--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
DATED AS OF THE 15TH DAY OF MARCH 1997
BY AND BETWEEN
MONARCH BANK
AND
NATIONAL BANK OF SOUTHERN CALIFORNIA
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
RECITALS
ARTICLE I. THE MERGER
SECTION 1.1. Structure of the Merger.................................... 2
SECTION 1.2. Effect on Outstanding Shares............................... 3
SECTION 1.3. Assumption of Liabilities.................................. 3
SECTION 1.4. Capital Structure of Surviving
Association................................................ 3
ARTICLE II. CONDUCT PENDING THE MERGER
SECTION 2.1. Conduct Pending the Merger................................. 4
ARTICLE III. REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties
of NBSC ................................................... 4
SECTION 3.2. Representations and Warranties
of Monarch ................................................ 4
ARTICLE IV. COVENANTS
SECTION 4.1. Certain Filings, Consents and
Arrangements............................................... 4
SECTION 4.2. Additional Agreements...................................... 4
SECTION 4.3. Tax-Free Reorganization Treatment.......................... 5
SECTION 4.4. Directors; Resignations.................................... 5
ARTICLE V. CONDITIONS TO CONSUMMATION
SECTION 5.1. Conditions to All Parties'
Obligations ............................................... 5
ARTICLE VI. TERMINATION
SECTION 6.1. Termination................................................ 5
SECTION 6.2. Effect of Termination...................................... 6
ARTICLE VII. EFFECTIVE DATE AND EFFECTIVE TIME
SECTION 7.1. Effective Date and Effective Time.......................... 6
-i-
PAGE
ARTICLE VIII. OTHER MATTERS
SECTION 8.1. Survival................................................... 6
SECTION 8.2. Waiver..................................................... 6
SECTION 8.3. Counterparts............................................... 7
SECTION 8.4. Governing Law.............................................. 7
SECTION 8.5. WAIVER OF JURY TRIAL....................................... 7
SECTION 8.6. Expenses................................................... 7
SECTION 8.7. Notices.................................................... 7
SECTION 8.8. Entire Agreement; Etc...................................... 8
SECTION 8.9. Assignment................................................. 8
-ii-
INDEX OF DEFINED TERMS
PAGE
CCB....................................................................... 1
Code...................................................................... 2
Effective Date............................................................ 6
Effective Time............................................................ 6
MB........................................................................ 1
Merger.................................................................... 2
Monarch................................................................... 1
Monarch Common Stock...................................................... 1
Monarch Rights............................................................ 1
NBSC...................................................................... 1
NBSC Common Stock......................................................... 1
Parent Merger............................................................. 2
Parent Plan............................................................... 2
Person.................................................................... 1
Plan...................................................................... 1
Surviving Association..................................................... 2
U.S. Banking Law.......................................................... 2
-iii-
AGREEMENT AND PLAN OF MERGER, dated as of the 15th day of March, 1997
(this "Plan"), by and between Monarch Bank, a California banking corporation
("Monarch"), and National Bank of Southern California, a national banking
association ("NBSC").
RECITALS:
A. MONARCH. Monarch is a banking corporation duly incorporated,
validly existing and in good standing under the laws of the State of
California, with its principal executive offices located in Laguna Niguel,
California. As of the date hereof, Monarch has (i) 1,000,000 authorized
shares of common stock, no par value ("Monarch Common Stock"), of which no
more than 391,743 shares were outstanding as of the date hereof and (ii) no
other class of capital stock authorized. All of the outstanding shares of
capital stock of Monarch are owned by Monarch Bancorp, a California
corporation ("MBC").
B. MONARCH RIGHTS, ETC. Monarch does not have any shares of its
capital stock reserved for issuance, any outstanding option, call or commitment
relating to shares of its capital stock or any outstanding securities,
obligations or agreements convertible into or exchangeable for, or giving any
individual, corporation, partnership, association, trust or unincorporated
organization (hereinafter "Person") any right (including, without limitation,
preemptive rights) to subscribe for or acquire from it, any shares of its
capital stock.
C. NBSC. NBSC is a national banking association duly incorporated,
validly existing and in good standing under the laws of the United States of
America, with its principal executive offices located in Newport Beach,
California. As of the date hereof, NBSC has (i) 562,500 authorized shares of
common stock, $5.00 par value ("NBSC Common Stock"), of which no more than
450,000 shares were outstanding as of the date hereof and (ii) no other class of
capital stock authorized. All of the outstanding shares of capital stock of
NBSC are owned by California Commercial Bankshares, a California corporation
("CCB").
D. NBSC RIGHTS, ETC. NBSC does not have any shares of its capital
stock reserved for issuance, any outstanding option, call or commitment relating
to shares of its capital stock or any outstanding securities, obligations or
agreements convertible into or exchangeable for, or giving any Person any right
(including, without limitation,
preemptive rights) to subscribe for or acquire from it, any shares of its
capital stock.
E. APPROVALS. The respective Boards of Directors have, or will have
prior to the Effective Time, duly approved this Plan and have, or will have
prior to the Effective Time, duly authorized its execution and delivery, and
the sole shareholder of Monarch and the sole shareholder of NBSC have, or
will have prior to the Effective Time, approved the terms of this Plan.
Accordingly, no dissenters' rights will be exercised by the sole shareholder
of either Monarch or NBSC.
F. INTENTION OF THE PARTIES. It is the intention of the parties to
this Plan that (a) the consummation of the Merger (as hereinafter defined) is
conditioned upon and will occur concurrently with or immediately after the
merger of CCB with and into MBC pursuant to the Agreement and Plan of Merger,
dated as of December 19, 1996 (the "Parent Plan"), between MBC and CCB (the
"Parent Merger") and (b) the Merger for federal income tax purposes shall
qualify as a "reorganization" within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code").
G. CAPITAL AND SURPLUS. Monarch has capital surplus of $4,255,000 and
undivided profits, including capital reserves, of $(590,000) as of December 31,
1996. NBSC has capital surplus of $12,551,000 and undivided profits, including
capital reserves, of $10,002,000 as of December 31, 1996.
In consideration of their mutual promises and obligations hereunder,
the parties hereto adopt and make this Plan and prescribe the terms and
conditions hereof and the manner and basis of carrying it into effect, which
shall be as follows:
ARTICLE I. THE MERGER
SECTION 1.1. STRUCTURE OF THE MERGER. On the Effective Date (as
defined in Section 7.1 hereof), Monarch will merge (the "Merger") with and into
NBSC, with NBSC being the surviving association (the "Surviving Association"),
pursuant to the provisions of, and with the effect provided in, the California
Financial Code and General Corporation Law and the National Bank Act (the "U.S.
Banking Law"). The corporate existence of Monarch and NBSC shall be merged into
and continued in the Surviving Association and the Surviving Association shall
be deemed to be the same corporation as Monarch and NBSC. All rights,
franchises, and interests of Monarch and NBSC in and to every type of property
(real, personal or mixed) and choses in action shall be transferred to and
vested in the Surviving
-2-
Association by virtue of the Merger and without any deed or other transfer. The
Surviving Association, upon the Merger, and without any order or other action on
the part of any court or otherwise, shall hold and enjoy all rights of property,
franchises and interests in any fiduciary capacity, in the same manner and to
the same extent as such rights, franchises and interests were held or enjoyed by
Monarch or NBSC at the time of the Merger. At the Effective Time (as defined in
Section 7.1 hereof), the articles of association, organization certificate,
bylaws, charter and certificate of authority to commence banking of the
Surviving Association shall be the articles of association, organization
certificate, bylaws, charter and certificate of authority to commence banking of
NBSC immediately prior to the Effective Time.
SECTION 1.2. EFFECT ON OUTSTANDING SHARES. (a) By virtue of the
Merger, automatically and without any action on the part of the holder
thereof, every nine shares of Monarch Common Stock issued and outstanding at
the Effective Time shall become and be converted, automatically and without
any action on the part of the holder thereof, into one share of NBSC Common
Stock with no consideration being issued in lieu of fractional shares.
(b) At the Effective Time, the issued and outstanding shares of NBSC
Common Stock, including shares issued pursuant to Section 1.2(a) hereof, shall
constitute all of the issued and outstanding shares of capital stock of the
Surviving Association.
SECTION 1.3. ASSUMPTION OF LIABILITIES. The Surviving Association
shall be responsible for all of the liabilities of every kind and description,
including liabilities arising from the operation of a trust department, of both
Monarch and NBSC existing as of the Effective Time.
SECTION 1.4. CAPITAL STRUCTURE OF SURVIVING ASSOCIATION. The
amount of capital of the Surviving Association shall be $5,051,000 divided
into 493,527 shares of common stock, each of $5.00 par value, and at the
Effective Time, the Surviving Association shall have a surplus of $16,806,000
and undivided profits of $9,412,000, including capital reserves, which will
be equal to the combined capital structures of Monarch and NBSC set forth in
the Recitals, adjusted, however, for normal earnings and expenses between
December 31, 1996 and the Effective Time.
-3-
ARTICLE II. CONDUCT PENDING THE MERGER
SECTION 2.1. CONDUCT PENDING THE MERGER. Except as expressly
provided in this Plan or in the Parent Plan, during the period from the date of
this Plan to the Effective Time, each of Monarch and NBSC shall comply with the
provisions of Article II of the Parent Plan, which Article is incorporated
herein by this reference, to the extent applicable.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF NBSC. NBSC represents
and warrants to Monarch that the Recitals of this Plan with respect to NBSC are
true and correct.
SECTION 3.2. REPRESENTATIONS AND WARRANTIES OF MONARCH. Monarch
represents and warrants to NBSC that the Recitals of this Plan with respect to
Monarch are true and correct.
ARTICLE IV. COVENANTS
SECTION 4.1. CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. Monarch and
NBSC shall (a) as soon as practicable make any filings and applications required
to be filed in order to obtain all approvals, consents and waivers of
governmental authorities necessary or appropriate for the consummation of the
transactions contemplated hereby and use their reasonable best efforts to cause
the applications for the approvals described in Section 5.1(b) of the Parent
Plan to be initially filed on or before February 15, 1997; (b) cooperate with
one another (i) in promptly determining what filings are required to be made or
approvals, consents or waivers are required to be obtained under any relevant
federal, state or foreign law or regulation and (ii) in promptly making any such
filings, furnishing information required in connection therewith and seeking
timely to obtain any such approvals, consents or waivers; and (c) deliver to the
other copies of the publicly available portions of all such filings and
applications promptly after they are filed.
SECTION 4.2. ADDITIONAL AGREEMENTS. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take promptly, or cause to be taken promptly, all
actions
-4-
and to do promptly, or cause to be done promptly, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Plan as soon as practicable,
including using efforts to obtain all necessary actions or non-actions,
extensions, waivers, consents and approvals from all applicable governmental
entities, effecting all necessary registrations, applications and filings
(including, without limitation, filings under any applicable state securities
laws) and obtaining any required contractual consents and regulatory approvals.
SECTION 4.3. TAX-FREE REORGANIZATION TREATMENT. Neither Monarch nor
NBSC shall take or cause to be taken any action, whether before or after the
Effective Time, which would disqualify the Merger as a "reorganization" within
the meaning of Section 368 of the Code.
SECTION 4.4. DIRECTORS; RESIGNATIONS. The parties agree that the
directors of NBSC immediately prior to the Effective Time shall continue to be
the directors of the Surviving Association at and after the Effective Time.
Monarch shall cause to be delivered to NBSC at the Effective Time the
resignations of the members of its Board of Directors.
ARTICLE V. CONDITIONS TO CONSUMMATION
SECTION 5.1. CONDITIONS TO ALL PARTIES' OBLIGATIONS. The respective
obligations of Monarch and NBSC to effect the Merger shall be subject to the
satisfaction or waiver prior to the Effective Time of the condition that all
conditions contained in Article V of the Parent Plan have been satisfied or
waived, which Article V is incorporated herein by this reference, and that the
Parent Merger shall have been consummated.
ARTICLE VI. TERMINATION
SECTION 6.1. TERMINATION. This Plan shall terminate, and the Merger
shall be abandoned, prior to the Effective Date, upon the termination of the
Parent Plan pursuant to Article VI thereof. This Plan may be terminated, and
the Merger abandoned, prior to the Effective Date, by Monarch or NBSC, upon
written notice to the other party, if either (i) any approval, consent or waiver
of a governmental authority required to permit consummation of the Merger or any
transaction necessary to consummate the
-5-
Merger shall have been denied or (ii) any governmental authority of competent
jurisdiction shall have issued a final, unappealable order enjoining or
otherwise prohibiting consummation of the Merger or any transaction necessary to
consummate the Merger.
SECTION 6.2. EFFECT OF TERMINATION. In the event of the termination
of this Plan as provided above, this Plan shall thereafter become void and,
subject to the provisions of Section 8.1 hereof, there shall be no liability on
the part of any party hereto or their respective officers or directors, except
that any such termination shall be without prejudice to the rights of any party
hereto arising out of the willful breach by any other party of any covenant or
willful misrepresentation contained in this Plan or the Parent Plan.
ARTICLE VII. EFFECTIVE DATE AND EFFECTIVE TIME
SECTION 7.1. EFFECTIVE DATE AND EFFECTIVE TIME. Upon the
satisfaction or waiver of all conditions to the consummation of the Merger, all
documents required to effect the Merger shall be executed in accordance with all
appropriate legal requirements and shall be filed as required by law, and the
Merger provided for herein shall become effective upon such filing. The date of
such filing is herein called the "Effective Date." The "Effective Time" of the
Merger shall be the time of such filing.
ARTICLE VIII. OTHER MATTERS
SECTION 8.1. SURVIVAL. Only those agreements and covenants of the
parties that are by their terms applicable in whole or in part after the
Effective Time shall survive the Effective Time. All other representations,
warranties, agreements and covenants shall be deemed to be conditions of the
Plan and shall not survive the Effective Time. If the Plan shall be terminated,
the agreements of the parties in Section 6.2, this Section 8.1, Section 8.5 and
Section 8.6 hereof shall survive such termination.
SECTION 8.2. WAIVER. Prior to the Effective Time, any provision of
this Plan may be: (i) waived by the party benefitted by the provision; or
(ii)amended or modified at any time (including the structure of the transaction)
by an agreement in writing between the parties hereto approved by their
respective Boards of Directors.
-6-
SECTION 8.3. COUNTERPARTS. This Plan may be executed in
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same instrument.
SECTION 8.4. GOVERNING LAW. This Plan shall be governed by, and
interpreted in accordance with, the laws of the State of California, and to the
extent applicable, federal law.
SECTION 8.5. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS PLAN OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 8.6. EXPENSES. Each party hereto will bear all expenses
incurred by it in connection with this Plan and the transactions contemplated
hereby.
SECTION 8.7. NOTICES. All notices, requests, acknowledgments and
other communications hereunder to a party shall be in writing and shall be
deemed to have been duly given when delivered by hand, telecopy, telegram or
telex (confirmed in writing) to such party at its address set forth below or
such other address as such party may specify by notice to the other party
hereto.
If to NBSC, to:
National Bank of Southern California
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
With copies to:
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
And
The Xxxxxxx Group
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxx Xxxxxx Xxxxxxx
-7-
If to Monarch, to:
Monarch Bank
0000 Xxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxx
With copies to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
SECTION 8.8. ENTIRE AGREEMENT; ETC. This Plan represents the entire
understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written agreements
heretofore made. All terms and provisions of this Plan shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Nothing in this Plan is intended to confer upon any
other Person any rights or remedies of any nature whatsoever under or by reason
of this Plan.
SECTION 8.9. ASSIGNMENT. This Plan may not be assigned by any party
hereto without the written consent of the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be
executed by their duly authorized officers as of the day and year first above
written.
MONARCH BANK
By:
-----------------------------
Name:
Title:
NATIONAL BANK OF SOUTHERN CALIFORNIA
By:
------------------------------
Name:
Title:
-8-
The Directors of Monarch Bank, by signing below, acknowledge that they
have approved the foregoing Merger Agreement and the transactions contemplated
thereby.
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
-9-
The Directors of National Bank of Southern California, by signing
below, acknowledge that they have approved the foregoing Merger Agreement and
the transactions contemplated thereby.
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
By:
------------------------------
Name:
Title: Director
-10-
