<PAGE>
As filed with the Securities and Exchange Commission on May 10, 1996
==============================================================================
Registration No. 333-
=====================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_____________________
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_____________________
ITLA CAPITAL CORPORATION
(Exact name of Registrant as specified in its Charter)
<TABLE>
<CAPTION>
DELAWARE 6036 95-2864759
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
incorporation or organization) Classification Code Number)
</TABLE>
7979 IVANHOE AVENUE, LA JOLLA, CALIFORNIA 92037
(818) 551-0600
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
_____________________
<TABLE>
<S> <C>
MR. GEORGE W. HALIGOWSKI PLEASE SEND COPIES OF ALL COMMUNICATIONS TO:
CHAIRMAN OF THE BOARD
PRESIDENT AND CHIEF EXECUTIVE OFFICER DAVE M. MUCHNIKOFF, P.C.
ITLA CAPITAL CORPORATION SILVER, FREEDMAN & TAFF, L.L.P.
7979 IVANHOE AVENUE (a limited liability partnership
LA JOLLA, CALIFORNIA 92037 including professional corporations)
(818) 551-0600 7TH FLOOR, EAST TOWER
(Name, address, including zip code, and telephone 1100 NEW YORK AVENUE, NW
number, including area code, of agent for service) WASHINGTON, DC 20005
(202) 414-6113
</TABLE>
_____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED/(1)/ PER SHARE/(1)/ OFFERING PRICE/(1)/ REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
no par value 7,820,500 shares $14.19 $110,972,895 $38,263
=========================================================================================================
</TABLE>
/(1)/The registration fee has been computed pursuant to Rule 457(f)(1) based on
the aggregate market value of all of the shares of Common Stock, no par value,
of Imperial Thrift and Loan Association as of May 7, 1996. The proposed maximum
offering price is based on the average high and low market price of the common
stock, which were $14.375 and $14.00 on May 7, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
ITLA CAPITAL CORPORATION
Cross-Reference Sheet Pursuant to Item 501(b) of Regulation S-K
Between Items in Part I of Form S-4 and Proxy Statement/Prospectus
<TABLE>
<CAPTION>
Item
Number Caption in Form S-4 Caption in Prospectus
- ------ ----------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
1 Forepart of Registration Statement and
Outside Front Cover Page of Prospectus....................... Facing Page of Registration Statement; Cross-Reference
Sheet; Available Information
2 Inside Front and Outside Back Cover
Pages of Prospectus.......................................... Cover Page; Table of Contents; Available Information;
3 Risk Factors, Ratios of Earnings to Fixed
Charges and Other Information................................ Summary; The Company; Imperial Thrift and Loan
Association; Other Matters
4 Terms of the Transaction..................................... Summary; Proposal II -- The Holding Company Merger and
Reorganization, Appendix A
5 Pro Forma Financial Information.............................. Not Applicable
6 Material Contracts With the Company
Being Acquired............................................... Summary; Proposal II -- The Holding Company Merger and
Reorganization; Appendix A
7 Additional Information Required for
Reoffering by Persons and Parties
Deemed to be Underwriters.................................... Not Applicable
8 Interests of Named Experts and Counsel....................... Legal Opinion
9 Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.................................................. Proposal II -- The Holding Company Merger
and Reorganization - Comparison of Stockholder Rights
10 Information With Respect to S-3
Registrants.................................................. Not Applicable
11 Incorporation of Certain Information
by Reference................................................. Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item
Number Caption in Form S-4 Caption in Prospectus
- ------ ----------------------------------------------------------- ------------------------------------------------------------
<S> <C> <C>
12 Information With Respect to S-2 or S-3
Registrants.................................................. Not Applicable
13 Incorporation of Certain Information by
Reference.................................................... Not Applicable
14 Information With Respect to Registrants
Other Than S-3 or S-2 Registrants............................ Proposal II -- The Holding Company Merger and
Reorganization; The Company
15 Information With Respect to S-3 Companies.................... Not Applicable
16 Information With Respect to S-2 or S-3 Companies............. Not Applicable
17 Information With Respect to Companies Other
Than S-3 or S-2 Companies.................................... Not Applicable
18 Information if Proxies, Consents or Authorizations
are to be Solicited.......................................... Summary; General Information; Proposal II--The
Holding Company Merger and Reorganization
19 Information if Proxies, Consents or Authorizations
are not to be Solicited or in an Exchange Offer.............. Not Applicable
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
-----------------------------------------
Section 145 of the Delaware General Corporation Law provides that an
officer, director, employee or agent may be indemnified by the Registrant from
and against expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred in connection with threatened, pending or completed
"proceedings" (including civil, criminal, administrative or investigative
proceedings) in which such person is involved by reason of such person's
position with the Registrant, provided that a determination has been made (by a
majority vote of a quorum consisting of directors who were not parties to such
proceeding, or if such a quorum is not obtainable, by independent legal counsel
in a written opinion, or by the shareholders) that such person acted in good
faith and in a manner that such person reasonably believes to be in, or not
opposed to, the best interests of the Registrant, such person may not be
indemnified if the person has been adjudged liable for negligence or misconduct
in the performance of such person's duty to the Registrant unless the court
otherwise determines. To the extent that such person has been successful on the
merits or otherwise in the defense of any proceeding, the Delaware Corporations
Code provides that such person shall be indemnified.
Provisions regarding indemnification of directors, officers, employees or
agents of the Registrant contained in Article Ninth of the Registrant's
Certificate of Incorporation (filed as part of the Prospectus/Proxy Statement)
are incorporated herein by this reference. Article Ninth also provides for the
authority to purchase insurance with respect thereto and is incorporated herein
by reference.
Item 21. Exhibits and Financial Statement Schedules.
------------------------------------------
2 Merger Agreement and Plan of Reorganization (attached as Appendix A to
the Proxy Statement/Prospectus filed as part of this Registration
Statement and hereby incorporated by reference).
3.1 Certificate of Incorporation of ITLA Capital Corporation (attached as
Appendix B to the Proxy Statement/Prospectus filed as part of this
Registration Statement and hereby incorporated by reference).
3.2 Bylaws of ITLA Capital Corporation.
4 Form of Common Stock Certificate.
5 Opinion of Silver, Freedman & Taff, L.L.P. with respect to the
legality of the Common Stock.
II-1
<PAGE>
8 Tax Opinion of Silver, Freedman & Taff, L.L.P.
10 Recognition and Retention Plan (attached as Appendix C to the Proxy
Statement/Prospectus filed as part of this Registration Statement and
hereby incorporated by reference).
21 Subsidiaries of the Registrant.
23.1 Consent of Silver, Freedman & Taff, L.L.P.
24 Power of Attorney (included in Part II of the Registration Statement).
99 Form of Proxy to be mailed to stockholders of ITLA Capital
Corporation.
Item 22. Undertakings.
------------
(1) The undersigned Registrant hereby undertakes: to file, during any period
in which offers or sales are being made, a post-effective amendment to this
Registration Statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus
any facts or events arising after the Effective Date of the Registration
Statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and (iii) to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to the information set forth in the Registration Statement.
(2) The undersigned Registrant hereby undertakes that for purpose of
determining any liability under the Securities Act of 1933, each post-
effective amendment that contains a form of prospectus shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11, or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(4) The undersigned Registrant hereby undertakes to supply by means of a post-
effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(4) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to officers, directors, and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion
II-2
<PAGE>
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment of the Registrant of expenses incurred or paid by a
director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
that matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of La Jolla, State of
California, on May 10, 1996.
ITLA CAPITAL CORPORATION
By:/s/ George W. Haligowski
----------------------------------------
George W. Haligowski
President, Chief Executive Officer and
Chairman of the Board
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
We, the undersigned directors and officers of the Registrant, hereby
severally constitute and appoint George W. Haligowski and Anthony L. Frey, and
either of them, our true and lawful attorneys and agents, to do any and all
things in our names in the capacities indicated below which said George W.
Haligowski and/or Anthony L. Frey may deem necessary or advisable to enable the
Registrant to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission, in
connection with the registration statement on Form S-4 relating to the offering
of the registrant's common stock, including specifically, but not limited to,
power and authority to sign for us in our names in the capacities indicated
below this registration statement and any and all amendments (including
post-effective amendments) thereto; and, we hereby approve, ratify and confirm
all that said George W. Haligowski and/or Anthony L. Frey shall do or cause to
be done by virtue thereof.
By: /s/ George W. Haligowski By: /s/ Anthony L. Frey
---------------------------------- --------------------------------
George W. Haligowski Anthony L. Frey
President, Chief Executive Officer Senior Vice President, Treasurer
and Chairman of the Board and Chief Financial Officer
(Principal Executive Officer) (Principal Financial and
Accounting Officer)
Date: May 10, 1996 Date: May 10, 1996
---------------------------------- -------------------------------
By: /s/ Sandor X. Mayuga By: /s/ Hirotaka Oribe
---------------------------------- -------------------------------
Sandor X. Mayuga, Director Hirotaka Oribe, Director
Date: May 10, 1996 Date: May 10, 1996
---------------------------------- -------------------------------
By: /s/ Jeffrey L. Lipscomb By: /s/ Robert R. Reed
---------------------------------- -------------------------------
Jeffrey L. Lipscomb, Director Robert R. Reed, Director
Date: May 10, 1996 Date: May 10, 1996
---------------------------------- -------------------------------
<PAGE>
As filed with the Securities and Exchange Commission on May 10, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________
EXHIBITS
TO
FORM S-4
UNDER
THE SECURITIES ACT OF 1933
___________________
ITLA CAPITAL CORPORATION
7979 Ivanhoe Avenue
La Jolla, California 92037
================================================================================
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page Number
in Sequentially
Numbered
Regulation S-B Registration
Number Statement
- -------------- ----------------
<C> <S> <C>
2 Merger Agreement and Plan of Reorganization (attached as Appendix A to the Proxy
Statement/Prospectus filed as part of this Registration Statement)......................... N/A
3.1 Certificate of Incorporation of ITLA Capital Corporation (attached as Appendix B to the
Proxy Statement/Prospectus)................................................................ N/A
3.2 Bylaws of ITLA Capital Corporation......................................................... ____
4 Form of Common Stock Certificate........................................................... ____
5 Opinion of Silver, Freedman & Taff, L.L.P. with respect to the legality of the Common
Stock...................................................................................... ____
8 Tax Opinion of Silver, Freedman & Taff, L.L.P. ............................................ ____
10 Recognition and Retention Plan (attached as Appendix C to the Proxy Statement/
Prospectus)............................................................................... N/A
21 Subsidiaries of the Registrant............................................................. ____
23 Consent of Silver, Freedman & Taff, L.L.P. ................................................ ____
24 Power of Attorney (included in Part II of the Registration Statement)...................... ____
99 Form of Proxy to be mailed to stockholders of ITLA Capital Corporation..................... ____
</TABLE>
<PAGE>
EXHIBIT 3.2
Bylaws
<PAGE>
ITLA CAPITAL CORPORATION
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meeting.
--------------
An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix.
Section 2. Special Meetings.
----------------
Subject to the rights of the holders of any class or series of preferred
stock of the Corporation, special meetings of stockholders of the Corporation
may be called only by the Board of Directors pursuant to a resolution adopted by
a majority of the total number of directors which the Corporation would have if
there were no vacancies on the Board of Directors (hereinafter the "Whole
Board").
Section 3. Notice of Meetings.
------------------
Written notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten nor more than 60 days before the
date on which the meeting is to be held, to each stockholder entitled to vote at
such meeting, except as otherwise provided herein or required by law (meaning,
here and hereinafter, as required from time to time by the Delaware General
Corporation Law or the Certificate of Incorporation of the Corporation).
When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than 30 days after
the date for which the meeting was originally noticed, or if a new record date
is fixed for the adjourned meeting, written notice of the place, date and time
of the adjourned meeting shall be given in conformity herewith. At any adjourned
meeting, any business may be transacted which might have been transacted at the
original meeting.
Section 4. Quorum.
------
At any meeting of the stockholders, the holders of at least one-third of
all of the shares of the stock entitled to vote at the meeting, present in
person or by proxy, shall constitute a quorum for all purposes, unless or except
to the extent that the presence of a larger number may be required by law. Where
a separate vote by a class or classes is required, a majority of the
<PAGE>
shares of such class or classes, present in person or represented by proxy,
shall constitute a quorum entitled to take action with respect to that vote on
that matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date
or time.
If a notice of any adjourned special meeting of stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present constituting a quorum, then except as otherwise required by law, those
present at such adjourned meeting shall constitute a quorum, and all matters
shall be determined by a majority of the votes cast at such meeting.
Section 5. Organization.
------------
Such person as the Board of Directors may have designated or, in the
absence of such a person, the President of the Corporation or, in his or her
absence, such person as may be chosen by the holders of a majority of the shares
entitled to vote who are present, in person or by proxy, shall call to order any
meeting of the stockholders and act as chairman of the meeting. In the absence
of the Secretary of the Corporation, the secretary of the meeting shall be such
person as the chairman appoints.
Section 6. Conduct of Business.
-------------------
(a) The chairman of any meeting of stockholders shall determine
the order of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of discussion as seem to him
or her in order.
(b) At any annual meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (i) by or at
the direction of the Board of Directors or (ii) by any stockholder of the
Corporation who is entitled to vote with respect thereto and who complies with
the notice procedures set forth in this Section 6(b). For business to be
properly brought before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice must be delivered or mailed to and received
at the principal executive offices of the Corporation not less than 60 days
prior to the anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is advanced by
more than twenty days, or delayed by more than 60 days from such anniversary
date, notice by the stockholder to be timely must be so delivered not later than
the close of business on the later of the 60th day prior to such annual meeting
or the tenth day following the day on which notice of the date of the annual
meeting was mailed or public announcement of the date of such meeting is first
made. A stockholder's notice to the Secretary shall set forth as to each matter
such stockholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (ii) the name
and address, as they appear on the Corporation's books, of the stockholder who
proposed such business, (iii) the class and number of shares of the
Corporation's capital stock that are beneficially owned by such stockholder and
(iv) any material interest of such stockholder in such business. Notwithstanding
anything in
2
<PAGE>
these By-laws to the contrary, no business shall be brought before or conducted
at an annual meeting except in accordance with the provisions of this Section
6(b). The officer of the Corporation or other person presiding over the annual
meeting shall, if the facts so warrant, determine and declare to the meeting
that business was not properly brought before the meeting in accordance with the
provisions of this Section 6(b) and, if he should so determine, he shall so
declare to the meeting and any such business so determined to be not properly
brought before the meeting shall not be transacted.
At any special meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting by or at the
direction of the Board of Directors.
(c) Only persons who are nominated in accordance with the
procedures set forth in these By-laws shall be eligible for election as
directors. Nominations of persons for election to the Board of Directors of the
Corporation may be made at a meeting of stockholders at which directors are to
be elected only (i) by or at the direction of the Board of Directors or (ii) by
any stockholder of the Corporation entitled to vote for the election of
directors at the meeting who complies with the notice procedures set forth in
this Section 6(c). Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made by timely notice in writing
to the Secretary of the Corporation. To be timely, a stockholder's notice shall
be delivered or mailed to and received at the principal executive offices of the
Corporation not less than 60 days prior to the date of the meeting; provided,
however, that in the event that less than 40 days' notice of the date of the
meeting is first given or made to stockholders, by public announcement or mail,
notice by the stockholder to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
date of the meeting was mailed or public announcement was first made. Such
stockholder's notice shall set forth (i) as to each person whom such stockholder
proposes to nominate for election or re-election as a director, all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected); and (ii) as to the
stockholder giving the notice: (x) the name and address, as they appear on the
Corporation's books, of such stockholder and (y) the class and number of shares
of the Corporation's capital stock that are beneficially owned by such
stockholder. At the request of the Board of Directors, any person nominated by
the Board of Directors for election as a director shall furnish to the Secretary
of the Corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a director of the Corporation unless nominated in accordance
with the provisions of this Section 6(c). The officer of the Corporation or
other person presiding at the meeting shall, if the facts so warrant, determine
that a nomination was not made in accordance with such provisions and, if he or
she should so determine, he or she shall so declare to the meeting and the
defective nomination shall be disregarded.
Section 7. Proxies and Voting.
------------------
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing (or as
otherwise permitted under applicable
3
<PAGE>
law) by the stockholder or his duly authorized attorney-in-fact filed in
accordance with the procedure established for the meeting. Proxies solicited on
behalf of the management shall be voted as directed by the stockholder or in the
absence of such direction, as determined by a majority of the Board of
Directors. No proxy shall be valid after eleven months from the date of its
execution except for a proxy coupled with an interest.
Each stockholder shall have one vote for every share of stock entitled to
vote which is registered in his or her name on the record date for the meeting,
except as otherwise provided herein or in the Certificate of Incorporation of
the Corporation or as required by law.
All voting, including on the election of directors but excepting where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefore by a stockholder entitled to vote or his or her proxy, a stock
vote shall be taken. Every stock vote shall be taken by ballot, each of which
shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballot shall be counted by an inspector or inspectors
appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law or as provided in the Certificate of
Incorporation, all other matters shall be determined by a majority of the votes
cast.
Section 8. Stock List.
----------
The officer who has charge of the stock transfer books of the Corporation
shall prepare and make, in the time and manner required by applicable law, a
list of stockholders entitled to vote and shall make such list available for
such purposes, at such places, at such times and to such persons as required by
applicable law. The stock transfer books shall be the only evidence as to the
identity of the stockholders entitled to examine the stock transfer books or to
vote in person or by proxy at any meeting of stockholders.
Section 9. Consent of Stockholders in Lieu of Meeting.
------------------------------------------
Subject to the rights of the holders of any class or series of preferred
stock of the Corporation, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders.
Section 10. Inspectors of Election
----------------------
The Board of Directors shall, in advance of any meeting of stockholders,
appoint one or more persons as inspectors of election, to act at the meeting or
any adjournment thereof and make a written report thereof, in accordance with
applicable law.
4
<PAGE>
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office.
-----------------------------------------
The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors. The number of directors shall be as
provided for in the Certificate of Incorporation. The Board of Directors shall
annually elect a Chairman of the Board and a President from among its members
and shall designate, when present, either the Chairman of the Board or the
President to preside at its meetings.
The directors, other than those who may be elected by the holders of any
class or series of preferred stock, shall be divided into three classes, as
nearly equal in number as reasonably possible, with the term of office of the
first class to expire at the conclusion of the first annual meeting of
stockholders, the term of office of the second class to expire at the conclusion
of the annual meeting of stockholders one year thereafter and the term of office
of the third class to expire at the conclusion of the annual meeting of
stockholders two years thereafter, with each director to hold office until his
or her successor shall have been duly elected and qualified. At each annual
meeting of stockholders, commencing with the first annual meeting, directors
elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding annual meeting of stockholders
after their election, with each director to hold office until his or her
successor shall have been duly elected and qualified.
Section 2. Vacancies and Newly Created Directorships.
-----------------------------------------
Subject to the rights of the holders of any class or series of preferred
stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the directors
then in office, though less than a quorum, and directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been elected expires, and until
such director's successor shall have been duly elected and qualified. No
decrease in the number of authorized directors constituting the Board shall
shorten the term of any incumbent director.
Section 3. Regular Meetings.
----------------
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
----------------
Special meetings of the Board of Directors may be called by one-third (1/3)
of the directors then in office (rounded up to the nearest whole number) or by
the President and shall
5
<PAGE>
be held at such place, on such date, and at such time as they or he or she shall
fix. Notice of the place, date, and time of each such special meeting shall be
given to each director by whom it is not waived by mailing written notice not
less than five days before the meeting or by telegraphing or telexing or by
facsimile transmission of the same not less than twenty-four (24) hours before
the meeting. Unless otherwise indicated in the notice thereof, any and all
business may be transacted at a special meeting.
Section 5. Quorum.
------
At any meeting of the Board of Directors, a majority of the authorized
number of directors then constituting the Board shall constitute a quorum for
all purposes. If a quorum shall fail to attend any meeting, a majority of those
present may adjourn the meeting to another place, date, or time, without further
notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
-------------------------------------------------
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 7. Conduct of Business.
-------------------
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting if all members thereof consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
Section 8. Powers.
------
The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:
(1) To declare dividends from time to time in accordance with law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form
as it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in
connection therewith;
6
<PAGE>
(4) To remove any officer of the Corporation with or without
cause, and from time to time to devolve the powers and duties of any officer
upon any other person for the time being;
(5) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for directors, officers, employees and agents
of the Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and
other benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and
(8) To adopt from time to time regulations, not inconsistent with
these By-laws, for the management of the Corporation's business and affairs.
Section 9. Compensation of Directors.
-------------------------
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, their services as members of committees of the
Board of Directors.
ARTICLE III
COMMITTEES
Section 1. Committees of the Board of Directors.
------------------------------------
The Board of Directors, by a vote of a majority of the Board of Directors,
may from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a director or directors to serve as the member or members, designating, if
it desires, other directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so designated
may exercise the power and authority of the Board of Directors to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the Delaware General Corporation
Law if the resolution which designated the committee or a supplemental
resolution of the Board of Directors shall so provide. In the absence or
disqualification of any member of any committee and any alternate member in his
or her place, the member or members of the committee present at the meeting and
not disqualified from voting, whether or not he or she or they constitute a
quorum, may by unanimous vote appoint another member of the Board of Directors
to act at the meeting in the place of the absent or disqualified member.
7
<PAGE>
Section 2. Conduct of Business.
-------------------
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one or two members, in
which event one member shall constitute a quorum; and all matters shall be
determined by a majority vote of the members present. Action may be taken by any
committee without a meeting if all members thereof consent thereto in writing,
and the writing or writings are filed with the minutes of the proceedings of
such committee.
Section 3. Nominating Committee.
--------------------
The Board of Directors may appoint a Nominating Committee of the Board,
consisting of not less than three members, one of which shall be the President
if, and only so long as, the President remains in office as a member of the
Board of Directors. The Nominating Committee shall have authority (i) to review
any nominations for election to the Board of Directors made by a stockholder of
the Corporation pursuant to Section 6(c)(ii) of Article I of these By-laws in
order to determine compliance with such By-law and (ii) to recommend to the
Whole Board nominees for election to the Board of Directors to replace those
directors whose terms expire at the annual meeting of stockholders next ensuing.
ARTICLE IV
OFFICERS
Section 1. Generally.
---------
(a) The Board of Directors as soon as may be practicable after the
annual meeting of stockholders shall choose a President, a Secretary and a
Treasurer and from time to time may choose such other officers as it may deem
proper. The President shall be chosen from among the directors. Any number of
offices may be held by the same person.
(b) The term of office of all officers shall be until the next
annual election of officers and until their respective successors are chosen,
but any officer may be removed from office at any time by the affirmative vote
of a majority of the authorized number of directors then constituting the Board
of Directors.
(c) All officers chosen by the Board of Directors shall each have
such powers and duties as generally pertain to their respective offices, subject
to the specific provisions of this Article IV. Such officers shall also have
such powers and duties as from time to time may be conferred by the Board of
Directors or by any committee thereof.
8
<PAGE>
Section 2. President.
---------
The President shall be the chief executive officer and, subject to the
control of the Board of Directors, shall have general power over the management
and oversight of the administration and operation of the Corporation's business
and general supervisory power and authority over its policies and affairs. The
President shall see that all orders and resolutions of the Board of Directors
and of any committee thereof are carried into effect.
Each meeting of the stockholders and of the Board of Directors shall be
presided over by such officer as has been designated by the Board of Directors
or, in his absence, by such officer or other person as is chosen at the meeting.
The Secretary or, in the Secretary's absence, the General Counsel of the
Corporation or such officer as has been designated by the Board of Directors or,
in his absence, such officer or other person as is chosen by the person
presiding, shall act as secretary of each such meeting.
Section 3. Vice President.
--------------
The Vice President or Vice Presidents, if any, shall perform the duties of
the President in his absence or during his disability to act. In addition, the
Vice Presidents shall perform the duties and exercise the powers usually
incident to their respective offices and/or such other duties and powers as may
be properly assigned to them from time to time by the Board of Directors, the
Chairman of the Board or the President.
Section 4. Secretary.
---------
The Secretary or an Assistant Secretary shall issue notices of meetings,
shall keep their minutes, shall have charge of the seal and the corporate books,
shall perform such other duties and exercise such other powers as are usually
incident to such offices and/or such other duties and powers as are properly
assigned thereto by the Board of Directors, the Chairman of the Board or the
President.
Section 5. Treasurer.
---------
The Treasurer shall have charge of all monies and securities of the
Corporation, other than monies and securities of any division of the Corporation
which has a treasurer or financial officer appointed by the Board of Directors,
and shall keep regular books of account. The funds of the Corporation shall be
deposited in the name of the Corporation by the Treasurer with such banks or
trust companies or other entities as the Board of Directors from time to time
shall designate. The Treasurer shall sign or countersign such instruments as
require his signature, shall perform all such duties and have all such powers as
are usually incident to such office and/or such other duties and powers as are
properly assigned to him by the Board of Directors, the Chairman of the Board or
the President, and may be required to give bond, payable by the Corporation, for
the faithful performance of his duties in such sum and with such surety as may
be required by the Board of Directors.
9
<PAGE>
Section 6. Assistant Secretaries and Other Officers.
----------------------------------------
The Board of Directors may appoint one or more assistant secretaries and
one or more assistant treasurers, or one appointee to both such positions, which
officers shall have such powers and shall perform such duties as are provided in
these By-laws or as may be assigned to them by the Board of Directors, the
Chairman of the Board or the President.
Section 7. Action with Respect to Securities of Other Corporations
-------------------------------------------------------
Unless otherwise directed by the Board of Directors, the President or any
officer of the Corporation authorized by the President shall have power to vote
and otherwise act on behalf of the Corporation, in person or by proxy, at any
meeting of stockholders of or with respect to any action of stockholders of any
other corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other Corporation.
ARTICLE V
STOCK
Section 1. Certificates of Stock.
---------------------
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the President or a Vice President, and by the
Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by him or her. Any or all of the
signatures on the certificate may be by facsimile.
Section 2. Transfers of Stock.
------------------
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these
By-laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefore.
Section 3. Record Date.
-----------
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
60 nor less than ten days before the date of any meeting of stockholders, nor
more than 60 days prior to the time for such other action as hereinbefore
described; provided, however, that if no record date is fixed by the
10
<PAGE>
Board of Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held, and, for determining stockholders entitled to receive
payment of any dividend or other distribution or allotment of rights or to
exercise any rights of change, conversion or exchange of stock or for any other
purpose, the record date shall be at the close of business on the day on which
the Board of Directors adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 4. Lost, Stolen or Destroyed Certificates.
--------------------------------------
In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such regulations as the Board of
Directors may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.
Section 5. Regulations.
-----------
The issue, transfer, conversion and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI
NOTICES
Section 1. Notices.
-------
Except as otherwise specifically provided herein or required by law, all
notices required to be given to any stockholder, director, officer, employee or
agent shall be in writing and may in every instance be effectively given by hand
delivery to the recipient thereof, by depositing such notice in the mail,
postage paid, by sending such notice by prepaid telegram or mailgram or by
sending such notice by facsimile machine or other electronic transmission. Any
such notice shall be addressed to such stockholder, director, officer, employee
or agent at his or her last known address as the same appears on the books of
the Corporation. The time when such notice is received, if hand delivered, or
dispatched, if delivered through the mail, by telegram or mailgram or by
facsimile machine or other electronic transmission, shall be the time of the
giving of the notice.
Section 2. Waivers.
-------
A written waiver of any notice, signed by a stockholder, director, officer,
employee or agent, whether before or after the time of the event for which
notice is to be given, shall be
11
<PAGE>
deemed equivalent to the notice required to be given to such stockholder,
director, officer, employee or agent. Neither the business nor the purpose of
any meeting need be specified in such a waiver.
ARTICLE VII
MISCELLANEOUS
Section 1. Facsimile Signatures.
--------------------
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these By-laws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
Section 2. Corporate Seal.
--------------
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and when
so directed by the Board of Directors or a committee thereof, duplicates of the
seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.
Section 3. Reliance upon Books, Reports and Records.
----------------------------------------
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
-----------
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
Section 5. Time Periods.
------------
In applying any provision of these By-laws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded
and the day of the event shall be included.
12
<PAGE>
ARTICLE VIII
AMENDMENTS
The By-laws of the Corporation may be adopted, amended or repealed as
provided in Article SEVENTH of the Certificate of Incorporation of the
Corporation.
13
<PAGE>
EXHIBIT 4
Form of Common Stock Certificate
<PAGE>
NUMBER _________________
COMMON STOCK
CUSIP No.
ITLA CAPITAL CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $.01 PER
SHARE OF ITLA CAPITAL CORPORATION (the "Corporation"), a Delaware corporation.
The shares represented by this certificate are transferable only on the stock
transfer books of the Corporation by the holder of record hereof, or by his duly
authorized attorney or legal representative, upon the surrender of this
certificate properly endorsed. This certificate is not valid until countersigned
and registered by the Corporation's transfer agent and registrar. THIS SECURITY
IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED OR GUARANTEED.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed by the facsimile signatures of its duly authorized officers and has
caused a facsimile of its corporate seal to be hereunto affixed.
DATED ________________________
_________________________________ ____________________________________
Michael L. Mayer, Secretary George W. Haligowski, President
and Chief Executive Officer
[Seal]
Countersigned and Registered
_______________________
Transfer Agent and Registrar
<PAGE>
ITLA CAPITAL CORPORATION
The shares represented by this certificate are issued subject to all the
provisions of the certificate of incorporation and bylaws of the Corporation as
from time to time amended (copies of which are on file at the principal
executive offices of the Corporation).
The Corporation's certificate of incorporation provides that no "person"
(as defined in the certificate of incorporation) who "beneficially owns" (as
defined in the certificate of incorporation) in excess of 10% of the outstanding
shares of the Corporation shall be entitled to vote any shares held in excess of
such limit. This provision of the certificate of incorporation shall not apply
to an acquisition of securities of the Corporation by an employee stock purchase
plan or other employee benefit plan of the Corporation or any of its
subsidiaries.
The Corporation's certificate of incorporation also includes a provision
the general effect of which is to require the affirmative vote of the holders of
80% of the outstanding voting shares of the Corporation to approve certain
"business combinations" (as defined in the certificate of incorporation) between
the Corporation and a stockholder owning in excess of 10% of the outstanding
shares of the Corporation. However, only the affirmative vote of a majority of
the outstanding shares or such vote as is otherwise required by law (rather than
the 80% voting requirement) is applicable to the particular transaction if it is
approved by a majority of the "disinterested directors" (as defined in the
certificate of incorporation) or, alternatively, the transaction satisfies
certain minimum price and procedural requirements. The Corporation's certificate
of incorporation also contains a provision which requires the affirmative vote
of holders of at least 80% of the outstanding voting shares of the Corporation
which are not beneficially owned by the "interested person" (as defined in the
certificate of incorporation) to approve the direct or indirect purchase or
other acquisition by the Corporation of any "equity security" (as defined in the
certificate of incorporation) from such interested person.
The Corporation will furnish to any stockholder upon request and without
charge a full statement of the powers, designations, preferences and relative
participating, optional or other special rights of each authorized class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights, to the extent that the same have been fixed, and
of the authority of the board of directors to designate the same with respect to
other series. Such request may be made to the Corporation or to its transfer
agent and registrar.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT_______ Custodian________
TEN ENT - as tenants by the entirety (Cust) (Minor)
JT TEN - as joint tenants with right of Under Uniform Gift to Minors Act - ____________
survivorship and not as tenants (State)
in common. UNIF TRANS MIN ACT_______ Custodian________
(Cust) (Minor)
Under Uniform Transfers to Minors Act - _____
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For Value Received,_______________________________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------------
- ----------------------------------------------
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
_______________________________________ Shares of Common Stock represented by
the within certificate, and do hereby irrevocably constitute and appoint
________________________ Attorney to transfer the said shares on the books of
the within named Corporation with full power of substitution in the premises.
Dated ___________ ______________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.
<PAGE>
EXHIBIT 5
Opinion of Silver, Freedman & Taff, L.L.P. with respect
to the legality of the Common Stock
<PAGE>
[LETTERHEAD OF SLIVER, FREEDMAN & TAFF, L.L.P. APPEARS HERE]
May 10, 1996
Board of Directors Board of Directors
ITLA Capital Corporation Imperial Thrift and Loan Association
7979 Ivanhoe Avenue 700 North Central Avenue, Suite 600
La Jolla, California 92037 Glendale, California 91203
Re: Registration Statement Under the Securities Act of 1933
-------------------------------------------------------
Gentlemen:
This opinion is rendered in connection with the Registration Statement to
be filed on Form S-4 with the Securities and Exchange Commission under the
Securities Act of 1933 relating to the shares of Common Stock of ITLA Capital
Corporation (the "Company"), par value $.01 per share, proposed to be issued to
holders of the common stock of Imperial Thrift and Loan Association as described
in the Registration Statement. As counsel, we have reviewed the corporate
proceedings relating to the Merger Agreement and Plan of Reorganization
contained in the Registration Statement and such other legal matters as we have
deemed appropriate for the purpose of this opinion. We are rendering this
opinion as of the time the Registration Statement referred to above becomes
effective.
We have examined originals, or copies identified to our satisfaction, of
such corporate records of the Company and have made such examinations of law as
we have deemed relevant. In our examination, we have assumed and have not
verified (i) the genuineness of all signatures, (ii) the authenticity of all
documents submitted to us as originals, (iii) the conformity with the originals
of all documents supplied to us as copies, and (iv) the accuracy and
completeness of all corporate records and documents and all certificates and
statements of fact, in each case given or made available to us by the Company.
We have relied upon certificates and other written documents from public
officials and government agencies and departments and we have assumed the
accuracy and authenticity of such certificates and documents.
<PAGE>
Board of Directors
and the Association
May 10, 1996
Page 2
Based on the foregoing, we are of the opinion that the shares of Common
Stock of the Company covered by the Registration Statement will, when issued in
accordance with the terms of the Merger Agreement and Plan of Reorganization, be
validly issued, fully paid and non-assessable shares of Common Stock of the
Company.
Very truly yours,
/s/ Silver, Freedman & Taff, L.L.P.
SILVER, FREEDMAN & TAFF, L.L.P.
<PAGE>
EXHIBIT 8
Tax Opinion of Silver, Freedman & Taff, L.L.P.
<PAGE>
[LETTERHEAD OF SLIVER, FREEDMAN & TAFF, L.L.P. APPEARS HERE]
May 7, 1996
Board of Directors
Imperial Thrift and Loan Association
700 North Central Avenue, Suite 600
Glendale, California 91203
Board Members:
In connection with the proposed reorganization of Imperial Thrift and Loan
Association ("Imperial"), we render the following opinion of counsel.
FACTS
-----
Imperial is an industrial loan company which is organized under the laws of
the State of California and, as of the above date, Imperial has 20,000,000
shares of authorized common stock with no par value, 7,820,500 of which shares
are issued and outstanding, and 5,000,000 shares of preferred stock with no par
value, none of which are outstanding.
ITLA Capital Corporation ("Holding") is a corporation organized under the
laws of the State of Delaware and, as of the above date, Holding has 20,000,000
shares of authorized common stock, par value $.01 per share, none of which are
issued and outstanding, and 5,000,000 shares of preferred stock, par value $.01
per share, none of which are issued and outstanding. Prior to the consummation
of the proposed reorganization, Holding will issue one (1) share of its common
stock to its incorporator for a purchase price of Ten Dollars ($10.00).
ITLA Corp. ("ITLA Corp.") is a corporation organized under the laws of the
State of California which is proposed to be a subsidiary of Holding and, as of
the above date, has authorized 100 shares of common stock, par value $.01 per
share, none of which are issued and outstanding. Prior to the consummation of
the proposed reorganization, Holding will acquire one (1) share of
<PAGE>
Board of Directors
May 7, 1996
Page 2
- --------------------------------------------------------------------------------
ITLA Corp. common stock for a purchase price of Ten Dollars ($10.00) and ITLA
Corp. will thereby become a wholly-owned subsidiary of Holding.
The Board of Directors of Imperial believes that a holding company
structure will provide for increased flexibility in future operations,
diversification and acquisitions. The business activities under the holding
company structure will not be subject to the restrictions otherwise applicable
to federal thrift institutions. Furthermore, the holding company form provides a
vehicle to acquire additional thrift institutions which can maintain their
independent and separate existence. Accordingly, the following transaction has
been proposed:
(i) Pursuant to a Merger Agreement and Plan of Reorganization among
Imperial, Holding and ITLA Corp., ITLA Corp. will merge with and into Imperial
in accordance with Imperial's Articles of Incorporation and applicable law with
Imperial being the surviving entity. Each share of the ITLA Stock will be
converted into one share of Imperial common stock and the ITLA Stock will be
canceled and cease to be outstanding. Imperial will survive the merger and
acquire all the assets and be subject to all the liabilities of ITLA Corp., if
any. The corporate existence of ITLA Corp. will cease.
(ii) Upon the effective date of the merger, each share of Imperial common
stock outstanding shall, without any action on the part of the holder thereof,
Imperial or Holding, be converted and exchanged into one share of Holding common
stock. There will be no fractional shares of Holding common stock issued in the
exchange nor cash paid in lieu of fractional shares.
(iii) Upon the effective date of the merger, Holding will redeem the one
(1) share of its common stock issued to its incorporator for a redemption price
of Ten Dollars ($10.00).
(iv) All savings accounts of Imperial outstanding immediately prior to
the reorganization will remain savings accounts of Imperial immediately after
the reorganization.
(v) Each option to purchase shares of Imperial common stock under the
1995 Employee Stock Incentive Plan and the 1995 Stock Option Plan for Non-
Employee Directors of Imperial outstanding on the effective date of the merger
will be automatically converted into an identical option, with identical prices,
terms and conditions, to purchase an identical number of shares of Holding
common stock.
As a result of the consummation of the proposed transaction, the former
shareholders of Imperial will wholly-own Holding stock in the same proportions
that they owned Imperial stock immediately before the consummation of the
proposed transaction and Imperial will be a wholly-owned subsidiary of Holding.
<PAGE>
Board of Directors
May 7, 1996
Page 3
- --------------------------------------------------------------------------------
The following assumptions have been made in connection with our opinions
relating to the proposed transaction:
(a) The fair market value of the Holding common stock received by each
Imperial shareholder will be approximately equal, in each instance, to the fair
market value of the Imperial common stock surrendered in the exchange.
(b) There is no plan, intention or other arrangement on the part of the
holders of five percent (5%) or more of Imperial common stock and, to the best
knowledge of management of the Imperial, there is no plan, intention or other
arrangement on the part of the other holders of Imperial common stock, to sell,
exchange or otherwise dispose of a number of shares of Holding common stock
received in the transaction which would reduce such holders' ownership of
Holding common stock to a number of shares having a value, as of the date of the
transaction, of less than 50 percent of the value of all the formerly
outstanding stock of Imperial as of the same date. For the purpose of this
representation, shares of Imperial common stock and shares of Holding common
stock held by Imperial shareholders and otherwise sold, redeemed or disposed of
prior to or subsequent to the transaction will be considered in making this
representation.
(c) Following the transaction, Imperial will hold at least 90 percent of
the fair market value of its net assets and at least 70 percent of the fair
market value of its gross assets and at least 90 percent of the fair market
value of ITLA Corp.'s net assets and at least 70 percent of the fair market
value of ITLA Corp.'s gross assets held immediately prior to the consummation of
the transaction. For purposes of this representation, amounts used by Imperial
or ITLA Corp. to pay reorganization expenses and all redemptions and
distributions (except for regular, normal dividends) made by Imperial are
included as assets of Imperial or ITLA Corp., respectively, immediately prior to
the transaction.
(d) Prior to the transaction, Holding will be in control of ITLA Corp.
within the meaning of Section 368(c) of the Internal Revenue Code of 1986, as
amended (the "Code").
(e) Imperial has no plan or intention to issue additional shares of its
common stock that would result in Holding losing control of Imperial within the
meaning of Section 368(c) of the Code.
(f) Holding has no plan or intention to reacquire any of its common stock
issued in the transaction except for one of its shares which will be issued to
its incorporator prior to the merger.
(g) Holding has no plan or intention to liquidate Imperial, merge Imperial
with or into another corporation, sell or otherwise dispose of any outstanding
common stock of Imperial, or cause Imperial to sell or otherwise dispose of any
of its assets or any of the assets acquired from ITLA
<PAGE>
Board of Directors
May 7, 1996
Page 4
- --------------------------------------------------------------------------------
Corp., except for dispositions made in the ordinary course of business or
transfers of assets to a corporation controlled by Imperial.
(h) ITLA Corp. will have no liabilities assumed by Imperial and will not
transfer to Imperial any assets subject to liabilities in the transaction.
(i) Following the transaction, Imperial will continue its historic
business or use a significant portion of its historic business assets in a
business.
(j) There is no intercorporate indebtedness existing between Holding and
Imperial or between ITLA Corp. and Imperial that was issued, acquired or will be
settled at a discount.
(k) In the transaction, shares of Imperial common stock representing
control of Imperial, as defined in Section 368(c) of the Code, will be exchanged
solely for common stock of Holding.
(l) Holding does not own, nor has it owned during the past five years, any
shares of the capital stock of Imperial.
(m) None of the parties to the proposed transaction is an investment
company as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
(n) Imperial is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
(o) On the date of the transaction, the fair market value of the assets of
Imperial will exceed the sum of its liabilities plus the amount of the
liabilities, if any, to which the assets are subject.
(p) Imperial has sufficient current and accumulated earnings and profits
for tax purposes such that the distribution, i.e. the cash dividend, will not
result in the recapture of any portion of the bad debt reserves of Imperial
under Section 593(e) of the Code.
(q) None of the compensation received by any shareholder-employees of
Imperial will be separate consideration for, or allocable to, any of their
shares of Imperial stock. None of the shares of Holding stock received by any
shareholder-employees will be separate consideration for, or allocable to, any
employment agreement. The compensation paid to any shareholder-employees will
be for services actually rendered and will be commensurate with amounts paid to
third parties bargaining at arm's-length for similar services.
<PAGE>
Board of Directors
May 7, 1996
Page 5
- --------------------------------------------------------------------------------
OPINION
-------
Based solely on the information contained herein, including the assumptions
set forth hereinabove, we are of the following opinion:
(1) Provided the proposed merger of ITLA Corp. with and into Imperial
qualifies as a merger under applicable law, the proposed transaction will
constitute a reorganization within the meaning of Section 368(a)(1)(A) and
368(a)(2)(E) of the Code. The reorganization will not be disqualified by reason
of the fact that stock of Holding is used in the transaction (Section
368(a)(2)(E) of the Code). It will also not be disqualified by the substitution
of Holding stock options for Imperial stock options as discussed above (Rev.
Rul. 70-269, 1970-1 C.B. 81). Holding, ITLA Corp. and Imperial will each be "a
party to a reorganization" within the meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized to ITLA Corp. on the transfer of
substantially all of its assets to Imperial (Section 361(a) of the Code).
(3) No gain or loss will be recognized to Imperial on the receipt by
Imperial of substantially all of the assets of ITLA Corp. in exchange for
Imperial common stock (Section 1032(a) of the Code).
(4) Imperial's basis in each ITLA Corp. asset received in the transaction
will be the same as the basis of those assets in the hands of ITLA Corp.
immediately prior to the transaction (Section 362(b) of the Code).
(5) Imperial's holding period in each ITLA Corp. asset will include the
period during which ITLA Corp. held such asset (Section 1223(2) of the Code).
(6) No gain or loss will be recognized by Holding upon the receipt of
Imperial common stock (Section 354(a)(1) of the Code).
(7) No gain or loss will be recognized by the shareholders of Imperial on
the exchange of their Imperial common stock solely for an identical number of
shares of Holding common stock (Section 354(a)(1) of the Code).
<PAGE>
Board of Directors
May 7, 1996
Page 6
- --------------------------------------------------------------------------------
(8) Each Imperial shareholder's basis in the Holding common stock received
in the transaction will be the same as their basis in their Imperial common
stock surrendered in the transaction (Section 358(a)(1) of the Code).
(9) The holding period of the Holding common stock to be received by the
Imperial shareholders includes the period during which the Imperial common stock
surrendered in exchange therefor was held provided that the Imperial common
stock was held as a capital asset in the hands of the Imperial shareholders on
the date of the exchange (Section 1223(1) of the Code).
(10) The net operating losses of Imperial, if any, will not be reduced or
eliminated by reason of the proposed reorganization under Section 382 of the
Code.
No opinion is expressed as to the tax treatment of the transaction under
other provisions of the Code and Income Tax Regulations or about the tax
treatment of any conditions existing at the time of or effects resulting from
the transaction that are not specifically covered in our opinions hereinabove
including the tax treatment of the receipt of cash by dissenting shareholders,
if any, and the associated tax consequences to Imperial or Holding resulting
therefrom. The payment of cash for dissenting shares will, for federal income
tax purposes, constitute a redemption of stock by Imperial that could result in
taxable income to Imperial.
Sincerely,
SILVER, FREEDMAN & TAFF, L.L.P.
BY: /s/ Barry P. Taff, P.C.
---------------------------------
<PAGE>
EXHIBIT 21
Subsidiaries of the Registrant
<PAGE>
Exhibit 21
----------
SUBSIDIARIES OF THE REGISTRANT/(1)/
<TABLE>
<CAPTION>
Parent Subsidiary Ownership Organization
- -------------------------- ------------------------------------ --------- ----------------
<S> <C> <C> <C>
ITLA Capital Corporation Imperial Thrift and Loan Association 100% California
</TABLE>
_______________________________
/(1)/ Upon consummation of the Reorganization.
The financial statements of the Registrant will be consolidated with those
of its subsidiary upon completion of the Reorganization.
<PAGE>
EXHIBIT 23
Consent of Silver, Freedman & Taff, L.L.P.
<PAGE>
[LETTERHEAD OF SILVER, FREEDMAN & TAFF, L.L.P. APPEARS HERE]
May 10, 1996
Board of Directors
ITLA Capital Corporation
7979 Ivanhoe Avenue
La Jolla, California 92037
Gentlemen:
We consent to the use of our opinions, to the incorporation by reference of
such opinions as exhibits to the Form S-4 and to the reference to our firm and
our opinions under the heading "Legal Opinion" in the Registration Statement on
Form S-4 filed by ITLA Capital Corporation and all amendments thereto. In
giving this consent, we do not admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder.
/s/ Silver, Freedman & Taff, L.L.P.
SILVER, FREEDMAN & TAFF, L.L.P.
<PAGE>
EXHIBIT 99
Form of Proxy to be mailed to stockholders of
ITLA Capital Corporation
<PAGE>
IMPERIAL THRIFT AND LOAN ASSOCIATION
700 North Central Avenue
Glendale, California 91203
(818) 551-0600
______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on July 25, 1996
Notice is hereby given that a Annual Meeting of Stockholders (the
"Meeting") of Imperial Thrift and Loan Association ("Imperial") will be held at
the Red Lion Hotel, located at 100 West Glenoaks Blvd., Glendale, California, on
July 25, 1996 at 3:00 p.m.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of Imperial;
2. A proposal to adopt a holding company structure for Imperial with the
result that Imperial will become a wholly-owned subsidiary of ITLA
Capital Corporation as provided in the Merger Agreement and Plan of
Reorganization attached as Appendix A to this Proxy Statement;
3. Ratification of the adoption of the Recognition and Retention Plan; and
such other matters as may properly come before the Meeting, or any adjournments
thereof. The Board of Directors is not aware of any other business to come
before the Meeting.
Any action may be taken on the foregoing proposal at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on June 10, 1996 are
the stockholders entitled to vote at the Meeting, and any adjournments thereof.
You are requested to fill in and sign the enclosed form of proxy which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
enclosed envelope. The proxy will not be used if you attend and vote at the
Meeting in person.
By Order of the Board of Directors
George W. Haligowski
Chairman of the Board, President and
Chief Executive Officer
Glendale, California
June __, 1996
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE IMPERIAL THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A SELF-
ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY...................................................................................... 1
Date, Time and Place of Meeting......................................................... 1
Purpose of Meeting...................................................................... 1
Record Date............................................................................. 1
Vote Required for Approval of Proposals................................................. 1
The Holding Company Reorganization...................................................... 1
Conditions and Regulatory Approvals..................................................... 1
Federal Income Tax Consequences......................................................... 1
Regulation and Supervision.............................................................. 2
Differences Between Imperial Common Stock and Company Common Stock...................... 2
Recommendation and Reasons.............................................................. 2
GENERAL INFORMATION.......................................................................... 3
Introduction............................................................................ 3
Revocation of Proxies................................................................... 3
Vote Required for Approval of Proposals................................................. 3
Voting Securities and Principal Holders Thereof......................................... 4
PROPOSAL I -- ELECTION OF DIRECTORS.......................................................... 5
Board of Directors of Imperial.......................................................... 5
Executive Officers Who Are Not Directors................................................ 6
Board of Directors Meetings and Committees.............................................. 7
Director Compensation................................................................... 7
Executive Compensation.................................................................. 8
Employment Agreements and Change of Control Agreements.................................. 8
Benefit Plans........................................................................... 9
Option Grants for 1995.................................................................. 11
Compensation Committee Report on Executive Compensation................................. 11
Shareholder Return Performance Presentation............................................. 13
Certain Transactions.................................................................... 13
PROPOSAL II -- THE HOLDING COMPANY MERGER AND REORGANIZATION................................ 14
Parties to the Merger Agreement......................................................... 14
Reasons for the Reorganization.......................................................... 14
Description of the Transaction; Exchange Ratio.......................................... 15
Federal Income Tax Consequences......................................................... 15
Conditions to the Reorganization........................................................ 15
Amendment or Termination................................................................ 16
Effective Date of the Reorganization.................................................... 16
Exchange of Stock Certificates Not Required............................................. 16
Operations After the Reorganization..................................................... 16
Accounting Treatment.................................................................... 17
Stock Option and Incentive Plan......................................................... 17
Comparison of Stockholder Rights........................................................ 17
Other Restrictions on Acquisitions of Stock............................................. 24
Dissenters' Rights of Appraisal......................................................... 25
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
PROPOSAL III -- RECOGNITION AND RETENTION PLAN............................................... 25
General................................................................................. 25
Principle Features of the RRP........................................................... 25
Effect of Adjustments................................................................... 26
Federal Income Tax Consequences......................................................... 26
Amendment to the RRP.................................................................... 26
Performance Criteria.................................................................... 26
FINANCIAL STATEMENTS......................................................................... 27
IMPERIAL THRIFT AND LOAN ASSOCIATION......................................................... 27
THE COMPANY.................................................................................. 27
General................................................................................. 27
Regulation.............................................................................. 27
Federal and State Taxation.............................................................. 28
Restrictions on Resale of Company Stock Received by Certain Persons..................... 28
Company Management...................................................................... 28
LEGAL OPINION................................................................................ 29
STOCKHOLDER PROPOSALS........................................................................ 29
OTHER MATTERS................................................................................ 29
APPENDIX A -- MERGER AGREEMENT AND PLAN OF REORGANIZATION.................................... A-1
APPENDIX B -- HOLDING COMPANY CERTIFICATE OF INCORPORATION................................... B-1
APPENDIX C -- RECOGNITION AND RETENTION PLAN................................................. C-1
</TABLE>
ii
<PAGE>
AVAILABLE INFORMATION
This Proxy Statement of Imperial Thrift and Loan Association
("Imperial") also serves as the prospectus relating to the offer and sale by
ITLA Capital Corporation (the "Company"), a newly-formed Delaware corporation,
of shares of its common stock, par value $.01 per share ("Company Common
Stock"), offered in exchange for the outstanding shares of common stock of
Imperial, no par value per share ("Imperial Common Stock"), in connection with a
proposed reorganization (the "Reorganization") pursuant to which the Company
would become the holding company for Imperial, as more fully discussed under
"Proposal II -- The Holding Company Merger and Reorganiza tion."
The Company has filed with the Securities and Exchange Commission (the
"SEC") a Registration Statement on Form S-4 under the Securities Act of 1933, as
amended (Registration Statement No. 333-_____), with respect to the shares of
Company Common Stock issuable upon conversion of Imperial Common Stock in the
Reorganization as described herein. For further information pertaining to
Company Common Stock offered hereby, reference is made to the Registration
Statement and to the exhibits thereto, which may be inspected at the public
reference facilities of the SEC, 450 Fifth Street, N.W., Washington, D.C.
20549, and copies of which can be obtained from the SEC at prescribed rates by
writing to the Public Reference Section of the SEC at the above-stated address.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE TRANSACTIONS DESCRIBED IN THIS PROXY
STATEMENT/PROSPECTUS OTHER THAN THOSE CONTAINED HEREIN, AND IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY EITHER IMPERIAL OR THE COMPANY OR THEIR MANAGEMENT. EXCEPT AS
OTHERWISE EXPRESSLY INDICATED, ALL INFORMATION IS GIVEN AS OF THE DATE OF THIS
PROXY STATEMENT/PROSPECTUS. NEITHER THE DELIVERY OF THIS PROXY
STATEMENT/PROSPECTUS AFTER SUCH DATE NOR ANY OFFER, SALE OR EXCHANGE OF ANY
SECURITY MADE HEREUNDER AFTER SUCH DATE SHALL UNDER ANY CIRCUMSTANCE CREATE ANY
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE INFORMATION SET FORTH
HEREIN SINCE SUCH DATE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, THE
CALIFORNIA COMMISSIONER OF CORPORATIONS ("COMMISSIONER") OR THE FEDERAL DEPOSIT
INSURANCE CORPORATION ("FDIC"), NOR HAS THE SEC, THE COMMISSIONER OR THE FDIC
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS SECURITY IS NOT A
DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED OR GUARANTEED.
iii
<PAGE>
________________________________________________________________________________
SUMMARY
The following is a summary of certain information contained in this
Proxy Statement/Prospectus. This summary is not complete and is qualified in
its entirety by the more detailed information appearing in this Proxy
Statement/Prospectus and appendices. Stockholders should review the entire
Proxy Statement/Prospectus and, in particular, the specific sections referred to
in this summary.
Date, Time and Place of Meeting
- -------------------------------
July 25, 1996, at 3:00 p.m., Glendale, California time, at the Red
Lion Hotel, located at 100 West Glenoaks Blvd., Glendale, California.
Purposes of Meeting
- -------------------
The purposes of the Meeting are to consider and vote upon a proposal
to adopt a holding company structure, elect two directors and ratify the
adoption of the Recognition and Retention Plan ("RRP"). If the proposal to
adopt a holding company structure is approved, Imperial will conduct its
operations as a wholly-owned subsidiary of the Company, a Delaware corporation
formed for the purpose of serving as the holding company for Imperial.
Record Date
- -----------
Only holders of record of shares of Imperial Common Stock, at the
close of business on June 10, 1996, are entitled to vote at the Meeting.
Vote Required for Approval of Proposals
- ---------------------------------------
The affirmative vote of the holders of at least 3,910,251 shares of
Imperial Common Stock, a majority of the total shares entitled to vote at the
Meeting, is required to approve the proposal to adopt a holding company
structure and ratify the adoption of the RRP. Directors shall be elected by a
plurality of the votes present in person or represented by proxy at the Meeting
and entitled to vote on the election of directors.
The Holding Company Reorganization
- ----------------------------------
Under the Merger Agreement and Plan of Reorganization (the "Merger
Agreement") attached hereto as Appendix A, Imperial will be merged with an
interim subsidiary of the Company. As a result of this transaction (the
"Reorganization") each share of Imperial Common Stock will be converted into one
share of common stock, $.01 par value per share, of the Company ("Company Common
Stock"). See "Proposal II -- The Holding CompanyMerger and Reorganization --
Description of the Transaction; Exchange Ratio."
Conditions and Regulatory Approvals
- -----------------------------------
The consummation of the Reorganization is conditioned upon the
fulfillment of certain conditions set forth in the Merger Agreement, including
approval by the stockholders of Imperial, the FDIC, and by the Commissioner. See
"Proposal II -- The Holding Company Merger and Reorganization -- Conditions to
the Reorganization."
Federal Income Tax Consequences
- -------------------------------
The Merger will qualify as a tax-free reorganization. No gain or loss
will be recognized by Imperial stockholders whose shares are converted into
Company Common Stock. See "Proposal II -- The Holding Company Merger and
Reorganization -- Federal Income Tax Consequences."
________________________________________________________________________________
<PAGE>
________________________________________________________________________________
Regulation and Supervision
- --------------------------
After the Reorganization, the Company will be a depository institution
holding company regulated by the Commissioner. It will be subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith will be required to file
reports, proxy statements and other information with the SEC. See "The Company
- -- Regulation." Imperial will continue to be regulated by the Commissioner and
the FDIC, however, it will no longer be regulated by the SEC.
Differences Between Imperial Common Stock and Company Common Stock
- ------------------------------------------------------------------
After the consummation of the Reorganization, the rights of the
stockholders of the Company will be governed by Delaware law and the Certificate
of Incorporation and Bylaws of the Company, whereas the rights of stockholders
of Imperial are governed by its Articles of Incorporation and Bylaws and by
California statutes and regulations and certain FDIC regulations. As a result,
certain differences will exist between the rights of stockholders of the Company
and those of Imperial. These differences relate to such matters as the issuance
of additional capital stock, amendment of governing instruments, anti-takeover
provisions, transactions with affiliates, limitations on director liability, and
indemnification of officers and directors. For a description of these
differences, see "Proposal II -- The Holding Company Merger and Reorganization -
- - Comparison of Stockholder Rights."
Recommendation and Reasons
- --------------------------
Imperial's Board of Directors has unanimously approved the Merger
Agreement and unanimously recommends that the stockholders vote FOR approval of
the Reorganization. A holding company structure offers significant advantages
in comparison to Imperial's present corporate structure. These advantages
include a broader range of permissible financial activities and increased
organizational flexibility. The Board of Directors also recommend that
stockholders vote FOR the election of the proposed directors and the
ratification of the RRP.
2
________________________________________________________________________________
<PAGE>
PROXY STATEMENT
IMPERIAL THRIFT AND LOAN ASSOCIATION
700 North Central Avenue
Glendale, California 91203
(818) 551-0600
ANNUAL MEETING OF STOCKHOLDERS
July 25, 1996
GENERAL INFORMATION
Introduction
- ------------
This Proxy Statement/Prospectus is furnished in connection with the
solicitation on behalf of the Board of Directors of Imperial of proxies, to be
used at a Annual Meeting of Stockholders of Imperial (the "Meeting") to be held
at the Red Lion Hotel, located at 100 West Glenoaks Blvd., Glendale, California,
on July 25, 1996 at 3:00 p.m., and at all adjournments of the Meeting. The
accompanying Notice of Annual Meeting and this Proxy Statement are first being
mailed to stockholders on or about June __, 1996.
Revocation of Proxies
- ---------------------
Stockholders who execute proxies retain the right to revoke them at
any time. Unless so revoked, the shares represented by such proxies will be
voted at the Meeting and at all adjournments thereof. The presence of a
stockholder at the Meeting will not automatically revoke such stockholder's
proxy. However, a stockholder may revoke a proxy at any time prior to its
exercise by filing a written notice of revocation with, or delivering a duly
executed proxy bearing a later date to, Michael L. Mayer, Secretary of Imperial,
700 North Central Avenue, Glendale, California 91203, or by attending the
Meeting and voting in person. Proxies solicited on behalf of the Board of
Directors of Imperial and not revoked will be voted in accordance with the
directions given therein. Where no instructions are indicated, proxies will be
voted FOR the proposals set forth in this Proxy Statement/Prospectus for
consideration at the Meeting.
Proxies marked as abstaining and proxies returned by brokers as "non-
votes" on behalf of shares held in street name will be treated as votes against
the proposals.
Vote Required for Approval of Proposals
- ---------------------------------------
Approval of the proposals to adopt a holding company structure and
ratification of the RRP require the affirmative vote of the holders of a
majority of the shares entitled to be voted at the Meeting. Directors shall be
elected by a plurality of the votes present in person or represented by proxy at
the Meeting and entitled to vote on the election of directors.
3
<PAGE>
Voting Securities and Principal Holders Thereof
- -----------------------------------------------
Stockholders of record as of the close of business on June 10, 1996
will be entitled to one vote for each share then held. As of that date,
Imperial had 7,820,500 shares of Imperial Common Stock issued and outstanding.
The following table sets forth, as of June 10, 1996, certain
information as to those persons who were known by management to be beneficial
owners of more than five percent of Imperial Common Stock outstanding and as to
the shares of Imperial Common Stock beneficially owned by all officers and
directors of Imperial as a group.
<TABLE>
<CAPTION>
SHARES PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
------------------------------------ ------------------ --------
<S> <C> <C>
Peter B. Cannell & Co., Inc.
919 Third Avenue
New York, New York 10022........................... 449,850/(1)/ 5.75%
Wellington Management Company
75 State Street
Boston, Massachusetts 02109........................ 592,000/(2)/ 7.57
Thomson Horstmann & Bryant, Inc.
Park 80 West, Plaza Two
Saddle Brook, New Jersey 07663..................... 510,000/(3)/ 6.50
Kramer Spellman L.P.
2050 Center Avenue, Suite 300
Fort Lee, New Jersey 07024......................... 677,800/(4)/ 8.67
All directors and executive officers as a group 28,500/(5)/ .38
(8 persons)........................................
</TABLE>
_______________
/(1)/ As reported by Peter B. Cannell & Co., Inc. ("Cannell") on a Schedule
13G dated on or about February 12, 1996, and filed with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended. Cannell reported sole voting and investment power as to
449,850 and shared voting and investment power as to none of the
449,850 shares covered by the report.
/(2)/ As reported by Wellington Management Company ("Wellington") on a
Schedule 13G dated on or about February 9, 1996, and filed with the
Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended. Wellington reported sole voting and investment
power as to no shares, shared voting power as to 229,000 shares and
shared investment power as to 592,000 of the 592,000 shares covered by
the report.
/(3)/ As reported by Thomson Horstmann & Bryant, Inc. ("Thomson") on a
Schedule 13G dated on or about January 18, 1996, and filed with the
Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended. Thomson reported sole voting power as to 311,900,
sole investment power as to 510,000, shared voting power as to 6,100
and shares investment power as to none of the 510,000 shares covered
by Thomson's report.
/(4)/ As reported by Kramer Spellman L.P. ("Kramer-Spellman") on a Schedule
13D dated on or about March 20, 1996 and on a Schedule 13D dated on or
about April 22, 1996. Messrs. Orin S. Kramer and Jay Spellman, the
general partners of Kramer-Spellman reported shared voting and
dispositive power as to all of the 677,800 shares covered by the
report.
/(5)/ Includes shares held directly and shares which are held in retirement
accounts or by certain members of the named individuals' families,
over which shares the respective directors and officers may be deemed
to have sole or shared voting or investment power. There are no shares
which are subject to options, exercisable within 60 days and held by
directors and executive officers pursuant to the Company's Stock
Option Plan.
4
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
Board of Directors of Imperial
- ------------------------------
Imperial's Board of Directors is presently composed of five members.
Approximately one-third of the directors are elected annually. Directors of
Imperial are generally elected to serve for a three year period or until their
respective successors shall have been elected and qualified.
The table below sets forth certain information regarding the
composition of Imperial's Board of Directors, including their terms of office
and the nominees for election as directors. It is intended that the proxies
solicited on behalf of the Board of Directors (other than proxies in which the
vote is withheld as to any nominee) will be voted at the Meeting for the
election of the nominee identified in the following table. If the nominee is
unable to serve, the shares represented by all such proxies will be voted for
the election of such substitute as the Board of Directors may recommend. At
this time, the Board of Directors knows of no reason why the nominees might be
unable to serve, if elected. Except as described herein, there are no
arrangements or understandings between any director or nominee and any other
person pursuant to which such director or nominee was selected.
<TABLE>
<CAPTION>
Positions Held in
Name Age/(1)/ Imperial Term
- -------------------- -------- ---------------------------
NOMINEES Director to
<S> <C> <C> Since Expire
George W. Haligowski.... 41 Chairman of the Board, -------- ------
President and Chief Executive
Officer <C> <C>
Sandor X. Mayuga........ 46 Director 1992 1999
DIRECTORS CONTINUING IN OFFICE
Jeffrey L. Lipscomb..... 42 Director 1995 1999
Robert R. Reed.......... 59 Director 1996 1998
Hirotaka Oribe.......... 60 Director 1995 1997
<CAPTION>
Shares of
Common Stock
Beneficially Percent
Owned at of
Name , 1996/(2)/ Class
- -------------------- ----------------- -------
NOMINEES
<S> <C> <C>
George W. Haligowski.... 25,000 *
Sandor X. Mayuga........ 800 *
DIRECTORS CONTINUING IN OFFICE
Jeffrey L. Lipscomb..... --- *
Robert R. Reed.......... 200 *
Hirotaka Oribe.......... 200 *
</TABLE>
_______________
* Represents less than 1% of the shares outstanding.
/(1)/ As of June 10, 1996.
/(2)/ Includes shares held directly, as well as shares held by certain family
members of the named individuals, over which such individuals may be
deemed to have sole voting and investment power.
The business experience during the last five years of each of the
directors is set forth below. Unless otherwise indicated, each director has held
his present position for at least five years. Each of the Directors of Imperial
has been a director of the Company since its incorporation in April 1996.
George W. Haligowski has served as Chairman of the Board, President
and Chief Executive Officer of Imperial since July 1992. From 1990 to the
present, he has also served as President, Chief Executive Officer and Principal
of Halivest International, Ltd., an international finance and asset management
company. From 1990 to present, he has also served as Chief Executive Officer of
Rockland Development, a real estate development company. He was previously
employed as a Vice President by Shearson Lehman Hutton, (1988-1990) and
5
<PAGE>
Prudential-Bache Securities (1983-1988), and by Avco Financial Services as
Regional Director of its Japanese branch operations in 1976 to 1981, as Training
Coordinator for Avco Thrift and Loan in 1976 and as a Branch Manager from 1974
to 1976.
Jeffrey L. Lipscomb Mr. Lipscomb has been a Registered Principal and
Assistant Manager of the San Diego office of Equitable Financial Companies since
1986, handling corporate group benefits and personal financial planning.
Sandor X. Mayuga is a member of the state bar of California has been a
member of the law firm of Tisdale & Nicholson since 1994, and previously
conducted his own private law practice from 1985 to 1995. Mr. Mayuga previously
served as a Director of Imperial and Lake America from December 1983 to June
1993.
Hirotaka Oribe is a licensed architect with international experience
in real estate development and urban planning. Since 1993, Mr. Oribe has served
as an adviser to Kajima Development Resources, Inc. From 1979 to 1993, Mr. Oribe
was Executive Vice President, Chief Operating Officer, and a Director of Kajima
Development Corporation, a firm engaged in development and construction of
single-family and multifamily housing, office buildings and retail space, and
land development. Mr. Oribe previously held other positions with affiliates of
Kajima Corporation of Japan from 1973 to 1979 and was a practicing architect
from 1962 to 1973.
Robert R. Reed is retired from Household International where he was
employed in various positions from 1960 to 1992. Mr. Reed served as Vice
President of Household Bank from 1980 to 1992. Mr. Reed was previously employed
in management positions with Household Financial Corporation from 1962 to 1980.
Mr. Reed previously served as a director of Imperial from September 1994 to
August 1995, when all directors appointed by the Company's former parent
resigned as part of the Company's initial public offering.
Executive Officers Who Are Not Directors
- ----------------------------------------
The following information as to the business experience during the
past five years is provided with respect to the executive officers of Imperial
who do not serve on Imperial's Board of Directors.
Anthony L. Frey served as First Vice President, Treasurer, and
Controller of Imperial since January 1995, and prior to that served as Vice
President--Finance since August 1994. Mr. Frey was promoted to Senior Vice
President and Chief Financial Officer in November 1995. From 1984 to 1994, Mr.
Frey served as Senior Vice President and Controller of HomeFed Bank, and from
1979 to 1984, Mr. Frey was employed by the accounting firm of KPMG Peat Marwick.
Mr. Frey is a certified public accountant.
Norval L. Bruce has served as Executive Vice President and Chief
Credit Officer of Imperial since December 1990; from July to December 1990 he
served as Senior Vice President and Chief Credit Officer. From 1988 to 1989, Mr.
Bruce served as Executive Vice President and Chief Credit Officer of Security
Pacific Bank, Nevada. Mr. Bruce was previously employed by Security Pacific Bank
from 1965 to 1988 in a variety of positions including management positions in
which he was responsible for both loan origination and credit quality.
George J. Guarini has served as Senior Vice President and Chief
Lending Officer since May 1996 and previously served as Senior Vice President -
Retail Lending of Imperial since January 1996. Mr. Guarini previously served as
the head of the Asset Management department since joining Imperial in June 1994.
From 1991 to 1994, Mr. Guarini served as Senior Vice President - Special Assets
of California Republic Bank. Mr. Guarini was employed from 1989 to 1991 by
Security Pacific National Bank as a Senior Lending Officer. Mr. Guarini was
previously employed from 1981 to 1989 by City Savings Bank, FSB located in
Somerset, New Jersey, in a variety of management positions.
6
<PAGE>
Board of Directors Meetings and Committees
- ------------------------------------------
Meetings and Committees of Imperial. Meetings of Imperial's Board of
Directors in fiscal 1995 were generally held on a monthly basis. For the fiscal
year ended December 31, 1995, the Board of Directors met eleven times. During
the 1995 fiscal year, no incumbent director of Imperial attended fewer than 75%
of the aggregate of the total number of Board meetings and the total number of
meetings held by the committees of the Board of Directors on which they served.
The Board of Directors of Imperial has standing Executive, Audit and
Compensation Committees.
Executive Committee. The primary responsibilities of the Executive
Committee are to advise Imperial's management on matters when the full Board of
Directors is unavailable or to conduct business as specifically designated by
the full Board. The current members of the Executive Committee are Messrs.
Haligowski and Oribe. The Executive Committee held seven meetings in fiscal
1995.
Audit Committee. The primary responsibilities of the Audit Committee
are to recommend to the Board of Directors a firm of independent certified
public accountants to conduct the annual audit of Imperial's books and records;
to review with such accounting firm the scope and results of the annual audit;
to review the performance by such independent accountants of professional
services in addition to those which are audit related; and to consult with the
internal and independent auditors with regard to the adequacy of Imperial's
system of internal controls. The members of the Audit Committee are Messrs.
Lipscomb and Mayuga. The Audit Committee held two meetings in fiscal 1995.
Compensation Committee. The primary responsibilities of the
Compensation Committee are to establish and review the compensation, both direct
and indirect, to be paid to Imperial's executive officers and other members of
management; to review and submit to the Board of Directors its recommendations
with respect to executive compensation plans; to establish and review
periodically Imperial's policies relating to executive perquisites; and to
oversee Imperial's employee benefit plans. The members of the Compensation
Committee are Messrs. Lipscomb and Oribe. The Compensation Committee met once in
fiscal 1995.
The full Board of Directors acts as the Nominating Committee that
nominates officers and directors of Imperial for election.
Director Compensation
- ---------------------
Nonemployee directors of Imperial receive a monthly fee of $1,250 and
fees of $500 for each Board and Committee meeting that they attend. Nonemployee
directors also participate in the 1995 Stock Option Plan for Nonemployee
Directors. See "Executive Compensation--Benefit Plans--Stock Plans." Directors
who are also officers are not compensated for their services as directors.
7
<PAGE>
Executive Compensation
- ----------------------
The following table sets forth the cash compensation of the Chief
Executive Officer and the named executive officers of Imperial with salary and
bonus greater than $100,000 for the year ended December 31, 1995.
<TABLE>
<CAPTION>
=============================================================================================================
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------
LONG TERM
ANNUAL COMPENSATION COMPENSATION
- -------------------------------------------------------------------------------------------------------------
ALL OTHER
SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#)/(4)/ ($)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
George W. Haligowski 1995 $174,058 $136,888/(1)(2)/ 285,000 $70,572/(5)/
Chairman of the Board, President 1994 150,000 194,174/(3)(7)/ --- 39,766/(5)/
and Chief Executive Officer
- -------------------------------------------------------------------------------------------------------------
Norval L. Bruce 1995 $108,125 $ 13,500/(1)/ 40,000 $15,168/(6)/
Executive Vice President and 1994 102,917 20,000/(7)/ --- 10,395/(6)/
Chief Credit Officer
- -------------------------------------------------------------------------------------------------------------
</TABLE>
_________________
/(1)/ Paid or payable in 1995 based on Imperial's performance in 1994.
/(2)/ Does not include $400,000 earned upon consummation of the October 1995
public offering pursuant to a prior agreement between Imperial's
former parent company and Mr. Haligowski. This amount is to be paid by
the former parent company in 1996. In addition, does not include
approximately $81,000 paid in 1996 to Mr. Haligowski in recognition of
his efforts in connection with Imperial's initial public offering.
/(3)/ Deferred at the election of the named officer under Imperial's
Nonqualified Deferred Compensation Plan.
/(4)/ Granted in 1995 and vests one-third on each of the three subsequent
anniversary dates of issuance (Oct. 23, 1995).
/(5)/ Consists of (a) $19,321 in auto related benefits, (b) $22,850 in
supplemental housing payments, (c) $7,154 in life insurance premiums,
(d) $6,682 in employer contributions under the Imperial 401(k) plan
and (e) $14,565 in preferential interest on employee savings accounts
in 1995. The respective amounts for 1994 were $7,855, $15,797, $7,154,
$4,125 and $4,835.
/(6)/ Consists of (a) $8,750 in auto related benefits, (b) $576 in life
insurance premiums, (c) $5,492 in employer contributions under the
Imperial 401(k) plan and (d) $350 in preferential interest on employee
savings accounts in 1995. The respective amounts for 1994 were $5,452,
$576, $3,925, and $442.
/(7)/ Paid or payable in 1994 based on Imperial's performance in 1993.
The annual base salary for each of Messrs. Frey, Bruce and Guarini for
1996 are $131,250, $126,000 and $126,000, respectively.
Employment Agreements and Change of Control Arrangements
- --------------------------------------------------------
Imperial has entered into an employment agreement with Mr. Haligowski,
and change of control agreements with Messrs. Frey, Bruce and Guarini. The
employment agreement provides for an initial employment term of three years,
with the agreement automatically annually extending for an additional one-year
period unless either party provides the other with at least 90 days notice of
the nonextension or termination. The employment agreement provides that Imperial
may terminate the officer "for cause," as defined in the employment agreement,
and that in the event Imperial terminates the officer without cause including as
a result of a change of control, the officer will be entitled to receive his
base salary for the remaining term of the agreement and a pro rata portion of
his bonus, if any, for the year in which his employment is terminated as well as
a continuation of all employment related benefits through the remaining term of
the agreement and the immediate vesting of any stock options previously granted
and outstanding. The annual base salary for Mr. Haligowski under the employment
agreement is currently
8
<PAGE>
$299,250 (which salary may be increased from time to time by the Board of
Directors). The employment agreement also provides for, among other things,
annual incentive compensation, disability pay, participation in stock benefit
plans, and other fringe benefits, including a supplemental housing payment of
not less than $2,500 per month, an automobile allowance of not less than $1,750
per month, and life insurance coverage in an amount not less than four times Mr.
Haligowski's annual salary. Under the employment agreement, Mr. Haligowski
received an initial option grant of 285,000 shares of common stock. See "--
Executive Compensation--Benefits--Stock Plans."
The change of control agreements have initial terms of one year and
automatically extend for additional one-year periods upon a change of control,
as defined in the agreement, or upon their anniversary date, unless either party
provides the other with at least 90 days notice of termination. These
agreements provide that in the event the officer is terminated within twelve
months following a change of control, as defined in the agreement, the officer
shall be entitled to receive upon such termination an amount equal to the
greater of the annualized salary as in effect on the date of the change of
control or the date of termination and a pro rata portion of his bonus, if any,
for the year in which his employment is terminated. The annual base salary for
each of Messrs. Frey, Bruce and Guarini is currently $131,250, $126,000 and
$126,000, respectively.
Change of control, in both the employment agreement and the change in
control agreements, is defined to include (i) the sale of substantially all of
the stock or assets of Imperial, whether by merger, consolidation, sale of
assets or sale or exchange of Common Stock or the complete liquidation of the
Company, (ii) the sale by the Company or the acquisition by any person in any
single transaction (or series of related transactions) of more than 30% of the
then outstanding Common Stock of Imperial (on a fully diluted basis) or (iii)
any date upon which the directors of Imperial nominated by the Board cease to
constitute a majority of the Board. Both the employment agreement and the
change of control agreements will provide that no payments may be made
thereunder in connection with the termination of the officers covered by such
agreements if, at the time such payments would otherwise be made, Imperial is
prohibited from making such payments by any applicable federal or state law or
regulation governing its operations, unless Imperial has obtained prior approval
for such otherwise prohibited payments from the appropriate regulatory
authorities.
Benefit Plans
- -------------
INSURANCE PLANS. All full-time employees, after approximately three
months employment with Imperial, are covered under group plans providing major
medical, dental, and vision benefits, and long-term disability, travel accident,
accidental death and dismemberment insurance and group term life insurance.
SALARY SAVINGS PLAN. The Imperial Salary Savings Plan is a cash or
deferred arrangement under Section 401(k) of the Internal Revenue Code (the
"Code") designed to provide employees with the opportunity to accumulate
retirement funds (the "401(k) Plan"). Permanent employees aged 21 or more are
eligible to participate in the 401(k) Plan as of January 1 or July 1 first
following their hire date. Under the 401(k) Plan, subject to limitations imposed
under Section 401(k) and Section 415 of the Code, a participant may elect to
defer on a monthly basis from 2% to 14% of his compensation by directing
Imperial to contribute such amount to the 401(k) Plan on such employee's behalf.
Imperial currently makes matching contributions to the 401(k) Plan equal to 50%
of the first 6% of the participant's monthly contribution. The Board reviews the
match on an annual basis, and Imperial may also make discretionary contributions
to the 401(k) Plan. "Compensation" for purposes of the 401(k) plan is defined as
a participant's compensation from Imperial as reported annually on Form W-2,
including contributions to the 401(k) Plan by the employee, and contributions by
Imperial in the employee's behalf to any other pension, insurance, welfare or
other employee benefit plan. Under the 401(k) Plan, a separate account is
established for each participant. Participants are always 100% vested in their
contributions and the earnings thereon. Participants become vested in employer
contributions and the earnings thereon at the rate of 20% per year commencing
with the first full year of service (defined as completion of 12 consecutive
months of work). Participants become fully vested in employer contributions and
the earnings thereon on their fifth anniversary of employment, or in the event
of death, permanent disability or attainment of age 65 while employed by
Imperial. The 401(k) Plan provides for in-service hardship distributions of
elective deferrals, as well as loans of a portion of vested account balances.
Distributions from the 401(k) Plan are made upon termination of service in a
lump sum or in annual installments
9
<PAGE>
over a period of years at the election of the participant with the right to take
a lump sum payment at any time during such period.
NONQUALIFIED DEFERRED COMPENSATION PLANS. The Imperial Supplemental
Salary Savings Plan (the "Supplemental Plan") and Nonqualified Deferred
Compensation Plan (the "Deferral Plan") are designed to provide additional
retirement benefits for certain officers and highly compensated employees. The
Supplemental Plan provides participating employees with an opportunity to make
up benefits not available under the 401(k) Plan due to any application of
limitations on compensation and maximum benefits under the 401(k) Plan. Benefits
under the Supplemental Plan are provided at the same time and in the same form
as benefits under the 401(k) Plan, and become taxable to the participant at that
point. The Deferral Plan allows a participant to defer receipt of, and current
taxation upon, designated portions of his direct cash compensation until a
future date specified by the participant. Both of these plans are unfunded
plans, meaning that all benefits payable thereunder are payable from Imperial's
general assets, and funds available to pay benefits are subject to the claims of
Imperial's general creditors. Imperial may establish an irrevocable grantor
trust in connection with the Supplemental Plan. This trust would be funded with
contributions from Imperial for the purpose of providing the benefits promised
under the terms of the Supplemental Plan, and the earnings on any trust assets
would be taxable to Imperial. Supplemental Plan participants would also only
have the rights of unsecured creditors with respect to the trust's assets.
STOCK PLANS. Imperial has adopted the 1995 Employee Stock Incentive
Plan and the 1995 Stock Option Plan for Nonemployee Directors (collectively, the
"Stock Option Plan") pursuant to which officers, directors and employees of
Imperial are eligible to receive options to purchase Common Stock. The purpose
of the Stock Option Plan is to enable Imperial to attract, retain and motivate
employees by providing for or increasing their proprietary interests in
Imperial, and in the case of nonemployee directors, to attract such directors
and further align their interests with those of Imperial. Every employee of
Imperial is eligible to be considered for the grant of awards under the Stock
Option Plan. The maximum number of shares of Common Stock that may be issued
pursuant to awards granted under the Stock Option Plan is 1,000,000 shares of
which a maximum of 550,000 shares may be awarded during the first year of the
Stock Option Plan, with annual awards thereafter limited to 100,000 additional
shares during each of the next five years of the Stock Option Plan (with the
shares subject to the Stock Option Plan and all grants thereunder being subject
to adjustments to prevent dilution).
The Stock Option Plan is administered by the Compensation Committee of
the Board, except that grants to nonemployee directors are made by the Board of
Directors pursuant to a predetermined formula. The Committee will consist of two
or more nonemployee directors of Imperial, and has full and final authority to
select the employees to receive awards and to grant such awards. Subject to the
provisions of the Stock Option Plan, the Committee has a wide degree of
flexibility in determining the terms and conditions of awards and the number of
shares to be issued pursuant thereto. The expenses of administering the Stock
Option Plan will be borne by Imperial.
The Stock Option Plan authorizes the Committee to enter into any type
of arrangement with an eligible employee that, by its terms, involves or might
involve the issuance of Common Stock or any other security or benefit with a
value derived from the value of Common Stock. Awards to employees are not
restricted to any specified form or structure. Stock options to purchase 5,000
shares of Common Stock were automatically granted to the nonemployee directors
upon the completion of the Company's initial public offering and upon their
election to the Board of Directors, and options to purchase an additional 1,000
shares will be granted annually thereafter, provided such individuals continue
to serve as directors.
Awards may not be granted under the Stock Option Plan after the tenth
anniversary of the adoption of the Stock Option Plan. As of June 10, 1996,
Imperial has granted an aggregate of 469,500 options under the Stock Option
Plan, of which 285,000 have been granted to Mr. Haligowski, 40,000 have been
granted to each of Messrs. Frey, Bruce and Guarini, 20,000 have been granted to
non-employee directors, and 44,500 have been granted to other employees. The
exercise price per share of the options so granted ranges from $10.00 to $13.00
per share and will generally vest 33-% per year, beginning with the first
anniversary of the date of the grant.
10
<PAGE>
Option Grants for 1995
- ----------------------
The following table sets forth certain information concerning stock
options granted pursuant to the Stock Option Plan to the named executive
officers in 1995. No stock appreciation rights have been granted pursuant to the
Stock Option Plan.
<TABLE>
<CAPTION>
===================================================================================================================
OPTION GRANTS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- -------------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George W. Haligowski 285,000 55.5% 10.00 10/23/05 $449,231 $943,350
- -------------------------------------------------------------------------------------------------------------------
Norval L. Bruce 40,000 7.8% 10.00 10/23/05 $ 60,050 $132,400
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The following table sets forth certain information concerning the
number and value of stock options at December 31, 1995 held by the named
executive officers, with adjustments for those options awarded prior to the
Stock Dividend.
<TABLE>
<CAPTION>
======================================================================================================================
OPTION VALUES AT DECEMBER 31, 1995
- ----------------------------------------------------------------------------------------------------------------------
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FY-END (#) FY-END ($)/(1)/
--------------------------------------------------------
SHARES ACQUIRED
NAME ON EXERCISE (#) VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
($)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George W. Haligowski --- N/A --- 285,000 --- $641,250
- ----------------------------------------------------------------------------------------------------------------------
Norval L. Bruce --- N/A --- 40,000 --- $ 90,000
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
____________________
/(1)/ The difference between the aggregate option exercise price and the
closing price of $12.25 of the underlying shares at December 31, 1995.
Compensation Committee Report on Executive Compensation
- -------------------------------------------------------
The Compensation Committee (the "Committee") has furnished the
following report on executive compensation:
Compensation Policies. Under the supervision of the Board of
Directors, Imperial has developed and implemented compensation policies, plans
and programs which seek to enhance the profitability of Imperial, and thus
shareholder value, by closely aligning the financial interests of Imperial's
employees, including its Chief Executive Officer ("CEO") and Imperial's other
senior management, with those of its shareholders.
11
<PAGE>
The executive compensation program of Imperial is designed to:
. Support a pay-for-performance policy that differentiates
compensation based on corporate and individual performance;
. Motivate employees to assume increased responsibility and reward
them for their achievement;
. Provide compensation opportunities that are comparable to those
offered by other leading companies, allowing the Company to
compete for and retain talented executives who are critical to
the Company's long-term success; and
. Align the interests of executives with the long-term interests of
shareholders through award opportunities that can result in
ownership of Common Stock.
At present, the executive compensation program is comprised of salary,
annual cash incentive opportunities, long-term incentive opportunities in the
form of stock options, and miscellaneous benefits typically offered to
executives by major corporations. The Committee considers the total
compensation (earned or potentially available) in establishing each element of
compensation so that total compensation paid is competitive with the market
place, based on an independent consultant's survey of salary competitiveness of
other financial institutions. The Committee intends to be advised periodically
by independent compensation consultants concerning salary competitiveness.
As to Mr. Haligowski and other executive officers, as an executive's
level of responsibility increases, his or her potential total compensation
opportunity is affected by Imperial performance incentives. Reliance on Imperial
performance causes greater variability in the individual's total compensation
from year to year. By varying annual and long-term compensation and basing both
on corporate performance, Imperial believes executive officers are encouraged to
continue focusing on building profitability and shareholder value.
SALARIES. With respect to Mr. Haligowski's base salary in 1995, the
prior Committee established his salary at the direction of Imperial's former
parent company. In conjunction with the initial public offering, this Committee
took into account a comparison of salaries of chief executive officers of local
financial institutions and increased Mr. Haligowski's salary to $285,000. The
current Committee determined based on Imperial's success in completing the
initial public offering to also award Mr. Haligowski a cash bonus of $81,000.
Likewise, each executive officer's base salary was determined utilizing
financial institution compensation surveys.
STOCK OPTION AWARDS. Imperial's Stock Option Plan is designed to
align a significant portion of the executive compensation program with
shareholder interests. The Stock Option Plan provides for the granting of stock-
based awards. To date, the only type of award approved by regulatory authorities
to be granted under the Stock Option Plan to executive officers and other key
employees consists of stock options.
RESTRICTED STOCK AWARDS. In 1996, the Committee adopted a policy
relating to the granting of restricted stock awards in lieu of a portion of the
cash bonus which would otherwise be paid to executive officers and certain key
employees under the proposed RRP, to be carried out by the RRP Committee,
consisting of Directors Lipscomb and Oribe. Under this policy, awards may be
granted to plan participants by the RRP Committee utilizing objective criteria
adopted by the Compensation Committee and approved by the Board of Directors,
after taking into account the practices of other publicly traded financial
institutions and such other factors as deemed appropriate. In addition, under
the formula, no awards under the proposed RRP will be granted in any year in
which the Imperial does not achieve a return on assets of at least .50% and
remains adequately capitalized under FDIC rules.
In 1993, Section 162(m) was added to the Code, the effect of which is
to eliminate the deductibility of compensation over $1 million, with certain
exclusions, paid to each of certain highly compensated executive officers of
publicly held corporations, such as the Company. Section 162(m) applies to all
remuneration (both cash and non-
12
<PAGE>
cash) that would otherwise be deductible for tax years beginning on or after
January 1, 1994, unless expressly excluded. Because the current compensation of
each of the Company's executive officers is well below the $1 million threshold,
the Company has not yet considered its policy regarding the new provision.
Jeffrey L. Lipscomb Hirotaka Oribe
Shareholder Return Performance Presentation
- -------------------------------------------
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the Savings and Loan Industry Index and the
Nasdaq Market Index for the period commencing October 27, 1995 and ended April
30, 1996.
CUMULATIVE TOTAL RETURN
IMPERIAL THRIFT AND LOAN ASSOCIATION, NASDAQ MARKET INDEX
AND SAVINGS AND LOAN INDUSTRY INDEX
<TABLE>
<CAPTION>
NASDAQ S&L
Measurement Period IMPERIAL INDEX INDEX
- --------------------- --------------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-10/27/1995 $100.00 $100.00 $100.00
11/30/1995 $105.00 $102.00 $106.00
12/29/1995 $108.00 $101.00 $108.00
01/31/1996 $110.00 $102.00 $106.00
02/29/1996 $118.00 $106.00 $107.00
03/29/1996 $123.00 $106.00 $110.00
04/30/1996 $126.00 $114.00 $110.00
</TABLE>
Certain Transactions
- --------------------
During the year, Imperial utilized the services of various law firms,
including the law firm of Tisdale & Nicholson. Sandor X. Mayuga, a director of
Imperial, is a partner in that law firm. During 1995, Mr. Mayuga's firm
received approximately $4,000 in legal fees from Imperial, which amount was not
in excess of 5% of such firm's revenues during 1995.
Additionally, during fiscal 1995, Imperial utilized the services of
Equitable Financial Companies for its corporate group benefits. Jeffrey L.
Lipscomb, a director of Imperial, is a Registered Principal and Assistant
Manager of the San Diego office of Equitable Financial Companies. Mr.
Lipscomb's firm received approximately $8,000 in fees from Imperial in 1995,
which amount was not in excess of 5% of such firm's revenues during 1995.
Section 16(a) of the Securities Exchange Act of 1934 requires
Imperial's directors and executive officers, and persons who own more than 10%
of a registered class of Imperial's equity securities, to file with the SEC
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of Imperial. Officers, directors and greater than
10% stockholders are required by SEC regulation to furnish Imperial with copies
of all Section 16(a) forms they file.
To Imperial's knowledge, based solely on a review of the copies of
such reports furnished to Imperial and written representations that no other
reports were required, during the fiscal year ended December 31, 1995, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10 percent beneficial owners were complied with.
13
<PAGE>
PROPOSAL II -- THE HOLDING COMPANY MERGER AND REORGANIZATION
The statements contained in this Proxy Statement/Prospectus with
respect to the terms and conditions of the Reorganization are subject to and
qualified in their entirety by the detailed provisions of the Merger Agreement
attached hereto as Appendix A.
Parties to the Merger Agreement
- -------------------------------
Imperial is a California-chartered thrift and loan association. The
Company is a recently-formed business corporation chartered and organized under
the laws of the State of Delaware for the purpose of becoming a holding company.
See "The Company." ITLA Corp. ("ITLA") is a newly-chartered California
corporation organized by Imperial and the Company solely for the purpose of
implementing the proposed Reorganization. ITLA has not conducted, and prior to
the merger with Imperial will not conduct, any business operations except in
connection with the Reorganization.
Reasons for the Reorganization
- ------------------------------
The Board of Directors of Imperial has determined that the
Reorganization is in the best interests of its stockholders and, accordingly,
recommends that the stockholders vote FOR the Reorganization.
The Reorganization and the formation of the Company as a depository
institution holding company offer Imperial and the Company various potential
advantages, including broader investment opportunities than those available to a
California-chartered thrift and loan association and increased organizational
flexibility. Further, because the Company will not be subject to certain
regulatory capital requirements, borrowing limitations and other restrictions
applicable to Imperial, the Company may have greater access to capital markets
for financing the growth of Imperial and possible future operating subsidiaries
of the Company. As a holding company, ITLA Capital Corporation will be able to
diversify its financial services and business activities through the Company or
subsidiaries which it may establish in the future.
Also, the Company could acquire other depository institutions and
operate them as separate corporate entities. For example, an acquired
institution could retain its own directors, officers and corporate name as well
as having representation on the Company's Board of Directors. This ability to
offer more autonomous operations could be decisive in negotiations with
acquisition candidates. However, while management continuously studies potential
acquisition opportunities, there are no specific plans, understandings or
agreements relating to the acquisition of any other institution by the Company.
There can be no assurance that such acquisition opportunities will be available
in the future or, if available, will be on terms deemed advantageous to the
Company.
It is anticipated that (subject to the Company's financial condition)
the Company may purchase Imperial Common Stock to provide capital to Imperial
when and if needed. If the Company were not formed, and Imperial sought
additional capital through the issuance of shares of Imperial Common Stock,
stockholders desiring to avoid dilution of their percentage ownership of
Imperial would have to purchase additional shares of Imperial Common Stock with
their personal funds. In contrast, such future infusions of capital may be made
by the Company, through funds available from borrowing or from the operations of
other subsidiaries which may be acquired by the Company in the future, without
affecting the percentage ownership of stockholders of the Company. See "The
Company --Regulation."
In the opinion of management, a holding company will be in a better
position to respond competitively in a rapidly changing, financial environment.
Management and the Board of Directors believe that operating as a holding
company will serve the interests of the public and of Imperial's stockholders,
depositors and borrowers by improving its capabilities for service in a highly
competitive environment.
14
<PAGE>
Description of the Transaction; Exchange Ratio
- ----------------------------------------------
The Company, Imperial and ITLA have executed the Merger Agreement
pursuant to which the Reorganization will be implemented. In accordance with the
Merger Agreement, ITLA (which has been organized as a wholly-owned subsidiary of
the Company) will be merged with and into Imperial, and all outstanding shares
of Imperial Common Stock will be converted into an equal number of shares of
Company Common Stock. The existing stockholders of Imperial will, after the
Reorganization, own all of the outstanding shares of Company Common Stock in
lieu of their present ownership of shares of Imperial Common Stock.
All of the assets and liabilities of Imperial and ITLA will become
assets and liabilities of the surviving entity, which will retain its present
home office and branch office locations and continue to carry on the business of
Imperial as a California-chartered thrift and loan association.
Federal Income Tax Consequences
- -------------------------------
The Merger Agreement provides that it is a condition to the proposed
Reorganization that, prior to the effective date of the Reorganization, Imperial
shall have received an opinion of its counsel, Silver, Freedman & Taff, L.L.P.,
(a limited liability partnership including professional corporations), 1100 New
York Avenue, N.W., Washington, D.C. 20005, to the effect that, for federal
income tax purposes:
(1) The Merger will constitute a reorganization within the
meaning of Section 368(a)(1)(A) and 368(a)(2)(E) of the Internal
Revenue Code of 1986 (the "Code"). The reorganization will not be
disqualified by reason of the fact that Company Common Stock is issued
in the transaction (Section 368(a)(2)(E) of the Code). The Company,
ITLA and Imperial will each be a "party to a reorganization" within
the meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized by the current Imperial
stockholders upon the exchange of their Imperial Common Stock solely
in exchange for Company Common Stock.
(3) No gain or loss will be recognized to the Company on the
receipt of Imperial Common Stock.
(4) No gain or loss will be recognized to ITLA on the transfer
of substantially all of its assets to Imperial.
(5) The basis of the Company Common Stock to be received by each
current Imperial stockholder will be the same as the basis of Imperial
Common Stock surrendered in the transaction.
(6) The holding period of the Company Common Stock to be
received by the current Imperial stockholders will include the holding
period of Imperial Common Stock surrendered in the transaction,
provided that Imperial Common Stock was a capital asset in the hands
of the current Imperial stockholders on the date of the exchange.
Conditions to the Reorganization
- --------------------------------
The consummation of the Reorganization is conditioned upon, among
other things: (i) approval by the Commissioner and the stockholders of Imperial;
and (ii) the receipt of a favorable opinion of counsel with respect to the
matters summarized above under the caption "-- Federal Income Tax Consequences."
It is contemplated that these conditions will be complied with before
consummation of the Reorganization. See "--Effective Date of the
Reorganization," below. However, the Merger Agreement provides that Imperial,
the Company and ITLA, without approval of their stockholders, may waive any of
the conditions (other than the necessary approvals of stockholders and
government authorities) to their respective obligations to consummate the
Reorganization.
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Except with the specific approval of its stockholders, Imperial will
not, subsequent to the approval of the Reorganization by Imperial's
stockholders, waive any condition to the Reorganization set forth in the Merger
Agreement if, in the judgment of its Board of Directors, such waiver would be
materially adverse to Imperial or its stockholders.
An application has been filed with the Commissioner and the FDIC for
approval of the proposed Reorganization. It is anticipated, although there can
be no assurance, that final approval by the Commissioner and the FDIC will be
received before approval of the Reorganization by Imperial's stockholders. By
approving the Reorganization, the stockholders will be approving compliance by
Imperial and the Company with any condition which may be imposed by the
Commissioner and the FDIC in connection with its approval of the Reorganization
and which is not deemed by Imperial to be materially adverse to Imperial or its
stockholders.
Amendment or Termination
- ------------------------
Imperial, the Company and ITLA, by mutual consent of their respective
Boards of Directors and to the extent permitted by law, may amend the Merger
Agreement pursuant to which the Reorganization will be implemented at any time
before or after approval of the Merger Agreement by their respective
stockholders, but no amendment which would have a materially adverse impact on
Imperial or its stockholders may be implemented unless approval of the
stockholders is first obtained.
The Merger Agreement also provides that it may be terminated and the
Reorganization abandoned at any time prior to the effective date by: (i) mutual
consent of the parties to the Merger Agreement; (ii) the specified parties to
the Merger Agreement if certain conditions to the consummation of the
Reorganization are not satisfied or waived; or (iii) by Imperial if certain
conditions to the consummation of the Reorganization are not met or waived. The
rights of the parties to the Merger Agreement to terminate it are set forth in
detail under Article X thereof. In the event of such termination, Imperial will
pay the fees and expenses incurred in connection with the Merger Agreement and
the proposed Reorganization.
Effective Date of the Reorganization
- ------------------------------------
The Effective Date shall be the day on which the Certificate of Merger
is issued by the Commissioner. The Boards of Directors of Imperial, ITLA and the
Company each specifically and expressly delegate to their respective chief
executive officers the authority to change, by mutual consent of such officers,
the Effective Date if necessary to properly and efficiently accomplish the
Merger. However, in no event shall the Merger become effective unless and until
approved by the Commissioner and the FDIC.
Exchange of Stock Certificates Not Required
- -------------------------------------------
The holders of Imperial Common Stock will be notified of the
consummation of the Reorganization. After the Reorganization is consummated, the
former stockholders of Imperial may forward to U.S. Stock Transfer Corporation,
1745 Gardens Avenue, Suite 200, Glendale, California 91204 (which will be the
transfer agent and registrar for the shares of Company Common Stock) stock
certificates theretofore evidencing Imperial Common Stock for surrender and
exchange for certificates representing Company Common Stock. THERE IS NO
REQUIREMENT THAT SUCH SURRENDER AND EXCHANGE BE MADE AND, UNTIL SO SURRENDERED
TO THE TRANSFER AGENT AND REGISTRAR, CERTIFICATES FORMERLY REPRESENTING IMPERIAL
COMMON STOCK WILL BE DEEMED FOR ALL CORPORATE PURPOSES TO EVIDENCE THE NUMBER OF
SHARES OF COMPANY COMMON STOCK WHICH THE HOLDER THEREOF WOULD BE ENTITLED TO
RECEIVE UPON SURRENDER.
Operations After the Reorganization
- -----------------------------------
After the Reorganization is consummated, Imperial will continue to
conduct its business substantially as it is now being conducted, except that
Imperial will be a wholly-owned subsidiary of the Company. The Reorganization
will not result in a change in Imperial's directors, officers or personnel. For
information with
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respect to the management of the Company, see "The Company --Company
Management." After consummation of the Reorganization, Imperial will be subject
to regulation and supervision by regulatory authorities to the same extent as it
is now. However, certain obligations pursuant to the Exchange Act, which are not
applicable to Imperial will become applicable to the Company after the
Reorganization. See "-- Comparison of Stockholder Rights --Reports to
Stockholders." For information with respect to the supervision and regulation of
the Company, see "The Company -- Regulation."
Accounting Treatment
- --------------------
For accounting purposes, the assets, liabilities and stockholders'
equity of Imperial immediately prior to the Reorganization will be carried
forward on the financial statements of Imperial and the Company after the
Reorganization at the amounts carried on their respective books at the effective
date of the Reorganization.
Stock Option and Incentive Plan
- -------------------------------
The Company will assume and continue Imperial's Stock Option Plan.
Holders of options granted or to be granted under the Stock Option Plan will,
following the effectiveness of the Reorganization, be entitled to purchase a
number of shares of Company Common Stock equal to the number of shares of
Imperial Common Stock such holder would have been entitled to purchase
immediately prior to the effective date of the Reorganization, upon the same
terms and conditions as under such Stock Option Plan and the option agreements
relating thereto in effect immediately prior to the Reorganization. Similarly,
following the Reorganization, restricted stock will relate to Company Common
Stock rather than to Imperial Common Stock. The Company will also have the right
to grant options and restricted stock awards as and to the extent provided by
the Stock Option Plan.
A vote in favor of the Reorganization will constitute a vote in favor
of the assumption of the Stock Option Plan by the Company.
Comparison of Stockholder Rights
- --------------------------------
Various features of the Certificate of Incorporation and Bylaws of the
Company differ from those of Imperial. The following discussion does not
purport to be a complete statement of such differences but summarizes the
differences that are deemed by Imperial to be material. For additional
information, reference is made to "The Company" and other information contained
elsewhere in this Proxy Statement/Prospectus, to the Certificate of
Incorporation of the Company attached as Appendix B to this Proxy Statement, and
to the Bylaws of the Company and the Articles of Incorporation and Bylaws of
Imperial which may be obtained by stockholders upon written request to the
Secretary, Imperial Thrift and Loan Association, 700 North Central Avenue,
Glendale, California 91203.
CHOICE OF DELAWARE LAW. For many years Delaware has followed a policy
of encouraging incorporation in that state. In furtherance of that policy, it
has adopted comprehensive, modern and flexible corporate laws which are
periodically updated and revised to meet changing business needs. As a result,
many major corporations, including a number of the largest and most successful
enterprises, choose Delaware for their domicile. Because of Delaware's
significance as the state of incorporation for many major domestic corporations,
the Delaware judiciary has become particularly familiar with matters of
corporate law and a substantial body of court decisions has developed construing
Delaware law. As a consequence, Delaware corporate law has been interpreted and
explained in a number of significant court decisions, which may provide greater
predictability with respect to the Company's corporate legal affairs.
ISSUANCE OF ADDITIONAL CAPITAL STOCK. Imperial has 20,000,000 shares
of authorized common stock, of which 7,820,500 shares were issued and
outstanding as of June 10, 1996. Additionally, Imperial has 5,000,000 shares of
authorized preferred stock of which no shares were issued and outstanding as of
June 10, 1996. These shares of common stock and preferred stock may be issued by
action of the Board of Directors without stockholder approval.
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The Company's Certificate of Incorporation also authorizes 20,000,000
shares of common stock and 5,000,000 shares of preferred stock, both of which
may generally be issued by action of the Board of Directors without stockholder
approval.
AMENDMENT OF GOVERNING INSTRUMENTS. Amendments to Imperial's Articles
of Incorporation or Bylaws may be made by action of the Board of Directors or by
the vote of a majority of stockholders. Amendments to the Company's Certificate
of Incorporation and Bylaws, like those of Imperial's, may be made by action of
the Board of Directors or, as permitted by Delaware law, by a majority vote of
the Company's stockholders.
TRANSACTIONS WITH AFFILIATES. Imperial, as a federally-insured
depository institution, is subject to certain restrictions, limitations,
conditions and prohibitions with respect to transactions with directors,
officers and its affiliates. These include, but are not limited to, limitations
upon extensions of credit, deposit relationships, loan services, loan
procurements, and asset purchases and sales. These requirements and restrictions
will continue to apply to Imperial following the Reorganization.
Under Delaware law, no contract or transaction between a corporation
and one or more of its directors or between a corporation and another
organization in which one or more of its directors is a director or officer or
is financially interested shall be void or voidable solely for this reason,
provided that the material facts of the relationship of the party to the
transaction are disclosed and the contract or transaction is authorized by a
majority of the disinterested directors or by a majority of the stockholders
entitled to vote or, at the time of such authorization, the contract or
transaction was fair and reasonable to the corporation.
Additionally, the Company is subject to certain federal regulations
relating to transactions between insured depository institutions and their
holding company. See "The Company -- Regulation."
SIZE OF THE BOARD OF DIRECTORS. Under Delaware law, the number of
directors of a corporation, or the range of authorized directors, may be fixed
or changed by the board of directors acting alone by amendment to the
corporation's bylaws, unless the directors are not authorized to amend the
bylaws or the number of directors is fixed in the certificate of incorporation,
in which case stockholder approval is required.
Under California law, the number of directors of a corporation may be
fixed in the articles or incorporation or bylaws of a corporation, or a range
may be established for the number of directors, with the Board of Directors
given authority to fix the exact number of directors within such range.
Imperial's Bylaws establish a range of five to nine directors, with the exact
number set by resolution of the Board of Directors at five.
REMOVAL OF DIRECTORS. Under Delaware law, a director of a corporation
that does not have a classified board of directors or cumulative voting may be
removed (with or without cause) with the approval of a majority of the
outstanding shares entitled to vote. A director of a corporation with a
classified board of directors may be removed only for cause, unless the
certificate of incorporation otherwise provides. The Company's Certificate of
Incorporation provides for a classified board of directors, but not for
cumulative voting.
Under California law, any director or the entire board of directors
may be removed, with or without cause, with the approval of a majority of the
outstanding shares entitled to vote; however, no individual director may be
removed (unless the entire board is removed) if the number of votes cast against
such removal would be sufficient to elect the director under cumulative voting.
The term "cause" with respect to the removal of directors is defined under
California law to mean a director who has been declared of unsound mind by an
order of court or convicted of a felony. In addition, holders of at least 10% of
shares of any class may bring suit to remove a director in case of fraudulent or
dishonest acts or gross abuse of authority or discretion with reference to the
corporation.
CLASSIFIED BOARD OF DIRECTORS. A classified board is one on which a
certain number, but not all, of the directors are elected on a rotating basis
each year. This method of electing directors makes a change in the composition
of the board of directors, and a potential change in control of a corporation, a
lengthier and more difficult process. Delaware law permits, but does not
require, a classified board of directors, with staggered terms under which one-
half or one-third of the directors are elected for terms of two or three years,
respectively. Under
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California law, directors generally are elected annually; however, corporations
that are Public Companies may designate a classified board of directors by
adopting amendments to their articles and bylaws that must be approved by
shareholders.
The Company's Certificate of Incorporation provide for a classified
board of directors. Imperial's Articles of Incorporation and Bylaws do not
provide for a classified board of directors.
SHAREHOLDER VOTING. Both Delaware and California law generally
require that a majority of the stockholders of both acquiring and target
corporations approve statutory mergers. Delaware law does not require a
stockholder vote of the surviving corporation in a merger (unless the
corporation provides otherwise in its certificate of incorporation) if (a) the
merger agreement does not amend the existing certificate of incorporation, (b)
each share of the surviving corporation outstanding before the merger is an
identical outstanding or treasury share after the merger and (c) the number of
shares to be issued by the surviving corporation in the merger does not exceed
20% of the shares outstanding immediately prior to the merger. California law
contains a similar exception to its voting requirements for reorganizations
where shareholders or the corporation itself, or both, immediately prior to
reorganization will own immediately after the reorganization equity securities
constituting more than five-sixths of the voting power of the surviving or
acquiring corporation or its entity.
Both California and Delaware law also require that a sale of all or
substantially all of the assets of a corporation be approved by a majority of
the voting shares of the corporation transferring such assets.
Delaware law generally does not require class voting, except in
certain transactions involving an amendment to the certificate of incorporation
that adversely affects a specific class of shares. In contrast and with certain
exceptions, California law requires that mergers, reorganizations, certain sales
of assets and similar transactions be approved by a majority vote of each class
of shares outstanding.
California law also requires that holders of nonredeemable common
stock receive nonredeemable common stock in a merger of the corporation with the
holder of more than 50% but less than 90% of such common stock or its affiliate
unless all of the holders of such common stock consent to the transaction. This
provision of California law may have the effect of making a "cash-out" merger by
a majority shareholder more difficult to accomplish. Although Delaware law does
not parallel California law in this respect, under some circumstances Section
203 of the Delaware General Corporation Law does provide similar protection
against coercive two-third bids for a corporation in which the shareholders are
not treated equally. See "Certain Business Combinations."
California law also provides that, except in certain circumstances,
when a tender offer or a proposal for a reorganization or for a sale of assets
is made by an interested party (generally a controlling or managing party of the
target corporation), an affirmative opinion in writing as to the fairness of the
consideration to be paid to the shareholders must be delivered to shareholders.
This fairness opinion requirement does not apply to a corporation that does not
have shares held of record by at least 100 persons, or to a transaction that has
been qualified under California state securities laws. Furthermore, if a tender
of shares or vote is sought pursuant to an interested party's proposal and a
later proposal is made by another party at least 10 days prior to the date of
acceptance of the interested party proposal, the shareholders must be informed
of the later offer and be afforded a reasonable opportunity to withdraw any
vote, consent or proxy, or to withdraw any tendered shares. Delaware law has no
comparable provision.
California law does not have any such statutory prohibition on
business combinations.
DISSENTERS' RIGHTS. Delaware law does not require dissenters' rights
of appraisal with respect to (i) sale of assets in a reorganization; (ii) a
merger by a corporation, the shares of which are either listed on a national
securities exchange, designated as a National Market security on the Nasdaq or
widely held (by more than 2,000 stockholders) if such stockholders receive
shares of the surviving corporation or of a listed or widely held corporation;
or (iii) stockholders of a corporation surviving a merger if no vote of such
stockholders is required to approve the merger. Under Delaware law, no vote of
the stockholders of a corporation surviving a merger is
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required if the number of shares to be issued in the merger does not exceed 20%
of the shares of the surviving corporation outstanding immediately prior to such
issuance and if certain other conditions are met.
California law, with respect to thrift and loan associations such as
Imperial, does not afford dissenters' rights to the proposed merger transaction.
INSPECTION OF STOCKHOLDERS' LIST. Both California law and Delaware
law allow any shareholder to inspect the shareholders' list for a purpose
reasonably related to such person's interest as a shareholder. California law
provides, in addition, for an absolute right to inspect and copy a corporation's
shareholders' list by persons holding 5% or more of the corporation's voting
shares, or any shareholders holding 1% or more of the corporation's voting
shares who have filed a Schedule 14B with the SEC relating to the election of
directors. Delaware law does not provide any such absolute right of inspection.
REPORTS TO STOCKHOLDERS. Imperial is required to transmit proxy
material and annual reports containing financial statements to its stockholders.
Following the Reorganization, these obligations will be assumed by the Company
and will be required to comply with the Exchange Act, which will transmit proxy
materials and annual reports containing financial statements to its stockholders
and will file with the SEC periodic reports, which will be available for public
inspection, to provide current financial and other information about the
Company.
LIMITED LIABILITY OF DIRECTORS. The Delaware General Corporation Law
was amended in 1986 in response to widespread concern about the ability of
Delaware corporations to attract capable directors in light of the difficulties
in obtaining and maintaining directors and officers liability insurance
("directors and officers' insurance") policies. The legislative commentary to
the law states that it is "intended to allow Delaware companies to provide
substitute protection, in various forms, to their directors and to limit
director liability under certain circumstances."
The Company's Certificate of Incorporation eliminates the liability of
directors to the fullest extent permissible under Delaware law, as such law
exists currently or as it may be amended in the future. Under Delaware law,
such provision may not eliminate or limit director monetary liability for (a)
breaches of the director's duty of loyalty to the corporation or its
stockholders; (b) acts or omissions not in good faith or involving intentional
misconduct or knowing violations of law; (c) the payment of unlawful dividends
or unlawful stock repurchases or redemptions; or (d) transactions in which the
director received an improper personal benefit. Such provision also may not
limit a director's liability for violation of, or otherwise relieve the Company
or its directors from the necessity of complying with, federal or state
securities laws or affect the availability of non-monetary remedies such as
injunctive relief or rescission.
The Corporations Code of California was amended in 1987 to permit
California corporations to include in their articles of incorporation a
provision generally similar to that permitted under Delaware law, except that:
(i) the California Law provides that indemnification is available for expenses
incurred in a derivative action if the director wins suit or with court approval
(including amounts paid in settlement if subsequently approved by the court).
Indemnification is also available for expenses incurred and amounts actually
paid to settle any threatened derivative action while Delaware only applies to
expenses (but not settlements) with respect to actual or threatened actions only
with court approval; and (ii) under the California provision, personal liability
of a director for monetary damages cannot be limited or eliminated where
liability arises from "acts or omissions that show a reckless disregard for the
director's duty to the corporation or its shareholders in circumstances in which
the director was aware, or should have been aware, in the ordinary course of
performing a director's duties, of a risk of serious injury to the corporation
or its shareholders," or from "acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's duty to
the corporation or its shareholders."
INDEMNIFICATION OF OFFICERS AND DIRECTORS. The California and
Delaware corporation laws have similar provisions and limitations regarding
indemnification by a corporation of its officers, directors and employees. In
general, under both California and Delaware law, the indemnification provided
therein is not deemed to be exclusive of any nonstatutory indemnification rights
provided to officers, directors and employees under any bylaw, agreement, or
vote of stockholders or disinterested directors.
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The Company's Certificate of Incorporation and Bylaws provide for
indemnification of directors and officers to the fullest extent permitted under
Delaware law. Imperial's Articles of Incorporation provide for indemnification
of directors and officers to the fullest extent permitted under California law.
The SEC takes the position that the indemnification of directors,
officers and controlling persons of a corporation against liabilities arising
under the Securities Act of 1933, as amended (the "Act"), is against public
policy as expressed in the Act and is, therefore, unenforceable.
Imperial is party from time to time to certain legal proceedings
incidental to its business. Management believes that the outcome of such
proceedings, in the aggregate, will not have a material effect on Imperial's
business or financial condition. Neither the Company nor Imperial, nor any of
its directors or officers, knows of any threatened litigation which might result
in claims under indemnity agreements.
CERTAIN BUSINESS COMBINATIONS. In the last several years, a number of
states (not including California) have adopted special laws designed to make
certain kinds of "unfriendly" corporate takeovers, or other transactions
involving a corporation and one or more of its significant stockholders, more
difficult. Under Section 203 of the Delaware General Corporation Law ("Section
203"), certain "business combinations" with "interested stockholders" of
Delaware corporations are subject to a three-year moratorium unless specified
conditions are met. With certain exceptions, an interested stockholder is a
person or group who or which owns 15% or more of the corporation's outstanding
voting stock (including any rights to acquire stock pursuant to an option,
warrant, agreement, arrangement or understanding, or upon the exercise of
conversion or exchange rights, and stock with respect to which the person has
voting rights only), or is an affiliate or associate of the corporation and was
the owner of 15% or more of such voting stock at any time within the previous
three years.
For purposes of Section 203, the term "business combination" is
defined broadly to include mergers with or caused by the interested stockholder;
sales or other dispositions to the interested stockholder (except
proportionately with the corporation's other stockholders) of assets of the
corporation or a subsidiary equal to 10% or more of the aggregate market value
of the corporation's consolidated assets or its outstanding stock; the issuance
or transfer by the corporation or a subsidiary of stock of the corporation or
such subsidiary to the interested stockholder (except for transfers in a
conversion or exchange in a pro rata distribution or certain other transactions,
none of which increase the interested stockholder's proportionate ownership of
any class or series of the corporation's or such subsidiary's stock); or receipt
by the interested stockholder (except proportionately as a stockholder),
directly or indirectly, of any loans, advances, guarantees, pledges or other
financial benefits provided by or through the corporation or a subsidiary.
The three-year moratorium imposed on business combinations by Section
203 does not apply if: (i) prior to the date on which such stockholder becomes
an interested stockholder the board of directors approves either the business
combination or the transaction that resulted in the person becoming an
interested stockholder; (ii) the interested stockholder owns 85% of the
corporation's voting stock upon consummation of the transaction that made him or
her an interested stockholder (excluding from the 85% calculation shares owned
by directors who are also officers of the target corporation and shares held by
employee stock plans that do not permit employees to decide confidentially
whether to accept a tender or exchange offer); or (iii) on or after the date
such person becomes an interested stockholder, the board approves the business
combination and it is also approved at a stockholder meeting by 66-% of the
voting stock not owned by the interested stockholder.
Section 203 has been challenged in lawsuits arising out of ongoing
takeover disputes, and it is not yet clear whether and to what extent its
constitutionality will be upheld by the courts. Although the United States
District Court for the District of Delaware has consistently upheld the
constitutionality of Section 203, the Delaware Supreme Court has not yet
considered the issue.
CUMULATIVE VOTING. Under cumulative voting, a shareholder is entitled
to cast as many votes as there are directors to be elected multiplied by the
number of shares registered in such shareholder's name. The shareholder may cast
all of such votes for a single nominee or may distribute them among any two or
more nominees. Under
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Delaware law, cumulative voting in the election of directors is not permitted
unless specifically adopted. The Company does not have any such provision in its
Certificate of Incorporation.
Under California law, cumulative voting is an absolute right for the
shareholders of all corporations except those corporations that have outstanding
shares listed on the New York Stock Exchange or the American Stock Exchange, or
that have outstanding securities qualified for trading as a National Market
security on the Nasdaq and at least 800 equity holders. Imperial's Bylaws
provide for cumulative voting for the election of directors.
LEGAL INVESTMENTS. Under the laws of some jurisdictions, shares of
Company Common Stock may not be legal investments for certain institutions and
fiduciaries, whereas shares of Imperial Common Stock are more likely to be. For
example, under the laws of some jurisdictions, certain pension funds may not be
permitted to invest in common stock or other securities of depository
institution holding companies. Stockholders of Imperial should consult their
personal advisors or plan administrators regarding the permissibility under
state law of investment in the Company Common Stock.
DIVIDENDS AND REPURCHASE OF SHARES. Delaware law permits a
corporation, unless otherwise restricted by its certificate of incorporation, to
declare and pay dividends out of surplus, or, if there is no surplus, out of net
profits for the fiscal year in which the dividend is declared and/or of the
preceding fiscal year, as long as the amount of capital of the corporation is
not less than the aggregate amount of the capital represented by the issued and
outstanding stock of all classes having a preference upon the distribution of
assets. In addition, Delaware law generally provides that a corporation may
redeem or repurchase its shares provided such redemption or repurchase would not
impair the capital of the corporation. The ability of a Delaware corporation to
pay dividends on, or to make repurchases or redemptions of, its shares is
dependent on the financial status of the corporation standing alone, not
consolidated with subsidiary or parent corporations. In determining the amount
of surplus of a Delaware corporation, the assets of the corporation, including
stock of subsidiaries owned by the corporation, must be valued at their fair
market value as determined by the board of directors, regardless of their
historical book value.
Under California law, Imperial may declare a dividend provided it has
a minimum unimpaired capital of $750,000 plus additional capital stock of
$50,000 for each of its branch offices. In addition, no distribution of
dividends is permitted unless: (i) such distribution would not exceed a thrift
and loan's retained earnings, or (ii) in the alternative, after giving effect to
the distributions the sum of a thrift and loan's assets (net of goodwill,
capitalized research and development expenses and deferred charges) would not be
less than 125% of its liabilities (net of deferred taxes, income and other
credits). Additionally, Imperial must receive the approval of the FDIC before
repurchasing its stock. Imperial's current bylaws, however, prohibit the payment
of dividends. Subsequent to the Reorganization, Imperial intends to amend its
bylaws to permit the payment of dividends.
CONTINUED APPLICABILITY OF CALIFORNIA LAW. Section 2115 of the
California General Corporation Law ("Section 2115") makes several provisions of
that law applicable to corporations that are incorporated in other states
("foreign corporations") if the corporation does a significant amount of
business in California and a majority of its shareholders of record have
California addresses. Thus, certain of the provisions in the Company's
Certificate of Incorporation and Bylaws that are inconsistent with California
law (including a classified board and the absence of cumulative voting for
directors) will not be enforceable if the Company becomes subject to Section
2115.
Section 2115 is applicable only to foreign corporations meeting two
tests, which are made at the end of a corporation's fiscal year for the next
succeeding fiscal year. First, over half of its payroll, sales and property must
be attributable to or located in California. The determination is made in
accordance with regulations promulgated in connection with determining a multi-
state corporation's state income taxes. The Company met this test for fiscal
1995.
Second, more than one-half of the corporation's outstanding voting
securities must be held of record by persons having California addresses.
Accounts in the names of broker-dealers and their nominees are excluded.
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Section 2115 does not apply to corporations having securities listed
on the New York Stock Exchange, the American Stock Exchange or having
outstanding securities designated as qualified for trading as a national market
security on the National Association of Securities Dealers Automatic Quotation
System (or any successor national market system) if such corporation has at
least 800 holders of its equity securities as of the record date of its most
recent annual meeting of shareholders. The Company's Common Stock is listed on
the Nasdaq National Market and believe it has at least 800 stockholders. As
such, Section 2115 is not applicable.
Section 1600 of the California General Corporation Law, which sets
forth shareholders' rights to inspect a corporation's shareholder list, applies
to foreign corporations that have their principal executive offices or regular
board meetings in California. Therefore, as long as the Company maintains its
principal executive offices in California, its shareholders will have the rights
set forth in Section 1600 of the California General Corporation Law.
CONTINUATION OF CERTAIN PROVISIONS. The Company's Certificate of
Incorporation will continue certain provisions not contained in Imperial's
Articles of Incorporation or Bylaws. Certain of these provisions, including
those (a) providing for a classified Board of Directors, or (b) restricting
removal of directors, could be deemed to have an anti-takeover effect and to
render more difficult the removal of management. As described elsewhere in this
Proxy Statement/Prospectus, Imperial's Stock Option Plan would also provide or
accelerate benefits in certain events involving a change of control or takeover
attempt.
Certain regulatory provisions may also have a takeover defensive
effect. FDIC regulations generally require persons who intend to acquire control
of a federally-insured financial institution to give 60-days' prior written
notice to the FDIC. FDIC regulations also require prior FDIC approval before any
company may acquire control of depository institution, such as Imperial. See
"The Company -- Regulation."
SPECIAL STOCKHOLDER MEETINGS. Under California law, a special meeting
of shareholders may be called by the Board of Directors, the chairman of the
board, the president, the holders of shares entitled to cast not less than 10%
of the votes at such meeting and such additional persons as are authorized by
the articles of incorporation or the bylaws. Under Delaware law, a special
meeting of stockholders may be called by the Board of Directors or by any other
person authorized to do so in the certificate of incorporation or the bylaws.
AMENDMENT TO CERTIFICATE OF INCORPORATION AND BYLAWS. Amendments to
the Company's Certificate of Incorporation must be approved by the Company's
Board of Directors and also by a majority of the outstanding shares of the
Company's voting stock, provided, however, that approval by at least 80% of the
outstanding voting stock is generally required for certain provisions (i.e.,
provisions relating to number, classification, election and removal of
directors; amendment of bylaws; call of special stockholder meetings; director
liability; power of indemnification; and amendments to provisions relating to
the foregoing in the certificate of incorporation).
The bylaws may be amended by a majority vote of the Board of Directors
or the affirmative vote of at least 80% of the total votes eligible to be voted
at a duly constituted meeting of stockholders.
PURPOSE AND TAKEOVER DEFENSIVE EFFECTS OF THE COMPANY'S CERTIFICATE OF
INCORPORATION AND BYLAWS. The Board of Directors of Imperial believes that the
provisions described above are prudent and will reduce the Company's
vulnerability to takeover attempts and certain other transactions which have not
been negotiated with and approved by its Board of Directors. The Board of
Directors believes these provisions are in the best interest of Imperial and of
the Company and its stockholders. In the judgment of the Board of Directors,
the Company's Board will be in the best position to determine the true value of
the Company and to negotiate more effectively for what may be in the best
interests of its stockholders. Accordingly, the Board of Directors believes
that it is in the best interests of the Company and its stockholders to
encourage potential acquirors to negotiate directly with the Board of Directors
of the Company and that these provisions will encourage such negotiations and
discourage hostile takeover attempts. It is also the view of the Board of
Directors that these provisions should not discourage persons from proposing a
merger or other transaction at prices reflective of the true value of the
Company and which is in the best interests of all stockholders.
23
<PAGE>
Attempts to take over financial institutions and their holding
companies have become increasingly common. Takeover attempts which have not been
negotiated with and approved by the Board of Directors present to stockholders
the risk of a takeover on terms which may be less favorable than might otherwise
be available. A transaction which is negotiated and approved by the Board of
Directors, on the other hand, can be carefully planned and undertaken at an
opportune time in order to obtain maximum value for the Company and its
stockholders, with due consideration given to matters such as the management and
business of the acquiring corporation and maximum strategic development of the
Company's assets.
An unsolicited takeover proposal can seriously disrupt the business
and management of a corporation and cause it great expense. Although a tender
offer or other takeover attempt may be made at a price substantially above then
current market prices, such offers are sometimes made for less than all of the
outstanding shares of a target company. As a result, stockholders may be
presented with the alternative of partially liquidating their investment at a
time that may be disadvantageous, or retaining their investment in an enterprise
which is under different management and whose objectives may not be similar to
those of the remaining stockholders. The concentration of control, which could
result from a tender offer or other takeover attempt, could also deprive the
Company's remaining stockholders of the benefits of certain protective
provisions of the Exchange Act, if the number of beneficial owners becomes less
than the 300 required for Exchange Act registration.
Despite the belief of Imperial and the Company as to the benefits to
stockholders of these provisions of the Company's Certificate of Incorporation
and bylaws, these provisions may also have the effect of discouraging a future
takeover attempt which would not be approved by the Company's Board, but
pursuant to which stockholders may receive a substantial premium for their
shares over then current market prices. As a result, these provisions may
prevent stockholders who might desire to participate in such a transaction from
doing so even if such transaction is favored by a majority of the Company's
stockholders. Such provisions will also render the removal of the Company's
Board of Directors and of management more difficult. The Board will enforce the
voting limitation provisions of the Certificate of Incorporation in proxy
solicitations and accordingly could utilize these provisions to defeat proposals
that are favored by a majority of the stockholders. The Boards of Directors of
Imperial and the Company, however, have concluded that the potential benefits
outweigh the possible disadvantages.
Pursuant to applicable law, at any annual or Annual Meeting of its
stockholders, the Company may adopt additional charter provisions regarding the
acquisition of its equity securities that would be permitted to a Delaware
corporation. The Company and Imperial do not presently intend to propose the
adoption of further restrictions on the acquisition of the Company's equity
securities.
Other Restrictions on Acquisitions of Stock
- -------------------------------------------
DELAWARE ANTI-TAKEOVER STATUTE. The Delaware General Corporation Law
(the "DGCL") provides that buyers who acquire more than 15% of the outstanding
stock of a Delaware corporation, such as the Company, are prohibited from
completing a hostile takeover of such corporation for three years. However, the
takeover can be completed if (i) the buyer, while acquiring the 15% interest,
acquires at least 85% of the corporation's outstanding stock (the 85%
requirement excludes shares held by directors who are also officers and certain
shares held under employee stock plans), or (ii) the takeover is approved by the
target corporation's board of directors and two-thirds of the shares of
outstanding stock of the corporation (excluding shares held by the bidder).
However, these provisions of the DGCL do not apply to Delaware
corporations with less than 2,000 stockholders or which do not have voting stock
listed on a national exchange or listed for quotation with a registered national
securities association. If this statute were applicable to the Company, the
Company could exempt itself from the requirements of the statute by adopting an
amendment to its Certificate of Incorporation or Bylaws electing not to be
governed by this provision. At the present time, the Board of Directors does not
intend to propose any such amendment.
24
<PAGE>
FEDERAL REGULATION. Federal law provides that no company or person,
"directly or indirectly or acting in concert with one or more persons, or
through one or more subsidiaries, or through one or more transactions," may
acquire "control" of a state non-member bank, such as Imperial, at any time
except upon giving 60 days' prior notice to the FDIC and having received no FDIC
objection to such acquisition of control.
Control, as defined under federal law, in general means ownership,
control of or holding irrevocable proxies representing more than 25% of any
class of voting stock, control in any manner of the election of a majority of
the bank's directors, or a determination by the FDIC that the acquiror has the
power to direct, or directly or indirectly to exercise a controlling influence
over, the management or policies of the institution. Acquisition of 10% or more
than of any class of a bank's voting stock, if the acquiror is the largest
stockholder or the stock is registered under the Exchange Act. The determination
of control may be rebutted by submission to the FDIC, prior to the acquisition
of stock or the occurrence of any other circumstances giving rise to such
determination, of a statement setting forth facts and circumstances which would
support a finding that no control relationship will exist and containing certain
undertakings. These federal regulations can make a change in control more
difficult, even if desired by the holders of the majority of the shares of the
stock.
Dissenters' Rights of Appraisal
- -------------------------------
Although under California law shareholders have the right, in some
circumstances, to dissent from certain corporate reorganizations and receive
cash for their shares, California law does not permit dissenters' rights in
connection with the type of reorganization presently proposed and described
herein.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE PROPOSED HOLDING COMPANY REORGANIZATION.
PROPOSAL III - RECOGNITION AND RETENTION PLAN
General
- -------
Subject to ratification by stockholders, the Board of Directors of the
Company has adopted an RRP as a method of providing key officers and directors
with a proprietary interest in the Company in a manner designed to encourage
such individuals to remain with the Company. Pursuant to the RRP, restricted
stock awards covering 300,000 shares have been reserved for issuance under the
RRP.
Attached as Appendix C to this Proxy Statement/Prospectus is the
complete text of the form of the RRP. The principal features of the RRP are
summarized below.
Principle Features of the RRP
- -----------------------------
The RRP provides for the award of shares of Common Stock ("RRP
Shares") subject to the restrictions described below. Each award under the RRP
will be made on such terms and conditions, consistent with the RRP, as the
committee administering the RRP shall determine.
The RRP is administered by the Company's RRP Committee. The RRP
Committee, currently consisting of certain outside directors, will select the
recipients and terms of awards pursuant to the RRP. In determining to whom and
in what amount to grant awards, the Compensation Committee considers the
position and responsibilities of eligible employees, the value of their services
to the Company and Imperial and other factors it deems relevant. Pursuant to the
terms of the RRP, any director or employee of the Company or its affiliates may
be selected by the RRP Committee to participate in the RRP.
25
<PAGE>
The RRP provides that RRP Shares used to fund awards under such plan
may be either authorized but unissued shares or shares acquired by the Company
in the open market and held as treasury shares. Since stockholders do not have
pre-emptive rights, to the extent the Company utilizes authorized but unissued
shares to fund the RRP, the interests of current stockholders will be diluted by
approximately 3.84%.
Award recipients earn (i.e., become vested in) awards as determined by
the Compensation Committee at the time of grant. RRP Shares are subject to
forfeiture if the recipient fails to remain in the continuous service (as
defined in the RRP) as an employee, officer or director of the Company or
Imperial for a stipulated period (the "restricted period"). Vested shares are
distributed to recipients as soon as practicable following the date on which
they are earned.
Subject to applicable rules, the RRP Committee may, in its discretion,
accelerate the time at which any or all restrictions will lapse, or may remove
any or all of the restrictions. In the event a recipient ceases to maintain
continuous service with the Company or Imperial by reason of death or
disability, RRP Shares still subject to restrictions will be free of these
restrictions and shall not be forfeited. In the event of termination for any
other reason, all shares will be forfeited and returned to the Company.
Effect of Adjustments
- ---------------------
Restricted stock awarded under the RRP will be adjusted by the RRP
Committee in the event of a reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or other
change in corporate structure.
Federal Income Tax Consequences
- -------------------------------
Holders of restricted stock will recognize ordinary income on the date
that the shares of restricted stock are no longer subject to a substantial risk
of forfeiture, in an amount equal to the fair market value of the shares on that
date. In certain circumstances, a holder may elect to recognize ordinary income
and determine such fair market value on the date of the grant of the restricted
stock. Holders of restricted stock will also recognize ordinary income equal to
their dividend or dividend equivalent payments when such payments are received.
Generally, the amount of income recognized by participants will be a deductible
expense for tax purposes by Imperial.
Amendment to the RRP
- --------------------
The Board of Directors of the Company may at any time amend, suspend
or terminate the RRP or any portion thereof, provided, however, that no such
amendment, suspension or termination shall impair the rights of any award
recipient, without his consent, in any award therefore made pursuant to the RRP.
Performance Criteria
- --------------------
No Plan Shares shall be granted in any fiscal year in which the
Imperial fails to meet the following requirements:
(a) achieves a return on average assets of 50 basis points; and
(b) is treated as adequately capitalized (as defined by FDIC
regulations).
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE ADOPTION OF THE RECOGNITION AND RETENTION PLAN.
26
<PAGE>
FINANCIAL STATEMENTS
The audited financial statements of Imperial as of December 31, 1995
and 1994 and for each of the two years in the period ended December 31, 1995,
prepared in conformity with generally accepted accounting principles, are
included in the Annual Report to Stockholders provided to all of Imperial's
stockholders. Any stockholder which would like to receive an additional copy of
Imperial's Annual Report to Stockholders for the fiscal year ended December 31,
1995, may do so by making a written request to Michael L. Mayer, Secretary of
Imperial, 700 North Central Avenue, Glendale, California 91203. Additionally,
Imperial will mail without charge, upon written request, a copy of the annual
report on Form 10-K, including the financial statements, schedules and list of
exhibits. Requests should be sent to Mr. Mayer at the above-referenced address.
No financial statements of the Company are presented in this Proxy
Statement/Prospectus, as the Company currently has no significant assets or
liabilities. In addition, no pro forma consolidated financial statements of the
Company are included herein since such statements would reflect no material
differences from the consolidated financial statements of Imperial.
IMPERIAL THRIFT AND LOAN ASSOCIATION
Imperial was originally chartered in 1974. Imperial is engaged in
originating real estate loans secured primarily by income producing properties
for retention in its portfolio, funded primarily by investment certificates in
the form of passbook and certificate of deposit accounts insured by the FDIC up
to applicable limits. Imperial's business is conducted through nine offices in
California and one loan production office in Nevada and through loan
correspondents located in the western United States. Real estate loans are
originated throughout the state of California; loans outside of California are
originated through Imperial's Las Vegas office or through other wholesale loan
origination arrangements. Deposit gathering activities are concentrated in Los
Angeles and Orange Counties, the San Francisco Bay Area, and the Sacramento and
San Diego areas. Imperial also accepts out of state deposits.
THE COMPANY
General
- -------
The Company was incorporated under the laws of Delaware in May 1996 at
the direction of the Board of Directors of Imperial for the purpose of serving
as a holding company for Imperial. The Company will be the sole stockholder of
ITLA, an interim subsidiary corporation which is being organized for the purpose
of facilitating the proposed Reorganization. Until the Effective Date, ITLA will
not conduct any operations or business. On the Effective Date, it will be merged
into Imperial and the resulting institution will continue the operations and
business of Imperial without interruption. Imperial intends to capitalize the
Company with approximately a $1.0 million dividend.
The Company's executive offices are located at 700 North Central
Avenue, Glendale, California 91203, and its telephone number is (818) 551-0600.
Regulation
- ----------
While the Company is a financial institution holding company, it is
not a bank holding company under the Bank Holding Company Act of 1956 or a
savings and loan association holding company under the Home Owners' Loan Act
and, therefore, is not regulated or supervised by the Board of Governors of the
Federal Reserve System or the Office of Thrift Supervision. Additionally, the
Company is not directly regulated or supervised by the Commissioner, the FDIC,
or any other bank regulatory authority, except with respect to the general
regulatory and
27
<PAGE>
enforcement authority of the Commissioner and the FDIC over transactions and
dealings between the Company and Imperial.
Federal and State Taxation
- --------------------------
After the consummation of the Reorganization, the Company and Imperial
intend to file consolidated federal and state income tax returns which would
have the effect of eliminating intercompany distributions, including dividends,
in the computation of the consolidated taxable income. Any income of the
Company would not be subject to the special bad debt deduction allowed by
Imperial, whether or not consolidated tax returns are filed.
Restrictions on Resale of Company Stock Received by Certain Persons
- -------------------------------------------------------------------
The Company's Common Stock will be subject to the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act").
Accordingly, Company Common Stock may be offered and sold only in compliance
with such registration requirements or pursuant to an applicable exemption from
registration.
The offering of shares of Company Common Stock issuable in connection
with the Reorganization has been registered under the Securities Act, but this
registration does not cover the resale of such shares. COMPANY COMMON STOCK
RECEIVED IN THE REORGANIZATION BY PERSONS WHO ARE NOT "AFFILIATES" OF THE
COMPANY MAY BE RESOLD WITHOUT REGISTRATION. Shares received by affiliates of the
Company (primarily the directors, officers and any "controlling" stockholders of
the Company) will be subject to the resale restrictions of Rule 145 under the
Securities Act, which are substantially the same as the restrictions of Rule 144
discussed below. In general, the Rule 145 restrictions terminate with respect to
persons who are no longer affiliated with the Company after a two-year holding
period if the Company continues to comply with the reporting requirements of the
Exchange Act which will apply to it after the Reorganization (see "Proposal II
--The Holding Company Merger and Reorganization --Comparison of Stockholder
Rights --Reports to Stockholders"), or after a three-year period if the Company
does not meet such requirements. However, any person who becomes an affiliate of
the Company will continue to be subject to the restrictions of Rule 144.
Rule 144 generally requires that there be publicly available certain
information concerning the Company, and that sales thereunder be made in routine
brokerage transactions or through a market maker. Beginning 90 days after the
date of this Proxy Statement, if the conditions of Rule 144 are satisfied
(including those that in some cases require affiliates' sales to be aggregated
with sales by certain other persons), each affiliate is entitled to sell in the
public market, without registration, in any three-month period, a number of
shares which does not exceed the greater of (i) one percent of the number of
outstanding shares of Company Common Stock or (ii) for so long as trading in the
stock is reported through the NASDAQ-NMS (or if the stock is admitted to trading
on a national securities exchange), the average weekly reported volume of
trading during the four weeks preceding the sale. Provision may be made in the
future by the Company to permit affiliates to have their shares registered for
sale under the Securities Act under certain circumstances.
Company Management
- ------------------
The initial Board of Directors of the Company consists of the current
directors of Imperial. Such directors will serve for terms which will run
concurrently with their respective terms as directors of Imperial.
The officers of the Company, each whom is currently an officer of
Imperial, are identified below. The officers of the Company are elected annually
by the Company's Board of Directors.
<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
George W. Haligowski President and Chief Executive Officer
Anthony L. Frey Senior Vice President, Treasurer and
Chief Financial Officer
Michael L. Mayer Secretary
</TABLE>
28
<PAGE>
It is currently expected that, unless the Company becomes actively
involved in the operation or acquisition of additional savings institutions or
other businesses, no separate compensation will be paid to the directors and
employees of the Company. However, the Company may determine that separate
compensation is appropriate in the future. Subject to the completion of the
Reorganization, the Stock Option Plan of Imperial will become the Stock Option
Plan of the Company and directors and employees of Imperial will continue to be
eligible to participate. Since the directors and employees of Imperial will not
initially be compensated by the Company but will continue to serve and be
compensated by Imperial, no additional Company benefit plans are anticipated at
this time. Imperial will continue to maintain its other benefit programs.
LEGAL OPINION
The legality of the Company Common Stock to be issued pursuant to the
Reorganization and certain other matters in connection with the Reorganization
will be passed upon by Silver, Freedman & Taff, L.L.P., a limited liability
partnership including professional corporations, 1100 New York Avenue, N.W.,
Washington, D.C. 20005.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in Imperial's proxy materials
for next year's Annual Meeting of Stockholders (or the Company's proxy
materials, if the Reorganization is then completed), any stockholder proposal to
take action at such meeting must be received at the main office of Imperial or
the Company, 700 North Central Avenue, Glendale, California 91203, no later than
__________, 1996. Any such proposals shall be subject to the requirements of
the proxy rules adopted under the Exchange Act.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than the matter described above in this Proxy
Statement/Prospectus. However, if any other matters should properly come before
the Meeting, it is intended that holders of the proxies will act in accordance
with their best judgment.
The cost of solicitation of proxies will be borne by Imperial.
Imperial will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of Imperial Common Stock. In addition to solicitation
by mail, directors, officers and regular employees of Imperial may solicit
proxies personally or by telegraph or telephone, without additional
compensation.
BY ORDER OF THE BOARD OF DIRECTORS
George W. Haligowski
Chairman of the Board, President and
Chief Executive Officer
Glendale, California
June __, 1996
29
<PAGE>
APPENDIX A
MERGER AGREEMENT AND PLAN OF REORGANIZATION
THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), is made and
entered into by and among IMPERIAL THRIFT AND LOAN ASSOCIATION, a California
licensed industrial loan company ("Imperial"), ITLA CORP., a California business
corporation and ITLA CAPITAL CORPORATION, a Delaware business corporation
("Holding"), effective as of the date executed by all of the parties.
WITNESSETH:
WHEREAS, Imperial is an industrial loan company duly organized and validly
existing under the laws of the State of California, with authorized capital
stock consisting of twenty million (20,000,000) shares of common stock, no par
value ("Thrift Stock"), of which 7,820,500 shares are issued and outstanding and
five million (5,000,000) shares of preferred stock, no par value, none of which
are outstanding;
WHEREAS, ITLA Corp. is a corporation duly organized and validly existing
under the laws of the State of California, which is proposed to be a subsidiary
of Holding and to have authorized capital stock consisting of 100 shares of
common stock, par value $.01 per share ("ITLA Stock");
WHEREAS, Holding is a capital stock corporation duly organized and validly
existing under the laws of Delaware, with authorized capital stock consisting of
twenty million (20,000,000) shares of common stock, par value $.01 per share
("Holding Stock") and five million (5,000,000) shares of preferred stock, par
value $.01 per share;
WHEREAS, Holding proposes to issue one share of its common stock to its
incorporator for a purchase price of $10.00 and to purchase one share of the
common stock of ITLA Corp. for $10.00;
WHEREAS, it is the desire of the parties to this Agreement to adopt a plan
of reorganization providing for the formation of a holding company for Imperial;
and
WHEREAS, a majority of the respective Boards of Directors of Imperial, ITLA
Corp., and Holding have approved and authorized the execution of this Agreement
pursuant to which the plan of reorganization, including the merger of ITLA Corp.
into Imperial, will be implemented.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and in order to prescribe the plan of
reorganization and merger, including its terms and conditions, the mode of
carrying the same into effect, the manner and basis of converting Thrift Stock
into Holding Stock and such other details and provisions as are deemed necessary
or proper, the parties hereby agree as follows:
<PAGE>
ARTICLE I
MERGER AND REORGANIZATION
1.1 Subject to the conditions hereinafter set forth, ITLA Corp. shall be
merged into Imperial under the Articles of Incorporation of Imperial at the
Effective Date (as defined in Article XI hereof) of the merger (the "Merger").
The Merger shall be effected pursuant to the provisions of, and with the effect
provided in, the applicable provisions of the laws of the State of California
and the federal laws of the United States and the requirements of the California
Department of Corporations ("DOC") and the Federal Deposit Insurance Corporation
(the "FDIC").
1.2 On the Effective Date, the resulting entity in the Merger shall be
Imperial (hereinafter referred to as the "Surviving Institution" whenever
reference is made to it as of the Effective Date of the Merger or thereafter)
which will continue to operate under its present name as "Imperial Thrift and
Loan Association." The Articles of Incorporation and Bylaws of Imperial in
effect on the Effective Date shall be the Articles of Incorporation and Bylaws
of the Surviving Institution. The established offices and facilities of Imperial
immediately prior to the Merger shall become the established offices and
facilities of the Surviving Institution.
1.3 On the Effective Date of the Merger, ITLA Corp. shall cease to exist
separately and shall be merged with and into Imperial in accordance with the
provisions of this Agreement and in accordance with the provisions of applicable
laws, rules and regulations, and all of the assets and property of every kind
and character, real, personal and mixed, tangible and intangible, chooses in
action, rights and credits then owned by ITLA Corp. or which would inure to it,
shall immediately, by operation of law and without any conveyance or transfer
and without any further act or deed, be vested in and become the property of the
Surviving Institution, which shall have, hold and enjoy the same in its own
right as fully and to the same extent as the same were possessed, held and
enjoyed by ITLA Corp. prior to such Merger. The Surviving Institution shall be
deemed to be and shall be a continuation of the entity and identity of ITLA
Corp. and Imperial and all of the rights and obligations of ITLA Corp. and
Imperial shall remain unimpaired and the Surviving Institution, on the Effective
Date of such Merger, shall succeed to all such rights and obligations and the
duties and liabilities connected therewith on such Effective Date.
1.4 On the Effective Date of the Merger, there will be no holders of
investment certificates issued by ITLA Corp. Holders of investment certificates
of Imperial as of the Effective Date of the Merger shall continue to be holders
of the same interest of the Surviving Institution without change as to
withdrawal value or other rights. No existing holder of any investment
certificate shall have any of his rights impaired by virtue of the Merger
contemplated hereby.
1.5 The directors and officers of the Surviving Institution on the
Effective Date shall be those persons who are directors and officers,
respectively, of Imperial immediately before the Effective Date. The committees
of the Board of Directors of the Surviving Institution on the Effective Date
shall be the same as, and shall be composed of the same persons who were serving
on, committees appointed by the Board of Directors of Imperial as they exist
immediately before the Effective Date. The committees, if any, of officers of
the Surviving
2
<PAGE>
Institution on the Effective Date shall be the same as, and shall be composed of
the same officers who were serving on, the committees of officers of Imperial as
they exist immediately before the Effective Date.
1.6 Except as expressly prohibited by applicable laws, all corporate acts,
plans, policies, applications, agreements, orders, registrations, licenses,
approvals and authorizations of Imperial and ITLA Corp., their respective
stockholders, Boards of Directors, committees elected or appointed by their
Boards of Directors, and their respective officers and agents, which were valid
and effective immediately before the Effective Date, shall be taken for all
purposes at and after the Effective Date as the acts, plans and policies,
applications, agreements, orders, registrations, licenses, approvals and
authorizations of the Surviving Institution and shall be as effective and
binding thereon as the same were with respect to Imperial and ITLA Corp.
immediately before the Effective Date.
1.7 On and after the Effective Date, the 1995 Employee Stock Incentive
Plan and the 1995 Stock Option Plan for Non-Employee Directors of Imperial (the
"Option Plans") shall be assumed by Holding and shares and options for shares
awarded under the Option Plans shall be shares of Holding Stock.
ARTICLE II
CONVERSION, EXCHANGE AND CANCELLATION OF SHARES
2.1 The manner and basis of converting and exchanging the issued and
outstanding shares of Thrift Stock into shares of Holding Stock and related
transactions concerning ITLA Corp., shall be as hereinafter provided in this
Article II.
2.2 On the Effective Date:
(a) Each share of Thrift Stock outstanding on the Effective Date
shall, without any action on the part of the holder thereof or Imperial or
Holding, be converted into and exchangeable for one share of Holding Stock;
(b) The outstanding share of ITLA Stock issued to Holding shall be
cancelled and converted into the same number of shares of Thrift Stock
issued and outstanding on the Effective Date; and
(c) The share of Holding Stock previously issued to the incorporator
and outstanding shall be cancelled for a redemption price of $10.00.
2.3 On and after the Effective Date, each holder of a certificate or
certificates which prior thereto represented outstanding shares of Thrift Stock
shall be entitled, upon surrender of such certificate or certificates for
cancellation to Holding, to receive as soon as practicable a new certificate
representing the number of shares of Holding Stock into which such holder's
shares of Thrift Stock were converted as a result of the Merger. Until so
surrendered, each certificate theretofore evidencing Thrift Stock shall not be
transferable on the books of the parties hereto,
3
<PAGE>
but shall be deemed to evidence ownership of the number of shares of Holding
Stock into which such shares of Thrift Stock have been converted by virtue of
the Merger.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDING
Holding hereby represents and warrants as follows:
3.1 Holding is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. At the Effective Date,
Holding will have corporate power to carry on its business as then to be
conducted and will be qualified to do business in every jurisdiction in which
the character and location of the assets to be owned by it or the nature of the
business to be transacted by it require qualification.
3.2 Holding has no subsidiaries other than ITLA Corp. at the date of this
Agreement. Between the date hereof and the Effective Date, Holding will not
create or acquire any subsidiaries, other than ITLA Corp., without the consent
of Imperial.
3.3 The authorized capital stock of Holding consists on the date hereof of
twenty million (20,000,000) shares of common stock, par value $.01 per share,
and five million (5,000,000) shares of preferred stock, par value $.01 per
share. Except as set forth above or as contemplated by this Agreement or
necessary for the effectuation of the Merger, as of the date hereof, Holding
does not have any shares of its capital stock issued or outstanding and does not
have any outstanding subscriptions, options or other agreements or commitments
obligating it to issue shares of its capital stock.
3.4 Compliance with the terms and provisions of this Agreement by Holding
will not conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree or ruling of any court or
governmental authority, domestic or foreign, or of any agreement or instrument
to which Holding is a party, or constitute a default thereunder.
3.5 The execution, delivery and performance of this Agreement have been
duly authorized by the Board of Directors of Holding and has been approved by
the incorporator as the sole stockholder of Holding.
3.6 Holding has complete and unrestricted power to enter into and to
consummate the transactions contemplated by this Agreement, subject to approval
of this Agreement by the incorporator as sole stockholder of Holding and the
provisions of Section 7.3 hereof.
3.7 On or prior to the Effective Date, Holding will make available for
issuance and delivery that number of shares of Holding Stock into which the
outstanding Thrift Stock is to be converted and exchanged pursuant to the Merger
as provided herein. All such shares of Holding Stock, when delivered in
exchange for Thrift Stock, will be duly authorized, validly issued and
outstanding, fully paid and non-assessable, and will be voting stock of Holding.
4
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF IMPERIAL
Imperial hereby represents and warrants as follows:
4.1 Imperial is an industrial loan company duly organized, validly
existing and in good standing under the laws of the State of California, and is
duly authorized to carry on its business as it is now being conducted.
4.2 The authorized capital stock of Imperial consists on the date hereof
of twenty million (20,000,000) shares of common stock, no par value, of which
7,820,500 shares are issued and outstanding, and five million (5,000,000) shares
of preferred stock, no par value, none of which are issued and outstanding.
4.3 Compliance with the terms and provisions of this Agreement by Imperial
will not conflict with, constitute a default under or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree or ruling of any court or governmental authority, domestic or foreign, or
of any agreement or instrument to which Imperial is a party.
4.4 The execution, delivery and performance of this Agreement have been
duly authorized by the Board of Directors of Imperial.
4.5 Imperial has complete and unrestricted power to enter into and to
consummate the transactions contemplated by this Agreement, subject to the
provisions of Sections 7.2 and 7.3 hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ITLA CORP.
ITLA Corp. hereby represents and warrants as follows:
5.1 ITLA Corp. is duly organized, validly existing and in good standing
under the laws of the State of California.
5.2 The authorized capital stock of ITLA Corp. consists of 100 shares of
common stock, par value $.01 per share. Except for the share of ITLA Corp.
stock issued to Holding for the effectuation of the Merger, prior to the Merger,
ITLA Corp. will not have any shares of its stock issued and outstanding. There
are no outstanding subscriptions, options or other arrangements or commitments
obligating ITLA Corp. to issue any shares of its capital stock.
5.3 Compliance with the terms and provisions of this Agreement by ITLA
Corp. will not conflict with, constitute a default under or result in a breach
of any of the terms, conditions or provisions of any judgment, order,
injunction, decree or ruling of any court or governmental authority, domestic or
foreign, or of any agreement or instrument to which ITLA Corp. is, or will be, a
party.
5
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5.4 Prior to the Merger, the execution, delivery and performance of this
Agreement will be duly authorized by the Board of Directors of ITLA Corp. and
will be approved by Holding as the sole stockholder of ITLA Corp.
5.5 ITLA Corp. has complete and unrestricted power to enter into and to
consummate the transaction contemplated by this Agreement, subject to the
approval of this Agreement and the Merger by Holding as sole stockholder of ITLA
Corp. and the provisions of Section 7.3 hereof.
ARTICLE VI
OBLIGATIONS OF THE PARTIES PENDING THE EFFECTIVE DATE
6.1 Prior to the Effective Date, (i) ITLA Corp. shall complete its
organization and have directors who shall be duly elected and qualified, (ii)
Holding shall complete its organization and have directors who shall be duly
elected and qualified, and (iii) this Agreement shall be duly submitted to the
stockholders of Imperial for the purpose of considering and acting upon this
Agreement in the manner required by law. Each party shall use its best efforts
to obtain the requisite approvals of this Agreement and the transactions
contemplated herein and, after obtaining such approval, the parties through
their respective officers and directors, shall execute and file with the
appropriate regulatory authorities all documents and papers, and the parties
shall take every reasonable action, necessary to comply with and to secure such
approval of this Agreement and the transactions contemplated herein as may be
required by all applicable statutes, rules and regulations.
ARTICLE VII
CONDITIONS PRECEDENT TO THE CONSUMMATION OF
THE MERGER AND REORGANIZATION
The obligations of the parties hereto to consummate the Merger and the
reorganization contemplated hereby shall be subject to the conditions that on or
before the Effective Date:
7.1 Each of the parties hereto shall have performed and complied with all
of its obligations hereunder which are to be complied with or performed on or
before the Effective Date.
7.2 This Agreement and related transactions contemplated hereby shall have
been duly and validly authorized, approved and adopted at a meeting of
stockholders duly and properly called for such purpose by Imperial by an
affirmative vote of at least 50 percent of the outstanding voting stock of
Imperial plus one affirmative vote, all in accordance with applicable law.
7.3 Orders, consents and approvals, in form and substance reasonably
satisfactory to all the parties hereto, shall have been entered by the DOC and
the FDIC (or there shall have been received satisfactory assurance that such
orders, consents or approvals are not required),
6
<PAGE>
granting the authority necessary for consummation of the transactions
contemplated by this Agreement pursuant to the provisions of the requirements of
the DOC and the FDIC, all other requirements prescribed by law and the rules and
regulations of any other regulatory authority having jurisdiction over the
transactions contemplated herein shall have been satisfied.
7.4 There shall have been received from Silver, Freedman & Taff, L.L.P.,
Washington, D.C., special counsel to Imperial, an opinion to the effect that:
1. The Merger will constitute a reorganization within the meaning of
Section 368(a)(1(A) and 368(a)(2)E) of the Internal Revenue Code of 1986
(the "Code"). The reorganization will not be disqualified by reason of the
fact that stock of Holding is used in the transaction (Section 368(a)(2)(E)
of the Code). It will also not be disqualified by the substitution of
Holding stock options for Thrift Stock options as discussed above (Rev.
Rul. 70-269, 1970-1 C.B. 81). Holding, ITLA Corp. and Imperial will each be
a "party to a reorganization" within the meaning of Section 368(b) of the
Code.
2. No gain or loss will be recognized to ITLA Corp. on the transfer
of substantially all of its assets to Imperial (Section 361(a) of the
Code).
3. No gain or loss will be recognized to Imperial on the receipt by
Imperial of substantially all of the assets of ITLA Corp. in exchange for
Thrift Stock (Section 1032(a) of the Code).
4. Imperial's basis in each ITLA Corp. asset received in the
transaction will be the same as the basis of those assets in the hands of
ITLA Corp. immediately prior to the transaction (Section 362(b) of the
Code).
5. Imperial's holding period in each ITLA Corp. asset will include
the period during which ITLA Corp. held such asset (Section 1223(2) of the
Code).
6. No gain or loss will be recognized by Holding upon the receipt of
Thrift Stock (Section 354(a)(1) of the Code).
7. No gain or loss will be recognized by the shareholders of
Imperial on the exchange of their Thrift Stock solely for an identical
number of shares of Holding Stock (Section 354(a)(1) of the Code).
8. Each Imperial shareholder's basis in the Holding Stock received
in the transaction will be the same as the basis in the Thrift Stock
surrendered in the transaction (Section 358(a)(1) of the Code).
9. The holding period of the Holding Stock to be received by
Imperial shareholders includes the period during which the Thrift Stock
surrendered in exchange therefor was held provided that the Thrift Stock
was held as a capital asset in the hands of Imperial shareholders on the
date of the exchange (Section 1223(1) of the Code).
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(10) The net operating losses of Imperial, if any, will not be reduced
or eliminated by reason of the proposed reorganization under Section 382 of
the Code.
7.5 No action, suit or proceeding shall have been instituted or shall have
been threatened before any court or other governmental body or by any public
authority to restrain, enjoin or prohibit the Merger and reorganization
contemplated herein, or which might restrict the operation of the business of
the Surviving Institution or the ownership of the capital stock of the Surviving
Institution or the exercise of any rights with respect thereto by Holding, or
subject any of the parties hereto or any of their directors or officers to any
liability, fine, forfeiture, or penalty on the grounds that the transactions
contemplated hereby, the parties hereto or their directors or officers, have
breached or will breach any applicable law or regulation, or have otherwise
acted improperly in connection with the transactions contemplated hereby, and
with respect to which the parties hereto have been advised by counsel that, in
the opinion of such counsel, such action, suit or proceeding raises substantial
questions of law or fact which could reasonably be decided adversely to any
party hereto or its directors or officers.
ARTICLE VIII
ADDITIONAL CONDITIONS PRECEDENT
8.1 Each obligation of Holding and ITLA to be performed on or prior to the
Effective Date shall be subject to the satisfaction, on or before the Effective
Date, of the following additional conditions:
(a) The representations and warranties made by the Imperial in this
Agreement shall be true as though such representations and warranties had
been made or given on and as of the Effective Date; and
(b) This Agreement and the transactions contemplated hereby shall
have been duly and validly authorized, approved and adopted by Imperial.
8.2 Each obligation of Imperial to performed on or prior to the Effective
Date shall be subject to the satisfaction, on or before the Effective Date, of
the following additional conditions:
(a) The representations and warranties made by Holding and by ITLA
contained in this Agreement shall be true as though such representations
and warranties had been made or given on and as of the Effective Date;
(b) This Agreement and the transactions contemplated hereby shall
have been duly and validly authorized, approved and adopted by Holding and
by ITLA; and
(c) The shares of Holding Stock to be issued in the Merger shall have
been approved for quotation on the National Association of Securities
Dealers National Market System or accepted for trading on a national
securities exchange.
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ARTICLE IX
AMENDMENTS
Imperial, Holding and ITLA Corp., by mutual consent of their respective
Boards of Directors or incorporators, as the case may be, to the extent
permitted by law, may amend, modify, supplement and interpret this Agreement in
such manner as may be mutually agreed upon by them in writing at any time before
or after the approval and adoption thereof by the stockholders of Imperial,
provided, however, that no such amendment, modification, supplement or
interpretation shall have a materially adverse impact on Imperial or its
stockholders except with the approval of the stockholders of Imperial.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Anything contained in this Agreement to the contrary notwithstanding,
this Agreement may be terminated and the Merger and reorganization abandoned at
any time (whether before or after the approval and adoption thereof by the
stockholders of Imperial) prior to the Effective Date:
(a) By mutual consent of the parties hereto;
(b) By Holding or ITLA Corp., if any condition set forth in Sections
7.1 through 7.5 of Article VII or Section 8.1 of Article VIII has not been
met or has not been validly waived or if; or
(c) By Imperial, if any condition set forth in Sections 7.1 through
7.5 of Article VII or Section 8.2 of Article VIII has not been met or has
not been validly waived.
10.2 An election by a party hereto to terminate this Agreement and abandon
the Merger and plan of reorganization as provided in Section 10.1 shall be
exercised on behalf of such corporation by its Board of Directors or
incorporators, as may be the case.
10.3 In the event of the termination of this Agreement pursuant to the
provisions of Section 10.1 hereof, this Agreement shall become void and have no
effect and create no liability on the part of any of the parties hereto or their
respective incorporators, directors, officers or stockholders in respect to this
Agreement.
10.4 Any of the terms or conditions of this Agreement (other than the
necessary approvals of stockholders and government authorities) may be waived at
any time by the party which is entitled to the benefit thereof, by action taken
by its Board of Directors; provided, however, that such action shall be taken
only if, in the judgment of the Board of Directors taking the action, such
waiver will not have a materially adverse effect on the benefits intended under
this Agreement to be afforded to the stockholders of Imperial.
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<PAGE>
ARTICLE XI
EFFECTIVE DATE
The effective date of the Merger ("Effective Date") shall be the last day
of the calendar month during which the last to occur of the following events
takes place: (i) the Merger is approved by the DOC and the FDIC and the
California Secretary of State certifies a copy of this Agreement, (ii) all other
required regulatory approvals have been obtained, and (iii) all other conditions
to the Merger herein set forth have been met. The Boards of Directors of
Imperial, ITLA Corp. and Holding each specifically and expressly delegate to
their respective chief executive officers the authority to change, by mutual
consent of such officers, the Effective Date of the Merger if necessary to
properly and efficiently accomplish the Merger.
ARTICLE XII
TERMINATION OF REPRESENTATIONS AND
WARRANTIES AND CERTAIN AGREEMENTS
The respective representations, warranties, covenants and agreements of the
parties hereto in Articles III, IV and V hereof shall expire with, and be
terminated and extinguished by, the Merger and reorganization pursuant to this
Agreement at the time of the consummation thereof on the Effective Date. None
of the parties shall be under any liability whatsoever with respect to any such
representation, warranty, covenant or agreement which does not survive the
Merger and reorganization, it being intended that the sole remedy of the parties
for a breach of any such representation, warranty, covenant or agreement shall
be to elect not to proceed with the Merger and reorganization if such breach has
resulted in the failure to satisfy a condition precedent to such party's
obligation to consummate the transactions contemplated hereby.
ARTICLE XIII
MISCELLANEOUS
13.1 This Agreement embodies the entire agreement among the parties and
there have been and are no agreements, representations or warranties among the
parties other than those set forth or provided for herein.
13.2 Any number of counterparts hereof may be executed and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one instrument.
13.3 Any notice or waiver to be given to any party shall be in writing and
shall be deemed to have been duly given if delivered, mailed, or sent by prepaid
telegram, addressed to such party at 700 North Central Avenue, Suite 600,
Glendale, California 91203.
13.4 The captions contained in this Agreement are solely for convenient
reference and shall not be deemed to affect the meaning or interpretation of any
paragraph hereof.
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13.5 Imperial will pay all fees and expenses incurred in connection with
the transactions contemplated by this Agreement.
11
<PAGE>
IN WITNESS WHEREOF, Imperial, ITLA Corp. and Holding each under the
authority of its Board of Directors have caused this Agreement to be executed
with the intent to be legally bound hereby.
IMPERIAL THRIFT AND
LOAN ASSOCIATION
ATTEST:
By: /s/ Michael L. Mayer By: /s/ George W. Haligowski
-------------------------------- --------------------------------
Michael L. Mayer, Secretary George W. Haligowski
Chairman, President and Chief
Executive Officer
Date: May 1, 1996 Date: May 1, 1996
--------------------------------- -------------------------------
ITLA CORP.
ATTEST:
By: /s/ Michael L. Mayer By: /s/ George W. Haligowski
-------------------------------- --------------------------------
Michael L. Mayer, Secretary George W. Haligowski
Chairman, President and Chief
Executive Officer
Date: May 1, 1996 Date: May 1, 1996
-------------------------------- -------------------------------
ATTEST: ITLA CAPITAL CORPORATION
By: /s/ Michael L. Mayer By: /s/ George W. Haligowski
------------------------------- --------------------------------
Michael L. Mayer, Secretary George W. Haligowski
Chairman, President and Chief
Executive Officer
Date: May 1, 1996 Date: May 1, 1996
-------------------------------- -------------------------------
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APPENDIX B
CERTIFICATE OF INCORPORATION
OF
ITLA CAPITAL CORPORATION
FIRST: The name of the Corporation is ITLA Capital Corporation
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(hereinafter sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
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State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of the registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
-----
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
FOURTH:
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A. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is twenty-five million
(25,000,000) consisting of:
1. Five million (5,000,000) shares of preferred stock, par value
one cent ($.01) per share (the "Preferred Stock"); and
2. Twenty million (20,000,000) shares of common stock, par value
one cent ($.01) per share (the "Common Stock").
B. The Board of Directors is hereby expressly authorized, subject to
any limitations prescribed by law, to provide for the issuance of the shares of
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware (such certificate being hereinafter
referred to as a "Preferred Stock Designation"), to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof. The number of
authorized shares of the Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the Common Stock, without a vote of the holders of
the Preferred Stock, or of any series thereof, unless a vote of any such holders
is required pursuant to the terms of any Preferred Stock Designation.
C. 1. Notwithstanding any other provision of this Certificate of
Incorporation, in no event shall any record owner of any outstanding Common
Stock which is beneficially owned, directly or indirectly, by a person who, as
of any record date for the determination of stockholders entitled to vote on any
matter, beneficially owns in excess of 10%
<PAGE>
of the then-outstanding shares of Common Stock (the "Limit"), be entitled, or
permitted to any vote in respect of the shares held in excess of the Limit. The
number of votes which may be cast by any record owner by virtue of the
provisions hereof in respect of Common Stock beneficially owned by such person
owning shares in excess of the Limit shall be a number equal to the total number
of votes which a single record owner of all Common Stock owned by such person
would be entitled to cast, multiplied by a fraction, the numerator of which is
the number of shares of such class or series beneficially owned by such person
and owned of record by such record owner and the denominator of which is the
total number of shares of Common Stock beneficially owned by such person owning
shares in excess of the Limit.
2. The following definitions shall apply to this Section C of
this Article FOURTH:
(a) An "affiliate" of a specified person shall mean a
person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the person
specified.
(b) "Beneficial ownership" shall be determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934 (or any successor rule or statutory provision), or, if
said Rule 13d-3 shall be rescinded and there shall be no successor rule or
statutory provision thereto, pursuant to said Rule 13d-3 as in effect on
March 31, 1996; provided, however, that a person shall, in any event, also
-------- -------
be deemed the "beneficial owner" of any Common Stock:
(1) which such person or any of its affiliates
beneficially owns, directly or indirectly; or
(2) which such person or any of its affiliates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding (but shall not be deemed to be the
beneficial owner of any voting shares solely by reason of an
agreement, contract, or other arrangement with this Corporation to
effect any transaction which is described in any one or more of the
clauses of Section A of Article EIGHTH) or upon the exercise of
conversion rights, exchange rights, warrants, or options or otherwise,
or (ii) sole or shared voting or investment power with respect thereto
pursuant to any agreement, arrangement, understanding, relationship or
otherwise (but shall not be deemed to be the beneficial owner of any
voting shares solely by reason of a revocable proxy granted for a
particular meeting of stockholders, pursuant to a public solicitation
of proxies for such meeting, with respect to shares of which neither
such person nor any such affiliate is otherwise deemed the beneficial
owner); or
(3) which are beneficially owned, directly or
indirectly, by any other person with which such first mentioned person
or any of its affiliates acts as a partnership, limited partnership,
syndicate or other group pursuant to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of this Corporation;
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<PAGE>
and provided further, however, that (1) no director or officer of this
-------- ------- -------
Corporation (or any affiliate of any such director or officer) shall,
solely by reason of any or all of such directors or officers acting in
their capacities as such, be deemed, for any purposes hereof, to
beneficially own any Common Stock beneficially owned by any other such
director or officer (or any affiliate thereof), and (2) neither any
employee stock ownership or similar plan of this Corporation or any
subsidiary of this Corporation nor any trustee with respect thereto
(or any affiliate of such trustee) shall, solely by reason of such
capacity of such trustee, be deemed, for any purposes hereof, to
beneficially own any Common Stock held under any such plan. For
purposes of computing the percentage beneficial ownership of Common
Stock of a person, the outstanding Common Stock shall include shares
deemed owned by such person through application of this subsection but
shall not include any other Common Stock which may be issuable by this
Corporation pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise. For all other purposes, the
outstanding Common Stock shall include only Common Stock then
outstanding and shall not include any Common Stock which may be
issuable by this Corporation pursuant to any agreement, or upon the
exercise of conversion rights, warrants or options, or otherwise.
(c) A "person" shall mean any individual, firm, corporation, or
other entity.
(d) The Board of Directors shall have the power to construe and
apply the provisions of this section and to make all determinations
necessary or desirable to implement such provisions, including but not
limited to matters with respect to (1) the number of shares of Common
Stock beneficially owned by any person, (2) whether a person is an
affiliate of another, (3) whether a person has an agreement,
arrangement, or understanding with another as to the matters referred
to in the definition of beneficial ownership, (4) the application of
any other definition or operative provision of this Section to the
given facts, or (5) any other matter relating to the applicability or
effect of this Section.
3. The Board of Directors shall have the right to demand
that any person who is reasonably believed to beneficially own Common Stock in
excess of the Limit (or holds of record Common Stock beneficially owned by any
person in excess of the Limit) (a "Holder in Excess") supply the Corporation
with complete information as to (1) the record owner(s) of all shares
beneficially owned by such Holder in Excess, and (2) any other factual matter
relating to the applicability or effect of this section as may reasonably be
requested of such Holder in Excess. The Board of Directors shall further have
the right to receive from any Holder in Excess reimbursement for all expenses
incurred by the Board in connection with its investigation of any matters
relating to the applicability or effect of this section on such Holder in
Excess, to the extent such investigation is deemed appropriate by the Board of
Directors as a result of the Holder in Excess refusing to supply the Corporation
with the information described in the previous sentence.
4. Except as otherwise provided by law or expressly
provided in this Section C, the presence, in person or by proxy, of the holders
of record of shares of capital stock of the Corporation entitling the holders
thereof to cast one-third of the votes (after giving
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<PAGE>
effect, if required, to the provisions of this Section) entitled to be cast by
the holders of shares of capital stock of the Corporation entitled to vote shall
constitute a quorum at all meetings of the stockholders, and every reference in
this Certificate of Incorporation to a majority or other proportion of capital
stock (or the holders thereof) for purposes of determining any quorum
requirement or any requirement for stockholder consent or approval shall be
deemed to refer to such majority or other proportion of the votes (or the
holders thereof) then entitled to be cast in respect of such capital stock.
5. Any constructions, applications, or determinations made
by the Board of Directors, pursuant to this Section in good faith and on the
basis of such information and assistance as was then reasonably available for
such purpose, shall be conclusive and binding upon the Corporation and its
stockholders.
6. In the event any provision (or portion thereof) of this
Section C shall be found to be invalid, prohibited or unenforceable for any
reason, the remaining provisions (or portions thereof) of this Section shall
remain in full force and effect, and shall be construed as if such invalid,
prohibited or unenforceable provision had been stricken herefrom or otherwise
rendered inapplicable, it being the intent of this Corporation and its
stockholders that each such remaining provision (or portion thereof) of this
Section C remain, to the fullest extent permitted by law, applicable and
enforceable as to all stockholders, including stockholders owning an amount of
stock over the Limit, notwithstanding any such finding.
FIFTH: The following provisions are inserted for the management of the
-----
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
A. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by Statute or by this Certificate of
Incorporation or the By-laws of the Corporation, the directors are hereby
empowered to exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written
ballot unless the By-laws so provide.
C. Subject to the rights of holders of any class or series of
Preferred Stock, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders.
D. Subject to the rights of holders of any class or series of
Preferred Stock, special meetings of stockholders of the Corporation may be
called only by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors which the Corporation would have if
there were no vacancies on the Board of Directors (the "Whole Board").
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<PAGE>
E. Stockholders shall not be permitted to cumulate their votes for
the election of directors.
SIXTH:
-----
A. The number of directors shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the Whole Board. The directors, other than those who may be elected
by the holders of any class or series of Preferred Stock, shall be divided into
three classes, as nearly equal in number as reasonably possible, with the term
of office of the first class to expire at the conclusion of the first annual
meeting of stockholders, the term of office of the second class to expire at the
conclusion of the annual meeting of stockholders one year thereafter and the
term of office of the third class to expire at the conclusion of the annual
meeting of stockholders two years thereafter, with each director to hold office
until his or her successor shall have been duly elected and qualified. At each
annual meeting of stockholders following such initial classification and
election, directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding annual meeting
of stockholders after their election, with each director to hold office until
his or her successor shall have been duly elected and qualified.
B. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the directors
then in office, though less than a quorum, and directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been elected expires, and until
such director's successor shall have been duly elected and qualified. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
C. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
By-laws of the Corporation.
D. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any directors, or the entire Board of Directors, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least 80% of the voting power of all of the then-
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (after giving effect to the provisions of
Article FOURTH of this Certificate of Incorporation), voting together as a
single class.
SEVENTH: The Board of Directors is expressly empowered to adopt, amend or
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repeal the By-laws of the Corporation. Any adoption, amendment or repeal of the
By-laws of the Corporation by the Board of Directors shall require the approval
of a majority of the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the By-laws of the Corporation. In addition to any vote
of the holders of any class or series of stock of this Corporation required by
law or by this Certificate of Incorporation, the affirmative vote of the holders
of at least 80% of the voting power of all of the then-outstanding shares of the
capital
5
<PAGE>
stock of the Corporation entitled to vote generally in the election of directors
(after giving effect to the provisions of Article FOURTH hereof), voting
together as a single class, shall be required to adopt, amend or repeal any
provisions of the By-laws of the Corporation.
EIGHTH:
------
A. In addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise expressly provided in this
Section:
1. any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or not itself
an Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an Interested
Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or
with any Interested Stockholder, or any Affiliate of any Interested
Stockholder, of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as hereafter defined) equaling or exceeding
25% or more of the combined assets of the Corporation and its Subsidiaries;
or
3. the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate Fair Market
Value equaling or exceeding 25% of the combined assets of the Corporation
and its Subsidiaries except pursuant to an employee benefit plan of the
Corporation or any Subsidiary thereof; or
4. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate of any Interested Stockholder; or
5. any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an
Interested Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class
of equity or convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested Stockholder or any
Affiliate of any Interested Stockholder (a "Disproportionate Transaction");
provided, however, that no such transaction shall be deemed a
Disproportionate Transaction if the increase in the proportionate ownership
of the Interested Stockholder or Affiliate as a result of such transaction
is no greater than the increase experienced by the other stockholders
generally;
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shall require the affirmative vote of the holders of at least 80% of the voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote in the election of directors (the "Voting Stock"), voting together as a
single class. Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may be specified, by
law or by any other provisions of this Certificate of Incorporation or any
Preferred Stock Designation or in any agreement with any national securities
exchange or quotation system or otherwise.
The term "Business Combination" as used in this Article EIGHTH shall mean
any transaction which is referred to in any one or more of paragraphs 1 through
5 of Section A of this Article EIGHTH.
B. The provisions of Section A of this Article EIGHTH shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only the affirmative vote of the majority of the outstanding
shares of capital stock entitled to vote, or such vote as is required by law or
by this Certificate of Incorporation, if, in the case of any Business
Combination that does not involve any cash or other consideration being received
by the stockholders of the Corporation solely in their capacity as stockholders
of the Corporation, the condition specified in the following paragraph 1 is met
or, in the case of any other Business Combination, all of the conditions
specified in either of the following paragraphs 1 and 2 are met:
1. The Business Combination shall have been approved by a
majority of the Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business Combination
of consideration other than cash to be received per share by the
holders of Common Stock in such Business Combination shall at least be
equal to the higher of the following:
I. (if applicable) the Highest Per Share Price,
including any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by the Interested Stockholder or
any of its Affiliates for any shares of Common Stock acquired by
it (X) within the two-year period immediately prior to the first
public announcement of the proposal of the Business Combination
(the "Announcement Date"), or (Y) in the transaction in which it
became an Interested Stockholder, whichever is higher.
II. the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder (such latter date is
referred to in this Article EIGHTH as the "Determination Date"),
whichever is higher.
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(b) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business Combination
of consideration other than cash to be received per share by holders
of shares of any class of outstanding Voting Stock other than Common
Stock shall be at least equal to the highest of the following (it
being intended that the requirements of this subparagraph (b) shall be
required to be met with respect to every such class of outstanding
Voting Stock, whether or not the Interested Stockholder has previously
acquired any shares of a particular class of Voting Stock):
I. (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the
Interested Stockholder for any shares of such class of Voting
Stock acquired by it (X) within the two-year period immediately
prior to the Announcement Date, or (Y) in the transaction in
which it became an Interested Stockholder, whichever is higher;
II. (if applicable) the highest preferential amount
per share to which the holders of shares of such class of Voting
Stock are entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; and
III. the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the Determination
Date, whichever is higher.
(c) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as the Interested Stockholder has
previously paid for shares of such class of Voting Stock. If the
Interested Stockholder has paid for shares of any class of Voting
Stock with varying forms of consideration, the form of consideration
to be received per share by holders of shares of such class of Voting
Stock shall be either cash or the form used to acquire the largest
number of shares of such class of Voting Stock previously acquired by
the Interested Stockholder. The price determined in accordance with
subparagraph B.2 of this Article EIGHTH shall be subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination of shares or similar event.
(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such Business
Combination; (i) except as approved by a majority of the Disinterested
Directors, there shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends (whether or not
cumulative) on any outstanding stock having preference over the Common
Stock as to dividends or liquidation; (ii) there shall have been (X)
no reduction in the annual rate of dividends paid on the Common Stock
(except as necessary to reflect any subdivision of the Common Stock),
except as approved by a majority of the Disinterested Directors, and
(Y) an increase in such
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annual rate of dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization, reorganization
or any similar transaction which has the effect of reducing the number
of outstanding shares of Common Stock, unless the failure to so
increase such annual rate is approved by a majority of the
Disinterested Directors; and (iii) neither such Interested Stockholder
nor any of its Affiliates shall have become the beneficial owner of
any additional shares of Voting Stock except as part of the
transaction which results in such Interested Stockholder becoming an
Interested Stockholder.
(e) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not have
received the benefit, directly or indirectly (except proportionately
as a stockholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax advantages
provided by the Corporation, whether in anticipation of or in
connection with such Business Combination or otherwise.
(f) A proxy or information statement describing the
proposed Business Combination and complying with the requirements of
the Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to stockholders of the Corporation at
least 30 days prior to the consummation of such Business Combination
(whether or not such proxy or information statement is required to be
mailed pursuant to such Act or subsequent provisions).
C. For the purposes of this Article EIGHTH:
1. A "Person" shall include an individual, a group acting in
concert, a corporation, a partnership, an association, a joint venture, a
pool, a joint stock company, a trust, an unincorporated organization or
similar company, a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities.
2. "Interested Stockholder" shall mean any Person (other than
the Corporation or any holding company or Subsidiary thereof) who or which:
(a) is the beneficial owner, directly or indirectly, of more
than 10% of the voting power of the outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question
was the beneficial owner, directly or indirectly, of 10% or more of
the voting power of the then-outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the two-year
period immediately prior to the date in question beneficially owned by
any Interested Stockholder, if such assignment or succession shall
have occurred in the course of a transaction
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or series of transactions not involving a public offering within the
meaning of the Securities Act of 1933.
3. A Person shall be a "beneficial owner" of any Voting Stock:
(a) which such Person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly or
indirectly within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as in effect on March 31, 1996; or
(b) which such Person or any of its Affiliates or
Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time), pursuant
to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise,
or (ii) the right to vote pursuant to any agreement, arrangement or
understanding (but neither such Person nor any such Affiliate or
Associate shall be deemed to be the beneficial owner of any shares of
Voting Stock solely by reason of a revocable proxy granted for a
particular meeting of stockholders, pursuant to a public solicitation
of proxies for such meeting, and with respect to which shares neither
such Person nor any such Affiliate or Associate is otherwise deemed
the beneficial owner); or
(c) which are beneficially owned, directly or indirectly
within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as in effect on March 31, 1996, by any other Person with which
such Person or any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purposes of acquiring, holding,
voting (other than solely by reason of a revocable proxy as described
in Subparagraph (b) of this Paragraph 3) or in disposing of any shares
of Voting Stock;
provided, however, that, in the case of any employee stock ownership or
similar plan of the Corporation or of any Subsidiary in which the
beneficiaries thereof possess the right to vote any shares of Voting Stock
held by such plan, no such plan nor any trustee with respect thereto (nor
any Affiliate of such trustee), solely by reason of such capacity of such
trustee, shall be deemed, for any purposes hereof, to beneficially own any
shares of Voting Stock held under any such plan.
4. For the purpose of determining whether a Person is an
Interested Stockholder pursuant to Paragraph 2 of this Section C, the
number of shares of Voting Stock deemed to be outstanding shall include
shares deemed owned through application of Paragraph 3 of this Section C
but shall not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
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5. "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in effect on
March 31, 1996.
6. "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in Paragraph 2 of this Section C, the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
7. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Stockholder and was a
member of the Board of Directors prior to the time that the Interested
Stockholder became an Interested Stockholder, and any director who is
thereafter chosen to fill any vacancy on the Board of Directors or who is
elected and who, in either event, is unaffiliated with the Interested
Stockholder, and in connection with his or her initial assumption of office
is recommended for appointment or election by a majority of Disinterested
Directors then on the Board of Directors.
8. "Fair Market Value" means: (a) in the case of stock, the
highest closing sales price of the stock during the 30-day period
immediately preceding the date in question of a share of such stock of the
Nasdaq System or any system then in use, or, if such stock is admitted to
trading on a principal United States securities exchange registered under
the Securities Exchange Act of 1934, Fair Market Value shall be the highest
sale price reported during the 30-day period preceding the date in
question, or, if no such quotations are available, the Fair Market Value on
the date in question of a share of such stock as determined by the Board of
Directors in good faith, in each case with respect to any class of stock,
appropriately adjusted for any dividend or distribution in shares of such
stock or in combination or reclassification of outstanding shares of such
stock into a smaller number of shares of such stock, and (b) in the case of
property other than cash or stock, the Fair Market Value of such property
on the date in question as determined by the Board of Directors in good
faith.
9. Reference to "Highest Per Share Price" shall in each case
with respect to any class of stock reflect an appropriate adjustment for
any dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number
of shares of such stock or any combination or reclassification of
outstanding shares of such stock into a smaller number of shares of such
stock.
10. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be
received" as used in Subparagraphs (a) and (b) of Paragraph 2 of Section B
of this Article EIGHTH shall include the shares of Common Stock and/or the
shares of any other class of outstanding Voting Stock retained by the
holders of such shares.
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D. A majority of the Disinterested Directors of the Corporation
shall have the power and duty to determine for the purposes of this Article
EIGHTH, on the basis of information known to them after reasonable inquiry, (a)
whether a person is an Interested Stockholder; (b) the number of shares of
Voting Stock beneficially owned by any person; (c) whether a person is an
Affiliate or Associate of another; and (d) whether the assets which are the
subject of any Business Combination have, or the consideration to be received
for the issuance or transfer of securities by the Corporation or any Subsidiary
in any Business Combination has an aggregate Fair Market Value equaling or
exceeding 25% of the combined assets of the Corporation and its Subsidiaries. A
majority of the Disinterested Directors shall have the further power to
interpret all of the terms and provisions of this Article EIGHTH.
E. Nothing contained in this Article EIGHTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
F. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least 80% of the voting power of all of the then-outstanding
shares of the Voting Stock, voting together as a single class, shall be required
to alter, amend or repeal this Article EIGHTH.
NINTH: The Board of Directors of the Corporation, when evaluating any
-----
offer of another Person (as defined in Article EIGHTH hereof) to (A) make a
tender or exchange offer for any equity security of the Corporation, (B) merge
or consolidate the Corporation with another corporation or entity or (C)
purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation, may, in connection with the exercise of its judgment
in determining what is in the best interest of the Corporation and its
stockholders, give due consideration to all relevant factors, including, without
limitation, the social and economic effect of acceptance of such offer on the
Corporation's present and future customers and employees and those of its
Subsidiaries (as defined in Article EIGHTH hereof); on the communities in which
the Corporation and its Subsidiaries operate or are located; on the ability of
the Corporation to fulfill its corporate objectives as a financial institution
holding company and on the ability of its subsidiary financial institution to
fulfill the objectives of a federally insured financial institution under
applicable statutes and regulations.
TENTH:
-----
A. Except as set forth in Section B of this Article TENTH, in
addition to any affirmative vote of stockholders required by law or this
Certificate of Incorporation, any direct or indirect purchase or other
acquisition by the Corporation of any Equity Security (as hereinafter defined)
of any class from any Interested Person (as hereinafter defined) shall require
the affirmative vote of the holders of at least 80% of the Voting Stock of the
Corporation that is not beneficially owned (for purposes of this Article TENTH
beneficial ownership shall be determined in accordance with Section C.2(b) of
Article FOURTH hereof) by such Interested Person, voting together as a single
class. Such affirmative vote shall be required notwithstanding the fact that no
vote may be required, or that a lesser percentage may be
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specified, by law or by any other provisions of this Certificate of
Incorporation or any Preferred Stock Designation or in any agreement with any
national securities exchange or quotation system, or otherwise. Certain defined
terms used in this Article TENTH are as set forth in Section C below.
B. The provisions of Section A of this Article TENTH shall not be
applicable with respect to:
1. any purchase or other acquisition of securities made as part
of a tender or exchange offer by the Corporation or a Subsidiary (which
term, as used in this Article TENTH, is as defined in the first clause of
Section C.6 of Article EIGHTH hereof) of the Corporation to purchase
securities of the same class made on the same terms to all holders of such
securities and complying with the applicable requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or any
subsequent provision replacing such Act, rules or regulations);
2. any purchase or acquisition made pursuant to an open market
purchase program approved by a majority of the Board of Directors,
including a majority of the Disinterested Directors (which term, as used in
this Article TENTH, is as defined in Article EIGHTH hereof); or
3. any purchase or acquisition which is approved by a majority
of the Board of Directors, including a majority of the Disinterested
Directors, and which is made at no more than the Market Price (as
hereinafter defined), on the date that the understanding between the
Corporation and the Interested Person is reached with respect to such
purchase (whether or not such purchase is made or a written agreement
relating to such purchase is executed on such date), of shares of the class
of Equity Security to be purchased.
C. For the purposes of this Article TENTH:
1. The term Interested Person shall mean any Person (other than
the Corporation, Subsidiaries of the Corporation, pension, profit sharing,
employee stock ownership or other employee benefit plans of the Corporation
and its Subsidiaries, entities organized or established by the Corporation
or any of its Subsidiaries pursuant to the terms of such plans and trustees
and fiduciaries with respect to any such plan acting in such capacity) that
is the direct or indirect beneficial owner of 5% or more of the Voting
Stock of the Corporation, and any Affiliate or Associate of any such
person.
2. The Market Price of shares of a class of Equity Security on
any day shall mean the highest sale price of shares of such class of Equity
Security on such day, or, if that day is not a trading day, on the trading
day immediately preceding such day, on the national securities exchange or
the Nasdaq System or any other system then in use on which such class of
Equity Security is traded.
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3. The term Equity Security shall mean any security described in
Section 3(a)(11) of the Securities Exchange Act of 1934, as in effect on
March 31, 1996, which is traded on a national securities exchange or the
Nasdaq System or any other system then in use.
4. For purposes of this Article TENTH, all references to the
term Interested Stockholder in the definition of Disinterested Director
shall be deemed to refer to the term Interested Person.
ELEVENTH:
--------
A. Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director or an
officer of the Corporation or is or was serving at the request of the
Corporation as a director or officer of another corporation, including, without
limitation, any Subsidiary (as defined in Article EIGHTH herein), partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director or officer or
in any other capacity while serving as a director or officer, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith; provided, however, that, except as provided in Section C hereof with
-------- -------
respect to proceedings to enforce rights to indemnification, the Corporation
shall indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation.
B. The right to indemnification conferred in Section A of this
Article shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
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Delaware General Corporation Law requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication"),
that such indemnitee is not entitled to be indemnified for such expenses under
this Section or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Sections A and B of this Article shall be contract
rights and such rights shall continue as to an indemnitee who has ceased to be a
director or officer and shall inure to the benefit of the indemnitee's heirs,
executors and administrators.
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C. If a claim under Section A or B of this Article is not paid in
full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, or in a suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the indemnitee shall also
be entitled to be paid the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the Delaware General Corporation Law. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper in
the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the indemnitee
has not met the applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any suit brought by
the indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article or otherwise shall be on the Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, the Corporation's
Certificate of Incorporation, By-laws, agreement, vote of stockholders or
Disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
F. The Corporation may, to the extent authorized from time to time
by a majority vote of the disinterested directors, grant rights to
indemnification and to the advancement of expenses to any employee or agent of
the Corporation to the fullest extent of the provisions of this Article with
respect to the indemnification and advancement of expenses of directors and
officers of the Corporation.
TWELFTH: A director of this Corporation shall not be personally liable to
-------
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its
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stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. If the Delaware General
Corporation Law is hereafter amended to further eliminate or limit the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
THIRTEENTH: The Corporation reserves the right to amend or repeal any
----------
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
-------- -------
notwithstanding any other provision of this Certificate of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any vote of the holders of any class or series of the stock of this
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80% of the voting power of all of
the then-outstanding shares of the capital stock of the Corporation entitled to
vote generally in the election of directors (after giving effect to the
provisions of Article FOURTH), voting together as a single class, shall be
required to amend or repeal this Article THIRTEENTH, clauses B or C of Article
FOURTH, clauses C or D of Article FIFTH, Article SIXTH, Article SEVENTH, Article
EIGHTH, Article TENTH or Article ELEVENTH.
FOURTEENTH: The name and mailing address of the sole incorporator are as
----------
follows:
NAME MAILING ADDRESS
---- ---------------
George W. Haligowski Imperial Thrift and Loan Association
700 North Central Avenue
Glendale, California 91203
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I, THE UNDERSIGNED, being the incorporator, for the purpose of forming a
corporation under the laws of the State of Delaware, do make, file and record
this Certificate of Incorporation, do certify that the facts herein stated are
true, and, accordingly, have hereto set my hand this 1st day of May, 1996.
/s/ George W. Haligowsi
-------------------------------------
George W. Haligowski, Incorporator
<PAGE>
APPENDIX C
ITLA CAPITAL CORPORATION
RECOGNITION AND RETENTION PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
------------
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors and officers of the Corporation and its
Affiliates.
2. Definitions. The following definitions are applicable to the
-----------
Plan:
"Association" - means Imperial Thrift and Loan Association, a
California thrift and loan and its predecessors and successors.
"Award" - means the grant by the Committee of Restricted Stock,
as provided in the Plan.
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Committee" - means the Committee referred to in Section 7
hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, advisory director, executive officer or
employee of the Corporation or any Affiliate. Service shall not be considered
interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Corporation or any Affiliate or in the case of transfers
between payroll locations of the Corporation or between the Corporation, its
subsidiaries or its successor.
"Corporation" - means ITLA Capital Corporation, a Delaware
corporation.
"ERISA" - means the Employee Retirement Income Security Act of
1974, as amended.
"Participant" - means any director, advisory director, executive
officer or employee of the Corporation or any Affiliate who is selected by the
Committee to receive an Award.
"Plan" - means the Recognition and Retention Plan of the
Corporation.
"Performance Requirements" - means the minimum requirements which
must be met by the Corporation or the Association as set forth in Section 13.
"Restricted Period" - means the period of time selected by the
Committee for the purpose of determining when restrictions are in effect under
Section 3 hereof with respect to Restricted Stock awarded under the Plan.
"Restricted Stock" - means Shares which have been contingently
awarded to a Participant by the Committee subject to the restrictions referred
to in Section 3 hereof, so long as such restrictions are in effect.
"Shares" - means the common stock, par value $0.01 per share, of
the Corporation.
3. Terms and Conditions of Restricted Stock. The Committee shall have
----------------------------------------
full and complete authority, subject to the limitations of the Plan, to grant
awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 3, to provide such other
terms and conditions (which need
<PAGE>
not be identical among Participants) in respect of such Awards, and the vesting
thereof, as the Committee shall determine.
(a) At the time of an award of Restricted Stock, the Committee
shall establish for each Participant a Restricted Period, during which or at the
expiration of which, as the Committee shall determine and provide in the
agreement referred to in paragraph (d) of this Section 3, the Shares awarded as
Restricted Stock shall vest, and subject to any such other terms and conditions
as the Committee shall provide. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered by the Participant,
except as hereinafter provided, during the Restricted Period. Except for such
restrictions, and subject to paragraphs (c) and (e) of this Section 3 and
Section 4 hereof, the Participant as owner of such shares shall have all the
rights of a stockholder, including but not limited to the right to receive all
dividends paid on such shares and the right to vote such shares. The Committee
shall have the authority, in its discretion, to accelerate the time at which any
or all of the restrictions shall lapse with respect thereto, or to remove any or
all of such restrictions, whenever it may determine that such action is
appropriate by reason of changes in applicable tax or other laws or other
changes in circumstances occurring after the commencement of such Restricted
Period.
(b) Except as provided in Section 5 hereof, if a Participant
ceases to maintain Continuous Service for any reason (other than death, total or
partial disability or normal or early retirement), unless the Committee shall
otherwise determine, all Shares of Restricted Stock theretofore awarded to such
Participant and which at the time of such termination of Continuous Service are
subject to the restrictions imposed by paragraph (a) of this Section 3 shall
upon such termination of Continuous Service be forfeited and returned to the
Corporation. If a Participant ceases to maintain Continuous Service by reason of
death, total or partial disability or normal or early retirement, Restricted
Stock then still subject to restrictions imposed by paragraph (a) of this
Section 3 will be free of those restrictions.
(c) Each certificate in respect of Shares of Restricted Stock
awarded under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in blank,
with the Corporation and shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the Recognition and Retention Plan of ITLA Capital
Corporation. Copies of such Plan are on file in the offices of the
Secretary of ITLA Capital Corporation, 7979 Ivanhoe Avenue, La Jolla,
California 92037.
(d) At the time of any Award, the Participant shall enter into
an Agreement with the Corporation in a form specified by the Committee, agreeing
to the terms and conditions of the Award and such other matters as the
Committee, in its sole discretion, shall determine (the "Restricted Stock
Agreement").
(e) At the time of an award of shares of Restricted Stock, the
Committee may, in its discretion, determine that the payment to the Participant
of dividends declared or paid on such shares, or specified portions thereof, by
the Corporation shall be deferred until the earlier to occur of (i) the lapsing
of the restrictions imposed under paragraph (a) of this Section 3 or (ii) the
forfeiture of such shares under paragraph (b) of this Section 3, and shall be
held by the Corporation for the account of the Participant until such time. In
the event of such deferral, there shall be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its discretion, may determine.
Payment of deferred dividends, together with interest accrued thereon, shall be
made upon the lapsing of the Restricted Period imposed under paragraph (a) of
this Section 3.
(f) At the expiration of the restrictions imposed by paragraph
(a) of this Section 3, the Corporation shall redeliver to the Participant (or
where the relevant provision of paragraph (b) of this Section 3 applies in the
case of a deceased Participant, to his legal representative, beneficiary or
heir) the certificate(s) and stock power deposited with it pursuant to paragraph
(c) of this Section 3 and the Shares represented by such certificate(s) shall be
free of the restrictions referred to in paragraph (a) of this Section 3.
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<PAGE>
4. Adjustments Upon Changes in Capitalization. In the event of any
------------------------------------------
change in the outstanding Shares subsequent to the effective date of the Plan by
reason of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number and class of shares with respect to which Awards theretofore have been
granted under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any shares of stock or other securities
received, as a result of any of the foregoing, by a Participant with respect to
Restricted Stock shall be subject to the same restrictions and the
certificate(s) or other instruments representing or evidencing such shares or
securities shall be legended and deposited with the Corporation in the manner
provided in Section 3 hereof.
5. Effect of Change in Control. Each of the events specified in the
---------------------------
following clauses (i) through (iii) of this Section 5 shall be deemed a "change
of control": (i) any third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial
owner of shares of the Corporation or the Association with respect to which 25%
or more of the total number of votes may be cast for the election of the Board
of Directors of the Corporation or the Association, (ii) as a result of, or in
connection with, any cash tender offer, exchange offer, merger or other business
combination, sale of assets or contested election, or combination of the
foregoing, the persons who were directors of the Corporation or the Association
shall cease to constitute a majority of the Board of Directors of the
Corporation or the Association, or (iii) the shareholders of the Corporation
shall approve an agreement providing either for a transaction in which the
Corporation will cease to be an independent publicly owned entity or for a sale
or other disposition of all or substantially all the assets of the Corporation
or the Association. If the Continuous Service of any Participant of the
Corporation is involuntarily terminated for whatever reason, at any time within
twelve months after a change in control, unless the Committee shall have
otherwise provided, any Restricted Period and Performance Requirements with
respect to Restricted Stock theretofore awarded to such Participant shall lapse
upon such termination and all Shares awarded as Restricted Stock shall become
fully vested in the Participant to whom such Shares were awarded.
6. Assignments and Transfers. No Award nor any right or interest of a
-------------------------
Participant under the Plan in any instrument evidencing any Award under the Plan
may be assigned, encumbered or transferred except, in the event of the death of
a Participant, by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Code or Title I of ERISA or
the rules thereunder.
7. Administration. The Plan shall be administered by a Committee
--------------
consisting of two or more members of the Board of Directors, neither of whom
shall be an officer or former officer of the Association or the Corporation.
The members of the Committee shall be appointed by the Board of Directors of the
Corporation. Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion to (i) select
Participants and grant Awards; (ii) determine the number of shares to be subject
to types of Awards generally, as well as to individual Awards granted under the
Plan; (iii) determine the terms and conditions upon which Awards shall be
granted under the Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to time regulations for the
administration of the Plan, interpret the Plan, and make all determinations
deemed necessary or advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
8. Shares Subject to Plan. Subject to adjustment by the operation of
----------------------
Section 4 hereof, the maximum number of Shares with respect to which Awards may
be made under the Plan are 300,000 shares. The shares with respect to which
Awards may be made under the Plan may be either authorized and unissued shares
or issued shares heretofore or hereafter reacquired and held as treasury shares.
An Award shall not be considered to have been made under the Plan with respect
to Restricted Stock which is forfeited and new Awards may be granted under the
Plan with respect to the number of Shares as to which such forfeiture has
occurred.
9. Employee Rights Under the Plan. No director, officer or employee
------------------------------
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no director, officer,
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<PAGE>
employee or other person shall have any claim or right to be granted an Award
under the Plan or under any other incentive or similar plan of the Corporation
or any Affiliate. Neither the Plan nor any action taken thereunder shall be
construed as giving any employee any right to be retained in the employ of the
Corporation, the Association or any Affiliate.
10. Withholding Tax. Upon the termination of the Restricted Period with
---------------
respect to any shares of Restricted Stock, the Corporation shall withhold from
any payment or distribution made under this Plan sufficient Shares to cover any
applicable withholding and employment taxes. The Corporation shall have the
right to deduct from all dividends paid with respect to shares of Restricted
Stock the amount of any taxes which the Corporation is required to withhold with
respect to such dividend payments. No discretion or choice shall be conferred
upon any Participant with respect to the form, timing or method of any such tax
withholding.
11. Amendment or Termination. The Board of Directors of the Corporation
------------------------
may amend, suspend or terminate the Plan or any portion thereof at any time;
provided, however, that no such amendment, suspension or termination shall
impair the rights of any Participant, without his consent, in any Award
theretofore made pursuant to the Plan.
12. Term of Plan. The Plan shall become effective upon its adoption by
------------
the Board of Directors of the Corporation. It shall continue in effect for a
term of ten years unless sooner terminated under Section 11 hereof.
13. Performance Criteria. No Plan Shares shall be granted in any fiscal
--------------------
year in which the Association fails to meet the following:
a) a return on average assets of 50 basis points for the fiscal; and
b) the Association is treated as adequately capitalized (as defined by
FDIC regulations).
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