AGREEMENT AND PLAN OF MERGER dated as of June 15, 2006 by and among FCB BANCORP, NATIONAL MERCANTILE BANCORP and FIRST CALIFORNIA FINANCIAL GROUP, INC.
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
dated as of June 15, 2006
by and among
NATIONAL MERCANTILE BANCORP
and
FIRST CALIFORNIA FINANCIAL GROUP, INC.
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EXHIBIT A
|
Form of Amended and Restated Certificate of Incorporation | |
EXHIBIT B
|
[Intentionally Omitted] | |
EXHIBIT C
|
Officers and Directors of Surviving Corporation | |
EXHIBIT D
|
Form of Affiliate Letter | |
EXHIBIT E
|
Form of Employment Agreement | |
EXHIBIT F
|
Form of Shareholder Agreement and List of Shareholders | |
EXHIBIT G
|
Certain Features of the Surviving Corporation’s Bank Subsidiaries | |
EXHIBIT H
|
[Intentionally Omitted] | |
EXHIBIT I
|
Form of Letter Agreement |
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AGREEMENT AND PLAN OF MERGER, dated as of June 15, 2006 (this “Agreement”), by and among FCB
Bancorp, a California corporation (“FCB”), National Mercantile Bancorp, a California corporation
(“NMB”), and First California Financial Group, Inc., a Delaware corporation and a wholly-owned
subsidiary of NMB (“Merger Sub”).
RECITALS
A. The Proposed Transaction. This Agreement provides for a business combination to be
effected through a merger of NMB with and into Merger Sub (the “Reincorporation Merger”) and
immediately thereafter the merger of FCB with and into Merger Sub (the “Primary Merger” and,
together with the Reincorporation Merger, the “Mergers”), with Merger Sub as the surviving
corporation in both Mergers.
B. Board Approvals. The respective boards of directors of FCB, NMB and Merger Sub have each
determined that the Merger, the Reincorporation Merger and the other transactions contemplated
hereby are consistent with, and in furtherance of, their respective business strategies and goals
and are in the best interests of their respective shareholders.
C. Intended Tax Treatment. For federal income tax purposes, the parties intend that each of
the Mergers will be treated as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder
(the “Code”).
D. Employment Agreement. C. G. Kum (the “Executive”) is concurrently entering into an
employment agreement in the form of Exhibit E hereto (the “Employment Agreement”) with the
Surviving Corporation, effective as of the Primary Merger Effective Time (as defined in Section
2.3).
E. Shareholders Agreements. As a condition to, and simultaneously with, the execution of this
Agreement, each shareholder of the parties identified on Exhibit F hereto (collectively, the
“Shareholders”) is entering into an agreement pursuant to which each Shareholder has agreed, upon
the terms and conditions set forth therein, among other things, to vote his or her shares in favor
of the applicable merger proposal.
F. Letter Agreement. As a condition to, and simultaneously with, the execution of this
Agreement, Xxxxx Xxxxxxxxxx is entering into a letter agreement in the form of Exhibit I hereto
with NMB that contains, among other things, a non-solicitation covenant.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations,
warranties and agreements contained herein, the parties agree as follows:
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ARTICLE I
Definitions; Interpretations
1.01. Certain Definitions. The following terms are used in this Agreement with the meanings
set forth below:
“Acquisition Proposal,” with respect to either FCB or NMB, means any tender or exchange offer
or proposal for a merger, consolidation or other business combination involving FCB or NMB, as the
case may be, or any of their respective Significant Subsidiaries or any proposal or offer to
acquire in any manner more than 15% of the voting power in, or more than 15% of the consolidated
assets or deposits of, FCB or NMB, as the case may be, in each case other than the transactions
contemplated by this Agreement.
“Agreement” means this Agreement, as amended or modified from time to time in accordance with
Section 9.02.
“Agreement of Merger” has the meaning set forth in Section 2.03.
“Benefit Plans” has the meaning set forth in Section 5.03(n).
“California Secretary” means the Secretary of State of the State of California.
“Closing” has the meaning set forth in Section 2.02.
“Closing Date” has the meaning set forth in Section 2.02.
“Code” has the meaning set forth in the Recitals.
“Confidentiality Agreement” has the meaning set forth in Section 6.06.
“Constituent Documents” means, with respect to FCB, the FCB Articles and the FCB By-Laws, and,
with respect to NMB, the NMB Articles and the NMB By-Laws.
“Costs” has the meaning set forth in Section 6.11(a).
“DGCL” means the Delaware General Corporation Law.
“Disclosure Schedule” has the meaning set forth in Section 5.01.
“Dissenting Shareholders” shall mean shareholders of NMB or FCB, as the case may be, who have
exercised and not withdrawn or failed to perfect a demand for the determination of the fair value
of their shares of NMB Common Stock or FCB Common Stock, as the case may be, under Section 1300 of
the GCL.
“Effective Date” means the date on which the Primary Merger Effective Time occurs.
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“Employees” has the meaning set forth in Section 5.03(n).
“Employment Agreement” has the meaning set forth in the Recitals.
“Environmental Laws” means any federal, state or local law, regulation, order, decree, permit,
authorization, opinion, common law or agency requirement relating to: (i) the protection or
restoration of the environment, health, safety, or natural resources, (ii) the handling, use,
presence, disposal, release or threatened release of any Hazardous Substance or (iii) noise, odor,
wetlands, indoor air, pollution, contamination or any injury or threat of injury to persons or
property in connection with any Hazardous Substance including, without limitation, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation, and
Liability Act, the Clean Water Act, the Federal Clean Air Act, and the Occupational Safety and
Health Act, each as amended, regulations promulgated thereunder, and state counterparts.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” has the meaning set forth in Section 5.03(n).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
“Exchange Agent” has the meaning set forth in Section 3.03(a).
“Executives” has the meaning set forth in the Recitals.
“FCB” has the meaning set forth in the preamble to this Agreement.
“FCB Affiliate” has the meaning set forth in Section 6.07(a).
“FCB Articles” means the Articles of Incorporation of FCB, as amended.
“FCB Benefit Plans” has the meaning set forth in Section 6.12.
“FCB Board” means the Board of Directors of FCB.
“FCB By-Laws” means the By-laws of FCB, as amended.
“FCB Common Stock” means the common stock, no par value per share, of FCB.
“FCB Exchange Ratio” shall mean 1.7904.
“FCB Insider” means those officers and directors of FCB subject to the reporting requirements
of Section 16(a) of the Exchange Act and who are listed in the Section 16 Information.
“FCB Meeting” has the meaning set forth in Section 6.02.
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“FCB Option” has the meaning set forth in Section 3.06(b).
“FCB Stock Plan” has the meaning set forth in Section 5.03(b).
“GAAP” means generally accepted accounting principles applied on a consistent basis.
“GCL” means the California General Corporation Law.
“Governmental Authority” means any court, administrative agency or commission or other
federal, state or local governmental authority or instrumentality.
“Hazardous Substance” means any substance in any concentration that is: (i) listed,
classified or regulated pursuant to any Environmental Law; (ii) any petroleum product or
by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated
biphenyls, radioactive materials or radon; or (iii) any other substance which is or may be the
subject of regulatory action by any Governmental Authority in connection with any Environmental
Law.
“Indemnified Party” has the meaning set forth in Section 6.11(a).
“Insurance Policies” has the meaning set forth in Section 5.03(t).
“Joint Proxy Statement” has the meaning set forth in Section 6.03(a).
“Lapse Date” has the meaning set forth in Section 2.06(a).
“Lien” means any charge, mortgage, pledge, security interest, restriction, claim, lien, or
encumbrance.
“Material Adverse Effect” means, with respect to FCB or NMB, any effect that (a) is material
and adverse to the financial condition, results of operations or business of FCB and its
Subsidiaries, taken as a whole, or NMB and its Subsidiaries, taken as a whole, respectively,
excluding the impact of (i) changes in banking and other laws of general applicability or
interpretations thereof by Governmental Authorities, (ii) changes in GAAP or regulatory accounting
requirements applicable to banks and their holding companies generally, (iii) changes in general
economic conditions affecting banks and their holding companies generally, provided that, with
respect to each of clause (i), (ii) or (iii), only to the extent that a change does not materially
affect it in a way that materially differs from other banking organizations and (iv) actions or
omissions of a party to this Agreement taken with the prior written consent of the other party to
this Agreement, in contemplation of the transactions contemplated hereby; or (b) would materially
impair the ability of FCB or NMB to perform its obligations under this Agreement or to consummate
the transactions contemplated hereby.
“Mergers” has the meaning set forth in the Recitals.
“Merger Sub” has the meaning set forth in the preamble to this Agreement.
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“Merger Sub Common Stock” has the meaning set forth in Section 3.01(e).
“NASDAQ” means the Nasdaq Stock Market.
“New Certificate” has the meaning set forth in Section 3.03(a).
“NMB” has the meaning set forth in the preamble to this Agreement.
“NMB Affiliate” has the meaning set forth in Section 6.07(a).
“NMB Articles” means the Articles of Incorporation of NMB.
“NMB Board” means the Board of Directors of NMB.
“NMB By-Laws” means the Restated Bylaws of NMB.
“NMB Common Stock” means the common stock, no par value, of NMB.
“NMB Exchange Ratio” shall mean one (1).
“NMB Option” has the meaning set forth in Section 3.06(c).
“NMB Meeting” has the meaning set forth in Section 6.02.
“NMB Preferred Stock” means the Series B Convertible Perpetual Preferred Stock, no par value,
of NMB.
“NMB Stock Plans” has the meaning set forth in Section 5.03(c).
“Old Certificate” has the meaning set forth in Section 3.03(a).
“Pension Plan” has the meaning set forth in Section 5.03(n).
“Person” means any individual, savings association, bank, corporation, limited liability
company, partnership, limited partnership, association, joint-stock company, business trust,
unincorporated organization or other entity.
“Plan” has the meaning set forth in Section 5.03(n).
“Previously Disclosed” by a party means information set forth in the applicable paragraph of
its Disclosure Schedule, or any other paragraph of its Disclosure Schedule so long as it is clear
on the face of the disclosure that such disclosure in such other paragraph of its Disclosure
Schedule is also applicable to the Section of this Agreement in question.
“Primary Agreement of Merger” has the meaning set forth in Section 2.03.
“Primary Certificate of Merger” has the meaning set forth in Section 2.03.
“Primary Merger” has the meaning set forth in the Recitals.
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“Registration Statement” has the meaning set forth in Section 6.03(a).
“Regulatory Authorities” has the meaning set forth in Section 5.03(j).
“Regulatory Filings” has the meaning set forth in Section 5.03(h).
“Reincorporation Agreement of Merger” has the meaning set forth in Section 2.03.
“Reincorporation Certificate of Merger” has the meaning set forth in Section 2.03.
“Reincorporation Merger” has the meaning set forth in the Recitals.
“Reincorporation Merger Effective Time” has the meaning set forth in Section 2.03.
“Representatives” means, with respect to any Person, such Person’s directors, officers,
employees, legal or financial advisors or any representatives of such legal or financial advisors.
“Rights” means, with respect to any Person, securities or obligations convertible into or
exercisable or exchangeable for, or giving any other Person any right to subscribe for or acquire
shares of capital stock of such first Person, or any options, calls or commitments relating to
shares of capital stock of such first Person, or any stock appreciation right or other instrument
the value of which is determined in whole or in part by reference to the market price or value of
shares of capital stock of such first Person.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
thereunder.
“Shareholders” has the meaning set forth in the Recitals.
“Subsidiary” and “Significant Subsidiary” have the meaning ascribed to those terms in Rule
1-02 of Regulation S-X of the SEC.
“Superior Proposal” means a bona fide written Acquisition Proposal involving more than 50% of
the consolidated assets or deposits or total voting power of the equity securities of FCB or NMB,
as the case may be, which the FCB Board or the NMB Board, as the case may be, concludes in good
faith to be more favorable from a financial point of view to its shareholders than the Mergers and
the other transactions contemplated hereby, (1) after receiving the advice of its financial
advisors, (2) after taking into account the likelihood of consummation of such transaction on the
terms set forth therein (as compared to, and with due regard for, the terms herein) and (3) after
taking into account all legal (after consultation with outside counsel), financial (including the
financing terms of any such proposal), regulatory and other aspects of such proposal and any other
relevant factors permitted under applicable law.
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“Surviving Corporation” has the meaning set forth in the Recitals.
“Surviving Corporation By-laws” has the meaning set forth in Section 2.05(b).
“Surviving Corporation Certificate” has the meaning set forth in Section 2.05(a).
“Surviving Corporation Common Stock” means the common stock of the Surviving Corporation.
“Surviving Corporation Preferred Stock” has the meaning set forth in Section 3.01(d).
“Tax” and “Taxes” means all federal, state, local or foreign taxes, charges, fees, levies or
other assessments, however denominated, including, without limitation, all net income, gross
income, gains, gross receipts, sales, use, ad valorem, goods and services, capital, production,
transfer, franchise, windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property, environmental,
unemployment or other taxes, custom duties, fees, assessments or charges of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional amounts imposed by any
taxing authority whether arising before, on or after the Effective Date.
“Tax Returns” means any return, amended return or other report (including elections,
declarations, disclosures, schedules, estimates and information returns) required to be filed with
respect to any Tax.
“Treasury Stock” means shares of FCB Common Stock held by NMB or any of its Subsidiaries or
shares of NMB Common Stock or NMB Preferred Stock held by FCB or any of its Subsidiaries, as the
case may be, in each case other than in a fiduciary (including custodial or agency) capacity or as
a result of debts previously contracted in good faith.
1.02. Interpretation. (a) In this Agreement, unless the context otherwise requires,
references:
(i) to the Recitals, Sections, Exhibits or Schedules are to a Recital or Section of, or
Exhibit or Schedule to, this Agreement;
(ii) to any statute or regulation are to the statute or regulation as amended, modified,
supplemented or replaced from time to time, and to any section of any statute or regulation are to
any successor to such section;
(iii) to any Governmental Authority include any successor to that Governmental Authority; and
(iv) to this Agreement are to this Agreement, the Exhibits and Schedules to it, taken as a
whole.
(b) The table of contents and headings contained herein are for reference purposes only and do
not limit or otherwise affect any of the provisions of this Agreement.
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(c) Whenever the words “include,” “includes” or “including” are used in this Agreement, they
will be deemed to be followed by the words “without limitation.”
(d) Whenever the words “herein” or “hereunder” are used in this Agreement, they will be deemed
to refer to this Agreement as a whole and not to any specific Section.
(e) This Agreement is the product of negotiation by the parties, having the assistance of
counsel and other advisers. It is the intention of the parties that this Agreement not be
construed more strictly with regard to one party than with regard to the other party.
ARTICLE II
The Mergers
2.01. The Mergers. Upon the terms and subject to the conditions set forth in this Agreement,
and in accordance with the DGCL and the GCL, NMB shall be merged with and into Merger Sub at the
Reincorporation Merger Effective Time with Merger Sub as the Surviving Corporation of the
Reincorporation Merger. Immediately thereafter, upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL and the GCL, FCB shall be merged with and
into Merger Sub at the Primary Merger Effective Time with Merger Sub as the Surviving Corporation
of the Primary Merger. The Surviving Corporation shall be headquartered, initially, at 0000
Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx.
2.02. Closing. The closing of the Mergers (the “Closing”) will take place in the offices of
Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx at 10:00 a.m. on the third
business day after satisfaction or waiver of the conditions set forth in Article VII (other than
those conditions that by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions), unless another time or date is agreed to by the parties
hereto (the “Closing Date”).
2.03. Effective Time. Subject to the provisions of this Agreement, as soon as practicable on
the Closing Date, the parties shall acknowledge and file with the Delaware Secretary a certificate
of merger (the “Reincorporation Certificate of Merger”) executed in accordance with the relevant
provisions of the DGCL and with the California Secretary an agreement of merger or other
appropriate documents consistent with the terms of this Agreement (in any such case, the
“Reincorporation Agreement of Merger”) executed in accordance with the relevant provisions of the
GCL. The parties shall make all other filings or recordings required under the DGCL and the GCL
and the Reincorporation Merger shall become effective at such time as FCB and NMB shall agree and
specify in the Reincorporation Certificate of Merger (the time the Reincorporation Merger becomes
effective being hereinafter referred to as the “Reincorporation Merger Effective Time”). Subject
to the provisions of this Agreement, as soon as practicable on the Closing Date following the
Reincorporation Merger Effective Time, the parties shall acknowledge and file with the Delaware
Secretary a certificate of merger (the “Primary Certificate of Merger”) executed in accordance with
the relevant provisions of the DGCL and with the California Secretary an agreement of merger or
other appropriate documents consistent with the terms of this Agreement (in any such case, the
“Primary Agreement of Merger”) executed in accordance with the relevant provisions of the GCL. The
parties shall
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make all other filings or recordings required under the DGCL and the GCL and the Primary
Merger shall become effective at such time as FCB and NMB shall agree and specify in the Primary
Certificate of Merger (the time the Primary Merger becomes effective being hereinafter referred to
as the “Primary Merger Effective Time”).
2.04. Effects of the Mergers. The Primary Merger shall have the effects set forth in Section
251 of the DGCL and Section 1107 of the GCL and in this Agreement. The Reincorporation Merger
shall have the effects set forth in Section 251 of the DGCL and Section 1107 of the GCL and in this
Agreement.
2.05. Certificate of Incorporation and By-laws.
(a) The certificate of incorporation of Merger Sub, as in effect immediately prior to the
Reincorporation Merger, shall be amended and restated as of the Reincorporation Merger Effective
Time so as to read in its entirety in the form set forth as Exhibit A and, as so amended and
restated, such certificate of incorporation shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein and by applicable law
(the “Surviving Corporation Certificate”).
(b) The by-laws of Merger Sub, as in effect immediately prior to the Mergers, shall be the
by-laws of the Surviving Corporation until thereafter changed or amended as provided therein and by
applicable law (the “Surviving Corporation By-laws”).
2.06. Corporate Governance. (a) Survival of Section 2.06. Notwithstanding any other
provision in this Agreement, the provisions of this Section 2.06 are intended to survive the
Primary Merger Effective Time and remain continuously in effect until immediately after the close
of the annual meeting of stockholders of the Surviving Corporation held in 2009 (the “Lapse Date”),
at which time the provisions of this Section 2.06 terminate. This Section 2.06(a) does not affect
the term of any employment agreements referred to in this Section 2.06.
(b) Board of Directors. At the Reincorporation Merger Effective Time and until the Primary
Merger Effective Time, the Surviving Corporation’s board of directors will be comprised of the
directors of NMB as of immediately prior to the Reincorporation Merger Effect Time. At the Primary
Merger Effective Time and through the Lapse Date and as and to the extent set forth in the
Surviving Corporation Certificate, the Surviving Corporation’s board of directors will comprise 10
directors, to consist initially of five current members of the FCB Board designated by FCB before
the Primary Merger Effective Time and five current members of the NMB Board designated by NMB
before the Primary Merger Effective Time. The members of the Surviving Corporation’s board of
directors as of the Primary Merger Effective Time will serve as directors until their respective
successors are duly elected and qualified in accordance with the Surviving Corporation Certificate,
Surviving Corporation By-laws and applicable law or until their respective earlier removals or
resignations. As long as he is a director of FCB at Closing, the current Chairman of FCB will be a
member of the Surviving Corporation’s board of directors until his successor is duly elected and
qualified or until his earlier removal or resignation. As long as he is a director of NMB at
Closing, the current Chairman of NMB will be a member of the Surviving Corporation’s board of
directors until his successor is duly elected and qualified or until his earlier removal or
resignation.
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(c) Other Matters. At the Reincorporation Merger Effective Time and until the Primary Merger
Effective Time, the officers of the Surviving Corporation shall consist of the officers of NMB as
of immediately prior to the Reincorporation Merger Effect Time. As long as he remains a director
of the Surviving Corporation, Xx. Xxxxxx X. Xxxxxx will be Chairman of the Board of the Surviving
Corporation from the Primary Merger Effective Time until the first annual meeting of stockholders
of the Surviving Corporation held after the Effective Date. As long as he remains a director of
the Surviving Corporation, Xx. Xxxx Xxxxxxxxxx will be Vice Chairman of the Board of the Surviving
Corporation from the Primary Merger Effective Time until the first annual meeting of stockholders
of the Surviving Corporation held after the Effective Date. Mr. C. G. Kum will be appointed
President and Chief Executive Officer of the Surviving Corporation as of the Primary Merger
Effective Time to serve at the pleasure of the Board of Directors, subject to the terms of his
Employment Agreement. In addition, NMB will cause the Merger Sub board of directors to adopt
resolutions prior to the Primary Merger Effective Time electing those persons set forth in Exhibit
C to the positions described in Exhibit C as of the Primary Merger Effective Time, each to serve at
the pleasure of the Board of Directors subject to the terms of any applicable employment agreement.
(d) Subsidiary Bank. As set forth in Exhibit G, matters with respect to the bank subsidiaries
of the Surviving Corporation will be as set forth therein and, as applicable, the constituent
documents of such entities.
ARTICLE III
Consideration; Exchange Procedures
3.01. Effect on Capital Stock. As of the Primary Merger Effective Time or Reincorporation
Merger Effective Time, as the case may be, by virtue of the Primary Merger or the Reincorporation
Merger, as the case may be, and without any action on the part of the holder of any shares of FCB
Common Stock, NMB Common Stock, NMB Preferred Stock or Merger Sub Common Stock:
(a) Each share of Treasury Stock shall automatically be canceled and retired and shall cease
to exist, and no consideration shall be delivered in exchange therefor.
(b) Except as set forth in this Article III and except for shares owned by Dissenting
Shareholders, each issued and outstanding share of FCB Common Stock immediately prior to the
Primary Merger Effective Time shall be converted into a number of fully paid and nonassessable
shares of Surviving Corporation Common Stock equal to the FCB Exchange Ratio. As of the Primary
Merger Effective Time, all shares of FCB Common Stock shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and from and after the Primary Merger Effective
Time, certificates representing FCB Common Stock (other than shares to be canceled in accordance
with Section 3.01(a)(i) and other than shares owned by Dissenting Shareholders) immediately prior
to the Primary Merger Effective Time shall be deemed for all purposes to represent the number of
shares of Surviving Corporation Common Stock into which they were converted pursuant to this
subparagraph (b).
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(c) Except as set forth in this Article III and except for shares owned by Dissenting
Shareholders, each issued and outstanding share of NMB Common Stock immediately prior to the
Reincorporation Merger Effective Time shall be converted into a number of fully paid and
nonassessable shares of Surviving Corporation Common Stock equal to the NMB Exchange Ratio. As of
the Reincorporation Merger Effective Time, all shares of NMB Common Stock shall no longer be
outstanding and shall automatically be canceled and shall cease to exist, and from and after the
Reincorporation Merger Effective Time, certificates representing NMB Common Stock (other than
shares to be cancelled in accordance with Section 3.01(a)(i) and other shares owned by Dissenting
Shareholders) immediately prior to the Reincorporation Merger Effective Time shall be deemed for
all purposes to represent the number of shares of Surviving Corporation Common Stock into which
they were converted pursuant to this subparagraph (c).
(d) Each issued and outstanding share of NMB Preferred Stock immediately prior to the
Reincorporation Merger Effective Time shall be converted into the right to receive one share of
Series A Convertible Perpetual Preferred Stock of the Surviving Corporation (the “Surviving
Corporation Preferred Stock”).
(e) Each share of common stock, par value $0.01 per share (the “Merger Sub Common Stock”) of
Merger Sub issued and outstanding immediately prior to the Reincorporation Merger Effective Time
shall automatically be canceled and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor. Each share of Merger Sub Common Stock issued and outstanding
immediately prior to the Primary Merger shall remain outstanding and be unaffected by virtue of the
Primary Merger.
3.02. Rights as Shareholders; Stock Transfers. At the Primary Merger Effective Time, holders
of FCB Common Stock shall cease to be, and shall have no rights as, shareholders of FCB, other than
to receive any dividend or other distribution with respect to such FCB Common Stock with a record
date occurring prior to the Effective Date and the right to receive Surviving Corporation Common
Stock in accordance with Section 3.01. After the Primary Merger Effective Time, there shall be no
transfers on the stock transfer books of FCB of shares of FCB Common Stock. At the Reincorporation
Merger Effective Time, holders of NMB Common Stock and NMB Preferred Stock shall cease to be, and
shall have no rights as, shareholders of NMB, other than to receive any dividend or other
distribution with respect to such NMB Common Stock or NMB Preferred Stock, as the case may be, with
a record date occurring prior to the Reincorporation Merger Effective Time and the right to receive
Surviving Corporation Common Stock or Surviving Corporation Preferred Stock, as the case may be, in
accordance with Section 3.01. After the Reincorporation Merger Effective Time, there shall be no
transfers on the stock transfer books of NMB or the Surviving Corporation of shares of NMB Common
Stock or NMB Preferred Stock.
3.03. Exchange Procedures.
(a) At or prior to the Reincorporation Merger Effective Time, Merger Sub shall deposit, or
shall cause to be deposited, with NMB’s transfer agent or a depository or trust institution of
recognized standing selected by NMB and reasonably satisfactory to FCB (in such capacity, the
“Exchange Agent”), which may be an affiliate of the Surviving Corporation, for the
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benefit of the holders of certificates formerly representing shares of FCB Common Stock or NMB
Common Stock or NMB Preferred Stock (“Old Certificates”) to be exchanged in accordance with this
Article III, certificates representing the shares of Surviving Corporation Common Stock or
Surviving Corporation Preferred Stock (“New Certificates”) to which the holders of the Old
Certificates are entitled pursuant to this Agreement and an estimated amount of cash sufficient to
pay any cash that may be payable in lieu of fractional shares.
(b) Promptly after the Effective Date, the Surviving Corporation shall send or cause to be
sent to each former holder of record of shares of FCB Common Stock, NMB Common Stock or NMB
Preferred Stock immediately prior to the Reincorporation Merger Effective Time transmittal
materials for use in exchanging such shareholder’s Old Certificates for the New Certificates
provided for in this Article III. The Surviving Corporation shall cause the New Certificates
and/or any check in respect of dividends or distributions which such Person shall be entitled to
receive to be delivered to such Person upon delivery to the Exchange Agent of Old Certificates
representing such shares of FCB Common Stock, NMB Common Stock or NMB Preferred Stock (or indemnity
and bond reasonably satisfactory to NMB and the Exchange Agent, if any of such certificates are
lost, stolen or destroyed, pursuant to paragraph (e)) owned by such shareholder together with
properly completed and duly executed transmittal materials. No interest will be paid on any such
cash to be paid in respect of dividends or distributions which any such Person shall be entitled to
receive pursuant to this Article III upon such delivery.
(c) Neither the Exchange Agent nor any party hereto shall be liable to any former holder of
FCB Common Stock, NMB Common Stock or NMB Preferred Stock for any amount properly delivered to a
public official pursuant to applicable unclaimed property, escheat or similar laws.
(d) From and after the Effective Date, no dividends or other distributions with respect to
Surviving Corporation Common Stock or Surviving Corporation Preferred Stock with a record date
occurring after the Effective Date shall be paid in respect of any unsurrendered Old Certificate
converted in the Mergers into the right to receive shares of Surviving Corporation Common Stock or
shares of Surviving Corporation Preferred Stock, as the case may be. Upon surrender of Old
Certificates (or indemnity and bond reasonably satisfactory to NMB and the Exchange Agent, if any
of such certificates are lost, stolen or destroyed, pursuant to paragraph (e)) in accordance with
this Section 3.03, the record holder thereof shall be entitled to receive any such dividends or
other distributions, without any interest thereon, which theretofore had become payable with
respect to shares of Surviving Corporation Common Stock or Surviving Corporation Preferred Stock
such holder had the right to receive upon surrender of Old Certificates (or delivery of such
indemnity).
(e) In the event any Old Certificate shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the Person claiming such Old Certificate to be lost, stolen
or destroyed and, if required by the Exchange Agent, the posting by such Person of a bond in
customary amount and upon such terms as may be required by NMB or the Exchange Agent as indemnity
against any claim that may be made against it with respect to such Old Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Old Certificate the shares of
Surviving Corporation Common Stock and any cash, unpaid dividends
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or other distributions that would be payable or deliverable in respect thereof pursuant to
this Agreement had such lost, stolen or destroyed Old Certificate been surrendered.
(f) The Surviving Corporation shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of NMB Common Stock, NMB
Preferred Stock or FCB Common Stock, as the case may be, such amounts as it is required to deduct
and withhold with respect to the making of such payment under the Code or any other applicable
state, local or foreign Tax law. To the extent that amounts are so withheld by the Surviving
Corporation, such withheld amounts (i) shall be remitted by the Surviving Corporation to the
applicable Governmental Authority, and (ii) shall be treated for all purposes of this Agreement as
having been paid to the holder of shares of NMB Common Stock or FCB Common Stock, as the case may
be, in respect of which such deduction and withholding was made by the Surviving Corporation, as
the case may be.
3.04. Fractional Shares. Notwithstanding any other provision hereof, no fractional shares of
Surviving Corporation Common Stock and no certificates or scrip therefore, or other evidence of
ownership thereof, will be issued in the Reincorporation Merger or the Primary Merger; instead, the
Surviving Corporation will pay to each holder of FCB Common Stock or NMB Common Stock, as the case
may be (after taking into account all Old Certificates delivered by such holder), an amount in cash
(without interest) determined by multiplying such fraction of a share of Surviving Corporation
Common Stock by the last reported sale price of NMB Common Stock, as reported by NASDAQ (as
reported in The Wall Street Journal or, if not reported therein, in another authoritative source),
for the last NASDAQ trading day preceding the Effective Date.
3.05. Anti-Dilution Provisions. In the event that FCB or NMB changes (or establishes a record
date for changing) the number or kind of shares of FCB Common Stock or NMB Common Stock, as the
case may be, issued and outstanding prior to the Effective Date as a result of a stock split,
reverse stock split, stock dividend, recapitalization, reclassification, reorganization or similar
transaction with respect to the outstanding FCB Common Stock or NMB Common Stock, as the case may
be, and the record date therefor shall be prior to the Effective Date, the FCB Exchange Ratio or
NMB Exchange Ratio, as applicable, shall be proportionately adjusted.
3.06. Treatment of Options.
(a) At the Reincorporation Merger Effective Time and the Primary Merger Effective Time,
respectively, the Surviving Corporation shall assume the NMB Stock Plans and the FCB Stock Plans as
well as the rights, duties and obligations of NMB and FCB, respectively, with respect to the
administration of such plans.
(b) At the Primary Merger Effective Time, each outstanding option to purchase shares of FCB
Common Stock (a “FCB Option”) under the FCB Stock Plan, vested or unvested, shall be converted into
an option to acquire a number of shares of Surviving Corporation Common Stock equal to the product
(rounded up to the nearest whole number except to the extent Section 409A of the Code requires
otherwise) of (x) the number of shares of FCB Common Stock subject to the FCB Option immediately
prior to the Primary Merger Effective Time and (y) the FCB Exchange Ratio, at an exercise price per
share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such FCB
Option
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immediately prior to the Primary Merger Effective Time divided by (B) the FCB Exchange Ratio;
provided, however, that the exercise price and the number of shares of Surviving
Corporation Common Stock purchasable pursuant to the FCB Options shall be determined in a manner
consistent with the requirements of Section 409A of the Code; provided, further,
that in the case of any FCB Option to which Section 422 of the Code applies, the exercise price and
the number of shares of Surviving Corporation Common Stock purchasable pursuant to such option
shall be determined in accordance with the foregoing, subject to such adjustments as are necessary
in order to satisfy the requirements of Section 424(a) of the Code. Except as specifically
provided above, following the Primary Merger Effective Time, each FCB Option shall continue to be
governed by the same terms and conditions as were applicable under such FCB Option immediately
prior to the Primary Merger Effective Time.
(c) At the Reincorporation Merger Effective Time, each outstanding option to purchase shares
of NMB Common Stock (an “NMB Option”) under the NMB Stock Plans, vested or unvested, shall be
converted into an option to acquire a number of shares of Surviving Corporation Common Stock equal
to the product (rounded up to the nearest whole number except to the extent Section 409A of the
Code requires otherwise) of (x) the number of shares of NMB Common Stock subject to the NMB Option
immediately prior to the Reincorporation Merger Effective Time and (y) the NMB Exchange Ratio, at
an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price
per share of such NMB Option immediately prior to the Reincorporation Merger Effective Time divided
by (B) the NMB Exchange Ratio; provided, however, that the exercise price and the
number of shares of Surviving Corporation Common Stock purchasable pursuant to the NMB Options
shall be determined in a manner consistent with the requirements of Section 409A of the Code;
provided, further, that in the case of any NMB Option to which Section 422 of the
Code applies, the exercise price and the number of shares of Surviving Corporation Common Stock
purchasable pursuant to such option shall be determined in accordance with the foregoing, subject
to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the
Code. Except as specifically provided above, following the Primary Merger Effective Time, each NMB
Option shall continue to be governed by the same terms and conditions as were applicable under such
NMB Option immediately prior to the Reincorporation Merger Effective Time.
(d) Registration. If registration of any interests in the FCB Stock Plan, NMB Stock Plans or
other FCB Benefit Plans or NMB Benefit Plans or the shares of Surviving Corporation Common Stock
issuable thereunder is required under the Securities Act, the Surviving Corporation shall file with
the SEC as soon as reasonably practicable after the Primary Merger Effective Time a registration
statement on Form S-8 with respect to such interests or Surviving Corporation Common Stock, and
shall use its reasonable best efforts to maintain the effectiveness of such registration statement
for so long as the relevant FCB Stock Plan, NMB Stock Plans or other FCB Benefit Plans or NMB
Benefit Plans, as applicable, remain in effect and such registration of interests therein or the
shares of Surviving Corporation Common Stock issuable thereunder (and compliance with any such
state laws) continues to be required. As soon as practicable after the registration of such
interests or shares, as applicable, the Surviving Corporation shall deliver to the holders of FCB
Options and NMB Options appropriate notices setting forth such holders’ rights pursuant to the
respective FCB Stock Plan or NMB Stock Plans, as the case may be, and agreements evidencing the
grants of such FCB Options and NMB Options, and stating that such FCB Options and NMB Options and
agreements have been
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assumed by the Surviving Corporation and shall continue in effect on the same terms and
conditions (subject to the adjustments required by this Section 3.06 after giving effect to the
Mergers and the terms of the FCB Stock Plan or NMB Stock Plans, as the case may be).
(e) Corporate Actions. At or prior to the Primary Merger Effective Time or the
Reincorporation Merger Effective Time, as applicable, FCB, the FCB Board and the FCB compensation
committee, as applicable, and NMB, the NMB Board and the NMB compensation committee, as applicable,
shall adopt any resolutions and take any actions which are necessary to effectuate the provisions
of Section 3.06(a) and 3.06(b). NMB shall and shall cause the Surviving Corporation to take all
actions which are necessary for the assumption of the FCB Options and NMB Options pursuant to
Section 3.06(a) and 3.06(b) including the reservation, issuance (subject to Section 3.06(b)) and
listing of Surviving Corporation Common Stock as necessary to effect the transactions contemplated
by this Section 3.06. Each of NMB and FCB shall take all actions necessary to ensure that from and
after the Primary Merger Effective Time, the Surviving Corporation will not be required to deliver
shares of NMB Common Stock or other capital stock of NMB or shares of FCB Common Stock or other
capital stock of FCB, as the case may be, to any Person pursuant to or in settlement of FCB Options
or NMB Options, as the case may be, after the Primary Merger Effective Time.
3.07. Appraisal Rights. (a) No Person who has exercised a demand for dissenters’ rights
pursuant to Section 1300 of the GCL shall be entitled to receive shares of Surviving Corporation
Common Stock in the Primary Merger or cash in lieu of fractional shares thereof or any dividends or
other distributions pursuant to this Article III unless and until the holder thereof shall have
effectively withdrawn or lost such holder’s right to dissent under the GCL, and any Dissenting
Shareholder shall be entitled to receive only the payment provided by Section 1300 of the GCL with
respect to shares of FCB Common Stock owned by such Dissenting Shareholder. If any Dissenting
Shareholders shall have effectively withdrawn or lost the right to dissent with respect to any
shares of FCB Common Stock, such shares shall thereupon be treated as though such shares had been
converted into shares of Surviving Corporation Common Stock pursuant to this Article III. FCB
shall give NMB (i) prompt notice of any written demands for dissenters rights, attempted
withdrawals of such demands, and any other instruments served pursuant to applicable law received
by FCB relating to shareholders rights to dissent and (ii) the opportunity to participate in all
negotiations and proceedings with respect to demand for dissenters’ rights under the GCL.
(b) No Person who has exercised a demand for dissenters’ rights pursuant to Section 1300 of
the GCL shall be entitled to receive shares of Surviving Corporation Common Stock in the
Reincorporation Merger or cash in lieu of fractional shares thereof or any dividends or other
distributions pursuant to this Article III unless and until the holder thereof shall have
effectively withdrawn or lost such holder’s right to dissent under the GCL, and any Dissenting
Shareholder shall be entitled to receive only the payment provided by Section 1300 of the GCL with
respect to shares of NMB Common Stock owned by such Dissenting Shareholder. If any Dissenting
Shareholders shall have effectively withdrawn or lost the right to dissent with respect to any
shares of NMB Common Stock, such shares shall thereupon be treated as through such shares had been
converted into shares of Surviving Corporation Common Stock pursuant to this Article III. NMB
shall give FCB (i) prompt notice of any written demands for dissenters rights, attempted
withdrawals of such demands, and any other instruments served pursuant to applicable
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law received by NMB relating to shareholders rights to dissent and (ii) the opportunity to
participate in all negotiations and proceedings with respect to demand for dissenters’ rights under
the GCL.
ARTICLE IV
Conduct of Business Pending Merger
4.01. Forebearances. Each of FCB and NMB agrees that from the date hereof until the Primary
Merger Effective Time, except as expressly contemplated by this Agreement or as set forth in
paragraph 4.01 of FCB’s Disclosure Schedule or paragraph 4.01 of NMB’s Disclosure Schedule, as the
case may be, without the prior written consent of the other party hereto (which consent shall not
be unreasonably withheld), it will not, and will cause each of its Subsidiaries not to:
(a) Ordinary Course. Conduct its business and the business of its Subsidiaries other than in
the ordinary and usual course or fail to use reasonable efforts to preserve intact their business
organizations and assets and maintain their rights, franchises and existing relations with
customers, suppliers, employees and business associates taken as a whole, or take any action
reasonably likely to have an adverse effect upon its ability to perform any of its material
obligations under this Agreement.
(b) Capital Stock. Other than pursuant to Rights outstanding on the date hereof, (i) issue,
sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares
of its stock or any Rights, (ii) enter into any agreement with respect to the foregoing or (iii)
permit any additional shares of its stock to become subject to new grants of employee or director
stock options, other Rights or other stock-based employee rights.
(c) Dividends, Etc. (i) Make, declare, pay or set aside for payment any dividend (other than
dividends from its wholly owned Subsidiaries to it or another of its wholly owned Subsidiaries) on
or in respect of, or declare or make any distribution on any shares of its stock or (ii) directly
or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares
of its capital stock.
(d) Compensation; Employment Agreements; Etc. Enter into or amend or renew any employment,
consulting, severance or similar agreements or arrangements with any of its directors, officers or
employees or those of its Subsidiaries, or hire any new employees with a rank of vice president or
above, or grant any salary or wage increase or increase any employee benefit (including equity,
awards, incentive or bonus payments), except (i) for normal individual increases in compensation to
employees (including, without limitation, annual salary increases and annual bonus payments (other
than equity compensation) in the ordinary course of business consistent with past practice, (ii)
for other changes that are required by applicable law and (iii) to satisfy Previously Disclosed
contractual obligations existing as of the date hereof.
(e) Benefit Plans. Enter into, establish, adopt or amend (except (i) as may be required by
applicable law or (ii) to satisfy Previously Disclosed contractual obligations existing as of the
date hereof) any pension, retirement, profit sharing, deferred compensation, bonus plan
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or arrangement, or any trust agreement (or similar arrangement) related thereto, in respect of
any of its directors, officers or employees or those of its Subsidiaries, or take any action to
accelerate the vesting or exercisability of stock options, restricted stock or other compensation
or benefits payable thereunder or fund or in any other way secure the payment, of compensation or
benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan.
(f) Dispositions. Sell, transfer, mortgage, encumber or otherwise dispose of or discontinue
any of its assets, deposits, business or properties except for sales, transfers, mortgages,
encumbrances or other dispositions or discontinuances in the ordinary course of business consistent
with past practice.
(g) Acquisitions. Acquire (other than by way of foreclosures or acquisitions of control in a
bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in
each case in the ordinary and usual course of business consistent with past practice) all or any
portion of the assets, business, deposits or properties of any other entity except in the ordinary
course of business consistent with past practice and in a transaction that, together with other
such transactions, is not material to it and its Subsidiaries, taken as a whole.
(h) Constituent Documents. In the case of FCB, amend the FCB Articles or the FCB By-Laws or
the articles of incorporation or by-laws (or similar governing documents) of any of its
Subsidiaries. In the case of NMB, amend the NMB Articles or the NMB By-Laws or the articles of
incorporation or by-laws (or similar governing documents) of any of its Subsidiaries.
(i) Accounting Methods. Implement or adopt any change in its accounting principles, practices
or methods, other than as may be required by GAAP or regulatory accounting requirements.
(j) Contracts. Enter into, renew or terminate, or make any payment not then required under,
any contract or agreement that calls for aggregate annual payments of $75,000 or more and which is
not terminable at will on 60 days or less notice without payment of a premium penalty, other than
loans, deposits, derivatives transactions, swaps, FHLB advances, repurchase agreements and other
transactions made in the ordinary course of the banking business and agreements permitted pursuant
to clause (b).
(k) Claims. Other than in the ordinary course of business, settle any claim, action or
proceeding against it, except for any claim, action or proceeding in an amount or for such
consideration, individually or in the aggregate for all such settlements, that is not material to
it and its Subsidiaries, taken as a whole, and would not impose any material restriction on the
business of the Surviving Corporation or create precedent for claims that are reasonably likely to
be material to it and its Subsidiaries, taken as a whole.
(l) Adverse Actions. Notwithstanding anything herein to the contrary, take any action that
would, or is reasonably likely to, prevent or impede either Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code. Subject to the terms and
conditions hereof, take any action that is intended or is reasonably likely to result in (i) any
of the conditions to the Mergers set forth in Article VII not being satisfied or (ii) a
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material violation of any provision of this Agreement except, in each case, as may be required
by applicable law or regulation.
(m) Banking Operations. Enter into any new material line of business or materially change its
material lending, investment, underwriting, risk and asset liability management and other material
banking and operating policies, except as required by applicable law, regulation or policies
imposed by any Governmental Authority.
(n) Indebtedness. Incur any indebtedness for borrowed money other than in the ordinary course
of business consistent with past practice.
(o) Commitments. Agree or commit to do any of the foregoing.
ARTICLE V
Representations and Warranties
5.01. Disclosure Schedules. On or prior to the date hereof, FCB has delivered to NMB a
schedule and NMB has delivered to FCB a schedule (respectively, its “Disclosure Schedule”) setting
forth, among other things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or as an exception to
one or more representations or warranties contained in Section 5.03 or to one or more of its
covenants contained in Article IV; provided, that the mere inclusion of an item in a Disclosure
Schedule as an exception to a representation or warranty shall not be deemed an admission by a
party that such item was required to be disclosed therein.
5.02. [Intentionally Omitted.]
5.03. Representations and Warranties. Subject to Section 5.01 and except as Previously
Disclosed, NMB and Merger Sub hereby represent and warrant to FCB, and FCB hereby represents and
warrants to NMB and Merger Sub, to the extent applicable, in each case with respect to NMB and its
Subsidiaries and FCB and its Subsidiaries, as applicable, as follows:
(a) Organization, Standing and Authority. It is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation. It is duly qualified
to do business and is in good standing in the states of the United States and any foreign
jurisdictions where its ownership or leasing of property or assets or the conduct of its business
requires it to be so qualified.
(b) FCB Common Stock. In the case of FCB only, the authorized capital stock of FCB
consists of 10,000,000 shares of FCB Common Stock. As of the date hereof, 3,277,807 shares of FCB
Common Stock were issued and outstanding. As of the date hereof, 159,600 shares of FCB Common
Stock were subject to issuance upon exercise of FCB Options granted and currently outstanding under
the FCB 2005 Stock Option Plan (the “FCB Stock Plan”). As of the date hereof, there were 40,400
shares of FCB Common Stock reserved for issuance and available for the grant of new awards under
the FCB Stock Plan. The outstanding shares of FCB Common Stock have been duly authorized and are
validly issued and outstanding, fully paid and nonassessable, and subject to no preemptive rights
(and were not issued in
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violation of any preemptive rights). Except as set forth above, as of the date hereof, FCB
does not have any Rights issued or outstanding with respect to FCB Common Stock, and FCB does not
have any commitment to authorize, issue or sell any FCB Common Stock or Rights, except pursuant to
this Agreement and outstanding FCB Options. As of the date hereof, FCB does not own any shares of
NMB Common Stock.
(c) NMB Stock. In the case of NMB only, the authorized capital stock of NMB consists
of 10,000,000 shares of NMB Common Stock and 1,000,000 shares of preferred stock. As of the date
hereof, 5,543,391 shares of NMB Common Stock and 1,000 shares of NMB Preferred Stock were issued
and outstanding. As of the date hereof, 606,984 shares of NMB Common Stock were subject to
issuance upon exercise of NMB Options granted and currently outstanding under the NMB 1994 Stock
Option Plan, NMB Amended 1996 Stock Incentive Plan or NMB 2005 Stock Incentive Plan (collectively,
the “NMB Stock Plans”). As of the date hereof, there were 190,338 shares of NMB Common Stock
reserved for issuance and available for the grant of new awards under the NMB Stock Plans. The
outstanding shares of NMB Common Stock have been duly authorized and are validly issued and
outstanding, fully paid and nonassessable, and subject to no preemptive rights (and were not issued
in violation of any preemptive rights). Except as set forth above, as of the date hereof, NMB does
not have any Rights issued or outstanding with respect to NMB Common Stock, and NMB does not have
any commitment to authorize, issue or sell any NMB Common Stock or Rights, except pursuant to this
Agreement and outstanding NMB Options. As of the date hereof, NMB does not own any shares of FCB
Common Stock.
(d) Significant Subsidiaries. (i) Except as contemplated by this Agreement, (A) it
owns, directly or indirectly, all the issued and outstanding equity securities of each of its
Significant Subsidiaries, (B) no equity securities of any of its Significant Subsidiaries are or
may become required to be issued (other than to it or its wholly owned Subsidiaries) by reason of
any Right or otherwise, (C) there are no contracts, commitments, understandings or arrangements by
which any of such Subsidiaries is or may be bound to sell or otherwise transfer any equity
securities of any such Significant Subsidiaries (other than to it or its wholly-owned
Subsidiaries), (D) there are no contracts, commitments, understandings, or arrangements relating to
its rights to vote or to dispose of such securities and (E) all the equity securities of each
Significant Subsidiary held by it or its Subsidiaries have been duly authorized and are validly
issued and outstanding, fully paid and nonassessable (except as provided in 12 U.S.C. § 55) and are
owned by it or its Subsidiaries free and clear of any Liens.
(ii) Each of its Significant Subsidiaries has been duly organized and is validly existing in
good standing under the laws of the jurisdiction of its organization, and is duly qualified to do
business and in good standing in the jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified.
(e) Corporate Power. It and each of its Significant Subsidiaries has the corporate
power and authority to carry on its business as it is now being conducted and to own all its
properties and assets; and it has the corporate power and authority to execute, deliver and perform
its obligations under this Agreement and to consummate the transactions contemplated hereby.
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(f) Corporate Authority. (i) Subject to receipt of the shareholder approval
described in paragraph (ii) of this Section 5.03(f), in the case of FCB, and in paragraph (iii) of
this Section 5.03(f), in the case of NMB, this Agreement and the transactions contemplated hereby
have been authorized by all necessary corporate action on or prior to the date hereof. This
Agreement is a valid and legally binding obligation of such party, enforceable in accordance with
its terms (except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating
to or affecting creditors’ rights or by general equity principles). In the case of FCB, the FCB
Board has received the written opinion of Xxxxx, Xxxxxxxx & Xxxxx, Inc. to the effect that as of
the date hereof the FCB Exchange Ratio is fair to the holders of FCB Common Stock from a financial
point of view. In the case of NMB, the NMB Board has received the written opinion of Sandler
X’Xxxxx & Partners, L.P. to the effect that as of the date hereof the FCB Exchange Ratio is fair to
the holders of NMB Common Stock from a financial point of view.
(ii) In the case of FCB, the affirmative vote of the holders of a majority of the outstanding
shares of FCB Common Stock to approve the principal terms of this Agreement is the only vote of the
holders of any class or series of FCB’s capital stock necessary to approve and adopt this
Agreement, and the transactions contemplated hereby.
(iii) In the case of NMB, the affirmative vote of the holders of a majority of the outstanding
shares of NMB Common Stock and the holders of a majority of the outstanding shares of NMB Preferred
Stock to approve the principal terms of this Agreement is the only vote of the holders of any class
or series of NMB capital stock necessary to approve and adopt this Agreement and the transactions
contemplated hereby.
(g) Regulatory Approvals; No Defaults. (i) No consents or approvals of, or filings or
registrations with, any Governmental Authority or with any third party are required to be made or
obtained by it or any of its Subsidiaries in connection with the execution, delivery or performance
by it of this Agreement or to consummate the Merger except for (A) filings and approvals of
applications with and by federal and state banking authorities, (B) filings with the SEC and state
securities authorities, (C) the shareholder approval described in paragraphs (ii) and (iii) of
Section 5.03(f), (D) the filing of the Agreement of Merger with the California Secretary pursuant
to the GCL and the Certificate of Merger with the Delaware Secretary pursuant to the DGCL, (E) the
filing of the Surviving Corporation Certificate as contemplated by Section 2.05 hereof and (F) such
filings with NASDAQ to obtain the authorizations for listing contemplated by this Agreement.
(ii) Subject to receipt of the regulatory approvals referred to in the preceding paragraph,
and the expiration of related waiting periods, and required filings under federal and state
securities laws, the execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby do not and will not (A) constitute a breach or violation of,
or a default under, or give rise to any payment obligation, Lien, acceleration of maturity,
performance or remedies or any right of termination or modification under, any law, rule or
regulation or any judgment, decree, order, governmental permit or license, or agreement, contract,
indenture or instrument of it or of any of its Subsidiaries or to which the properties or assets of
it or any of its Subsidiaries is subject or bound, (B) constitute a
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breach or violation of, or a default under, the FCB Articles or the NMB Articles, as the case
may be, or the FCB By-laws or the NMB By-laws, as the case may be, or (C) require any consent or
approval under any such law, rule, regulation, judgment, decree, order, governmental permit or
license, agreement, indenture or instrument.
(h) Financial Reports and Regulatory Documents; Material Adverse Effect. (i) In the
case of NMB, its Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, and all
other reports, registration statements, definitive proxy statements or information statements filed
by it or any of its Subsidiaries subsequent to December 31, 2005, under the Securities Act, or
under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act or under the securities regulations of
the SEC, in the form filed, and in the case of FCB, its Annual Report on Form 10-K for the fiscal
year ended December 31, 2005, and all other reports, registration statements, definitive proxy
statements or information statements filed by it or any of its Subsidiaries subsequent to December
31, 2005 under the Securities Act, or under Section 13(a), 13(c), or 14 or 15(d) of the Exchange
Act or under the securities regulations of the SEC, in the form filed (collectively for each of the
parties, its “Regulatory Filings”) with the SEC as of the date filed, (A) complied in all material
respects as to form with the applicable requirements under the Securities Act or the Exchange Act,
as the case may be, and (B) did 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 therein, in
the light of the circumstances under which they were made, not misleading; and each of the balance
sheets contained in or incorporated by reference into any such Regulatory Filing (including the
related notes and schedules thereto) fairly presented in all material respects, its financial
position and that of its Subsidiaries as of its date, and each of the statements of income and
changes in shareholders’ equity and cash flows or equivalent statements in such Regulatory Filings
(including any related notes and schedules thereto) fairly presented in all material respects, the
results of operations, changes in shareholders’ equity and changes in cash flows, as the case may
be, of it and its Subsidiaries for the periods to which they relate, in each case in accordance
with GAAP consistently applied during the periods involved, except in each case as may be noted
therein, subject to immaterial normal year-end audit adjustments in the case of unaudited
statements.
(ii) Since December 31, 2005, it and its Subsidiaries have not incurred any liability other
than in the ordinary course of business consistent with past practice.
(iii) Since December 31, 2005, (A) it and its Subsidiaries have conducted their respective
businesses in the ordinary and usual course consistent with past practice (excluding the incurrence
of expenses related to this Agreement and the transactions contemplated hereby) and (B) no event
has occurred or circumstance arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section 5.03 or otherwise), is reasonably
likely to have a Material Adverse Effect with respect to it.
(i) Litigation. Except as Previously Disclosed or set forth in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2005, there is no suit, action or proceeding
pending or, to the knowledge of it, threatened against or affecting it or any of its Subsidiaries
(and it is not aware of any basis for any such suit, action or proceeding) that, individually or in
the aggregate, is (i) material to it and its Subsidiaries, taken as a whole, or
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(ii) that is reasonably likely to prevent or delay it in any material respect from performing its
obligations under, or consummating the transactions contemplated by, this Agreement.
(j) Regulatory Matters. (i) Neither it nor any of its Subsidiaries is a party to or
is subject to any written order, decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory
letter from, any federal or state Governmental Authority charged with the supervision or regulation
of financial institutions or issuers of securities or engaged in the insurance of deposits or the
supervision or regulation of it or any of its Subsidiaries (collectively, the “Regulatory
Authorities”).
(ii) Neither it nor any of its Subsidiaries has been advised by any Regulatory Authority that
such Regulatory Authority is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such written order, decree, agreement, memorandum of
understanding, commitment letter, supervisory letter or similar submission.
(k) Compliance with Laws. It and each of its Subsidiaries:
(i) is in compliance with all applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable thereto or to the employees
conducting such businesses, including, without limitation, the Bank Secrecy Act, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure
Act , the USA Patriot Act and all other applicable fair lending laws and anti-money laundering laws
and other laws relating to discriminatory business practices, bank secrecy and foreign asset
controls;
(ii) has all permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, all Governmental Authorities that are required in
order to permit them to own or lease their properties and to conduct their businesses as presently
conducted; all such permits, licenses, certificates of authority, orders and approvals are in full
force and effect and, to its knowledge, no suspension or cancellation of any of them is threatened;
and
(iii) has received, since December 31, 2004, no written notification from any Governmental
Authority (A) asserting that it or any of its Subsidiaries is not in compliance with any of the
statutes, regulations or ordinances which such Governmental Authority enforces or (B) threatening
to revoke any license, franchise, permit or governmental authorization.
(l) Material Contracts; Defaults. Except for those agreements and other documents
filed as exhibits to its Regulatory Filings, neither it nor any of its Subsidiaries is a party to,
bound by or subject to any agreement, contract, arrangement, commitment or understanding (whether
written or oral) (i) that is a “material contract” within the meaning of Item 601(b)(10) of the
SEC’s Regulation S-K or (ii) that materially restricts the conduct of business by it or any of its
Subsidiaries. Neither it nor any of its Subsidiaries is in default under any material 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
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bound or affected, or under which it or its respective assets, business, or operations
receives benefits, 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.
(m) No Brokers. No action has been taken by it that would give rise to any valid
claim against any party hereto for a brokerage commission, finder’s fee or other like payment with
respect to the transactions contemplated by this Agreement, excluding a Previously Disclosed fee to
be paid to Xxxxx, Xxxxxxxx & Xxxxx, Inc. in the case of FCB and a Previously Disclosed fee to be
paid to Sandler X’Xxxxx & Partners, L.P. in the case of NMB.
(n) Employee Benefit Plans.
(i) All material benefit and compensation plans, contracts, policies or arrangements covering
its current employees or former employees and those of its Subsidiaries (its “Employees”) and its
current or former directors, including, but not limited to, “employee benefit plans” within the
meaning of Section 3(3) of ERISA, and deferred compensation, stock option, stock purchase, stock
appreciation rights, stock based, incentive and bonus plans (its “Benefit Plans”), are Previously
Disclosed and each Benefit Plan which has received a favorable opinion letter from the Internal
Revenue Service National Office, including any master or prototype plan, has been separately
identified. True and complete copies of all Benefit Plans, including, but not limited to, any
trust instruments and insurance contracts forming a part of any Benefit Plans, and all amendments
thereto, have been made available to the other party hereto.
(ii) All employee benefit plans, other than “multiemployer plans” within the meaning of
Section 3(37) of ERISA, covering its Employees (its “Plans”), to the extent subject to ERISA, are
in substantial compliance with ERISA. Each of it Plans 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 Code has received a favorable determination letter from the Internal
Revenue Service (“IRS”) covering all tax law changes prior to the Economic Growth and Tax Relief
Reconciliation Act of 2001 or has applied to the IRS for such favorable determination letter within
the applicable remedial amendment period under Section 401(b) of the Code, and it is not aware of
any circumstances likely to result in revocation of any such favorable determination letter or the
loss of the qualification of such Plan under Section 401(a) of the Code. There is no material
pending or, to its knowledge, threatened litigation relating to its Benefit Plans. Neither it nor
any of its Subsidiaries has engaged in a transaction with respect to any of its Plans that,
assuming the taxable period of such transaction expired as of the date hereof, could be reasonably
likely to subject it 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. Neither it nor any of
its Subsidiaries has incurred or reasonably expects to incur a material tax or penalty imposed by
Section 4980F of the Code or Section 502 of ERISA.
(iii) Neither it, any or its Subsidiaries nor any entity which is considered one employer with
it under Section 4001 of ERISA or Section 414 of the Code (an “ERISA Affiliate”) (x) maintains or
contributes to or has within the past six years maintained or contributed to a Pension Plan that is
subject to Subtitles C or D of Title IV of ERISA or
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(y) maintains or has an obligation to contribute to or has within the past six years maintained or
had an obligation to contribute to a Multiemployer Plan.
(iv) All contributions required to be made under the terms of any of its Plans have been
timely made or have been reflected on its consolidated financial statements included in its
Regulatory Filings.
(v) Neither it nor any of its Subsidiaries has any obligations for retiree health and life
benefits under any of its Benefit Plans. It or its Subsidiaries may amend or terminate any of its
Benefit Plans at any time without incurring any liability thereunder.
(vi) There has been no amendment to, announcement by it or any of its Subsidiaries relating
to, or change in employee participation or coverage under, any Benefit Plan which would increase
materially the expense of maintaining such plan above the level of the expense incurred therefor
for the most recent fiscal year. Neither the execution of this Agreement, shareholder approval of
this Agreement nor the consummation of the transactions contemplated hereby will (w) entitle any
employees of it or any of its subsidiaries to severance pay or any increase in severance pay upon
any termination of employment after the date hereof, (x) accelerate the time of payment or vesting
or result in any payment or funding (through a grantor trust or otherwise) of compensation or
benefits under, increase the amount payable or result in any other material obligation pursuant to,
any of the Benefit Plans, (y) limit or restrict the right of it or, after the consummation of the
transactions contemplated hereby, the Surviving Corporation to merge, amend or terminate any of the
Benefit Plans or (z) result in payments under any of the Benefit Plans which would not be
deductible under Section 162(m) or Section 280G of the Code.
(o) Labor Matters. Neither it 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 it 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 any of its Subsidiaries to bargain
with any labor organization as to wages or conditions of employment, nor is there any strike or
other material labor dispute involving it or any of its Subsidiaries pending or, to its knowledge,
threatened, nor to its knowledge is there any activity involving its or any of its Subsidiaries’
employees seeking to certify a collective bargaining unit or engaging in other organizational
activity.
(p) Environmental Matters. Neither its conduct nor its operation or the conduct or
operation of its Subsidiaries nor any condition of any property presently or previously owned,
leased or operated by any of them (including, without limitation, in a fiduciary or agency
capacity), violates or violated Environmental Laws and no condition has existed or event has
occurred with respect to any of them or any such property that, with notice or the passage of time,
or both, is reasonably likely to result in liability under Environmental Laws. No property on which
it or any of its Subsidiaries holds a Lien, violates or violated Environmental Laws and no
condition has existed or event has occurred with respect to any such property that, with notice or
the passage of time, or both, is reasonably likely to result in liability under Environmental Laws.
Neither it nor any of its Subsidiaries has received any written notice from any Person that
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it or its Subsidiaries or the operation or condition of any property ever owned, leased,
operated, or held as collateral or in a fiduciary capacity by any of them are or were in violation
of or otherwise are alleged to have liability under any Environmental Law, including, but not
limited to, responsibility (or potential responsibility) for the cleanup or other remediation of
any pollutants, contaminants, or hazardous or toxic wastes, substances or materials at, on,
beneath, or originating from, any such property.
(q) Tax Matters. (i)(A) All Tax Returns that are required to be filed (taking into
account any extensions of time within which to file) by or with respect to it and its Subsidiaries
have been duly and timely filed, and all such Tax Returns are complete and accurate in all material
respects, (B) all Taxes due in respect of such Tax Returns referred to in clause (A) have been paid
in full, (C) all Taxes that it or any of its Subsidiaries is obligated to withhold from amounts
owing to any employee, creditor or third party have been paid over to the proper Governmental
Authority in a timely manner, to the extent due and payable, (D) it has not received notice of any
proposal or intention by the Internal Revenue Service or the appropriate Tax authority to audit or
review the Tax Returns referred to in clause (A) or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has expired, (E) all deficiencies
asserted or assessments made as a result of such examinations have been paid in full, (F) no issues
that have been raised by the relevant taxing authority in connection with the examination of any of
the Tax Returns referred to in clause (A) are currently pending, and (G) no extensions or waivers
of statutes of limitation have been given by or requested with respect to any of its Taxes or those
of its Subsidiaries. It has made available to the other party hereto true and correct copies of
the U.S. federal income Tax Returns filed by it and its Subsidiaries for the year ended December
31, 2004. It has made provision in accordance with GAAP, in the financial statements included in
the Regulatory Filings filed prior to the date hereof, for all Taxes that accrued on or before the
end of the most recent period covered by its Regulatory Filings filed prior to the date hereof.
Neither it nor any of its Subsidiaries is a party to any Tax allocation or sharing agreement, is or
has been a member of an affiliated group filing consolidated or combined Tax returns (other than a
group over which it is or was the common parent) or otherwise has any liability for the Taxes of
any person (other than its own Taxes and those of its Subsidiaries). As of the date hereof,
neither it nor any of its Subsidiaries has any reason to believe that any conditions exist that
could reasonably be expected to prevent or impede the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code. No Liens for Taxes exist with respect to any of
its assets or properties or those of its Subsidiaries, except for statutory Liens for Taxes not yet
due and payable or that are being contested in good faith and reserved for in accordance with GAAP.
Neither it nor any of its Subsidiaries has been a party to any distribution occurring during the
last three years in which the parties to such distribution treated the distribution as one to which
Section 355 of the Code applied.
(ii) No Tax is required to be withheld pursuant to Section 1445 of the Code as a result of the
transfer contemplated by this Agreement.
(r) Derivative Instruments. All interest rate swaps, caps, floors, option agreements,
futures and forward contracts and other similar risk management arrangements, whether entered into
for its own account, or for the account of one or more of its Subsidiaries or their customers, if
any, were entered into (i) in accordance with prudent business practices and
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all applicable laws, rules, regulations and regulatory policies and (ii) with counterparties
believed to be financially responsible at the time; and each of them constitutes the valid and
legally binding obligation of such party or one of its Subsidiaries, enforceable in accordance with
its terms (except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating
to or affecting creditors’ rights or by general equity principles), and are in full force and
effect. Neither it nor its Subsidiaries, nor to its knowledge, any other party thereto, is in
breach of any of its obligations under any such agreement or arrangement.
(s) Books and Records. Its books and records and those of its Subsidiaries have been
fully, properly and accurately maintained in all material respects, and there are no material
inaccuracies or discrepancies of any kind contained or reflected therein.
(t) Insurance. It has made available to the other party hereto all of the insurance
policies, binders, or bonds maintained by it or its Subsidiaries (its “Insurance Policies”). It
and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as
its management reasonably has determined to be prudent in accordance with industry practices. All
of its Insurance Policies are in full force and effect; it and its Subsidiaries are not in material
default thereunder; and all claims thereunder for which a basis is known, or reasonably should be
known, by it have been filed in due and timely fashion.
(u) Merger Sub. As of the date hereof, the authorized capital stock of Merger Sub
consists of 1,000 shares of Merger Sub Common Stock, all of which are validly issued and
outstanding. All of the issued and outstanding capital stock of Merger Sub is, as of the date
hereof and will be as of immediately prior to the Reincorporation Merger Effective Time, owned by
NMB, and there are (i) no other shares of capital stock or voting securities of Merger Sub, (ii) no
securities of Merger Sub convertible into or exchangeable for shares of capital stock or voting
securities of Merger Sub and (iii) no options or other rights to acquire from Merger Sub, and no
obligations of Merger Sub to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of Merger Sub, except as contemplated
by this Agreement. Merger Sub has not conducted any business prior to the date hereof and has no,
and prior to the Reincorporation Merger Effective Time will have no, assets, liabilities or
obligations of any nature other than those incident to its formation and pursuant to this Agreement
and the Mergers and the other transactions contemplated by this Agreement.
ARTICLE VI
Covenants
6.01. Reasonable Best Efforts. Subject to the terms and conditions of this Agreement, each of
FCB, NMB and Merger Sub agrees to use its respective reasonable 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 Mergers as
promptly as practicable and otherwise to enable consummation of the transactions contemplated
hereby and shall cooperate fully with the other party hereto to that end.
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6.02. Shareholder Approvals. (a) Each of FCB and NMB agrees to take in accordance with
applicable law and its respective Constituent Documents all action necessary to convene a meeting
of its respective shareholders (including any adjournment or postponement, the “FCB Meeting” and
the “NMB Meeting”, respectively), as promptly as practicable, to consider and vote upon the
approval of the principal terms of this Agreement, in the case of each of the FCB Meeting and the
NMB Meeting, as well as any other matters required to be approved by such entity’s shareholders for
consummation of the Mergers, in the case of both the FCB Meeting and the NMB Meeting.
(b) The boards of directors of FCB and NMB have adopted resolutions recommending to the
shareholders of FCB and the shareholders of NMB, respectively, the approvals specified in Section
6.02(a) and the other matters required to be approved or adopted in order to carry out the
intentions of this Agreement. Except as otherwise permitted by this Agreement, the FCB Board and
NMB Board each will submit to their shareholders the principal terms of this Agreement and any
other matters required to be approved by their shareholders in order to carry out the intentions of
this Agreement. In furtherance of that obligation, FCB and NMB each will take, in accordance with
applicable law and its respective Constituent Documents, all action necessary to convene a meeting
of its shareholders, as promptly as practicable, to consider and vote upon such matters. The FCB
Board and NMB Board each will use all reasonable best efforts to obtain from their respective
shareholders a vote approving such matters. Notwithstanding anything in this Agreement to the
contrary, if the NMB Board or the FCB Board, after consultation with counsel, determines in good
faith that, because of a conflict of interest or other special circumstances (it being agreed that
such special circumstances will include, for purposes of this Agreement, the receipt by a party of
an Acquisition Proposal that such party’s board of directors concludes in good faith constitutes a
Superior Proposal), it would reasonably be expected to be a violation of its fiduciary duties under
applicable law to continue to recommend such matters, then, the NMB Board or FCB Board, as the case
may be, may decline to submit such matters to its shareholders or may, if such submission has
already occurred, rescind its notice of the meeting with the effect set forth in Sections 8.01(c)
and 8.02; provided that it may not take any actions under this sentence until after giving the
other party hereto at least five business days to respond to such Acquisition Proposal (and after
giving the other party notice of the latest material terms, conditions and third party in the
Acquisition Proposal) and then taking into account any amendment or modification to this Agreement
proposed by the other party hereto.
6.03. Registration Statement and Joint Proxy Statement. (a) FCB and NMB will cooperate in
ensuring that all filings required pursuant to SEC Rules 165, 425 and 14a-12 are timely and
properly made. The parties agree jointly to prepare a registration statement on Form S-4 or other
applicable form (the “Registration Statement”) to be filed by Merger Sub with the SEC in connection
with the issuance of Surviving Corporation Common Stock in the Mergers (including the proxy
statement and prospectus and other proxy solicitation materials of FCB, NMB and Merger Sub
constituting a part thereof (the “Joint Proxy Statement”) and all related documents). The parties
agree to cooperate, and to cause their Subsidiaries to cooperate, with the other party, its counsel
and its accountants, in the preparation of the Registration Statement and the Joint Proxy
Statement; and provided that both parties and their respective Subsidiaries have cooperated as
required above, FCB and NMB agree to file or cause to be filed the Registration Statement with the
SEC as soon as reasonably practicable. Each of FCB and NMB agrees to use
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all reasonable efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as reasonably practicable after filing thereof. NMB also agrees to use
all reasonable efforts to obtain all necessary state securities law or “Blue Sky” permits and
approvals required to carry out the transactions contemplated by this Agreement. FCB agrees to
furnish to NMB all information concerning FCB, its Subsidiaries, officers, directors and
shareholders as may be reasonably requested in connection with the foregoing.
(b) Each of FCB and NMB agrees, as to itself and its Subsidiaries, that none of the
information supplied or to be supplied by it for inclusion or incorporation by reference in (i) the
Registration Statement will, at the time the Registration Statement and each amendment or
supplement thereto, if any, becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (ii) the Joint Proxy Statement and any
amendment or supplement thereto will, at the date of mailing to shareholders and at the time of the
FCB Meeting or the NMB Meeting, as the case may be, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which such statement was made, not
misleading. Each of FCB and NMB further agrees that if it shall become aware prior to the
Effective Date of any information furnished by it that would cause any of the statements in the
Joint Proxy Statement or the Registration Statement to be false or misleading with respect to any
material fact, or to omit to state any material fact necessary to make the statements therein not
false or misleading, to promptly inform the other party thereof and to take the necessary steps to
correct the Joint Proxy Statement or the Registration Statement.
(c) NMB agrees to advise FCB, promptly after NMB 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 NMB 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.
6.04. Press Releases. FCB and NMB shall consult with each other before issuing any press
release with respect to the Mergers or this Agreement and shall not issue any such press release or
make any such public statement without the prior consent of the other party, which shall not be
unreasonably withheld; provided, however, that a party may, without the prior consent of the other
party (but after prior consultation, to the extent practicable in the circumstances) issue such
press release or make such public statement as may upon the advice of outside counsel be required
by law or the rules and regulations of NASDAQ. FCB and NMB shall cooperate to develop all public
announcement materials and make appropriate management available at presentations related to the
transactions contemplated by this Agreement as reasonably requested by the other party.
6.05. Access; Information. (a) Each of FCB and NMB agrees that upon reasonable notice and
subject to applicable laws relating to the exchange of information, it shall afford the other
party, and the other party’s officers, employees, counsel, accountants and other authorized
representatives, such access during normal business hours throughout the period prior to the
Primary Merger Effective Time to the books, records (including, without limitation, tax returns
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and work papers of independent auditors), properties, personnel and to such other information
as any party may reasonably request and, during such period, it shall furnish promptly to such
other party (i) a copy of each material report, schedule and other document filed by it pursuant to
the requirements of federal or state securities or banking laws, and (ii) all other information
concerning the business, properties and personnel of it as the other may reasonably request.
(b) Each party agrees that it will, and will cause its Representatives to, comply with the
Confidentiality Agreement with respect to all information obtained under this Section 6.05.
(c) No investigation by either party of the business and affairs of the other party, pursuant
to this Section 6.05 or otherwise, shall affect or be deemed to modify or waive any representation,
warranty, covenant or agreement in this Agreement, or the conditions to either party’s obligation
to consummate the transactions contemplated by this Agreement.
6.06. Acquisition Proposals. (a) FCB and NMB each agrees that it will not, and will cause
its Subsidiaries and its and its Subsidiaries’ officers, directors, agents, advisors and affiliates
not to, initiate, solicit, encourage or knowingly facilitate inquiries or proposals with respect
to, or engage in any negotiations concerning, or provide any confidential or nonpublic information
or data to, or have any discussions with, any Person relating to, any Acquisition Proposal;
provided that, in the event either party receives an unsolicited bona fide written
Acquisition Proposal and such party’s board of directors concludes in good faith that there is a
reasonable likelihood that such Acquisition Proposal constitutes or is reasonably likely to result
in a Superior Proposal, such party may, and may permit its Subsidiaries and its and its
Subsidiaries’ Representatives to, furnish or cause to be furnished nonpublic information and
participate in such negotiations or discussions to the extent that the board of directors of such
party concludes in good faith (after consultation with counsel) that failure to take such actions
would reasonably be expected to be a violation of its fiduciary duties under applicable law;
provided that prior to providing any nonpublic information permitted to be provided pursuant to the
foregoing proviso, it shall have entered into a confidentiality agreement with such third party on
terms no less favorable to it than the confidentiality agreement as entered into on April 20, 2006
between NMB and FCB (the “Confidentiality Agreement”). Each of FCB and NMB will immediately cease
and cause to be terminated any activities, discussions or negotiations conducted before the date of
this Agreement with any persons other than FCB or NMB, as the case may be, with respect to any
Acquisition Proposal and will use its reasonable best efforts to enforce any confidentiality or
similar agreement relating to an Acquisition Proposal. FCB and NMB will promptly (within one
business day) advise the other party following receipt of any Acquisition Proposal and the
substance thereof (including the identity of the person making such Acquisition Proposal), and will
keep the other party apprised of any related developments, discussions and negotiations (including
the terms and conditions of the Acquisition Proposal) on a current basis.
(b) Nothing contained in this Agreement shall prevent a party or its board of directors from
complying with Rule 14d-9 and Rule 14e-2 under the Exchange Act with respect to an Acquisition
Proposal, provided that such Rules will in no way eliminate or modify the effect that any action
pursuant to such Rules would otherwise have under this Agreement.
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6.07. Affiliate Agreements. (a) Not later than the 15th day prior to the mailing of the
Joint Proxy Statement, each of FCB and NMB shall deliver to the other a schedule of each Person
that, to the best of its knowledge, is or is reasonably likely to be, as of the date of the FCB
Meeting or the NMB Meeting, as applicable, deemed to be an “affiliate” of FCB or NMB, as applicable
(each, an “FCB Affiliate” or “NMB Affiliate”), as that term is used in Rule 145 under the
Securities Act.
(b) Each of FCB and NMB shall use its commercially reasonable efforts to cause each Person who
may be deemed to be an FCB Affiliate or NMB Affiliate, as applicable, to execute and deliver to the
other party on or before the date of mailing of the Joint Proxy Statement an agreement in
substantially the form attached hereto as Exhibit D.
6.08. Certain Information. Without limiting the generality of Section 6.05, after the date
hereof until the earlier of the Primary Merger Effective Time and the termination of this Agreement
in accordance with its terms, each party hereto shall furnish to the other party a copy of its
monthly board package and minutes of the board’s loan committee meetings (including all materials
provided in advance of such meetings).
6.09. NASDAQ. Each of NMB and FCB shall use commercially reasonable efforts to cause the
Surviving Corporation Common Stock to be issued in the Merger to be approved for quotation on the
NASDAQ, subject to official notice of issuance, as promptly as practicable after the date hereof,
and in any event prior to the Effective Date.
6.10. Regulatory Applications. (a) FCB and NMB and their respective Subsidiaries shall
cooperate and use their respective reasonable best efforts to prepare as promptly as possible all
documentation to effect all filings and to obtain all permits, consents, approvals and
authorizations of all third parties and Governmental Authorities necessary to consummate the
transactions contemplated by this Agreement and NMB shall make all necessary regulatory filings as
soon as reasonably practicable. Each of FCB and NMB shall have the right to review in advance, and
to the extent practicable each will consult with the other, in each case subject to applicable laws
relating to the exchange of information, with respect to all material written information submitted
to any third party or any Governmental Authority in connection with the transactions contemplated
by this Agreement. In exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable. Each party hereto agrees that it will consult with the
other party hereto with respect to the obtaining of all material permits, consents, approvals and
authorizations of all third parties and Governmental Authorities necessary or advisable to
consummate the transactions contemplated by this Agreement and each party will keep the other party
apprised of the status of material matters relating to completion of the transactions contemplated
hereby.
(b) Subject to applicable law, each party agrees, upon request, to furnish the other party
with all readily obtainable information concerning itself, its Subsidiaries, directors, officers
and shareholders and such other matters as may be reasonably necessary or advisable in connection
with any filing, notice or application made by or on behalf of such other party or any of its
Subsidiaries with or to any third party or Governmental Authority.
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6.11. Indemnification. (a) Following the Effective Date, the Surviving Corporation shall
indemnify, defend and hold harmless the present and former directors and officers of FCB, NMB and
their respective Subsidiaries (each, an “Indemnified Party”) against all costs or expenses
(including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or liabilities
(collectively, “Costs”) as incurred, in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising out of actions or
omissions occurring at or prior to the Primary Merger Effective Time (including, without
limitation, the transactions contemplated by this Agreement) to the fullest extent that FCB, NMB
and their respective Subsidiaries are permitted to indemnify (and advance expenses to) their
respective directors and officers under the laws of their respective jurisdictions of
incorporation, their respective charters and their respective by-laws.
(b) For a period of three years from the Primary Merger Effective Time, the Surviving
Corporation shall use its reasonable best efforts to provide director’s and officer’s liability
insurance that serves to reimburse the present and former officers and directors of FCB, NMB or any
of their respective Subsidiaries (determined as of the Reincorporation Merger Effective Time) with
respect to claims against such directors and officers arising from facts or events occurring at or
prior to the Primary Merger Effective Time (including, without limitation, the transactions
contemplated by this Agreement) which insurance shall contain at least the same coverage and
amounts, and contain terms and conditions no less advantageous, as that coverage currently provided
by FCB or NMB, as the case may be.
(c) Any Indemnified Party wishing to claim indemnification under Section 6.11(a), upon
learning of any claim, action, suit, proceeding or investigation described above, shall promptly
notify the Surviving Corporation thereof; provided that the failure so to notify shall not affect
the obligations of the Surviving Corporation under Section 6.11(a) unless and to the extent that
the Surviving Corporation is actually and materially prejudiced as a result of such failure.
(d) If the Surviving Corporation or any of its successors or assigns shall consolidate with or
merge into any other entity and shall not be the continuing or surviving entity of such
consolidation or merger or shall transfer all or substantially all of its assets to any other
entity, then and in each case, the Surviving Corporation shall cause proper provision to be made so
that the successors and assigns of the Surviving Corporation shall assume the obligations set forth
in this Section 6.11.
(e) The provisions of this Section 6.11 are intended to be for the benefit of, and shall be
enforceable by, each Indemnified Party and his or her heirs and representatives.
6.12. Benefit Plans. (a) The Surviving Corporation shall, from and after the Primary Merger
Effective Time, (i) provide former employees of FCB and NMB who remain as employees of the
Surviving Corporation with employee benefit plans no less favorable in the aggregate than those
provided to similarly situated employees of NMB who remain as employees of the Surviving
Corporation, (ii) provide employees of FCB and NMB who remain as employees of the Surviving
Corporation credit for years of service with FCB or NMB, as the case may be, or any of such
entity’s Subsidiaries prior to the Primary Merger Effective Time for the purpose of eligibility and
vesting except for purposes of qualifying for subsidized early retirement benefits or
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to the extent it would result in a duplication of benefits, (iii) to the extent reasonably
practicable cause any and all pre-existing condition limitations (to the extent such limitations
did not apply to a pre-existing condition under comparable FCB Benefit Plans or NMB Benefit Plans)
and eligibility waiting periods under group health plans of the Surviving Corporation to be waived
with respect to former employees of FCB and NMB who remain as employees of the Surviving
Corporation (and their eligible dependents) and who become participants in such group health plans
and (iv) to the extent reasonably practicable cause to be credited to any deductible or
out-of-pocket expense of the Surviving Corporation benefit plans any deductibles or out-of-pocket
expenses incurred by employees of FCB or NMB and their beneficiaries and dependents during the
portion of the calendar year prior to their participation in the Surviving Corporation benefit
plans. Notwithstanding the foregoing, nothing contained herein shall obligate the Surviving
Corporation or any of its Affiliates to (i) maintain any particular Benefit Plan or (ii) retain the
employment of any particular employee. Prior to the Primary Merger Effective Time, NMB and FCB
shall consult with each other in good faith to determine which FCB Benefit Plans and NMB Benefit
Plans shall be amended, modified or terminated, as the case may be, on or after the Effective Date
and shall then take all actions reasonably necessary to effect such determinations.
(b) FCB and NMB shall, and shall cause the Surviving Corporation to, honor in accordance with
their terms, all vested or accrued benefit obligations to, and contractual rights of, current and
former employees of FCB and NMB and their respective Subsidiaries, including, without limitation,
any benefits or rights under the agreements listed on Section 6.12 of the FCB Disclosure Schedule
or the NMB Disclosure Schedule, as the case may be, or that arise as a result of the transactions
contemplated by this Agreement (either alone or in combination with any other event).
(c) Prior to making any written or oral communications to their directors, officers or
employees pertaining to compensation or benefit matters that are affected by the transactions
contemplated by this Agreement, each party shall provide the other party with a copy of the
intended communication and a reasonable period of time to review and comment on the communication,
and the parties shall cooperate in providing any such mutually agreeable communication.
6.13. Exemption from Liability Under Section 16(b). Assuming that FCB delivers to NMB the
Section 16 Information in a timely and accurate manner before the Primary Merger Effective Time,
the NMB Board, or a committee of “non-employee directors” thereof (as such term is defined for
purposes of Rule 16b-3(d) under the Exchange Act), will reasonably promptly thereafter and in any
event before the Primary Merger Effective Time adopt a resolution providing that the receipt by the
FCB Insiders of Surviving Corporation Common Stock in exchange for shares of FCB Common Stock, and
of options to purchase shares of Surviving Corporation Common Stock upon conversion of options to
purchase shares of FCB Common Stock, in each case pursuant to the transactions contemplated hereby
and to the extent such securities are listed in the Section 16 Information, are approved by the NMB
Board or by such committee thereof, and are intended to be exempt from liability pursuant to
Section 16(b) under the Exchange Act, such that any such receipt will be so exempt.
6.14. Notification of Certain Matters. Each of FCB and NMB shall give prompt notice to the
other of any fact, event or circumstance known to it that (i) is reasonably likely,
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individually or taken together with all other facts, events and circumstances known to it, to
result in any Material Adverse Effect with respect to it or (ii) would cause or constitute a
material breach of any of its representations, warranties, covenants or agreements contained
herein.
ARTICLE VII
Conditions to Consummation of the Mergers
7.01. Conditions to Each Party’s Obligation to Effect the Mergers. The respective obligation
of each of FCB, NMB and Merger Sub to consummate the Mergers is subject to the fulfillment or
written waiver by FCB and NMB prior to the Primary Merger Effective Time of each of the following
conditions:
(a) Shareholder Approvals. The principal terms of this Agreement shall have been duly
approved by the requisite vote of the shareholders of FCB and NMB.
(b) Regulatory Approvals. Any consents, waivers, clearances, approvals and
authorizations (including pursuant to state “Blue Sky” laws) of Governmental Authorities that are
necessary to permit consummation of the Mergers shall have been obtained and shall remain in full
force and effect and all statutory waiting periods in respect thereof shall have expired.
(c) No Injunction. No Governmental Authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation, judgment, decree,
injunction or other order (whether temporary, preliminary or permanent) which is in effect and
prohibits consummation of either Merger. No statute, rule, regulation, order, injunction or decree
shall have been enacted, entered, promulgated or enforced by any Governmental Authority which
prohibits or makes illegal the consummation of either Merger.
(d) Registration Statement. The Registration Statement shall have become effective
under the Securities Act and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and be in effect and no proceedings for that purpose shall have
been initiated by the SEC and not withdrawn.
(e) Listing. The Surviving Corporation Common Stock to be issued in the Mergers shall
have been approved for quotation on NASDAQ.
(f) Opinion of Counsel. Each party shall have received an opinion of Xxxxxxxx &
Xxxxxxxx LLP, joint counsel to the parties, dated the Effective Date, to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion, (i) the Mergers will be
treated as reorganizations within the meaning of Section 368(a) of the Code and (ii) FCB and Merger
Sub will each be a party to such reorganization within the meaning of Section 368(b) of the Code
with respect to the Primary Merger and NMB and Merger Sub will each be a party to such
reorganization within the meaning of Section 368(b) of the Code with respect to the Reincorporation
Merger. In rendering its opinion, Xxxxxxxx & Xxxxxxxx LLP may require and rely upon written
representations from FCB and shareholders of NMB.
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7.02. Conditions to Obligation of FCB. The obligation of FCB to consummate the Merger is also
subject to the fulfillment or written waiver by FCB prior to the Primary Merger Effective Time of
each of the following conditions:
(a) Representations and Warranties. The representations and warranties of NMB and
Merger Sub set forth in this Agreement shall be true and correct (without giving effect to any
qualifications as to materiality or Material Adverse Effect) as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date (in each case except to the
extent such representations and warranties speak as of an earlier date in which case they shall be
true and correct as of such date), except where any failures of any such representations and
warranties to be so true and correct would not be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect with respect to NMB except for Section 5.03(c) and (f)
which shall be true in all material respects; and FCB shall have received a certificate signed on
behalf of NMB by the Chief Executive Officer or Chief Financial Officer of NMB to the foregoing
effect.
(b) Performance of Obligations of NMB. NMB and Merger Sub shall have performed in all
material respects all obligations required to be performed by them under this Agreement at or prior
to the Primary Merger Effective Time, and FCB shall have received a certificate, dated the
Effective Date, signed on behalf of NMB by the Chief Executive Officer and the Chief Financial
Officer of NMB to such effect.
7.03. Conditions to Obligation of NMB. The obligation of NMB and Merger Sub to consummate the
Mergers is also subject to the fulfillment, or written waiver by NMB, prior to the Primary Merger
Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and warranties of FCB set
forth in this Agreement shall be true and correct (without giving effect to any qualifications as
to materiality or Material Adverse Effect) as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date (except to the extent such representations and
warranties speak as of an earlier date in which case they shall be true and correct as of such
date), except where any failures of any such representations and warranties to be so true and
correct would not be reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect with respect to FCB except for Section 5.03(b) and (f) which shall be true in all
material respects; and NMB shall have received a certificate signed on behalf of FCB by the Chief
Executive Officer or Chief Financial Officer of FCB to the foregoing effect.
(b) Performance of Obligations of FCB. FCB shall have performed in all material
respects all obligations required to be performed by it under this Agreement at or prior to the
Primary Merger Effective Time, and NMB shall have received a certificate, dated the Effective Date,
signed on behalf of FCB by the Chief Executive Officer and the Chief Financial Officer of FCB to
such effect.
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ARTICLE VIII
Termination
8.01. Termination. This Agreement may be terminated, and the Mergers may be abandoned:
(a) Mutual Consent. At any time prior to the Reincorporation Merger Effective Time,
by the mutual consent of FCB and NMB, if the Board of Directors of each so determines by vote of a
majority of the members of its entire Board.
(b) Breach. At any time prior to the Reincorporation Merger Effective Time, by FCB or
NMB, if its Board of Directors so determines by vote of a majority of the members of its entire
Board, in the event of either: (i) a breach by the other party of any representation or warranty
contained herein, which breach cannot be or has not been cured within 60 calendar days after the
giving of written notice to the breaching party of such breach; or (ii) a breach by the other party
of any of the covenants or agreements contained herein, which breach cannot be or has not been
cured within 60 calendar days after the giving of written notice to the breaching party of such
breach, provided that any such breach under clause (i) or (ii) would entitle the non-breaching
party not to consummate the Merger under Article VII hereof.
(c) Adverse Action. At any time prior to the Reincorporation Merger Effective Time,
by FCB or NMB, if the other party’s board of directors submits this Agreement to its shareholders
without a recommendation for approval or with special and materially adverse conditions on such
approval; or such board of directors otherwise withdraws or materially and adversely modifies (or
discloses its intention to withdraw or materially and adversely modify) its recommendation referred
to in Section 6.02 or rescinds its notice of shareholder meeting or declines to submit the
principal terms of this Agreement to a vote of its shareholders; or such board of directors
recommends to its shareholders an Acquisition Proposal other than the Mergers; or such board of
directors negotiates or authorizes the conduct of negotiations (and five business days have elapsed
without such negotiations being discontinued) with a third party (it being understood and agreed
that “negotiate” shall not be deemed to include the provision of information to, or the request and
receipt of information from, any person that submits an Acquisition Proposal or discussions
regarding such information for the sole purpose of ascertaining the terms of such Acquisition
Proposal and determining whether the board of directors will in fact engage in, or authorize,
negotiations) regarding an Acquisition Proposal other than the Mergers.
(d) Delay. At any time prior to the Reincorporation Merger Effective Time, by FCB or
NMB, if its Board of Directors so determines by vote of a majority of the members of its entire
Board, in the event that the Mergers are not consummated by March 31, 2007, except to the extent
that the failure of the Mergers then to be consummated arises out of or results from the knowing
and willful action or inaction of the party seeking to terminate pursuant to this Section 8.01(d),
which action or inaction is in violation of its obligations under this Agreement.
(e) Denial of Regulatory Approval. By FCB or NMB, if its Board of Directors so
determines by a vote of a majority of the members of its entire Board, in the event
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the approval of any Governmental Authority required for consummation of either Merger and the
other transactions contemplated by this Agreement shall have been denied by final nonappealable
action of such Governmental Authority.
(f) Shareholder Approval. By FCB or NMB, if its Board of Directors so determines by a
vote of a majority of the members of its entire Board, in the event that (i) the approval of the
principal terms of this Agreement by the shareholders of FCB shall not have been obtained at the
FCB Meeting or at any adjournment or postponement thereof or (ii) the approval of the principal
terms of this Agreement by the shareholders of NMB shall not have been obtained at the NMB Meeting
or at any adjournment or postponement thereof.
(g) Superior Proposal. By FCB or NMB, as the case may be, at any time prior to the
time the requisite vote of its shareholders is obtained, if (i) such party is not in material
breach of any of the terms of this Agreement, (ii) the board of directors of such party authorizes
it, subject to complying with the terms of this Agreement, to enter into a definitive agreement
(other than a mere confidentiality agreement) with respect to a Superior Proposal and such party
notifies the other in writing that it intends to enter into such an agreement, attaching the most
current version of such agreement to such notice, (iii) the other party does not make, within four
business days of receipt of such party’s written notification of its intention to enter into a
binding agreement for a Superior Proposal, an offer that the board of directors of such party
determines, in good faith after consultation with its financial advisors, is at least as favorable,
from a financial point of view, to the shareholders of such party as the Superior Proposal and (iv)
such party prior to such termination pays to the other party in immediately available funds any
fees required to be paid pursuant to Section 8.02. Each of FCB and NMB agrees (x) that it will not
enter into the binding agreement referred to in clause (ii) above until at least the fifth business
day after it has provided the notice to the other party required thereby, (y) to notify the other
party promptly if its intention to enter into the written agreement referred to in its notification
shall change at any time after giving such notification and (z) during such four day period, to
negotiate in good faith with the other party with respect to any revisions to the terms of the
transaction contemplated by this Agreement proposed by the other party in response to a Superior
Proposal, if any.
8.02. Effect of Termination and Abandonment. (a) In the event of termination of this
Agreement and the abandonment of the Mergers pursuant to this Article VIII, this Agreement shall
become void and of no effect with no liability to any Person on the part of any party hereto (or of
any of its Representatives or affiliates); provided, however, and notwithstanding anything in the
foregoing to the contrary, that (i) except as otherwise provided herein, no such termination shall
relieve any party hereto of any liability or damages to the other party hereto resulting from any
willful material breach of this Agreement, (ii) the provisions set forth in the second sentence of
Section 9.01 shall survive termination of this Agreement and termination shall not relieve any
party of any liability under such provisions.
(b) In the event that (i) a bona fide Acquisition Proposal shall have been made to FCB or any
of its Subsidiaries or any of its shareholders or any Person shall have publicly announced an
intention (whether or not conditional) to make an Acquisition Proposal with respect to FCB or any
of its Subsidiaries (and such Acquisition Proposal or publicly announced intention shall not have
been publicly withdrawn) and thereafter this Agreement is terminated by
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either FCB or NMB pursuant to Section 8.01(f)(i) or (ii) this Agreement is terminated by FCB
pursuant to Section 8.01(g) or by NMB pursuant to Section 8.01(c), then FCB shall promptly, but in
no event later than two days after the date of such termination, pay NMB a termination fee of
$4,000,000 (the “Termination Fee”) (provided, however, that the Termination Fee to be paid
pursuant to clause (iv) of Section 8.01(g) shall be paid as set forth in such section) payable by
wire transfer of same day funds; provided, however, that no Termination Fee shall be payable to NMB
pursuant to clause (i) of this paragraph (b) unless and until within 12 months of such termination
FCB or any of its Subsidiaries shall have entered into a definitive agreement (other than merely a
confidentiality agreement) with respect to, or shall have consummated or shall have approved or
recommended to FCB’s stockholders or otherwise not opposed, an Acquisition Proposal (substituting
“50%” for “15%” in the definition thereof). FCB’s payment shall be the sole and exclusive remedy
of NMB for damages against FCB and any of its Subsidiaries and their respective Representatives
with respect to the breach of any covenant or agreement giving rise to such payment. FCB
acknowledges that the agreements contained in this
Section 8.02(b) are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements, NMB would not
enter into this Agreement; accordingly, if FCB fails to promptly pay the amount due pursuant to
this Section 8.02(b), and, in order to obtain such payment, NMB commences a suit that results in a
judgment against FCB for the fee set forth in this
Section 8.02(b) or any portion of such fee, FCB shall
pay to NMB or Merger Sub its costs and expenses (including attorneys’ fees) in connection with such
suit, together with interest on the amount of the fee at the publicly announced prime rate of
interest published in The Wall Street Journal on the date such payment was required to be made from
the date such payment was required to be made through the date of payment.
(c) In the event that (i) a bona fide Acquisition Proposal shall have been made to NMB or any
of its Subsidiaries or any of its shareholders or any Person shall have publicly announced an
intention (whether or not conditional) to make an Acquisition Proposal with respect to NMB or any
of its Subsidiaries (and such Acquisition Proposal or publicly announced intention shall not have
been publicly withdrawn) and thereafter this Agreement is terminated by either FCB or NMB pursuant
to Section 8.01(f)(ii) or (ii) this Agreement is terminated by NMB pursuant to Section 8.01(g) or
by FCB pursuant to Section 8.01(c), then NMB shall promptly, but in no event later than two days
after the date of such termination, pay FCB the Termination Fee (provided, however, that the
Termination Fee to be paid pursuant to clause (iv) of Section 8.01(g) shall be paid as set forth in
such section), promptly payable by wire transfer of same day funds; provided, however, that no fee
shall be payable to FCB pursuant to clause (i) of this paragraph (c) unless and until within 12
months of such termination NMB or any of its Subsidiaries shall have entered into a definitive
agreement (other than merely a confidentiality agreement) with respect to, or shall have
consummated or shall have approved or recommended to NMB’s shareholders or otherwise not opposed,
an Acquisition Proposal (substituting “50%” for “15%” in the definition thereof). NMB’s payment
shall be the sole and exclusive remedy of FCB against NMB and any of its Subsidiaries and their
respective Representatives with respect to the breach of any covenant or agreement giving rise to
such payment. NMB acknowledges that the agreements contained in this Section 8.02(c) are an
integral part of the transactions contemplated by this Agreement and that, without these
agreements, FCB would not enter into this Agreement; accordingly, if NMB fails to promptly pay the
amount due pursuant to this Section 8.02(c), and, in order to obtain such payment, FCB commences a
suit that results in a judgment against NMB for the fee set forth in this Section 8.02(c) or any
portion of such fee,
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NMB shall pay to FCB its costs and expenses (including attorneys’ fees) in connection with
such suit, together with interest on the amount of the fee at the publicly announced prime rate of
interest published in The Wall Street Journal in effect on the date such payment was required to be
made from the date such payment was required to be made through the date of payment.
ARTICLE IX
Miscellaneous
9.01. Survival. No representations, warranties, agreements and covenants contained in this
Agreement shall survive the Primary Merger Effective Time (other than Sections 2.06 and 6.11 and
this Article IX which shall survive the Primary Merger Effective Time and the Reincorporation
Merger Effective Time). This Article IX, Section 8.02 and the Confidentiality Agreement shall survive
the termination of this Agreement. All other representations, warranties, covenants and agreements
in this Agreement shall not survive the consummation of the Mergers or the termination of this
Agreement.
9.02. Waiver; Amendment. Prior to the Reincorporation Merger Effective Time, any provision of
this Agreement may be (a) waived by the party benefited by the provision, or (b) amended or
modified at any time, by an agreement in writing between FCB and NMB hereto executed in the same
manner as this Agreement, except that (i) after the FCB Meeting, this Agreement may not be amended
if it would violate California law or reduce the consideration to be received by FCB shareholders
in the Primary Merger and (ii) after the NMB Meeting, this Agreement may not be amended if it would
violate California law or reduce the consideration to be received by NMB shareholders in the
Reincorporation Merger.
9.03. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to constitute an original.
9.04. Governing Law. This Agreement shall be governed by, and interpreted in accordance with,
the laws of the State of California (except to the extent to which, under the internal affairs
doctrine as applied under California law, Delaware law applies by reason of being the law of Merger
Sub’s state of incorporation).
9.05. Expenses. Each party hereto will bear all expenses incurred by it in connection with
this Agreement and the transactions contemplated hereby, except that printing expenses and SEC fees
and the fees and expenses of Xxxxxxxx & Xxxxxxxx LLP shall be shared equally between the parties.
9.06. Notices. All notices, requests and other communications hereunder to a party shall be
in writing and shall be deemed given if personally delivered, telecopied (with confirmation) or
mailed by registered or certified mail (return receipt requested) to such party at its address set
forth below or such other address as such party may specify by notice to the parties hereto.
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If to FCB Bancorp, to:
C. G. Kum
President and Chief Executive Officer
FCB Bancorp
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
President and Chief Executive Officer
FCB Bancorp
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxx X. Xxxxxx
Horgan, Rosen, Beckham & Coren, L.L.P.
00000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Telephone: 000-000-0000
Fax: 000-000-0000
Horgan, Rosen, Beckham & Coren, L.L.P.
00000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Telephone: 000-000-0000
Fax: 000-000-0000
If to National Mercantile Bancorp, to:
Xxxxx X. Xxxxxxxxxx
President and Chief Executive Officer
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
President and Chief Executive Officer
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
With a copy to:
Xxxx X. Xxxxx
Xxxx & Xxxxx P.C.
0000 Xxxxxxx Xxxx Xxxx
00XX Xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
Xxxx & Xxxxx P.C.
0000 Xxxxxxx Xxxx Xxxx
00XX Xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
In the case of a notice to either party with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
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9.07. Entire Understanding; No Third Party Beneficiaries. This Agreement, together with the
Exhibits and Schedules hereto and the Confidentiality Agreement, represents the entire
understanding of the parties hereto with reference to the transactions contemplated hereby and
thereby and this Agreement supersedes any and all other oral or written agreements heretofore made.
No representation, warranty, inducement, promise, understanding or condition not set forth in this
Agreement has been made or relied on by any party in entering into this Agreement. Except for
Section 6.11, nothing in this Agreement expressed or implied is intended to confer upon any Person,
other than the parties hereto or their respective successors, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
9.08. Effect. No provision of this Agreement shall be construed to require FCB, NMB or any of
their respective Subsidiaries, affiliates or directors to take any action or omit to take any
action which action or omission would violate applicable law (whether statutory or common law),
rule or regulation.
9.09. Severability. Except to the extent that application of this Section 9.09 would have a
Material Adverse Effect on either party or the Surviving Corporation, any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
9.10. Alternative Structure. Notwithstanding anything to the contrary contained in this
Agreement, prior to the Reincorporation Merger Effective Time, the parties may mutually agree to
revise the structure of the Mergers and related transactions provided that each of the transactions
comprising such revised structure shall (i) not change the amount or form of consideration to be
received by the shareholders of FCB or NMB and the holders of FCB Options or NMB Options, (ii) be
capable of consummation in as timely a manner as the structure contemplated herein and (iii) not
otherwise be prejudicial to the interests of the shareholders of either party. This Agreement and
any related documents shall be appropriately amended in order to reflect any such revised
structure.
9.11. Enforcement of the Agreement. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of California located in either
Los Angeles or Ventura Counties, this being in addition to any other remedy to which they are
entitled at law or in equity.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in
counterparts by their duly authorized officers, all as of the day and year first above written.
| FCB BANCORP |
||||
| By: | /s/ C. G. Kum | |||
| Name: | C. G. Kum | |||
| Title: | President and Chief Executive Officer | |||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Secretary | |||
| NATIONAL MERCANTILE BANCORP |
||||
| By: | /s/ Xxxxx Xxxxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Secretary | |||
| FIRST CALIFORNIA FINANCIAL GROUP, INC. |
||||
| By: | /s/ Xxxxx Xxxxxxxxxx | |||
| Name: | Xxxxx Xxxxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: | Xxxxxx X. Xxxxx | |||
| Title: | Secretary | |||
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EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
FIRST CALIFORNIA FINANCIAL GROUP, INC.
FIRST CALIFORNIA FINANCIAL GROUP, INC. a Delaware corporation (the “Corporation”), hereby
certifies as follows:
1. The name of the Corporation is FIRST CALIFORNIA FINANCIAL GROUP, INC. The date of filing
of its original certificate of incorporation with the Secretary of State was June 7, 2006 and the
name under which it was originally incorporated was FIRST CALIFORNIA FINANCIAL GROUP, INC.
2. This restated certificate of incorporation amends, restates and integrates the provisions
of the certificate of incorporation of said Corporation and has been duly adopted in accordance
with the provisions of the General Corporation Law of the State of Delaware.
3. The text of the certificate of incorporation is hereby amended and restated to read herein
as set forth in full:
FIRST. The name of the Corporation is FIRST CALIFORNIA FINANCIAL GROUP, INC.
SECOND. The address of the Corporation’s registered office in the State of Delaware is ___. The
name of its registered agent at such address is ___.
THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of Delaware.
FOURTH. (a) (i) The total number of shares of all classes of stock which the Corporation
shall have authority to issue is ___, of which ___shares shall be designated as common stock of no par
value (the “Common Stock”) and ___shares shall be designated as preferred stock of no par value (the
“Preferred Stock”). Shares of Preferred Stock may be issued in one or more series from time to
time by the board of directors, and the board of directors is expressly authorized to fix by
resolution or resolutions the designations and the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof, of the shares of each series of Preferred
Stock, including without limitation the following:
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(A) the distinctive serial designation of such series which shall distinguish it from
other series;
(B) the number of shares included in such series;
(C) the dividend rate (or method of determining such rate) payable to the holders of
the shares of such series, any conditions upon which such dividends shall be paid and the
date or dates upon which such dividends shall be payable;
(D) whether dividends on the shares of such series shall be cumulative and, in the
case of shares of any series having cumulative dividend rights, the date or dates or method
of determining the date or dates from which dividends on the shares of such series shall be
cumulative;
(E) the amount or amounts which shall be payable out of the assets of the Corporation
to the holders of the shares of such series upon voluntary or involuntary liquidation,
dissolution or winding up the Corporation, and the relative rights of priority, if any, of
payment of the shares of such series;
(F) the price or prices at which, the period or periods within which and the terms and
conditions upon which the shares of such series may be redeemed, in whole or in part, at
the option of the Corporation or at the option of the holder or holders thereof or upon the
happening of a specified event or events;
(G) the obligation, if any, of the Corporation to purchase or redeem shares of such
series pursuant to a sinking fund or otherwise and the price or prices at which, the period
or periods within which and the terms and conditions upon which the shares of such series
shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(H) whether or not the shares of such series shall be convertible or exchangeable, at
any time or times at the option of the holder or holders thereof or at the option of the
Corporation or upon the happening of a specified event or events, into shares of any other
class or classes or any other series of the same or any other class or classes of stock of
the Corporation, and the price or prices or rate or rates of exchange or conversion and any
adjustments applicable thereto; and
(I) whether or not the holders of the shares of such series shall have voting rights,
in addition to the voting rights provided by-law, and if so the terms of such voting
rights.
Subject to the rights of the holders of any series of Preferred Stock, the number of authorized
shares of any class or series of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of
the stock of the Corporation entitled to vote thereon, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of Delaware or any corresponding provision hereafter
enacted.
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(b) The board of directors has provided for the issuance of a series of Preferred Stock of
the Corporation consisting of 1,000 shares of Series A Convertible Perpetual Preferred Stock with
the designations and the powers, preferences and rights, and the qualifications, limitations and
restrictions as set forth in Exhibit A hereto.
FIFTH. The board of directors of the Corporation is expressly authorized to adopt, amend or
repeal by-laws of the Corporation.
SIXTH. Elections of directors need not be by written ballot except and to the extent provided
in the by-laws of the Corporation. The holders of Common Stock shall be entitled at all elections
of directors to as many votes as shall equal the number of votes which (except for this provision
as to cumulative voting) such holder would be entitled to cast for the election of directors with
respect to such holder’s shares of Common Stock multiplied by the number of directors to be
elected, and such holder may cast all of such votes for a single director or may distribute them
among the number to be voted for, or for any two or more of them as such holder may see fit, and to
one vote for each share of Common Stock on all other matters.
SEVENTH. (a) The following provisions of this Article Seventh will be effective from [insert
Primary Merger Effective Time] until immediately after the close of the annual meeting of
stockholders of the Corporation held in 2009 (the “Lapse Date”).
(b) Subject to the provisions of this Article Seventh and subject to the terms of any class or
series of stock having a preference over the Common Stock as to dividends or upon liquidation or
providing for special circumstances under which holders thereof may elect directors, until the
Lapse Date, (1) in order to qualify for election as a director of the Corporation at an annual or
special meeting of stockholders or by written consent of stockholders, an individual must be
nominated either by (i) a stockholder entitled to vote in the election of directors who has
complied with all requirements for such nomination that may be provided for in these Amended and
Restated Articles of Incorporation and the Corporation’s By-laws or (ii) the applicable Nominating
Committee (as defined below) and (2) in order to qualify for election as a director of the
Corporation by the board of directors to fill a vacancy or newly created directorship, an
individual must be nominated to the board of directors by the applicable Nominating Committee (as
defined below). The qualification procedures for clauses (1)(i) and (ii) of the previous sentence
are known herein as the “Nomination Procedures”.
(i) (A) Upon the Reincorporation Merger Effective Time, the number of directors of
the Corporation shall be ten (10), which number shall consist of an equal number of
Former FCB Directors (as defined below) and Former NMB Directors (as defined below), in
each case as designated pursuant to the Merger Agreement. If the board of directors
decides to increase at any time the number of members of the board of directors, the
board of directors shall designate such new directorships in such a way as to cause the
ratio of the number of Former NMB Directorships (as defined below) to the number of
Former FCB Directorships (as defined below) (the “Ratio”) to equal one.
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(B) If the board of directors decides to decrease the number of members of the board
of directors, the board of directors shall designate those directorships that are up for
election at the annual stockholders’ meeting in such a way as to cause the Ratio to equal
one.
(C) If the board of directors decides to decrease, during any period between
consecutive annual stockholders meetings, the number of members of the board of directors,
the board of directors shall cause the Ratio to equal one
(ii) The board of directors may decide by the vote of a Special Majority (as
defined below), on the recommendation of both a NMB Nominating Committee (as defined
below) and an FCB Nominating Committee (as defined below), (A) not to designate any one
or more directorships in the manner described in the previous paragraph (i), or (B) to
determine that the Nominating Committee Procedures shall not apply to any one or more
directorships.
(iii) At [insert date of Primary Merger Effective Time], any director who was
formerly a director of FCB Bancorp shall be a “Former FCB Director” and any director who
was formerly a director of National Mercantile Bancorp shall be a “Former NMB Director.”
Any person filling (by election or appointment) a Former NMB Directorship and nominated
under the Nomination Procedures shall be considered a “Former NMB Director”; any person
filling (by election or appointment) a Former FCB Directorship and qualified by the
Nomination Procedures shall be considered a “Former FCB Director.” Any person who is a
Former NMB Director or Former FCB Director under this paragraph (iii) shall also be a
“Continuing Director”.
(iv) For any directorship occupied by, vacated by, to be occupied by, or designated
for a Former FCB Director (a “Former FCB Directorship”), the Nominating Committee will
consist of two Former FCB Directors (an “FCB Nominating Committee”); for any
directorship occupied by, vacated by, to be occupied by, or designated for a Former NMB
Director (a “Former NMB Directorship”), the Nominating Committee will consist of two
Former NMB Directors (an “NMB Nominating Committee”). Subject to the powers of the
stockholders of the Corporation pursuant to this Certificate of Incorporation, the
By-Laws and under Delaware law, the FCB Nominating Committee will have sole and
exclusive power to nominate persons to fill the Former FCB Directorships and the NMB
Nominating Committee will have the sole and exclusive power to nominate persons to fill
the Former NMB Directorships. Either an FCB Nominating Committee or an NMB Nominating
Committee may be referred to herein by the general term “Nominating Committee”.
(v) The members of the FCB Nominating Committee will be Former FCB Directors
designated from time to time by Mr. ___; the members of the NMB Nominating Committee will
be Former NMB Directors designated from time to time by ___; provided, that, should ___or ___
no longer be a director of the Corporation or be otherwise unable to recommend for
appointment such
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members of a Nominating Committee, the members of the FCB Nominating Committee will
be Former FCB Directors appointed by the longest tenured Former FCB Director then
serving on the board of directors and the Former NMB Directors will be Former NMB
Directors appointed by the longest tenured Former NMB Director then serving on the board
of directors.
(c) “Special Majority” means a number of directors equal to at least (A) three-quarters of the
entire membership of the Corporation’s board of directors and (B) a majority of both the Former FCB
Directors and Former NMB Directors then serving.
(d) In the event that the holders of any class or series of stock of the Corporation shall be
entitled, voting separately as a class, to elect any directors of the Corporation, then the number
of directors that may be elected by such holders shall be in addition to the number fixed pursuant
to foregoing provisions of this Certificate of Incorporation and, except as otherwise expressly
provided in the terms of such class or series, the terms of the directors elected by such holders
shall expire at the annual meeting of stockholders next succeeding their election without regard to
the classification of the remaining directors.
(e) This Article SEVENTH may not be amended, modified or repealed except by an amendment to
this Amended and Restated Certificate of Incorporation adopted by the affirmative vote of (i)
two-thirds of the directors of the Corporation and (ii) the holders of not less than two-thirds of
the voting power of all outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for purposes hereof as a single class.
EIGHTH. No action required to be taken or which may be taken at any annual or special meeting
of stockholders of the Corporation may be taken without a meeting, and the power of stockholders to
consent in writing, without a meeting, to the taking of any action is specifically denied.
NINTH. A director of the Corporation shall not be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent
that such exemption from liability or limitation thereof is not permitted under the Delaware
General Corporation Law as currently in effect or as the same may hereafter be amended. No
amendment, modification or repeal of this Article NINTH shall adversely affect any right or
protection of a director that exists at the time of such amendment, modification or repeal.
TENTH. To the fullest extent permitted by applicable law, the Corporation is authorized to
provide indemnification of (and advancement of expenses to) agents of the Corporation (and any
other persons to which the DGCL permits the Corporation to provide indemnification) through bylaw
provisions, agreements with such agents or other persons, by vote of stockholders or disinterested
directors or otherwise, in excess of the indemnification and advancement otherwise permitted by
Section 145 of the DGCL, subject only to limits created by the DGCL and applicable decisional law,
with respect to actions for breach of duty to the Corporation, its stockholders, and others.
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IN WITNESS WHEREOF, FIRST CALIFORNIA FINANCIAL GROUP, INC. has caused this certificate to be signed
by , its , on the day of , 2006.
| FIRST CALIFORNIA FINANCIAL GROUP, INC. |
||||
| By: | ___________________________ | |||
| [insert name] | ||||
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EXHIBIT A
RIGHTS, PREFERENCES AND PRIVILEGES
OF
SERIES A CONVERTIBLE PERPETUAL PREFERRED STOCK
OF
FIRST CALIFORNIA FINANCIAL GROUP, INC.,
A DELAWARE CORPORATION
(A) Title of Series. The designation of the series of preferred stock shall be Series A
Convertible Perpetual Preferred Stock (the “Series A Preferred Stock).
(B) Number of Shares in Series. The number of shares of Series A Preferred Stock shall be
1,000.
(C) Voting Privileges of Series A Preferred Stock.
(1) Except as provided herein or required by-law, the holders of Series A Preferred Stock
shall not have the right to vote on any matters submitted to the stockholders.
(2) In addition to any vote required by the Delaware General Corporation Law, the First
California Financial Group, Inc. (the “Corporation”) shall not, without the affirmative vote or
written consent of the holders (acting together as a class) of not less than a majority of the then
outstanding shares of Series A Preferred Stock:
(a) authorize, create or issue any additional shares of Series A Preferred Stock or shares of
any class or series of stock having any preference or priority superior to or on parity with the
Series A Preferred Stock with respect to the payment or distribution of assets upon the dissolution
or liquidation, voluntary or involuntary, of the Corporation;
(b) declare or pay any dividend on its Common Stock or on any other class or series of capital
stock of the Corporation ranking junior to the Series A Preferred Stock;
(c) repurchase, redeem or otherwise acquire for any consideration any shares of its Common
Stock or shares of any other class or series of capital stock of the Corporation ranking junior to
the Series A Preferred Stock; or
(d) amend, alter or repeal any provisions of the Amended and Restated Certificate of
Incorporation of the Corporation, amend, alter or repeal any provisions of this Exhibit A to the
Amended and Restated Certificate of Incorporation, or adopt, amend, alter or repeal any Certificate
of Determination of Rights and Preferences with respect to any class or series of capital stock, in
each case, so as to adversely affect the rights, preferences and privileges relating to Series A
Preferred Stock
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or the holders thereof or waive any of the rights granted to the holders of the Series A
Preferred Stock hereby.
(D) Dividends. Except as contemplated by paragraph (E) below, the holders of the Series A
Preferred Stock shall not be entitled to receive any dividends.
(E) Liquidation Preference. In the event of an involuntary or voluntary liquidation or
dissolution of the Corporation at any time, the holders of shares of Series A Preferred Stock shall
be entitled to receive out of the assets of the Corporation, an amount per share of Series A
Preferred Stock equal to the Liquidation Amount of the Series A Preferred Stock. The “Liquidation
Amount” per share of Series A Preferred Stock as of any date shall be equal to the sum of $1,000
(the “Base Amount”) (appropriately adjusted to reflect stock splits, stock dividends,
reorganizations, consolidations and similar changes hereafter effected and relating to the Series A
Preferred Stock) plus an amount (calculated on the basis of a 365-day year and actual days elapsed
to payment) equal to 8.5% per annum of the Base Amount (as such Base Amount may be adjusted to
reflect stock splits, stock dividends, reorganizations, consolidations and similar changes
hereafter effected), which shall accrue commencing with ___. Notwithstanding the foregoing, in the
event of either an involuntary or a voluntary liquidation or dissolution of the Corporation,
payment shall be made first to the holders of shares of Series A Preferred Stock in the amounts set
forth in the Corporation’s Amended and Restated Certificate of Incorporation before any payment of
the Liquidation Amount shall be made or any assets distributed to the holders of the Series A
Preferred Stock, Common Stock or any other class or series of capital stock of the Corporation
ranking junior to the Series A Preferred Stock. If all amounts payable to the holders of the
Series A Preferred Stock pursuant to the Corporation’s Amended and Restated Certificate of
Incorporation have been paid, then payment in the amounts herein fixed shall be made to the holders
of the Series A Preferred Stock before payment shall be made or any assets distributed to the
holders of the Common Stock or any other class or series of capital stock of the Corporation
ranking junior to the Series A Preferred Stock with respect to payment upon dissolution or
liquidation of the Corporation. If upon any liquidation or dissolution of the Corporation the
assets available for distribution shall be insufficient to pay the holders of all outstanding
shares of Series A Preferred Stock and any other class or series of capital stock ranking on a
parity with the Series A Preferred Stock as to payments upon dissolution or liquidation of the
Corporation the full amounts to which they respectively shall be entitled, then such assets or the
proceeds thereof shall be distributed among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon were paid in full.
At any time, in the event of the merger, consolidation or reorganization of the Corporation
with or into any other entity or entities (in which merger, consolidation or reorganization any
stockholders of the Corporation receive distributions of cash, securities or other property), or
the sale, transfer or other disposition of all or substantially all of the assets of the
Corporation, or a series of related similar such transactions, then such transactions shall be
deemed, for purposes of determining the amounts to be received by the holders of the Series A
Preferred Stock in any such transaction, and for purposes of determining the priority of receipt of
such amounts as
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between the holders of the Series A Preferred Stock and the holders of other classes or series
of capital stock, to be a liquidation or dissolution of the Corporation; provided, however, the
foregoing shall not apply to (i) any transaction as to which the holders of a majority of the
outstanding Series A Preferred Stock shall have waived by affirmative vote or written consent the
application of this paragraph; and (ii) any merger or consolidation with an affiliate of the
Corporation the sole purpose of which is to change the Corporation’s domicile solely within the
United States and in which holders of capital stock exchange such securities for a pro rata amount
of substantially identical securities of a successor corporation.
Nothing hereinabove set forth shall affect in any way the right of each holder of shares of
Series A Preferred Stock to convert such shares in accordance with paragraph (G) below.
(F) Redemption.
(1) The Corporation, in its sole option, may redeem all shares of Series A Preferred Stock, at
any time, from funds legally available therefor at the Liquidation Amount per share as of the date
of redemption (the “Redemption Date”). In the event that the Corporation elects to redeem any
shares of Series A Preferred Stock, it must redeem all of the outstanding shares of Series A
Preferred Stock.
(2) Notice of any redemption pursuant to this subparagraph (F) shall be mailed at least 30,
but not more than 60, days in advance of the Redemption Date to the holders of record of shares of
Series A Preferred Stock so to be redeemed at their respective addresses as the same shall appear
on the books of the Corporation. To facilitate the redemption of shares of Series A Preferred
Stock, the board of directors of the Corporation may fix a record date for the determination of
holders of shares of Series A Preferred Stock to be redeemed not more than 60 days prior to the
Redemption Date. Each such notice shall state: (i) the Redemption Date and the number of shares to
be redeemed from such holder; (ii) the redemption price; (iii) whether the shares of Series A
Preferred Stock called for redemption may be converted and the applicable conversion price; and
(iv) the place or places where certificates for such shares are to be surrendered for payment of
the redemption price.
(3) As of the Redemption Date, notwithstanding that any certificates for such shares shall not
have been surrendered for cancellation, the shares represented thereby shall no longer be deemed
outstanding, rights to receive distributions shall cease to accrue, and all rights of the holders
of the Series A Preferred Stock called for redemption, as stockholders of the Corporation with
respect to such shares, shall cease and terminate, except the right to receive the redemption
price, without interest, upon the surrender of their respective certificate; provided, however,
that if the Corporation defaults in payment of the redemption price for any reason, the rights of
the holders of Series A Preferred Stock shall continue until the Corporation cures the default.
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(4) Redemption of any shares of Series A Preferred Stock is subject to the prior approval of
any federal regulatory agency with jurisdiction over such matters, to the extent required by-law.
(5) No redemption hereunder made in contemplation of a Transaction (as defined in paragraph
(G) below) shall be effective, without the affirmative vote or written consent of the holders of a
majority of the then outstanding Series A Preferred Stock, unless the amount per share of Common
Stock, which would be payable in a Transaction to a holder of Series A Preferred Stock, were such
holder to convert such Series A Preferred Stock into shares of Common Stock as provided in
paragraph (G), would be less than the Liquidation Amount per share payable in such redemption.
(G) Conversion Right.
(1) At any time after the earlier of (i) June 30, 2005 or (ii) the following events (an “Early
Conversion Event”): the execution of a definitive agreement relating to a merger, consolidation or
reorganization of the Corporation with or into any other entity or entities in which the holders of
the Corporation’s capital stock receive cash, property or securities (other than securities issued
by any party to the merger, consolidation or reorganization which result in the holders of the
Corporation’s voting capital stock prior to the merger, consolidation or reorganization holding not
less than 66.67% of the voting power of the surviving entity) the execution of a definitive
agreement relating to any sale, transfer or other disposition of all or substantially all the
Corporation’s assets, or adoption of any plan or arrangement relating to dissolution or liquidation
of the Corporation (such merger, consolidation or reorganization, sale, transfer or disposition of
assets or dissolution or liquidation being collectively referred to herein as a “Transaction”),
each holder of the Series A Preferred Stock will have the right, exercisable at the option of the
holder, to convert some or all of such holder’s shares of Series A Preferred Stock into Common
Stock at the conversion price in effect at the time of conversion, determined as hereinafter
provided. The price at which shares of Common Stock shall be delivered upon conversion (the
“Conversion Price”) shall initially be $5.63 per share of Common Stock; provided, however, that
such initial Conversion Price shall be subject to adjustment from time to time in certain instances
as hereinafter provided. The number of shares of Common Stock to be issued upon conversion for
each share of Series A Preferred Stock shall be determined by dividing the Liquidation Amount per
share then in effect by the Conversion Price then in effect. In the case of the call for
redemption of the shares of Series A Preferred Stock, such right of conversion shall cease and
terminate as to the shares designated for redemption on the Redemption Date thereof; provided,
however, that no such call for redemption shall affect a notice of conversion validly given by a
holder prior to the Redemption Date. Within 10 days after an Early Conversion Event and at least
20 days prior to consummation of a Transaction, as defined below, and not less than 20 days prior
to the record date or the date on which the Corporation’s transfer books are closed in respect
thereto, the Corporation shall give each holder of Series A Preferred Stock written notice, by
first-class, postage prepaid, addressed to the registered holders of Series A Preferred Stock at
the addresses of such holders as shown on the books of the Corporation, of an
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Early Conversion Event, which notice shall contain a summary of the principal terms of the
proposed Transaction. If the notice of an Early Conversion Event is mailed prior to June 30, 2005,
each holder of the Series A Preferred Stock shall have the right, exercisable at any time prior to
the third business day prior to the closing of the Transaction, to request that its shares of
Series A Preferred Stock be converted into shares of Common Stock. The conversion shall be deemed
to occur immediately prior to the Transaction. However, in the event that any Transaction scheduled
to close prior to June 30, 2005 is not consummated for any reason, then the requested conversions
will not be effected and each holder’s Series A Preferred Stock certificate will be promptly
returned to the holder.
(2) To convert shares of Series A Preferred Stock into shares of Common Stock, the holder
thereof shall surrender at the principal executive office of the Corporation both (i) the
certificate or certificates therefor, duly endorsed to the Corporation or in blank, and (ii)
provide written notice addressed to the Corporation that such holder elects to convert such shares.
If the notice of conversion is received by the Corporation after June 30, 2005, the shares of
Series A Preferred Stock shall be deemed to have been converted immediately prior to the close of
business on the day of the surrender of such shares for conversion as herein provided, and the
person entitled to receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder of such shares of Common Stock at such time. If the
notice of conversion is received by the Corporation on or before June 30, 2005, such conversion
shall be deemed effective in accordance with subparagraph (G)(1) above. As promptly as practicable
on or after the conversion date, the Corporation shall issue and deliver or cause to be issued and
delivered at such office a certificate or certificates for the number of shares of Common Stock
issuable upon such conversion.
(3) In case the Corporation shall (i) declare a dividend upon the Common Stock payable in
Convertible Securities, or in any rights or options to purchase Common Stock or Convertible
Securities, or (ii) declare any other dividend or make any other distribution upon the Common Stock
payable otherwise than out of earnings or earned surplus, then thereafter each holder of shares of
Series A Preferred Stock upon the conversion thereof will be entitled to receive the number of
shares of Common Stock into which such shares of Series A Preferred Stock have been converted and,
in addition and without payment therefor, each dividend described in clause (i) above and each
dividend or distribution described in clause (ii) above which such holder would have received by
way of dividends or distributions if continuously since such holder became the record holder of
such shares of Series A Preferred Stock such holder (a) had been the record holder of the number of
shares of Common Stock then received, and (b) had retained all dividends or distributions in stock
or securities (including Common Stock or Convertible Securities, and any rights or options to
purchase any Common Stock or Convertible Securities) payable in respect of such Common Stock or in
respect to any stock or securities paid as dividends or distributions and originating directly or
indirectly from such Common Stock. For the purposes of the foregoing, a dividend or distribution
other than in cash shall be considered payable out of earnings or earned surplus only to the extent
that such earnings or earned surplus are charged an amount equal to the fair value
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of such dividend or distribution as determined by the board of directors of the Corporation.
(4) In case the Corporation shall at any time subdivide its outstanding shares of Common Stock
into a greater number of shares, or shall pay a dividend on the Common Stock in shares of Common
Stock, the Conversion Price in effect immediately prior to such subdivision shall be
proportionately reduced, and conversely, in case the outstanding shares of Common Stock of the
Corporation shall be combined into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased.
(5) If any capital reorganization or reclassification of the capital stock of the Corporation,
or consolidation or merger of the Corporation with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be effected in such a way that holders
of Common Stock shall be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization, reclassification,
consolidation, merger or sale, and subject to subparagraph (C) above, lawful and adequate provision
shall be made whereby the holders of Series A Preferred Stock shall thereafter have the right to
receive, upon the basis and upon the terms and conditions specified herein and in lieu of the
shares of the Common Stock immediately theretofore receivable upon the conversion of Series A
Preferred Stock, such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common Stock equal to the
number of shares of such stock immediately theretofore receivable upon the conversion of Series A
Preferred Stock had such reorganization, reclassification, consolidation, merger or sale not taken
place, plus all declared dividends unpaid and accumulated or accrued on the Series A Preferred
Stock to the date of such reorganization, reclassification, consolidation, merger or sale, and in
any such case appropriate provision shall be made with respect to the rights and interests of the
holders of Series A Preferred Stock to the end that the provisions hereof (including without
limitation provisions for adjustments of the Conversion Price and of the number of shares
receivable upon the conversion of Series A Preferred Stock) shall thereafter be applicable, as
nearly as may be in relation to any shares of stock, securities or assets thereafter receivable
upon the conversion of Series A Preferred Stock. The Corporation shall not effect any such
consolidation, merger or sale unless prior to the consummation thereof the successor Corporation
(if other than the Corporation) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument executed and mailed to the registered
holders of Series A Preferred Stock, at the last addresses of such holders appearing on the books
of the Corporation, the obligation to deliver to such holders such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holders may be entitled to receive.
(6) Upon any adjustment of the Conversion Price, then and in each case the Corporation shall
give written notice thereof by first-class mail, postage prepaid, addressed to the registered
holders of Series A Preferred Stock, at the addresses of such holders as shown on the books of the
Corporation, which notice shall state the Conversion Price resulting from such adjustment and the
increase or decrease, if any, in
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the number of shares receivable at such price upon the conversion of Series A Preferred Stock,
setting forth in reasonable detail the method of calculation and the facts upon which such
calculation is based.
(7) In case at any time:
(a) the Corporation shall pay any dividend payable in stock upon its Common Stock or make any
distribution (other than regular cash dividends) to the holders of its Common Stock;
(b) the Corporation shall offer for subscription pro rata to the holders of its Common Stock
any additional shares of stock of any class or other rights;
(c) there shall be any capital reorganization, or reclassification of the capital stock of the
Corporation, or a consolidation or merger of the Corporation with, or sale of all or substantially
all of its assets to, another corporation; or
(d) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the
Corporation;
then, in any one or more of said cases, the Corporation shall give written notice, by
first-class mail, postage prepaid, addressed to the registered holders of Series A Preferred Stock
at the addresses of such holders as shown on the books of the Corporation, of the date on which (i)
the books of the Corporation shall close or a record shall be taken for such dividend, distribution
or subscription rights, or (ii) such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up shall take place, as the case may be. Such notice also shall
specify the date as of which the holders of Common Stock of record shall participate in such
dividend, distribution or subscription rights, or shall be entitled to exchange their Common Stock
for securities or other property deliverable upon such reorganization reclassification,
consolidation, merger, sale, dissolution, liquidation, or winding up, as the case may be. Such
written notice shall be given at least 20 days prior to the action in question and not less than 20
days prior to the record date or the date on which the Corporation’s transfer books are closed in
respect thereto.
(8) As used in this paragraph (G): (i) the term “Common Stock” shall mean and include the
Corporation’s presently authorized Common Stock and also shall include any capital stock of any
class of the Corporation hereafter authorized which shall not be limited to a fixed sum or
percentage in respect of the rights of the holders thereof to participate in dividends or in the
distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, provided that the shares receivable pursuant to conversion of shares of Series A
Preferred Stock shall include shares designated as Common Stock of the Corporation as of the date
of issuance of such shares of Series A Preferred Stock; and (ii) the term “Convertible Securities”
shall mean securities of the Corporation convertible into Common Stock.
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(9) No fractional shares of Common Stock shall be issued upon conversion, but, instead of any
fraction of a share which would otherwise be issuable, the Corporation shall pay a cash adjustment
in respect of such fraction in an amount equal to the same fraction of the market price per share
of Common Stock as of the close of business on the day of conversion. “Market price” shall mean if
the Common Stock is traded on a securities exchange or on the Nasdaq Stock Market, the closing
price of the Common Stock on such exchange or the Nasdaq Stock Market, or, if the Common Stock is
otherwise traded in the over-the-counter market, the closing bid price, in each case averaged over
a period of 20 consecutive business days prior to the date as of which “market price” is being
determined. If at any time the Common Stock is not traded on an exchange or the Nasdaq Stock
Market, or otherwise traded in the over—the-counter market, the “market price” shall be deemed to
be the fully diluted book value per share determined from the financial statements of the
Corporation prepared in the ordinary course of business as of the last day of the first month
ending not less than 45 days preceding the date as of which the determination is to be made.
If more than one shares of the Series A Preferred Stock shall be surrendered for conversion at
one time by the same holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of shares of the Series A Preferred
Stock so surrendered.
(H) Reacquired Shares. Any shares of Series A Preferred Stock redeemed by the Corporation or
converted by the holder thereof shall be retired and canceled and added to the shares of Preferred
Stock. All such cancelled shares shall become authorized but unissued shares of Preferred Stock
undesignated as to series and may be reissued as part of a new series of Preferred Stock to be
created by resolution of the board of directors of the Corporation.
(I) Limitations. Except as may otherwise be required by-law, the shares of Series A Preferred
Stock shall not have any powers, preferences or relative, participating, optional or other special
rights other than those specifically set forth in this resolution (as such resolution may be
amended from time to time) or otherwise in the Amended and Restated Certificate of Incorporation of
the Corporation.
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EXHIBIT C
OFFICERS AND DIRECTORS OF SURVIVNG CORPORATION
1. Capitalized terms used but not defined herein shall have the meanings set forth in the
Agreement.
2. At the Effective Time, the Board of Directors of the Surviving Corporation shall be comprised of
the following:
FCB Directors:
Xxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxx
C. G. Kum
Xxxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxx
C. G. Kum
Xxxxxx Xxxxxxx
NMB Directors:
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
W. Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
W. Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxxxxxx
3. Initially, (i) C. G. Kum shall be appointed President and Chief Executive Officer of the
Surviving Corporation, (ii) Xxxxxx X. Xxxxxxxxx shall be appointed Executive Vice President and
Chief Financial Officer of the Surviving Corporation, (iii) Xxxxx X. Xxxxx shall be appointed
Executive Vice President and Chief Strategy Officer of the Surviving Corporation, (iv) Xxxxxx X.
Xxxxxxxx shall be appointed Executive Vice President and Chief Credit Officer of the Surviving
Corporation and (v) Xxxxxx X. Xxxxxxx shall be appointed Executive Vice President, Head of
Commercial Banking, of the Surviving Corporation.
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EXHIBIT D
First
California Financial Group, Inc.
[address]
[address]
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an “affiliate” of FCB
Bancorp, a California corporation (“FCB”), or National Mercantile Bancorp (“NMB”) as the term
“affiliate” is defined for purposes of paragraphs (c) and (d) of Rule 145 (“Rule 145”) of the Rules
and Regulations (the “Rules and Regulations”) of the Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Act”). I have been further advised that
pursuant to the terms of the Agreement and Plan of Merger, dated as of June 15, 2006 (the “Merger
Agreement”), by and among NMB, FCB and First California Financial Group, Inc., (“FCFG”), each of
NMB and FCB will be merged into FCFG (the “Mergers”), and that as a result of one of the Mergers, I
will be eligible to receive shares of common stock of FCFG (“FCFG Common Stock”) in exchange for
shares of FCB Common Stock or NMB Common Stock, as the case may be (each as defined in the Merger
Agreement), owned by me.
I hereby represent, warrant and covenant to FCFG that with respect to any FCFG Common Stock I
receive pursuant to a Merger:
1. I shall not make any sale, transfer or other disposition of the FCFG Common Stock in
violation of the Act or the Rules and Regulations.
2. I have carefully read this letter and the Merger Agreement and discussed its requirements
and other applicable limitations upon my ability to sell, transfer or otherwise dispose of FCFG
Common Stock to the extent I believed necessary with my counsel or with counsel for FCB or NMB, as
the case may be.
3. I have been advised that any issuance of FCFG Common Stock to me pursuant to the Merger
Agreement has been registered with the SEC on a registration statement on Form S-4. However, I have
also been advised that, since at the time the Merger will be submitted to the shareholders of FCB
or NMB, as the case may be, for approval I may be an “affiliate” of such entity, any sale or
disposition by me of any of the FCFG Common Stock may only be made, under current law, in
accordance with the provisions of paragraph (d) of Rule 145 under the Act, pursuant to an effective
registration statement under the Act or pursuant to an exemption thereunder. I agree that I will
not sell, transfer, or otherwise dispose of FCFG Common Stock issued to me in a Merger unless (i)
such sale, transfer or other disposition has been registered under the Act; (ii) such sale,
transfer or other disposition is made in conformity with the volume and other limitations of Rule
144 promulgated by the SEC under the Act; or (iii) in the written opinion of counsel, which opinion
and counsel shall be reasonably acceptable to FCFG, such sale, transfer or other disposition is
otherwise exempt from registration under the Act.
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4. I understand that FCFG is under no obligation to register the sale, transfer or other
disposition of the FCFG Common Stock by me or on my behalf or to take any other action necessary to
make compliance with an exemption from registration available.
5. I understand that stop transfer instructions will be given to FCFG’s transfer agent with
respect to FCFG Common Stock and that there will be placed on the certificates for the FCFG Common
Stock issued to me, or any substitutions therefor, a legend stating in substance:
“The securities represented by this certificate have been issued in a transaction to
which Rule 145 promulgated under the Securities Act of 1933 applies and may be sold
or otherwise transferred only in compliance with the requirements of Rule 145 or
pursuant to a registration statement under said act or an exemption from such
registration.”
6. I also understand that unless the transfer by me of my FCFG Common Stock has been
registered under the Act or is a sale made in conformity with the provisions of Rule 145, FCFG
reserves the right to put the following legend on the certificates issued to my transferee:
“The sale of the shares represented by this certificate has not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), and the shares
were acquired from a person who received such shares in a transaction to which Rule
145 promulgated under the Securities Act applies. The shares have been acquired by
the holder not with a view to, or for resale in connection with, any distribution
thereof within the meaning of the Securities Act and may not be sold, pledged or
otherwise transferred except in accordance with an exemption from the registration
requirements of the Securities Act.”
It is understood and agreed that this letter agreement shall terminate and be of no further
force and effect and the legends set forth in paragraphs (5) or (6) above, as the case may be,
shall be removed by delivery of substitute certificates without such legend, and the related stop
transfer of restrictions shall be lifted forthwith, if (i) any such shares of FCFG Common Stock
shall have been registered under the Act for sale, transfer or other disposition by me or on my
behalf and are sold, transferred or otherwise disposed of, or (ii) any such shares of FCFG Common
Stock are sold in accordance with the provisions of paragraphs (c), (e), (f) and (g) of Rule 144
promulgated under the Act, or (iii) I am not at the time an affiliate of FCFG and have been the
beneficial owner of the FCFG Common Stock for at least one year (or such other period as may be
prescribed by the Act and the Rules and Regulations), and FCFG has filed with the SEC all of the
reports it is required to file under the Securities Exchange Act of 1934, as amended, during the
preceding 12 months, or (iv) I am not and have not been for at least three months an affiliate of
FCFG and have been the beneficial owner of the FCFG Common Stock for at least two years (or such
other period as may be prescribed by the Act and the Rules and Regulations), or (v) FCFG shall have
received a letter from the Staff of the SEC, or a written opinion of counsel, which opinion and
counsel shall be reasonably acceptable to FCFG, to the effect that the stock transfer restrictions
and the legend are not required.
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Sincerely,
Dated:
Accepted this ___day of ___, 2006
| FIRST CALIFORNIA FINANCIAL GROUP, INC. |
||||
| By: | ||||
| Name: | Xxxxx Xxxxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
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EXHIBIT E
June 15, 2006
C. G. Kum,
0000 Xxxxx xx Xxxxxxxx,
Xxxxxxxxx, Xxxxx. 00000.
0000 Xxxxx xx Xxxxxxxx,
Xxxxxxxxx, Xxxxx. 00000.
Re: Employment Agreement
Dear C. G.:
This is your Employment Agreement (the “Agreement”) with First California
Financial Group, Inc., a Delaware corporation (the “Company”). It sets forth the terms of your
employment with the Company and its affiliates from time to time (together, the “Group”).
1. Your Position, Performance and Other Activities
(a) Position. You will be employed in the position of Chief Executive Officer (“CEO”) of the
Company and will report directly to the Company’s Board of Directors (the “Board”). You will be
appointed to the Board as of your Start Date (as defined in Section 2) and the Company will use all
reasonable efforts to cause you to be nominated for re-election each time your term expires during
your employment. You agree to serve as a member of the Board, as well as a member of any Board
committee to which you may be elected or appointed. You also agree that you will be deemed to have
resigned from the Board and each Board committee voluntarily, without any further action by you, as
of the end of your employment.
(b) Authority, Responsibilities and Reporting. You will have the authority, responsibilities
and reporting relationships that correspond to your position, including any particular authority,
responsibilities and reporting relationships consistent with your position that the Board may
assign to you from time to time and compliance with such policies of the Company as may be adopted
from time to time.
(c) Performance. During your employment, you will devote substantially all of your business
time and attention to the Group and will use good faith efforts to discharge your responsibilities
under this Agreement to the best of your ability.
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During your employment, your place of
performance will be the headquarters of the Company or First California Bank or such other place
as the Board determines. Your performance will be reviewed by the Board on an on-going basis and no
less frequently then annually.
(d) Other Activities. During your employment, you will not render any business, commercial or
professional services to any non-member of the Group. However, you may (1) serve on corporate,
civic or charitable boards, (2) manage
personal investments, and (3) deliver lectures, fulfill speaking engagements and teach at
educational institutions, so long as (A) these activities do not interfere with your performance of
your responsibilities under this Agreement and (B) any service on a corporate, civic or charitable
board is disclosed at least annually to the Board.
2. Term of Your Employment
This Agreement is being entered into in connection with the Agreement and Plan of Merger,
dated as of June 15, 2006 (the “Merger Agreement”), by and among FCB Bancorp, National Mercantile
Bancorp and the Company. Your employment under this Agreement will (a) begin on the date the
Primary Merger, as that term is defined in the Merger Agreement, becomes effective (the “Start
Date”), and (b) end at the close of business on the effective date of termination of your
employment pursuant to Section 6 hereof. However, if the Merger Agreement or your employment with
FCB Bancorp terminates for any reason before the Primary Merger is consummated, all the provisions
of this Agreement will terminate and there will be no liability of any kind under this Agreement
with the effect, among other things, that you will not become an officer, director or employee of
the Company and are entitled to no payments or compensation under this Agreement. Your
“Compensation Period” begins on your Start Date and will continue indefinitely, but can be
terminated by either party providing at least 30 days’ advance written notice in accordance with
Section 5(e). References in this Agreement to “your employment” are to your employment under this
Agreement.
3. Your Compensation
(a) Salary. During your employment, you will receive an annual base salary (as increased from
time to time, your “Salary”) payable in accordance with the Group’s regular payroll practices. The
starting amount of your Salary is $375,000. The Company will review your Salary at least annually
commencing with fiscal 2008 and may increase at any time for any reason.
(b) Incentive Compensation. You will be eligible to receive an annual bonus (your “Bonus”)
for each fiscal year of the Group in accordance with the terms set forth on Annex A. Your total
annual Bonus (cash plus equity awards) cannot exceed 150% of your Salary.
(c) Initial Stock Options. In addition to your Salary and Bonus, on your Start Date, you will
be awarded stock options to purchase 100,000 shares of the Company’s common stock (your “Sign-On
Options"). Your Sign-On Options will be granted under the Company’s stock incentive plan and will
have an exercise price equal to the closing price of the Company’s common stock on the date of
grant. Your Sign-On Options will vest 33 1/3%, 33 1/3% and 33 1/3% on the third,
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fourth and fifth
anniversaries of the date of grant and will have a term of eight (8) years. Your Sign-On Options
will be subject to the terms of the Company’s stock incentive plan and to the terms of your award
agreement under it.
4. Other Employee Benefits
(a) Vacation. You will be entitled to paid annual vacation during your employment in
accordance with Company policy; provided, that in no event shall such vacation be less than four
(4) weeks per year.
(b) Business Expenses. You will be reimbursed for all business expenses incurred by you in
performing your responsibilities under this Agreement. However, your reimbursement will be subject
to the Group’s normal practices for senior executives.
(c) Facilities. During your employment, you will be provided with office space, facilities,
secretarial support and other business services consistent with your position on a basis that is at
least as favorable as that provided to similarly situated senior executives of the Group.
(d) Employee Benefit Plans. During your employment, you will be eligible to participate in
the Group’s employee benefit and welfare plans, including plans providing retirement benefits,
medical, dental, hospitalization, life or disability insurance, on a basis that is at least as
favorable as that provided to similarly situated senior executives of the Group.
5. Termination of Your Employment
(a) No Reason Required. You or the Company may terminate your employment at any time for any
reason, or for no reason, subject to compliance with Section 5(e).
(b) Termination by the Company for Cause.
(1) “Cause” means any of the following:
(A) Your continued failure, either due to willful action or as a result of
gross neglect, to substantially perform your duties and responsibilities to the
Group under this Agreement (other than any such failure resulting from your
incapacity due to physical or mental illness) that, if capable of being cured, has
not been cured within thirty (30) days after written notice is delivered to you by
the Company, which notice specifies in reasonable detail the manner in which the
Company believes you have not substantially performed your duties and
responsibilities.
(B) Your engagement in conduct which is demonstrably and materially injurious
to the Group, or that materially xxxxx the reputation or financial position of the
Group, unless the conduct in question was undertaken in good faith on an informed
basis with due
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care and with a rational business purpose and based upon the honest
belief that such conduct was in the best interest of the Group.
(C) Your indictment or conviction of, or plea of guilty or nolo contendere to,
a felony or any other crime involving dishonesty, fraud or moral turpitude.
(D) Your being found liable in any SEC or other civil or criminal securities
law action or entering any cease and desist order with respect to such action
(regardless of whether or not you admit or deny liability) where the conduct which
is the subject of such action is demonstrably and materially injurious to the
Group.
(E) Your breach of your fiduciary duties to the Group which may reasonably be
expected to have a material adverse effect on the Group.
(F) Your (i) obstructing or impeding, (ii) endeavoring to influence, obstruct
or impede, or (iii) failing to materially cooperate with, any investigation
authorized by the Board or any governmental or self-regulatory entity (an
“Investigation”). However, your failure to waive attorney-client privilege
relating to communications with your own attorney in connection with an
Investigation shall not constitute “Cause.”
(G) Your removing, concealing, destroying, purposely withholding, altering or
by any other means falsifying any material which is requested in connection with an
Investigation.
(H) Your disqualification, bar, order or similar requirement by any
governmental or self-regulatory authority from serving as an officer or director of
any member of the Group or your loss of any governmental or self-regulatory license
that is reasonably necessary for you to perform your responsibilities to the Group
under this Agreement, if (i) the disqualification, bar or loss continues for more
than 30 days and (ii)during that period the Group uses its good faith efforts to
cause the disqualification or bar to be lifted or the license replaced. While any
disqualification, bar or loss continues during your employment, you will serve in
the capacity contemplated by this Agreement to whatever extent legally permissible
and, if your employment is not permissible, you will be placed on leave (which will
be paid to the extent legally permissible).
(I) Your unauthorized use or disclosure of confidential or proprietary
information, or related materials, or the violation of any of the terms of the
Company’s standard confidentiality policies and procedures, in the case of any item
identified in this clause (I) which may reasonably be expected to have a material
adverse effect on the Group and that, if capable of being cured, has not been cured
within 30 days after written notice is delivered to you by the Company,
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which notice specifies in reasonable detail the alleged unauthorized use or disclosure or violation.
(J) Your violation of the Group’s (i) workplace violence policy or (ii)
policies on discrimination, unlawful harassment or substance abuse.
For this definition, no act or omission by you will be “willful” unless it is made by
you in bad faith or without a reasonable belief that your act or omission was in the
best interests of the Group.
(c) Your Termination for Good Reason Following a Change in Control.
(1) “Good Reason” means the occurrence (without your expressed written consent) of any
of the following within the 18-month period following a Change in Control:
(A) The assignment of duties substantially inconsistent with your position,
duties, responsibilities and status as Chief Executive Officer of the Company
(except in connection with a for Cause termination).
(B) A 5% or greater reduction by the Group in your Salary, Bonus target or
benefits as in effect prior to the Change of Control.
(C) The Group’s requiring you to be based anywhere other than within Los
Angeles or Ventura County, California, exclusive of required travel on business.
(d) Termination on Disability or Death.
(1) The term “Disability” means your absence from your responsibilities with the
Company on a full-time basis for 180 business days in any consecutive 12 months as a result
of incapacity due to mental or physical illness or injury. If the Company determines in
good faith that your Disability has occurred, the Company may give you Termination Notice
(as defined below). If within 30 days of the Termination Notice you do not return to
full-time performance of your responsibilities, your employment will terminate. If you do
return to full-time performance in that 30-day period, the Termination Notice will be
cancelled for all purposes of this Agreement. Except as provided in this Section 5(c),
your incapacity due to mental or physical illness or injury will not affect the Company’s
obligations under this Agreement.
(2) Your employment will terminate automatically on your death. If you die before
your employment starts, all the provisions of this Agreement will also terminate and there
will be no liability of any kind under this Agreement.
(e) Advance Notice Generally Required.
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(1) To terminate your employment, either you or the Company must provide a Termination
Notice to the other. A “Termination Notice” is a written notice that states the specific
provision of this Agreement on which
termination is based, including, if applicable, the specific clause of the definition
of Cause and a reasonably detailed description of the facts that permit termination under
that clause. (The failure to include any fact in a Termination Notice that contributes to
a showing of Cause does not preclude the Company from asserting that fact in enforcing its
rights under this Agreement.)
(2) You and the Company agree to provide 30 days’ advance Termination Notice of any
termination, unless your employment is terminated by the Company for Cause or because of
your Disability or death. Accordingly, the effective date of termination of your
employment will be 30 days after Termination Notice is given, except that (A) the effective
date will be the date of the Company’s Termination Notice if your employment is terminated
by the Company for Cause, although the Company may provide a later effective date in the
Termination Notice, (B) the effective date will be 30 days after Termination Notice is
given if your employment is terminated because of your Disability, and (C) the effective
date will be the time of your death if your employment is terminated because of your death.
The Company may elect to place you on paid leave for all or part of the advance notice
period. Notwithstanding the foregoing, if you give the Company Termination Notice, the
Company in its sole discretion may waive the 30-day notice requirement and accelerate the
effective date of termination of your employment to any earlier date.
6. The Company’s Obligations in Connection with Your Termination
(a) General Effect. On termination your employment will end and the Group will have no
further obligations to you except as provided in this Section 6.
(b) On or before March 1, 2009, by the Company Without Cause. If, on or before March 1, 2009,
the Company terminates your employment without Cause:
(1) The Company will pay you the following as of the end of your employment: (A) your
unpaid Salary through the date of termination, (B) your Salary for any accrued but unused
vacation, and (C) any accrued expense reimbursements and other cash entitlements (together,
your “Accrued Compensation”). In addition, the Company will timely pay you any amounts and
provide to you any benefits that are required, or to which you are entitled, under any
plan, contract or arrangement of the Group (together, the “Other Benefits”).
(2) The Company will pay you an amount equal to two (2) times your then current Salary
payable in accordance with the Company’s form of separation agreement as in effect from
time to time.
(3) If you timely elect to continue your Company-provided group health insurance
coverage pursuant to the federal COBRA law, the Company will reimburse you for the cost of
such COBRA premiums, at the same level
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as you maintain as of the date of termination,
through the end of the COBRA period (18 months), or until such time as you qualify for
health insurance benefits through a new employer, whichever occurs first. The
reimbursement shall be for 100% of your COBRA premiums, as well as for your eligible
dependents’ COBRA premiums, and the coverage to be provided on this basis shall be health
and dental coverage.
(c) After March 1, 2009, by the Company Without Cause. If, after March 1, 2009, the Company
terminates your employment without Cause:
(1) The Company will pay you the following as of the end of your employment your
Accrued Compensation and Other Benefits; and
(2) If at least seven member out of ten of the Board (or a similar proportion if the
number of Board members changes) has voted in favor of your termination, the Company will
pay you an amount equal to 0.5 times your then current Salary payable in accordance with
the Company’s form of separation agreement as in effect from time to time; or
(3) If less than seven member out of ten of the Board (or a similar proportion if the
number of Board members changes) has voted in favor of your termination, the Company will
pay you an amount equal to 1.5 times your then current Salary plus 150% of the average of
the Bonuses you received during the prior two fiscal years, payable in accordance with the
Company’s form of separation agreement as in effect from time to time.
(4) If you timely elect to continue your Company-provided group health insurance
coverage pursuant to the federal COBRA law, the Company will reimburse you for the cost of
such COBRA premiums, at the same level as you maintain as of the date of termination,
through the end of the COBRA period (18 months), or until such time as you qualify for
health insurance benefits through a new employer, whichever occurs first. The
reimbursement shall be for 100% of your COBRA premiums, as well as for your eligible
dependents’ COBRA premiums, and the coverage to be provided on this basis shall be health
and dental coverage.
(d) By the Company For Cause or by You for Any Reason. If the Company terminates your
employment for Cause or you terminate your employment for any reason, the Company will pay your
Accrued Compensation and provide your Other Benefits.
(e) Your Disability or Death. If your employment terminates because of Disability or death,
the Company will pay you your Accrued Compensation, a pro-rated portion of your prior year’s Bonus
based on the number days worked during the year of termination and provide your Other Benefits.
(f) Change in Control. If within 18 months following a “Change in Control” (as defined
below), the Company terminates your employment without Cause or you terminate your employment for
Good Reason, the Company will pay you the greater of (i) the payments in Section 6(b) or (ii) 2.99
times your average annual compensation (Salary and Bonus) over the prior 5 years (or such shorter
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period as you have been employed); provided however, that this payment may be subject to the
reduction set forth in Annex B.
A “Change in Control” shall mean any transaction or series of related transactions as a result of
which:
(i) the Company consummates a reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of its assets (each a “Business Combination”), in each case
unless immediately following the consummation of such Business Combination all of the following
conditions are satisfied:
(A) Persons, who, immediately prior to such Business Combination, were the beneficial owners
of the Outstanding Voting Securities of the Company, beneficially own (within the meaning of Rule
13d-3 promulgated under the Exchange Act, directly or indirectly, more than 50% of the combined
voting power of the then Outstanding Voting Securities of the entity (the “Resulting Entity”)
resulting from such Business Combination (including, without limitation, an entity which as a
result of such transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries);
(B) no Person, other than the Existing Shareholder Group, beneficially owns (within the
meaning of Rule l3d-3), directly or indirectly, more than: (i) 50% of the then outstanding combined
voting power of the Outstanding Voting Securities of the Resulting Entity, except to the extent
that such Person’s beneficial ownership of the Company immediately prior to the Business
Combination exceeded such threshold, and (ii) beneficially owns more the Existing Shareholder
Group;
(C) at least one-half of the members of the board of directors of the Resulting Entity were
members of the Board at the time the Board authorized the Company to enter into the definitive
agreement providing for such Business Combination; or
(ii) any Person acquires beneficial ownership (within the meaning of Rule 13d-3) of more than
50% of the combined voting power (calculated as provided in Rule l3d-3 in the case of rights to
acquire securities) of the then Outstanding Voting Securities of the Company and has greater
beneficial ownership than the Existing Shareholder Group; provided, however, that for purposes of
this clause, the following acquisitions shall not constitute a Change of Control: (x) any
acquisition directly from the Company, (y) any acquisition by the Company, (z) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity
controlled by the Company; or (zz) any acquisition by the Existing Shareholder Group.
“Existing Shareholder Group” shall mean Xxxx Xxxxxxxxxx, Xxxxx Xxxxxxxxxx, Xxxx X. Xxxxxx (the
“Individual Shareholders”), members of the immediate family of the Individual Shareholders, and any
affiliated Person of Individual Shareholders or any member of their immediate family.
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“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act, which
definition shall include a “person” within the meaning of Section 13(d)(3) of the Exchange Act.
“Outstanding Voting Securities” of any Person means the outstanding securities of such Person
entitling the holders thereof to vote generally in the election of directors of such Person
(g) Condition. The Company will not be required to make the payments and provide the benefits
stated in this Section 6 unless you execute and deliver to the Company an agreement releasing from
all liability (other than liability to make the payments and provide the benefits contemplated by
this Agreement and any indemnification rights you may otherwise be entitled to) each member of the
Group and any of their respective past or present officers, directors, employees or agents.
(h) Timing. The benefits provided in this Section 6 will begin after the end of your
employment.
7. No Public Statements or Disparagement
You agree that you will not make any public statement that would libel, slander or disparage
any member of the Group or any of their respective past or present officers, directors, employees
or agents.
8. Effect on Other Agreements; Entire Agreement
This Agreement is the entire agreement between you and the Company with respect to the
relationship contemplated by this Agreement and supersedes any earlier agreement, written or oral,
with respect to the subject matter of this Agreement. In entering into this Agreement, no party
has relied on or made any representation, warranty, inducement, promise or understanding that is
not in this Agreement. You hereby acknowledge that you are not subject to any obligation which
would in any way restrict the performance of your duties hereunder.
9. Successors
(a) Payments on Your Death. If you die and any amounts are or become payable under this
Agreement, we will pay those amounts to your estate.
(b) Assignment by You. You may not assign this Agreement without the Company’s consent.
Also, except as required by law, your right to receive payments or benefits under this Agreement
may not be subject to execution, attachment, levy or similar process. Any attempt to effect any of
the preceding in violation of this Section 9(b), whether voluntary or involuntary, will be void.
(c) Assumption by any Surviving Company. Before the effectiveness of any merger,
consolidation, statutory share exchange or similar transaction (including an exchange offer
combined with a merger or consolidation) involving the Company (a “Reorganization”) or any sale,
lease or other disposition (including by way of a series of transactions or by way of merger,
consolidation, stock sale or similar transaction involving one or more subsidiaries) of all or
substantially all of
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the Company’s consolidated assets (a “Sale”), the Company will cause (1) the
Surviving Company to unconditionally assume this Agreement in writing and (2) a copy of the
assumption to be provided to you. After the Reorganization or Sale, the
Surviving Company will be treated for all purposes as the Company under this Agreement. The
“Surviving Company” means (i) in a Reorganization, the entity resulting from the Reorganization or
(ii) in a Sale, the entity that has acquired all or substantially all of the assets of the Company.
10. Disputes
(a) Employment Matters. This Section 10 applies to any controversy or claim between you and
the Group arising out of or relating to or concerning this Agreement or any aspect of your
employment with the Group or the termination of that employment (together, an “Employment Matter”).
(b) Mandatory Arbitration. Any controversy arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in
connection with any of its provisions, or any other controversy arising out of you employment,
including, but not limited to, any state or federal statutory claims, shall be submitted to
arbitration in the County of Los Angeles, California, before a sole arbitrator selected from
Judicial Arbitration and Mediation Services, Inc., Los Angeles, California, or its successor
(“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected
from the American Arbitration Association, and shall be conducted in accordance with the provisions
of California Code of Civil Procedure §§ 1280 et seq. as the exclusive forum for the resolution of
such dispute; provided, however, that provisional injunctive relief may, but need not, be sought by
either party to this Agreement in a court of law while arbitration proceedings are pending, and any
provisional injunctive relief granted by such court shall remain effective until the matter is
finally determined by the Arbitrator. Final resolution of any dispute through arbitration may
include any remedy or relief which the Arbitrator deems just and equitable, including any and all
remedies provided by applicable state or federal statutes. At the conclusion of the arbitration,
the Arbitrator shall issue a written decision that sets forth the essential findings and
conclusions upon which the Arbitrator’s award or decision is based. Any award or relief granted by
the Arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by
any court of competent jurisdiction. The parties hereto acknowledge and agree that they are hereby
waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of
the parties hereto against the other in connection with any matter whatsoever arising out of or in
any way connected with this Agreement or your employment. The parties agree hereto that the
Company shall be responsible for payment of the forum costs of any arbitration hereunder, including
the Arbitrator’s fee. You and the Company further agree that in any proceeding to enforce the
terms of this Agreement, the prevailing party shall be entitled to its or his reasonable attorneys’
fees and costs (other than forum costs associated with the arbitration) incurred by it or him in
connection with resolution of the dispute in addition to any other relief granted. Notwithstanding
this provision, the parties hereto may mutually agree to mediate any dispute prior to or following
submission to arbitration.
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(c) Limitation on Damages. You and the Group agree that there will be no punitive damages
payable as a result of any Employment Matter and agree not to request punitive damages.
(d) Enforcement of Arbitration Awards. You or the Group may bring an action or special
proceeding in a state or federal court of competent jurisdiction sitting in the County of Los
Angeles, California to enforce any arbitration award under Section 10(b).
(e) Jurisdiction and Choice of Forum. You and the Group irrevocably submit to the exclusive
jurisdiction of any state or federal court located in the County of Los Angeles, California over
any Employment Matter that is not otherwise arbitrated or resolved according to Section 10(b).
This includes any action or proceeding to compel arbitration or to enforce an arbitration award.
Both you and the Group (1) acknowledge that the forum stated in this Section 10(e) has a reasonable
relation to this Agreement and to the relationship between you and the Group and that the
submission to the forum will apply even if the forum chooses to apply non-forum law, (2) waive, to
the extent permitted by law, any objection to personal jurisdiction or to the laying of venue of
any action or proceeding covered by this Section 10(e) in the forum stated in this Section, (3)
agree not to commence any such action or proceeding in any forum other than the forum stated in
this Section 10(e) and (4) agree that, to the extent permitted by law, a final and non-appealable
judgment in any such action or proceeding in any such court will be conclusive and binding on you
and the Group. However, nothing in this Agreement precludes you or the Group from bringing any
action or proceeding in any court for the purpose of enforcing the provisions of Section 10(b) and
this Section 10(e).
(f) Waiver of Jury Trial. To the extent permitted by law, you and the Group waive any and all
rights to a jury trial with respect to any Employment Matter.
(g) Governing Law. This Agreement, and all questions relating to its validity,
interpretation, performance and enforcement, as well as the legal relations hereby created between
the parties hereto, shall be governed by and construed under, and interpreted and enforced in
accordance with, the laws of the State of California, notwithstanding any California or other
conflict of law provision to the contrary .
11. General Provisions
(a) Construction. (1) References (A) to Sections are to sections of this Agreement unless
otherwise stated; (B) to any contract (including this Agreement) are to the contract as amended,
modified, supplemented or replaced from time to time; (C) to any statute, rule or regulation are to
the statute, rule or regulation as amended, modified, supplemented or replaced from time to time
(and, in the case of statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the section; (D) to any
governmental authority include any successor to the governmental authority; (E) to any plan include
any programs, practices and policies; (F) to any
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entity include any corporation, limited liability
company, partnership, association, business trust and similar organization and include any
governmental authority; and (G) to any affiliate of any entity are to any person or other entity
directly or indirectly controlling, controlled by or under common control with the first entity.
(2) The various headings in this Agreement are for convenience of reference only and
in no way define, limit or describe the scope or intent of any provisions or Sections of
this Agreement.
(3) Unless the context requires otherwise, (A) words describing the singular number
include the plural and vice versa, (B) words denoting any gender include all genders and
(C) the words “include”, “includes” and “including” will be deemed to be followed by the
words “without limitation.”
(4) It is your and the Group’s intention that this Agreement not be construed more
strictly with regard to you or the Group.
(b) Withholding. You and the Group will treat all payments to you under this Agreement as
compensation for services. Accordingly, the Group may withhold from any payment any taxes that are
required to be withheld under any law, rule or regulation.
(c) Severability. If any provision of this Agreement is found by any court of competent
jurisdiction (or legally empowered agency) to be illegal, invalid or unenforceable for any reason,
then (1) the provision will be amended automatically to the minimum extent necessary to cure the
illegality or invalidity and permit enforcement and (2) the remainder of this Agreement will not be
affected.
(d) No Set-off or Mitigation. Except if your employment is terminated by the Company for
Cause, your and the Company’s respective obligations under this Agreement will not be affected by
any set-off, counterclaim, recoupment or other right you or any member of the Group may have
against each other or anyone else. You do not need to seek other employment or take any other
action to mitigate any amounts owed to you under this Agreement.
(e) Notices. All notices, requests, demands and other communications under this Agreement
must be in writing and will be deemed given (1) on the business day sent, when delivered by hand or
facsimile transmission (with confirmation) during normal business hours, (2) on the business day
after the business day sent, if delivered by a nationally recognized overnight courier or (3) on
the third business day after the business day sent if delivered by registered or certified mail,
return receipt requested, in each case to the following address or number (or to such other
addresses or numbers as may be specified by notice that conforms to this Section 11(e)):
If to you, to your address then on file with the Company’s payroll department.
If to the Company or any other member of the Group, to:
First California Financial Group, Inc.
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1880 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Xxxention: Chairman of the Board
Vice Chairman of the Board
Facsimile: (000) 000-0000
Xxx Xxxxxxx, XX 00000
Xxxention: Chairman of the Board
Vice Chairman of the Board
Facsimile: (000) 000-0000
(f) Consideration. This Agreement is in consideration of the mutual covenants contained in
it. You and the Group acknowledge the receipt and sufficiency of the consideration to this
Agreement and intend this Agreement to be legally binding.
(g) Amendments and Waivers. Any provision of this Agreement may be amended or waived but only
if the amendment or waiver is in writing and signed, in the case of an amendment, by you and the
Company or, in the case of a waiver, by the party that would have benefited from the provision
waived. Except as this Agreement otherwise provides, no failure or delay by you or the Group to
exercise any right or remedy under this Agreement will operate as a waiver, and no partial exercise
of any right or remedy will preclude any further exercise.
(h) Legal Counsel; Mutual Drafting. Each party recognizes that this is a legally binding
contract and acknowledges and agrees that they have had the opportunity to consult with legal
counsel of their choice. Each party has cooperated in the drafting, negotiation and preparation of
this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be
construed against either party on the basis of that party being the drafter of such language. You
agree and acknowledge that you have read and understand this Agreement, are entering into it freely
and voluntarily, and have been advised to seek counsel prior to entering into this Agreement and
have had ample opportunity to do so.
(i) Golden Parachute Limitation. Anything in this Agreement to the contrary notwithstanding,
the Company shall not be obligated to make any payment hereunder that would be prohibited as a
“golden parachute payment” or “indemnification payment” under Section 18(k) of the Federal Deposit
Insurance Act.
(j) Key Employee Delay on Payments. Notwithstanding the timing of payments set forth in
Agreement, if the Company determines that you are a “specified employee” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended and that, as a result of such status,
any portion of the payment under this Agreement would be subject to additional taxation, the
Company will delay paying any portion of such payment until the earliest permissible date on which
payments may commence without triggering such additional taxation (with such delay not to exceed
six (6) months), with the first such payment to include the amounts that would have been paid
earlier but for the above delay.
(k) Third-Party Beneficiaries. Subject to Section 9, this Agreement will be binding on, inure
to the benefit of and be enforceable by the parties and their respective heirs, personal
representatives, successors and assigns. This Agreement does not confer any rights, remedies,
obligations or liabilities to any entity or
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person other than you and the Company and your and the
Company’s permitted successors and assigns, although (1) this Agreement will inure to the benefit
of the Group and (2) Section 9(a) will inure to the benefit of the most recent persons named in a
notice under that Section.
(l) Prior Agreements. You are presently the Chief Executive Officer and President of FCB
Bancorp and its subsidiary First California Bank. You acknowledge and agree that, if the Start
Date occurs, except for accrued and unpaid salary to Start Date, reimbursement of expenses and
accrued and unpaid vacation, you are entitled to no further or additional compensation from FCB
Bancorp or any affiliate of FCB Bancorp under any agreement, contract or understanding that
presently exists, or exists between now and the Start Date. Without limiting the generality of the
foregoing, under such circumstance you shall not be entitled to any bonus or incentive compensation
for 2006 or any part thereof, it being intended that the incentive compensation arrangement under
Annex A shall supersede any agreement or understanding with FCB Bancorp or its affiliates.
12. Counterparts.
This Agreement may be executed in counterparts, each of which will constitute an original and all
of which, when taken together, will constitute one agreement. However, this Agreement will not be
effective until the date both parties have executed this Agreement.
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This Page Intentionally Left Blank
Signature Page Follows
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| Very truly yours, | ||||
| FIRST CALIFORNIA FINANCIAL GROUP, INC. | ||||
| Name: | Xxxxx Xxxxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| Accepted and agreed to: | ||||
| C. G. Kum | ||||
June 15, 2006
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Annex A
Incentive Compensation
Prior to the beginning of each fiscal year beginning after your Start Date, the Board will set an
earnings target for the Company, which shall be an after tax, after bonus accrued target (“Net
Earnings Target”). If the Company achieves 85% or more of the Net Earnings Target, you shall be
entitled to receive a Bonus equal to (A) the percentage derived by dividing the Company’s actual
Net Earnings by the Net Earnings Target (but in no case exceeding 115%) multiplied by (B) 3%
multiplied by (C) the Company’s Net Earnings. The resulting amount shall constitute your Bonus.
Additionally, if the Bonus earned in any fiscal year would exceed 120% of your Salary, then the
excess above 120% shall be payable, at the sole discretion of the Company, in cash, restricted
stock (valued at the then current market price) or stock options (valued based upon the
Black-Scholes or similar method and with a vesting schedule to be mutually agreed) provided,
however, that your total Bonus (both cash and restricted stock or stock options) shall not exceed
150% of your Salary.
You shall not be entitled to any Bonus with respect to a fiscal year unless you are employed on the
last day of such fiscal year. It is expected that you will be paid your Bonus within two and
one-half months of the end of the fiscal year in which it is earned.
For the fiscal year in which the Primary Merger becomes effective, you and the Company will agree
on a mutually acceptable bonus based on your existing bonus arrangement with FCB Bancorp. But in
no event will the bonus for the fiscal year in which the Primary Merger is effective be less than
the bonus that you would have earned on your existing bonus arrangement with FCB Bancorp assuming
the absence of the Primary Merger transaction, as determined in good faith by the Board.
Significant Acquisitions. In any compensation year in which there is a Significant
Acquisition which has not been factored into the Net Earnings Target for such fiscal year, the
Incentive Compensation targets will be adjusted as appropriate to enable the Incentive Compensation
payout to match the expectations of the Board.
A “Significant Acquisition” shall mean: (i) the purchase by the Company of securities representing
more than 50% of the voting power of an entity either: (A) that has total assets, as of the end of
the most recent fiscal quarter preceding the acquisition that exceed 25% of the consolidated total
assets of the Company as of such date; or (B) has net earnings for the four fiscal quarters
preceding the acquisition that exceed 25% of the consolidated net earnings of the Company for such
four quarters; or (ii) the acquisition of at least 80% of the assets of an entity, and either (A)
such assets have a book value in excess of 25% of consolidated total assets of the Company as of
the end of the Company’s most recent fiscal quarter; or (B) such entity has net earnings for the
four fiscal quarters preceding the acquisition that exceed 25% of the consolidated net earnings of
the Company for such four quarters; (iii) the merger between the Company or a direct or indirect
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subsidiary with an entity that either: (A) has total assets, as of the end of the most recent
fiscal quarter for which such entity has finalized financial statements, that exceed 25% of the
consolidated total assets of the Company as of such date; or (B) has net earnings for the four
fiscal quarters preceding the acquisition that exceed 25% of the consolidated net earnings of the
Company for such four quarters.
It is the intent of this adjustment to allow the Board to adjust the Net Earnings Target to reflect
the incremental increase in net earnings anticipated by the Board to result from the Significant
Acquisition, not to readjust upward the Net Earnings Target related to the pre-acquisition business
of the Company based on the performance of the Company prior to the closing of the Significant
Acquisition. But in no event will the annual Bonus for the year during which a Significant
Acquisition is completed be less than that which would have been earned absent such Significant
Acquisition as determined in good faith by the Board.
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Annex B
Limitation on Payments Following a Change in Control
Notwithstanding anything in the Agreement to the contrary, in the event it shall be determined
that any payment, award, benefit or distribution (or any acceleration of any payment, award,
benefit or distribution) by the Company (or any of its affiliated entities) or any entity which
effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of
Executive (whether pursuant to the terms of this Agreement or otherwise) (the “Payments”) would be
subject to the excise tax (the “Excise Tax”) under Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), then the amounts payable to Executive under this Agreement shall be
reduced (reducing first the payments under Section 4(a)(ii), unless an alternative method of
reduction is elected by Executive) to the maximum amount as will result in no portion of the
Payments being subject to such excise tax (the “Safe Harbor Cap”). For purposes of reducing the
Payments to the Safe Harbor Cap, only amounts payable to Executive under this Agreement (and no
other Payments) shall be reduced, unless consented to by Executive.
All determinations required to be made under this Section 5 shall be made by the public
accounting firm that is retained by the Company as of the date immediately prior to the Change in
Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the
Company and Executive within fifteen (15) business days of the receipt of notice from the Company
or the Executive that there has been a Payment, or such earlier time as is requested by the
Company. Notwithstanding the foregoing, in the event (i) the Board shall determine prior to the
Change in Control that the Accounting Firm is precluded from performing such services under
applicable auditor independence rules or (ii) the Audit Committee of the Board determines that it
does not want the Accounting Firm to perform such services because of auditor independence concerns
or (iii) the Accounting Firm is serving as accountant or auditor for the individual, entity or
group effecting the Change in Control, the Board shall appoint another nationally recognized public
accounting firm to make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). If payments are reduced to the Safe Harbor Cap, the
Accounting Firm shall provide a reasonable opinion to Executive that he or she is not required to
report any Excise Tax on his or her federal income tax return. All fees, costs and expenses
(including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be
borne by the Company. If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion to such effect, and to the effect that
failure to report the Excise Tax, if any, on Executive’s applicable federal income tax return will
not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm
determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish Executive
with a written opinion to such effect. The determination by the Accounting Firm shall be binding
upon the Company and Executive.
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EXHIBIT F
Form of Shareholder Agreement and List of Shareholders
LIST OF SHAREHOLDERS
FCB Shareholders
Xxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxx
C. G. Kum
Xxxxxx Xxxxxxx
Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx Trust
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxx
C. G. Kum
Xxxxxx Xxxxxxx
Xxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx Trust
NMB Shareholders:
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
W. Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxxx
Judge Xxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxx
W. Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxxxxxx
Xxxxx X. Xxxxxxxxxx
Judge Xxxx X. Xxxxxx
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
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SHAREHOLDER AGREEMENT (FCB Version)
This SHAREHOLDER AGREEMENT (this “Shareholder Agreement”) is made and entered into as of June
15, 2006 by and between National Mercantile Bancorp, a California corporation (“Bancorp”), and the
signatory hereto (the “Shareholder”).
WHEREAS, Bancorp, FCB Bancorp, a California corporation (the “Company”), and First California
Financial Group, Inc. have entered into that certain Agreement and Plan of Merger, dated as of the
date hereof (the “Merger Agreement”).
WHEREAS, as a condition to entering into the Merger Agreement the parties thereto have
required that the Shareholder, solely in the Shareholder’s capacity as a holder of FCB Common
Stock, enter into, and the Shareholder has agreed to enter into, this Shareholder Agreement.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
1. Representations and Warranties of the Shareholder. The Shareholder hereby represents and
warrants to Bancorp as follows:
(a) Authority; Binding Obligation. The Shareholder has all necessary power and authority to
enter into this Shareholder Agreement and perform all of the Shareholder’s obligations hereunder.
This Shareholder Agreement has been duly and validly executed and delivered by the Shareholder (and
the Shareholder’s spouse, if the Shares (as defined below) constitute community property under
applicable law) and constitutes a valid and legally binding obligation of the Shareholder and such
spouse, enforceable against the Shareholder and such spouse, as the case may be, in accordance with
its terms.
(b) Ownership of Shares. The Shareholder is the beneficial owner or record holder of the
number of shares of FCB Common Stock listed under the Shareholder’s name on the signature page
hereto (the “Existing Shares” and, together with any shares of FCB Common Stock the record or
beneficial ownership of which is acquired by the Shareholder after the date hereof, the “Shares”)
and, as of the date hereof, the Existing Shares constitute all the shares of FCB Common Stock owned
of record or beneficially by the Shareholder. With respect to the Existing Shares, the Shareholder
has sole voting power and sole power to issue instructions with respect to or otherwise engage in
the actions set forth in Section 2 hereof, sole power of disposition and sole power to demand
appraisal rights, with no restrictions on the voting rights, rights of disposition or otherwise,
subject to applicable laws and the terms of this Shareholder Agreement.
(c) No Conflicts. Neither the execution, delivery and performance of this Shareholder
Agreement nor the consummation of the transactions contemplated hereby will conflict with or
constitute a violation of or a default under (with or without notice, lapse of
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time, or both) any contract, agreement, voting agreement, shareholders’ agreement, trust
agreement, voting trust, proxy, power of attorney, pooling arrangement, note, mortgage, indenture,
instrument, arrangement or other obligation or restriction of any kind to which the Shareholder is
a party or which the Shareholder or the Shareholder’s Shares are subject to or bound.
2. Voting Agreement and Agreement Not to Transfer.
(a) The Shareholder hereby agrees to vote or caused to be voted all of the Shareholder’s
Shares (i) in favor of the approval of the principal terms of the Merger Agreement as well as any
other matters required to be approved by the shareholders of the Company for consummation of the
Mergers; (ii) against any action or agreement that would result in a breach in any material respect
of any covenant, representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; and (iii) except with the prior written consent of Bancorp, against the
following actions (other than the Mergers or the consummation of any actions contemplated by the
Merger Agreement): (A) any extraordinary corporate transactions, such as a merger, consolidation
or other business combination involving the Company; (B) any sale, lease, transfer or disposition
of a material amount of the assets of the Company; (C) any change in the majority of the board of
directors of the Company; (D) any material change in the present capitalization of the Company; (E)
any amendment of the Company’s articles of incorporation or bylaws; (F) any other change in the
corporate structure, business, assets or ownership of the Company; or (G) any other action which is
intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage
or adversely affect the contemplated economic benefits to Bancorp of the Mergers and the
transactions contemplated by the Merger Agreement. Notwithstanding the foregoing, Shareholder
shall not be obligated to vote or cause to be voted all of the Shareholder’s Shares in accordance
with the provisions of Section 2(a)(i)-(iii) hereof, if there has been a material modification or
amendment of the terms of the Merger Agreement or a waiver of any material condition to the Merger
Agreement.
(b) The Shareholder hereby agrees not to (i) sell, transfer, convey, assign or otherwise
dispose of any of his or her Shares without the prior written consent of Bancorp which shall not be
unreasonably withheld, other than Shares sold or surrendered to pay the exercise price of any FCB
Options or to satisfy the Company’s withholding obligations with respect to any taxes resulting
from such exercise, or (ii) pledge, mortgage or otherwise encumber such Shares. Any permitted
transferee of the Shareholder’s Shares must become a party to this Shareholder Agreement and any
purported transfer of the Shareholder’s Shares to a Person that does not become a party hereto
shall be null and void ab initio.
3. Cooperation. The Shareholder agrees that he or she will not (directly or indirectly)
initiate, solicit, encourage or facilitate any Acquisition Proposal from any Person.
4. Shareholder Capacity. The Shareholder is entering this Shareholder Agreement in his or her
capacity as the record or beneficial owner of the Shares, and not in his or her capacity as a
director or officer of the Company. Nothing in this Shareholder Agreement shall be deemed in any
manner to limit the discretion of any Shareholder to take
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any action, or fail to take any action, in his or her capacity as a director or officer of the
Company that may be either (a) required of the Shareholder under applicable law or (b) is otherwise
permitted by the Merger Agreement.
5. Termination. The obligations of the Shareholder hereunder shall terminate upon the
consummation of the Mergers. If the Mergers are not consummated, the obligations of the Shareholder
hereunder shall terminate upon the termination of the Merger Agreement in accordance with its
terms.
6. Specific Performance. The Shareholder acknowledges that it would be impossible to
determine the amount of damages that would result from any breach of any of its obligations under
this Shareholder Agreement and that the remedy at law for any breach, or threatened breach, would
likely be inadequate and, accordingly, agrees that Bancorp shall, in addition to any other rights
or remedies which it may have at law or in equity, be entitled to seek such equitable and
injunctive relief as may be available from any court of competent jurisdiction to restrain the
Shareholder from violating any of its obligations under this Shareholder Agreement. In connection
with any action or proceeding for such equitable or injunctive relief, the Shareholder hereby
waives any claim or defense that a remedy at law alone is adequate and agrees, to the maximum
extent permitted by law, to have the obligations of the Shareholder under this Shareholder
Agreement specifically enforced against him, without the necessity of posting bond or other
security, and consents to the entry of equitable or injunctive relief against the Shareholder
enjoining or restraining any breach or threatened breach of this Shareholder Agreement.
7. Indemnification.
(a) If and only if the Mergers are consummated in accordance with the terms of the Merger
Agreement, Bancorp and its successors and assigns, including but not limited to the Surviving
Corporation (collectively the “Indemnifying Party”), shall, to the fullest extent permitted by law,
indemnify, defend and hold harmless Shareholder (as incurred to the extent incurred subsequent to
the Primary Merger Effective Time) against all costs or expenses (including reasonable attorneys’
fees), judgments, fines, losses, claims, damages or liabilities incurred by Shareholder, regardless
of whether incurred prior to or after the Primary Merger Effective Time (collectively, “Costs”) in
connection with any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of this Shareholder Agreement other than an action for
specific performance under Section 6 hereof. A Shareholder wishing to claim indemnification under
this Section 7, upon learning of any claim, action, suit, proceeding or investigation described
above, shall promptly notify Indemnifying Party thereof; provided that the failure so to notify
shall not affect the obligations of Indemnifying Party under this Section 7 unless and to the
extent that Indemnifying Party is actually and materially prejudiced as a result of such failure.
In case any such action shall be brought against Shareholder, it shall promptly notify the
Indemnifying Party of the commencement thereof, and the Indemnifying Party shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to Shareholder, and after notice
from the Indemnifying Party to Shareholder of its election to so assume the defense thereof, the
Indemnifying Party shall not be liable to Shareholder for
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any legal expenses of other counsel or any other expenses, in each case subsequently incurred
by such indemnified party.
(b) If Bancorp or any of its successors or assigns shall consolidate with or merge into any
other entity and shall not be the continuing or surviving entity of such consolidation or merger or
shall transfer all or substantially all of its assets to any other entity, then and in each case,
Bancorp shall cause proper provision to be made so that the successors and assigns of Bancorp shall
assume the obligations set forth in this Section 7.
(c) The provisions of this Section 7 shall survive termination of this Shareholder Agreement.
8. Miscellaneous.
(a) Definitional Matters.
(i) For purposes of this Agreement, beneficial ownership shall be determined
in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended.
(ii) All capitalized terms used but not defined in this Shareholder Agreement
shall have the respective meanings that the Merger Agreement ascribes to such
terms.
(iii) The section and paragraph captions herein are for convenience of
reference only, do not constitute part of this Shareholder Agreement and shall not
be deemed to limit or otherwise affect any of the provisions hereof.
(b) Entire Agreement. This Shareholder Agreement constitutes the entire agreement of the
parties hereto with reference to the transactions contemplated hereby and supersedes all other
prior agreements, understandings, representations and warranties, both written and oral, between
the parties or their respective representatives, agents or attorneys, with respect to the subject
matter hereof.
(c) Parties in Interest. This Shareholder Agreement shall be binding upon and inure solely to
the benefit of each party hereto and the other parties to the Merger Agreement and their respective
successors, assigns, estate, heirs, executors, administrators and other legal representatives, as
the case may be. Nothing in this Shareholder Agreement, express or implied, is intended to confer
upon any other Person, other than parties hereto or their respective successors, assigns, estate,
heirs, executors, administrators and other legal representatives, as the case may be, any rights,
remedies, obligations or liabilities under or by reason of this Shareholder Agreement.
(d) Assignment. This Shareholder Agreement shall not be assignable by law or otherwise
without the prior written consent of the other party hereto; provided, however, that Bancorp may
assign any of its rights and obligations hereunder to any of its affiliates or to any other entity
which may acquire all or substantially all of the assets, shares
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or business of Bancorp or any of its subsidiaries or any entity with or into which Bancorp or
any of its subsidiaries may be consolidated or merged.
(e) Modifications; Waivers. This Shareholder Agreement shall not be amended, altered or
modified in any manner whatsoever, except by a written instrument executed by the parties hereto.
No waiver of any breach or default hereunder shall be considered valid unless in writing and signed
by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent
breach of the same or similar nature.
(f) Severability. Any term or provision of this Shareholder Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity and unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Shareholder Agreement in any other jurisdiction. If any provision of this
Shareholder Agreement is so broad as to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
(g) Governing Law. This Shareholder Agreement shall be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in accordance with the laws of the
State of California, without regard to the conflict of law principles thereof.
(h) Jurisdiction and Venue. Any legal action or proceeding with respect to this Shareholder
Agreement may be brought in the courts of the State of California in the County of Los Angeles or
of the United States of America for the Central District of California and, by execution and
delivery of this Agreement, each of the Shareholder and Bancorp hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of and venue in the
aforesaid courts, notwithstanding any objections it may otherwise have. Each of the Shareholder
and Bancorp irrevocably consents to the service of process out of any of the aforementioned courts
in any such action or proceeding by the delivery of notice as provided in Section 8(k) below, such
service to become effective thirty (30) days after such delivery.
(i) Attorney’s Fees. The prevailing party in any litigation, arbitration, mediation,
bankruptcy, insolvency or other proceeding (“Proceeding”) relating to the enforcement or
interpretation of this Shareholder Agreement may recover from the unsuccessful party all fees and
disbursements of counsel (including expert witness and other consultants’ fees and costs) relating
to or arising out of (a) the Proceeding (whether or not the Proceeding results in a judgment) and
(b) any post-judgment or post-award Proceeding including, without limitation, one to enforce or
collect any judgment or award resulting from any Proceeding. All such judgments and awards shall
contain a specific provision for the recovery of all such subsequently incurred costs, expenses,
fees and disbursements of counsel.
(j) Counterparts. This Shareholder Agreement may be executed in one or more counterparts
(including by facsimile), each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument.
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(k) Notices. All notices, requests, instructions and other communications to be given
hereunder by any party to the other shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified mail, postage
prepaid (return receipt requested), to such party at its address set forth below or such other
address as such party may specify to the other party by notice provided in accordance with this
Section 8(k).
If to Bancorp, to:
(1)
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
and
(2)
FCB Bancorp
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: C. G. Kum
FCB Bancorp
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: C. G. Kum
If to the Shareholder, to the address noted on the signature page hereto.
(l) Advice of Counsel. SHAREHOLDER ACKNOWLEDGES THAT, IN EXECUTING THIS SHAREHOLDER
AGREEMENT, SHAREHOLDER HAS HAD THE OPPOERTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL,
AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL
NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
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IN WITNESS WHEREOF, the parties hereto have executed this Shareholder Agreement as of the date
first above written.
| NATIONAL MERCANTILE BANCORP |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
SHAREHOLDER:
Name:
Number of Shares:
Number of Stock Options:
Number of Shares:
Number of Stock Options:
Address for Notices:
SHAREHOLDER’S SPOUSE:
Name:
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SHAREHOLDER AGREEMENT (NMB Version)
This SHAREHOLDER AGREEMENT (this “Shareholder Agreement”) is made and entered into as of June
15, 2006 by and between FCB Bancorp, a California corporation (“Bancorp”), and the signatory hereto
(the “Shareholder”).
WHEREAS, Bancorp, National Mercantile Bancorp, a California corporation (the “Company”), and
First California Financial Group, Inc. have entered into that certain Agreement and Plan of Merger,
dated as of the date hereof (the “Merger Agreement”).
WHEREAS, as a condition to entering into the Merger Agreement, the parties thereto have
required that the Shareholder, solely in the Shareholder’s capacity as a holder of NMB Common Stock
and/or NMB Preferred Stock, enter into, and the Shareholder has agreed to enter into, this
Shareholder Agreement.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
1. Representations and Warranties of the Shareholder. The Shareholder hereby represents and
warrants to Bancorp as follows:
(a) Authority; Binding Obligation. The Shareholder has all necessary power and authority to
enter into this Shareholder Agreement and perform all of the Shareholder’s obligations hereunder.
This Shareholder Agreement has been duly and validly executed and delivered by the Shareholder (and
the Shareholder’s spouse, if the Shares (as defined below) constitute community property under
applicable law) and constitutes a valid and legally binding obligation of the Shareholder and such
spouse, enforceable against the Shareholder and such spouse, as the case may be, in accordance with
its terms.
(b) Ownership of Shares. The Shareholder is the beneficial owner or record holder of the
number of shares of NMB Common Stock and/or NMB Preferred Stock listed under the Shareholder’s name
on the signature page hereto (the “Existing Shares” and, together with any shares of NMB Common
Stock the record or beneficial ownership of which is acquired by the Shareholder after the date
hereof, the “Shares”) and, as of the date hereof, the Existing Shares constitute all the shares of
NMB Common Stock and NMB Preferred Stock owned of record or beneficially by the Shareholder. With
respect to the Existing Shares, the Shareholder has sole voting power and sole power to issue
instructions with respect to or otherwise engage in the actions set forth in Section 2 hereof, sole
power of disposition and sole power to demand appraisal rights, with no restrictions on the voting
rights, rights of disposition or otherwise, subject to applicable laws and the terms of this
Shareholder Agreement.
(c) No Conflicts. Neither the execution, delivery and performance of this Shareholder
Agreement nor the consummation of the transactions contemplated hereby will
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conflict with or
constitute a violation of or a default under (with or without notice, lapse of time, or both) any
contract, agreement, voting agreement, shareholders’ agreement, trust agreement, voting trust,
proxy, power of attorney, pooling arrangement, note, mortgage, indenture, instrument, arrangement
or other obligation or restriction of any kind to which the Shareholder is a party or which the
Shareholder or the Shareholder’s Shares are subject to or bound.
2. Voting Agreement and Agreement Not to Transfer; Waiver.
(a) The Shareholder hereby agrees to vote or caused to be voted all of the Shareholder’s
Shares (i) in favor of the approval of the principal terms of the Merger Agreement as well as any
other matters required to be approved by the shareholders of the Company for consummation of the
Mergers; (ii) against any action or agreement that would result in a breach in any material respect
of any covenant, representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; and (iii) except with the prior written consent of Bancorp, against the
following actions (other than the Mergers or the consummation of any actions contemplated by the
Merger Agreement): (A) any extraordinary corporate transactions, such as a merger, consolidation
or other business combination involving the Company; (B) any sale, lease, transfer or disposition
of a material amount of the assets of the Company; (C) any change in the majority of the board of
directors of the Company; (D) any material change in the present capitalization of the Company; (E)
any amendment of the Company’s articles of incorporation or bylaws; (F) any other change in the
corporate structure, business, assets or ownership of the Company; or (G) any other action which is
intended, or could reasonably be expected to, impede, interfere with, delay, postpone, discourage
or adversely affect the contemplated economic benefits to Bancorp of the Mergers and the
transactions contemplated by the Merger Agreement. Notwithstanding the foregoing, Shareholder
shall not be obligated to vote or cause to be voted all of the Shareholder’s Shares in accordance
with the provisions of Section 2(a)(i)-(iii) hereof, if there has been a material modification or
amendment of the terms of the Merger Agreement or a waiver of any material condition to the Merger
Agreement.
(b) The Shareholder hereby agrees not to (i) sell, transfer, convey, assign or otherwise
dispose of any of his or her Shares without the prior written consent of Bancorp which shall not be
unreasonably withheld, other than Shares sold or surrendered to pay the exercise price of any NMB
Options or to satisfy the Company’s withholding obligations with respect to any taxes resulting
from such exercise, or (ii) pledge, mortgage or otherwise encumber such Shares. Any permitted
transferee of the Shareholder’s Shares must become a party to this Shareholder Agreement and any
purported transfer of the Shareholder’s Shares to a Person that does not become a party hereto
shall be null and void ab initio.
(c) By execution of this Shareholder Agreement, Shareholder waives the application of all
provisions of the Certificate of Determination of Rights, Preferences and Privileges of Series B
Convertible Perpetual Preferred Stock of the Company that would, but for such waiver, result in the
transactions contemplated by the Merger Agreement being
deemed to be a liquidation or dissolution of NMB and acknowledges that NMB shall be an express
beneficiary of this waiver.
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3. Cooperation. The Shareholder agrees that he or she will not (directly or indirectly)
initiate, solicit, encourage or facilitate any Acquisition Proposal from any Person.
4. Shareholder Capacity. The Shareholder is entering this Shareholder Agreement in his or her
capacity as the record or beneficial owner of the Shares, and not in his or her capacity as a
director or officer of the Company. Nothing in this Shareholder Agreement shall be deemed in any
manner to limit the discretion of any Shareholder to take any action, or fail to take any action,
in his or her capacity as a director or officer of the Company that may be either (a) required of
the Shareholder under applicable law or (b) is otherwise permitted by the Merger Agreement.
5. Termination. The obligations of the Shareholder hereunder shall terminate upon the
consummation of the Mergers. If the Mergers are not consummated, the obligations of the Shareholder
hereunder shall terminate upon the termination of the Merger Agreement in accordance with its
terms.
6. Specific Performance. The Shareholder acknowledges that it would be impossible to
determine the amount of damages that would result from any breach of any of its obligations under
this Shareholder Agreement and that the remedy at law for any breach, or threatened breach, would
likely be inadequate and, accordingly, agrees that Bancorp shall, in addition to any other rights
or remedies which it may have at law or in equity, be entitled to seek such equitable and
injunctive relief as may be available from any court of competent jurisdiction to restrain the
Shareholder from violating any of its obligations under this Shareholder Agreement. In connection
with any action or proceeding for such equitable or injunctive relief, the Shareholder hereby
waives any claim or defense that a remedy at law alone is adequate and agrees, to the maximum
extent permitted by law, to have the obligations of the Shareholder under this Shareholder
Agreement specifically enforced against him, without the necessity of posting bond or other
security, and consents to the entry of equitable or injunctive relief against the Shareholder
enjoining or restraining any breach or threatened breach of this Shareholder Agreement.
7. Indemnification.
(a) If and only if the Mergers are consummated in accordance with the terms of the Merger
Agreement, Bancorp and its successors and assigns, including but not limited to the Surviving
Corporation (collectively the “Indemnifying Party”), shall, to the fullest extent permitted by law,
indemnify, defend and hold harmless Shareholder (as incurred to the extent incurred subsequent to
the Primary Merger Effective Time) against all costs or expenses (including reasonable attorneys’
fees), judgments, fines, losses, claims, damages or liabilities incurred by Shareholder, regardless
of whether incurred prior to or after the Primary Merger Effective Time (collectively, “Costs”) in
connection with any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of this Shareholder Agreement other than an action for
specific performance under Section 6 hereof. A Shareholder wishing to claim indemnification under
this Section 7, upon learning of any claim, action, suit, proceeding or investigation
described above, shall promptly notify Indemnifying Party thereof; provided that the failure so to
notify shall not affect the obligations of Indemnifying Party under this Section 7 unless and
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to
the extent that Indemnifying Party is actually and materially prejudiced as a result of such
failure. In case any such action shall be brought against Shareholder, it shall promptly notify
the Indemnifying Party of the commencement thereof, and the Indemnifying Party shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to Shareholder, and after notice
from the Indemnifying Party to Shareholder of its election to so assume the defense thereof, the
Indemnifying Party shall not be liable to Shareholder for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such indemnified party.
(b) If Bancorp or any of its successors or assigns shall consolidate with or merge into any
other entity and shall not be the continuing or surviving entity of such consolidation or merger or
shall transfer all or substantially all of its assets to any other entity, then and in each case,
Bancorp shall cause proper provision to be made so that the successors and assigns of Bancorp shall
assume the obligations set forth in this Section 7.
(c) The provisions of this Section 7 shall survive termination of this Shareholder Agreement.
8. Miscellaneous.
(a) Definitional Matters.
(i) For purposes of this Agreement, beneficial ownership shall be determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended.
(ii) All capitalized terms used but not defined in this Shareholder Agreement shall
have the respective meanings that the Merger Agreement ascribes to such terms.
(iii) The section and paragraph captions herein are for convenience of reference only,
do not constitute part of this Shareholder Agreement and shall not be deemed to limit or
otherwise affect any of the provisions hereof.
(b) Entire Agreement. This Shareholder Agreement constitutes the entire agreement of the
parties hereto with reference to the transactions contemplated hereby and supersedes all other
prior agreements, understandings, representations and warranties, both written and oral, between
the parties or their respective representatives, agents or attorneys, with respect to the subject
matter hereof.
(c) Parties in Interest. This Shareholder Agreement shall be binding upon and inure solely to
the benefit of each party hereto and the other parties to the Merger Agreement and their respective
successors, assigns, estate, heirs, executors, administrators and other legal representatives, as
the case may be. Nothing in this Shareholder Agreement, express or implied, is intended to confer
upon any other Person, other than parties hereto or
their respective successors, assigns, estate, heirs, executors, administrators and other legal
representatives, as the case may be, any rights, remedies, obligations or liabilities under or by
reason of this Shareholder Agreement.
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(d) Assignment. This Shareholder Agreement shall not be assignable by law or otherwise
without the prior written consent of the other party hereto; provided, however, that Bancorp may
assign any of its rights and obligations hereunder to any of its affiliates or to any other entity
which may acquire all or substantially all of the assets, shares or business of Bancorp or any of
its subsidiaries or any entity with or into which Bancorp or any of its subsidiaries may be
consolidated or merged.
(e) Modifications; Waivers. This Shareholder Agreement shall not be amended, altered or
modified in any manner whatsoever, except by a written instrument executed by the parties hereto.
No waiver of any breach or default hereunder shall be considered valid unless in writing and signed
by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent
breach of the same or similar nature.
(f) Severability. Any term or provision of this Shareholder Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity and unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Shareholder Agreement in any other jurisdiction. If any provision of this
Shareholder Agreement is so broad as to be unenforceable, the provision shall be interpreted to be
only so broad as is enforceable.
(g) Governing Law. This Shareholder Agreement shall be deemed to be made in and in all
respects shall be interpreted, construed and governed by and in accordance with the laws of the
State of California, without regard to the conflict of law principles thereof.
(h) Jurisdiction and Venue. Any legal action or proceeding with respect to this Shareholder
Agreement may be brought in the courts of the State of California in the County of Los Angeles or
of the United States of America for the Central District of California and, by execution and
delivery of this Agreement, each of the Shareholder and Bancorp hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of and venue in the
aforesaid courts, notwithstanding any objections it may otherwise have. Each of the Shareholder
and Bancorp irrevocably consents to the service of process out of any of the aforementioned courts
in any such action or proceeding by the delivery of notice as provided in Section 8(k) below, such
service to become effective thirty (30) days after such delivery.
(i) Attorney’s Fees. The prevailing party in any litigation, arbitration, mediation,
bankruptcy, insolvency or other proceeding (“Proceeding”) relating to the enforcement or
interpretation of this Shareholder Agreement may recover from the unsuccessful party all fees and
disbursements of counsel (including expert witness and other consultants’ fees and costs) relating
to or arising out of (a) the Proceeding (whether or not the Proceeding results in a judgment) and
(b) any post-judgment or post-award Proceeding including, without limitation, one to enforce or
collect any judgment or award resulting from
any Proceeding. All such judgments and awards shall contain a specific provision for the
recovery of all such subsequently incurred costs, expenses, fees and disbursements of counsel.
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(j) Counterparts. This Shareholder Agreement may be executed in one or more counterparts
(including by facsimile), each of which shall be deemed to be an original, but all of which shall
constitute one and the same instrument.
(k) Notices. All notices, requests, instructions and other communications to be given
hereunder by any party to the other shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified mail, postage
prepaid (return receipt requested), to such party at its address set forth below or such other
address as such party may specify to the other party by notice provided in accordance with this
Section 8(k).
If to Bancorp, to:
(1)
FCB Bancorp
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: C. G. Kum
FCB Bancorp
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: C. G. Kum
and
(2)
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxxx
If to the Shareholder, to the address noted on the signature page hereto.
(l) Advice of Counsel. SHAREHOLDER ACKNOWLEDGES THAT, IN EXECUTING THIS SHAREHOLDER
AGREEMENT, SHAREHOLDER HAS HAD THE OPPOERTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL,
AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL
NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
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IN WITNESS WHEREOF, the parties hereto have executed this Shareholder Agreement as of the date
first above written.
| FCB BANCORP |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
SHAREHOLDER:
Name:
Number of Shares: (NMB Common Stock); (NMB Preferred Stock)
Number of NMB Options:
Number of Shares: (NMB Common Stock); (NMB Preferred Stock)
Number of NMB Options:
Address for Notices:
SHAREHOLDER’S SPOUSE:
Name:
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EXHIBIT G
CERTAIN FEATURES OF THE SURVIVING CORPORATION’S BANK SUBSIDIARIES
1. Capitalized terms used but not defined herein shall have the meanings set forth in the
Agreement.
2. The Surviving Corporation shall, as soon as reasonably practicable following the Effective Date,
take such steps as are necessary to merge the bank subsidiaries of NMB and FCB (as so merged, the
“Merged Bank”). It is the intention of NMB and FCB that, subject to the fiduciary duties of the
Board of Directors of the Surviving Corporation, the Merged Bank would be a California
state-chartered, non-member bank.
3. The Merged Bank shall initially operate what were the operations of South Bay Bank, N.A. as a
separate division.
4. The Board of Directors of the Merged Bank shall be appointed by the Board of Directors of the
Surviving Corporation, with one member to be one of the members of the board of directors of South
Bay, N.A. as of the date of the Agreement.
5. Initially, (i) Xxxx Xxxxxxxxxx shall be appointed as Chairman of the Board of the Merged Bank
and an individual from the NMB Board as of the date of the Agreement shall be appointed as Vice
Chairman of the Board of the Merged Bank, (ii) C. G. Kum shall be appointed President and Chief
Executive Officer of the Merged Bank, (iii) Xxxxxx X. Xxxxxxxx shall be appointed Executive Vice
President of the Merged Bank, (iv) Xxxxxx X. Xxxxxxxxx shall be appointed Executive Vice President
and Chief Financial Officer of the Merged Bank, (v) Xxxxxx X. Xxxxxxx shall be appointed Executive
Vice President of the Merged Bank and (vi) Xxxxx X. Xxxxx shall be appointed Executive Vice
President of the Merged Bank.
6. Initially, the Merged Bank shall be named First California Bank and shall be headquarted in
Camarillo, California.
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EXHIBIT I
NATIONAL MERCANTILE BANCORP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
June 15, 2006
Xx. Xxxxx X. Xxxxxxxxxx
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
National Mercantile Bancorp
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Re: Employment Agreement
Dear Xxxxx:
Reference is made to your Employment Agreement dated as of January 1, 1999, as amended by that
certain Assignment, Assumption and Amendment of Employment Agreement effective as of January 1,
2002 (the “Employment Agreement”). Capitalized terms used in this Letter Agreement and not
otherwise defined in this Letter have the meanings ascribed to them in the Employment Agreement.
National Mercantile Bancorp (the “Company”) has concurrently herewith entered into
that certain Agreement and Plan of Merger (the “Merger Agreement”) that provides that the
Company will merge into a newly formed Delaware subsidiary corporation that will immediately
thereafter merge (the “Merger”) with FCB Bancorp, a California corporation (“FCB”).
You and the Company agree as follows in connection with the Merger Agreement (which agreement
shall, to the extent applicable, amend your Employment Agreement):
1. Your positions as an executive officer of the Company and its subsidiaries will terminate
effective as of the closing of the Merger (the “Closing”). However, in light of the strong
personal contacts you have with our borrowers and depositors on the Westside of Los Angeles and our
Century City office, you and the Company agree that you will remain as a non-officer employee to
consult and assist in the transition to the new executive management team. Your employment will
terminate on March 31, 2007.
Your compensation from the Closing through March 31, 2007 will be as follows: Your Base Salary
will be at the annual rate of $349,456 through December 31, 2006 and your incentive compensation
for 2006 will be $349,456. For the period January 1, 2007 through March 31, 2007, you will receive
total compensation of $74,728, payable in installments in accordance with the Company’s normal
payroll practices.
(a) If the Closing occurs, the Company shall pay to you (or as you direct), as severance, a total of
$1,325,838, payable in equal monthly installments of $22,097.30
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Xx. Xxxxx X. Xxxxxxxxxx
June 15, 2006
Page 2
June 15, 2006
Page 2
commencing on October 1, 2007 and continuing on the first day of each of the following 59 months.
No interest or earnings shall accrue on such amount. The Company shall have the right to withhold
from any payment due the amount of income and any other tax required to be withheld by the Company
as employer by applicable law or regulation.
At your request, upon termination of your employment at March 31, 2007, the amount of the
severance will be deposited for your benefit in a Rabbi Trust (the “Trust”) with a mutually
acceptable trustee. The amounts in the Trust will be invested in United States treasury
obligations and/or government guaranteed obligations or other mutually acceptable obligations, with
all income to be distributed to the Company. The trustee of the Trust will withhold all payroll
taxes as payments are made to you and distribute the withheld amounts to the Company for remittance
to the appropriate taxing authorities. The Company’s personnel will perform services required by
the Trust. The cost and expense of the Trust shall be borne by the Company. The Company shall
have the right to defer the funding of the Trust if, in its sole discretion, it does not have
sufficient funds to fund the Trust and pay its anticipated operating expenses; provided,
however, that in such event the Company shall obtain such funds from one or more of its
subsidiary banks by means of dividend or capital distribution, subject to any necessary regulatory
approvals (and the Company will use its reasonable best efforts to obtain any necessary regulatory
approvals).
This Agreement also constitutes the notice of non-renewal of your Employment Agreement under
Section 8.4 of the Employment Agreement.
You have no obligation to seek other employment, and any payments you are entitled to receive
from the Company following the termination of your employment may not be offset by any payments you
receive from any subsequent employer.
2. If the Closing occurs, for two years following the termination of your employment, the
Company will continue to provide to you and your spouse all insurance benefits (including medical,
dental, vision, life and long-term disability) that it provides to you and your spouse at the date
of this Letter Agreement to the extent permitted under the terms of the respective plan and with
premium and copayments by you to the extent currently required under the plans; provided that you
shall monthly reimburse the Company for these costs for the first six months following termination
of your employment, and at the end of such six month period, the Company will pay to you an amount
equal to the amount of your reimbursement of the Company under this Section 2.
3. On April 1, 2007, the Company will lease to you on an arm’s length basis or sell to you
(for the wholesale bluebook value) free and clear of all liens and encumbrances the automobile that
the Company is providing to you; on October 1, 2007, the Company shall, as the case may be,
transfer to you the automobile and reimburse you for the lease payments that you have made or
return to you the amount that you paid for the automobile.
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4. If the Closing occurs, and in lieu of your covenant under Section 9 of the Employment
Agreement, you agree that until January 2, 2008, you shall not, alone or as a member, employee or
agent of any partnership, or as an officer, agent, employee, director or stockholder of any other
corporation, whether directly or indirectly, (a) solicit any then existing customer of the Company
and its subsidiaries for the opportunity to provide any services of the kind offered to or provided
to that customer by the Company or any of its subsidiaries, or (b) solicit for employment any
person employed by the Company or any of its subsidiaries, or encourage or induce any such person
to terminate his or her employment by the Company or any of its subsidiaries.
5. For and in consideration of the payments and benefits set out in this Letter Agreement
(which benefits exceed those you would otherwise have received under your Employment Agreement),
you agree that as of the date of termination of your employment, and on behalf of yourself and your
heirs, successors and assigns, you hereby finally and unconditionally release and discharge the
Company, and any and all of its subsidiaries, affiliates and other related companies, as well as
any and all of their officers, directors, agents, employees, partners, shareholders, attorneys,
predecessors, successors and assigns (the “Released Parties”) from any and all claims,
demands, liabilities, damages, obligations, actions or causes of action of any kind, known or
unknown, past or present, arising out of, relating to, or in connection with your employment and
the termination of your employment, except as set forth below.
The claims released by you include, but are not limited to: (a) claims for defamation, libel,
invasion of privacy, intentional or negligent infliction of emotional distress, wrongful
termination, constructive discharge, breach of contract, breach of the covenant of good faith and
fair dealing, breach of fiduciary duty, and fraud; (b) claims under federal, state or local laws
prohibiting employment discrimination and claims under federal and state labor statutes and
regulations, including, but not limited to, the Age Discrimination in Employment Act, the
California Fair Employment and Housing Act, the California Labor Code, Title VII of the Civil
Rights Act of 1964, as amended, and the Fair Labor Standards Act, as well as any and all claims,
demands, debts, and causes of action of whatsoever kind or nature, whether known or unknown,
suspected or unsuspected, matured or unmatured, which you now have or claim to have or had at any
time or claimed to have against the Released Parties in connection with your employment or
termination of employment.
You agree, from and after the Closing, to forever refrain from instituting, initiating,
prosecuting, maintaining or voluntarily participating in any lawsuit, claim or other proceeding in
any jurisdiction or forum against any Released Party relating in any way to your employment or
termination from employment.
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This release does not, and the Company acknowledges that it does not, release the Company or
its subsidiaries from any obligations: (i) under the Employment Agreement, except as expressly
modified or terminated by this Letter Agreement (such as reimbursement of expenses and payments for
accrued vacation); (ii) to indemnify you under the Employment Agreement, the Merger Agreement, the Bylaws of the Company or a
subsidiary, or applicable law; or (iii) under this Letter Agreement. In addition, the Company
agrees not to specifically exclude you from any policy of directors and officer’s liability
insurance currently or hereafter maintained by the Company, provided that this covenant does not
require the Company to maintain such insurance or to exclude certain c lasses of officers or
directors as a group.
As a condition to its obligation to make any severance payments to you, the Company may
require you to confirm that in writing that the release remains in full force and effect and covers
all claims (other than the exceptions described in the preceding paragraph) through the date of
termination of your employment.
6. The release contained herein is intended to be complete and final and to cover not only
claims, demands, liabilities, damages, actions and causes of action which are known, but also
claims, demands, liabilities, damages, actions and causes of action which are unknown or which you
do not suspect to exist in your favor which, if known at the time of executing this Agreement,
might have affected your actions, and therefore you expressly waive the benefit of the provision of
Section 1542 of the California Civil Code, which provides:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
You hereby waive and relinquish all rights and benefits which you have or may have had under
Section 1542 of the California Civil Code or the law of any other state, country, or jurisdiction
to the same or similar effect to the full extent that you may lawfully waive such rights.
7. If the Closing occurs, the payments made by the Company pursuant to this Letter Agreement
upon Closing supersede any severance or other compensation to which you are entitled pursuant to
the Employment Agreement upon termination of your employment or upon a change of control, or upon
any other severance plan or policy of the Company and its subsidiaries, including without
limitation the payments under Sections 8 and 11 of the Employment Agreement.
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8. The agreements and obligations of the Company and you under Sections 2, 3, 4, 5, 6 and 7 of
this Letter Agreement shall be conditioned upon your being an employee of the Company immediately
prior to the Closing unless you are not an employee because either the Company terminated your
employment without cause as permitted by Section 8.2.3 of the Employment Agreement or you resign
for the reasons set forth in Section 8.3.3 of the Employment Agreement. If your employment
terminates prior to the Closing for any other reason, your rights and obligations upon termination
and/or change of control are those set forth in the Employment Agreement without modification by
this Letter Agreement. If the Company terminates your employment prior to the Closing without cause, or
if you resign for the reasons set forth in Section 8.3.3 of the Employment Agreement prior to the
Closing, you shall be entitled to your benefits under the Employment Agreement and, if the Closing
subsequently occurs: (i) the benefits under this Letter Agreement shall supersede the benefits
under the Employment Agreement, and (ii) the Company shall be entitled to offset against payments
owed under this Letter Agreement the amount of any severance payments paid to you under the
Employment Agreement.
9. If the Merger Agreement shall terminate without the consummation of the Merger, upon such
termination this Letter Agreement shall terminate without action of the parties and shall be of no
force or effect.
10. The parties hereto understand that this agreement is a legally binding agreement that
affects such party’s rights. You acknowledge that Xxxx & Xxxxx P.C. served as counsel to the
Company in connection with this agreement. You acknowledge and agree that you have received such
advice of your own counsel as you have deemed necessary or desirable in connection with your
decision to enter into this Letter Agreement.
11. You represent that you have carefully read this entire Letter Agreement and that you know
and understand its contents. You have had the opportunity to receive independent legal advice from
attorneys of your choice with respect to the preparation, review and advisability of executing this
Agreement. You further represent and acknowledge that you have freely and voluntarily executed
this Agreement after independent investigation and without fraud, duress, or undue influence, with
a full understanding of the legal and binding effect of this Agreement. You specifically
acknowledge that you has been advised he have had twenty-one (21) days to review this Agreement,
have had the opportunity to make counterproposals to the Agreement, and have been advised that you
have ten (10) days after signing this Agreement to revoke this Agreement.
12. This Letter Agreement and the Employment Agreement contains the sole and entire agreement
and understanding of you and the Company with respect to the entire subject matter discussed
herein, and any and all prior discussions, negotiations,
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commitments and understandings, whether
oral or otherwise, related to the subject matter of this Letter Agreement and the Employment
Agreement are hereby merged herein. Without limiting the generality of the foregoing, this Letter
Agreement and the Employment Agreement supersede all memos, drafts, correspondence, minutes and
discussions relating to the termination of your employment and the severance and other benefits
payable upon such termination and the timing of such payments.
13. Except as specifically modified herein, the Employment Agreement shall remain in full
force and effect.
If the foregoing confirms your understanding, please sign where indicated below and return a
copy of this Letter Agreement to the Company.
| Very truly yours, NATIONAL MERCANTILE BANCORP |
||||
| By | ||||
| Its | Xxxxxx X. Xxxxxx, Chairman of the Board | |||
Agreed and accepted:
|
||
