EXHIBIT 2
PLAN OF REORGANIZATION AND MERGER AGREEMENT
This Plan of Reorganization and Merger Agreement ("Agreement") is made
and entered into as of this March 18, 2002 by and between Mission Bank (the
"Bank") and Mission Merger Company ("Subsidiary"), to which Mission Bancorp (the
"Holding Company") is a party.
RECITALS AND UNDERTAKINGS
A. The Bank is a California banking corporation with its head banking
office in Hemet, County of Riverside, State of California. Subsidiary and the
Holding Company are each corporations duly organized and existing under the laws
of the State of California with their principal offices in Bakersfield, ▇▇▇▇
County, State of California.
B. As of the date hereof, the Bank has 1,000,000 shares of no par value
common stock authorized and 555,584 shares outstanding. It is anticipated that
prior to the Effective Date (as defined in Section 1.2 herein), the Bank will
have no more than 595,009 shares outstanding, reflecting the number of shares of
common shares outstanding as of the date of this Agreement (555,584) plus the
possible exercise of all stock options presently granted but unexercised
(39,425).
C. As of the date hereof, Subsidiary has an authorized maximum number
of shares of capital stock of 1,000,000 shares, and at the Effective Date of the
merger 100 of such shares will be issued and outstanding, all of which shares
will be owned by the Holding Company.
D. As of the date hereof, the Holding Company has an authorized maximum
number of shares of capital stock consisting of 10,000,000 shares of no par
value common stock, 100 of which will be outstanding at the time of the merger
referred to herein.
E. The Boards of Directors of the Bank and Subsidiary have,
respectively, approved this Agreement and authorized its execution, and the
Board of Directors of the Holding Company has approved this Agreement,
undertaken that the Holding Company shall join in and be bound by it, and
authorized the undertakings hereinafter made by the Holding Company.
F. The parties intend by this Agreement to set forth the terms and
conditions of a "reorganization" under Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the mutual agreements of the
parties contained herein, the parties hereby agree as follows:
SECTION 1. GENERAL
1.1 THE MERGER. On the Effective Date, Subsidiary shall be merged into
the Bank, and the Bank shall be the surviving corporation (the "Surviving
Corporation") and a subsidiary of the Holding Company, and its name shall
continue to be "Mission Bank."
1.2 EFFECTIVE DATE. This Agreement shall become effective at the close
of business on the day on which this Agreement shall have been filed with the
Secretary of State of the State of California in accordance with Section 1103 of
the California General Corporation Law (the "Effective Date").
1.3 ARTICLES OF INCORPORATION AND BYLAWS. On the Effective Date, the
Articles of Incorporation of the Bank, as in effect immediately prior to the
Effective Date, shall be and remain the Articles of Incorporation of the
Surviving Corporation; the Bylaws of the Bank shall be and remain the Bylaws of
the Surviving Corporation until altered, amended or repealed; the certificate of
authority of the Bank issued by the Commissioner of the California Department of
Financial Institutions ("CDFI") shall be and remain the certificate of authority
of the Surviving Corporation; and the Bank's insurance of deposits coverage by
the Federal Deposit Insurance Corporation ("FDIC") shall be and remain the
deposit insurance of the Surviving Corporation.
1.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. On the
Effective Date, the directors and officers of the Bank immediately prior to 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. Upon the merger becoming effective, all
rights, privileges, franchises and property of Subsidiary, and all debts and
liabilities due or to become due to Subsidiary, 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 Subsidiary.
b. LIABILITIES. Upon the merger becoming effective, all debts,
liabilities, and obligations due or to become due of, and all claims or demands
for any cause existing against Subsidiary shall be and become the debts,
liabilities, obligations of, and 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. Upon the merger becoming effective,
all rights of creditors of Subsidiary, and all liens upon the property of
Subsidiary, shall be preserved unimpaired, limited
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in lien to the property affected by the liens immediately prior to the time of
the merger.
d. PENDING ACTIONS. Upon the merger becoming effective, any action
or proceeding pending by or against Subsidiary shall not be deemed to have
abated or been discontinued, but may be prosecuted to judgment, with the right
to appeal or review as in other cases, as if the merger had not taken place or
the Surviving Corporation may be substituted for Subsidiary.
1.6 FURTHER ASSURANCES. The Bank and Subsidiary 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 and
otherwise to carry out the intent and purposes hereof.
SECTION 2. CAPITAL STOCK OF THE SURVIVING CORPORATION
2.1 STOCK OF SUBSIDIARY. Upon the merger becoming effective, the shares
of capital stock of Subsidiary issued and outstanding immediately prior to the
Effective Date shall thereupon be converted into and exchanged by the Holding
Company for 100 shares of fully paid and nonassessable common stock of the Bank
as the Surviving Corporation.
2.2 STOCK OF THE BANK. Upon the merger becoming effective, each and
every share of common stock of the Bank issued and outstanding shall, by virtue
of the merger and without any action on the part of the holders thereof, be
exchanged for and converted into one share of fully paid and nonassessable
common stock of the Holding Company, without par value.
2.3 EXCHANGE OF STOCK. Upon the merger becoming effective:
a. the shareholders of record of the Bank shall be entitled to
receive and shall be allocated one share of common stock of the Holding Company
for each share of common stock of the Bank;
b. the Holding Company shall issue the shares of its common stock
which the shareholders of the Bank shall be entitled to receive; and
c. each holder of a certificate representing shares of common stock
of the Bank shall,
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upon presentation of such certificate for surrender to the Holding Company, be
entitled to receive in exchange thereof, a certificate or certificates
representing the number of shares of common stock of the Holding Company to
which such holder shall be entitled. Until so surrendered, each outstanding
certificate which prior to the merger represented shares of common stock of the
Bank shall be deemed, for all corporate purposes, to evidence ownership of an
equal number of shares of common stock of the Holding Company. On and after the
Effective Date, each issued and outstanding share of common stock of the Bank
shall represent one (1) share of common stock of the Holding Company. Such
certificates may, but need not be, surrendered and exchanged by the holders
thereof after the Effective Date, for new certificates representing the number
of shares of common stock of the Holding Company to which the shareholders are
entitled as set forth in this Agreement. Certificates evidencing ownership of
shares of common stock of the Holding Company shall be issued to the holders of
lost or destroyed shares of common stock of the Bank upon presentation to the
Holding Company of such evidence of ownership and agreement of indemnity as the
Holding Company may reasonably require.
2.4 STOCK OPTIONS. Upon and by reason of the merger becoming effective,
the options to purchase shares of common stock of the Bank which have been
granted by the Bank pursuant to Mission Bank Stock Option Plan shall be deemed
to be options granted by the Holding Company and the obligations of the Bank
with respect thereto shall be assumed by the Holding Company with the same terms
and conditions, and each option to acquire one share of common stock of the Bank
which is not exercised prior to the Effective Date, shall be deemed to be an
option to acquire one share of common stock of the Holding Company.
SECTION 3. APPROVALS
3.1 SHAREHOLDER APPROVAL. This Agreement shall be submitted to the
shareholders of the Bank and Subsidiary for ratification and approval in
accordance with the applicable provisions of law.
3.2 REGULATORY APPROVALS. The parties shall obtain the waivers,
consents and approvals of all regulatory authorities as required by law for
consummation of the merger and plan of reorganization on the terms herein
provided, including, without being limited to, those consents and approvals
referred to in Paragraph 4.1b.
SECTION 4. CONDITIONS PRECEDENT, TERMINATION AND PAYMENT OF EXPENSES
4.1 CONDITIONS PRECEDENT TO THE MERGER. Consummation of the merger is
conditioned upon:
a. ratification and approval of this Agreement by the shareholders
of the Bank and Subsidiary, as required by law;
b. obtaining all other consents and approvals, and satisfaction of
all other requirements prescribed by law which are necessary for consummation of
the merger, including, but not limited to, approval of the FDIC, approval of the
CDFI, approval of the Board of Governors of the Federal Reserve
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System under the Bank Holding Company Act, as amended, and any required action
under the Securities Act of 1933 with respect to the securities of the Holding
Company issuable upon consummation of the merger;
c. obtaining all consents or approvals, governmental or otherwise,
which are or, in the opinion of counsel for the Bank may be, necessary to permit
or enable the Surviving Corporation, upon and after the merger, to conduct all
or any part of the business and activities of the Bank up to the time of the
merger, in the manner in which such activities and business are then conducted;
d. the Bank's obtaining for the Holding Company, prior to the
Closing Date, a letter, in form and substance satisfactory to the Holding
Company's legal counsel, signed by each person who is an "affiliate" of the Bank
for purposes of Rule 145 of the Securities and Exchange Commission to the effect
that (i) such person will not dispose of any shares of common stock of the
Holding Company to be received pursuant to the reorganization and merger, in
violation of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, or in any event prior
to such time as financial results covering at least 30 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 referring to
the issuance of such shares in a transaction to which Rule 145 is applicable and
to the giving of stop-transfer instructions to the Holding Company's transfer
agent with respect to such certificate(s);
e. for the benefit of the Bank and unless waived, the Holding
Company shall have received an opinion from a law firm or tax accounting firm,
in form and substance satisfactory to both the Bank and the Holding Company, to
the effect that: the merger of Subsidiary with and into the Bank and the
exchange of shares of common stock of the Bank for shares of common stock of the
Holding Company, as provided for herein, will be considered a reorganization
within the meaning of Section 368(a)(1)(A) of the Code; no gain or loss will be
recognized by the Bank pursuant to consummation of the merger; and no gain or
loss will be recognized by the shareholders of the Bank upon the exchange of
their shares of common stock of the Bank for shares of common stock of the
Holding Company, as provided for herein; and
f. performance by each party hereto of all of its obligations
hereunder to be performed prior to the merger becoming effective.
4.2 TERMINATION OF THE MERGER. If any condition in Paragraph 4.1 has
not been fulfilled, or, if in the opinion of a majority of the Board of
Directors of any of the parties:
a. any action, suit, proceeding or claim has been instituted, made
or threatened relating to the proposed merger which makes consummation of the
merger inadvisable; or
b. for any other reason consummation of the merger is inadvisable;
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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, except as provided in Section 4.3
hereof.
4.3 EXPENSES OF THE MERGER. Subject to applicable federal laws and
regulations, each party shall bear its own expenses of the merger, including
filing fees, printing costs, mailing costs, accountants' fees and legal fees.
SECTION 5. MISCELLANEOUS
5.1 ASSIGNMENT. Neither party shall have the right to assign its rights
or obligations under this Agreement.
5.2 EXECUTION. This Agreement may be executed in counterparts, each of
which when so executed shall be deemed an original and such counterparts shall
together constitute one and the same instrument.
5.3 GOVERNING LAW. This Agreement is made and entered into in the State
of California, and the laws of said State shall govern the validity and
interpretation hereof.
5.4 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the plan of reorganization and merger
and supersedes all prior arrangements or understandings with respect thereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
MISSION BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its: President
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By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Its: Secretary
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MISSION MERGER COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its: President and Secretary
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MISSION BANCORP
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its: President
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By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Its: Secretary
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