EXHIBIT 2
PLAN OF REORGANIZATION AND MERGER AGREEMENT
This Plan of Reorganization and Merger Agreement is entered into as of
_______ __, 1998, by and between East-West Bank ("Bank"), East West Merger Co.,
Inc. ("Merger Co."), and East West Bancorp, Inc. ("Company").
RECITALS AND UNDERTAKINGS
A. Bank is a California banking corporation with its principal office in
the City of San Marino, California. Merger Co. is a corporation organized and
existing under the laws of the State of California with its principal offices in
the City of San Marino, California. Company is a corporation organized and
existing under the laws of the State of Delaware with its principal offices in
the City of San Marino, California.
B. As of June 30, 1998, Bank had 50,000,000 shares of common stock, no
par value per share ("Bank Common Stock"), authorized and 23,775,000 shares
issued and outstanding.
C. As of the date hereof, Merger Co. has 100 shares of common stock, no
par value per share ("Merger Co. Common Stock"), authorized, and at the time of
the merger referred to herein 100 of such shares of Merger Co. Common Stock will
be outstanding, all of which outstanding shares will be owned by Company.
D. As of the date hereof, Company has 55,000,000 shares of capital stock
authorized, of which 50,000,000 shares are common stock, $0.001 par value per
share ("Company Common Stock"), and 5,000,000 shares are preferred stock, $0.001
par value per share ("Company Preferred Stock"), of which 100 shares of Company
Common Stock will be outstanding and no shares of Company Preferred Stock will
be outstanding at the time of the merger referred to herein.
E. The Boards of Directors of Bank and Merger Co. have, respectively,
approved this Agreement and authorized its execution; and the Board of Directors
of Company has approved this Agreement and has authorized the Company to join in
and be bound by this Agreement, and authorized the undertakings and
representations made herein by Company.
NOW, THEREFORE, in consideration of the promises and the mutual covenants,
agreements, and undertakings of the parties herein set forth and for the purpose
of prescribing the terms and conditions of the merger, the parties hereto agree
as follows:
SECTION 1.
GENERAL
1.1 THE MERGER. On the Effective Date, Merger Co. shall be merged into
Bank, which shall be the surviving corporation (the "Surviving Corporation") and
a subsidiary of Company, and the name of the Surviving Corporation shall be
"East West Bank."
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1.2 EFFECTIVE DATE. The merger described herein shall become effective,
and actions to consummate such merger shall commence, at the close of business
on the date (the "Effective Date") upon which an executed counterpart of this
Agreement (as amended, if necessary, to conform to any requirements of law or
governmental authority or agency, which requirements are not materially in
contravention of any of the substantive terms hereof) shall have been filed with
the Office of the Secretary of State of the State of California, in accordance
with Section 1103 of the California Corporations Code.
1.3 ARTICLES OF INCORPORATION, BYLAWS, CERTIFICATE OF AUTHORITY, AND
DEPOSIT INSURANCE COVERAGE. At the close of business on the Effective Date, the
Articles of Incorporation of Bank, as in effect immediately prior to such time
on the Effective Date, shall be and remain the Articles of Incorporation of the
Surviving Corporation, except that the Articles of Incorporation shall be
amended such that the name of the Surviving Corporation shall be East West Bank;
the Bylaws of Bank shall be and remain the Bylaws of the Surviving Corporation
until altered, amended or repealed; the Certificate of Authority of Bank issued
by the Commissioner of Financial Institutions of the State of California shall
be and remain the Certificate of Authority of the Surviving Corporation; and
Bank insurance of deposits coverage by the Federal Deposit Insurance Corporation
shall be and remain the deposit insurance of the Surviving Corporation.
1.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the close of
business on the Effective Date, the directors and officers of Bank immediately
prior to such time on the Effective Date shall be and remain the directors and
officers of the Surviving Corporation. Directors of the Surviving Corporation
shall serve until the next Annual Meeting of Shareholders of the Surviving
Corporation or until such time as their successors are elected and have
qualified.
1.5 EFFECT OF THE MERGER.
(a) ASSETS AND RIGHTS. At the close of business on the Effective Date
and thereafter, all rights, privileges, franchises and property of Merger Co.,
and all debts and liabilities due or to become due to Merger Co., including
things in action and every interest or asset of conceivable value or benefit,
shall be deemed fully and finally and without any right of reversion
transferred to and vested in the Surviving Corporation without further act or
deed, and the Surviving Corporation shall have and hold the same in its own
right as fully as the same was possessed and held by Merger Co.
(b) LIABILITIES. At the close of business on the Effective Date and
thereafter, all debts, liabilities, and obligations due or to become due of, and
all claims and demands for any cause existing against, Merger Co. shall be and
become the debts, liabilities or obligations of, or the claims and demands
against, the Surviving Corporation in the same manner as if the Surviving
Corporation had itself incurred or become liable for them.
(c) CREDITORS' RIGHTS AND LIENS. At the close of business on the
Effective Date and thereafter, all rights of creditors of Merger Co., and all
liens upon the property
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of Merger Co., shall be preserved unimpaired, and shall be limited to the
property affected by such liens immediately prior to the Effective Date.
(d) PENDING ACTIONS. At the close of business on the Effective Date
and thereafter, any action or proceeding pending by or against Merger Co. shall
not be deemed to have abated or been discontinued, but may be pursued to
judgment with the full right to appeal or review. Any such action or proceeding
may be pursued as if the merger described herein had not occurred, or with the
Surviving Corporation substituted in place of Merger Co., as the case may be.
1.6 FURTHER ASSURANCES. Bank and Merger Co. each agree that at any time,
or from time to time, as and when requested by the Surviving Corporation, or by
its successors and assigns, it will execute and deliver, or cause to be executed
and delivered, in its name by its last acting officers, or by the corresponding
officers of the Surviving Corporation, all such conveyances, assignments,
transfers, deeds or other instruments, and will take or cause to be taken such
further or other action as the Surviving Corporation, its successors or assigns
may deem necessary or desirable in order to evidence the transfer, vesting or
devolution of any property right, privilege or franchise or to vest or perfect
in or confirm to the Surviving Corporation, its successors and assigns, title to
and possession of all the property rights, privileges, powers, immunities,
franchises and interests referred to in this Section 1, or otherwise to carry
out the intent and purposes of this Agreement.
SECTION 2.
TREATMENT OF CAPITAL STOCK
2.1 STOCK OF MERGER CO. At the close of business on the Effective Date,
each share of Merger Co. Common Stock issued and outstanding immediately prior
thereto shall, by virtue of the merger described herein, be deemed to be
exchanged for and converted into one share of fully paid nonassessable Bank
Common Stock as the Surviving Corporation.
2.2 STOCK OF BANK. At the close of business on the Effective Date, each
share of Bank Common Stock issued and outstanding immediately prior thereto
shall, by virtue of the merger described herein, and without any action on the
part of the holder thereof, be exchanged for and converted into one share of
fully paid nonassessable Company Common Stock, in accordance with the provisions
of Paragraph 2.3.
2.3 EXCHANGE OF STOCK BY BANK SHAREHOLDERS. The conversion of the shares
of Bank provided in Paragraph 2.2 above shall occur automatically at the close
of business on the Effective Date without action by the holders thereof. Each
share certificate evidencing ownership of shares of Bank Common Stock thereupon
shall be deemed to evidence one share of Company Common Stock. Each holder of
shares of Bank Common Stock may but is not required to surrender such holders
share certificate or certificates to the Company, or an Exchange Agent appointed
by the Company, and shall be entitled to receive in exchange therefor a
certificate or certificates representing the number of shares into which such
holders shares theretofore represented by a certificate or certificates so
surrendered shall have been converted.
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2.4 EMPLOYEE STOCK OPTIONS AND INCENTIVES. At the close of business on
the Effective Date, the Company will assume Bank's rights and obligations under
Bank's 1998 Employee Stock Incentive Plan (the "Plan") and under each of the
outstanding options and incentives previously granted under the Plan (each such
option and incentive existing immediately prior to the Effective Date being an
"existing award" and each such option or incentive so assumed by the Company
being called an "assumed award"), by which assumption all rights of a grantee of
an existing award relating to Bank Common Stock shall become the same right with
respect to Company Common Stock on a one for one basis. Each assumed award,
subject to such modification as may be required, shall constitute a continuation
of the existing award substituting the Company for Bank and employment by the
Company or any of its subsidiaries for employment by the Bank. The price per
share of Company Common Stock at which the assumed award (or any installment)
may be exercised shall be the price as was applicable to the purchase of the
Bank Common Stock pursuant to the existing award, and all other terms and
conditions applicable to the assumed awards shall, except as herein provided, be
unchanged. Upon consummation of the merger, the Plan shall be terminated
assumed awards shall become awards made pursuant to Company's 1998 Employee
Stock Incentive Plan.
2.5 STOCK OF COMPANY. At the close of business on the Effective Date,
each share of Company Common Stock issued and outstanding immediately prior
thereto shall, by virtue of the merger described herein, be canceled.
SECTION 3.
OBLIGATIONS OF THE PARTIES PENDING THE EFFECTIVE DATE OF MERGER
3.1 STOCKHOLDER APPROVALS. As soon as practicable, this Agreement shall
be duly submitted to stockholders of Bank, Merger Co. and Company for the
purpose of considering and acting upon this Agreement in the manner required by
law. Each of the parties shall use its best efforts to obtain the requisite
approval of its stockholders to this Agreement and the transactions contemplated
herein.
3.2 REGULATORY APPROVALS. Each of the parties hereto shall execute and
file with the appropriate regulatory authorities all necessary documents and
instruments and shall take every reasonable and necessary step and action to
comply with and to secure such regulatory approval of this Agreement and the
transactions contemplated herein as may be required by all applicable statutes,
rules and regulations, including without limitation the consents and approvals
referred to in Paragraphs 4.1(b), 4.1(c), and 4.1(d).
SECTION 4.
CONDITIONS PRECEDENT, TERMINATION, AND PAYMENT OF EXPENSES
4.1 CONDITIONS PRECEDENT TO THE MERGER. Consummation of the merger
described herein is subject to satisfaction of the following conditions:
(a) Ratification and confirmation of this Agreement by the respective
stockholders of Bank, Merger Co. and Company, in accordance with the applicable
provisions of law;
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(b) Obtaining all other consents and approvals, on terms and
conditions satisfactory to each of the parties hereto, and satisfying all other
requirements, prescribed by law or otherwise, which are necessary for the merger
described herein to be consummated, including without limitation: approvals from
the Federal Deposit Insurance Corporation, the Commissioner of Financial
Institutions of the State of California, and the Board of Governors of the
Federal Reserve System under the Bank Holding Company Act of 1956, approval from
the California Commissioner of Corporations under the California Corporate
Securities Law of 1968 and authorizations, to the extent necessary under
applicable blue sky laws with respect to the securities of the Company issued
upon consummation of the merger, and the declaration as effective by the
Securities and Exchange Commission of a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
securities of the Company issuable upon consummation of the merger,
(c) Issuance (unless waived by each of the parties hereto) of a
favorable ruling by the Internal Revenue Service of the United States Department
of the Treasury, in form and substance satisfactory to each of the parties
hereto and their counsel, with respect to the tax consequences to the parties
and their stockholders of the merger described herein;
(d) Procuring all other consents or approvals, governmental or
otherwise, which in the opinion of counsel for Bank are or may be necessary to
permit or to enable the Surviving Corporation to conduct, upon and after the
merger described herein, all or any part of the business and other activities in
which Bank will be engaged up to the time of such merger, in the same manner and
to the same extent Bank engages in such businesses and other activities
immediately prior to such merger;
(e) Bank obtaining for Company prior to the Effective Date, a letter,
in form and substance satisfactory to legal counsel for Company, signed by each
person who is an "affiliate" of Bank for purposes of Rule 145 promulgated under
the Securities Act, to the effect that (i) such person will not dispose of any
shares of Company Common Stock to be received in the merger, in violation of the
Securities Act or the rules and regulations promulgated thereunder, an in any
event such person will not dispose of such shares prior to such time as
financial results covering at least thirty days of post-merger combined
operations have been published, and (ii) such person consents to the placing of
a legend on the certificate(s) evidencing such shares, restricting transfer of
such shares and referring to the issuance of such shares in a transaction in
which Rule 145 applies and to the giving of stop-transfer instructions to
Company's transfer agent(s) with respect to such certificate(s); and
(f) Performance by each of the parties hereto of all obligations under
this Agreement which are to be performed prior to the consummation of the merger
described herein.
4.2 TERMINATION OF THE MERGER. If any condition specified in Paragraph
4.1 has not been fulfilled, or prior to the Effective Date a majority of the
members of the Board of Directors of any of the parties hereto has determined
that:
(a) The number of shares of Bank Common Stock voting against the
merger makes consummation of the merger inadvisable; or
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(b) Any action, suit, proceeding or claim relating to the merger
described herein has been instituted, made or threatened which makes
consummation of the merger inadvisable; or
(c) For any other reason consummation of the merger is inadvisable;
then this Agreement may be terminated at any time before the merger becomes
effective. Upon termination, this Agreement shall be void and of no further
effect, and there shall be no liability by reason of this Agreement or the
termination thereof on the part of the parties or their respective directors,
officers, employees, agents or shareholders.
4.3 AMENDMENT, MODIFICATION, ETC. Bank, Company, and Merger Co., by
mutual consent of their respective boards of directors, to the extent permitted
by applicable law, may amend, modify, supplement, and interpret this Agreement
in such manner as may be mutually agreed upon by them in writing at any time
before or after adoption thereof by shareholders of the Bank, Company, and
Merger Co., as applicable; provided, however, that no such amendment,
modification, or supplementation shall change the number or kind of securities
to be issued by Company in exchange for each security of Bank, or any other
principal term, except by the affirmative action of such shareholders as
required by law.
4.4 EXPENSES OF THE MERGER. All expenses of the merger, described herein,
including, without limitation, filing fees, printing costs, mailing costs,
accountant's fees and legal fees, shall be borne jointly by the Surviving
Corporation and Company; provided, however, that if the merger is abandoned for
any reason, then all of such expenses shall be paid by Bank.
SECTION 5.
MISCELLANEOUS
5.1 ENTIRE AGREEMENT. This Agreement embodies the entire agreement among
the parties and there have been and are no agreements, representations or
warranties among the parties with respect to the subject matter of this
Agreement other than those set forth herein or those provided for herein.
5.2 GOVERNING LAW. This Agreement has been executed in the State of
California and the laws of such State shall govern the validity and the
interpretation hereof and the performance by the parties hereto.
5.3 COUNTERPARTS. To facilitate the filing of this Agreement, any number
of counterparts hereof maybe executed and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument.
5.4 RIGHTS OF DISSENTING SHAREHOLDERS. To the extent required by the
California General Corporation Law, any shareholder of Bank who holds shares
that were not voted in favor of the merger may be permitted, by complying with
the procedures set forth in Chapter 13 of the General Corporation Law of
California, to require Bank to purchase for cash such shares at their fair
market value.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Plan of
Reorganization and Merger Agreement to be executed by their duly authorized
officers as of the day and year first above written.
EAST-WEST BANK EAST-WEST BANCORP, INC.
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Xxxxxxx Xx Xxxxxxx Xx
Chairman of the Board, Chairman of the Board,
President and Chief President and Chief
Executive Officer Executive Officer
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Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxx
Secretary Secretary
EAST WEST MERGER CO., INC.
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Xxxxxxx Xx
Chairman of the Board,
President and Chief
Executive Officer
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Xxxxxxx X. Xxxxxx
Secretary
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