EXHIBIT 10
SETTLEMENT AND STANDSTILL AGREEMENT
This Settlement and Standstill Agreement (the "Agreement") is entered
into as of October 27, 2004, by First Financial Bancorp, a California
corporation (the "Company"); Bank of Lodi, N.A., a national banking association
("Bank"); Xxxxxx Xxxxxxx ("Xxxxxxx"), Xxxxxx Xxxxxxx ("Xxxxxxx"), Xxxxx Xxx
Xxxxxxxxxx ("Xxx Xxxxxxxxxx"), (collectively, the "Participants"), and Placer
Sierra Bancshares, a California corporation ("Placer"). Except as the context
otherwise requires, all capitalized terms shall have the meaning as defined in
Section 1.2.
RECITALS:
A. The Participants and the Company's Executive Management with a
majority of the Company's Board of Directors have had a
disagreement concerning the operations of the Company and its
wholly owned subsidiary the Bank since early 2003. The Participants
have incurred expenses in connection with the dispute.
B. The Participants have notified the Company of their intention to
nominate a slate of candidates in opposition to the Company's slate
of directors for the 2004 annual meeting (the "2004 Annual
Meeting") which the Board of Directors has not scheduled to date.
X. Xxxxxxx and Coldani have submitted two shareholder proposals (the
"Proposals") for inclusion in the Company's 2004 Annual Meeting
proxy. The Company has opposed the inclusion of the Proposals in
the Company's proxy and has requested that the Securities and
Exchange Commission (the "SEC") determine that the Proposals need
not be included in the Company's proxy.
D. On or about September 7, 2004, the Company announced the execution
of an Agreement and Plan of Merger dated as of September 7, 2004
(the "Merger Agreement") by which the Company will be merged with
and into Placer Sierra Bancshares (the "Merger"). The Board voted
to present the Merger Agreement to the shareholders of the Company
for their approval. Participants abstained from the vote at the
September 7 meeting on the basis that they believed that they were
not given sufficient time to evaluate this merger, as well as other
offers made at or about the same time. The Board of Directors of
the Company has scheduled a special meeting of the shareholders of
the Company on November 3, 2004 ("Special Shareholders' Meeting"),
to consider and vote on the Merger.
E. The Company and the Participants wish to proceed to settle their
past differences and unanimously support the Merger.
F. The terms upon which the Company and the Participants have agreed
to settle their differences are set forth herein.
STATEMENT OF AGREEMENT
NOW THEREFORE, the Company, each of the undersigned Participants,
severally and jointly, and Placer do hereby agree as follows:
SECTION 1 CONSTRUCTION AND DEFINITIONS
1.1. CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. Terms defined in the singular shall include the
plural, and vice versa, and pronouns in any gender shall include the masculine,
feminine, and neuter, as the context requires. Any reference to any federal,
state, local, or foreign statute or law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise. The word "including" shall mean including without limitation, and use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise. All references to a "Section" refer to the sections of this
Agreement, and all references to an "Exhibit" refer to the documents attached to
this Agreement, unless the context otherwise requires.
1.2. DEFINITIONS. Except for the names of the parties hereto (which
shall be referenced herein as defined above), the following capitalized terms
used in this Agreement shall, unless the context otherwise requires, have the
following meaning:
(a) "AFFILIATE" of a specified Person is a Person that, directly or
indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person
specified, and when used with respect to any or all of the
Participants shall include the group commonly referred to as the
"Friends Of First Financial Bancorp."
(b) "2004 ANNUAL MEETING" shall have the meaning given in paragraph B
of the Recitals to this Agreement.
(c) "ASSOCIATE" shall mean, with respect to a specified Person, (1) any
corporation or organization (other than the Company) of which the
Person is an officer, director, or partner or is, directly or
indirectly, the beneficial owner of 10 percent or more of any class
of equity security as such term is defined in Rule 3a-11 of the
General Rules and Regulations under the Exchange Act, (2) any trust
or other estate in which the Person has a substantial beneficial
interest or as to which the Person serves as trustee or in a
similar fiduciary capacity, and (3) any relative or spouse of the
Person, or any relative of the spouse, who has the same home as the
Person, or is an officer or director of any corporation controlling
or controlled by the Person.
(d) "BANK" shall have the meaning given in the first paragraph of this
Agreement.
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(e) "BENEFICIAL OWNERSHIP" with respect to a security means having or
sharing the rights or powers of a "beneficial owner" determined
pursuant to Rule 13d-3 of the Exchange Act.
(f) "BUSINESS DAY" means any day other than a Saturday, Sunday, or
other day on which banking institutions in the State of California
are authorized or obligated by law or executive order to close.
(g) "CLAIMANT" has the meaning specified in Section 4.1.
(h) "CLAIMS" has the meaning specified in Section 4.1.
(i) "CLOSE OF BUSINESS" on any given date shall mean 5:30 p.m., Pacific
Time, on that date; provided, however, that if the date is not a
Business Day it shall mean 5:30 p.m., Pacific Time, on the next
succeeding day which is a Business Day.
(j) "COMPANY" has the meaning specified in the first paragraph of this
Agreement and includes all subsidiaries, Affiliates and Associates
thereof and any successors thereto.
(k) "COMMON STOCK" means any of the Company's shares of common stock,
no par value, which are issued and outstanding or which the Company
is authorized to issue.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement, and all
references to any rule or regulation of the General Rules and
Regulations under the Exchange Act shall be, except as otherwise
specifically provided herein, to the rule or regulation as was in
effect on the date of this Agreement.
(m) "EXPIRATION DATE" means the date on which the Merger Agreement with
Placer Sierra Bancshares is terminated under Article VII of the
Merger Agreement.
(n) "GROUP" means any two or more Persons acting as a partnership,
limited partnership, syndicate, or other group constituting a
"Person" within the meaning of Section 13(d)(3) of the Exchange Act
or a "group" within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act or other comparable rules under the Exchange Act that
may hereafter exist.
(o) "PARTICIPANT" has the meaning given in the preamble to this
Agreement.
(p) "PERSON" means any individual, firm, corporation, partnership,
limited liability company, limited liability partnership, trust,
estate, sole proprietorship, or other association or entity.
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(q) "RELATED PARTY" shall mean, (i) with respect to any Person, any (A)
spouse of such Person, (B) trust in which such Person is either a
trustee or beneficiary, and (C) entity or organization in which
such Person, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with such Person; provided, however that the Friends of
First Financial Bancorp shall not be considered a Related Party of
the Participants; and (ii) with respect to Coldani, in addition to
the foregoing, Xxxxxxx Xxxxxxx or any Related Party of Xxxxxxx
Xxxxxxx.
(r) "RELEASED PARTIES" has the meaning given in Section 4.1 of this
Agreement.
(s) "SEC" means the United States Securities and Exchange Commission.
(t) "VOTING SECURITIES" means the Common Stock, or the equity
securities or other equity interest, having voting power, and
securities convertible into, exchangeable for or exercisable for
(whether or not currently convertible, exchangeable or exercisable)
such capital stock or other equity security.
SECTION 2 STANDSTILL AGREEMENT OF PARTICIPANTS
2.1. NOMINATIONS. Assuming that the Merger Agreement with Placer Sierra
Bancshares is still in effect, at the 2004 Annual Meeting, if any, none of the
Participants shall nominate or request recognition from the floor to nominate
any Person as a candidate for the Board of Directors of the Company, nor will
Participants induce, assist or request any other shareholder to do the same.
2.2. WITHDRAWAL OF NOTICE OF NOMINATION. The Participants hereby
formally withdraw the notice of the nomination of all Persons previously
identified to the Company by the Participants as proposed nominees.
2.3. WITHDRAWAL OF PROPOSALS. Xxxxxxx and Xxxxxxx hereby formally
withdraw the Proposals previously submitted for inclusion in the Company's proxy
for the 2004 Annual Meeting, subject to the understanding that the Merger
Agreement with Placer Sierra Bancshares shall be presented to the shareholders
of the Company at the Special Shareholders' Meeting.
2.4. SUPPORT OF MERGER. With respect to the Merger and the Merger
Agreement, each Participant agrees:
(a) That he will cast his vote as a member of the Company's Board of
Directors to ratify and approve the Merger Agreement;
(b) That he will execute the Shareholder Agreement attached to the
Merger Agreement as Exhibit D;
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(c) That he will execute the Non-solicitation and Confidentiality
Agreement attached to the Merger Agreement as Exhibit E;
(d) That he will cast all shares in which he has a Beneficial Ownership
in favor of the Merger and will cause each and every Related Party
of his to cast all shares in which such Related Party has a
Beneficial Ownership in favor of the Merger; and
(e) That he will individually and collectively with the other
Participants issue a press release publicly supporting the Merger.
The content of the press release shall be in language agreed upon
by all Participants, the Company and Placer.
2.5 SUPPORT OF COMPANY'S SLATE OF DIRECTORS. Assuming that the Merger
Agreement with Placer Sierra Bancshares is still in effect, each Participant
shall cast all shares in which he has a Beneficial Ownership in favor of the
slate of directors proposed for election by the Company at the 2004 Annual
Meeting.
2.6. TERMINATION OF CERTAIN ACTIVITIES. From and after the date of this
Agreement until the Expiration Date, the Participants shall jointly and
severally discontinue and shut down the operations of the "Friends of First
Financial Bancorp" and shall, except as otherwise contemplated by this
Agreement, cease any communications to the Company's shareholders in the name of
Friends of First Financial Bancorp. Further, within 3 business days following
the receipt by the Participants of the payment contemplated by Section 3.5(a)
hereof, the Participants shall jointly and severally terminate the website
"XxxxXxxXxxx.xxx" and shall remove all material from that website and shall
render that website inoperable.
2.7. STANDSTILL COVENANTS. Each Participant agrees that for the period
from the date of this Agreement to the Expiration Date that Participant will
not, without the prior approval of the board of directors of the Company,
directly or indirectly, take, or solicit, request, advise, assist, encourage, or
facilitate (including by providing financing to) any other Person to take, any
of the following actions except as necessary or appropriate to consummate the
transactions contemplated by the Merger Agreement:
(a) MAKE TENDER OR EXCHANGE OFFER. Commence, or announce any intention
to commence, or (directly or indirectly or through or in
conjunction with any other Person) engage in, a tender or exchange
offer for Voting Securities made by any other Person or entity;
(b) SOLICIT PROXIES. Solicit proxies or written consents of
shareholders with respect to Voting Securities under any
circumstances, or make, or in any way participate in, any
"solicitation" of any "proxy" to vote any Voting Securities or
become a "participant" in any election contest with respect to the
Company (as such terms are defined or used in Regulation 14A under
the Exchange Act), or seek to advise or influence any Person with
respect to the voting of any Voting Securities;
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(c) REQUEST SPECIAL SHAREHOLDERS MEETINGS. Seek to call, or request the
call of, a special meeting of the shareholders of the Company, or
induce or assist or request any other shareholder to seek the
calling of a special shareholders meeting;
(d) ACTION REGARDING SHAREHOLDER PROPOSALS. Make any shareholder
proposal in respect of the Company, regardless of whether such
proposal is made for inclusion in the Company's proxy materials, is
made at or in respect of any shareholders meeting or is made in
connection with any attempt to solicit shareholder consents; or
induce or assist any other shareholder in doing the same; or
solicit shareholders with respect to approval or disapproval of any
proposal, whether submitted by any shareholder or shareholders or
by the Company itself, for action by the shareholders of the
Company;
(e) DIRECTOR NOMINATIONS. Nominate or propose any Person or Persons as
a director of the Company or of any of its subsidiaries, or induce
or assist or request any other shareholder to do the same;
(f) CONTROL. Act, alone or in concert with others, to seek to control
the management, board of directors, policies, or affairs of the
Company or solicit, propose, seek to effect or negotiate with any
other Person (including, without limitation, the Company) with
respect to any form of business combination or other extraordinary
transaction with the Company or any restructuring,
recapitalization, similar transaction, or other transaction not in
the ordinary course of business, with respect to the Company,
including seeking to remove from office any director of the
Company;
(g) LEGAL ACTION. Take any action, alone or in concert with others, to
instigate, or to encourage, facilitate, incite, or seek to cause
others to instigate, legal proceedings against the Company or any
of its the officers, directors, employees, Affiliates or
Associates.
(h) VOTING AGREEMENTS. Other than as required in connection with the
Merger Agreement, enter into any shareholders agreement, voting
agreement or voting trust with other holders of Common Stock.
SECTION 3. COMPANY UNDERTAKINGS.
3.1. [INTENTIONALLY OMITTED]
3.2. NOMINATION OF DIRECTORS FOR 2004 ANNUAL MEETING. The Company shall
nominate a slate of directors as candidates for election at the 2004 Annual
Meeting which shall consist of no more than 11 candidates, which shall include
only the directors now serving as members of the Company's Board of Directors,
including the Participants, and Xxxxx Xxxxx, a current director of Bank. It is
understood that if Company directors Xxxxxxx Xxxxxx and Xxxx Xxxxx complete
their work on the derivative lawsuit review prior to the 2004 Annual Meeting of
Shareholders, they will not be candidates for directorship.
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3.3 TIMING OF 2005 ANNUAL MEETING. If the Merger is not consummated,
the Company shall hold its 2005 annual meeting not later than the later of (a)
April 30, 2005 or (b) 90 days following the Expiration Date.
3.4 SHAREHOLDER PROPOSALS. If the Merger is not consummated and the
Company holds a 2005 annual meeting, the Company shall include in the proxy for
the 2005 annual meeting the Proposals; provided, however, nothing in this
provision shall preclude the Company from making a statement in opposition to
the Proposals in its proxy materials. The Company agrees that it shall not
pursue a request from the SEC that the Proposals need not be included in the
Company's proxy for the 2005 annual meeting and will take any actions necessary
or appropriate to withdraw the Company's objections to the Proposals previously
filed with the SEC by the Company. In addition, the Participants shall have a
reasonable opportunity to recommend candidates to the Corporate Governance and
Nominating Committee for consideration as nominees for directors of the Company
to be considered at the 2005 annual meeting.
3.5 CONSIDERATION TO PARTICIPANTS. In consideration of the release,
waiver and extinguishment of all claims contemplated by Section 4 of this
Agreement, including but not limited to reimbursement of expenses in connection
with the Participants activities in the formation and operation of the "Friends
of First Financial Bancorp", all vested or unvested (whether previously granted
or not, whether previously cancelled or not) Company stock options ("Participant
Stock Options"), all other benefits bestowed on Company or Bank directors, all
other forms of compensation or reimbursement owed or could be alleged to be owed
as directors of the Company or Bank, immediately prior to the Effective Time (as
that term is defined in the Merger Agreement) of the Merger, the Company shall
make the following payments or cause the Bank to provide the following benefits
to the Participants as applicable:
(a) Within three (3) business days of the date of this Agreement, the
Company shall pay to the Participants the sum of $130,000 for
expenses incurred.
(b) (i) At the closing of the consummation of the Merger and
conditioned thereupon, or (ii) on the sixth month anniversary of
the first public announcement that the Merger Agreement has been
terminated and provided that each Participant is in compliance with
all of his obligations under this Agreement, the Company shall pay
to the Participants the amounts set forth on EXHIBIT A; provided,
however, that with respect to the payments made as a result of the
termination of the Merger Agreement under the immediately preceding
subsection (b)(ii), Placer shall reimburse the Company to the
extent that the amounts paid by the Company under EXHIBIT A exceed
the amounts that would have been paid if the term "Per Share Merger
Consideration" as used in EXHIBIT A were defined to be the average
of the daily closing price of a share of Company common stock
reported on the OTC Bulletin Board during the 20 consecutive
trading days on which trades were reported on Company common stock
ending at the end of the sixth month anniversary of the public
announcement that the Merger Agreement has been terminated.
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(c) From the date of this Agreement until the Termination Date, during
any period in which and for so long as a Participant is a director
of the Company, such Participant shall be eligible to receive all
compensation and benefits to which all directors of the Bank are
entitled. In addition, for any Participant who had a Long Term Care
Agreement with the Bank at or about April 2003, the Company shall
make an annual payment directly to such Participant in an amount
equal to the premium payment that would have been paid by the Bank
under such Long Term Care Agreement through October 2009.
3.6 SUPPLEMENTAL COMPENSATION ARRANGEMENTS. Conditioned upon (i)
the consummation of the Merger or (ii) the termination of the Merger Agreement
and provided that Participants are in full compliance with their obligations
under this Agreement on the Expiration Date, the Company hereby acknowledges
that the following agreements are in full force and effect and that the named
Participants therein shall be entitled to all benefits thereunder: (i) Director
Supplemental Compensation Agreement, dated May 18, 1999, by and between the Bank
and Xxxxxxx; and (ii) Director Supplemental Compensation Agreement, dated May
18, 1999, by and between the Bank and Coldani.
3.7 INDEMNIFICATION. The Participants will be entitled to
indemnification from the Company and the Bank to the same extent and subject to
the same limitations as all of the other directors of the Company and the Bank,
including, without limitation, provisions relating to the advancement of legal
fees and costs and including indemnification for actions or omissions of the
Participants relating to the Company or the Bank on or before the date hereof.
Simultaneously with the execution of this Agreement, each Participant shall
enter into an Indemnification Agreement with the Bank in the form attached
hereto as EXHIBIT B. In the event that the indemnification provided to the
Participants pursuant to this Section 3.7 is dependent upon insurance coverage,
any denial of coverage will not relieve the Company and the Bank of their
indemnity obligations. The indemnification provided to Participants shall
survive the termination of this Agreement.
3.8 STOCK OPTIONS. Without in any way limiting the release given by the
parties pursuant to Section 4 of this Agreement and in no way acknowledging,
admitting or agreeing that the Participant Stock Options are outstanding as of
the date hereof, the parties specifically agree that (i) the Participants hereby
surrender the Participant Stock Options for cancellation and termination
immediately prior to the consummation of the Merger, and (ii) the Participant
Stock Options are hereby cancelled and terminated for all intents and purposes
immediately prior to the consummation of the Merger.
3.9 DIRECTOR EMERITUS. Upon the execution of this Agreement, Xxxxxxx
Xxxxxxx will be reappointed as a director emeritus of the Bank and shall be
entitled to all benefits associated therewith for so long as he continues in
such capacity.
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SECTION 4 MUTUAL RELEASES
4.1. RELEASE.
(a) Each Participant for and on behalf of himself and each of his
assignees, nominees, employees, agents, attorneys, xxxxxxxxxxxxxxx,
xxxxx, xxxxxxx, and successors, on the other part, each (as a
"PARTICIPANT CLAIMANT") hereby releases and forever discharges the
Company and each of its Affiliates, Associates, predecessors,
successors, parents, subsidiaries, divisions, partners, assignees
and nominees, and all employees, directors, officers, agents,
attorneys, representatives and shareholders of each of them, and
each of their Affiliates, Associates, heirs, estates, successors,
and assigns, on one part, and each such Person of the other's part
(the "RELEASED PARTIES") of and from any and all manner of claims,
rights, actions, causes of action, suits, liens, obligations,
accounts, debts, demands, agreements, promises, liabilities,
controversies, costs, expenses, and attorneys' or paralegals' or
other fees whatsoever, whether arising in law or equity, whether
based on any federal, state or foreign law or right of action,
matured or unmatured, contingent or fixed, liquidated or
unliquidated, known or unknown, accrued or unaccrued which the
Released Parties or any of them, the Participant Claimants, or any
of them, ever had or now have by reason, in connection with,
arising out of the matters described in this Agreement, including
but not limited to the provisions of Section 3.5 hereof, all
matters relating to compensation and benefits as an officer,
director, employee or agent of Company or Bank, all matters
relating to Participant Claimant's status as a shareholder of
Company, and those matters referred to or alleged in the
"Xxxxxxxxxxx.xxx" website or other letters from the Participants to
the Company's shareholders (collectively, "CLAIMS"). "Claims" shall
not include any claims arising out of or relating to this Agreement
or any rights or obligations contained herein.
(b) The Company and each of its Affiliates, Associates, predecessors,
successors, parents, subsidiaries, divisions, partners, assignees
and nominees, and all employees, directors, officers, agents,
attorneys, representatives and shareholders of each of them, and
each of their Affiliates, Associates, heirs, estates, successors,
and assigns, on one part, and each such Person of the other's part,
each (as a "COMPANY CLAIMANT") hereby releases and forever
discharges each Participant and each of his Affiliates, Associates,
assignees, nominees, employees, agents, attorneys, xxxxxxxxxxxxxxx,
xxxxx, xxxxxxx, and successors on one part, (the "RELEASED
PARTIES") of and from any and all manner of claims, rights,
actions, causes of action, suits, liens, obligations, accounts,
debts, demands, agreements, promises, liabilities, controversies,
costs, expenses, and attorneys' or paralegals' or other fees
whatsoever, whether arising in law or equity, whether based on any
federal, state or foreign law or right of action, matured or
unmatured, contingent or fixed, liquidated or unliquidated, known
or unknown, accrued or unaccrued which the Released Parties or any
of them, the Company Claimants, or any of them, ever had or now
have by reason, in connection with, arising out of the matters
described in this Agreement, (collectively, the "COMPANY CLAIMS").
"Company Claims" shall not include any claims arising out of or
relating to this Agreement or any rights or obligations contained
herein.
(c ) This release shall be deemed to extinguish all such Claims of the
Company and the Participants, and the Company and the Participants
covenant not to institute or maintain any suits against any of the
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Released Parties with respect to any of such Company Claims or
Participant Claims; provided that this release shall not preclude
either the Company or the Participants from instituting any action
against the other party for alleged breach of this Agreement to the
extent that the obligations of the parties hereunder remained
executory at the time of the alleged breach.
4.2 WAIVER OF CALIFORNIA CIVIL CODE SECTION 1542. In executing this
Agreement, the Participants and the Company waive and relinquish all rights and
benefits afforded by California Civil Code Section 1542 ("SECTION 1542"), and do
so understanding and acknowledging the significance and consequences of this
specific waiver. Section 1542 states as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
The waiver of Section 1542 provided by this paragraph is an essential
term of this Agreement without which the settlement would not have been reached
SECTION 5 REMEDIES; CHOICE OF LAW; JURISDICTION
5.1. CHOICE OF LAW; CONSENT TO JURISDICTION. All disputes, claims, or
controversies arising out of or relating to this Agreement shall be governed by
and construed in accordance with the laws of the State of California without
regard to its rules of conflict of laws. Each of the parties hereby irrevocably
and unconditionally consents to submit to the sole and exclusive jurisdiction of
United States District Court for the Eastern District of California, or any
state court sitting in the County of San Xxxxxxx, State of California, or any
litigation arising out of or relating to this Agreement (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in such courts and
agrees not to plead or claim in any such court that such litigation brought
therein has been brought in any inconvenient forum. Each of the parties hereto
agrees that service of process may be made on such party by prepaid certified
mail with a proof of mailing receipt validated by the United States Postal
Service constituting evidence of valid service. Service so made shall have the
same legal force and effect as if served upon such party personally within the
State of California.
5.2. REMEDIES. Each party hereto hereby acknowledges and agrees that
irreparable harm would occur in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or are
otherwise breached or threatened to be breached. It is accordingly agreed that
the parties shall be entitled to specific relief hereunder, including, without
limitation, an injunction or injunctions to prevent and enjoin breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof, in addition to any other remedy to which they may be entitled
at law or in equity. Any requirements for the securing or posting of any bond
with such remedy are hereby waived. The prevailing party or parties in such
action or proceeding for such relief shall be entitled to recover from the other
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party or parties all costs and expenses, including but not limited to reasonable
attorneys' fees, court costs, witness fees, disbursements, and any other
expenses of litigation or negotiation incurred by such prevailing party or
parties.
SECTION 6 MISCELLANEOUS
6.1. PUBLIC ANNOUNCEMENT.
(a) The parties agree that the Company may issue a press release
announcing this Agreement. The Participants agree that the press
release may quote them as follows: "In light of the Board's
resolution to support the proposed merger of the Company with
Placer Sierra Bank, and considering all facts put before us, we now
believe it is in the best interests of the shareholders to support
this merger with Placer Sierra Bank, which is considered a strong
institution with a good reputation." The press release shall also
state that the Participants will be included in management's slate
of nominees for election to the Company's Board of Directors at the
2004 Shareholders Meeting. The parties acknowledge that the Company
will file with the SEC a form 8-K pertaining to this Agreement,
with this Agreement as an attachment, promptly following the
execution of this Agreement and will make such other disclosure of
this Agreement as may be necessary to comply with the rules and
regulations of the SEC.
(b) From the date hereof until the Expiration Date, except as otherwise
reasonably determined by any party to be necessary to comply with
its legal obligations (in which case such party shall notify all
other parties in advance of the communication, including the
contents of such communication and the basis for such legal
necessity), no party to this Agreement (including any party's
officers, directors or employees) shall publicly comment on this
Agreement unless such comment is communicated in writing and
approved by all other parties to this Agreement, including, without
limitation, any response to inquiries from the media.
(c) From the date hereof until the Expiration Date, the Company shall
not issue any press release that disparages, libels, defames or
otherwise contains a statement that places Participants in a bad
light or damages their reputations. From the date hereof until the
Expiration Date, the Participants shall not issue any press release
that disparages, libels, defames or otherwise contains a statement
that places the Company or the Bank in a bad light or damages
either of their reputations.
6.2. COSTS AND EXPENSES. All costs and expenses incurred in connection
with the transactions contemplated hereby, including the negotiation, execution,
delivery, and performance hereof, shall be paid by the party incurring such cost
or expense.
6.3. AMENDMENT; WAIVER. No amendment or waiver of any provision of this
Agreement shall be implied by any failure of any party to enforce any remedy
upon the violation of such provision, even if such violation is continued or
repeated subsequently, and in no event shall any amendment or waiver of any
provision of this Agreement be effective against any party hereto unless
expressed in writing signed by the party granting the waiver. No express waiver
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shall affect any provision other than the one specified in such waiver, and that
only for the time and in the manner specifically stated.
6.4. HEADINGS. The headings and captions are for convenience only and
shall not be deemed to limit, construe, affect or alter the meaning of the
underlying provisions.
6.5. COUNTERPARTS. This Agreement may be delivered by facsimile and
executed in any number of counterparts, each of which shall be an original and
all of which shall constitute one and the same document.
6.6. SEVERABILITY. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any jurisdiction for any reason, such
invalidity, illegality or unenforceability shall not affect the remainder of
this Agreement, and the remainder of this Agreement shall be construed and
enforced as if such invalid, illegal or unenforceable portion were not contained
herein.
6.7. NOTICE. Any notice or other communication required or permitted
hereunder shall, unless otherwise expressly provided, be in writing and be
deemed to have been properly given, served and received (a) if delivered by
messenger, when delivered, (b) if mailed, on the third Business Day after
deposit in the United States Mail, certified or registered, postage prepaid,
return receipt requested, (c) if emailed or faxed, two hours after being
dispatched by email or fax if such second hour falls on a Business Day within
the hours of 9:00 a.m. through 5:00 p.m. of the time in effect at the place of
receipt, or at 9:00 a.m. on that Business Day if the second hour is before 9:00
a.m., or at 9:00 a.m. on the next Business Day thereafter if such second hour is
later than 5:00 p.m. or other than on a Business Day, or (d) if delivered by
commercial overnight express courier, freight prepaid, for next day delivery,
the next Business Day after delivery to such courier; in every case addressed to
the party to be notified as follows:
In the case of the Company:
First Financial Bancorp
000 Xxxxx Xxx Xxxx
Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
First Financial Bancorp
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO:
Xxxxxxx XxXxxxxxx LLP
Three Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
12
In the case of the Participants, or of any of them:
Xxxxx Xxxxxxx
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx X
Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
WITH A COPY TO:
Xxxx X. Xxxxxxx, Esq.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address(es) or addressee(s) as any party entitled to receive
notice hereunder shall designate to the others in the manner provided herein for
the service of notices. Rejection or refusal to accept delivery or inability to
deliver because of changed address or because no notice of changed address was
given, shall be deemed receipt.
6.8. SUCCESSORS. This Agreement shall inure to the benefit of, and be
binding upon, each party and that party's respective successors and assigns.
6.9. COMPLETE AGREEMENT. This Agreement contains the entire agreement
among the parties and supersedes any prior understanding or agreements among
them respecting any matter covered by this Agreement.
6.10. FURTHER ASSURANCES. Each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all tings necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement. If any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the parties shall take all such necessary action.
6.11 RELATIONSHIP OF THE PARTIES. Except as specifically stated
otherwise, the liability of the parties under this Agreement is several and not
joint. From and after the Expiration Date, Placer shall have no liabilities or
obligations arising from, relating to or in connection with this Agreement other
than those arising under Section 3.5(b)(ii) and Section 6.1 hereof.
THE NEXT PROVISION OF THIS DOCUMENT IS HEADED "SIGNATURES" AND INTENTIONALLY
BEGINS ON A SEPARATE PAGE
13
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first set forth above.
FIRST FINANCIAL BANCORP
By: /s/ XXXXXXXX XXXXXXXX
_________________________
Xxxxxxxx Xxxxxxxx
Chairman of the Board
BANK OF LODI
By: /s/ XXXXXXXX XXXXXXXX
_________________________
Xxxxxxxx Xxxxxxxx
Chairman of the Board
PLACER SIERRA BANCSHARES
By: /s/ XXXXXX X. XXXXXX
_________________________
Xxxxxx X. Xxxxxx
Chairman and CEO
THE FOLLOWING PARTICIPANTS, JOINTLY AND INDIVIDUALLY:
/s/ XXXXXX XXXXXXX /s/ XXXXXX XXXXXXX
________________________ __________________
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
/s/ XXXXX XXX XXXXXXXXXX
________________________
Xxxxx Xxx Xxxxxxxxxx
14
EXHIBIT A
PAYMENTS AT CLOSING
Each Participant shall receive an amount equal to the difference between the Per
Share Merger Consideration (as defined in the Agreement) and the exercise price
for the unexercised stock options identified below that were held by each
Participant prior to April 2003:
Number
Participant of Shares Exercise Price
Xxxxxx Xxxxxxx 3,465 $ 8.1126
Xxxxx Xxx Xxxxxxxxxx 2,200 $ 8.6364
Xxxxxx Xxxxxxx 6,063 $ 9.8958
3,465 $ 8.1126
The total amount received by the Participants under this Exhibit A would be
$250,682.20.
15
EXHIBIT B
INDEMNIFICATION AGREEMENT
DIRECTORS AND OFFICERS INDEMNIFICATION AND
ADVANCEMENT AGREEMENT
This Directors and Officers Indemnification and Advancement
Agreement (this "AGREEMENT") dated ____________, 2004 is entered into between
First Financial Bancorp, a California corporation (the "Company") and
_______________________ ("INDEMNITEE"), with reference to the following facts:
A. Indemnitee is a director and/or officer of the Company and
in such capacity is performing a valuable service for the Company.
B. The Company and Indemnitee are aware of the heightened risk
of litigation, including derivative actions, and other claims that may be
asserted against directors and officers of any bank or corporation in connection
with their activities in such capacities and by reason of their status as such.
The Company wishes to (1) induce and encourage highly experienced and capable
persons such as Indemnitee to serve as directors and officers of the Company;
(2) encourage such persons to resist what they consider unjustifiable suits and
claims made against them in connection with the good faith performance of their
duties to the Company as a whole and to the public stockholders, secure in the
knowledge that certain expenses, costs and liabilities incurred by them in their
defense of such litigation will be borne by the Company and that they will
receive the maximum protection against such risks and liabilities as legally may
be made available to them; and (3) encourage directors and officers to exercise
their best business judgment regarding matters which come before the board of
directors without undue concern for the risk that claims may be made against
them on account thereof.
C. The Company has investigated the availability and
efficiency of liability insurance to provide its directors and officers with
adequate protection again the foregoing legal risks and potential liabilities.
It has concluded that such insurance does not provide adequate protections to
its directors and officers. Thus, it would be in the best interests of the
Company to contract with its directors and officers, including Indemnitee, to
indemnify them to the fullest extent permitted by law against personal liability
for actions taken in good faith performance of their duties to the Company.
D. Section 317 of the General Corporation Law of the State of
California, which set forth certain provisions relating to mandatory and
permissive indemnification of directors and officers (among others) and which is
applicable to a national bank pursuant to regulations issued by the Office of
the Comptroller of the Currency (12 C.F.R. Section 7.2000 and related
provisions), requires indemnification in certain circumstances, permits it in
other circumstances, and prohibits it in some circumstances.
16
Therefore, to ensure adequacy and reliability of protection
afforded to Indemnitee and to induce Indemnitee to continue to serve as a
director and/or officer, the Company has determined and agreed to enter into
this Agreement with Indemnitee.
SECTION 1. MANDATORY INDEMNIFICATION. To the maximum extent permitted
by California law, the Company hereby agrees to indemnify, defend and hold
harmless Indemnitee, within 30 days after Indemnitee's demand therefor, from and
against:
(a) any and all Expenses (including without limitation
reasonable attorneys' fees), and liabilities (including any judgments
and fines) and amounts paid in settlement, defense or other disposition
of a proceeding actually and reasonably incurred by Indemnitee in
connection with any threatened, pending or completed claim, action,
suit or proceeding, whether civil, criminal, administrative or
investigative (including an action by or in the right of the Company)
to which Indemnitee is, was or at any time becomes a party, or is
threatened to be made a party or is otherwise involved in any
proceeding, by reason of the fact that Indemnitee is or was a director,
officer, employee or agent of the Company or was serving at the request
of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise of
the Company or arising out of or connected with any action taken or
omitted by Indemnitee in such capacity, (collectively, a "CLAIM"), and
(b) any and all Expenses of establishing or enforcing, or
attempting to establish or enforce, a right of indemnification or
advancement as against the Company (whether under this Agreement or
otherwise, or enforcing or attempting to enforce remedies against any
insurance provided by the Company, with respect to a Claim. The
proceedings referred to in this Section 1(b) are herein called
"RECOVERY PROCEEDINGS."
As used in this Agreement, "Expenses" includes, without limitation, attorneys'
fees and all other costs, expenses and obligations paid or incurred in
connection with investigating, defending, being a witness in or participating in
a Claim or a Recovery Proceeding, or preparing to do any of the foregoing.
SECTION 2. MANDATORY ADVANCEMENT.
(a) Unless and until, and except to the extent that, a Final
Determination has been made that indemnification pursuant to Section 1
is impermissible under California law, the Company shall advance all
Expenses incurred by Indemnitee in connection with a Claim or a
Recovery Proceeding within 10 days after demand therefor. Indemnitee
hereby undertakes to repay such advances (without interest) if and to
the extent a Final Determination is made that indemnification pursuant
to Section 1 is impermissible. Indemnitee's entitlement to advancement
under this Section 2 shall not be affected by any determination, by a
court or otherwise and including any determination that indemnification
pursuant to Section 1 is not permissible, except a Final Determination.
The Indemnitee's obligation to reimburse the Company for advanced
Expenses shall be unsecured.
(b) As used in this Agreement, "FINAL DETERMINATION" means an
express determination by a court of competent jurisdiction which is no
longer subject to possible or pending appeal or other form of review.
17
SECTION 3. INDEMNIFICATION PROCEDURE.
Indemnitee may request indemnification in accordance with Section 1 by
giving written notice to the Company. If the Company rejects such request, or
fails to agree to grant indemnification in accordance with Section 1 within 30
days after such request, Indemnitee may at any time thereafter bring an action
in a court of applicable jurisdiction (which may, but need not be, the court in
which a Claim is pending) to determine the permissibility of indemnification
pursuant to Section 1 and Indemnitee's entitlement to such indemnification. In
any such proceeding, the issue shall be determined de novo, and any rejection or
other determination by or on behalf of the Company shall be accorded no weight.
In any such proceeding, the burden of proving the impermissibility of
indemnification shall be on the Company.
SECTION 4. ADVANCEMENT PROCEDURE. Indemnitee may request advancement in
accordance with Section 2 by giving written notice to the Company. If the
Company rejects such request, or fails to agree to grant advancement in
accordance with Section 2 within 10 days after such request, Indemnitee may at
any time thereafter bring an action in a court of applicable jurisdiction (which
may, but need not be, the court in which a Claim is pending) to enforce
Indemnitee's right to advancement in accordance with Section 2. In any such
proceeding, such right shall be determined de novo, and any rejection or other
determination by or on behalf of the Company shall be accorded no weight.
SECTION 5. LIMITATION. Notwithstanding anything in this Agreement,
Indemnitee shall not be entitled to indemnification or advancement in connection
with any proceeding (other than a Recovery Proceeding) initiated by Indemnitee
against the Company or any director or officer of the Company except when the
Company has joined in or the Board of Directors has consented to the initiation
of the proceeding.
SECTION 6. DEFENSE PROCEDURE.
(a) Indemnitee shall give the Company notice within 30 days
after he becomes aware of any Claim for which he believes
indemnification will or could be sought under this Agreement. Failure
to so notify the Company shall not relieve the Company of any liability
under this Agreement except to the extent that the Company can
demonstrate that it was prejudiced thereby, or of any liability which
it may have to Indemnitee otherwise than under this Agreement.
(b) With respect to any Claim for which indemnity is requested
pursuant to this Agreement, the Company shall be entitled to assume the
defense of such Claim, with counsel approved by Indemnitee, upon
delivery to Indemnitee of notice of its election to do so. After
delivery of such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Company, the Company will not be
liable to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to such Claim (except
for the reasonable costs of investigation), provided that (i)
Indemnitee shall have the right to employ his own counsel in any such
proceeding at Indemnitee's expense; and (ii) if (A) the employment of
counsel by Indemnitee has been authorized by the Company, or (B)
Indemnitee shall have reasonably concluded that there may be a conflict
18
of interest between the Company and Indemnitee in the conduct of any
such defense or (C) the Company shall not, in fact, have promptly
employed counsel to assume the defense of such proceeding, or if such
counsel fails to diligently pursue such defense, the fees and expenses
of Indemnitee's own counsel shall be at the expense of the Company. The
Company shall not settle any Proceeding in any manner which would
impose any penalty or limitation on the Indemnitee without the
Indemnitee's written consent, which consent shall not be unreasonably
withheld. The Company shall not be entitled to assume the defense of
any Proceeding brought by or on behalf of the Company or as to which
the Indemnitee has concluded that there may be a conflict of interest
between the Company on the one hand and the Indemnitee on the other
hand.
SECTION 7. SUBROGATION; DUPLICATION OF PAYMENTS. In the event of any
payment under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of such costs of Indemnitee, who
shall execute such instruments and perform such other acts as the Company shall
reasonably request, but at the sole expense of the Company, to enable the
Company to effectively enforce such rights. The Company shall not be liable
under this Agreement to make any payment in connection with any claim made
against Indemnitee to the extent Indemnitee has actually received payment (by
reason of insurance or otherwise) of the amounts otherwise payable hereunder;
provided, however, that (i) such portions, if any, of any proceeds of any such
insurance policy that are required to be reimbursed to the insurance carrier
under the terms of its insurance policy shall not be deemed to be payments to
Indemnitee hereunder, and (ii) the pendency or assertability of a claim under
such insurance policy or otherwise shall not entitle the Company to delay
payment hereunder.
SECTION 8. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may be entitled under the Articles of Association, the Bylaws,
any agreement, any vote of stockholders of the Company's parent or of
disinterested directors, the General Company Law of the State of California, the
National Company Act and other federal laws, or otherwise.
SECTION 9. LIABILITY INSURANCE. The Company hereby covenants and agrees
that, as long as Indemnitee shall continue to serve as a director and/or officer
of the Company, subject to this Section 9, it shall maintain in full force and
effect, directors and officers insurance ("D&O Insurance") from established and
reputable insurers in reasonable amounts and in any event in amounts not less
than the amount of coverage in effect on the date of this Agreement. The
Indemnitee shall be entitled to the protection of any such insurance policies
the Company maintains generally for the benefit of its directors and officers
(and to the extent the Company maintains such an insurance policy or policies,
the Indemnitee shall be covered by such policy or policies in accordance with
its or their terms, to the maximum extent of the coverage available for any
director or officer of the Company).
SECTION 10. CONTINUATION OF PROTECTION. All agreements and obligations
of the Company contained herein shall continue during the period in which
Indemnitee is a director and/or officer of the Company and shall continue
thereafter so long as Indemnitee shall be subject to any possible Claim. The
indemnification and right to insurance coverage under this Agreement shall
continue as to Indemnitee even though he may have ceased to be a director and/or
officer and shall inure to the benefit of the heirs and personal representatives
of Indemnitee.
19
SECTION 11. NOTICES. All notices, requests, demands and other
communications (collectively "NOTICES") provided for under this Agreement shall
be in writing (including without limitation facsimile), and shall be deemed
given (i) upon delivery to the other party's address stated below its signature
hereto (which delivery shall be conclusively evidenced, without limitation, by
the delivery certificate or receipt of an established delivery company), or (ii)
upon transmission thereof by facsimile to the other party's facsimile number
stated below its signature hereto (which transmission shall be conclusively
evidenced, without limitation, by the successful transmission report of the
transmitting facsimile machine), or (iii) upon actual receipt after deposit of
such notice in the U.S. mails (postage prepaid and return receipt requested)
addressed to the other party's address stated below its signature hereto.
SECTION 12. LATE PAYMENT. Any payment not made hereunder when due shall
bear interest from the due date through the date of actual payment at a rate of
2% per year over the reference or prime rate announced from time to time by
Company of America, N.A., or (if lower) the maximum rate permitted under
applicable law.
SECTION 13. CHOICE OF LAW. This Agreement shall be construed as a whole
and in accordance with its fair meaning. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of California.
SECTION 14. WAIVERS, AMENDMENTS. No provision of this Agreement may be
waived, amended, supplemented, terminated or repealed in whole or in part,
except only by the written consent of all parties. Any waiver shall apply only
to the instance or circumstance expressly provided therein, and not to any other
instance or circumstance, whether similar or dissimilar. The indemnification
rights afforded to the Indemnitee hereby are contract rights and may not be
diminished, eliminated or otherwise affected by amendments to the Articles of
Association, Bylaws or other agreements, including D&O Insurance policies.
SECTION 15. SUCCESSORS AND ASSIGNS; PARTIES IN INTEREST. All terms and
conditions of this Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective transferees, successors and assigns,
including without limitation an estate of Indemnitee. The Company will require
any successor to or assign of the Company to expressly confirm that it is bound
by this Agreement, but any failure or refusal to give such assurance shall not
affect the binding nature of this Agreement on such successor or assign. Nothing
in this Agreement, whether express or implied, is intended to confer any right
or remedies under or by reason of this Agreement to any persons other than the
parties to it and their respective successors and assigns, nor is anything in
this Agreement intended to relieve or discharge the obligation or liability of
any third persons to any party hereto. No provision of this Agreement shall give
any third persons any right of subrogation or action against any party hereto.
SECTION 16. SEVERABILITY. If this Agreement or any portion hereof or
its application in any instance or respect is invalidated on any ground by any
court of competent jurisdiction, then this Agreement shall continue in effect in
all other respects. The parties intend that this Agreement be enforceable to the
maximum extent permitted by law.
20
SECTION 17. COUNTERPARTS. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
SECTION 18. ENTIRE AGREEMENT. Except as provided in Section 5 hereof,
this Agreement represents and contains the entire agreement and understanding
between and among the parties, and all previous statements or understandings,
whether express or implied, oral or written, relating to the subject matter
hereof are fully and completely extinguished and superseded by this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
FIRST FINANCIAL BANCORP INDEMNITEE
By: ______________________________ _______________________________
Its: ______________________________ Name: ________________________
Address: Address:
000 Xxxxx Xxx Xxxx
Xxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx, President & CEO
21
EXHIBIT A
UNDERTAKING TO REPAY ADVANCE OF EXPENSES
The undersigned, ___________________________________, has
requested that First Financial Bancorp advance expenses to or on behalf of
undersigned in connection with the defense of the proceeding entitled
_________________________________. The undersigned understands that, under the
provisions of applicable law and the Indemnity Agreement between Company and the
undersigned, expenses can only be advanced subject to an undertaking by the
undersigned to repay such advances unless and to the extent it is ultimately
determined that the undersigned is entitled to indemnification. Accordingly, the
undersigned does hereby agree to repay any such advances, without interest, by
the later of 90 days after the termination of the proceeding or demand by First
Financial Bancorp, unless it is ultimately determined that the undersigned is
entitled to indemnification for such advances.
DATED:________________________ ___________________________________
22
