EXHIBIT 10.2
OPTION SETTLEMENT AGREEMENT
This Option Settlement Agreement (this "Agreement"), dated as of April
____, 1997, is entered into between Pacific Century Financial Corporation, a
Hawaii corporation formerly known as Bancorp Hawaii, Inc. ("PCFC"), and
_____________________________ (the "Optionee").
R E C I T A L S:
A. PCFC and CU Bancorp, a California corporation ("CU"), entered into
that certain Agreement and Plan of Reorganization dated as of February 24, 1997
(the "Reorganization Agreement") providing for the merger (the "Merger") of CU
with and into PCFC.
B. CU has issued various options (the "CU Options") to acquire shares of
its common stock, without par value, including certain CU Options held by
Optionee.
C. Optionee is a director of CU who, because he is not employed by
California United Bank ("CU Bank"), is not expected to be eligible to receive
Replacement Options to be issued by PCFC. As a result, any CU Options not
exercised by Optionee prior to the Effective Time will be cancelled upon
consummation of the Merger.
D. The parties hereto wish to simplify settlement of unexercised CU
Options held by Optionee.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties and covenants, agreements and conditions herein
contained, and intending to be legally bound hereby, the parties agree as
follows:
1. CERTAIN DEFINITIONS. Except as otherwise provided in this
Agreement, capitalized terms in this Agreement (including the Recitals) have the
meanings ascribed thereto in the Reorganization Agreement.
2. NON-EXERCISE AND CANCELLATION OF OPTIONS. Optionee agrees that
Optionee will not, prior to the Effective Time, exercise any of Optionee's CU
Options. Optionee acknowledges that non-exercise of Optionee's CU Options prior
to the Effective Time will result in cancellation of such CU Options at the
Effective Time.
3. SETTLEMENT OF OPTIONS. PCFC agrees that it will, within 10
Business Days following the Effective Time, pay to Optionee in cash or cash
equivalent, without interest, the Option Settlement Amount. The "Option
Settlement Amount" means an amount equal to (a) the Per Share Cash Consideration
multiplied by the number of shares of CU Stock that immediately prior to the
Effective Time are subject to unexercised CU Options held by Optionee, less (b)
the aggregate exercise price for such unexercised CU Options.
4. WITHHOLDING TAXES. Optionee acknowledges that withholding may be
required with respect to federal and state income and payroll taxes arising from
payment to Optionee of the Option Settlement Amount. Optionee agrees that PCFC
may withhold from the Option Settlement Amount such portion thereof as PCFC
determines, in its sole discretion, is necessary or advisable with respect to
any such withholding obligations.
5. TERMINATION AND PARTIAL TERMINATION.
a. This Agreement shall terminate automatically without further
action upon termination of the Reorganization Agreement in accordance with these
terms. Upon such termination of this Agreement, the respective obligations of
the parties hereto shall immediately become void and have no further force and
effect.
b. Five Business Days prior to the expiration date of any CU
Option held by Optionee, Optionee's obligations under Section 2, and PCFC's
obligations under Section 3, shall automatically terminate with respect to such
CU Option.
c. If Optionee is at the Effective Time an employee of CU Bank,
PCFC shall have no obligation under Section 3 to make any payment with respect
to any CU Option as to which Optionee has been afforded an opportunity to
receive a Replacement Option pursuant to the Reorganization Agreement.
6. NO RELIANCE. Optionee acknowledges that none of PCFC, CU or CU
Bank has provided Optionee with advice, warranties or representations regarding
any of the legal or tax effects of this Agreement or the transactions
contemplated hereby. Optionee represents that he has obtained such legal and
tax advice with respect thereto from Optionee's own legal and tax advisors as
Optionee has deemed appropriate.
7. REPRESENTATIONS OF OPTIONEE. Optionee represents that Exhibit A
hereto accurately sets forth, as to Optionee, the number of shares of CU Stock
subject to CU Options held by Optionee and the exercise prices and expiration
dates thereof. Optionee represents that Optionee is the sole legal and
beneficial owner, and has good title to, all of the CU Options indicated as
owned by Optionee on Exhibit A, and that such CU Options are owned by Optionee
free and clear of liens, security interests, charges or other encumbrances.
2.
Optionee represents that Optionee has the legal right, power, capacity and
authority to execute, deliver and perform this Agreement, and that this
Agreement is the valid and binding obligation of Optionee enforceable in
accordance with its terms, except as the enforcement thereof may be limited by
general principles of equity. Optionee represents that the execution, delivery
and performance of this Agreement will not (a) conflict with or result in the
breach of, or default or actual or potential loss of any benefit under, any
provision of any agreement, instrument or obligation to which the Optionee or
the Optionee's spouse is a party or by which any of Optionee's properties or the
Optionee's spouse's properties are bound, or give any other party to any such
agreement, instrument or obligation a right to terminate or modify any term
thereof; (b) require the consent or approval of any third party; (c) result in
the creation or imposition of any lien, mortgage or encumbrance on any CU
Options or any other assets of the Optionee or the Optionee's spouse; or (d)
violate any law, rule or regulation to which the Optionee or the Optionee's
spouse is subject.
8. INTEGRATION. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and (except for
other documents to be executed pursuant to the Reorganization Agreement)
supersedes all prior agreements and understandings of the parties in connection
therewith.
9. HEADINGS. The descriptive headings of the Sections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
10. NOTICES. Any notice or communication required or permitted
hereunder, shall be deemed to have been given if in writing and (a) delivered in
person, (b) delivered by confirmed facsimile transmission (c) sent by overnight
carrier, postage prepaid with return receipt requested or (d) mailed by
certified or registered mail, postage prepaid with return receipt requested,
addressed as follows:
If to PCFC, addressed to:
Pacific Century Financial Corporation
000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Fax. No. (000) 000-0000
3.
With a copy addressed to:
Carlsmith Ball Xxxxxxx Case & Ichiki
2200 Pacific Tower
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: J. Xxxxxx Xxx Xxxxxx, Esq.
Fax. No. (000) 000-0000
If to Optionee, addressed to:
________________________________________
________________________________________
________________________________________
With a copy addressed to:
CU Bancorp
00000 Xxxxxxx Xxxx.
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Fax No. (000) 000-0000
or at such other address and to the attention of such other person as a party
may notice to the others in accordance with this Section 10. Any such notice or
communication shall be deemed received on the date delivered personally or
delivered by confirmed facsimile transmission, on the first Business Day after
it was sent by overnight carrier, postage prepaid with return receipt requested,
or on the fourth Business Day after it was sent by certified or registered mail,
postage prepaid with return receipt requested.
11. GOVERNING LAW. This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the laws of the
State of Hawaii applicable to contracts between Hawaii parties made and
performed in such State.
12. EXPENSES. Each party hereto shall pay its own costs and
expenses, including, but not limited to, those of its attorneys, in connection
with this Agreement and transactions covered and contemplated hereby.
4.
13. ATTORNEYS' FEES. In the event either of the parties to this
Agreement brings an action or suit against the other party by reason of any
breach of any covenant, agreement, representation, warranty or other provision
hereof, or any breach by such other party of any duty or obligation created
hereunder, the prevailing party in whose favor final judgment is entered shall
be entitled to have and recover of and from the losing party all reasonable
costs and expenses incurred or sustained by such prevailing party in connection
with such suit or action, including without limitation, legal fees and court
costs (whether or not taxable as such).
14. NO ASSIGNMENT. Neither this Agreement nor any rights, duties or
obligations hereunder shall be assignable by PCFC or Optionee, in whole or in
part, except that PCFC may assign any of its rights, duties or obligations
hereunder to CU or CU Bank. Any attempted assignment in violation of this
prohibition shall be null and void. Subject to the foregoing, all of the terms
and provisions hereof shall be binding upon, and inure to the benefit of, the
successors of the parties hereto.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to the other party. Such delivery may be
accomplished by and be effective upon facsimile transmission to the other party,
provided an originally executed copy of this Agreement is subsequently furnished
to such party.
16. JURY WAIVER. THE PARTIES HERETO AGREE TO WAIVE TRIAL BY JURY IN
ANY DISPUTE OVER THIS AGREEMENT OR RELATED THERETO IN ANY MANNER.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed this
Agreement as of the day and year first above written.
PACIFIC CENTURY FINANCIAL OPTIONEE
CORPORATION
By:_________________________________ ___________________________________
Title: Name:
5.
SPOUSAL CONSENT
I am the spouse of the Optionee named in the above Agreement. I understand
that I may consult independent legal counsel as to the effect of this Agreement
and the consequences of my execution of this Agreement and, to the extent I felt
it necessary, I have discussed it with legal counsel. I hereby confirm this
Agreement and agree that it shall bind my interest, if any, in the CU Options
held by Optionee.
_______________________________
Name:
6.
EXHIBIT A
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
PROJECTED
SHARES EXERCISE TOTAL AGGREGATE OPTION
DIRECTOR SUBJECT TO EXPIRATION PRICE PER EXERCISE EXERCISE SETTLEMENT
OPTIONS DATE SHARE PRICE PRICE AMOUNT
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. 5,000 7/1/04 $6.25 $31,250.00 $45,450.00
Xxxxxxxxx
-------------------------------------------------------------------------------------------------------------------
5,000 6/30/05 $6.88 $34,400.00 $42,300.00
-------------------------------------------------------------------------------------------------------------------
5,000 1/19/06 $10.50 $52,500.00 $24,200.00
-------------------------------------------------------------------------------------------------------------------
SUBTOTAL 15,000 $118,150.00 $111,950.00
-------------------------------------------------------------------------------------------------------------------
X. Xxxxxxx 7,194 7/14/97 $6.44 $46,329.36 $46,329.36 $64,026.60
Xxxxxx
-------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. 7,194 7/14/97 $6.44 $46,329.36 $46,329.36 $64,026.60
Xxxxxx
-------------------------------------------------------------------------------------------------------------------
Xxxx X. 15,120 10/20/97 $5.79 $87,544.80 $144,396.00
Glass
-------------------------------------------------------------------------------------------------------------------
7,500 7/1/04 $6.25 $46,875.00 $68,175.00
-------------------------------------------------------------------------------------------------------------------
7,500 6/30/05 $6.88 $51,600.00 $63,450.00
-------------------------------------------------------------------------------------------------------------------
5,000 7/19/06 $10.50 $52,500.00 $24,200.00
-------------------------------------------------------------------------------------------------------------------
SUBTOTAL 35,120 $238,519.80 $300,221.00
-------------------------------------------------------------------------------------------------------------------
Xxxxxx X. 5,000 7/1/04 $6.25 $31,250.00 $45,450.00
Xxxxxx
-------------------------------------------------------------------------------------------------------------------
5,000 6/30/05 $6.88 $34,400.00 $42,300.00
-------------------------------------------------------------------------------------------------------------------
5,000 7/19/06 $10.50 $52,500.00 $24,200.00
-------------------------------------------------------------------------------------------------------------------
SUBTOTAL 15,000 $118,150.00 $111,950.00
-------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxx 7,194 7/14/97 $6.44 $46,329.36 $46,329.36 $64,026.60
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
TOTAL 86,702 $613,807.88 $613,807.88 $716,200.80
-------------------------------------------------------------------------------------------------------------------
7.
