Exhibit 10.8
STOCKHOLDERS' AGREEMENT
Stockholders' Agreement (this "Agreement"), dated as of this 20th day of
April 1998, by and among PBOC Holdings, Inc., a Delaware corporation (formerly
known as SoCal Holdings, Inc.) (the "Company"), and the Trustees of the Estate
of Bernice Pauahi Bishop, a trust organized under the laws of Hawaii ("Bishop"),
BIL Securities (Offshore) Limited, a corporation organized under the laws of New
Zealand ("BIL Securities"), and Arbur, Inc., a Delaware corporation ("Arbur")
(collectively the "Stockholders"), who are the holders of all of the outstanding
shares of common stock, par value $0.01 per share ("Common Stock") and all of
the outstanding shares of series preferred stock, par value $0.01 per share
("Preferred Stock") of the Company.
WHEREAS, the Company and the Stockholders (which included BIL (Far East
Holdings) Limited which transferred its interest in the Company to BIL
Securities as of August 2, 1995) entered into an Agreement and Plan of
Reorganization dated as of June 1, 1995 ("Plan of Reorganization"), which
provided for the recapitalization of the Company and its wholly-owned
subsidiary, People's Bank of California (formerly known as Southern California
Federal Savings and Loan Association) (the "Bank");
WHEREAS, Article II of the Plan of Reorganization provided, among other
things, that the Company would issue and sell to: (x) Bishop: $10.0 million
aggregate principal amount of its senior notes ("Senior Notes"), 85,000 shares
of its Preferred Stock, Series C ("Series C Preferred Stock"), 14,000 shares of
its Preferred Stock, Series D ("Series D Preferred Stock"), 226,000 shares of
its Preferred Stock, Series E ("Series E Preferred Stock"); (y) BIL Securities:
14,000 shares of Series D Preferred Stock and 106,000 shares of Series E
Preferred Stock; and (z) Arbur: 40,000 shares of Series D Preferred Stock
(collectively, the outstanding Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock is referred to as the "Outstanding Preferred
Stock"), and the Stockholders agreed to purchase such securities from the
Company;
WHEREAS, the Company provided the Stockholders in the Plan of
Reorganization with, among other things, (i) a right of first refusal with
respect to the sale by the Company or the Bank of any shares of Capital
Securities (as defined in the Plan of Reorganization) of either of the Company
or the Bank, under the circumstances defined therein; and (ii) certain
continuing covenants as set forth in Article V of the Plan of Reorganization.
WHEREAS, the Company and the Stockholders entered into a Stockholders'
Agreement dated as of June 1, 1995 (the "1995 Stockholders' Agreement"), which
provides, among other things, for restrictions on the ability of the
Stockholders to transfer shares of SCH Common Stock and registration rights
under various circumstances with respect to the Company's SCH Capital Stock, as
each term is defined in the 1995 Stockholders' Agreement;
WHEREAS, the Company has filed a Registration Statement on Form S-1 (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") with respect to a proposed public offering of its Common Stock
(the "Public Offering") and, in connection therewith, but subject to
consummation of the Public Offering, the Stockholders desire to (i) take certain
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actions to amend and restate the Amended and Restated Certificate of
Incorporation and to adopt new Bylaws of the Company, (ii) simplify the
Company's capital structure, including an exchange of Outstanding Preferred
Stock for shares of Common Stock in accordance with the terms hereof and
prepayment of the Company's Senior Notes, (iii) terminate the remaining
operative provisions of the Plan of Reorganization and the 1995 Stockholders'
Agreement and (iv) agree to continuing Board representation by the Stockholders
subject to certain conditions; and
WHEREAS, the Stockholders understand that in order to normalize the
number of shares of Common Stock and price per share of Common Stock that is
outstanding prior to the Public Offering, the Company has authorized a 32:1
stock split (the "Stock Split"), to be effected in the form of a stock dividend
of additional shares of Common Stock, which dividend is intended to be paid
subsequent to the exchange of Outstanding Preferred Stock for Common Stock and
immediately prior to the declaration of effectiveness by the Commission of the
Company's Registration Statement with respect to the Public Offering.
NOW, THEREFORE, in consideration of the mutual promises and agreements
of the parties hereto and other good and valuable consideration, the parties
hereby agree as follows:
1. EFFECTIVE TIME OF AGREEMENT.
Each of the transactions contemplated by this Agreement shall be
taken immediately prior to the declaration of effectiveness by the
Commission of the Company's Registration Statement with respect to the
Public Offering
2. AGREEMENT WITH RESPECT TO AMENDMENT AND RESTATEMENT OF
CERTIFICATE OF INCORPORATION AND ADOPTION OF NEW BYLAWS.
(a) The Stockholders hereby authorize the Board of Directors to
adopt the Amended and Restated Certificate of Incorporation of the
Company in the form attached hereto as Exhibit A (the "Amended
Certificate") and authorize the Board of Directors to cause such Amended
Certificate to be filed with the Delaware Secretary of State immediately
prior to consummation of the Public Offering. The Stockholders hereby
approve and affirm the adoption and filing with the Delaware Secretary
of State of the Amended Certificate.
(b) The Stockholders hereby authorize the Board of Directors to
adopt new Bylaws in the form attached hereto as Exhibit B, which Bylaws
shall be effective upon consummation of the Public Offering.
3. EXCHANGE OF OUTSTANDING PREFERRED STOCK.
(a) The Stockholders acknowledge that the terms of the
Certificate of Designation and Preferences with respect to each series
of Outstanding Preferred Stock provides that the Company has the right
to redeem the Outstanding Preferred Stock at any time, upon providing
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specified notice to each of the Stockholders as to the date and place of
redemption. The Stockholders hereby agree with the Company that in lieu
of said redemption of the Outstanding Preferred Stock, each share of
Outstanding Preferred Stock shall be exchanged for shares of Common
Stock, which exchange shall take place prior to the Stock Split and the
commencement of the Public Offering. Thus, Bishop, BIL Securities and
Arbur shall receive 178,571.428572, 65,934 and 21,978.021978 shares of
Common Stock in such exchange, respectively. Notwithstanding the
foregoing, the Pricing Committee of the Company's Board of Directors
which has been established in connection with the Public Offering may,
in their discretion, determine not to exchange the full amount of BIL
Securities' Outstanding Preferred Stock prior to commencement of the
Public Offering. To the extent that not all of BIL Securities'
Outstanding Preferred Stock is so exchanged, the Stockholders hereby
authorize the Pricing Committee to exchange such Outstanding Preferred
Stock of BIL Securities for Common Stock of the Company immediately
following the commencement of the Public Offering under terms which
would provide BIL Securities with shares of Common Stock of equivalent
value to that which was exchanged for the Stockholders pursuant to this
Section 3 prior to commencement of the Public Offering.
(b) The Stockholders acknowledge that the accumulated and unpaid
dividends on the Outstanding Preferred Stock, at the stated dividend
rate with respect to each of the Series C Preferred Stock, Series D
Preferred Stock and Series E Preferred Stock, shall be paid by the
Company to the Stockholders following the closing of the Public Offering
by wire transfer of funds to the account designated in writing by each
Stockholder to the Secretary of the Company. The Stockholders
acknowledge that the Outstanding Preferred Stock shall be cancelled by
the Company upon consummation of such exchange and the Public Offering.
4. PREPAYMENT OF SENIOR NOTES.
Bishop agrees that effective upon consummation of the Public
Offering and pursuant to Section 7 of the Senior Notes, the Company
shall prepay all $10.0 million aggregate principal amount of the Senior
Notes. Bishop acknowledges that immediately following the Public
Offering, the Company shall pay Bishop the aggregate principal amount of
such Senior Notes, plus accrued interest thereon to the date of
prepayment (but not including the date of prepayment), by wire transfer
of funds to the account designated in writing by Bishop to the Secretary
of the Company. Bishop acknowledges that the Senior Notes shall be
marked "paid in full" by the Company following such prepayment
hereunder.
5. TERMINATION OF PLAN OF REORGANIZATION AND 1995
STOCKHOLDERS' AGREEMENT.
The Stockholders agree that the remaining operative provisions of
the Plan of Reorganization and the 1995 Stockholders' Agreement in its
entirety are terminated effective with the consummation of the Public
Offering.
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6. CONTINUING BOARD REPRESENTATION BY STOCKHOLDERS.
(a) The Company agrees that for so long as each Stockholder
continues to be a Material Stockholder (as defined in Section 6(b)
hereof), if requested by such Stockholder, it shall (i) exercise all
authority under applicable law to cause the number of nominees permitted
to be designated by such Stockholder (as provided in Section 6(b)
hereof) and consented to by the Board of Directors of the Company (such
consent not to be unreasonably withheld) (a "Company Designated
Director") to be included in the slate of nominees recommended by the
Board of Directors to stockholders for election as directors at each
annual meeting of stockholders of the Company after the date of this
Agreement at which the term of the Company Designated Director is
scheduled to expire (subject to the satisfaction of any applicable
regulatory requirements), and (ii) use all practical efforts to cause
the election of such slate, including such Company Designated Director.
(b) For purposes of this Section 6, Bishop shall be considered a
Material Stockholder and entitled to nominate two (2) directors for
election to the Company's Board of Directors for so long as Bishop
beneficially owns 9.9% or more of the Company's outstanding Common Stock
following the consummation of the Public Offering. Bishop shall be
considered a Material Stockholder entitled to nominate one (1) director
for election to the Company's Board of Directors for so long as Bishop
beneficially owns less than 9.9% but 5.0% or more of the Company's
outstanding Common Stock following the consummation of the Public
Offering. BIL Securities and Arbur collectively shall be considered a
Material Stockholder entitled to nominate one (1) director for election
to the Company's Board of Directors for so long as BIL Securities and
Arbur collectively beneficially own 5.0% or more of the Company's
outstanding Common Stock following the consummation of the Public
Offering. Bishop shall not be considered a Material Stockholder if
Bishop's beneficial ownership of the Company's outstanding Common Stock
following consummation of the Public Offering is less than 5.0% and BIL
Securities and Arbur collectively shall not be considered Material
Stockholders if BIL Securities' and Arbur's collective beneficial
ownership of the Company's outstanding Common Stock following
consummation of the Public Offering is less than 5.0% For purposes of
this Agreement, "beneficial ownership" shall have the meaning set forth
in Section 13(d) of the Securities Exchange Act of 1934, as amended.
(c) Notwithstanding any other provision of this Section 6, the
Company shall not be required to take any action required by this
Section 6 if such action would cause the Company to be in violation of
any law, regulation, order or other written requirement of the Office of
Thrift Supervision, the Federal Deposit Insurance Corporation, or any
successor thereto, provided that the Company agrees to promptly use its
reasonable best efforts to remove any regulatory impediment to the
exercise of the Stockholder's rights under this Agreement.
(d) The Company agrees that in the event that a Stockholder's
Company Designated Director elected to the Board of Directors of the
Company shall cease to serve as a director for any reason while such
Stockholder remains a Material Stockholder, the vacancy resulting
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therefrom (including a vacancy on any committee of the Board of
Directors) will be filled promptly by the Board of Directors with a
substitute Company Designated Director designated by such Stockholder if
requested to do so by such Stockholder.
(e) Unless otherwise approved by the requisite vote of all
stockholders required by the Company's Amended and Restated Certificate
of Incorporation to amend the Bylaws, for so long as the provisions of
this Section 6 shall be applicable, the Bylaws of the Company shall
provide for and the Board of Directors shall be comprised of seven (7)
directors.
(f) Notwithstanding any other provisions of this Agreement and
subject to any applicable regulatory restrictions, the Stockholders
shall at all times have and retain a right of attendance at Board of
Directors meetings, irrespective of their continued status as Material
Stockholders, until such time as the Litigation shall have been settled
or otherwise terminated (and any Litigation Recovery therefrom
distributed) in accordance with the Shareholder Rights Agreement
executed contemporaneously with this Agreement, or until the
Stockholders shall have transferred all of their Rights under such
Shareholder Rights Agreement. For purposes of this Section 6(f), the
terms "Litigation," "Litigation Recovery," and "Rights" shall have the
meaning set forth in such Shareholder Rights Agreement.
7. REPRESENTATIONS AND WARRANTIES.
Each of the parties hereto represents and warrants to the other
parties that (i) such party has full power and authority to enter into
this Agreement and to perform its obligations hereunder, (ii) such party
has taken all actions required to authorize the execution of this
Agreement and the performance of its obligations hereunder, (iii) this
Agreement is a valid and binding obligation upon and enforceable in
accordance with its terms against such party, and (iv) such party will
not take any action inconsistent with the purposes and provisions of
this Agreement.
8. EXECUTION IN COUNTERPARTS.
This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute
but one and the same Agreement.
9. GOVERNING LAW.
This Agreement shall be deemed to be a contract made under the
laws of the State of California and for all purposes shall be construed
in accordance with the laws of said State, without regard to principles
of conflict of laws.
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10. ENTIRE AGREEMENT.
This Agreement constitutes the entire contract between the
parties relative to the subject matter hereof and all other previous
agreements among the parties relative to the subject matter hereof are
superseded by this Agreement.
11. SURVIVAL.
The provisions of Section 6 shall survive the consummation of the
Public Offering and shall continue in full force and effect thereafter,
but only so long as any of the Stockholders are Material Stockholders.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first shown above.
PBOC HOLDINGS, INC.
By: /s/ Rudolf P. Guenzel
-------------------------------------
Name: Rudolf P. Guenzel
Title: President and Chief Executive Officer
STOCKHOLDERS:
By: /s/ Richard Sung Hong Wong
-------------------------------------
Name: Richard Sung Hong Wong
Title: Trustee
By: /s/ Lokelani Lindsey
-------------------------------------
Name: Marion Mae Lokelani Lindsey
Title: Trustee
By: /s/ Oswald Stender
-------------------------------------
Name: Oswald Kofoad Stender
Title: Trustee
BIL SECURITIES (OFFSHORE) LIMITED
By: /s/ Michael S. Dreyer
-------------------------------------
Name: Michael S. Dreyer
Title: Attorney-in-Fact
ARBUR, INC.
By: /s/ Christine W. Jenkins
-------------------------------------
Name: Christine W. Jenkins
Title: Vice President and Secretary
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