SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
Amendment No. 2
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SIERRAWEST BANCORP
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(Exact name of registrant as specified in its charter)
CALIFORNIA 68-0091859
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State of Incorporation IRS Employer ID Number
10181 Truckee-Tahoe Airport Road, Truckee, California 96160
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Address of registrant's principal executive office Zip Code
Securities to be registered pursuant to Section 12(b) of the Act:
None
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(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
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(Title of Class)
<PAGE>
On February 25, 1999, SierraWest Bancshares (the "Company")
and American Stock Transfer & Trust Company, as Rights Agent (the "Rights
Agent"), amended that certain Rights Agreement dated January 16, 1996, as
amended, between the Company and the Rights Agent (the "Rights Agreement"). The
Rights Agreement was amended to allow the Company, BancWest Corp., a Delaware
corporation ("BancWest"), and its subsidiary, Bank of the West, a California
banking corporation ("Bank of the West") to enter into and engage in the
transactions described in an Agreement and Plan of Merger dated February 25,
1999 among the Company, BancWest and Bank of the West pursuant to which the
Company will merge with Bank of the West (the "BancWest Merger") and a related
Stock Option Agreement by the Company and BancWest (such agreements
collectively, the "BancWest Merger Agreements") without triggering the rights
outstanding under the Rights Agreement. This Amendment No. 2 to Form 8-A amends
in its entirety Item 1 of the Form 8-A previously filed by the Company with
respect to the Rights (as defined below) on January 3, 1996.
Item 1. Description of Registrant's Securities to be Registered
On December 21, 1995, the Board of Directors of the Company
declared a dividend of one preferred share purchase right ("Right") for each
outstanding share of common stock, no par value (the "Common Stock"), of the
Company. The dividend was payable on January 16, 1996 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, no par value (the "Preferred Stock"), of the
Company at a price of $100 per one one-hundredth of a share of Preferred Stock
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement between the Company the Rights
Agent.
Initially, the Rights will be attached to all certificates
representing Common Stock then outstanding, regardless of whether any such
certificates have a copy of this Summary of Rights attached thereto, and no
separate Right Certificates will be distributed. The Rights will separate from
the Common Stock and a Distribution Date will occur upon the earlier of (i) 10
days following a public announcement that, without the prior consent of the
Board of Directors, a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 10% or more of the
outstanding Common Stock (a "Stock Acquisition Date"), or (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 10% or more of such outstanding Common Stock.
On February 25, 1999, the Rights Agreement was amended to allow the Company,
BancWest and its subsidiary, Bank of the West, to enter into and engage in the
transactions described in the BancWest Merger Agreements. As amended, the Rights
Agreement provides that BancWest, Bank of the West and their affiliates and
associates will not be Acquiring Persons as a result of the BancWest Merger
Agreements or the transactions described in those agreements.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Stock. Until
the Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date, upon transfer or new
issuance of Common Stock, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Stock, outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on January 16, 2006 (the "Final Expiration Date"), unless
the Rights are earlier redeemed or exchanged by the Company, in each case, as
described below.
The Purchase Price payable, and the number of one
one-hundredths of a share of Preferred Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) upon
the grant to holders of the Preferred Stock of certain rights or warrants to
subscribe for or purchase Preferred Stock at a price, or securities convertible
into Preferred Stock with a conversion price, less than the then current market
price of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Preferred Stock) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a share of Preferred Stock issuable upon exercise of each
Right are also subject to adjustment in the event of a stock split of the Common
Stock or a stock dividend on the Common Stock payable in Common Stock or a
subdivision, consolidation or combination of the Common Stock occurring, in any
such case, prior to the Distribution Date.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth interest in a
share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential dividend payment of 100 times the dividend declared per share of
Common Stock. In the event of liquidation, the holders of the Preferred Stock
will be entitled to a minimum preferential liquidation payment of $100.00 per
share but will be entitled to an aggregate payment of 100 times the payment made
per share of Common Stock. Each share of Preferred Stock will have 100 votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which Common Stock are exchanged, each
share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. These rights are protected by customary
antidilution provisions.
In the event that any person (other than BancWest, Bank of the
West or any of their affiliates or associates) becomes the beneficial owner of
10% or more of the Common Stock of the Company, 10 days thereafter (a "Flip-In
Event") each holder of a Right will thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price of the Right, Common Stock
(or, in certain circumstances, a combination of cash, other property, Common
Stock or other securities) which has a value of two times the Purchase Price of
the Right (such right being called the "Flip-In Right"). In the event that the
Company is acquired in a merger or other business combination transaction where
the Company is not the surviving corporation (other than the BancWest Merger) or
in the event that 50% or more of its assets or earning power is sold, proper
provision shall be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
of the Right, common stock of the acquiring entity which has a value of two
times the Purchase Price of the Right. Upon the occurrence of the Flip-In Event,
any Rights that are or were at any time owned by an Acquiring Person shall
become null and void insofar as they relate to the Flip-In Right.
At any time after the acquisition by a person or group of
affiliated or associated persons (other than BancWest, Bank of the West or any
of their affiliates or associates) of beneficial ownership of 10% or more of the
outstanding Common Stock and prior to the acquisition by such person or group of
50% or more of the outstanding Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such person or group
which have become void), in whole or in part, at an exchange ratio of one share
of Common Stock, or one one-hundredth of a shared of Preferred Stock (or of a
share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depository receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) the tenth day
after the Stock Acquisition Date, or (ii) the expiration of the Rights, the
Company may redeem the Rights in whole, but not in part, at a price of $.001 per
Right ("Redemption Price"). The redemption shall be effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. Additionally, the Board of Directors may, following
the Stock Acquisition Date, redeem the then outstanding Rights in whole, but not
in part, at the Redemption Price providing that either (a) the Acquiring Person
reduces his beneficial ownership to less than 10% of the voting power of the
Company in a manner which is satisfactory to the Directors and there are not
other Acquiring Persons, or (b) such redemption is incidental to a merger or
other business combination transaction or series of transactions involving the
Company but not involving an Acquiring Person or any person who was an Acquiring
Person. The redemption of Rights described in the preceding sentence shall be
effective only after 10 business days prior notice. Upon the effective date of
the redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
Until a Right is exercised, the holder of a Right will not, by
reason of being such a holder, have rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of
Directors of the Company in any manner without the consent of the holders of the
Rights, including an amendment to lower certain thresholds described above to
not less than the greater of (i) any percentage greater than the largest
percentage of the outstanding Common Stock then known to the Company to be
beneficially owned by any person or group of affiliated or associated persons
and (ii) 10%, except that from and after such time as any person becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights.
As of February 23, 1999, there were 5,317,338 shares of Common
Stock issued and outstanding and 314,748 shares reserved for issuance under
employee stock option plans, each with one Right attached. As long as the Rights
are attached to the Common Stock, the Company will issue one Right for each
share of Common Stock issued between the Record Date and the Distribution Date
so that all such shares will have attached Rights. As provided above, however,
upon and following the occurrence of the Flip-In Event, any such Rights that are
or were at any time owned by an Acquiring Person shall become null and void
insofar as they relate to the Flip-In Right. There are 200,000 shares of
Preferred Stock reserved for issuance upon exercise of the Rights.
The Rights Agreement is designed to protect shareholders in
the event of an unsolicited attempt to acquire the Company for an inadequate
price and to protect against abusive practices that do not treat all
shareholders equally such as, among others, partial and two-tier tender offers,
coercive offers, and creeping stock accumulation programs. Such practices can
pressure stock holders into tendering their investments prior to realizing the
full value or total potential of such investments. The Rights Agreement is
intended to make the cost of such abusive practices prohibitive and create an
incentive for a potential acquiror to negotiate in good faith with the Board.
The Rights Agreement is not intended to, and will not, prevent all unsolicited
offers to acquire the Company. If an unsolicited offer is made, and the Board
determines that it is fair and in the best interest of the Company and its
shareholders, then, pursuant to the terms of the Rights Agreement, the Board has
the authority to redeem the Rights and permit the offer to proceed. Essentially,
the Rights Agreement will provide the Board with sufficient opportunity to
evaluate the fairness of any unsolicited offer and the credibility of the
bidder, and will therefore enable the Board to represent the interests of all
shareholders more effectively. Of course, in deciding whether to redeem the
Rights in connection with any unsolicited offer, the Board will be bound by its
fiduciary obligations to act in the best interests of the Company and its
shareholders.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a registration statement on
Form 8-A filed January 3, 1996 and an amendment to such registration statement
filed on January 29, 1998. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
Item 2. Exhibits.
4.1 Rights Agreement dated as of January 16, 1996, between the Company and
American Stock Transfer & Trust Co., as Rights Agent, including Form of
Right Certificate (attached as Exhibit B to the Rights Agreement) and
the Summary of Rights to Purchase Preferred Shares (attached as Exhibit
C to the Rights Agreement) (incorporated herein by reference to Exhibit
4 to the Registrant's Registration Statement on Form 8-A filed with the
Commission on January 3, 1996).
4.2. Amendment to Rights Agreement dated as of January 29, 1998 between the
Company and American Stock Transfer & Trust Co., as Rights Agent
(incorporated herein by reference to Exhibit 4.2 to Amendment No. 1 to
the Registrant's Registration Statement on Form 8-A filed with the
Commission on January 29, 1998).
4.3. Amendment to Rights Agreement dated as of February 25, 1999 between the
Company and American Stock Transfer & Trust Co., as Rights Agent,
including the Summary of Rights to Purchase Preferred Shares (attached
as Exhibit A thereto).
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this registration statement to be signed on its behalf
by the undersigned duly authorized person.
Date: March 3, 1999 SierraWest Bancorp
By: /s/ David Broadley
David Broadley
Its: Executive Vice President and
Chief Financial Officer
<PAGE>
Exhibit Index
<TABLE>
No. Description Page
- --- ----------- ----
<S> <C> <C>
4.1 Rights Agreement dated as of January 16, 1996, between the Company and
American Stock Transfer & Trust Co., as Rights Agent, including Form of
Right Certificate (attached as Exhibit B to the Rights Agreement) and
the Summary of Rights to Purchase Preferred Shares (attached as Exhibit
C to the Rights Agreement) (incorporated herein by reference to Exhibit
4 of the Registrant's Registration Statement on Form 8-A filed with the
Commission on January 3, 1996).
--
4.2. Amendment to Rights Agreement dated as of January 29, 1998 between the
Company and American Stock Transfer & Trust Co., as Rights Agent
(incorporated herein by reference to Exhibit 4.2 to Amendment No. 1 to
the Registrant's Registration Statement on Form 8-A filed with the
Commission on January 29, 1998).
--
4.3. Amendment to Rights Agreement dated as of February 25, 1999 between the
Company and American Stock Transfer & Trust Co., as Rights Agent,
including the Summary of Rights to Purchase Preferred Shares (attached
as Exhibit A thereto).
8
</TABLE>
<PAGE>
Exhibit 4.3
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AMENDMENT TO RIGHTS AGREEMENT
This Amendment, dated as of February 25, 1999 (the
"Amendment"), is to the Rights Agreement dated as of January 16, 1996, as
amended (the "Rights Agreement"), between SierraWest Bancorp, a California
corporation (the "Company"), and American Stock Transfer & Trust Co. (the
"Rights Agent").
WHEREAS, the Board of Directors of the Company has approved
(1) an Agreement and Plan of Merger dated as of February 25, 1999 among BancWest
Corporation, a Delaware corporation ("BancWest"), Bank of the West, a California
banking corporation ("Bank of the West") and the Company providing for the
merger of the Company with and into Bank of the West and a related Merger
Agreement in the form of an exhibit thereto and (2) a related Stock Option
Agreement dated as of February 25, 1999 between BancWest and the Company (such
agreements together, the "Merger Agreements");
WHEREAS, the Merger Agreements contemplate that the Company,
at the time such agreements are executed, shall have taken all actions necessary
to prevent the Merger Agreements and the transactions contemplated therein from
triggering the Rights (as defined in the Rights Agreement) outstanding under the
Rights Agreement;
WHEREAS, the Board of Directors has determined that this
Amendment is in the best of interests of the Corporation and its shareholders;
and
WHEREAS, the Company and the Rights Agent have determined
that, pursuant to Section 27 of the Rights Agreement, the Rights Agreement may
be amended as set forth herein without the approval of the holders of the
Rights.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the Company and the Rights Agent hereby
agree as follows:
1. This Amendment shall become effective on the date that the
Company and BancWest have both executed either of the Merger Agreements,
immediately before the earlier of either such execution.
2. Subsection 1(a) of the Rights Agreement is hereby amended
to include the following additional sentence to immediately follow the current
language therein: "Notwithstanding the foregoing, neither BancWest Corporation,
a Delaware corporation ("BancWest"), nor any of its Affiliates or Associates,
nor Banque National de Paris, a French corporation, nor any of its Affiliates of
Associate shall be an `Acquiring Person.'"
3. Section 1 of the Rights Agreement is hereby amended to
include a new Subsection 1(v) which shall read as follows: "`Section 11(a)(ii)
Event' shall mean any Flip-In Event as defined in Section 11(a)(ii)."
4. Section 1 of the Rights Agreement is hereby amended to
include a new Subsection 1(w) which shall read as follows:
"Section 13 Event" shall mean any event described in clause
(i), (ii), (iii) or (iv) of Section 13(a) of this Agreement,
other than the delivery, execution or performance or
consummation of any of the transactions contemplated in the
Agreement and Plan of Merger dated as of February 25, 1999
among BancWest, Bank of the West, a California banking
corporation ("Bank of the West") and the Company, the
Agreement of Merger in the form attached thereto as Exhibit B
or the Stock Option Agreement dated as of February 25, 1999
between the Company and BancWest.
5. Section 1 of the Rights Agreement is hereby amended to
include a new Subsection 1(x) which shall read as follows: "`Triggering Event'
shall mean any Section 11(a)(ii) Event or any Section 13 Event."
6. Section 13 of the Rights Agreement is hereby amended to
include a new Subsection 13(f) which shall read as follows:
(f) Notwithstanding anything in this Agreement to the
contrary, this Section 13 shall not be applicable to the
execution, delivery, or the performance or consummation of any
of the transactions contemplated in, the Agreement and Plan of
Merger dated as of February 25, 1999 among BancWest, Bank of
the West and the Company, the Merger Agreement in the form
attached thereto as Exhibit B or the Stock Option Agreement
dated as of February 25, 1999 between the Company and
BancWest.
7. The form of Summary of Rights to Purchase Preferred Shares
attached as Exhibit C to the Rights Agreement is hereby replaced in its entirety
by the form of Summary of Rights to Purchase Preferred Shares attached as
Exhibit A hereto.
8. As promptly as practicable following the date of this
Amendment, the Company shall take all appropriate actions to cause the legend on
the certificates for the Common Stock referring to the Rights Agreement to make
reference to this Amendment.
9. This Amendment shall be limited solely to the matters
expressly set forth herein and shall not (a) prejudice any right or rights which
the Company may now have or may in the future have under or in connection with
the Agreement or any instruments or agreements referred to therein or (b) except
to the extent expressed as set forth herein, modify the Agreement or any Rights,
or any instruments or agreements referred to therein.
10. Unless defined herein, all capitalized terms shall have
the meanings provided in the Rights Agreement.
11. This Amendment shall be deemed to be a contract made under
the laws of the State of California and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
12. This Amendment may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument. Signatures are deemed acceptable from the facsimile
transmission.
13. This Amendment shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Company's common shares).
Nothing in this Amendment shall be construed to give any person other than the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, the Company's common shares) any legal or
equitable right, remedy or claim under this Amendment and the Merger Agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed and their respective corporate seals to be hereto affixed and
attested, all as of the date and year first above written.
SIERRAWEST BANCORP
By: /s/ David Broadley
____________________________
David Broadley
____________________________
Its: Executive Vice President and
Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST CO.
By: /s/ Herbert J. Lemmer
_____________________________
Its: Vice President
_____________________________
<PAGE>
EXHIBIT A
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On December 21, 1995, the Board of Directors of SierraWest
Bancorp, a California corporation (formerly Sierra-Tahoe Bancorp) ("Company")
declared a dividend of one preferred share purchase right ("Right") for each
outstanding share of common stock, no par value ("Common Stock"), of the
Company. The dividend was payable on January 16, 1996 ("Record Date") to the
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, no par value ("Preferred Stock"), of the Company
at a price of $100 per one one-hundredth of a share of Preferred Stock
("Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of January 16, 1996, as
amended, and subsequently amended January 29, 1998 ("Rights Agreement") between
the Company and American Stock Transfer & Trust Co., as Rights agent ("Rights
Agent").
Initially, the Rights will be attached to all certificates
representing Common Stock then outstanding, regardless of whether any such
certificates have a copy of this Summary of Rights attached thereto, and no
separate Right Certificates will be distributed. The Rights will separate from
the Common Stock and a Distribution Date will occur upon the earlier of (i) 10
days following a public announcement that, without the prior consent of the
Board of Directors, a person or group of affiliated or associated persons
("Acquiring Person") have acquired beneficial ownership of 10% or more of the
outstanding Common Stock ("Stock Acquisition Date"), or (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 10% or more of such outstanding Common Stock.
On February 25, 1999, the Rights Agreement was amended to allow the Company,
BancWest Corp., a Delaware corporation ("BancWest") and its subsidiary, Bank of
the West, a California banking corporation ("Bank of the West") to enter into
and engage in the transactions described in an Agreement and Plan of Merger
dated February 25, 1999 among the Company, BancWest and Bank of the West
pursuant to which the Company will merge with Bank of the West (the "BancWest
Merger") and a related Stock Option Agreement by the Company and BancWest (such
agreements collectively, the "BancWest Merger Agreements"). As amended, the
Rights Agreement provides that BancWest, Bank of the West and their Affiliates
and Associates will not be Acquiring Persons as a result of the BancWest Merger
Agreements or the transactions described in those agreements.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Stock. Until
the Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date, upon transfer or new
issuance of Common Stock, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Stock, outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on January 16, 2006 ("Final Expiration Date"), unless the
Rights are earlier redeemed or exchanged by the Company, in each case, as
described below.
The Purchase Price payable, and the number of one
one-hundredths of a share of Preferred Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) upon
the grant to holders of the Preferred Stock of certain rights or warrants to
subscribe for or purchase Preferred Stock at a price, or securities convertible
into Preferred Stock with a conversion price, less than the then current market
price of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Preferred Stock) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a share of Preferred Stock issuable upon exercise of each
Right are also subject to adjustment in the event of a stock split of the Common
Stock or a stock dividend on the Common Stock payable in Common Stock or a
subdivision, consolidation or combination of the Common Stock occurring, in any
such case, prior to the Distribution Date.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-hundredth interest in a
share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled to a minimum
preferential dividend payment of 100 times the dividend declared per share of
Common Stock. In the event of liquidation, the holders of the Preferred Stock
will be entitled to a minimum preferential liquidation payment of $100.00 per
share but will be entitled to an aggregate payment of 100 times the payment made
per share of Common Stock. Each share of Preferred Stock will have 100 votes,
voting together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which Common Stock are exchanged, each
share of Preferred Stock will be entitled to receive 100 times the amount
received per share of Common Stock. These rights are protected by customary
antidilution provisions.
In the event that any person (other than BancWest, Bank of the
West or any of their Affiliates or Associates) becomes the beneficial owner of
10% or more of the Common Stock of the Company, 10 days thereafter (a "Flip-In
Event") each holder of a Right will thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price of the Right, Common Stock
(or, in certain circumstances, a combination of cash, other property, Common
Stock or other securities) which has a value of two times the Purchase Price of
the Right (such right being called the "Flip-In Right"). In the event that the
Company is acquired in a merger or other business combination transaction where
the Company is not the surviving corporation (other than the BancWest Merger) or
in the event that 50% or more of its assets or earning power is sold, proper
provision shall be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
of the Right, common stock of the acquiring entity which has a value of two
times the Purchase Price of the Right. Upon the occurrence of the Flip-In Event,
any Rights that are or were at any time owned by an Acquiring Person shall
become null and void insofar as they relate to the Flip-In Right.
At any time after the acquisition by a person or group of
affiliated or associated persons (other than BancWest, Bank of the West or any
of their Affiliates or Associates) of beneficial ownership of 10% or more of the
outstanding Common Stock and prior to the acquisition by such person or group of
50% or more of the outstanding Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such person or group
which have become void), in whole or in part, at an exchange ratio of one share
of Common Stock, or one one-hundredth of a shared of Preferred Stock (or of a
share of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depository receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) the tenth day
after the Stock Acquisition Date, or (ii) the expiration of the Rights, the
Company may redeem the Rights in whole, but not in part, at a price of $.001 per
Right ("Redemption Price"). The redemption shall be effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. Additionally, the Board of Directors may, following
the Stock Acquisition Date, redeem the then outstanding Rights in whole, but not
in part, at the Redemption Price providing that either (a) the Acquiring Person
reduces his beneficial ownership to less than 10% of the voting power of the
Company in a manner which is satisfactory to the Directors and there are not
other Acquiring Persons, or (b) such redemption is incidental to a merger or
other business combination transaction or series of transactions involving the
Company but not involving an Acquiring Person or any person who was an Acquiring
Person. The redemption of Rights described in the preceding sentence shall be
effective only after 10 business days prior notice. Upon the effective date of
the redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
Until a Right is exercised, the holder of a Right will not, by
reason of being such a holder, have rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of
Directors of the Company in any manner without the consent of the holders of the
Rights, including an amendment to lower certain thresholds described above to
not less than the greater of (i) any percentage greater than the largest
percentage of the outstanding Common Stock then known to the Company to be
beneficially owned by any person or group of affiliated or associated persons
and (ii) 10%, except that from and after such time as any person becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights.
As of February 23, 1999, there were 5,317,338 shares of Common
Stock issued and outstanding and 314,748 shares reserved for issuance under
employee stock option plans, each with one Right attached. As long as the Rights
are attached to the Common Stock, the Company will issue one Right for each
share of Common Stock issued between the Record Date and the Distribution Date
so that all such shares will have attached Rights. As provided above, however,
upon and following the occurrence of the Flip-In Event, any such Rights that are
or were at any time owned by an Acquiring Person shall become null and void
insofar as they relate to the Flip-In Right. There are 200,000 shares of
Preferred Stock reserved for issuance upon exercise of the Rights.
The Rights Agreement is designed to protect shareholders in
the event of an unsolicited attempt to acquire the Company for an inadequate
price and to protect against abusive practices that do not treat all
shareholders equally such as, among others, partial and two-tier tender offers,
coercive offers, and creeping stock accumulation programs. Such practices can
pressure stock holders into tendering their investments prior to realizing the
full value or total potential of such investments. The Rights Agreement is
intended to make the cost of such abusive practices prohibitive and create an
incentive for a potential acquiror to negotiate in good faith with the Board.
The Rights Agreement is not intended to, and will not, prevent all unsolicited
offers to acquire the Company. If an unsolicited offer is made, and the Board
determines that it is fair and in the best interest of the Company and its
shareholders, then, pursuant to the terms of the Rights Agreement, the Board has
the authority to redeem the Rights and permit the offer to proceed. Essentially,
the Rights Agreement will provide the Board with sufficient opportunity to
evaluate the fairness of any unsolicited offer and the credibility of the
bidder, and will therefore enable the Board to represent the interests of all
shareholders more effectively. Of course, in deciding whether to redeem the
Rights in connection with any unsolicited offer, the Board will be bound by its
fiduciary obligations to act in the best interests of the Company and its
shareholders.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a registration statement on
Form 8-A filed January 3, 1996 and amended by amendments to such registration
statement filed on January 29, 1998 and February 25, 1999. A copy of the Rights
Agreement is available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is hereby incorporated herein by
reference.
