Exhibit 2.5
FIRST AMENDMENT TO
FIRST RESTATEMENT OF AGREEMENT AND
PLAN OF REORGANIZATION
This FIRST AMENDMENT TO FIRST RESTATEMENT OF AGREEMENT AND
PLAN OF REORGANIZATION (the "First Amendment") is dated as of March 4, 1999 and
entered into by and between Valley Bank (the "Bank"), and Pacific Community
Banking Group (the "Company").
WHEREAS, the Bank and the Company entered into a First
Restatement of Agreement and Plan of Reorganization dated as of January 5, 1999
(the "Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement as
provided in this First Amendment as provided herein.
NOW, THEREFORE, in consideration of the premises and mutual
promises of the parties set forth below, the parties hereto agree as follows:
1. Capitalized terms used herein and not otherwise defined
shall have the same meaning as set forth in the Agreement.
2. Recital B.(a) and B.(b) of the Agreement is hereby amended
to read in its entirety as follows:
"(a) The Company will establish Interim Bank (as
defined below) as a wholly-owned subsidiary;
(b) Bank and Interim Bank will enter into an
Agreement of Merger (as defined below) providing for the merger of Interim Bank
and Bank under the state charter of the Interim Bank;"
3. The definition of "Agreement of Merger" in the Agreement is
hereby amended to read in its entirety as follows:
"'Agreement of Merger' shall mean the Agreement of Merger to
be entered into by and between Interim Bank (as defined below) and the Bank
substantially in the form of EXHIBIT "A" hereto, but subject to any changes that
may be necessary to conform to any requirements of any Governmental Entity
having authority over the Merger."
4. The definition of "Per Share Cash Consideration" in the
Agreement is hereby deleted.
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5. The following definitions are hereby added to the Agreement
as follows:
"'Interim Bank' shall mean the interim California banking
corporation established by Company solely for the purpose of effecting the
Merger.
'Interim Bank Stock' shall mean the common stock, no par
value, of Interim Bank."
6. The definition of "Merger" in the Agreement is hereby
amended to read in its entirety as follows:
"'Merger' shall mean the merger of the Bank with and into
Interim Bank."
7. The first and second sentences of Section 2.1 of the
Agreement are hereby amended to read in their entirety as follows:
"The Company agrees that it will use its best efforts, with
all necessary cooperation of the Bank, to perfect the organization of Interim
Bank in accordance with the CFC and the regulations promulgated thereunder prior
to the Closing Date. The directors and officers of Interim Bank, and the
Articles of Incorporation and Bylaws of Interim Bank, shall be determined by the
Company."
8. Section 2.1(a) of the Agreement is hereby amended to read
in its entirety as follows:
"(a) MERGER OF THE BANK AND INTERIM BANK. The Bank and Interim
Bank shall be merged under the certificate of authority of the Interim Bank,
with the Interim Bank being the Surviving Bank pursuant to the provisions of,
and with the effect provided in, the CGCL and the CFC, and shall continue its
corporate existence under the laws of the State of California. The name of the
Surviving Bank shall be "Valley Bank." Upon the consummation of the Merger, the
separate corporate existence of the Bank shall cease."
9. Section 2.1(c) of the Agreement is hereby amended to read
in its entirety as follows:
"(c) EFFECT ON INTERIM BANK STOCK. All shares of Interim Bank
Stock outstanding shall remain outstanding and shall be held by the Company."
10. Section 2.1(d) of the Agreement is hereby amended to read
in its entirety as follows:
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"(d) BANK CORPORATE GOVERNANCE CHANGES. The Charter Documents
of the Interim Bank as in effect immediately prior to the Effective Time shall
continue in effect after the Merger until thereafter amended in accordance with
applicable law. At the Effective Time of the Merger, the directors of Interim
Bank and the Bank shall be the directors of the Surviving Bank until their
successors have been chosen and qualified in accordance with the Articles of
Incorporation and Bylaws of the Surviving Bank. The officers of Interim Bank and
the Bank at the Effective Time of the Merger shall be the officers of the
Surviving Bank until they resign or are replaced or terminated by the Board of
Directors of the Surviving Bank or otherwise in accordance with the Surviving
Bank's Charter Documents. The obligations of the Bank shall be assumed by the
Surviving Bank, and operations including the policies and procedures of the
Bank, shall continue in effect at the Surviving Bank after the Merger; except
that the Bank and the Interim Bank shall have taken prior to the Effective Time
all necessary steps so that at the Effective Time (i) at the request of the
Company, Mr. N. Douglas Mills, President and Chief Executive Officer of the
Bank, shall resign from his positions (but not as an employee of the Bank), in
form and substance satisfactory to the Company, either during the pendency of
this transaction or following the consummation of this transaction, without
incurring any liability on the part of any Party, except that (a) the Surviving
Bank and Mr. Mills will enter into the Second Amendment to Mr. Mills' Employment
Agreement originally dated September 26, 1996 and amended October 30, 1997, upon
the Bank's payment on the Closing Date to Mr. Mills of the compensation
described in revised Section 2.3 of the Second Amendment to Mr. Mills'
Employment Agreement with the Bank in the form attached hereto as Exhibit
2.1(d)(i)(a), (b) Mr. Mills will remain a director of the Surviving Bank unless
and until a successor is appointed by the Company, and (c) the Board and/or the
Company will not become liable for any obligations under Mr. Mills' Salary
Continuation Agreement dated October 19, 1995, as amended October 30, 1997, nor,
unless accelerated earlier by the Company in its sole discretion, will such
Salary Continuation Agreement accelerate, until termination of Mr. Mills'
employment with the Company or a subsidiary of the Company pursuant to the
Second Amendment to Mr. Mills' Employment Agreement; (ii) Caswell shall have
been appointed Chairman of the Board and Chief Executive Officer of the
Surviving Bank; xiii) except for the persons set forth on Exhibit 2.1(d), which
Exhibit shall be delivered by the Company to the Bank within sixty (60) days of
the date of the Agreement, each of the directors of the Bank shall have tendered
his resignation as a director of the Bank and Surviving Bank, in form and
substance satisfactory to the Company, without incurring any liability on the
part of any Party; (iv) the number of authorized directors, and the specific
members of the Board of Directors, of the Surviving Bank shall be changed as
determined in the sole discretion of the Company; (v) the Company shall name
additional directors in its sole discretion who shall be duly elected and
appointed to the Board of Directors of the Surviving Bank (or if any such
persons is unable to serve, such other person designated by the Company) and
shall serve until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified; (vi) the remaining
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members of the Board of Directors of the Bank will agree to support any and all
expense reductions, consolidations, mergers, transfer of headquarters, sale of
assets, FRB membership, closure of branches, or any other corporate changes as
requested by the Company, consistent with their fiduciary duties; and (vii) the
Surviving Bank will assume the obligations of the employment agreements for
Bonnie Parrott, Mark A. Nugent, Marvin Lentini and Dianna Williams, and the
Surviving Bank will assume the obligations of Bank under that "Employment
Compensation Agreement" dated March 12, 1970 by and between Bank and Walter M.
Wachtel in favor of Willow Wachtel Decker (clauses (i)-(vii) being hereinafter
collectively referred to as the Bank Corporate Governance Changes.")."
11. Section 2.2 of the Agreement is hereby amended to read in
its entirety as follows:
"2.2 EFFECT OF THE MERGER. At the Effective Time of the
Merger, the corporate existence of Interim Bank and the Bank shall be merged
into and continued in the Surviving Bank, and the Surviving Bank shall be deemed
the same corporation as each corporation participating in the Merger. All
rights, franchises, and interests of Interim Bank and Bank in and to every type
of property (real, personal and mixed) and choses in action shall be transferred
to and vested in the Surviving Bank by virtue of the Merger without any deed or
other transfer and the Surviving Bank shall hold and enjoy all rights of
property, franchises and interests, in the same manner and to the same extent as
such rights, franchises and interests were held or enjoyed by any one of the
consolidating corporations at the Effective Time of the Merger."
12. The second sentence of Section 2.4 of the Agreement is
hereby amended to read in its entirety as follows:
"The Per Share Consideration shall be equal to the sum of (i)
$5.00 in cash; and (ii) a fraction of a share of Company Stock having a value
equal to $5.00, with the amount of the fraction of a share of Company Stock
equal to the quotient of $5.00 and the Offering Price, except that the Company
may, in its sole discretion, increase or decrease the amount of Company Stock
and increase or decrease the amount of cash in the Per Share Consideration in
order to attempt to accommodate the elections of the holders of Bank Stock as
provided in Sections 2.1(b) and 2.11."
13. The first sentence of Section 3.1 of the Agreement is
hereby amended to read in its entirety as follows:
"Consummation of the transactions contemplated by this
Agreement shall take place at the offices of Knecht & Hansen, 1301 Dove Street,
Suite 900, Newport Beach, California, or such other location as may be agreed
upon by the parties, on the Closing Date."
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14. Section 3.2 of the Agreement is hereby amended to read in
its entirety as follows:
"3.2 EXECUTION OF AGREEMENT OF MERGER. Prior to the Closing
Date, and as soon as practicable after approval by the Commissioner to organize
Interim Bank, the Agreement of Merger (as amended, if necessary, to conform to
any requirements of any Governmental Entity having authority over the Merger)
shall be executed by Bank and Interim Bank. On the Closing Date, the Agreement
of Merger, bearing the certification of the Secretary of State, together with
all requisite certificates shall be duly filed in the office of the Commissioner
after being filed with the California Secretary of State with the approval of
the Commissioner endorsed thereon, in accordance with the CGCL and Section 4880
et SEQ. of the CFC."
15. The first sentence of Section 5.2 of the Agreement is
hereby amended to read in its entirety as follows:
"The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, no par value, of which 10,000 shares are
outstanding on the date hereof, all validly issued, fully paid and
nonassessable, and 100,000,000 shares of Preferred Stock, of which not more than
2 million shares have been issued or are to be issued before the Closing Date."
16. Section 5.20 of the Agreement is hereby amended to read in
its entirety as follows:
"5.20 AUTHORITY OF INTERIM BANK. The execution and delivery by
Interim Bank of the Agreement of Merger and, subject to the requisite approval
of the shareholder of Interim Bank, the consummation of the transactions
completed thereby will be duly and validly authorized by all necessary
corporation action on the part of Interim Bank, and the Agreement of Merger will
be upon execution by the parties thereto a valid and binding obligation of
Interim Bank, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditors generally, by general
equitable principles and by the provisions of Section 8(b)(6)(D) of the Federal
Deposit Insurance Act, 12 U.S.C. Section 1818(b)(6)(D). The Company agrees to
take any and all actions reasonably necessary to ensure that Interim Bank
consummates the transactions contemplated hereby. Except as set forth in Exhibit
5.20, neither the execution and delivery by Interim Bank of the Agreement of
Merger, nor the consummation of the transaction contemplated therein, nor
compliance by Interim Bank with any of the provisions thereof will (a) conflict
with or result in a breach of any provision of its Charter Documents, (b) except
for approval by the shareholder of Interim Bank and the prior approval of the
FRB, the Commissioner or the FDIC, require any Consents; (c) result in the
creation
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or imposition of any Encumbrance on any of the properties or assets of Interim
Bank; or (d) subject to obtaining the Consents referred to in subsection (b) of
this Section 5.20, and the expiration of any waiting period, violate any Rules
to which Interim Bank is subject."
17. Section 6.13 of the Agreement is hereby amended to read in
its entirety as follows:
"6.13 EXECUTION OF AGREEMENT OF MERGER. As soon as possible
after receipt of approval of the Commissioner to organize Interim Bank, subject
to receipt of any and all necessary approvals and Permits by any Governmental
Entity and approval by the Bank's shareholders, the Bank shall execute the
Agreement of Merger and any and all related documents."
18. Section 6.19 of the Agreement is hereby amended to read in
its entirety as follows:
"6.19 BANK EMPLOYEE BENEFITS. Prior to or at the Effective
Time of the Merger, the Bank will terminate the Bank Stock Option Plan. Upon the
agreement of the Company and the Bank, the Bank shall cause all Employee Plans
of the Bank to be terminated except as otherwise provided by applicable labor
laws, or as agreed between the Bank and the Company.@
19. Section 7.2(ii) of the Agreement is hereby amended to read
in its entirety as follows
"(ii) refrain from amending its Charter Documents except to
the extent as may be required or contemplated by this Agreement, and except as
the Company proposes to amend its articles of incorporation and bylaws as
attached to this Agreement as EXHIBIT 7.2(II)."
20. Section 7.6 of the Agreement is hereby amended to read in
its entirety as follows:
"7.6 CORPORATE ACTION. The Company shall take or cause to be
taken all necessary corporate action required to carry out the transactions
contemplated in this Agreement and the Agreement of Merger, including without
limitation, all necessary action required to organize and fund Interim Bank."
21. Section 7.13 of the Agreement is hereby amended to read in
its entirety as follows:
A7.13 EXECUTION OF AGREEMENT OF MERGER. As soon as practicable
after receipt of approval of the Commissioner to organize Interim Bank, the
Company as the sole shareholder of Interim Bank, shall approve the Merger and
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shall cause Interim Bank to execute the Agreement of Merger and take any and all
other actions reasonably necessary to consummate the transactions contemplated
herein."
22. Section 7.15 of the Agreement is hereby amended to read in
its entirety as follows:
"7.15 AUTHORIZATION. The execution and delivery of the
Agreement of Merger and the consummation of the transactions contemplated
thereby will have been duly authorized by the Board of Directors of Interim
Bank. The Agreement of Merger will constitute a legal, valid and binding
agreement of Interim Bank in accordance with its respective terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other laws of general application relating to or
affecting enforcement of creditors rights and the application of equitable
principles in any action, legal or equitable. Interim Bank will have full
corporate power and authority to perform its obligations under the Agreement of
Merger and the transactions contemplated thereby."
23. Section 7.16 of the Agreement is hereby amended to read in
its entirety as follows:
"7.16 NO CONFLICTS; DEFAULTS. The execution, delivery and
performance of the Agreement of Merger and the consummation of the transactions
contemplated therein, and compliance by Interim Bank with any provision thereof
will not (a) conflict with or result in a breach of, or default or loss of any
benefit under, any provision of its Charter Documents or, except as set forth in
Exhibit 7.16 any material agreement, instrument or obligation to which Interim
Bank will become a party or by which the property of Interim Bank will become
bound or give any other party to any such agreement, instrument or obligation
the right to terminate or modify any term thereof; (b) except for the prior
approval of the FRB, the FDIC and the Commissioner and as set forth in Exhibit
7.16, require any Consents; (c) result in the creation or imposition of any
Encumbrance on any of the properties or assets of Interim Bank; or (d) violate
the Charter Documents or any Rules to which Interim Bank is subject."
24. Section 9.1(ii) of the Agreement is hereby amended to read
in its entirety as follows:
"(ii) to the extent required by applicable Rule, all
Consents of any Governmental Entity, including, without limitation, those of the
FRB, the FDIC and the Commissioner, shall have been obtained, granted or waived
for organization of Interim Bank and the Merger, and all applicable waiting
periods under all rules shall have expired; and"
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25. Section 9.3 of the Agreement is hereby amended to read in
its entirety as follows:
"9.3 SHAREHOLDER APPROVAL. The Agreement, the Merger, and the
other transactions contemplated hereby, shall have been approved by the holders
of at least two-thirds (2/3) of the issued and outstanding shares of Bank Stock
entitled to vote and the requisite approval of the Company as the sole
shareholder of Interim Bank as soon as practicable. Any and all other action
required by the shareholders of the Bank or the Company to authorize or effect
the transactions called for herein shall have been duly and validly taken."
26. The last sentence of Section 10.5 of the Agreement is
hereby amended to read in its entirety as follows:
"All actions necessary to authorize the execution, delivery
and performance of the Agreement by the Company and consummation of the Merger
by the Company and Interim Bank shall have been duly and validly taken by the
Board of Directors of the Company and Interim Bank."
27. This First Amendment may be entered into in one or more
counterparts, all of which shall be considered one in the same instrument, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
28. Except as herein amended, the Agreement shall remain in
full force and effect.
29. This First Amendment shall be governed by and construed in
accordance with the laws of the State of California.
30. The execution and delivery of this First Amendment by the
officers executing the First Amendment have been duly authorized by the Boards
of Directors of the Bank and the Company, and this First Amendment constitutes a
legal, valid and binding agreement of the parties in accordance with its
respective terms.
31. Exhibit A (Agreement of Merger), Exhibit C (VB Warrant
Agreement and its attached Exhibit A), and Exhibit 10.1 of the Agreement are
hereby amended to read in their entirety substantially in the forms attached
hereto as Exhibit A, Exhibit C (and its attached Exhibit A) and Exhibit 10.1,
respectively.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
PACIFIC COMMUNITY BANKING GROUP
By:
--------------------------------------
E. Lynn Caswell
Chairman and Chief Executive Officer
VALLEY BANK
By:
--------------------------------------
Marion V. Ashley
Chairman of the Board
By:
--------------------------------------
N. Douglas Mills
President and Chief Executive Officer
By:
--------------------------------------
Secretary
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