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EX-10
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of February 25, 1999 (the "Agreement"),
by and between SIERRAWEST BANCORP, a California corporation ("Issuer"), and
BANCWEST CORPORATION, a Delaware corporation ("Grantee").
RECITALS
A. The Plan. Grantee, Issuer and Issuer's wholly-owned subsidiary, Bank of
the West, a California state-chartered bank ("BW"), are concurrently herewith
entering into an Agreement and Plan of Merger, dated as of the date hereof (the
"Plan"), providing for, among other things, the merger of Issuer with and into
BW with BW being the surviving corporation.
B. Condition to Plan. As a condition and inducement to Grantee's execution
of the Plan, Grantee has required that Issuer agree, and Issuer has agreed, to
grant Grantee the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:
1. Defined Terms. Capitalized terms which are used but not defined herein
shall have the meanings ascribed to such terms in the Plan.
2. Grant of Option. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase
up to 1,059,490 shares of common stock, no par value ("Issuer Common Stock"), of
Issuer (as adjusted as set forth herein, the "Option Shares," which shall
include the Option Shares before and after any transfer of such Option Shares,
but in no event shall the number of Option Shares for which this Option is
exercisable exceed 19.9% of the issued and outstanding shares of Issuer Common
Stock) at a purchase price per Option Share (as adjusted as set forth herein,
the "Purchase Price") equal to $28.875. Each Option Share issued upon exercise
of the Option shall be accompanied by Rights (the "SierraWest Rights") as
provided in the SierraWest Rights Agreement.
3. Exercise of Option.
(a) The Holder (as hereinafter defined) may exercise the Option, in
whole or in part, at any time and from time to time following the
occurrence of a Purchase Event (as hereinafter defined); provided that the
option shall terminate and be of no further force or effect upon the
earliest to occur of (A) the Effective Time, (B) termination of the Plan
in accordance with the terms thereof prior to the occurrence of a Purchase
Event or a Preliminary Purchase Event (as hereinafter
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defined) or (C) 12 months after termination of the Plan following the
occurrence of a Purchase Event or a Preliminary Purchase Event; provided,
however, that any purchase of shares upon exercise of the Option shall be
subject to compliance with applicable law. Notwithstanding the termination
of the Option, Grantee or Holder as the case may be, shall be entitled to
purchase those Option Shares with respect to which it has exercised the
Option in accordance herewith prior to the termination of the Option. The
term "Holder" shall mean the holder or holders of the Option from time to
time, and which initially is Grantee. The termination of the Option shall
not affect any rights hereunder which by their terms extend beyond the
date of such termination.
(b) As used herein, a "Purchase Event" means any of the following
events:
(i) Without Grantee's prior written consent, Issuer or any of
its Significant Subsidiaries shall have recommended, publicly
proposed or publicly announced an intention to authorize, recommend
or propose, or entered into an agreement with any person (other than
Grantee or any Subsidiary of Grantee) to effect (A) a merger,
consolidation or similar transaction involving Issuer or any of its
Significant Subsidiaries (other than transactions solely between
Issuer's subsidiaries that are not violative of the Plan), (B) the
disposition, by sale, lease, exchange or otherwise, of assets or
deposits of Issuer or any of its Significant Subsidiaries
representing in either case 15% or more of the consolidated assets
or deposits of Issuer and its subsidiaries or (C) the issuance, sale
or other disposition by Issuer (including by way of merger,
consolidation, share exchange or any similar transaction) of
securities representing 15% or more of the voting power of Issuer or
any of its Significant Subsidiaries, other than, in each case of
(A), (B), or (C), any merger, consolidation, share exchange or
similar transaction involving Issuer or any of its Significant
Subsidiaries in which the voting securities of Issuer outstanding
immediately prior thereto continue to represent (by either remaining
outstanding or being converted into the voting securities of the
surviving entity of any such transaction) at least 80% of the
combined voting power of the voting securities of the Issuer or the
surviving entity outstanding immediately after the completion of
such merger, consolidation, or similar transaction (provided any
such transaction is not violative of the Plan) (each of (A), (B), or
(C), an "Acquisition Transaction"); or
(ii) any person (other than Grantee or any Subsidiary of
Grantee) shall have acquired beneficial ownership (as such term is
defined in Rule 13d-3 promulgated under the Exchange Act) of or the
right to acquire beneficial ownership of, or any "group" (as such
term is defined in Section 13(d)(3) of the Exchange Act), other than
a group of which Grantee or any Subsidiary of Grantee is a member,
shall have been formed which beneficially owns or has the right to
acquire
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beneficial ownership of 15% or more of the voting power of Issuer or
any of its Significant Subsidiaries; or
(iii) any person (other than Grantee or any Subsidiary of
Grantee) shall have commenced (as such term is defined in Rule 14d-2
under the Exchange Act) or shall have filed a registration statement
under the Securities Act with respect to, a tender offer or exchange
offer to purchase any shares of Issuer Common Stock such that, upon
consummation of such offer, such person would own or control 15% or
more of the then outstanding shares of Issuer Common Stock (such an
offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively); or
(iv) the shareholders shall not have approved the Plan by the
requisite vote at the SierraWest Shareholders Meeting, the
SierraWest Shareholders Meeting shall not have been held or shall
have been canceled prior to termination of the Plan, or Issuer's
Board of Directors shall have failed to make, withdrawn or modified
in a manner adverse to Grantee the recommendation of Issuer's Board
of Directors with respect to the Plan, in each case after it shall
have been publicly announced or disclosed that any person (other
than Grantee or any Subsidiary of Grantee) shall have (A) made, or
disclosed an intention to make, a bona fide proposal to engage in an
Acquisition Transaction, (B) commenced a Tender Offer or filed a
registration statement under the Securities Act with respect to an
Exchange Offer or (C) filed an application (or given a notice),
whether in draft or final form, under the BHC Act, the Bank Merger
Act, as amended (the "BMA") or the Change in Bank Control Act of
1978, as amended (the "CBCA"), for approval to engage in an
Acquisition Transaction.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
(i) any person (other than Grantee or any Subsidiary of
Grantee) shall have made a bona fide proposal to Issuer or its
shareholders by public announcement, or written communication that
is or becomes the subject of public disclosure, to engage in an
Acquisition Transaction; or
(ii) after a proposal is made by a third party to Issuer or
its shareholders to engage in an Acquisition Transaction, or such
third party states its intention to the Issuer to make such a
proposal if the Plan terminates, Issuer shall have breached any
representation, warranty, covenant or agreement contained in the
Plan, which breach would entitle Issuer to terminate the Plan
pursuant to Section 7.1(d) thereof; or
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(iii) any person (other than Grantee or any Subsidiary of
Grantee) other than in connection with a transaction to which
Grantee has given its prior written consent, shall have filed an
application or notice with any Governmental Entity for approval to
engage in an Acquisition Transaction; or
(iv) any event entitling Grantee to terminate the Plan
pursuant to Section 7.1(f) of the Plan.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Issuer shall notify Grantee promptly in writing of the
occurrence of any Preliminary Purchase Event or Purchase Event, it being
understood that the giving of such notice by Issuer shall not be a
condition to the right of Holder to exercise the Option.
(e) In the event Holder wishes to exercise the Option, it shall send
to Issuer a written notice (the date of which being herein referred to as
the "Notice Date") specifying (i) the total number of Option Shares it
intends to purchase pursuant to such exercise and (ii) a place and date
not earlier than three business days nor later than 20 business days from
the Notice Date for the closing (the "Closing") of such purchase (the
"Closing Date"); provided that if the Closing cannot be consummated by
reason of any applicable judgment, decree, order, law or regulation, the
period of time that otherwise would run pursuant to this sentence shall
run instead from the date on which such restriction on consummation has
expired or been terminated; and provided, further, without limiting the
foregoing, that if prior notification to or approval of any Governmental
Entity is required in connection with such purchase, Issuer shall
cooperate with the Holder in the filing of the required notice of
application for approval and the obtaining of such approval and the
Closing shall occur immediately following such regulatory approvals (and
any mandatory waiting periods). Any exercise of the Option shall be deemed
to occur on the Notice Date relating thereto.
(f) Notwithstanding Section 3(e), in no event shall any Closing Date
be more than 18 months after the related Notice Date, and if the Closing
Date shall not have occurred within 18 months after the related Notice
Date due to the failure to obtain any such required approval, the exercise
of the Option effected on the Notice Date shall be deemed to have expired.
In the event (i) Holder receives official notice that an approval of any
other Governmental Entity required for the purchase of Option Shares will
not be issued or granted or (ii) a Closing Date shall not have occurred
within 18 months after the related Notice Date due to the failure to
obtain any such required approval, Grantee shall be entitled to exercise
its right as set forth in Section 8 to exercise the option in connection
with the resale of Issuer Common Stock or other securities pursuant to a
registration statement as provided in Section 9. The provisions of this
Section 3 and Section 4 shall apply with appropriate adjustments to any
such exercise.
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4. Payment and Delivery of Certificates.
(a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated
by Issuer, an amount equal to the Purchase Price multiplied by the number
of Option Shares to be purchased on such Closing Date, and (ii) present
and surrender this Agreement to the Issuer at the address of the Issuer
specified in Section 12(f).
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section
4(a), (i) Issuer shall deliver to Holder (A) a certificate or certificates
representing the Option Shares to be purchased at such Closing, which
Option Shares shall be free and clear of any liens, claims or encumbrances
and subject to no preemptive rights, and (B) if the Option is exercised in
part only, an executed new agreement with the same terms as this Agreement
evidencing the right to purchase the balance of the shares of Issuer
Common Stock purchasable hereunder, and (ii) Holder shall deliver to
Issuer a letter agreeing that Holder shall not offer to sell or otherwise
dispose of such Option Shares in violation of applicable federal and state
law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by applicable
law, certificates for the Option Shares delivered at each Closing shall be
endorsed with a restrictive legend which shall read substantially as
follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF FEBRUARY 25,
1999. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF
WITHOUT CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the portion of the above legend
relating to the Securities Act shall be removed by delivery of substitute
certificates without such legend if Holder shall have delivered to Issuer
a copy of a letter from the staff of the SEC, or an opinion of counsel in
form and substance reasonably satisfactory to Issuer and its counsel, to
the effect that such legend is not required for purposes of the Securities
Act and (ii) the reference to restrictions pursuant to this Agreement in
the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the Option Shares evidenced by certificate(s)
containing such reference have been sold or transferred in compliance with
the provisions of this Agreement under circumstances that do not require
the retention of such reference.
(d) Upon the giving by Holder to Issuer of the written notice of
exercise of the Option provided for under Section 3(e), the tender of the
applicable Purchase Price in immediately available funds and the tender of
this Agreement to Issuer, Holder shall be deemed to be the holder of
record of the shares of Issuer Common Stock
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issuable upon such exercise, notwithstanding that the stock transfer books
of Issuer shall then be closed or that certificates representing such
shares of Issuer Common Stock shall not then be actually delivered to
Holder. Issuer shall pay all expenses, and any and all United States
federal, state, and local taxes and other charges that may be payable in
connection with the preparation, issuance and delivery of stock
certificates under this Section 4(d) in the name of Holder or its
assignee, transferee, or designee.
(e) Issuer agrees (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares
of Issuer Common Stock so that the Option may be exercised without
additional authorization of Issuer Common Stock after giving effect to all
other options, warrants, convertible securities and other rights to
purchase Issuer Common Stock, (ii) that it will not, by charter amendment
or through reorganization, consolidation, merger, dissolution or sale of
assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by Issuer, (iii) promptly
to take all action as may from time to time be required (including (A)
complying with all premerger notification, reporting and waiting period
requirements and (B) in the event prior approval of or notice to any
Governmental Entity is necessary before the Option may be exercised (the
"Governmental Approvals"), cooperating fully with Holder in preparing such
applications or notices and providing such information to such
Governmental Entity as it may require) in order to permit Holder to
exercise the Option and Issuer duly and effectively to issue shares of the
Issuer Common Stock pursuant hereto, and (iv) promptly to take all action
provided herein to protect the rights of Holder against dilution.
5. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee (and Holder, if different than Grantee) as follows:
(a) Corporate Authority. Issuer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of this
Agreement and, subject to receiving any necessary Governmental Approvals,
the consummation of the transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of Issuer, and no other
corporate proceedings on the part of Issuer are necessary to authorize
this Agreement or to consummate the transactions so contemplated; this
Agreement has been duly and validly executed and delivered by Issuer.
(b) Beneficial Ownership. To the best knowledge of Issuer, as of the
date of this Agreement, no person or group has beneficial ownership of
more than 10% of the issued and outstanding shares of Issuer Common Stock.
(c) Shares Reserved for Issuance; Capital Stock. Issuer has taken
all necessary corporate action to authorize and reserve and permit it to
issue, and at all times from the date hereof through the termination of
this Agreement in accordance with its terms, will have reserved for
issuance upon the exercise of the Option, that
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number of shares of Issuer Common Stock equal to the maximum number of
shares of Issuer Common Stock at any time and from time to time
purchasable upon exercise of the Option, and all such shares, upon
issuance pursuant to the Option, will be duly authorized, validly issued,
fully paid and nonassessable, and will be delivered free and clear of any
liens, claims or encumbrances (other than those created by this
Agreement), and not subject to any preemptive rights.
(d) No Violations. The execution, delivery and performance of this
Agreement does not and will not, and the consummation by Issuer of any of
the transactions contemplated hereby will not, constitute or result in (A)
a breach or violation of, or a default under, its articles of
incorporation or by-laws, or the comparable governing instruments of any
of its subsidiaries, or (B) a breach or violation of, or a default under,
any agreement, lease, contract, note, mortgage, indenture, arrangement or
other obligation of it or any of its subsidiaries (with or without the
giving of notice, the lapse of time or both) or under any law, rule,
ordinance or regulation or judgment, decree, order, award or governmental
or nongovernmental permit or license to which it or any of its
subsidiaries is subject, that would, in any case give any other person the
ability to prevent or enjoin Issuer's performance under this Agreement in
any material respect.
(e) SierraWest Rights Agreement Amendment. The SierraWest Rights
Agreement has been amended to provide that Grantee will not become an
"Acquiring Person" and that no "Triggering Event," "Stock Acquisition
Date" or "Distribution Date" (as such terms are defined in the SierraWest
Rights Agreement) will occur as a result of the approval, execution or
delivery of this Agreement or the Plan or the consummation of the
transactions contemplated hereby and thereby, including the acquisition of
shares of Issuer Common Stock by Grantee or Holder pursuant to this
Agreement.
6. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to Issuer as follows:
(a) Corporate Authority. Grantee has full corporate power and
authority to enter into this Agreement and, subject to obtaining the
approvals referred to in this Agreement, to consummate the transactions
contemplated by this Agreement; the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Grantee; and this Agreement has been duly executed and delivered by
Grantee.
(b) Purchase Not for Distribution. Any Option Shares or other
securities acquired by Grantee or Holder upon exercise of the Option will
not be taken with a view to the public distribution thereof and will not
be transferred or otherwise disposed of except in a transaction registered
or exempt from registration under the Securities Act.
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7. Adjustment upon Changes in Issuer Capitalization, Etc.
(a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination,
exchange of shares, exercise of the SierraWest Rights or similar
transaction, the type and number of shares or securities subject to the
Option, and the Purchase Price therefor, shall be adjusted appropriately,
and proper provision shall be made in the agreements governing such
transaction so that Holder shall receive, upon exercise of the Option, the
number and class of shares or other securities or property that Holder
would have received in respect of Issuer Common Stock if the Option had
been exercised immediately prior to such event, or the record date
therefor, as applicable. If any additional shares of Issuer Common Stock
are issued after the date of this Agreement (other than pursuant to an
event described in the first sentence of this Section 7(a)), upon exercise
of any option to purchase Issuer Common Stock outstanding on the date
hereof, the number of shares of Issuer Common Stock subject to the Option
shall be adjusted so that, after such issuance, it, together with any
shares of Issuer Common Stock previously issued pursuant hereto, equals
19.9% of the number of shares of Issuer Common Stock then issued and
outstanding, without giving effect to any shares subject to or issued
pursuant to the Option. No provision of this Section 7 shall be deemed to
affect or change, or constitute authorization for any violation of, any of
the covenants or representations in the Plan.
(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of
its subsidiaries, and shall not be the continuing or surviving corporation
of such consolidation or merger, (ii) to permit any person, other than
Grantee or one of its subsidiaries, to merge into Issuer and Issuer shall
be the continuing or surviving corporation, but, in connection with such
merger, the then outstanding shares of Issuer Common Stock shall be
changed into or exchanged for stock or other securities of Issuer or any
other person or cash or any other property or the outstanding shares of
Issuer Common Stock immediately prior to such merger shall after such
merger represent less than 50% of the outstanding shares and share
equivalents of the merged company, or (iii) to sell or otherwise transfer
all or substantially all of its assets or deposits to any person, other
than Grantee or one of its subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provisions so that
the Option shall, upon the consummation of any such transaction and upon
the terms and conditions set forth herein, be converted into, or exchanged
for, an option (the "Substitute Option"), at the election of Holder, of
either (x) the Acquiring Corporation (as hereinafter defined), (y) any
person that controls the Acquiring Corporation, or (z) in the case of a
merger described in clause (ii), Issuer (such person being referred to as
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided, that, if the terms of the Substitute Option cannot, for legal
reasons, be the same as the Option, such terms shall be as similar as
possible and in no event less advantageous to Holder. Substitute Option
Issuer shall also enter into an agreement
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with Holder in substantially the same form as this Agreement, which shall
be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock (as hereinafter defined) as is equal to
the Assigned Value (as hereinafter defined) multiplied by the number of
shares of Issuer Common Stock for which the Option was theretofore
exercisable, divided by the Average Price (as hereinafter defined). The
exercise price of the Substitute Option per share of Substitute Common
Stock (the "Substitute Option Price") shall be equal to the Purchase Price
multiplied by a fraction in which the numerator is the number of shares of
Issuer Common Stock for which the option was theretofore exercisable and
the denominator is the number of shares of the Substitute Common Stock for
which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the continuing or
surviving corporation of a consolidation or merger with Issuer (if
other than Issuer), (y) Issuer in a merger in which Issuer is the
continuing or surviving person, or (z) the transferee of all or
substantially all of Issuer's assets (or a substantial part of the
assets of its subsidiaries taken as a whole).
(ii) "Substitute Common Stock" shall mean the shares of
capital stock (or similar equity interest) with the greatest voting
power in respect of the election of directors (or persons similarly
responsible for the direction of the business and affairs) of the
Substitute Option Issuer.
(iii) "Assigned Value" shall mean the highest of (w) the price
per share of Issuer Common Stock at which a Tender Offer or an
Exchange Offer therefor has been made, (x) the price per share of
Issuer Common Stock to be paid by any third party pursuant to an
agreement with Issuer, (y) the highest closing price for shares of
Issuer Common Stock within the six-month period immediately
preceding the consolidation, merger, or sale in question and (z) in
the event of a sale of all or substantially all of Issuer's assets
or deposits an amount equal to (I) the sum of the price paid in such
sale for such assets (and/or deposits) and the current market value
of the remaining assets of Issuer, as determined by a nationally
recognized investment banking firm selected by Holder divided by
(II) the number of shares of Issuer Common Stock outstanding at such
time. In the event that a Tender Offer or an Exchange Offer is made
for Issuer Common Stock or an agreement is entered into for a merger
or consolidation involving consideration other than cash, the value
of the securities or other property issuable or deliverable in
exchange for Issuer Common Stock
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shall be determined by a nationally recognized investment banking
firm selected by Holder.
(iv) "Average Price" shall mean the average closing price of a
share of Substitute Common Stock for the one year immediately
preceding the consolidation, merger, or sale in question, but in no
event higher than the closing price of the shares of Substitute
Common Stock on the day preceding such consolidation, merger or
sale; provided that if Issuer is the issuer of the Substitute
Option, the Average Price shall be computed with respect to a share
of common stock issued by Issuer, the person merging into Issuer or
by any company which controls such person, as Holder may elect.
(f) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 19.9% of the aggregate
of the shares of Substitute Common Stock outstanding prior to exercise of
the Substitute Option. In the event that the Substitute Option would be
exercisable for more than 19.9% of the aggregate of the shares of
Substitute Common Stock but for the limitation in the first sentence of
this Section 7(f), Substitute Option Issuer shall make a cash payment to
Holder equal to the excess of (i) the value of the Substitute Option
without giving effect to the limitation in the first sentence of this
Section 7(f) over (ii) the value of the Substitute Option after giving
effect to the limitation in the first sentence of this Section 7(f). This
difference in value shall be determined by a nationally-recognized
investment banking firm selected by Holder.
(g) Issuer shall not enter into any transaction described in Section
7(b) unless the Acquiring Corporation and any person that controls the
Acquiring Corporation assume in writing all the obligations of Issuer
hereunder and take all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including,
without limitation, any action that may be necessary so that the holders
of the other shares of common stock issued by Substitute Option Issuer are
not entitled to exercise any rights by reason of the issuance or exercise
of the Substitute Option and the shares of Substitute Common Stock are
otherwise in no way distinguishable from or have lesser economic value
(other than any diminution in value resulting from the fact that the
Substitute Common Stock are restricted securities, as defined in Rule 144
under the Securities Act or any successor provision) than other shares of
common stock issued by Substitute Option Issuer).
8. Repurchase at the Option of Holder.
(a) At the request of Holder at any time (i) commencing upon the
first occurrence of a Repurchase Event (as defined in Section 8(d)) and
ending 18 months immediately thereafter and (ii) for 30 business days
following the occurrence of either of the events set forth in clauses (i)
and (ii) of Section 3(f) (but solely as to the shares of Issuer Common
Stock with respect to which the required approval was not received, Issuer
(or any successor) shall repurchase from Holder (x) the Option and (y) all
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shares of Issuer Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The date on which
Holder exercises its rights under this Section 8 is referred to as the
"Request Date". Such repurchase shall be at an aggregate price (the
"Section 8 Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Holder for any shares
of Issuer Common Stock acquired pursuant to the Option with respect
to which Holder then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as
defined below) for each share of Issuer Common Stock over (y) the
Purchase Price (subject to adjustment pursuant to Section 7),
multiplied by the number of shares of Issuer Common Stock with
respect to which the Option has not been exercised; and
(iii) the excess, if any, of the Applicable Price over the
Purchase Price (subject to adjustment pursuant to Section 7) paid
(or, in the case of Option Shares with respect to which the Option
has been exercised but the Closing Date has not occurred, payable)
by Holder for each share of Issuer Common Stock with respect to
which the Option has been exercised and with respect to which Holder
then has beneficial ownership, multiplied by the number of such
shares.
(b) If Holder exercises its rights under this Section 8, Issuer
shall, within 10 business days after the Request Date, pay the Section 8
Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment, Holder shall surrender to Issuer the
Option and the certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Holder then has beneficial
ownership, and Holder shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all
Liens. Notwithstanding the foregoing, to the extent that prior
notification to or approval of any Governmental Entity is required in
connection with the payment of all or any portion of the Section 8
Repurchase Consideration, Holder shall have the ongoing option to revoke
its request for repurchase pursuant to Section 8, in whole or in part, or
to require that Issuer deliver from time to time that portion of the
Section 8 Repurchase Consideration that it is not then so prohibited from
paying and promptly file the required notice or application for approval
and expeditiously process the same (and each party shall cooperate with
the other in the filing of any such notice or application and the
obtaining of any such approval) and the period of time that would
otherwise run pursuant to the preceding sentence for the payment of the
portion of the Section 8 Repurchase Consideration shall run instead from
the date on which, as the case may be, (i) any required notification
period has expired or been terminated or (ii) such approval has been
obtained and, in either event, any requisite waiting period shall have
passed. If any Governmental Entity disapproves of any part of Issuer's
proposed repurchase pursuant to this Section 8, Issuer shall promptly give
notice of such fact to
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Holder. If any Governmental Entity prohibits the repurchase in part but
not in whole, then Holder shall have the right (i) to revoke the
repurchase request or (ii) to the extent permitted by such Governmental
Entity, determine whether the repurchase should apply to the Option and/or
Option Shares and to what extent to each, and Holder shall thereupon have
the right to exercise the Option as to the number of Option Shares for
which the Option was exercisable at the Request Date less the sum of the
number of shares covered by the Option in respect of which payment has
been made pursuant to Section 8(a)(ii) and the number of shares covered by
the portion of the Option (if any) that has been repurchased; provided
that if the Option shall have terminated prior to the date of such notice
or shall be scheduled to terminate at any time before the expiration of a
period ending on the thirtieth business day after such date, Grantee shall
nonetheless have the right so to exercise the Option or exercise its
rights under Section 9 until the expiration of such period of 30 business
days. Holder shall notify Issuer of its determination under the preceding
sentence within five (5) business days of receipt of notice of disapproval
of the repurchase.
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of Issuer Common Stock paid for
any such share by the person or groups described in Section 8(d)(i), (ii)
the price per share of Issuer Common Stock received by holders of Issuer
Common Stock in connection with any merger or other business combination
transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii), or (iii)
the highest closing sales price per share of Issuer Common Stock quoted on
the Nasdaq National Market System during the 40 business days preceding
the Request Date; provided, however, that in the event of a sale of less
than all of Issuer's assets, the Applicable Price shall be the sum of the
price paid in such sale for such assets and the current market value of
the remaining assets of Issuer as determined by a nationally recognized
investment banking firm selected by Holder, divided by the number of
shares of the Issuer Common Stock outstanding at the time of such sale. If
the consideration to be offered, paid or received pursuant to either of
the foregoing clauses (i) or (ii) shall be other than in cash, the value
of such consideration shall be determined in good faith by an independent
nationally recognized investment banking firm selected by Holder and
reasonably acceptable to Issuer, which determination shall be conclusive
for all purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i) any person
(other than Grantee or any Subsidiary of Grantee) shall have acquired
beneficial ownership of (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), or the right to acquire beneficial ownership of,
or any "group" (as such term is defined under the Exchange Act) shall have
been formed which beneficially owns or has the right to acquire beneficial
ownership of, 25% or more of the then outstanding shares of Issuer Common
stock, or (ii) Issuer has entered into an agreement pursuant to which any
of the transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii)
could or will be consummated.
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9. Registration Rights.
(a) Demand Registration Rights. Issuer shall, subject to the
conditions of Section 9(c) below, if requested by any Holder, including
Grantee and any permitted transferee ("Selling Shareholder"), as
expeditiously as possible prepare and file a registration statement under
the Securities Act if such registration is necessary in order to permit
the sale or other disposition of any or all shares of Issuer Common Stock
or other securities that have been acquired by or are issuable to the
Selling Shareholder upon exercise of the Option in accordance with the
intended method of sale or other disposition stated by the Selling
Shareholder in such request, including without limitation a "shelf"
registration statement under Rule 415 under the Securities Act or any
successor provision, and Issuer shall use its best efforts to qualify such
shares or other securities for sale under any applicable state securities
laws.
(b) Additional Registration Rights. If Issuer at any time after the
exercise of the Option proposes to register any shares of Issuer Common
Stock under the Securities Act in connection with an underwritten public
offering of such Issuer Common Stock, Issuer will promptly give written
notice to the Selling Shareholders of its intention to do so and, upon the
written request of any Selling Shareholder given within 30 days after
receipt of any such notice (which request shall specify the number of
shares of Issuer Common Stock intended to be included in such underwritten
public offering by the Selling Shareholder), Issuer will cause all such
shares for which a Selling Shareholder requests participation in such
registration, to be so registered and included in such underwritten public
offering; provided, however, that Issuer may elect to not cause any such
shares to be so registered (i) if the underwriters in good faith object
for valid business reasons, or (ii) in the case of a registration solely
to implement an employee benefit plan or a registration filed on Form S-4
of the Securities Act or any successor Form; provided, further, however,
that such election pursuant to (i) may only be made two times. If some but
not all the shares of Issuer Common Stock with respect to which Issuer
shall have received requests for registration pursuant to this Section
9(b) shall be excluded from such registration, Issuer shall make
appropriate allocation of shares to be registered among the Selling
Shareholders desiring to register their shares pro rata in the proportion
that the number of shares requested to be registered by each such Selling
Shareholder bears to the total number of shares requested to be registered
by all such Selling Shareholders then desiring to have Issuer Common Stock
registered for sale.
(c) Conditions to Required Registration. Issuer shall use all
reasonable efforts to cause each registration statement referred to in
Section 9(a) above to become effective and to obtain all consents or
waivers of other parties which are required therefor and to keep such
registration statement effective; provided, however, that Issuer may delay
any registration of Option Shares required pursuant to Section 9(a) above
for a period not exceeding 90 days provided Issuer shall in good faith
determine that any such registration would adversely affect an offering or
contemplated offering of other securities by Issuer, and Issuer shall not
be required to register Option Shares under the Securities Act pursuant to
Section 9(a) above:
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(i) prior to the earliest of (a) termination of the Plan
pursuant to Article VII thereof, (b) failure to obtain the requisite
shareholder approval pursuant to Section 6.1(a) of the Plan, and (c)
a Purchase Event or a Preliminary Purchase Event;
(ii) on more than one occasion during any calendar year;
(iii) within 90 days after the effective date of a
registration referred to in Section 9(b) above pursuant to which the
Selling Shareholder or Selling Shareholders concerned were afforded
the opportunity to register such shares under the Securities Act and
such shares were registered as requested; and
(iv) unless a request therefor is made to Issuer by Selling
Shareholders that hold at least 25% or more of the aggregate number
of Option Shares (including shares of Issuer Common Stock issuable
upon exercise of the Option) then outstanding.
In addition to the foregoing, Issuer shall not be required to maintain the
effectiveness of any registration statement after the expiration of nine
months from the effective date of such registration statement. Issuer
shall use all reasonable efforts to make any filings, and take all steps,
under all applicable state securities laws to the extent necessary to
permit the sale or other disposition of the Option Shares so registered in
accordance with the intended method of distribution for such shares;
provided, however, that Issuer shall not be required to consent to general
jurisdiction or qualify to do business in any state where it is not
otherwise required to so consent to such jurisdiction or to so qualify to
do business.
(d) Expenses. Except where applicable state law prohibits such
payments, Issuer will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses
(including the fees and expenses of counsel), legal expenses, including
the reasonable fees and expenses of one counsel to the holders whose
Option Shares are being registered, printing expenses and the costs of
special audits or "cold comfort" letters, expenses of underwriters,
excluding discounts and commissions but including liability insurance if
Issuer so desires or the underwriters so require, and the reasonable fees
and expenses of any necessary special experts) in connection with each
registration pursuant to Section 9(a) or 9(b) above (including the related
offerings and sales by holders of Option Shares) and all other
qualifications, notifications or exemptions pursuant to Section 9(a) or
9(b) above.
(e) Indemnification. In connection with any registration under
Section 9(a) or 9(b) above Issuer hereby indemnifies the Selling
Shareholders, and each underwriter thereof, including each person, if any,
who controls such holder or underwriter within the meaning of Section 15
of the Securities Act, against all expenses, losses, claims, damages and
liabilities caused by any untrue, or alleged untrue, statement of a
material fact contained in any registration statement or prospectus or
notification or offering
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15
circular (including any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission, or alleged omission, to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as such
expenses, losses, claims, damages or liabilities of such indemnified party
are caused by any untrue statement or alleged untrue statement that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon and in conformity with, information furnished in
writing to Issuer by such indemnified party expressly for use therein, and
Issuer and each officer, director and controlling person of Issuer shall
be indemnified by such Selling Shareholders, or by such underwriter, as
the case may be, for all such expenses, losses, claims, damages and
liabilities caused by any untrue, or alleged untrue, statement, that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information furnished
in writing to Issuer by such holder or such underwriter, as the case may
be, expressly for such use.
Promptly upon receipt by a party indemnified under this Section 9(e) of
notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 9(e), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section 9(e) unless the failure so to notify the indemnified party results in
substantial prejudice thereto. In case notice of commencement of any such action
shall be given to the indemnifying party as above provided, the indemnifying
party shall be entitled to participate in and, to the extent it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense of such action at its own expense, with counsel chosen by it and
satisfactory to such indemnified party. The indemnified party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the indemnified party unless
(i) the indemnifying party either agrees to pay the same, (ii) the indemnifying
party fails to assume the defense of such action with counsel satisfactory to
the indemnified party, or (iii) the indemnified party has been advised by
counsel that one or more legal defenses may be available to the indemnifying
party that may be contrary to the interest of the indemnified party, in which
case the indemnifying party shall be entitled to assume the defense of such
action notwithstanding its obligation to bear fees and expenses of such counsel.
No indemnifying party shall be liable for any settlement entered into without
its consent, which consent may not be unreasonably withheld.
If the indemnification provided for in this Section 9(e) is unavailable to
a party otherwise entitled to be indemnified in respect of any expenses, losses,
claims, damages or liabilities referred to herein, then the indemnifying party,
in lieu of indemnifying such party otherwise entitled to be indemnified, shall
contribute to the amount paid or payable by such party to be indemnified as a
result of such expenses, losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative benefits received by
Issuer, the Selling
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Shareholders and the underwriters from the offering of the securities and also
the relative fault of Issuer, the Selling Shareholders and the underwriters in
connection with the statements or omissions which resulted in such expenses,
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The amount paid or payable by a party as a result of the
expenses, losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any action or claim;
provided, however, that in no case shall any Selling Shareholder be responsible,
in the aggregate, for any amount in excess of the net offering proceeds
attributable to its Option Shares included in the offering. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Any obligation by any holder to
indemnify shall be several and not joint with other holders.
In connection with any registration pursuant to Section 9(a) or 9(b)
above, Issuer and each Selling Shareholder (other than Grantee) shall enter into
an agreement containing the indemnification provisions of this Section 9(e).
(f) Miscellaneous Reporting. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to
permit the expeditious sale at any time of any Option Shares by the
Selling Shareholders thereof in accordance with and to the extent
permitted by any rule or regulation promulgated by the SEC from time to
time, including, without limitation, Rule 144. Issuer shall at its expense
provide the Selling Shareholders with any information necessary in
connection with the completion and filing of any reports or forms required
to be filed by them under the Securities Act or the Exchange Act, or
required pursuant to any state securities laws or the rules of any stock
exchange.
10. Quotation; Listing. If Issuer Common Stock or any other securities to
be acquired in connection with the exercise of the Option are then authorized
for quotation or trading or listing on the NYSE, the Nasdaq National Market
System or any securities exchange, Issuer, upon the request of Holder, will
promptly file an application, if required, to authorize for quotation or trading
or listing the shares of Issuer Common Stock or other securities to be acquired
upon exercise of the Option on the NYSE, the Nasdaq National Market System or
such other securities exchange and will use its best efforts to obtain approval,
if required, of such quotation or listing as soon as practicable.
11. Division of Option. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Holder, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory
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indemnification, and upon surrender and cancellation of this Agreement, if
mutilated, Issuer will execute and deliver a new Agreement of like tenor and
date. Any such new Agreement executed and delivered shall constitute an
additional contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
12. Miscellaneous.
(a) Expenses. Each of the parties hereto shall bear and pay all
costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its
own financial consultants, investment bankers, accountants and counsel;
provided, however, that Issuer will pay all stamp taxes in connection with
the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save the Selling Shareholders harmless,
without limitation as to time, against any and all liabilities, with
respect to all such taxes..
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiaries; Severability.
This Agreement, together with the Plan and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to
the subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto (other than the indemnified parties
under Section 9(e) and any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section 12(h)) any
rights or remedies hereunder. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or Governmental Entity to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. If for any reason such court or Governmental
Entity determines that the Option does not permit Holder to acquire, or
does not require Issuer to repurchase, the full number of shares of Issuer
Common Stock as provided in Section 2 (as may be adjusted herein), it is
the express intention of Issuer to allow Holder to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible
without any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of California without regard to any
applicable conflicts of law rules.
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(e) Descriptive Headings. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied
(with confirmation) or mailed by registered or certified mail (return
receipt requested) to the parties at the addresses set forth in the Plan
(or at such other address for a party as shall be specified by like
notice).
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and
the same agreement and shall become effective when both counterparts have
been signed, it being understood that both parties need not sign the same
counterpart.
(h) Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned
by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party, except that Holder
may assign this Agreement to a wholly-owned subsidiary of Holder and
Holder may assign its rights hereunder in whole or in part after the
occurrence of a Purchase Event. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the Option
by the Holder, Issuer and the Holder shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.
(j) Specific Performance. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree
to waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such equitable
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relief and that this provision is without prejudice to any other rights that the
parties hereto may have for any failure to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
SIERRAWEST BANCORP
By /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and Chief Executive
Officer
BANCWEST CORPORATION
By /s/ Xxxxxx X. Xxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Chairman and Chief Executive
Officer
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