security Bancorporation
N. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Copies to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Bancwest or Bank of the West, to:
BANCWEST FINANCIAL CORPORATION
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Copies to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, L.L.P.
Suite 3200
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
8.8 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This
Plan and the Stock Option Agreement represents the entire
understanding of the Parties with reference to transactions
contemplated by this Plan and the Stock Option Agreement and
supersede any and all other oral or written agreements previously
made. Nothing in this Plan, expressed or implied, is intended to
confer upon any Person, other than the Parties or their
respective successors, any rights, remedies, obligations or
liabilities under or by reason of this Plan or the Stock Option
Agreement.
8.9 BENEFIT PLANS. From and after the Effective Date, employees
of Bancwest and its Subsidiaries shall be entitled to participate
in the Employee Stock Ownership Plan, employee benefit and
similar plans (including stock option, bonus or other incentive
plans) of the Continuing Corporation and its Subsidiaries so that
employees of Bancwest and its Subsidiaries shall, following the
Merger, receive total compensation substantially comparable to
that received immediately prior to the Merger. For the purpose
of determining eligibility to participate in such plans and the
vesting of benefits under any USBN plans (but not for the accrual
of benefits), USBN shall give effect to years of service with
Bancwest or Bancwest's Subsidiaries, as the case may be, as if
such service were with USBN or its Subsidiaries. Employees of
Bancwest and its Subsidiaries will be entitled to carry over
unused vacation days and sick leave accrued as of the Effective
Date. Upon consummation of the Merger, all employees of Bancwest
and its Subsidiaries shall be deemed to be at-will employees of
USBN and its Subsidiaries, except for ▇▇▇ ▇▇▇▇▇▇, who is party to
the Employment Agreement, and any other employees who enter into
written employment agreements with USBN or its Subsidiaries.
36
8.10 HEADINGS. The headings contained in this Plan are for
reference purposes only and are not part of this Plan.
IN WITNESS WHEREOF, the Parties have caused this instrument
to be executed in counterparts by their duly authorized officers,
all as of the day and year first above written.
UNITED SECURITY FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its Chairman
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its President and Chief Executive Officer
BANCWEST BANCORPORATION
By: ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
Its President and Chairman
BANK OF THE WEST
By: /s/ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
Its President and Chief Executive Officer
37
