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EXHIBIT 4(I)
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STANDSTILL AND GOVERNANCE AGREEMENT
BETWEEN
FIRST HAWAIIAN, INC.
AND
BANQUE NATIONALE DE PARIS
DATED AS OF NOVEMBER 1, 1998
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS............................................................... 1
SECTION 1.1 Certain Defined Terms....................................... 1
SECTION 1.2 Other Defined Terms......................................... 6
SECTION 1.3 Other Definitional Provisions............................... 6
SECTION 1.4 Methodology for Calculations................................ 7
STANDSTILL................................................................ 7
SECTION 2.1 Acquisition of Additional Voting Securities................. 7
SECTION 2.2 Certain Restrictions........................................ 11
SECTION 2.3 Notice of Certain Events; Press Releases, etc............... 12
SECTION 2.4 Post-Standstill Period...................................... 12
TRANSFER RESTRICTIONS..................................................... 14
SECTION 3.1 General Transfer Restrictions............................... 14
SECTION 3.2 Restrictions on Transfer.................................... 14
SECTION 3.3 Right of First Refusal...................................... 15
SECTION 3.4 Transferees................................................. 17
VOTING.................................................................... 17
SECTION 4.1 Voting on Certain Matters................................... 17
SECTION 4.2 Irrevocable Proxy........................................... 17
SECTION 4.3 Quorum...................................................... 18
CORPORATE GOVERNANCE...................................................... 18
SECTION 5.1 Composition of the Board.................................... 18
SECTION 5.2 Agenda...................................................... 19
SECTION 5.3 Committees.................................................. 19
SECTION 5.4 Certain Officers............................................ 19
SECTION 5.5 Regulatory Cooperation...................................... 19
MISCELLANEOUS............................................................. 20
SECTION 6.1 Conflicting Agreements...................................... 20
SECTION 6.2 Duration of Agreement....................................... 20
SECTION 6.3 Ownership Information....................................... 20
SECTION 6.4 Further Assurances.......................................... 20
SECTION 6.5 Amendment and Waiver........................................ 20
SECTION 6.6 Severability................................................ 21
SECTION 6.7 Entire Agreement............................................ 21
SECTION 6.8 Successors and Assigns...................................... 21
SECTION 6.9 Counterparts................................................ 21
SECTION 6.10 Remedies.................................................... 21
SECTION 6.11 Notices..................................................... 21
SECTION 6.12 Governing Law; Consent to Jurisdiction...................... 22
SECTION 6.13 Legends..................................................... 23
SECTION 6.14 Interpretation.............................................. 24
SECTION 6.15 Effectiveness............................................... 24
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STANDSTILL AND GOVERNANCE AGREEMENT
STANDSTILL AND GOVERNANCE AGREEMENT dated as of November 1, 1998 between
First Hawaiian, Inc., a Delaware corporation (the "Company"), and Banque
Nationale de Paris, a societe anonyme or limited liability banking corporation
organized under the laws of the Republic of France ("BNP").
WHEREAS, the Company and BancWest Corporation, a corporation organized
under the laws of California and a subsidiary of BNP ("BancWest"), entered into
an Agreement and Plan of Merger, dated as of May 28, 1998 (the "Merger
Agreement"), pursuant to which and subject to the terms and conditions thereof,
among other things, BancWest will merge (the "Merger") with and into the Company
and all of the outstanding shares of common stock, without par value, of
BancWest will be converted into shares of Class A Common Stock (as defined
herein);
WHEREAS, upon the closing of the Merger (the "Closing"), BNP will
Beneficially Own (as defined herein), directly and through its Subsidiaries (as
defined herein) 45% of the issued and outstanding Company Common Shares (as
defined herein);
WHEREAS, it is a condition to the obligations of each of the Company and
BancWest to consummate the Merger pursuant to the Merger Agreement that this
Agreement shall have been duly executed and delivered by the Company and BNP;
and
WHEREAS, the parties hereto desire to enter into this Agreement to
establish certain arrangements with respect to the Company Common Shares to be
Beneficially Owned by BNP and its Affiliates following the closing of the
Merger, as well as restrictions on certain activities in respect of the Company
Common Shares, corporate governance and other related corporate matters.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used herein, the following terms
shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person;
provided, however, that solely for purposes of this Agreement,
notwithstanding anything to the contrary set forth herein, neither the
Company nor any of its Subsidiaries shall be deemed to be a Subsidiary or
Affiliate of BNP solely by virtue of BNP's ownership of the Class A Common
Stock or Common Stock, the election of Class A Directors nominated by it to
the Board or any other action taken by BNP or its Affiliates which is
permitted under this Agreement, in each case in accordance with the terms
and conditions of, and subject to the limitations and restrictions set
forth in, this Agreement (and irrespective of the characteristics of the
aforesaid relationships and actions under applicable law or accounting
principles).
"Agreement" means this Standstill and Governance Agreement as it may
be amended, supplemented, restated or modified from time to time.
"Beneficial Ownership" by a Person of any securities includes
ownership by any Person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares (i)
voting power which includes the power to vote, or to direct the voting of,
such security; and/or (ii) investment power which includes the power to
dispose, or to direct the disposition of, such security;
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and shall otherwise be interpreted in accordance with the term "beneficial
ownership" as defined in Rule 13d-3 adopted by the Commission under the
Exchange Act; provided that for purposes of determining Beneficial
Ownership, a Person shall be deemed to be the Beneficial Owner of any
securities which may be acquired by such Person (irrespective of whether
the right to acquire such securities is exercisable immediately or only
after the passage of time, including the passage of time in excess of 60
days, the satisfaction of any conditions, the occurrence of any event or
any combination of the foregoing) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise. For purposes of this Agreement, a Person
shall be deemed to Beneficially Own any securities Beneficially Owned by
its Affiliates or any Group of which such Person or any such Affiliate is
or becomes a member.
"BHC Act" means the Bank Holding Company Act of 1956, as amended (or
any successor statute), and the rules and regulations of the Board of
Governors of the Federal Reserve System promulgated thereunder (or under
any successor statute).
"Board" means the Board of Directors of the Company.
"Business Combination Proposal" means any proposal with respect to a
merger or consolidation in which the Company is a constituent corporation
or a sale, lease, exchange or mortgage of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole and pursuant to
any of which transactions all of the Company Common Shares (other than
those, if any, which are Beneficially Owned by BNP and its Affiliates)
would be exchanged for cash, securities or other property, and, solely for
purposes of Sections 2.1(c), 2.2(b), 2.2(c) and 2.4(b), a tender or
exchange offer for any and all of the outstanding Company Common Shares.
Any Business Combination Proposal submitted by BNP pursuant to this
Agreement shall be a proposal for the acquisition of not less than 100% of
the issued and outstanding Company Common Shares (other than those which
are Beneficially Owned by BNP and its Affiliates).
"Business Day" shall mean any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by law to be closed in
Honolulu, Hawaii, San Francisco, California or Paris, France.
"By-Laws" means the By-Laws of the Company, as amended or supplemented
from time to time.
"Capital Stock" means, with respect to any Person at any time, any and
all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of capital stock, partnership
interests (whether general or limited) or equivalent ownership interests in
or issued by such Person.
"Change of Control" means (i) any Person becomes the Beneficial Owner
of more than 50% of the total voting power of the outstanding Voting
Securities of the Company, (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Non-Class A
Directors (together with any new Non-Class A Directors whose election by
such Non-Class A Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
Non-Class A Directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Directors of the Company then in office, (iii) a merger or
consolidation of the Company with or into another Person or the merger or
consolidation of another Person into the Company, as a result of which
transaction or series of related transactions (A) any Person becomes the
Beneficial Owner of more than 50% of the total voting power of all Voting
Securities of the Company (or, if the Company is not the surviving or
transferee company of such transaction or transactions, of such surviving
or transferee company) outstanding immediately after such transaction or
transactions, or (B) the shares of Company Common Stock outstanding
immediately prior to such transaction or transactions do not represent a
majority of the voting power of all Voting Securities of the Company (or
such surviving or transferee company, if not the Company) outstanding
immediately after such transaction or transactions, (iv) the sale, lease,
exchange or mortgage of all or substantially all of the assets of the
Company and its
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Subsidiaries, or (v) the approval by the stockholders of the Company of a
plan of liquidation or dissolution of the Company.
"Class A Common Stock" means the class A common stock, par value $1.00
per share, of the Company and any securities issued in respect thereof, or
in substitution therefor, in connection with any stock split, dividend or
combination, or any reclassification, recapitalization, merger,
consolidation, exchange or other similar reorganization.
"Class A Director" means any Class A Nominee who is elected or
appointed as a Class A Director of the Company and is then serving in such
capacity.
"Class A Holders" means (i) BNP and (ii) any Affiliate of BNP or any
Qualified Transferee to which shares of Class A Common Stock have been
Transferred in accordance with Sections 3.2(c)(iii) and 3.2(c)(vi) hereof,
respectively.
"Class A Nominee" means any Person proposed by the Class A Holders for
election or appointment as a Class A Director pursuant to the Restated
Charter.
"Commission" means the United States Securities and Exchange
Commission.
"Company Common Shares" means, collectively, the Company Common Stock
and the Class A Common Stock.
"Company Common Stock" means the common stock, par value $1.00 per
share, of the Company (other than the Class A Common Stock) and any
securities issued in respect thereof, or in substitution therefor, in
connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or
other similar reorganization.
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly, of the power to
direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, as trustee or executor,
by contract or any other means, or otherwise to control such Person within
the meaning of such term as used in Section 2(e) of Regulation Y; provided,
however, that solely for purposes of this Agreement, notwithstanding
anything to the contrary set forth herein, neither the Company nor any of
its Subsidiaries shall be deemed to be controlled by or under common
control with BNP or any of its Affiliates solely by virtue of BNP's
ownership of the Class A Common Stock or Common Stock, the election of
Class A Directors nominated by it to the Board or any other action taken by
BNP or its Affiliates which is permitted under this Agreement, in each case
in accordance with the terms and conditions of, and subject to the
limitations and restrictions set forth in, this Agreement (and irrespective
of the characteristics of the aforesaid relationships and actions under
applicable law or accounting principles).
"Current Market Value" means, with respect to any security, the
average of the daily closing prices on the Nasdaq National Market (or the
principal exchange or market on which such security may be listed or may
trade) for such security for the 20 consecutive trading days commencing on
the 22nd trading day prior to the date as of which the Current Market Value
is being determined. The closing price for each day shall be the closing
price, if reported, or, if the closing price is not reported, the average
of the closing bid and asked prices as reported by the Nasdaq National
Market (or such principal exchange or market) or a similar source
reasonably and in good faith selected from time to time by the Company for
such purpose. In the event such closing prices are unavailable, the Current
Market Value shall be the Fair Market Value of such security established by
an Independent Investment Banking Firm in accordance with the procedures
specified in Section 3.3(f).
"Director" means any member of the Board (other than any advisory,
honorary or other non-voting member of the Board).
"Equity Securities" means any and all shares of Capital Stock of the
Company, securities of the Company convertible into, or exchangeable for,
such shares, and options, warrants or other rights to
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acquire such shares (regardless of whether such securities, options,
warrants or other rights are then exercisable or convertible).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor statute).
"Executive Committee" means the Executive Committee of the Board, as
duly constituted from time to time (subject to Section 5.2).
"Fair Market Value" means, as to any securities or other property, the
cash price at which a willing seller would sell and a willing buyer would
buy such securities or property in an arm's-length negotiated transaction
without time constraints.
"Group" shall have the meaning assigned to it in Section 13(d)(3) of
the Exchange Act.
"Independent Director" means (except as set forth in the proviso
hereto) any Non-Class A Director who is not an Affiliate or a past or
present officer, director or employee of, and was not nominated by, BNP or
any of its Affiliates, and is not associated with an entity that performs
substantial services for any of the foregoing; provided that, solely when
used with respect to any action to be taken by the Board or the Executive
Committee relating to a transaction or proposed transaction with, or
otherwise relating to any other holder of 10% or more of the outstanding
Company Common Shares (or 10% or more of any other class of Voting
Securities of the Company), the term Independent Director shall mean any
director who is not an Affiliate or a past or present officer, director or
employee of, and was not nominated by, such stockholder (or other
securityholder) or any of its Affiliates, and is not associated with an
entity that performs substantial services for any of the foregoing.
"Independent Investment Banking Firm" means an investment banking firm
of nationally recognized standing that is, in the reasonable judgment of
the Person or Persons engaging such firm, independent of such Person or
Persons and qualified to perform the task for which it has been engaged.
"Initial Ownership Percentage" means the Ownership Percentage of BNP
and its Affiliates immediately following the Closing.
"Non-Class A Directors" means the Directors who are not Class A
Directors.
"Ownership Percentage" means, at any time, the ratio, expressed as a
percentage, (i) of the total Equity Securities Beneficially Owned by BNP
and its Affiliates to (ii) the sum of (x) the total number of outstanding
Company Common Shares and (y) any Company Common Shares that are issuable
upon conversion, exchange or exercise of any Equity Securities included in
clause (i); provided, however, that shares subject to options under Company
benefit plans granted or shares otherwise issued under Company benefit
plans to any Person who, at the time of the grant or issuance, was an
officer or director of the Company or any of its Subsidiaries shall not be
deemed to be Equity Securities Beneficially Owned by BNP or any of its
Affiliates; and provided further, however, that Equity Securities
Beneficially Owned by BNP and its Affiliates shall not include, for
purposes of clause (i) above, any Equity Securities held by BNP and its
Subsidiaries in trust, managed, custodial or nominee accounts and the like,
or held by mutual funds for which BNP or one of its Subsidiaries acts as
investment advisor, in each case for the benefit of customers of BNP and
its Subsidiaries ("Trust Account Shares"), provided that (A) such Trust
Account Shares were acquired by BNP or its Subsidiaries in the ordinary
course of their banking or investment management businesses, solely for
investment and not with the intent or purpose of influencing control of the
Company or avoiding the provisions of this Agreement, and (B) to the extent
that such Trust Account Shares at any time constitute in the aggregate more
than four percent of the Company's then outstanding Voting Securities (such
excess shares, the "Excess Trust Shares"), BNP shall, and shall cause its
Subsidiaries which hold any such Excess Trust Shares to, (x) vote such
Excess Trust Shares on all matters submitted to a vote of stockholders of
the Company in the same proportion as the stockholders of the Company other
than BNP and its Affiliates vote (or, if BNP or such Subsidiaries are not
legally permitted to so vote such Excess Trust Shares, BNP shall, and shall
cause any of its Subsidiaries which hold any such shares to, vote a number
of Company Common Shares having the same
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voting power as such Excess Trust Shares in the same proportion as the
stockholders of the Company other than BNP and its Affiliates vote), and
(y) BNP shall, and shall cause its Subsidiaries to, use all reasonable
efforts to either reduce its aggregate Beneficial Ownership of such Trust
Account Shares to four percent or less of the Company's then outstanding
Voting Securities or Transfer (pursuant to clauses (i) or (ii) of Section
3.2(c)) a sufficient number of other Equity Securities having aggregate
voting power equal to the Excess Trust Shares. For purposes of Section
5.1(b) only, the Ownership Percentage shall include the Equity Securities
Beneficially Owned by any Qualified Transferee in addition to the Equity
Securities Beneficially Owned by BNP and its Affiliates.
"Permitted Ownership Percentage" means, immediately following the
Closing, the Initial Ownership Percentage and thereafter, such Ownership
Percentage as may be permitted under the terms of this Agreement to be
Beneficially Owned by BNP and its Affiliates from time to time; provided
that except as expressly permitted by Sections 2.1 and 2.4 hereof, in no
event shall the Permitted Ownership Percentage be greater than the Initial
Ownership Percentage.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, other entity, government or
any agency or political subdivision thereof or any Group comprised of two
or more of the foregoing.
"Prime Rate" means the prime rate, base lending rate or similar bench
▇▇▇▇ rate in effect from time to time as announced by The Chase Manhattan
Bank (or any successor institution).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, between the Company and BNP.
"Regulation Y" means Regulation Y (12 C.F.R. Part 225) or any
successor regulation, as promulgated by the Board of Governors of the
Federal Reserve System under the BHC Act.
"Restated Charter" means the amended Certificate of Incorporation of
the Company, the form of which is set forth in Exhibit A to the Merger
Agreement, as amended or supplemented from time to time.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission from time to time
thereunder (or under any successor statute).
"Standstill Period" shall mean the period commencing on the Closing
and continuing until the fourth anniversary of the Closing.
"Subsidiary" means, with respect to any Person, any corporation or
other organization, whether incorporated or unincorporated, (x) of which
such Person or any other Subsidiary of such Person is a general partner
(excluding partnerships, the general partnership interests of which held by
such Person or any Subsidiary of such Person do not have a majority of the
voting interests in such partnership), or (y) at least a majority of the
securities or other interests of which having by their terms ordinary
voting power to elect a majority of the board of directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person
or by any one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries.
"Transfer" means, directly or indirectly, to sell, transfer, assign,
pledge, encumber, hypothecate or similarly dispose of (by operation of law
or otherwise), either voluntarily or involuntarily, or to enter into any
contract, option or other arrangement or understanding with respect to the
sale, transfer, assignment, pledge, encumbrance, hypothecation or similar
disposition of (by operation of law or otherwise), any Equity Securities or
any interest in any Equity Securities, provided, however, that a merger or
consolidation in which BNP or any of its Affiliates is a constituent
corporation shall not be deemed to be the Transfer of any Equity Securities
Beneficially Owned by such Person (provided, that the primary purpose of
any such transaction is not to avoid the provisions of this Agreement and
that the successor or surviving Person to such merger or consolidation, if
not BNP or such Affiliate, expressly assumes all obligations of BNP or such
Affiliate, as the case may be, under this Agreement). For purposes of this
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Agreement, the term Transfer shall include the sale of an Affiliate or
BNP's interest in an Affiliate which Beneficially Owns Company Common
Shares.
"Voting Securities" means at any time shares of any class of Capital
Stock or other securities of the Company which are then entitled to vote
generally in the election of Directors and not solely upon the occurrence
and during the continuation of certain specified events.
SECTION 1.2 Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
TERM SECTION
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Acquisition Restrictions.................................... Section 2.1(a)
Acquisition Restrictions Termination Events................. Section 2.1(b)
Appraisal................................................... Section 3.3(f)
Average Price............................................... Section 2.1(f)
BancWest.................................................... Preamble
BNP......................................................... Preamble
BNP Repurchase.............................................. Section 2.1(f)
Closing..................................................... Recitals
Company..................................................... Preamble
Company Repurchase.......................................... Section 2.1(f)
Excess Trust Shares......................................... Section 1.1
Litigation.................................................. Section 6.12(a)
Market Check Period......................................... Section 2.4(b)
Market Sale Option.......................................... Section 2.1(f)
Merger Agreement............................................ Recitals
Notice...................................................... Section 6.11
Offer Price................................................. Section 3.3(b)
Permitted Transferee........................................ Section 3.2(c)
Post-Standstill Period...................................... Section 2.4(a)
Process Agent............................................... Section 6.12(b)
Proxy Information........................................... Section 5.1(b)
Qualified Pledgee........................................... Section 3.2(c)
Qualified Transferee........................................ Section 3.2(c)
Repurchase Number of Shares................................. Section 2.1(f)
Repurchase Option........................................... Section 2.1(f)
Repurchase Price............................................ Section 2.1(f)
Required Repurchase Event................................... Section 2.1(f)
Superior Proposal........................................... Section 2.4(b)
Term........................................................ Section 6.2
Third Party................................................. Section 2.1(b)
Transfer Measurement Date................................... Section 2.1(e)
Transfer Notice............................................. Section 3.3(a)
Transfer Reduction Level.................................... Section 2.1(e)
Transferring Party.......................................... Section 3.3
Trust Account Shares........................................ Section 1.1
Update Notice............................................... Section 2.1(f)
SECTION 1.3 Other Definitional Provisions. (a) The words "hereof ",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any
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particular provision of this Agreement, and Article, Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
SECTION 1.4 Methodology for Calculations. For purposes of calculating the
number of outstanding Company Common Shares, Equity Securities or Voting
Securities and the number of Company Common Shares, Equity Securities or Voting
Securities Beneficially Owned by BNP and its Affiliates as of any date, any
Company Common Shares, Equity Securities or Voting Securities held in the
Company's treasury or belonging to any Subsidiaries of the Company which are not
entitled to be voted or counted for purposes of determining the presence of a
quorum pursuant to Section 160(c) of the Delaware General Corporation Law (or
any successor statute) shall be disregarded.
ARTICLE II
STANDSTILL
SECTION 2.1 Acquisition of Additional Voting Securities. (a) During the
Standstill Period, except as provided in paragraphs (b), (c), (d) and (e) below,
BNP covenants and agrees with the Company that it shall not, and shall cause
each of its Affiliates, directors and executive officers not to, directly or
indirectly, acquire, offer or propose to acquire or agree to acquire, whether by
purchase, tender or exchange offer, through the acquisition of control of
another Person (including by way of merger or consolidation), by joining a
partnership, syndicate or other Group or otherwise, the Beneficial Ownership of
any additional Voting Securities (except by way of stock dividends, stock
reclassifications or other distributions or offerings made available and, if
applicable, exercised on a pro rata basis, to holders of Company Common Shares
generally) (the "Acquisition Restrictions").
(b) The foregoing Acquisition Restrictions will not apply if either (i) a
third party who is not an Affiliate of BNP or any of its Affiliates (a "Third
Party", which term shall include any Group, other than a Group which includes
BNP or any of its Affiliates as a member) commences a bona fide tender or
exchange offer for more than 50% of the outstanding Company Common Shares and
the Board does not both (x) recommend against the tender or exchange offer
within ten Business Days after the commencement thereof (which, in the case of
an exchange offer, shall be deemed to be the effective date of the registration
statement relating to the securities offered in such exchange offer) or such
longer period as shall then be permitted under the Commission's rules and (y)
adopt a stockholders' rights plan (if the Company does not then have one in
effect) which does not contain an exception from the definition of "Acquiring
Person", "Triggering Event" or similar terms for such Third Party or its
Affiliates (it being understood that, notwithstanding the foregoing, the Board
shall not be required to adopt such a plan if such plan is opposed by any of the
Class A Directors), (ii) a Third Party acquires Beneficial Ownership of 25% of
the outstanding Company Common Shares (other than as a result of purchases of
such securities from the Company) and at such time, the Ownership Percentage is
equal to at least 25%, or (iii) a Third Party acquires Beneficial Ownership of
20% of the outstanding Company Common Shares (other than as a result of
purchases of such securities from the Company) and publicly discloses in a
filing on Schedule 13D or otherwise a possible intention to seek control of the
Company or to engage in a transaction that would result in a Change of Control
of the Company and at such time, the Ownership Percentage is equal to at least
20%; provided that if the Acquisition Restrictions terminate as a result of any
of (i), (ii) or (iii) above, BNP may only acquire shares of Company Common Stock
pursuant to (x) a tender or exchange offer for any and all outstanding shares of
Company Common Stock or (y) a Business Combination Proposal for the Company so
long as (A) such proposal is made in writing delivered only to the Executive
Committee and (B) BNP and its representatives keep confidential and refrain from
disclosing to any other Person the fact that they have made any such proposal or
any of the terms thereof. If (x) the foregoing tender or exchange offer referred
to in clause (i) shall have been terminated, (y) the Third Party referred to in
clauses (ii) or (iii) shall have reduced its Beneficial Ownership below 25% or
20%, respectively, of the outstanding Company Shares or (z) the Third Party
referred to in clause (iii) shall have publicly altered or modified its prior
public disclosure to provide that it intends to hold the shares
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acquired for investment purposes and not with the intention to seek control of
the Company or to engage in a transaction that would result in a Change of
Control of the Company, in each case without BNP having made a bona fide tender
or exchange offer or a bona fide Business Combination Proposal, then the
Acquisition Restrictions shall be reinstated at the Permitted Ownership
Percentage in effect prior to the termination of the Acquisition Restrictions.
The events described in clauses (i), (ii) and (iii) of this Section 2.1(b) and
in Section 2.1(c) are hereinafter referred to as the "Acquisition Restrictions
Termination Events".
(c) Notwithstanding any other provision hereof, BNP shall be entitled at
any time to acquire shares of Company Common Stock in excess of the
then-applicable Permitted Ownership Percentage if (i) BNP shall make a capital
infusion into the Company (A) in response to the requirements of applicable U.S.
bank regulatory authorities, as advised in writing to the Company by such
authority, or (B) because the Company shall cease to be a "well-capitalized"
bank holding company within the meaning of Section 225.2(r)(1) of Regulation Y
and is not restored to the status of a "well capitalized" bank holding company
within twelve months after the date on which it ceased to be a "well
capitalized" bank holding company; provided that nothing herein shall be deemed
to derogate the authority of the Board to approve the terms of any such capital
infusion, or (ii) the Company shall become subject to any regulatory capital
directive, or become an institution in "troubled" condition under 12 C.F.R.
ss.325.6 and Section 225.71(d) of Regulation Y, respectively, or under 12 C.F.R.
ss.263.81(c) or under any successor provisions. Any shares of Company Common
Stock acquired pursuant to this paragraph (c) shall not be subject to any of the
voting restrictions contained in Section 4.1(a)(ii) or 4.2. In the event that
BNP wishes to acquire additional shares of Company Common Stock following any
acquisition of shares pursuant to this paragraph (c), such acquisition may only
be effected through a Business Combination Proposal which provides for a price
per share of Company Common Stock so acquired that, in the written opinion of an
Independent Investment Banking Firm selected by the Board (by a majority vote of
the Directors constituting the entire Board), is fair from a financial point of
view to the holders of such Company Common Stock.
(d) If the Ownership Percentage declines due to an issuance or disposition
by the Company of Company Common Stock or other Equity Securities (whether in a
public offering, in connection with an acquisition, upon exercise of employee
stock options or otherwise), BNP and its Affiliates shall be permitted to
purchase a number of shares of Company Common Stock or other Equity Securities
in the open market or in privately-negotiated transactions so that the Ownership
Percentage following such purchase is no greater than the then-applicable
Permitted Ownership Percentage; provided that neither BNP nor any of its
Affiliates shall be permitted to purchase any shares pursuant to this Section
2.1(d) if the act of purchasing such shares would cause a transaction entered
into or proposed to be entered into by the Company to be disqualified as a
"pooling of interests" under applicable accounting rules, in which case such
purchase rights shall be deferred until such time as such purchases may be
effected without adversely affecting the pooling accounting treatment of such
transaction. The Company and BNP agree to confer and reasonably cooperate with
one another with respect to share repurchases or purchases to facilitate
satisfaction of such requirements of the applicable accounting rules with
respect to any such transaction.
(e) (i) In the event that the Ownership Percentage decreases by an
aggregate of less than 10% (the "Transfer Reduction Level") from the Ownership
Percentage on the same date of the prior year (the "Transfer Measurement Date")
as a result of a Transfer or a series of Transfers by BNP or its Affiliates of
any Company Common Shares or other Equity Securities (other than any Transfers
pursuant to clauses (iv), (v), (vi) or (vii) of Section 3.2(c)), BNP and its
Affiliates may purchase additional shares of Company Common Stock or other
Equity Securities in open market purchases or in privately-negotiated
transactions so long as, after giving effect to such acquisitions, the Ownership
Percentage does not exceed the Permitted Ownership Percentage on the Transfer
Measurement Date (as reduced in accordance with clause (ii) below subsequent to
such Transfer Measurement Date).
(ii) Upon any Transfer of any Company Common Shares or other Equity
Securities by BNP or any of its Affiliates pursuant to clauses (iv), (v), (vi)
or (vii) of Section 3.2(c) or to the extent of any other Transfers that result
in the Ownership Percentage decreasing below the Transfer Reduction Level, the
Permitted Ownership Percentage shall be automatically decreased to the actual
Ownership Percentage following such event. For purposes of this Section 2.1(e),
a Transfer pursuant to clause (vii) of Section 3.2(c) shall not be
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deemed to have occurred so long as BNP continues to have sole power to vote or
direct the voting of such Company Common Shares or other Equity Securities which
have been so pledged.
(f) (i) Upon a repurchase or redemption of Equity Securities by the Company
that, by reducing the number of outstanding Equity Securities, increases the
Ownership Percentage (a "Company Repurchase") to an amount in excess of the
then-applicable Permitted Ownership Percentage, BNP shall dispose, or cause its
Affiliates to dispose, of Equity Securities Beneficially Owned by them as set
forth in clauses (ii) or (iii) below, as applicable; provided, however, that if
effecting such disposition at such time would subject BNP or any such Affiliate
to liability under Section 16(b) of the Exchange Act, then the obligation of BNP
to effect, or cause its Affiliates to effect, such disposition shall be deferred
until the earliest date on which it or its Affiliates may effect such
disposition without incurring such liability under Section 16(b).
(ii) In the event of a proposed Company Repurchase (other than pursuant to
a proposed program of open market repurchases by the Company, which shall be
treated in accordance with the provisions of clause (iii) below) which, together
with any prior Company Repurchases of less than 1% of the outstanding Equity
Securities with respect to which no Equity Securities Beneficially Owned by BNP
or its Affiliates were disposed of in the manner required by this Section
2.1(f), shall be in excess of 1% of the outstanding Equity Securities prior to
such Company Repurchase (a "Required Repurchase Event"), the Company shall give
written notice to BNP not later than five Business Days prior to the Company
Repurchase, specifying the number and type of Equity Securities to be
repurchased and the repurchase price (the "Repurchase Price") (if known) per
security. On the date of the Company Repurchase giving rise to such notice, BNP
shall sell or cause one or more of its Affiliates to sell to the Company (a "BNP
Repurchase") a sufficient number of Equity Securities of the type repurchased or
to be repurchased by the Company, or, if BNP and its Affiliates do not own such
type of Equity Securities, shares of Class A Common Stock or Company Common
Stock (the "Repurchase Number of Shares"), such that the Ownership Percentage
following such BNP Repurchase is equal to the Ownership Percentage prior to the
Company Repurchase or Company Repurchases giving rise to such Required
Repurchase Event, at a price, payable in cash, equal to the Repurchase Price;
provided that, at BNP's option and subject to applicable law, in lieu of selling
any Equity Securities to the Company, BNP may dispose or cause one or more of
its Affiliates to dispose of the Repurchase Number of Shares in open market
transactions of the type described in clauses (i) and (ii) of Section 3.2(c)
(the "Market Sale Option"). BNP shall give written notice to the Company not
later than two Business Days prior to the Company Repurchase of its election to
exercise its Market Sale Option and shall consummate the sale of such Equity
Securities as specified in such written notice within ten Business Days
thereafter (or such longer period as may be required to comply with any volume
restrictions on sales of securities under Rule 144 of the Securities Act (or any
successor rule) if BNP elects to dispose of such Equity Securities in
transactions of the type described in clause (ii) of Section 3.2(c)). BNP shall
not be deemed to be in violation of this Agreement to the extent that the
Permitted Ownership Percentage has been reduced as a result of a Company
Repurchase which has not resulted in a Required Repurchase Event pursuant to
this paragraph.
(iii) In the event that the Company shall propose to commence a program of
open market repurchases of Equity Securities which would constitute a Required
Repurchase Event, the Company shall give written notice thereof to BNP not later
than ten Business Days prior to the commencement of any repurchases of Equity
Securities pursuant thereto, and BNP shall have the option, exercisable by
written notice given to the Company within five Business Days after receipt of
such notice from the Company, to either (i) participate in such repurchases by
selling Equity Securities to the Company on a regular basis proportionate with
the Company's repurchase of Equity Securities in the open market (the
"Repurchase Option"), or (ii) sell the applicable number of Equity Securities
pursuant to the Market Sale Option. In either case the Company shall give
written notice to BNP (the "Update Notice") not less frequently than every
second week as to the number of Equity Securities so repurchased by the Company
during the two preceding calendar weeks, the weighted average price paid for
such repurchased Equity Securities (the "Average Price"), and the Repurchase
Number of Shares. If BNP has elected the Repurchase Option, BNP shall sell, or
cause one or more of its Affiliates to sell, to the Company the Repurchase
Number of Shares at the Average Price within five Business Days after receiving
the Update Notice. If BNP has not elected the Repurchase Option, it shall sell
the Repurchase Number of Shares pursuant to the Market Sale Option within ten
Business Days after
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receiving the Update Notice (or such longer period as may be required to comply
with any volume restrictions on sales of securities under Rule 144 of the
Securities Act (or any successor rule) if BNP elects to dispose of such Equity
Securities in transactions of the type described in clause (ii) of Section
3.2(c)).
(g) Except as expressly provided herein, neither BNP nor any Affiliate
thereof shall permit any of their respective Subsidiaries (regardless of whether
such entity became a Subsidiary of BNP or such Affiliate after the date of this
Agreement) to Beneficially Own any Equity Securities. Notwithstanding the
foregoing, the acquisition (whether by merger, consolidation or otherwise) by
BNP or an Affiliate thereof of any entity that Beneficially Owns Equity
Securities, or the acquisition of Equity Securities in connection with securing
or collecting a debt previously contracted in good faith in the ordinary course
of BNP's or such Affiliate's banking business, shall not constitute a violation
of the Permitted Ownership Percentage in effect at the time of such acquisition;
provided that a significant purpose of any such transaction is not to avoid the
provisions of this Agreement; and provided further, that the provisions of
paragraph (h) below are complied with.
(h) If at any time BNP or any of its Affiliates become aware that BNP and
its Affiliates Beneficially Own in the aggregate more than the Permitted
Ownership Percentage (including by virtue of acquisitions referred to in
paragraph (g) above), then BNP shall, as soon as is reasonably practicable (but
in no manner that would require BNP or any such Affiliate to incur liability
under Section 16(b) of the Exchange Act) take all action necessary to reduce the
amount of Equity Securities Beneficially Owned by it and its Affiliates to an
amount not greater than the Permitted Ownership Percentage in effect at such
time. Notwithstanding any other provision of this Agreement, in no event may BNP
or any of its Affiliates exercise any voting rights in respect of any Equity
Securities Beneficially Owned by BNP and its Affiliates in excess of the
Permitted Ownership Percentage in effect at such time.
(i) Any shares of Company Common Stock acquired by BNP or any of its
Affiliates in accordance with the terms of paragraphs (b), (c), (d) and (e)
above shall be exchangeable by BNP, at its option, for shares of Class A Common
Stock. Except pursuant to this Section 2.1(i), the Company agrees that, after
the Closing, it shall not issue any additional shares of Class A Common Stock to
any Person (other than in exchange or substitution for shares of Class A Common
Stock already Beneficially Owned by such Person or in connection with a dividend
payable in shares of Class A Common Stock to holders of Class A Common Stock or
upon exercise of options, warrants or other securities previously distributed as
a dividend on the shares of Class A Common Stock which are exercisable for or
convertible into shares of Class A Common Stock). In order to effect any such
exchange, BNP shall surrender the certificate or certificates evidencing the
shares of Company Common Stock to be exchanged for Class A Common Stock to the
secretary of the Company. Such certificates shall be duly endorsed to the
Company or in blank, accompanied by proper instruments of transfer to the
Company or in blank. The Company shall, within five Business Days after the
surrender thereof, issue and deliver, or cause to be issued and delivered, to
BNP certificates representing that number of shares of Class A Common Stock
equal to the number of shares of Company Common Stock converted pursuant to the
terms of this Section 2.1(i). Subject to the Restated Charter and the By-Laws,
upon such surrender, the shares shall be deemed to be treated as shares of Class
A Common Stock for all purposes of this Agreement irrespective of any delay in
issuing such new share certificates. The Company agrees to use its reasonable
best efforts (including, without limitation, seeking to obtain from its
stockholders approval of an amendment to the Restated Charter to increase the
number of authorized shares of Class A Common Stock at the next scheduled
meeting of stockholders with respect to which a proxy statement has not
theretofore been mailed) to at all times keep reserved, out of its authorized
but unissued shares of Class A Common Stock, such number of shares of Class A
Common Stock as shall be sufficient to provide for the reasonably anticipated
exchange of its outstanding Common Stock into Class A Common Stock in accordance
with the terms of this Section 2.1(i).
(j) Any additional Equity Securities acquired by BNP or any of its
Affiliates or its or their directors or executive officers following the Closing
shall be subject to the restrictions contained in this Agreement as fully as if
such Equity Securities were acquired by BNP pursuant to the Merger, it being
understood that any Company Common Shares acquired by any Person who at the time
of such acquisition was an officer or director of the Company or any of its
Subsidiaries pursuant to options granted or any other issuances of shares
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of Company Common Stock under any Company benefit plan shall not be deemed to be
subject to this Agreement.
SECTION 2.2 Certain Restrictions. (a) During the Standstill Period, except
as provided below, BNP agrees not to, and to cause each of its Affiliates and
its and their respective directors and executive officers not to, directly or
indirectly, alone or in concert with others:
(i) initiate, propose or otherwise solicit securityholders of the
Company for the approval of one or more securityholder proposals or induce
or attempt to induce any other Person to initiate any securityholder
proposal, or seek election to or seek to place a representative or other
Affiliate or nominee on the Board (other than a Class A Nominee) or seek
removal of any member of the Board (other than a Class A Director);
(ii) (A) except in the manner and to the extent permitted under
Section 2.1(b), propose or seek to effect a merger, consolidation,
recapitalization, reorganization, sale, lease, exchange or other
disposition of substantially all assets or other business combination
involving, or a tender or exchange offer for securities of, the Company or
any of its Subsidiaries or any material portion of its or such Subsidiary's
business or assets or any other type of transaction that would otherwise
result in a Change of Control of the Company or in any increase in the
Ownership Percentage beyond the then existing Ownership Percentage (any
such action described in this clause (A), a "Company Transaction
Proposal"), (B) seek to exercise any control or influence over the
management of the Company or the Board or any of the businesses, operations
or policies of the Company (other than solely by virtue of representation
on the Board and participation in meetings and other actions of the Board
and any duly constituted committee thereof or by informal meetings or
consultations with members of the Board or management), (C) advise, assist
or encourage or finance (or assist or arrange financing to or for) any
other Person in connection with any of the matters restricted by, or to
otherwise seek to circumvent the limitations of, this Agreement, or (D)
present to the Company, its stockholders or any third party any proposal
constituting or that can reasonably be expected to result in a Company
Transaction Proposal or in an increase in the Ownership Percentage;
(iii) publicly suggest or announce its willingness or desire to engage
in a transaction or group of transactions or have another Person engage in
a transaction or group of transactions that constitute or could reasonably
be expected to result in a Company Transaction Proposal or in an increase
in the Ownership Percentage or take any action that might require the
Company to make a public announcement regarding any such Company
Transaction Proposal;
(iv) initiate, request, induce, encourage or attempt to induce or give
encouragement to any other Person to initiate, or otherwise provide
assistance to any Person who has made or is contemplating making, or enter
into discussions or negotiations with respect to, any proposal constituting
or that can reasonably be expected to result in a Company Transaction
Proposal or in an increase in the Ownership Percentage;
(v) solicit proxies (or written consents) or assist or participate in
any other way, directly or indirectly, in any solicitation of proxies (or
written consents), or otherwise become a "participant" in a "solicitation,"
or assist any "participant" in a "solicitation" (as such terms are defined
in Rule 14a-1 of Regulation 14A and Instruction 3 of Item 4 of Schedule
14A, respectively, under the Exchange Act) in opposition to the
recommendation or proposal of the Board, or recommend or request or induce
or attempt to induce any other Person to take any such actions, or seek to
advise, encourage or influence any other Person with respect to the voting
of (or the execution of a written consent in respect of) Voting Securities
or, except as otherwise expressly required, permitted or contemplated by
this Agreement or the Restated Charter, execute any written consent in lieu
of a meeting of the holders of Voting Securities or grant a proxy with
respect to the voting of Voting Securities to any Person other than an
officer or agent of BNP or the Company;
(vi) form, join in or in any other way (including by deposit of Equity
Securities) participate in a partnership, pooling agreement, syndicate,
voting trust or other Group with respect to Equity Securities,
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or enter into any agreement or arrangement or otherwise act in concert with
any other Person, for the purpose of acquiring, holding, voting or
disposing of Equity Securities;
(vii) take any other actions, alone or in concert with any other
Person, to seek to effect a Change of Control of the Company or an increase
in the Ownership Percentage or otherwise seek to circumvent any of the
limitations set forth in this Section 2.2; or
(viii) request, or induce or encourage any other Person to request,
that the Company amend or waive any of the provisions of this Agreement.
(b) If any Acquisition Restrictions Termination Event occurs, the
restrictions set forth in paragraphs (i) through (viii) above will not apply to
the extent (but only to the extent) necessary to enable BNP to make the Business
Combination Proposal permitted to be made under Section 2.1(b) hereof and
subject to the terms and conditions relating thereto.
(c) Notwithstanding the foregoing restrictions, BNP may at any time submit
a Business Combination Proposal for the Company so long as (i) such Business
Combination Proposal is made in writing delivered only to the Executive
Committee in a manner which does not require public disclosure thereof by the
Company and (ii) BNP and its representatives keep confidential and refrain from
disclosing to any other Person the fact that they have made such a Business
Combination Proposal or any of the terms thereof, it being understood that the
Executive Committee shall be under no obligation to BNP or its Affiliates to
accept such Business Combination Proposal or to cause such Business Combination
Proposal to be submitted to the full Board for consideration. In addition, (x)
if it shall become part of the agenda of any meeting of the Board or any
committee thereof to review any proposal submitted by a Third Party with respect
to a Company Transaction Proposal which would result in a Change of Control of
the Company (other than as a result of action taken by BNP pursuant to Section
5.2), or (y) if the Board or any committee thereof shall determine to solicit
proposals for such a transaction from Third Parties, the Company shall give
prompt written notice of such determination to BNP and shall provide BNP with a
reasonable opportunity to, in the case of clause (x), participate as a potential
bidder prior to accepting such Third Party proposal or, in the case of clause
(y), participate in the solicitation process as a potential bidder. For purposes
of this Section 2.2(c), the reference to "Company Common Stock" in clause
(iii)(B) of the term "Change of Control" shall be deemed to be a reference to
"Company Common Shares".
SECTION 2.3 Notice of Certain Events; Press Releases, etc. (a) During the
Standstill Period, BNP will, subject to any requirements of applicable law or
regulation, inform the Chief Executive Officer of the Company orally within one
Business Day and as promptly as practicable in writing (but in no more than ten
Business Days) upon it or any of its Affiliates being contacted by any Person or
Group with respect to any of the matters covered by paragraphs (i) through
(viii) of Section 2.2(a) as to the content and nature of any such contact and
the identity of such Person or Group.
(b) Unless otherwise required by applicable law, BNP will not, and will not
permit any of its Affiliates to, issue any press release or make any public
announcement or other communication with respect to any of the matters described
in Sections 2.1(b) or 2.2(a) without the prior written consent of the Chief
Executive Officer of the Company or as authorized by a resolution adopted by a
majority of the Board.
SECTION 2.4 Post-Standstill Period. (a) Following the expiration of the
Standstill Period and during the remainder of the Term (such period, the
"Post-Standstill Period"), BNP covenants and agrees with the Company that:
(i) neither BNP nor any of its Affiliates will take any action
resulting in a majority of the Directors being BNP nominees or otherwise
not constituting Independent Directors (other than as a result of a
transaction permitted by clauses (ii) or (iii) below);
(ii) neither BNP nor any of its Affiliates will acquire Beneficial
Ownership of Equity Securities such that following such acquisition, the
Ownership Percentage would be greater than the Permitted Ownership
Percentage that was in effect on the date on which the Standstill Period
expired, except in transactions effected pursuant to the procedures
described in paragraph (b) below; and
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(iii) neither BNP nor any of its Affiliates will take any other action
that could result in an increase in the Ownership Percentage or other
material transactions between the Company and BNP or its Affiliates except
in transactions effected pursuant to the procedures described in paragraph
(b) below.
(b) During the Post-Standstill Period, BNP may submit a Business
Combination Proposal to the Executive Committee on a confidential basis,
whereupon (if BNP has notified the Company that it is submitting such Business
Combination Proposal pursuant to this Section 2.4(b) and not pursuant to the
first sentence of Section 2.2(c)) the Executive Committee shall promptly (but no
later than 10 days after the submission of such proposal) retain an Independent
Investment Banking Firm and outside legal counsel to assist the Executive
Committee in its review of the proposal and shall follow the procedures
hereinafter set forth. The fees and expenses of such financial and legal
advisors shall be borne by the Company. If the Independent Investment Banking
Firm is unable to conclude within a reasonable period of time (not exceeding 60
days) following submission of such Business Combination Proposal to the
Executive Committee that such Business Combination Proposal is fair from a
financial point of view to the stockholders of the Company (other than BNP and
its Affiliates), or concludes that it is inadequate, then BNP shall withdraw
such Business Combination Proposal and shall not submit another Business
Combination Proposal to the Company pursuant to this Section 2.4(b) for a period
of twelve months from the date on which such Independent Investment Banking Firm
reaches such conclusion. If the Independent Investment Banking Firm concludes
that the Business Combination Proposal is fair and adequate, then the Executive
Committee shall cause the proposal to be submitted to the full Board for
consideration. If a majority of the Independent Directors on the Board shall
conclude, after considering the advice of such financial and legal advisors as
such Independent Directors consider relevant and material in the circumstances,
that the transaction contemplated by such Business Combination Proposal is not
in the best interests of all of the Company's stockholders at that time, then
BNP shall withdraw such Business Combination Proposal and shall not submit
another Business Combination Proposal to the Company pursuant to this Section
2.4(b) for a period of twelve months from the date on which the Independent
Directors make such conclusion. Approval of such Business Combination Proposal
by the Board shall require the affirmative vote of a majority of the Independent
Directors then on the Board (in addition to any other vote required by
applicable law) and may be subject to any "market check" procedures for a
reasonable period of time (not exceeding 90 days) (the "Market Check Period") as
the Board (including a majority of the Independent Directors of the Board) may
determine to be appropriate in the circumstances. If within the Market Check
Period the Company receives from a Third Party a superior proposal (a "Superior
Proposal") to the Business Combination Proposal submitted by BNP (as determined
in good faith by the Board (including a majority vote of the Independent
Directors)), the Company shall offer BNP a reasonable period after delivery to
BNP of notice of such Superior Proposal (but no more than five Business Days) to
revise its Business Combination Proposal so that the terms thereof, as so
revised, are superior to the Superior Proposal (as determined in good faith by
the Board (including a majority vote of the Independent Directors)). If BNP does
not submit, within such five Business Day period, a revised proposal which is
determined in accordance with the preceding sentence to be superior to the
Superior Proposal, the Board may cause the Company to enter into an agreement
for such Superior Proposal and recommend acceptance thereof to the stockholders
of the Company. In such event, BNP agrees that it shall, and shall cause each of
its Affiliates to, in connection with any vote or action by written consent of
the stockholders of the Company with respect to such agreement, vote or cause to
be voted (or execute or cause to be executed a written consent in respect of)
all Voting Securities, if any, Beneficially Owned by BNP and its Affiliates in
favor of the Superior Proposal (or, if such Superior Proposal is a tender or
exchange offer, tender and cause each of its Affiliates to tender, its Equity
Securities) unless the Board withdraws its recommendation of such Superior
Proposal prior to the date on which such vote is held or such action by written
consent becomes effective or the consummation of such tender or exchange offer
occurs, as the case may be. If the Company shall not have received a Superior
Proposal during the Market Check Period, then the Company and BNP may enter into
a definitive agreement (containing customary terms and conditions, including
customary "fiduciary out" provisions) to consummate BNP's Business Combination
Proposal (it being understood that, following the execution of a definitive
agreement with the Company, BNP need not vote its shares in favor of any
alternative proposal or tender its shares in any alternative tender or exchange
offer which is thereafter entered into by the Company or made by any Third
Party); provided that the Board has received a
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reaffirmation as of such date of the fairness opinion described above in form
and substance reasonably and in good faith satisfactory to a majority of the
Independent Directors. If the Independent Investment Banking Firm shall be
unable to reaffirm such fairness opinion, the Company shall give notice thereof
to BNP which shall have 15 days to improve its proposal so that such opinion may
be reaffirmed and if, after submission of an improved proposal, if any, such
opinion is still not reaffirmed, then the proposed transaction shall terminate
and BNP may not submit another such proposal under this Section 2.4(b) for 12
months following the date such proposal is first submitted by the Executive
Committee to the Board for consideration.
(c) During the Post-Standstill Period, BNP may contact or respond to
contacts from other stockholders of the Company regarding the business and
affairs of the Company on a confidential basis, but, for the first four years of
such Post-Standstill Period, BNP may not, and may not permit any of its
Affiliates to, either directly or through others (i) solicit, finance or become
a participant in a solicitation (as such terms are defined in Rule 14a-1 of Rule
14A and Instruction 3 of Item 4 of Schedule 14A, respectively, under the
Exchange Act) of proxies or written consents, (A) for the election of Non-Class
A Directors of the Company, (B) for any stockholder proposal opposed by the
Board or (C) against any proposal submitted to the stockholders and recommended
by the Board, (ii) make or submit any proposal to the Company's stockholders
opposed by the Board, (iii) make any public statement as to any intention or
plan to take actions not consistent with the then-applicable terms of this
Agreement (including, without limitation, Section 2.4(b)), (iv) publicly
announce (except as otherwise legally required) any intention to dispose of some
or all of its Equity Securities or acquire additional Equity Securities, (v)
form or join a Group with the objective or effect of effecting a Change of
Control of the Company, (vi) take any action inconsistent with the procedures
described in paragraph (b) above or (vii) publicly request or encourage others
to request that the Company waive any of the then-applicable provisions or
limitations contained in this Agreement.
ARTICLE III
TRANSFER RESTRICTIONS
SECTION 3.1 General Transfer Restrictions. The right of BNP and its
Affiliates to Transfer any Equity Securities is subject to the restrictions set
forth in this Article III, and no Transfer of Equity Securities by BNP or any of
its Affiliates may be effected except in compliance with this Article III. Any
attempted Transfer in violation of this Agreement shall be of no effect and null
and void, regardless of whether the purported transferee has any actual or
constructive knowledge of the Transfer restrictions set forth in this Agreement,
and shall not be recorded on the stock transfer books of the Company.
SECTION 3.2 Restrictions on Transfer. (a) Without the prior written
consent of the Company, except as provided in paragraph (d) below, during an
initial period of eighteen months following the Closing, BNP shall not, and
shall cause its respective Affiliates not to, Transfer any Equity Securities;
provided, that the foregoing restriction shall not prohibit BNP or any of its
Affiliates from Transferring any Equity Securities (x) to the Company (or its
designee) pursuant to Section 2.1(f), (y) in the manner provided in clause (i)
or (ii) of paragraph (c) below to the extent such Transfer is required pursuant
to Section 2.1(f) or 2.1(h) or the second proviso to the definition of
"Ownership Percentage" or (z) as provided in clause (iii) of paragraph (c)
below.
(b) For the period between eighteen months and two years following the
Closing, the restrictions set forth in paragraph (a) above shall continue to
apply to Transfers of Equity Securities by BNP or its Affiliates except that BNP
and its Affiliates may also effect Transfers of Equity Securities as provided in
clause (ii) of paragraph (c) below.
(c) Following the second anniversary of the Closing, except as provided in
paragraph (d) below, BNP shall not, and shall cause its Affiliates not to,
Transfer any Equity Securities; provided that the foregoing restriction shall
not be applicable to Transfers (i) of Company Common Shares in a
Commission-registered underwritten offering in which no Transfer of a number of
shares of Company Common Stock representing more than 2% of the outstanding
Company Common Shares is made to any Person or Group, (ii) pursuant to the
restrictions of Rule 144 under the Securities Act applicable to sales of
securities by Affiliates of an issuer
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(regardless of whether BNP or its Affiliates is deemed at such time to be an
Affiliate of the Company), (iii) to an Affiliate of BNP which agrees in writing
with the Company to be bound by this Agreement as fully as if it or they were an
initial signatory hereto, (iv) pursuant to a tender or exchange offer by a Third
Party that is not rejected by the Board within the time period prescribed by the
Exchange Act and the rules and regulations promulgated by the Commission
thereunder, (v) of no more than 4.9% of the outstanding Company Common Shares to
any one institutional investor which (A) purchases such shares in the normal
course of its investment business, for investment purposes only, and with no
intention of influencing control of the Company and which purchases such shares
pursuant to an exemption from the registration requirements of the Securities
Act, and (B) provides appropriate certification to the Company as to the
foregoing matters; provided that neither BNP nor any of its Affiliates may
exercise its right to Transfer shares as described in this clause (v) on more
than one occasion in any 12-month period, (vi) of any number of shares to any
one or more institutional investors (but not more than 20% of the
then-outstanding Company Common Shares to any one bank holding company, as such
term is defined Section 2(c)(1) of Regulation Y, or foreign bank or foreign
banking organization, as such terms are defined in Sections 211.21(m) and (n) of
Regulation K under the International Banking Act of 1978, as amended) who are
reasonably acceptable to the Board (such approval not to be unreasonably
withheld or delayed) and who agree in writing with the Company to be bound by
the then-applicable provisions of this Agreement as fully as if it or they were
an initial signatory hereto (a "Qualified Transferee"), or (vii) pursuant to a
bona fide pledge to secure money borrowed by BNP or any Affiliate, entered into
in good faith and not for purposes of avoiding the restrictions set forth in
this Agreement; provided (x) that such pledge is made to a Person who is a
Qualified Transferee pursuant to clause (vi) above (a "Qualified Pledgee"), (y)
the number of Equity Securities pledged complies with the limitations as to
amount set forth in clause (vi) above and (z) at the time such pledge is made,
such Qualified Pledgee agrees in writing to be bound by the then-applicable
provisions of this Agreement as fully as if it was an initial signatory hereto;
subject, in the case of Transfers pursuant to clauses (i), (v) and (vi), to the
Company's right of first refusal described in Section 3.3. In the case of any
Transfer to an Affiliate of BNP in accordance with clause (iii), BNP shall (a)
be liable for the performance by such Affiliate of its obligations under this
Agreement, and (b) act, and cause such Affiliate to agree that BNP shall act, as
agent for such Affiliate in connection with the receipt or giving of any and all
notices or approvals under this Agreement. Any Affiliate or Qualified Transferee
to whom BNP Transfers Equity Securities pursuant to clauses (iii) or (vi) of
this Section, respectively, shall be referred to herein as a "Permitted
Transferee".
(d) If at any time a court of competent jurisdiction or an applicable
regulatory agency or authority orders BNP or its Affiliates to dispose of any
and all of the Equity Securities Beneficially Owned by them, then BNP or such
Affiliate may dispose of such Equity Securities in transactions described in
clauses (i) through (vi) of paragraph (c) above, in each case only to the extent
necessary to comply with such order, subject, in each case, to the extent
provided in Section 3.3, to a right of first refusal by the Company as set forth
in such Section 3.3.
SECTION 3.3 Right of First Refusal. Prior to making any offer to Transfer
any Equity Securities pursuant to clauses (i), (v) or (vi) of Section 3.2(c),
BNP and/or its Affiliates proposing to effect such Transfer (collectively, the
"Transferring Party") shall give the Company the opportunity to purchase such
Equity Securities in the following manner:
(a) The Transferring Party shall give written notice (the "Transfer
Notice") to the Company, specifying (i) the Person to whom the Transferring
Party proposes to make such Transfer (in the case of clauses (v) or (vi) of
Section 3.2(c)) and the proposed manner of Transfer, (ii) the number or
amount and description of the Equity Securities to be Transferred, (iii)
except in the case of a public offering, the Offer Price (as defined
below), and (iv) all other material financial and economic terms and
conditions of the proposed Transfer, including a description of any
non-cash consideration sufficiently detailed to permit valuation thereof.
The Transfer Notice shall constitute an offer to the Company (or its
designee, as provided below) which is irrevocable during the period
described in paragraph (c) below, to sell to the Company (or any permitted
designee) the Equity Securities which are the subject of such Transfer
Notice upon the terms set forth in this Section 3.3 and the Transfer
Notice. The Company may elect to purchase (or cause its permitted designee
to purchase) all (but not less than all) the Equity Securities
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that are the subject of the Transfer Notice for cash at the Offer Price
(or, if the Offer Price includes property other than cash, the equivalent
in cash of such property as determined in accordance with Section 3.3(d))
and upon the other financial and economic terms and conditions specified in
the Transfer Notice.
(b) For purposes of this Section 3.3, "Offer Price" shall be defined
to mean on a per share basis, or in the case of Equity Securities other
than Company Common Shares, a per unit basis, (i) in the case of a public
offering, the Current Market Value per Equity Security as of the date the
election notice of the Company hereinafter described is delivered, and (ii)
in the case of a privately-negotiated transaction, the proposed sale price
per Equity Security.
(c) If the Company elects to purchase the offered Equity Securities,
it shall give notice to the Transferring Party within 15 Business Days of
its receipt of the Transfer Notice of its election, which notice shall
include the date set for the closing of such purchase, which date shall be
no later than five Business Days following the delivery of such election
notice, or, if later, five Business Days after receipt of all required
regulatory approvals. In the event that the number of Equity Securities
purchased by the Company in connection with its exercise of its rights
pursuant to this Section 3.3 in any twelve-month period would exceed 4.9%
of the total number of outstanding Company Common Shares at the date of the
Transfer Notice (or, if more than one Transfer Notice has been given, the
date of the last of such Transfer Notices), the Company may, at its option,
designate any Person to purchase the Equity Securities subject to such
Transfer Notice; provided that if the closing of the purchase of the Equity
Securities by any such designee is delayed by reason of the need by such
designee to obtain required regulatory approvals beyond the date on which
the Company could have consummated such purchase pursuant to the first
sentence of this Section 3.3(c), the purchase price for such Equity
Securities shall also include interest on the Offer Price for the Equity
Securities subject to the Transfer Notice at the Prime Rate from the date
on which the Company would have been legally permitted to consummate such
purchase to but excluding the date that the designee actually purchases the
shares.
(d) If (i) the consideration specified in the Transfer Notice consists
of, or includes, consideration other than cash or a publicly traded
security, or (ii) any property other than Company Common Stock is proposed
to be transferred in connection with the transaction to which the Transfer
Notice relates, then the price payable by the Company under this Section
3.3 for the Equity Securities being transferred shall be equal to the Fair
Market Value of such consideration which shall be determined in the manner
set forth in Section 3.3(f). Notwithstanding anything to the contrary
contained in this Section 3.3, the time periods applicable to an election
by the Company to purchase the offered securities set forth in Section
3.3(a) shall not be deemed to commence until the Fair Market Value has been
determined. The Company and BNP shall cooperate and use their respective
best efforts to cause the Fair Market Value to be determined as promptly as
practicable but in no event later than 10 Business Days after the receipt
by the Company of the Transfer Notice.
(e) If the Company does not respond to the Transfer Notice within the
required response time period or elects not to purchase the offered Equity
Securities, the Transferring Party shall be free to complete the proposed
Transfer (to the same proposed transferee, in the case of a
privately-negotiated transaction) on terms no less favorable to the
Transferring Party than those set forth in the Transfer Notice, provided
that (x) such Transfer is closed within (i) 90 days after the latest of (A)
the expiration of the foregoing required response time periods, (B) the
receipt by BNP of the foregoing election notice by the Company or (C) the
receipt of all regulatory approvals and consents, and the expiration or
termination of all waiting periods in respect thereof, necessary to
consummate such proposed Transfer or (ii) in the case of a public offering,
within 20 days of the declaration by the Commission of the effectiveness of
a registration statement filed with the Commission pursuant to the
Registration Rights Agreement, and (y) the price at which the Equity
Securities are transferred must be equal to or higher than the Offer Price
(except in the case of a public offering, in which case the price at which
the Equity Securities are sold (before deducting underwriting discounts and
commissions) shall be equal to at least 90% of the Offer Price). Any Equity
Securities which continue to be held by the Transferring Party following
such period shall again be subject to the provisions of this Section 3.3.
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(f) In the event that a determination of Fair Market Value must be
made pursuant to Section 3.3(d), the Company and BNP shall select a
mutually acceptable Independent Investment Banking Firm which shall
promptly make a determination (an "Appraisal") of the Fair Market Value of
the applicable consideration or the property proposed to be transferred.
Such Independent Investment Banking Firm's determination of the Fair Market
Value shall be conclusive and binding absent manifest error. The fees and
expenses of such Independent Investment Banking Firm shall be borne by the
Company.
SECTION 3.4 Transferees. Any Permitted Transferee shall be subject to the
then-applicable obligations of BNP under this Agreement as if such Permitted
Transferee were BNP; provided that in the case of a Transfer by BNP or one or
more of its Affiliates of less than all of the Equity Securities Beneficially
Owned by BNP and its Affiliates to a Qualified Transferee or Qualified Pledgee,
the Permitted Ownership Percentage applicable to each such Qualified Transferee
and its Affiliates and each such Qualified Pledgee and its Affiliates shall be
equal to the Ownership Percentage of such Qualified Transferee and its
Affiliates or such Qualified Pledgee and its Affiliates, respectively,
immediately following such Transfer, subject to adjustment as provided herein.
Prior to the initial acquisition of Beneficial Ownership of any Equity
Securities by any Permitted Transferee, and as a condition thereto, BNP agrees
to cause such Permitted Transferee to agree in writing with the Company to be
bound by the terms and conditions of this Agreement to the extent described in
Section 3.2(c) and this Section 3.4. Except as otherwise contemplated by this
Agreement BNP agrees not to cause or permit any Permitted Transferees who are
Affiliates of BNP to cease to qualify as an Affiliate of BNP so long as such
Permitted Transferees Beneficially Own any Company Common Shares, and if any
such Permitted Transferee shall cease to be so qualified, such Permitted
Transferee shall automatically upon the occurrence of such event cease to be a
"Permitted Transferee" for any purpose under this Agreement, and BNP shall
immediately cause all Company Common Shares Beneficially Owned by such entity to
be Transferred to BNP or another Permitted Transferee.
ARTICLE IV
VOTING
SECTION 4.1 Voting on Certain Matters. (a)(i) Each Class A Holder may vote
its shares of Class A Common Stock in its sole discretion with respect to Class
A Nominees for election as Class A Directors.
(ii) Unless an Acquisition Restrictions Termination Event shall have
occurred and the Acquisition Restrictions have not been reinstated pursuant to
the terms of this Agreement (but only until such time, if any, as the
Acquisition Restrictions shall have been reinstated), BNP shall, and shall cause
each of its Affiliates who Beneficially Owns Voting Securities to, at any annual
or special meeting of securityholders at which members of the Board are to be
elected or in connection with a solicitation of consents through which members
of the Board are to be elected, vote or cause to be voted (or act by written
consent with respect to) all Voting Securities (other than shares of Class A
Common Stock), if any, Beneficially Owned by it in the same proportion as the
stockholders of the Company other than BNP and its Affiliates vote.
(b) BNP may, and may cause each of its Affiliates to, in connection with
any vote or action by written consent of the stockholders of the Company (other
than with respect to any vote or action by written consent described in
paragraph (a)(ii) of this Section 4.1 or in Section 2.4(b) with respect to a
Superior Proposal, in which event such Voting Securities shall be voted or
caused to be voted as provided therein), vote or cause to be voted all Voting
Securities Beneficially Owned by it, as it shall elect in its sole discretion.
SECTION 4.2 Irrevocable Proxy. (a) Unless an Acquisition Restrictions
Termination Event shall have occurred and the Acquisition Restrictions have not
been reinstated pursuant to the terms of this Agreement (but only until such
time, if any, as the Acquisition Restrictions shall have been reinstated), at
least ten Business Days prior to any meeting of stockholders, BNP shall, and
shall cause each of its Affiliates who own Voting Securities to, deliver a duly
executed irrevocable proxy to the Company specifying how BNP or such Affiliate
shall vote such Voting Securities (to the extent such Voting Securities are
entitled to vote thereon) as to the election or removal of Non-Class A Directors
or a Superior Proposal described in Section 2.4(b) if such
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matters are scheduled to be brought before the meeting (which shall be in
accordance with Section 4.1(a)(ii) or Section 2.4(b), as applicable). Such proxy
shall appoint such officers of the Company as the Board shall designate as BNP's
or such Affiliates' (as the case may be) true and lawful proxies and
attorneys-in-fact as to the matters to be voted at the meeting and shall state
that it is irrevocable.
(b) Unless an Acquisition Restrictions Termination Event shall have
occurred and the Acquisition Restrictions have not been reinstated pursuant to
the terms of this Agreement (but only until such time, if any, as the
Acquisition Restrictions shall have been reinstated), in connection with any
proposed action by written consent of the stockholders relating to the election
or removal of Non-Class A Directors or the approval of a Superior Proposal
described in Section 2.4(b), BNP shall, and shall cause each of its Affiliates
who own any Voting Securities to, execute and deliver its written consent to the
Company with respect to any Voting Securities Beneficially Owned by BNP or its
Affiliates (to the extent such Voting Securities are entitled to execute a
written consent with respect to such matters). Any written consent delivered by
BNP or any of its Affiliates shall be made in accordance with Section 4.1(a)(ii)
or Section 2.4(b), as applicable.
SECTION 4.3 Quorum. BNP shall, and shall cause each of its Affiliates who
hold Voting Securities to, be present in person or represented by proxy at all
meetings of securityholders of the Company to the extent necessary so that all
Voting Securities Beneficially Owned by BNP and its Affiliates shall be counted
as present for the purpose of determining the presence of a quorum at such
meetings.
ARTICLE V
CORPORATE GOVERNANCE
SECTION 5.1 Composition of the Board. (a) Effective as of the Closing, the
Board shall initially be comprised of 20 directors of whom nine Directors shall
be Class A Directors nominated and elected solely by the Class A Holders. Such
initial nine Class A Directors shall be apportioned equally among the three
classes of Directors of the Company as determined by the Class A Holders. Prior
to the Closing, the Board shall take such action as is required under applicable
law (including increasing the size of the Board if necessary) to cause to be
elected to the Board, effective upon the Closing, the initial Class A Nominees.
Following the Closing, the size of the Board may be increased or decreased as
permitted by the By-Laws and Restated Charter of the Company as in effect from
time to time.
(b) At least 30 days prior to its distribution of its proxy statement or
information statement with respect to each meeting of stockholders at which
Directors are to be elected, the Company shall notify the Class A Holders as to
the number of Class A Nominees that the Class A Holders are entitled to
designate (calculated based on the estimated Ownership Percentage as of the
anticipated record date). BNP, on behalf of the Class A Holders, shall notify
the Company of the identity of the Class A Nominees designated pursuant to this
Section and shall provide to the Company any information regarding such Class A
Nominees required by the Exchange Act and the rules and regulations promulgated
by the Commission thereunder to be set forth in such proxy statement or
information statement (the "Proxy Information") on or prior to the close of
business on the later of (x) the 15th day following its receipt of the Company's
notice and (y) the 30th day prior to the Company's anticipated distribution of
such proxy statement or information statement. Promptly following the record
date, the Company shall advise the Class A Holders of the actual Ownership
Percentage as of the record date and shall provide the Class A Holders with a
reasonable opportunity to withdraw the name or names of previously submitted
Class A Nominees (in the event that such holders are entitled to elect fewer
directors than previously estimated) or supplement the list of Class A Nominees
(in the event that such holders are entitled to nominate more Class A Nominees
than previously estimated). The Proxy Information, on the date the proxy
statement is first mailed to the Company's stockholders and on the date of the
related stockholders meeting, shall not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
(c) The Company shall provide notice of any meeting of the Board of
Directors for which advance notice is required to be given under the By-Laws in
the manner and at the times required by such By-Laws. In order
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to assure timely receipt of any such notice, (i) BNP shall provide to the
Company, or shall cause each Class A Director to provide to the Company (A) a
fax number to which such notices may be sent by fax, or an e-mail address to
which such notices may be sent by electronic e-mail and (B) an address to which
notices may be sent by mail or recognized courier service, and (ii) the Company
shall provide any notice to each Class A Director of a Board meeting required by
the preceding sentence (A) by fax or e-mail (as specified by such Director) not
later than the date on which such notice is first required to be sent or given,
and (B) by mail or recognized courier service, sent on such date, in each case
in accordance with the delivery instructions provided by BNP or such Director
from time to time in accordance with clause (i) or if no such instructions are
provided, to such Class A Director in care of BNP at its principal executive
offices. Each Class A Director shall be responsible for providing the Company
with the information specified in clause (i) of the preceding sentence and any
changes to such information that may be applicable from time to time.
(d) No Person who is not an officer of BNP or any of its Affiliates shall
be a Class A Nominee and no Person who is not an officer of BNP or any of its
Affiliates shall be permitted to fill any vacancy created with respect to any
Class A directorship unless, in either case, such Person shall be reasonably
satisfactory to the Board (as evidenced by a resolution duly adopted by the
Directors constituting a majority of the entire Board prior to the time such
Person becomes a Class A Nominee).
SECTION 5.2 Agenda. If BNP wishes to include a matter on the agenda for
any meeting of the Board, BNP shall communicate such matter to the Chief
Operating Officer of the Company who may communicate such matter to the Chief
Executive Officer of the Company for consideration. The Chief Executive Officer
shall place such matters on the agenda as soon as reasonably practicable, in his
judgment, subject to the terms hereof.
SECTION 5.3 Committees. So long as the Ownership Percentage is at least
20%, the Company shall cause each committee of the Board to, subject to any
requirements under the Exchange Act or applicable securities exchange or market,
include at the request of BNP a number of Class A Directors proportionate to the
Ownership Percentage; provided that in no event shall BNP be entitled to
designate a majority of the members of any such committee. Subject to the
foregoing, the Board shall have the power at any time to fill vacancies in, to
change the membership of or to discharge any committee. BNP and the Company
agree that it is their understanding and intention that the provisions of
Section 4.1 of the By-Laws or paragraph (b) of Article Sixth of the Restated
Charter shall not be construed to limit the rights of BNP under this Section
5.3.
SECTION 5.4 Certain Officers. (a) Upon the Closing, the present Chief
Executive Officer of the Company shall remain the Chief Executive Officer of the
Company and First Hawaiian Bank and the CEO of Bank of the West shall become the
Chief Operating Officer of the Company and remain the Chief Executive Officer of
Bank of the West. Each of these officers shall continue to serve in those
respective capacities unless removed by a vote of two-thirds of the Board or
until their death, voluntary retirement or resignation. Each party hereto agrees
not to take, and to cause its Affiliates and, in the case of BNP, to use its
reasonable best efforts to cause any Class A Directors nominated by it not to
take, any action inconsistent with the foregoing sentence. Upon a vacancy
occurring in either of those positions for any reason, a nominating committee of
the Board shall be formed consisting of two Class A Directors (selected by the
Class A Directors) and two Independent Directors (selected by the Non-Class A
Directors). Such nominating committee shall nominate an individual to fill the
vacancy and will submit the nomination to the full Board for approval by a
two-thirds vote. If the initial four director nominating committee cannot agree
on a nomination, the members of the committee will jointly select a fifth
director, who must be a Non-Class A Director, to resolve the disagreement by a
majority vote of such nominating committee and will submit the nomination to the
full Board for a vote in accordance with the terms of the By-Laws.
(b) BNP shall have the right to designate a deputy chief auditor of the
Company and any successor thereto from time to time, provided that such
individual (i) is or thereupon becomes an employee of the Company or First
Hawaiian Bank, and (ii) is reasonably acceptable to both the Chief Executive
Officer and the Chief Operating Officer of the Company.
SECTION 5.5 Regulatory Cooperation. The Company and BNP agree to
cooperate, and BNP agrees to cause its Affiliates to reasonably cooperate, with
each other to prepare and file on a timely basis all
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necessary notices, applications for approvals and consents and other documents
and information with all applicable regulatory authorities that may be necessary
in connection with any acquisitions or divestitures of any companies,
businesses, branches or assets, or for the commencement of any de novo
activities, by the Company or any of its Subsidiaries as may from time to time
in the future be approved or authorized by the Board. The Company agrees to
reimburse BNP for all actual, documented and reasonable out-of-pocket expenses
incurred by BNP in connection with making or processing any such filing.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Conflicting Agreements. Each party represents and warrants
that it has not granted and is not a party to any proxy, voting trust or other
agreement that is inconsistent with or conflicts with any provision of this
Agreement.
SECTION 6.2 Duration of Agreement. Except as otherwise provided in this
Agreement, the rights and obligations of BNP and its Affiliates under this
Agreement shall terminate at such time as (i) the Ownership Percentage is less
than 10% or (ii) (A) upon the consummation of a transaction provided for in a
Business Combination Proposal made pursuant to Section 2.4(b) or pursuant to any
other section hereof in accordance with the procedures set forth in Section
2.4(b) or (B) upon consummation of any other tender or exchange offer set forth
in a Business Combination Proposal in which at least 90% of the outstanding
Company Common Shares (other than Company Common Shares Beneficially Owned by
BNP and its Affiliates) are acquired by BNP and its Affiliates (the "Term").
SECTION 6.3 Ownership Information. (a) For purposes of this Agreement,
BNP, in determining the amount of outstanding Equity Securities, may rely upon
information set forth in the most recent quarterly or annual report, and any
current report subsequent thereto, filed by the Company with the Commission,
unless the Company shall have updated such information by delivery of notice to
BNP.
(b) BNP shall deliver to the Company, promptly (but in no event more than
two Business Days) after any Transfer of Equity Securities, an accurate written
report specifying the amount and class of Equity Securities Transferred in such
transaction and the amount of each class of Equity Securities owned by BNP and
its Affiliates after giving effect to such transaction; provided, however, that
no such report need be delivered with respect to any Transfer of Equity
Securities by BNP and its Affiliates that is reported in a statement on Schedule
13D filed with the Commission and delivered to the Company by BNP in accordance
with Section 13(d) of the Exchange Act. In addition, upon the reasonable request
of the Company, BNP shall deliver to the Company a written notice specifying the
amount of Equity Securities then Beneficially Owned by BNP and its Affiliates.
The Company shall be entitled to rely on the most recently delivered report,
statement on Schedule 13D or notice for all purposes of this Agreement, unless
BNP shall have updated such information by delivery of a subsequent report,
statement on Schedule 13D or notice.
SECTION 6.4 Further Assurances. At any time or from time to time after the
date hereof, the parties agree to cooperate with each other, and at the request
of any other party, to execute and deliver any further instruments or documents
and to take all such further action as the other party may reasonably request in
order to evidence or effectuate the consummation of the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.
SECTION 6.5 Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement, and no
giving of any consent provided for hereunder, shall be effective against the
Company or BNP unless such modification, amendment, waiver or consent is
approved by a majority of the Directors then in office, a majority of the
Independent Directors then in office and a majority of the Class A Directors
then in office. The failure of any party to enforce any of the provisions of
this Agreement shall in no way be construed as a waiver of such provisions and
shall not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
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SECTION 6.6 Severability. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect.
SECTION 6.7 Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement and the Merger Agreement, together with the several
agreements and other documents and instruments referred to therein or annexed
thereto, embody the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, that may have related to the subject matter hereof in any way.
Without limiting the generality of the foregoing, to the extent that any of the
terms hereof are inconsistent with the rights or obligations of BNP under any
other agreement with the Company, the terms of this Agreement shall govern.
SECTION 6.8 Successors and Assigns. Neither this Agreement nor any of the
rights or obligations of any party under this Agreement shall be assigned, in
whole or in part (except by operation of law pursuant to a merger whose purpose
is not to avoid the provisions of this Agreement), by any party without the
prior written consent of the other parties hereto except as and to the extent
expressly provided for in Article III. Subject to the foregoing, this Agreement
shall bind and inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.
SECTION 6.9 Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
SECTION 6.10 Remedies. (a) Each party hereto acknowledges that money
damages would not be an adequate remedy in the event that each and every one of
the covenants or agreements in this Agreement are not performed in accordance
with their terms, and it is therefore agreed that, in addition to and without
limiting any other remedy or right it may have, the non-breaching party will
have the right to an injunction, temporary restraining order or other equitable
relief in any court of competent jurisdiction enjoining any such breach and
enforcing specifically each and every one of the terms and provisions hereof.
Each party hereto agrees not to oppose the granting of such relief in the event
a court determines that such a breach has occurred, and to waive any requirement
for the securing or posting of any bond in connection with such remedy.
(b) All rights, powers and remedies provided under this Agreement or
otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
SECTION 6.11 Notices. Any notice, request, claim, demand or other
communication under this Agreement (each a "Notice") shall be in writing, shall
be either personally delivered, sent by reputable overnight courier service
(charges prepaid), sent by facsimile to the address for such Person set forth
below or such other address as the recipient party has specified by prior
written notice to the other parties hereto and shall be deemed to have been
given hereunder on (i) the date of delivery if sent by messenger, (ii) on the
Business Day following the Business Day on which delivered to a recognized
courier service if sent by overnight courier or (iii) upon confirmation of
receipt, if sent by fax.
If to the Company:
First Hawaiian, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to BNP:
Banque Nationale de Paris
Affaires Juridiques et Fiscales
Affaires Juridiques Internationales
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Attention: General Counsel
Telephone: (011) (33) (1) 40.14.26.78
Fax: (011) (33) (1) 40.14.86.30
with a copy to:
Pillsbury Madison & Sutro LLP
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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SECTION 6.12 Governing Law; Consent to Jurisdiction. (a) This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of law. Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the non-exclusive jurisdiction of the courts of the State of New York and of the
United States of America, in each case located in the County of New York, for
any action, proceeding or investigation in any court or before any governmental
authority ("Litigation") arising out of or relating to this Agreement and the
transactions contemplated hereby. Each of the parties hereto hereby irrevocably
and unconditionally waives, and agrees not to assert, by way of motion, as a
defense, counterclaim or otherwise, in any such Litigation, the defense of
sovereign immunity, any claim that it is not personally subject to the
jurisdiction of the aforesaid courts for any reason other than the failure to
serve process in accordance with this Section 6.12, that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and to the fullest extent permitted by applicable law, that the
Litigation in any such court is brought in an inconvenient forum, that the venue
of such Litigation is improper, or that this Agreement, or the subject matter
hereof, may not be enforced in or by such courts and further irrevocably waives,
to the fullest extent permitted by applicable law, the benefit of any defense
that would hinder, ▇▇▇▇▇▇ or delay the levy, execution or collection of any
amount to which the party is entitled pursuant to the final judgment of any
court having jurisdiction. Each of the parties irrevocably and unconditionally
waives, to the
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fullest extent permitted by applicable law, any and all rights to trial by jury
in connection with any Litigation arising out of or relating to this Agreement
or the transactions contemplated hereby.
(ii) BNP hereby irrevocably designates French American Banking Corporation
(in such capacity, the "Process Agent"), with an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ its designee, appointee and agent to receive, for and
on its behalf, service of process in such jurisdiction in any Litigation arising
out of or relating to this Agreement and such service shall be deemed complete
upon delivery thereof to the Process Agent; provided that in the case of any
such service upon the Process Agent, the party effecting such service shall also
deliver a copy thereof to BNP in the manner provided in Section 6.11. Each of
the Company and BNP further irrevocably consents to the service of process out
of any of the aforementioned courts in any such Litigation by the mailing of
copies thereof by registered mail, postage prepaid, to such party at its address
set forth in this Agreement, such service of process to be effective upon
acknowledgment of receipt of such registered mail. BNP expressly acknowledges
that the foregoing waiver is intended to be irrevocable under the laws of the
State of New York and of the United States of America; provided that BNP's
consent to jurisdiction and service contained in this Section 6.12 is solely for
the purpose referred to in this Section 6.12 and shall not be deemed to be a
general submission to said courts or in the State of New York other than for
such purpose. If the Process Agent shall cease to act as such or to exist, BNP
covenants that it shall appoint without delay another such agent reasonably
satisfactory to the Company.
SECTION 6.13 Legends. (a) Upon original issuance thereof, and until such
time as the same is no longer required under the applicable requirements of the
Securities Act or applicable state securities or "blue sky" laws or until such
time as the Equity Securities are no longer subject to the restrictions of this
Agreement, any certificate issued representing any Equity Securities held by
BNP, any of its Affiliates or any Qualified Transferee shall bear the following
conspicuous legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VOTING
AGREEMENTS, RESTRICTIONS ON TRANSFER AND CERTAIN OTHER LIMITATIONS SET
FORTH IN A CERTAIN STANDSTILL AND GOVERNANCE AGREEMENT DATED AS OF NOVEMBER
1, 1998 BETWEEN FIRST HAWAIIAN, INC. (THE "COMPANY") AND BANQUE NATIONALE
DE PARIS, AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE "AGREEMENT"),
COPIES OF WHICH AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY. THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON VOTING PROVIDED FOR IN THE AGREEMENT AND NO VOTE OF SUCH
SECURITIES THAT CONTRAVENES SUCH AGREEMENT SHALL BE EFFECTIVE."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
("TRANSFERRED") UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH TRANSFER IS EXEMPT FROM
REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS."
(b) Upon any acquisition by BNP or any of its Affiliates of additional
Equity Securities pursuant to this Agreement, BNP shall, and shall cause each of
its Affiliates to, submit any and all certificates representing such Equity
Securities to the Company so that the legends required by this Section 6.13 may
be placed thereon.
(c) The Company may make a notation on its records or give instructions to
any transfer agents or registrars for the Equity Securities in order to
implement the restrictions on Transfer set forth in this Agreement.
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(d) In connection with any Transfer of Equity Securities, the transferor
shall provide the Company with such customary certificates, opinions and other
documents as the Company may reasonably request to assure that such Transfer
complies fully with applicable securities and other laws.
(e) The Company shall use its reasonable best efforts to comply on a timely
basis with any request for any Transfer of Equity Securities made in accordance
with the provisions of this Agreement; provided, however, that the Company shall
not incur any liability for any delay in recognizing any Transfer of Equity
Securities if the Company in good faith reasonably believes that such Transfer
may have been or would be in violation in any material respect of the provisions
of the Securities Act, applicable state securities or "blue sky" laws, or this
Agreement.
(f) After such time as any of the legends described by this Section 6.13
are no longer required on any certificate or certificates representing the
Equity Securities and such Equity Securities are no longer subject to this
Agreement, upon the request of BNP, the Company will cause such certificate or
certificates to be exchanged for a certificate or certificates that do not bear
such legends.
SECTION 6.14 Interpretation. The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
SECTION 6.15 Effectiveness. This Agreement shall become effective upon
consummation of the Merger and prior thereto shall be of no force or effect. If
the Merger Agreement shall be terminated in accordance with its terms, this
Agreement shall automatically be deemed to have been terminated and shall
thereafter be of no force or effect.
IN WITNESS WHEREOF, the parties hereto have executed this Standstill and
Governance Agreement as of the date first written above.
FIRST HAWAIIAN, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer and
Treasurer
BANQUE NATIONALE DE PARIS
By: /s/ ▇. ▇▇▇▇ GARBOUA
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Name: ▇. ▇▇▇▇ Garboua
Title: Directeur General Delegue
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