<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-
1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
GOLDEN STATE BANCORP INC.
- -------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
- -------------------------------------------------------------------------------
(Title of Class of Securities)
381197 10 2
- -------------------------------------------------------------------------------
(CUSIP Number)
Barry F. Schwartz, Esq. Gerald J. Ford
MacAndrews & Forbes Holdings Inc. Hunter's Glen/Ford, Ltd.
35 East 62nd Street 200 Crescent Court, Suite 1350
New York, New York 10021 Dallas, Texas 75201
(212) 572-8600 (214) 871-5131
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 11, 1998
- -------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ]
NOTE: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
(Continued on following pages)
(Page 1 of 13)
<PAGE>
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CUSIP No. 381197 10 2 13D Page 2 of 13 Pages
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Mafco Holdings Inc.
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 41,067,270*
OWNED BY ----------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
41,067,270*
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
41,067,270*
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.7%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
- ---------------
* Mafco Holdings Inc. expressly disclaims any beneficial interest in any
shares of Common Stock beneficially owned by Hunter's Glen/Ford, Ltd.,
Ford Diamond Corporation or Gerald J. Ford.
<PAGE>
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CUSIP No. 381197 10 2 13D Page 3 of 13 Pages
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
First Gibraltar Holdings Inc.
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 41,067,270*
OWNED BY ----------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
41,067,270*
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
41,067,270*
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.7%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
- ---------------
* First Gibraltar Holdings Inc. expressly disclaims any beneficial
interest in any shares of Common Stock beneficially owned by Hunter's
Glen/Ford, Ltd., Ford Diamond Corporation or Gerald J. Ford.
<PAGE>
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CUSIP No. 381197 10 2 13D Page 4 of 13 Pages
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Gerald J. Ford
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)[X]
(b)[ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 15,655,718*
OWNED BY ----------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
15,655,718*
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
15,655,718*
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.2%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
- -------------------------------------------------------------------------------
- ---------------
* Mr. Ford expressly disclaims any beneficial interest in any shares of
Common Stock beneficially owned by Mafco Holdings Inc. or First
Gibraltar Holdings Inc.
<PAGE>
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CUSIP No. 381197 10 2 13D Page 5 of 13 Pages
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Ford Diamond Corporation
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 15,655,718*
OWNED BY ----------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
15,655,718*
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
15,655,718*
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.2%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
- ---------------
* Ford Diamond Corporation expressly disclaims any beneficial interest
in any shares of Common Stock beneficially owned by Mafco Holdings
Inc. or First Gibraltar Holdings Inc.
<PAGE>
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CUSIP No. 381197 10 2 13D Page 6 of 13 Pages
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON.
Hunter's Glen/Ford, Ltd.
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
[ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
- -------------------------------------------------------------------------------
7. SOLE VOTING POWER
-0-
NUMBER OF ----------------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY 15,655,718*
OWNED BY ----------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON ----------------------------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
15,655,718*
- -------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
15,655,718*
- -------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.2%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- -------------------------------------------------------------------------------
- ---------------
* Hunter's Glen/Ford, Ltd. expressly disclaims any beneficial interest
in any shares of Common Stock beneficially owned by Mafco Holdings
Inc. or First Gibraltar Holdings Inc.
<PAGE>
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CUSIP No. 381197 10 2 13D Page 7 of 13 Pages
- --------------------- ------------------
ITEM 1. SECURITY AND ISSUER.
This statement relates to the shares of common stock, par value $1.00
per share (the "Common Stock"), of Golden State Bancorp Inc., a Delaware
corporation (the "Company"). The Company has its principal executive offices at
135 Main Street, San Francisco, California 94105.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by (a) Mafco Holdings Inc., a Delaware
corporation ("Mafco Holdings"), (b) First Gibraltar Holdings Inc., a Delaware
corporation and an indirect wholly owned subsidiary of Mafco Holdings ("FGH"),
(c) Gerald J. Ford, (d) Ford Diamond Corporation, a Texas corporation ("FDC"),
and (e) Hunter's Glen/Ford, Ltd., a Texas limited partnership ("Hunter's Glen,"
and together with Mafco Holdings, FGH, FDC and Mr. Ford, the "Reporting
Persons").
Mafco Holdings is a diversified holding company with interests in
several industries. Through its 83% ownership of Revlon, Inc., Mafco Holdings
is engaged in the cosmetics and skin care, fragrance and personal care products
business. Mafco Holdings also owns 72% of Panavision Inc., a supplier of film
camera systems to the motion picture and television industries, 29.9% of
Sunbeam Corporation (assuming exercise of warrants to purchase 23,000,000
shares of Sunbeam common stock), and 65% of Meridian Sports Incorporated, a
manufacturer and marketer of ski boats. Mafco Holdings, through its 64%
beneficial ownership of Consolidated Cigar Holdings Inc., is engaged in the
manufacture and distribution of cigars and pipe tobacco. Mafco Holdings also
owns 39% of M&F Worldwide Corp. (assuming conversion of certain preferred
stock) which is in the business of processing licorice and other flavors. The
principal executive offices of Mafco Holdings are located at 35 East 62nd
Street, NewYork, New York 10021. All of the capital stock of Mafco Holdings is
owned by Ronald O. Perelman. Effective September 11, 1998, Mr. Perelman became
a director of the Company.
FGH is a holding company whose only significant asset is the Common
Stock it holds. The principal executive offices of FGH are located at 35 East
62nd Street, New York, New York 10021. All of the capital stock of FGH is
beneficially owned indirectly by Mafco Holdings.
Mr. Ford's principal occupation is Chairman of the Board and Chief
Executive Officer of the Company and of California Federal Bank, A Federal
Savings Bank ("Cal Fed"), an indirect wholly owned subsidiary of the Company.
The principal business address of Mr. Ford is 200 Crescent Court, Suite 1350,
Dallas, Texas 75201. Mr. Ford is a United States citizen.
<PAGE>
- --------------------- ------------------
CUSIP No. 381197 10 2 13D Page 8 of 13 Pages
- --------------------- ------------------
FDC is a Texas corporation having its principal executive office at
200 Crescent Court, Suite 1350, Dallas, Texas 75201. Mr. Ford owns all of the
capital stock of FDC and is its sole director. FDC serves as a general partner
of Hunter's Glen and of other Ford family partnerships.
Hunter's Glen is a Texas limited partnership having its principal
executive office at 200 Crescent Court, Suite 1350, Dallas, Texas 75201.
Hunter's Glen was organized for estate planning purposes and owns 15,655,718 of
the shares of Common Stock reported herein. Mr. Ford and FDC are the two
general partners of Hunter's Glen. The sole limited partner of Hunter's Glen is
a trust established for the benefit of Mr. Ford's children.
The name, business address, present principal occupation or employment
and citizenship of each director and executive officer of Mafco Holdings, FGH
and FDC is set forth in Schedule I hereto and is incorporated herein by
reference. All of the individuals named on Schedule I are citizens of the
United States of America.
To the knowledge of the Reporting Persons, during the last five years
neither any of the Reporting Persons nor any of the persons listed on Schedule
I hereto has been (a) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) was a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violations with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 4 below, pursuant to the terms of the
Reorganization Agreement (as defined below), FGH and Hunter's Glen received,
upon consummation of the Mergers (as defined below), 41,067,270 and 15,655,718
shares, respectively, of Common Stock in consideration for all of their
respective ownership interests in First Nationwide (Parent) Holdings Inc. and
First Nationwide Holdings Inc. In addition, as more fully described in Item 4
below, pursuant to the Reorganization Agreement, FGH and Hunter's Glen will be
entitled to receive additional shares of Common Stock as contingent
consideration in the Mergers under certain circumstances.
ITEM 4. PURPOSE OF TRANSACTION.
Merger Transactions
On February 4, 1998, FGH, Hunter's Glen, First Nationwide (Parent)
Holdings Inc., a Delaware corporation and formerly a wholly owned subsidiary of
FGH ("Parent Holdings"), First Nationwide Holdings Inc., a Delaware corporation
that formerly was 80% owned by Parent Holdings
<PAGE>
- --------------------- ------------------
CUSIP No. 381197 10 2 13D Page 9 of 13 Pages
- --------------------- ------------------
and 20% owned by Hunter's Glen ("FNH"), the Company, and Golden State Financial
Corporation, a Delaware corporation and a wholly owned subsidiary of the
Company ("GSF"), entered into an Agreement and Plan of Reorganization (as
amended, the "Reorganization Agreement"). Pursuant to the Reorganization
Agreement, Parent Holdings merged with and into the Company and FNH merged with
and into GSF (such transactions being referred to herein as the "Mergers").
Following the consummation of the Mergers, Glendale Federal Bank, Federal
Savings Bank, a subsidiary of GSF ("Glendale Federal") merged with and into Cal
Fed, with Cal Fed continuing as an indirect, wholly owned subsidiary of the
Company.
Pursuant to the terms of the Reorganization Agreement, FGH and
Hunter's Glen received upon consummation of the Mergers, in consideration for
all of their respective ownership interests in Parent Holdings and FNH,
41,067,270 and 15,655,718 shares, respectively, of Common Stock. In addition,
the Reorganization Agreement provides that FGH and Hunter's Glen will be
entitled to receive contingent merger consideration, through the issuance by
the Company of additional shares of Common Stock to FGH and Hunter's Glen (the
"Contingent Shares") following consummation of the Mergers, based on (a) the
use by the Company of certain potential tax benefits resulting from certain net
operating loss carryforwards of Parent Holdings, FNH and Cal Fed and the
realization of certain other potential tax assets and liabilities of the
Company and Parent Holdings, and (b) Cal Fed's net after-tax recovery in
certain specified litigation, including a percentage of the net after-tax
recovery in Cal Fed's goodwill litigation against the United States (the "Cal
Fed Goodwill Litigation"), following payment by Cal Fed of all amounts due to
the holders of its contingent litigation recovery participation interests
("CALGZs") and its secondary contingent litigation recovery participation
interests ("CALGLs") and the retention by the Company of certain amounts of
such recovery as provided in the Reorganization Agreement. The Reorganization
Agreement provides generally that the amount of the net after-tax recovery, if
any, resulting from the Cal Fed Goodwill Litigation to be excluded for purposes
of calculating the number of Contingent Shares issuable in respect thereof will
be based on the dollar amount of the 15% of the net after-tax recovery in
Glendale Federal's goodwill lawsuit against the United States (the "Glendale
Goodwill Litigation") to be excluded in calculating the aggregate number of
shares of Common Stock underlying Golden State's Litigation Tracking Warrants,
adjusted to reflect the pro forma ownership interest of FGH and Hunter's Glen
in the combined company at the time of consummation of the Mergers. The
Litigation Tracking Warrants, which were distributed by the Company to its
stockholders on May 29, 1998, represent in the aggregate the right to receive
upon exercise thereof Common Stock having an aggregate market value equal to
85% of the net after-tax recovery, if any, in the Glendale Goodwill Litigation.
If any Contingent Shares become issuable pursuant to the terms of the
Reorganization Agreement as described above, FGH will receive 80% of such
Contingent Shares and Hunter's Glen will receive 20% of such Contingent Shares.
<PAGE>
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CUSIP No. 381197 10 2 13D Page 10 of 13 Pages
- --------------------- -------------------
The number of Contingent Shares to be issued to FGH and Hunter's Glen
pursuant to the Reorganization Agreement cannot be determined at the present
time as such number depends upon factors that are not subject to determination
at this time. These factors include, among other things, the net value to the
combined company of certain contingent assets and liabilities of the Company
and Parent Holdings (including potential recoveries in the Glendale Goodwill
Litigation, the Cal Fed Goodwill Litigation and certain other litigation,
potential tax benefits resulting from certain net operating loss carry forwards
of the consolidated group of which Parent Holdings formerly was a member and
other contingent tax assets and liabilities of the Company and Parent Holdings)
and the market price of the Common Stock at the time that any issuance of
Contingent Shares would be required under the Reorganization Agreement.
Board of Directors and Management of the Company
Upon consummation of the Mergers, the board of directors of the
Company was increased in size from 12 to 15 directors, with five of the 15
directors being designated by the Company from among its 12 directors serving
prior to the Mergers and the other ten directors being designated by Parent
Holdings, including Mr. Perelman and Howard Gittis, a Vice Chairman and
director of Mafco Holdings and FGH. Upon consummation of the Mergers, Mr. Ford
was appointed Chairman of the Board and Chief Executive Officer of the Company,
and Carl B. Webb, President and Chief Operating Officer of Cal Fed, was
appointed as a director and as President and Chief Operating Officer of the
Company.
The Reorganization Agreement and Amendment No. 1 thereto are attached
hereto as Exhibit 2.1 and Exhibit 2.2 and are incorporated herein by reference
in their entirety. The foregoing summary of the Reorganization Agreement does
not purport to be complete and is qualified in its entirety by reference to
such exhibits.
Registration Rights Agreement
In connection with the closing of the Mergers, FGH and Hunter's Glen
entered into a registration rights agreement (the "Registration Rights
Agreement") with the Company. The Registration Rights Agreement provides each
of FGH and Hunter's Glen with "demand rights" pursuant to which the Company
will, at the request of either FGH or Hunter's Glen, file a registration
statement under the Securities Act of 1933, as amended, covering the resale of
shares of Common Stock issued to FGH and/or Hunter's Glen pursuant to the
Reorganization Agreement. Additionally, pursuant to the Registration Rights
Agreement, if the Company proposes to register any common equity securities for
sale pursuant to an underwritten offering, FGH and Hunter's Glen will be
entitled to include in such registration statement such number of shares of
Common Stock as FGH and Hunter's Glen desire to sell, subject to certain
limitations. The Registration Rights Agreement contains other customary
covenants by the Company, FGH and Hunter's Glen and customary
<PAGE>
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CUSIP No. 381197 10 2 13D Page 11 of 13 Pages
- --------------------- -------------------
indemnification, resale restrictions and other provisions, and the Company is
obligated to pay all registration expenses incurred in connection with the
transactions contemplated by the Registration Rights Agreement. The foregoing
description of the Registration Rights Agreement is qualified in its entirety
by reference to the full text of such agreement, which is attached hereto as
Exhibit 10.1 and is incorporated herein by reference.
Other Matters
Except as described above, neither the Reporting Persons nor, to the
knowledge of the Reporting Persons, any of the persons named in Schedule I
hereto have any plans or proposals which relate to or would result in any of
the actions or transactions specified in clauses (a) through (j) of Item 4 of
Schedule 13D.
The Reporting Persons acquired and continue to hold the shares of
Common Stock reported herein for investment purposes. In this connection, the
Reporting Persons expect to evaluate on an ongoing basis their investment in
the Company, and may from time to time acquire shares of Common Stock, dispose
of shares of Comon Stock or formulate other purposes, plans or proposals
regarding the Company or the Common Stock held by the Reporting Persons to the
extent deemed advisable in light of general investment policies, market
conditions and other factors. Any such acquisitions or dispositions may be
made, subject to applicable law, in open market or privately negotiated
transactions or otherwise.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) As of September 11, 1998, based on information provided by
the Company, there were 118,495,364 shares of Common Stock outstanding, of
which as a result of the consummation of the Mergers as described in Item 4,
Mafco Holdings and FGH may be deemed to share beneficial ownership of
41,067,270 shares of Common Stock, representing 34.7% of the Common Stock then
outstanding, and Mr. Ford, FDC and Hunter's Glen may be deemed to share
beneficial ownership of 15,655,718 shares of Common Stock, representing 13.2%
of the Common Stock then outstanding. Upon the occurrence of certain events
discussed in Item 4, the Reporting Persons have the right to acquire additional
shares of Common Stock from the Company. Mafco Holdings and FGH expressly
disclaim any beneficial ownership of or interest in any shares of Common Stock
beneficially owned by Hunter's Glen, FDC or Mr. Ford. Mr. Ford, FDC and
Hunter's Glen expressly disclaim any beneficial ownership of or interest in any
shares of Common Stock beneficially owned by Mafco Holdings or FGH.
Except as set forth in this Item 5, neither the Reporting Persons nor,
to the knowledge of the Reporting Persons, any of the persons listed on
Schedule I hereto beneficially own any shares of Common Stock.
<PAGE>
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CUSIP No. 381197 10 2 13D Page 12 of 13 Pages
- --------------------- -------------------
(c) Other than the transactions described in Item 4 of this Schedule
13D or set forth in the table below, there were no transactions by the
Reporting Persons or, to the knowledge of the Reporting Persons, any of the
persons named on Schedule I hereto during the past 60 days.
The following table sets forth transactions in shares of Common Stock
effected by any of the persons named in Schedule I hereto during the past 60
days:
<TABLE>
<CAPTION>
Date Individual Nature of Transaction # Shares Price per Share
- ---- ---------- --------------------- -------- ---------------
<S> <C> <C> <C> <C>
9/3/98 I. Engelman purchase through broker 10,000 $ 17.4375
9/18/98 H. Gittis purchase through broker 10,000 $ 20.25
</TABLE>
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The 41,067,270 shares of Common Stock received by FGH in the Mergers,
as well as any Contingent Shares received by FGH in the future and the capital
stock of any intermediate holding companies affiliated with Mafco Holdings, are
or may be from time to time pledged to secure certain obligations.
Except as provided in the Reorganization Agreement and the
Registration Rights Agreement or as set forth herein, to the knowledge of the
Reporting Persons, there are no contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in Item 2 or
Schedule I hereto, or between such persons and any other person with respect to
any securities of the Company, including but not limited to transfer or voting
of any such securities, finder's fees, joint ventures, loan or option
arrangements, put or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
Exhibit 2.1 - Agreement and Plan of Reorganization, dated as of
February 4, 1998, by and among Golden State Bancorp
Inc., Golden State Financial Corporation, First
Nationwide (Parent) Holdings Inc., First Nationwide
Holdings Inc., First Gibraltar Holdings Inc., and
Hunter's Glen/Ford, Ltd.
Exhibit 2.2 - Amendment No. 1, dated as July 13, 1998, to the
Agreement and Plan of Reorganization, dated as of
February 4, 1998, by and among Golden State Bancorp
Inc., Golden State Financial Corpo ration, First
Nationwide (Parent) Holdings Inc., First Nationwide
Holdings Inc., First Gibraltar Holdings Inc., and
Hunter's
<PAGE>
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CUSIP No. 381197 10 2 13D Page 13 of 13 Pages
- --------------------- -------------------
Glen/Ford, Ltd.
Exhibit 10.1 - Registration Rights Agreement, dated as of
September 11, 1998, by and among Golden State Bancorp
Inc., First Gibraltar Holdings Inc. and Hunter's
Glen/Ford, Ltd.
Exhibit 99.1 - Agreement pursuant to Rule 13d-1(f)
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set fort in this statement is true, complete and
correct.
Date: September 21, 1998
MAFCO HOLDINGS INC.
By: /s/ Glenn P. Dickes
-----------------------------------
Name: Glenn P. Dickes
Title: Senior Vice President
FIRST GIBRALTAR HOLDINGS INC.
By: /s/ Glenn P. Dickes
-----------------------------------
Name: Glenn P. Dickes
Title: Vice President
FORD DIAMOND CORPORATION
By: /s/ Gerald J. Ford
-----------------------------------
Name: Gerald J. Ford
Title: President
HUNTER'S GLEN/FORD, LTD.
By: /s/ Gerald J. Ford
-----------------------------------
Name: Gerald J. Ford
Title: General Partner
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
Mafco Holdings Inc.
Set forth below is each director and executive officer of Mafco
Holdings Inc. Unless otherwise indicated each person identified below is
principally employed by Mafco Holdings Inc. The principal address of Mafco
Holdings Inc. and the current business address for each individual listed below
is 35 East 62nd Street, New York, New York 10021. Each such person is a citizen
of the United States.
Name and Address Present Principal Occupation or Employment
- ---------------- ------------------------------------------
Ronald O. Perelman Director and Chairman of the Board
Donald G. Drapkin Director and Vice Chairman
Howard Gittis Director and Vice Chairman
James R. Maher Director and President
Irwin Engelman Executive Vice President and Chief Financial Officer
Barry F. Schwartz Executive Vice President and General Counsel
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
First Gibraltar Holdings Inc.
Set forth below is each director and executive officer of First
Gibraltar Holdings Inc. The principal address of First Gibraltar Holdings Inc.
and the current business address for each individual listed below is 35 East
62nd Street, New York, New York 10021. Each such person is a citizen of the
United States.
Name and Address Position Held with FGH
- ---------------- ----------------------
Ronald O. Perelman Chairman of the Board and Chief Executive Officer
Donald G. Drapkin Vice Chairman
Howard Gittis Vice Chairman
Bruce Slovin Vice Chairman
Irwin Engelman Executive Vice President and Chief Financial Officer
Barry F. Schwartz Executive Vice President and General Counsel
DIRECTORS AND EXECUTIVE OFFICERS
Ford Diamond Corporation
Set forth below is each director and executive officer of Ford Diamond
Corporation. The principal address of Ford Diamond Corporation and, unless
otherwise indicated below, the current business address for each individual
listed below is 200 Crescent Court, Suite 1350, Dallas, Texas 75201. Each such
person is a citizen of the United States.
<TABLE>
<CAPTION>
Name and Address Position Held with FDC Present Principal Occupation or Employment
- ---------------- ---------------------- ------------------------------------------
<S> <C> <C>
Gerald J. Ford President and Sole Director Chairman & Chief Executive Officer, Golden State
Bancorp Inc. and California Federal Bank
Nancy J. Foederer Vice President and Treasurer Vice President & Treasurer, Diamond A-Ford Cor
poration
Charles W. Brown Secretary and Assistant Treasurer Secretary, Diamond A-Ford Corporation
Shirley Booth Assistant Secretary Executive Assistant, California Federal Bank
Robert C. Taylor Assistant Secretary Attorney, Taylor Lohmeyer Corrigan, PC
2911 Turtle Creek Blvd., Suite 1010
Dallas, Texas 75219
</TABLE>
<PAGE>
Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
GOLDEN STATE BANCORP INC.
GOLDEN STATE FINANCIAL CORPORATION
FIRST NATIONWIDE (PARENT) HOLDINGS INC.
FIRST NATIONWIDE HOLDINGS INC.
FIRST GIBRALTAR HOLDINGS INC.
AND
HUNTER'S GLEN/FORD, LTD.
DATED AS OF FEBRUARY 4, 1998
<PAGE>
TABLE of CONTENTS
Page
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ARTICLE I
THE MERGER........................................................3
1.1. The Merger..................................................3
1.2. Effective Time..............................................4
1.3. Conversion of Parent Holdings Common Stock,
FNH Common Stock and FNH Preferred Stock.................5
1.4. Golden State Common Stock and Merger Sub Common Stock......10
1.5. Tax Consequences...........................................10
1.6. Contingent Consideration...................................10
ARTICLE II
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES..............................35
2.1. Disclosure Schedules...................................35
2.2. Standards..............................................36
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GOLDEN STATE..................38
3.1. Corporate Organization....................................38
3.2. Capitalization............................................40
3.3. Authority; No Violation...................................45
3.4. Consents and Approvals....................................49
3.5. Reports...................................................50
3.6. Financial Statements......................................51
3.7. Broker's Fees.............................................53
3.8. Absence of Certain Changes or Events......................54
3.9. Legal Proceedings.........................................55
3.10. Taxes....................................................56
3.11. Employees................................................59
3.12. SEC Reports..............................................62
3.13. Golden State Information.................................63
3.14. Compliance with Applicable Law...........................64
3.15. Certain Contracts........................................64
3.16. Agreements with Regulatory Agencies......................66
3.17. State Takeover Laws; Charter Provision...................67
3.18. Environmental Matters....................................68
3.19. Derivative Transactions..................................70
3.20. Opinion..................................................71
3.21. Approvals................................................71
3.22. Loan Portfolio...........................................71
3.23. Reorganization...........................................73
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Page
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3.24. Material Interests of Certain Persons....................73
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT HOLDINGS..............................................74
4.1. Corporate Organization....................................74
4.2. Capitalization............................................76
4.3. Authority; No Violation...................................79
4.4. Consents and Approvals....................................82
4.5. Reports...................................................83
4.6. Financial Statements......................................84
4.7. Broker's Fees.............................................86
4.8. Absence of Certain Changes or Events......................86
4.9. Legal Proceedings.........................................88
4.10. Taxes.....................................................88
4.11. Employees.................................................92
4.12. SEC Reports...............................................96
4.13. Parent Holdings Information...............................97
4.14. Compliance with Applicable Law............................97
4.15. Ownership of Golden State Common Stock; Affiliates
and Associates..........................................98
4.16. Agreements with Regulatory Agencies.......................98
4.17. Approvals.................................................99
4.18. Reorganization............................................99
4.19. Certain Contracts........................................100
4.20. Environmental Matters....................................102
4.21. Derivative Transactions..................................103
4.22. Loan Portfolio...........................................105
4.23. Material Interests of Certain Persons....................106
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS......................107
5.1. Covenants Relating to Conduct of Business................107
ARTICLE VI
ADDITIONAL AGREEMENTS..........................................117
6.1. Regulatory Matters.......................................117
6.2. Access to Information....................................119
6.3. Stockholder Meeting......................................122
ii
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Page
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6.4. Legal Conditions to Merger..............................122
6.5. Cash-out of Stock Options...............................123
6.6. Employee Benefit Plans; Existing Agreements.............124
6.7. Indemnification.........................................126
6.8. Additional Agreements...................................131
6.9. Advice of Changes.......................................132
6.10. Execution and Authorization of Bank Merger
Agreement.............................................132
6.11. Board of Directors......................................133
6.12. Registration Rights Agreement...........................134
6.13. Distribution and Listing of LTWs; Amendment
of Certificate of Incorporation.......................134
6.14. Tax Sharing Agreement...................................135
6.15. Transfer and Similar Taxes..............................136
6.16. Purchases of Golden State Securities....................136
6.17. Stock Exchange Listing..................................137
6.18. Certain Agreements of FGH, Parent Holdings
and Ford..............................................137
6.19. Bank Charter Amendment..................................139
ARTICLE VII
CONDITIONS PRECEDENT...........................................140
7.1. Conditions to Each Party's Obligation To Effect
the Mergers...........................................140
7.2. Conditions to Obligations of Parent Holdings
and FNH...............................................142
7.3. Conditions to Obligations of Golden State and
Merger Sub............................................145
ARTICLE VIII
TERMINATION AND AMENDMENT......................................148
8.1. Termination..............................................148
8.2. Effect of Termination; Expenses..........................152
8.3. Amendment................................................153
8.4. Extension; Waiver........................................153
ARTICLE IX
GENERAL PROVISIONS.............................................154
9.1. Closing..................................................154
9.2. Alternative Structure....................................155
iii
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Page
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9.3. Nonsurvival of Representations, Warranties and
Agreements............................................155
9.4. Expenses................................................156
9.5. Notices.................................................156
9.6. Interpretation..........................................157
9.7. Counterparts............................................158
9.8. Entire Agreement........................................158
9.9. Governing Law...........................................158
9.10. Enforcement of Agreement................................159
9.11. Severability............................................159
9.12. Publicity...............................................160
9.13. Assignment; No Third Party Beneficiaries .............. 160
iv
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as
of February 4, 1998, by and among First Nationwide (Parent) Holdings Inc., a
Delaware corporation ("Parent Holdings"), First Nationwide Holdings Inc., a
Delaware corporation and a subsidiary of Parent Holdings ("FNH"), Golden State
Bancorp Inc., a Delaware corporation ("Golden State"), Golden State Financial
Corporation, a Delaware corporation and a wholly owned subsidiary of Golden
State ("Merger Sub"), First Gibraltar Holdings Inc., a Delaware corporation
("FGH"), and Hunter's Glen/Ford, Ltd., a limited partnership organized under
the laws of the State of Texas ("Ford," and, together with FGH, the
"Shareholders").
WHEREAS, the respective Boards of Directors of Parent
Holdings, FNH, Golden State and Merger Sub have determined that it is in the
best interests of their respective companies and their stockholders to
consummate the business combination transactions provided for herein in which,
subject to the terms and conditions set forth herein, Parent Holdings will
merge with and into Golden State (the "Parent Merger") and FNH, following the
contribution of all of its assets and liabilities (including 100% of the
common stock of CFB (as defined below)) to a
1
<PAGE>
newly-formed, wholly owned subsidiary of FNH ("New FNH"), will merge with and
into Merger Sub (the "FNH Merger")(the Parent Merger and the FNH Merger
together are referred to herein as the "Mergers");
WHEREAS, as soon as practicable after the execution and
delivery of this Agreement, California Federal Bank, A Federal Savings Bank, a
federally chartered stock savings bank and a wholly owned subsidiary of FNH
("CFB," and sometimes referred to herein as the "Surviving Bank"), and Glendale
Federal Bank, Federal Savings Bank, a federally chartered stock savings bank
and a wholly owned subsidiary of Golden State ("GFB"), will enter into a
Subsidiary Agreement and Plan of Merger (the "Bank Merger Agreement") providing
for the merger (the "Subsidiary Merger") of GFB with and into CFB, and it is
intended that the Subsidiary Merger be consummated immediately following the
consummation of the Mergers;
WHEREAS, as a condition to, and immediately after the
execution of this Agreement, Parent Holdings and Golden State are entering into
a Stock Option Agreement in the form attached hereto as Annex C;
WHEREAS, as a condition to, and contemporaneously with the
execution of this Agreement, Parent Holdings, CFB, Golden State, GFB, Stephen
J. Trafton and
2
<PAGE>
Richard A. Fink are entering into a Litigation Management Agreement (the
"Management Agreement");
WHEREAS, Golden State and the Shareholders have agreed, in
connection with the Mergers and upon the terms and subject to the conditions
set forth herein, to enter into a Registration Rights Agreement in
substantially the form attached hereto as Annex D (the "Registration Rights
Agreement") relating to the shares of Golden State Common Stock (as defined
herein) to be issued to the Shareholders in the Mergers; and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Mergers and also to prescribe
certain conditions to the consummation of the Mergers.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to
be legally bound hereby, the parties agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Subject to the terms and conditions of this
Agreement, in accordance with the Delaware General Corporation Law (the
"DGCL"), simulta-
3
<PAGE>
neously at the Effective Time (as defined in Section 1.2 hereof), (a) Parent
Holdings shall merge with and into Golden State pursuant to an Agreement and
Plan of Merger substantially in the form attached hereto as Annex A (the
"Parent Plan of Merger"), and (b) FNH shall merge with and into Merger Sub
pursuant to an Agreement and Plan of Merger substantially in the form attached
hereto as Annex B (the "FNH Plan of Merger"). Golden State and Merger Sub shall
be the surviving corporations in the Mergers, and shall continue their
respective corporate existences under the laws of the State of Delaware. Upon
consummation of the Mergers, the separate corporate existence of each of
Parent Holdings and FNH shall terminate. Golden State is sometimes referred to
herein as the "Surviving Corporation."
1.2. Effective Time. The Mergers shall become effective as
set forth in the certificates of merger (the "Certificates of Merger") which
shall be filed with the Secretary of State of the State of Delaware (the
"Secretary") on the Closing Date (as defined in Section 9.1 hereof). The term
"Effective Time" shall be the date and time when the Mergers become effective,
as set forth in the Certificates of Merger. The term "Effective Date" shall be
the date on which the Effective Time occurs.
4
<PAGE>
1.3. Conversion of Parent Holdings Common Stock, FNH Common
Stock and FNH Preferred Stock. (a) At the Effective Time, the 1,000 shares of
the common stock, par value $1.00 per share, of Parent Holdings (the "Parent
Holdings Common Stock") issued and outstanding shall, by virtue of this
Agreement and the Parent Plan of Merger, and without any action on the part of
the holder thereof, be converted into and exchangeable for (i) that number of
shares of the common stock, par value $1.00 per share, of Golden State ("Golden
State Common Stock") equal to (x) the Closing Issuance Number less (y) the Ford
Shares Number, and (ii) the right to receive the contingent consideration
attributable to FGH as set forth in Section 1.6.
(b) At the Effective Time, each of the 800 shares
of Class A common stock, par value $1.00 per share, of FNH (the "FNH Class A
Common Stock") issued and outstanding shall, by virtue of this Agreement
and the FNH Plan of Merger, and without any action on the part of the holder
thereof, be canceled and no consideration shall be paid in respect thereof.
(c) At the Effective Time, the 200 shares
of Class B common stock, par value $1.00 per share, of FNH (the "FNH Class B
Common Stock") issued and outstand-
5
<PAGE>
ing shall, by virtue of this Agreement and the FNH Plan of Merger, and without
any action on the part of the holder thereof, be converted into and
exchangeable for (i) that number of shares of Golden State Common Stock equal
to (rounded up to the nearest share) the Ford Shares Number, and (ii) the right
to receive the contingent consideration attributable to Ford as set forth in
Section 1.6.
(d) For purposes of this Agreement, the following terms
have the meanings indicated:
"Adjusted Average Daily Price" means (a) the
Average Daily Price less (b) the Glendale Litigation
Adjustment.
"Aggregate LTW Value" means the product of (x) the Average
Daily LTW Price and (y) the total number of LTWs outstanding plus those
reserved for issuance as of the business day immediately prior to the Closing
Date.
"Average Daily LTW Price" means the daily volume weighted
average price of the LTWs on the New York Stock Exchange (the "NYSE"), or on
such other stock market or securities trading system on which the LTWs may be
listed or quoted from time to time (as reported by Bloomberg Financial Services
or, if not reported therein, in another mutually agreed upon authoritative
source) for
6
<PAGE>
15 randomly selected days during the 30 consecutive NYSE trading days ending on
the third business day prior to the Closing Date. The random selection shall be
made in a manner reasonably acceptable to both Golden State and Parent
Holdings.
"Average Daily Price" means the daily volume weighted average
price per share of Golden State Common Stock on the NYSE (as reported by
Bloomberg Financial Services or, if not reported therein, in another mutually
agreed upon authoritative source) for 15 randomly selected days during the 30
consecutive NYSE trading days ending on the third business day prior to the
Closing Date. The random selection shall be made in a manner reasonably
acceptable to both Golden State and Parent Holdings.
"Closing Issuance Number" means (x) the Pro
Forma Shares Number less (y) the Outstanding Shares
Number.
"Ford Shares Number" means the amount obtained by (I)
dividing (A) (1) the product of the Closing Issuance Number and the Average
Daily Price, plus (2) the sum of $455 million and the amount of all interest on
the outstanding principal amount of 12 1/2% Senior Exchange Notes due 2003 of
Parent Holdings which is accrued but
7
<PAGE>
unpaid as of the Closing Date, less (3) the aggregate amount of cash and cash
equivalents held by Parent Holdings as of the Closing Date, by (B) the Average
Daily Price and (II) multiplying the result obtained in clause (I) by 0.2.
"Glendale Litigation Adjustment" means the quotient obtained
by dividing (x) the product of (1) the Glendale Litigation Value and (2) the
Glendale Retention Factor, by (y) the Outstanding Shares Number.
"Glendale Litigation Value" means the quotient obtained by
dividing (x) the Aggregate LTW Value by (y) one minus the Glendale Retention
Factor.
"Glendale Retention Factor" means a number, expressed as a
decimal, equal to one minus the percentage (expressed as a decimal) of the net
after-tax recovery in the Glendale Litigation to be distributed in the
aggregate to the holders of the LTWs as set forth in the final terms of the
LTWs as issued (provided that the Glendale Retention Factor shall in no event
exceed 0.15).
"LTW" means the Litigation Tracking Warrants to be issued and
distributed by Golden State to its stockholders after the date of this
Agreement and having substantially the terms set forth in Annex E attached
hereto.
8
<PAGE>
"Outstanding Shares Number" means the total number of
fully-diluted shares of Golden State Common Stock as of the Closing Date
(excluding shares of Golden State Common Stock issuable upon exercise of LTWs
or upon exercise of the option granted to Parent Holdings under the Option
Agreement), with all Golden State Options which have been surrendered for a
cash payment after the date of this Agreement pursuant to Section 6.5 treated
as if they had remained outstanding, and computed on the "treasury stock
method" of calculating earnings per share under Statement of Financial
Accounting Standards No. 128 as in effect as of the date hereof, in all cases
using the Average Daily Price as the "market price" of Golden State Common
Stock.
"Pro Forma Factor" is determined as follows:
IF THE ADJUSTED THE PRO FORMA
AVERAGE DAILY PRICE IS: FACTOR IS:
$32.00 or less..................................... 0.58
greater than $32.00 but
less than $32.50................................... 0.57
$32.50 or greater but less
than $33.00........................................ 0.56
$33.00 or greater.................................. 0.55
9
<PAGE>
"Pro Forma Shares Number" means the quotient,
rounded up to the nearest whole share, obtained by dividing (x) the
Outstanding Shares Number by (y) the Pro Forma Factor.
1.4. Golden State Common Stock and Merger Sub Common Stock.
The shares of Golden State Common Stock and Merger Sub Common Stock issued and
outstanding immediately prior to the Effective Time shall be unaffected by the
Mergers and shall remain issued and outstanding following the Effective Time.
1.5. Tax Consequences. It is intended that the Mergers and
the Subsidiary Merger constitute reorganizations within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
this Agreement (together with the FNH Plan of Merger and the Parent Plan of
Merger) shall constitute a "plan of reorganization" for purposes of Section 368
of the Code.
1.6. Contingent Consideration. FGH and Ford, as holders of
the Parent Holdings Common Stock and the FNH Class B Common Stock,
respectively, shall be entitled to receive additional merger consideration in
accordance with the terms and provisions of this Section 1.6.
10
<PAGE>
(a) Goodwill Litigation Recovery.
(i) Not later than the tenth business day following the
date on which CFB shall have received the CFB Cash Payment (as defined below),
Golden State shall issue to FGH and Ford an aggregate number of shares of
Golden State Common Stock (the "Goodwill Recovery Shares Number") equal to the
quotient obtained by dividing (x) the CFB Litigation Distribution Amount (as
defined below) by (y) the daily volume weighted average price per share of
Golden State Common Stock on the NYSE (as reported by Bloomberg Financial
Services or, if not reported therein, in another mutually agreed upon
authoritative source) (the "Average Stock Price") for 15 randomly selected days
during the 30 consecutive trading-day period ending on the business day
immediately prior to the date of issuance of such shares. The number of such
shares to be issued to FGH shall be 80% of the Goodwill Recovery Shares Number,
and the number of such shares to be issued to Ford shall be 20% of the Goodwill
Recovery Shares Number.
(ii) In the event that a final, nonappealable judgment in
or final settlement of the Goodwill Litigation does not result in a CFB Cash
Payment, or in the event that the sum of the Net Cash Pay-
11
<PAGE>
ment and the CFB Litigation Tax Benefits is less than the sum of the Litigation
Recovery Retention Amount and the Interest Factor, then FGH and Ford shall each
make a cash payment to Golden State, within twenty business days following the
date of such final judgment or settlement, which cash payments shall equal, in
the aggregate, an amount (the "Contribution Amount") equal to the difference
between (i) the sum of the Litigation Recovery Retention Amount and the
Interest Factor, and (ii) the sum of the Net Cash Payment and the CFB
Litigation Tax Benefits, with FGH being severally liable for 80% of the
Contribution Amount and Ford being severally liable for 20% of the Contribution
Amount; provided, however, that in lieu of paying such amounts to Golden State
in cash, each of FGH and Ford may elect to tender shares of Golden State Common
Stock in payment of all or a portion of such party's percentage share of the
Contribution Amount, with such shares being accepted as payment by Golden State
at a per share value equal to the Average Stock Price for 15 randomly selected
days during the 30 trading-day period ending on the business day immediately
prior to the date of payment.
(iii) In the event that CFB receives the CFB Cash Payment
prior to such time as GFB receives a
12
<PAGE>
GFB Payment in the Glendale Litigation, then Golden State shall issue shares of
Golden State Common Stock to FGH and Ford as contemplated by and in accordance
with the terms of paragraph (i) above, except that for purposes of calculating
the CFB Litigation Distribution Amount, the Litigation Recovery Retention
Amount shall be estimated as the excess of (x) the quotient obtained by
dividing (1) the product of the Glendale Litigation Value and the Glendale
Retention Factor, by (2) the Pro Forma Factor, over (y) the product of the
Glendale Litigation Value and the Glendale Retention Factor (the result of such
calculation being referred to herein as the "Estimated Litigation Recovery
Retention Amount") (provided that for purposes of calculating the Glendale
Litigation Value in this clause (iii), the Average Daily LTW Price shall be
calculated for 15 randomly-selected days during a 30 trading-day period ending
on the business day immediately prior to the date of issuance of the shares of
Golden State Common Stock). Within ten business days following the actual
receipt by GFB of a GFB Payment in the Glendale Litigation, the Estimated
Litigation Recovery Retention Amount shall be compared to the actual
Litigation Recovery Retention Amount calculated pursuant to this Section 1.6,
and the parties shall effect a settlement as
13
<PAGE>
follows:
(A) If the Estimated Litigation Recovery Retention
Amount exceeds the Litigation Recovery Retention Amount,
then Golden State shall issue to FGH and Ford additional
shares of Golden State Common Stock having an aggregate
value (valued at the Average Stock Price for 15 randomly
selected days during the 30 trading-day period ending on
the business day immediately prior to the date of issuance
of such shares) equal to the amount of such excess, with
80% of such shares being issued to FGH and 20% of such
shares being issued to Ford; or
(B) If the Estimated Litigation Recovery Retention
Amount is less than the Litigation Recovery Retention
Amount, then each of FGH and Ford shall contribute the
difference in cash and/or stock, at its election, in the
same manner and proportion as contemplated by paragraph
(ii) above.
(b) Guarini Litigation Recovery. Not later than
the tenth business day following the date on which CFB
shall have actually received a cash payment or other
property (a "Guarini Payment") pursuant to a final,
nonappealable judgment in, or final settlement of, the
Guarini Litigation (as defined below), Golden State shall
14
<PAGE>
issue to FGH and Ford an aggregate number of shares of Golden State Common
Stock (the "Guarini Recovery Shares Number") equal to the quotient
obtained by dividing (x) the aggregate amount of any such cash payment
plus the fair market value (as determined by the Board of Directors of
Golden State in good faith) of any such other property, less the sum of
(1) the aggregate expenses incurred previously and hereafter by CFB in
prosecuting the Guarini Litigation and obtaining the Guarini Payment and
(2) an amount equal to the net amount of the taxable portion of the
Guarini Payment after deducting the expenses in clause (1), multiplied by
the highest combined statutory rate of federal, state and local income
taxes in effect in the taxable year in which the Guarini Payment is
received, by (y) the Average Stock Price for 15 randomly selected days
during the 30 trading-day period ending on the business day immediately
prior to the date of issuance of the shares. The number of such shares to
be issued to FGH shall be 80% of the Guarini Recovery Shares Number, and
the number of such shares to be issued to Ford shall be 20% of the Guarini
Recovery Shares Number.
(c) Tax Benefits.
(i) For each taxable period that
15
<PAGE>
ends after the Effective Date (a "Taxable Period"), without duplication of any
amount payable to FGH or Ford pursuant to Section 1.6(a) or 1.6(b), Golden
State shall make a payment (a "Tax Payment") to each of FGH and Ford within
five (5) days after the filing of the federal income tax return for such
Taxable Period of any Taxpayer or the receipt of a refund under Section
1.6(c)(ii)(C)(2), an amount equal to 80%, in the case of FGH, and 20%, in the
case of Ford, of the Federal Net Tax Benefits of Parent Holdings, FNH, CFB or
any Subsidiary of CFB, if any, as and when realized by the Taxpayer in the
Taxable Period, as reviewed and attested to by KPMG Peat Marwick LLP. In the
event that Federal Net Tax Benefits is a negative number for any Taxable
Period, FGH and Ford shall pay Golden State 80% and 20%, respectively, of such
negative amount.
(ii) For purposes of this Agreement:
(A) With respect to Parent Holdings, FNH, CFB or any
subsidiary of CFB, the "Tax Benefits" shall be the sum of
(1) the excess (if any) of "deductible temporary
differences" over "taxable temporary differences" as those
terms are defined in Statement of Financial Accounting
Standards No. 109 ("SFAS 109") (including, without
16
<PAGE>
limitation, net operating loss, capital loss, credit
carryovers, including alternative minimum tax credit, and
other carryovers but not including any tax benefits taken
into account in determining the aggregate amount of
payments to the holders of the CALGZs and CALGLs
immediately after the Effective Date) not including the
amount of any taxable temporary difference attributable to
the Goodwill Litigation (but taking into account the
deconsolidation of Parent Holdings and FNH from the Mafco
Holdings Inc. group and the ownership change that will
occur with respect to Parent Holdings and FNH under Section
382 of the Code as a result of the Mergers), as reviewed
and attested to by KPMG Peat Marwick LLP; provided,
however, such amount shall be adjusted for any final
determination of tax liability or tax attributes for
taxable periods ending on or before the date of the
Effective Time; provided further, however, that such
deductible temporary differences and taxable temporary
differences shall not be adjusted for any purchase
accounting adjustments as a result of the transactions
contemplated by this Agreement, and (2) any federal income
tax benefit (other than tax benefits taken into account in
determining the
17
<PAGE>
aggregate amount of payments to the holders of the
CALGZs and CALGLs) actually realized by the Taxpayer in any
Taxable Period by reason of the treatment as interest under
Section 483 of the Code (or any successor provision
thereto) of any Tax Payment, payment of the Goodwill
Recovery Shares Number or payment of the Guarini Recovery
Shares Number or any other payment under Section 1.6
hereof, or any increase in Tax Payment, payment of the
Goodwill Recovery Shares Number or payment of the Guarini
Recovery Shares Number or any other payment under Section
1.6 hereof.
(B) "Taxpayer" shall mean:
(1) after the Effective Date the affiliated
group of corporations within the meaning of Section 1504
of the Code of which Golden State or its successor is
the common parent and Parent Holdings, FNH, CFB or their
successors are members, or
(2) after the Effective Date each of Golden State,
Parent Holdings, FNH, New FNH, CFB or any successor.
(C) The "Federal Net Tax Benefits" shall be equal to
the aggregate of:
18
<PAGE>
(1) the excess, if any, of (x) the federal income tax
liability for the Taxable Period (calculated with all
carryovers and carrybacks to the Taxable Period that would
have been allowable) which would have been incurred by the
Taxpayer if the Tax Benefits had not been deducted,
credited or used to offset income or tax liability in the
Taxable Period, over (y) the federal income tax liability
for the Taxable Period (calculated with all available
carryovers and carrybacks to the Taxable Period) actually
incurred by the Taxpayer (for purposes of determining the
use of items of any deductible temporary differences and
taxable temporary differences for purposes of (C)(1)(x)
above, such items will be deemed deductible or taxable to
the extent of the amount of such items at the Effective
Date multiplied by a fraction the numerator of which is the
actual use of the net operating loss carryover for any
Taxable Period and the denominator of which is the total
net operating loss carryover immediately after the
Effective Date), plus
(2) any federal income tax refunds with Applicable
Interest (including refunds
19
<PAGE>
or interest with respect to payments in lieu of
federal income taxes under the Tax Sharing Agreement (as
defined in Section 6.14)) of Parent Holdings, FNH, CFB, any
subsidiary of CFB or any predecessor of any of them for any
taxable period ending on or before the Effective Date that
have not been reflected on the books of Parent Holdings,
FNH, CFB or any Subsidiary of CFB as of the Effective Date,
minus
(3) any federal income tax deficiencies with
Applicable Interest (including any tax sharing payment
obligations or interest with respect to payments in lieu of
federal income taxes under the Tax Sharing Agreement (as
defined in Section 6.14)), of Parent Holdings, FNH, CFB,
any subsidiary of CFB or any predecessor of any of them for
any taxable period ending on or before the Effective Date
that have not been reflected on the books of Parent
Holdings, FNH, CFB or any Subsidiary of CFB as of the
Effective Date.
(iii) All Tax Payments shall be made in shares of Golden State Common
Stock valued at the daily volume weighted average price per share of Golden
State Common Stock for the Taxable Period except that in
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the case of a further Tax Payment pursuant to paragraph (iv), payment shall be
made in shares of Golden State Common Stock valued at the daily volume weighted
average price per share of Golden State Common Stock for 15 randomly selected
days during the 30 trading-day period ending on the date immediately prior to
the date of such Tax Payment; provided, however, that no Tax Payment need be
made in Golden State Common Stock to the extent that the aggregate Tax
Payments including any adjustment pursuant to paragraph (iv) below (provided,
however, that for this purpose only Federal Net Tax Benefits shall not include
any Tax Benefits used to offset any recovery attributable to the Goodwill
Litigation), exceed $100 million times the number of years from the year of
the Closing until the year of such Tax Payment ("Limitation"). The amount of
any Tax Payment that exceeds the Limitation shall carry forward and become a
Tax Payment in the succeeding year. Notwithstanding the foregoing, any return
of Tax Payment pursuant to paragraph (iv) below shall be made in cash except
that any return of Tax Payment made within six months of a Tax Payment shall
be made in shares of Golden State Common Stock valued at the value of such
stock for purposes of such Tax Payment. Any payment by FGH or Ford pursuant
to the final sentence of Section 1.6(c)(i) shall be made in cash.
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(iv) If for any reason there is any adjustment to Tax Benefits for any
Taxable Period that is reviewed and attested to by KPMG Peat Marwick LLP,
Federal Net Tax Benefits shall be recalculated and either a further Tax Payment
(in the case of an increase in Federal Net Tax Benefit) or a return of Tax
Payment (in the case of a decrease in Federal Net Tax Benefit) shall be made by
Golden State or by FGH and Ford, as the case may be, to the other party, in
accordance with paragraph (iii) above, within five (5) days of the filing of a
federal income tax return, claim for refund or final assessment or other event
finally fixing such adjustment.
(v) At any time following the Closing, if Golden State incurs any
federal or state tax liability arising out of any adjustment or adjustments
(each, a "382 Adjustment Event") to the limitation on net operating losses and
other attributes or net unrealized built-in losses of GFB and its Subsidiaries,
as defined in Section 382 of the Code, resulting from a change of ownership of
GFB and its Subsidiaries in 1993, as described in the July 2, 1993 prospectus
with respect to the Plan of Reorganization of Glenfed, Inc. and GFB, then
Golden State shall issue to FGH and Ford an aggregate amount of shares of
Golden State Common Stock equal to
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the quotient obtained by dividing (A) the product of (x) one minus the Pro
Forma Factor times (y) the increase in federal and state tax liability plus
interest and penalties arising thereon on account of any 382 Adjustment Event
(such amount in this clause (y), the "382 Adjustment Amount"), by (B) the
Average Stock Price for 15 randomly selected days during the 30 trading-day
period immediately preceding the date of issuance of such shares (such
quotient, the "382 Adjustment Number"). If Golden State suffers any increase in
federal or state tax liability arising out of a 382 Adjustment Event which
occurs after the date of this Agreement and prior to the Effective Date, then
Golden State shall issue to FGH and Ford on the Effective Date, in addition to
the shares issuable pursuant to Section 1.3, a number of shares of Golden State
Common Stock equal to the 382 Adjustment Number with respect to such 382
Adjustment Event. In all cases under this subsection (v), the number of shares
to be issued to FGH shall be 80% of the 382 Adjustment Number, and the number
of such shares to be issued to Ford shall be 20% of the 382 Adjustment Number.
"Applicable Interest" means (A) for federal income tax refunds, the
interest received that has not been reflected on the books of Parent Holdings,
FNB, CFB,
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or any Subsidiary of CFB as of the Effective Date, less the product of such
excess interest times the highest combined statutory rates of federal, state,
and local income taxes in effect during the tax year in which the interest is
received, or (B) for federal income tax deficiencies, the interest paid for any
federal income tax that has not been reflected on the books of Parent Holdings,
FNB, CFB, or any Subsidiary of CFB as of the Effective Date, less the product
of such excess interest times the highest combined statutory rates of federal,
state, and local income taxes in effect during the tax year in which the
interest is paid.
(d) Definitions. For purposes of this Section 1.6, the following terms
have the meanings indicated:
"CFB Cash Payment" means the aggregate amount of the cash payment (or
the cash resulting from the monetization of any non-cash payment) actually
received by CFB in respect of a final, non-appealable judgment in or final
settlement of the Goodwill Litigation.
"Net Cash Payment" means (A) the CFB Cash Payment minus (B) the sum of
the following: (i) the aggregate expenses incurred previously and hereafter by
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CFB in prosecuting the Goodwill Litigation and obtaining such CFB Cash Payment,
(ii) the expenses incurred by CFB in connection with the creation, issuance and
trading of the CALGZs and the CALGLs, including, without limitation, legal and
accounting fees and the fees and expenses of the interest agent, (iii) an
amount equal to the taxable portion of the net CFB Cash Payment (the taxable
portion of the CFB Cash Payment less the expenses described in the preceding
clauses (i) and (ii)) multiplied by the highest combined statutory rate of
federal, state and local income taxes in effect in the taxable year in which
the CFB Cash Payment is received, (iv) the aggregate amount of the payments due
to the holders of the CALGZs, and (v) the aggregate amount of the payments due
to the holders of the CALGLs.
"CALGZs" means the Contingent Litigation Recovery Participation
Interests of CFB.
"CALGLs" means the Secondary Contingent Litigation Recovery
Participation Interests of CFB.
"CFB Litigation Distribution Amount" means (i) the sum of (A) the
amount of the Net Cash Payment and (B) the CFB Litigation Tax Benefits, less
(ii) the sum of (A) the Litigation Recovery Retention Amount and (B) the
Interest Factor.
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"CFB Litigation Tax Benefits" means the tax benefits (other than tax
benefits taken into account in determining the aggregate amount of payments to
the holders of the CALGZs and the CALGLs), if any, actually realized by the
Taxpayer for a Taxable Period as a result of tax items (including items of loss
or deduction and recovery of basis but not including any exclusion from income)
derived from the receipt or paying over of the proceeds of the Goodwill
Litigation, including from the basis (if any) of the property that is the
subject of the Goodwill Litigation that are not reflected on the books of
Parent Holdings, FNH, CFB or any Subsidiary of CFB as of the Effective Date,
measured by the excess of the federal income tax liability that would have
been incurred by the Taxpayer for the Taxable Period without such items over
the federal income tax liability actually incurred by the Taxpayer for the
Taxable Period.
"Glendale Litigation Tax Benefits" means the tax benefits, if any,
actually realized by the Taxpayer for any Taxable Period as a result of tax
items (including items of loss or deduction and recovery of basis) derived from
the receipt or paying over of the proceeds of the Glendale Litigation,
including from the basis (if any) of the property that is the subject of the
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Glendale Litigation that are not reflected on the books of Golden State or any
Subsidiary of Golden State as of the Effective Date or from the permanent
exclusion from income of the receipt of any payment of proceeds from the
Glendale Litigation, measured by the excess of the federal income tax
liability that would have been incurred by the Taxpayer for the Taxable Period
without such items over the federal income tax liability actually incurred by
the Taxpayer for such Taxable Period.
"Litigation Recovery Retention Amount" means the sum of (1) (x) the
quotient obtained by dividing the Glendale Litigation Retention Amount by the
Pro Forma Factor, less (y) the Glendale Litigation Retention Amount and (2) the
Glendale Litigation Tax Benefits.
"Glendale Litigation Retention Amount" means an amount equal to the
Glendale Retention Factor multiplied by the amount obtained from the following
equation: (a) the aggregate amount (the "GFB Payment") of any cash payment and
the fair market value (as determined pursuant to the Management Agreement) of
any property actually received by GFB pursuant to a final, nonappealable
judgment in or final settlement of the Glendale Litigation (including any
post-judgment interest actually received by GFB or a successor thereto on any
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such payment), minus (b) the sum of the following: (i) the aggregate expenses
incurred previously and hereafter by GFB or its successor in prosecuting the
Glendale Litigation and obtaining the GFB Payment, (ii) the aggregate expenses
incurred by Golden State or its successor in connection with the creation,
issuance and trading of the LTWs, including, without limitation, legal,
financial advisory and accounting fees and the fees and expenses of the warrant
agent; and (iii) an amount equal to the net GFB Payment (the GFB Payment less
the expenses described in the preceding clauses (i) and (ii)) multiplied by the
highest, combined statutory rate of federal, state and local income taxes in
effect during the tax year in which the full GFB Payment is received.
"Interest Factor" means an amount equal to the interest deemed to be
accrued on the Litigation Recovery Retention Amount, at a rate of 10.0% per
annum, compounded semiannually, from the date on which GFB actually receives
the GFB Payment (or if the GFB Payment is received in installments, the final
installment of the GFB Payment) to and including the date on which CFB actually
receives the full amount of the CFB Cash Payment.
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"Goodwill Litigation" means California Federal Bank v. United States,
Civil Action No. 92-138C, filed on February 28, 1992, in the United States
Court of Federal Claims.
"Glendale Litigation" means the case against the United States in the
Claims Court captioned Glendale Federal Bank, F.S.B. v. United States, No. 90-
772C, filed on August 15, 1990.
"Guarini Litigation" means the case against the United States in the
Claims Court captioned First Nationwide Bank, et al., v. United States, Civil
Action No. 96-590C, filed on September 20, 1996.
(d) Netting of Obligations; Expenses; Limit on Payments.
(i) Notwithstanding anything to the contrary in Sections 1.6(a)-(d)
and subject to the following provisions of this Section 1.6(e), whenever FGH
and Ford are required to pay an amount to Golden State under this Section 1.6,
such amount (expressed as the number of shares of Golden State Common Stock
required assuming FGH and Ford had elected to tender payment in such form
(regardless of whether Ford and FGH had the right to make such an election))
shall be limited to the
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number of shares of Golden State Common Stock previously issued to FGH and Ford
under this Section 1.6 (the "Section 1.6 Share Amount"). The Section 1.6 Share
Amount shall be adjusted upwards from time to time to reflect the issuance of
additional shares to FGH and Ford under this Section 1.6 and downwards, but not
below zero, to reflect any amount paid or payable by FGH and Ford (expressed
as the number of shares of Golden State Common Stock required assuming FGH and
Ford had elected to tender payment in such form (regardless of whether Ford and
FGH had the right to make such an election)) under this Section 1.6. If, but
for the immediately preceding sentence, any payment to Golden State by FGH and
Ford under Section 1.6 would result in a Section 1.6 Share Amount that is less
than zero, such negative number (expressed as a positive number and converted
to a dollar amount based on the Average Stock Price for 15 randomly selected
days during the 30 trading-day period ending on the date such payment is due)
shall be added to the balance of a notional account (the "Shortfall Account").
The balance of the Shortfall Account shall be $0.00 on the Effective Date, and
any positive balance in the Shortfall Account shall bear interest, compounded
semiannually, at the rate contemplated in the definition of
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"Interest Factor" from the date such balance is established until there is an
offsetting debit against such balance as set forth in Section 1.6(e)(ii).
(ii) At any time that Golden State would otherwise be obligated to
issue shares of Golden State Common Stock to FGH and Ford pursuant to Sections
1.6(a), (b) or (c), the CFB Litigation Distribution Amount, the Guarini Payment
or the Tax Payment, as the case may be, shall be offset by the balance of the
Shortfall Account as of such time for purposes of determining the number of
shares of Golden State Common Stock to be issued. If, as a result of such
offset, the number of shares of Golden State Common Stock to be issued to FGH
and Ford would be zero or less, no such shares shall be issued; in all other
cases the number of such shares to be issued shall be calculated as set forth
in Section 1.6(a), (b) or (c), as the case may be, after application of such
offset. In either case, the balance of the Shortfall Account shall be reduced,
but not below $0.00, by the amount of such offset.
(iii) All computations of the Section 1.6 Share Amount and the balance
of the Shortfall Account from time to time hereunder shall be performed by the
parties hereto and reviewed and attested by KPMG Peat
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Marwick LLP, and the parties hereto agree to cooperate therewith in such
connection (it being understood that this paragraph (iii) shall not require
review and attes tation by KPMG Peat Marwick LLP of any calculations made
pursuant to Sections 1.6(a), (b) or (c) which would not otherwise be required
pursuant to the express provisions of Sections 1.6(a), (b) and (c)).
(iv) Notwithstanding anything to the contrary contained herein, for
all purposes under this Section 1.6, (a) any payments required to be made to
FGH and Ford pursuant to this Section 1.6, and the amount of the Glendale
Litigation Tax Benefits and the CFB Litigation Tax Benefits, shall be
calculated net of all third party out-of-pocket expenses incurred by Golden
State or Parent Holdings or any of their respective Subsidiaries in connection
with the event or recovery giving rise to such payment or its determination
((including, without limitation, all attorneys' fees incurred in any
proceedings or discussions with any tax authority, but excluding any allocation
of general management overhead or similar internal expenses) and (b) any
Section 382 Amount calculated pursuant to Section 1.6(c)(v) shall include
(and shall be increased by) the aggregate amount of all third party
out-of-pocket expenses incurred by Golden State or
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Parent Holdings or any of their respective Subsidiaries, as the case may be, in
connection with the determination of such amounts (including, without
limitation, all attorneys' fees incurred in any proceedings or discussions
with any tax authority, but excluding any allocation of general management
overhead or similar internal expenses). All third party out-of-pocket expenses
referred to in this paragraph (iv) shall be computed on a tax-effected basis
(taking into account any tax benefits actually realized as a result of the
payment thereof as attested to by KPMG Peat Marwick LLP).
(v) Notwithstanding anything to the contrary in this Agreement, the
aggregate amount of the value of the shares of Golden State Common Stock (based
on the Average Stock Price calculated for the purpose of issuing such shares in
accordance with the applicable subsection of this Section 1.6) issued to Ford
and FGH pursuant to this Section 1.6 (net of the value of any payments, in cash
or stock, made by Ford and FGH to Golden State pursuant to this Section 1.6)
shall in no event exceed the aggregate value of the shares of Golden State
Common Stock issued to FGH and Ford pursuant to Section 1.3 (valued at the
Average Daily Price).
(vi) Notwithstanding any provision
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of this Section 1.6 to the contrary, in the event that there is a business
combination or similar transaction involving Golden State as a result of which
Golden State Common Stock is no longer publicly traded, all payments due any
party under this Section 1.6 after the date of such transaction (the
"Determination Date") shall be payable in cash and not in shares of Golden
State Common Stock; provided, however, that, solely for the purposes of
determining the Section 1.6 Share Amount and the Shortfall Account from time to
time, such subsequent payments shall be deemed made in shares of Golden State
Common Stock, as though there continued to be a public market in such shares,
and the number of such shares represented by any such payment shall be
determined using a valuation per share equal to the Notional Market Value. The
"Notional Market Value" as of any date shall equal the Average Stock Price of
Golden State Common Stock for 15 randomly selected days during the 30
trading-day period ending on the Determination Date, grown during the period
from the Determination Date to such date at the rate of interest (compounded
semiannually) contemplated by the definition of "Interest Factor."
(vii) The parties hereto may mutually agree to substitute another
nationally-recognized
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independent accounting firm in place of KPMG Peat Marwick LLP for all purposes
under this Section 1.6, and from and after such substitution, all references
herein to KPMG Peat Marwick LLP shall be deemed to be references to such other
accounting firm.
(f) Each party hereto agrees to cooperate in good faith with the other
parties to this Agreement, and to take such further actions as are reasonably
necessary, to carry out the purpose and intent of and to effect the
transactions contemplated by this Section 1.6.
ARTICLE II
DISCLOSURE SCHEDULES; STANDARDS
FOR REPRESENTATIONS AND WARRANTIES
2.1. Disclosure Schedules. Prior to the execution and delivery of
this Agreement, Golden State has delivered to Parent Holdings, and Parent
Holdings has delivered to Golden State, a schedule (in the case of Golden
State, the "Golden State Disclosure Schedule," and in the case of Parent
Holdings, the "Parent Holdings Disclosure Schedule") setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof
or as an exception to one
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or more of such party's representations or warranties contained in Article III,
in the case of Golden State, or Article IV, in the case of Parent Holdings, or
to one or more of such party's covenants contained in Article V; provided,
however, that notwithstanding anything in this Agreement to the contrary (a) no
such item is required to be set forth in the Disclosure Schedule as an
exception to a representation or warranty if its absence would not result in
the related representation or warranty being deemed untrue or incorrect under
the standard established by Section 2.2, and (b) the mere inclusion of an item
in a Disclosure Schedule as an exception to a representation or warranty shall
not be deemed an admission by a party that such item represents a material
exception or material fact, event or circumstance or that such item has had or
would have a Material Adverse Effect (as defined herein) with respect to
either Golden State or Parent Holdings, respectively.
2.2. Standards. (a) No representation or warranty of Golden State
contained in Article III or of Parent Holdings contained in Article IV shall be
deemed untrue or incorrect for any purpose under this Agreement, and no party
hereto shall be deemed to have breached a representation or warranty for any
purpose under this
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Agreement, in any case as a consequence of the existence or absence of any
fact, circumstance or event unless such fact, circumstance or event,
individually or when taken together with all other facts, circumstances or
events inconsistent with any representations or warranties contained in Article
III, in the case of Golden State, or Article IV, in the case of Parent
Holdings, has had a Material Adverse Effect with respect to Golden State or
Parent Holdings, respectively (but disregarding, for purposes of applying this
test, any materiality or "Material Adverse Effect" exceptions or qualifiers
contained in any individual representation or warranty).
(b) As used in this Agreement, the term "Material Adverse Effect"
means, with respect to Parent Holdings or Golden State, as the case may be, a
material adverse effect on (i) the business, results of operations or financial
condition of such party and its Subsidiaries (as defined below) taken as a
whole, other than any such effect attributable to or resulting from (w) any
change in banking or similar laws, rules or regulations of general
applicability or interpretations thereof by courts or governmental authorities,
(x) any change in GAAP (as defined herein) or regulatory accounting principles
applicable to banks, thrifts or their holding compa-
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nies generally, (y) any action or omission of Parent Holdings or Golden State
or any Subsidiary of either of them taken with the prior written consent of the
other party hereto, or (z) any expenses incurred by such party in connection
with this Agreement or the transactions contemplated hereby, or (ii) the
ability of such party and its Subsidiaries to consummate the transactions
contemplated hereby. As used in this Agreement, the word "Subsidiary" when used
with respect to any party means any corporation, partnership or other
organization, whether incorporated or unincorporated, which is consolidated
with such party for financial reporting purposes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GOLDEN STATE
Subject to Article II, Golden State hereby represents and warrants to
Parent Holdings and FNH as follows:
3.1. Corporate Organization. (a) Golden State is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Golden State has the corporate power and authority to own or lease
all of its properties and assets and to carry on its business as it is now
being
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conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary. Golden State is duly registered as a
unitary savings and loan holding company under the Home Owners' Loan Act of
1933, as amended (the "HOLA"). The Certificate of Incorporation and Bylaws of
Golden State, copies of which have previously been made available to Parent
Holdings, are true, complete and correct copies of such documents as in effect
as of the date of this Agreement.
(b) As of the Effective Time, Merger Sub will be a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. GFB is a stock savings bank duly organized, validly existing and in
good standing under the laws of the United States of America. The deposit
accounts of GFB are insured by the Federal Deposit Insurance Corporation (the
"FDIC") through the Savings Association Insurance Fund (the "SAIF") to the
fullest extent permitted by law, and all premiums and assessments required to
be paid in connection therewith have been paid when due. Each of Golden State's
other Subsidiaries is a corpora-
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tion duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization. Each of Golden State's
Subsidiaries has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being conducted
and is duly licensed or qualified to do business in each jurisdiction in which
the nature of the business conducted by it or the character or the location of
the properties and assets owned or leased by it makes such licensing or
qualification necessary. The articles of incorporation, bylaws and similar
governing documents of each Subsidiary of Golden State, copies of which have
previously been made available to Parent Holdings, are true, complete and
correct copies of such documents as in effect as of the date of this Agreement.
(c) The minute books of Golden State and each of its Subsidiaries
contain true and correct records of all meetings and other corporate actions
held or taken since June 30, 1995 of their respective stockholders and Boards
of Directors (including committees of their respective Boards of Directors).
3.2. Capitalization. (a) As of the date of this Agreement, the
authorized capital stock of Golden
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State consists of 100,000,000 shares of Golden State Common Stock and
50,000,000 shares of preferred stock, par value $1.00 per share (the "Golden
State Preferred Stock"). At the Effective Time, the authorized capital stock of
Golden State will consist of 250,000,000 shares of Golden State Common Stock
and 50,000,000 shares of Golden State Preferred Stock. As of January 31, 1998,
there are (x) 51,085,174 shares of Golden State Common Stock outstanding and no
shares of Golden State Common Stock held in the Golden State treasury, (y) no
shares of Golden State Common Stock reserved for issuance upon exercise of
outstanding stock options or otherwise except for (i) 5,310,680 shares of
Golden State Common Stock reserved for issuance pursuant to the Golden State
Option Plans (as defined in Section 6.5) and described in Section 3.2(a) of
the Golden State Disclosure Schedule, (ii) 7,800,000 shares of Golden State
Common Stock reserved for issuance in connection with the merger of CENFED
Financial Corporation with and into a wholly owned Subsidiary of Golden State
(the "CENFED Merger") pursuant to the Agreement and Plan of Merger (the "CENFED
Merger Agreement"), dated as of August 17, 1997, as amended, by and among
Golden State, Golden State Financial Corporation ("GSFC") and CENFED, (iii)
3,500,000 to 7,500,000
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shares of Golden State Common Stock, based on a floating Exchange Ratio,
reserved for issuance in connection with the merger (the "Redfed Merger") of
RedFed Bancorp Inc. ("Redfed") with and into a wholly owned Subsidiary of
Golden State pursuant to the Agreement and Plan of Merger (the "Redfed Merger
Agreement"), dated as of November 30, 1997, by and between Golden State and
Redfed, (iv) 1,522 shares of Golden State Common Stock reserved for issuance
upon the exercise of common stock purchase warrants (the "Five-Year Warrants")
issued pursuant to that certain Warrant Agreement, dated as of February 23,
1993, between GFB and Chemical Trust Company of California, as Warrant Agent,
(v) 10,836,417 shares of Golden State Common Stock reserved for issuance upon
exercise of common stock purchase warrants (the "Seven-Year Warrants") issued
pursuant to that certain Warrant Agreement, dated as of August 15, 1993,
between GFB and Chemical Trust Company of California, as Warrant Agent, (vi)
11,200,00 shares of Golden State Common Stock reserved for issuance upon
conversion of shares of Series A Preferred Stock, and (vii) 10,165,950 shares
of Golden State Common Stock reserved for issuance upon exercise of the option
issued by Golden State to Parent Holdings pursuant to the Stock Option
Agreement, dated February 4, 1998, between Parent
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Holdings and Golden State (the "Option Agreement") and (z) 4,621,982 shares of
Golden State Preferred Stock designated "Noncumulative Convertible Preferred
Stock, Series A" (the "Series A Preferred Stock") issued and outstanding. All
of the issued and outstanding shares of Golden State Common Stock and Golden
State Preferred Stock have been duly authorized and validly issued and are
fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. The shares of Golden State Common
Stock to be issued pursuant to this Agreement will be duly authorized and
validly issued and, when issued, all such shares will be fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. Except as referred to above or reflected in
Section 3.2(a) of the Golden State Disclosure Schedule, Golden State does not
have and is not bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of Golden State Common Stock or Golden State Preferred
Stock or any other equity security of Golden State or any securities
representing the right to purchase or otherwise receive any shares of Golden
State Common Stock or Golden
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State Preferred Stock or any other equity security of Golden State. The names
of the optionees, the date of each option to purchase Golden State Common Stock
granted, the number of shares subject to each such option, the expiration date
of each such option, and the price at which each such option may be exercised
under the Golden State Option Plans, are set forth in Section 3.2(a) of Golden
State Disclosure Schedule.
(b) Section 3.2(b) of the Golden State Disclosure Schedule sets forth
a true and correct list of all of the Subsidiaries of Golden State. Except as
set forth in Section 3.2(b) of the Golden State Disclosure Schedule, Golden
State owns, directly or indirectly, all of the issued and outstanding shares of
the capital stock of each of such Subsidiaries, free and clear of all liens,
charges, encumbrances and security interests whatsoever, and all of such shares
are duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the
ownership thereof. No Subsidiary of Golden State has or is bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of capital
stock or any other equity
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security of such Subsidiary or any securities representing the right to
purchase or otherwise receive any shares of capital stock or any other equity
security of such Subsidiary.
3.3. Authority; No Violation. (a) Each of Golden State and Merger Sub
has full corporate power and authority to execute and deliver this Agreement
(and, in the case of Golden State, the Management Agreement and the Option
Agreement (this Agreement, the Management Agreement and the Option Agreement,
collectively, the "Golden State Documents")) and to consummate the transactions
contemplated hereby (and, in the case of Golden State, thereby). The execution
and delivery by Merger Sub of this Agreement and by Golden State of each of the
Golden State Documents, and the consummation of the transactions contemplated
hereby and thereby have been duly and validly approved by the respective Boards
of Directors of Merger Sub and Golden State. The Board of Directors of Golden
State has directed that this Agreement and the Parent Plan of Merger be
submitted to Golden State's stockholders for approval at a meeting of such
stockholders and, except for the approval and adoption of this Agreement and
the Parent Plan of Merger by the requisite vote of Golden State's stockholders,
no other
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corporate proceedings on the part of either Golden State or Merger Sub are
necessary to approve the Golden State Documents and to consummate the
transactions contemplated thereby. Each of the Golden State Documents has been
duly and validly executed and delivered by Golden State and, in the case of
this Agreement, will be by Merger Sub prior to the Effective Time, and
(assuming due authorization, execution and delivery by each of Parent Holdings
and FNH) this Agreement constitutes or, in the case of Merger Sub, will at the
Effective Time constitute a valid and binding obligation of each of Golden
State and Merger Sub, enforceable against Golden State and Merger Sub in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity and
by bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally.
(b) GFB has full corporate power and authority to execute and deliver
the Bank Merger Agreement and to consummate the transactions contemplated
thereby. The execution and delivery of the Bank Merger Agreement and the
consummation of the transactions contemplated thereby will be duly and validly
approved by the Board of Directors of GFB. Upon the due and valid
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approval of the Bank Merger Agreement by Golden State or GSFC, as applicable,
as the sole stockholder of GFB and by the Board of Directors of GFB, no other
corporate proceedings on the part of GFB will be necessary to consummate the
transactions contemplated thereby. The Bank Merger Agreement, upon execution
and delivery by GFB, will be duly and validly executed and delivered by GFB and
will (assuming due authorization, execution and delivery by CFB) constitute a
valid and binding obligation of GFB, enforceable against GFB in accordance
with its terms, except as enforcement may be limited by general principles of
equity whether applied in a court of law or a court of equity and by
bankruptcy, insolvency and similar laws affecting creditors' rights and
remedies generally.
(c) Except as set forth in Section 3.3(c) of the Golden State
Disclosure Schedule, neither the execution and delivery of the Golden State
Documents by Golden State and Merger Sub or the Bank Merger Agreement by GFB,
nor the consummation by Golden State, Merger Sub or GFB, as applicable, of the
transactions contemplated hereby or thereby, nor compliance by Golden State,
Merger Sub or GFB, as applicable, with any of the terms or provisions hereof or
thereof, will (i) violate any provi-
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sion of the Certificate of Incorporation or Bylaws of Golden State or the
certificate of incorporation, bylaws or similar governing documents of any of
its Subsidiaries, or (ii) assuming that the consents and approvals referred to
in Section 3.4 hereof are duly obtained, (x) violate any statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to Golden State or any of its Subsidiaries, or any of their
respective properties or assets, or (y) violate, conflict with, result in a
breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of Golden State or
any of its Subsidiaries under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, license, lease, agreement
or other instrument or obligation to which Golden State or any of its
Subsidiaries is a party, or by which they or any of their respective properties
or assets may be bound or affected.
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3.4. Consents and Approvals. Except for (a) the filing of applications
and notices, as applicable, with the Office of Thrift Supervision (the "OTS")
under the HOLA and the Bank Merger Act, and approval of such applications and
notices, (b) the filing with the Securities and Exchange Commission (the
"SEC") of a proxy statement in definitive form relating to the meeting of
Golden State's stockholders to be held as contemplated by this Agreement (the
"Proxy Statement"), (c) the approval and adoption of this Agreement and the
Parent Plan of Merger by the requisite votes of the stockholders of Golden
State, (d) approval of the listing of Golden State Common Stock to be issued
pursuant to this Agreement on the NYSE, (e) the filing of the Certificates of
Merger with the Secretary pursuant to the DGCL, (f) the filings required by the
Bank Merger Agreement, and (g) such filings, authorizations or approvals as
may be set forth in Section 3.4 of the Golden State Disclosure Schedule, no
consents or approvals of or filings or registrations with any court,
administrative agency or commission or other governmental authority or
instrumentality (each a "Governmental Entity") or with any third party are
necessary in connection with (1) the execution and delivery by Golden State of
the Golden State Documents and by Merger Sub of this Agreement, (2) the
consummation by Golden State and Merger
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Sub of the transactions contemplated thereby, (3) the execution and delivery by
GFB of the Bank Merger Agreement, and (4) the consummation by GFB of the
transactions contemplated thereby.
3.5. Reports. Golden State and each of its Subsidiaries have timely
filed all reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file since
June 30, 1995 with (i) the OTS, (ii) the FDIC, (iii) any state banking
commissions or any other state regulatory authority (each a "State Regulator")
and (iv) any other self-regulatory organization ("SRO") (collectively with the
Board of Governors of the Federal Reserve System, the "Regulatory Agencies"),
and have paid all fees and assessments due and payable in connection therewith.
Except for normal examinations conducted by a Regulatory Agency in the regular
course of the business of Golden State and its Subsidiaries, and except as
set forth in Section 3.5 of the Golden State Disclosure Schedule, no
Regulatory Agency has initiated any proceeding or, to the knowledge of Golden
State, investigation into the business or operations of Golden State or any of
its Subsidiaries since June 30, 1995. There is no unre-
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solved violation, criticism, or exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of Golden State
its Subsidiaries.
3.6. Financial Statements. Golden State has previously made available
to Parent Holdings copies of (a) the consolidated statements of financial
condition of GFB and its Subsidiaries as of June 30 for the fiscal years 1996
and 1997, and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the fiscal years 1995 through 1997,
inclusive, as reported in GFB's Annual Report on Form 10-K for the fiscal year
ended June 30, 1997 filed with the OTS under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), in each case accompanied by the audit
report of KPMG Peat Marwick LLP, independent public accountants with respect to
GFB, and (b) the unaudited consolidated statements of financial condition of
Golden State and its Subsidiaries as of September 30, 1997 and the related
unaudited consolidated statements of operations and cash flows for the
three-month period then ended as reported in Golden State's Quarterly Report on
Form 10-Q for the period ended September 30, 1997 filed with the Securities and
Exchange Commission (the "SEC")
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under the Exchange Act. The June 30, 1997 consolidated statement of financial
condition of GFB (including the related notes, where applicable) fairly
presents the consolidated financial position of GFB and its Subsidiaries as of
the date thereof, and the other financial statements referred to in this
Section 3.6 (including the related notes, where applicable) fairly present, and
the financial statements to be filed by Golden State with the SEC after the
date hereof will fairly present (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in nature and amount), the
results of the consolidated operations and consolidated financial position of
GFB and its Subsidiaries, and Golden State and its Subsidiaries, as the case
may be, for the respective fiscal periods or as of the respective dates therein
set forth; each of such statements (including the related notes, where
applicable) complies, and the financial statements to be filed by Golden State
with the SEC after the date hereof will comply, with applicable accounting
requirements and with the published rules and regulations of the OTS and the
SEC, as applicable, with respect thereto; and each of such statements
(including the related notes, where applicable) has been, and the financial
statements to be filed by Golden State
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with the SEC after the date hereof will be, prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved, except as indicated in the notes thereto or, in the case
of unaudited statements, as permitted by Form 10-Q. The books and records of
Golden State and its Subsidiaries have been, and are being, maintained in
accordance with GAAP and any other applicable legal and accounting
requirements.
3.7. Broker's Fees. Neither Golden State nor any Subsidiary of Golden
State nor any of their respective officers or directors has employed any
broker or finder or incurred any liability for any broker's fees, commissions
or finder's fees in connection with any of the transactions contemplated by the
Golden State Documents or the Bank Merger Agreement, except that Golden State
has engaged, and will pay a fee or commission to, Credit Suisse First Boston
Corporation ("CS First Boston") in accordance with the terms of a letter
agreement between CS First Boston and Golden State, a true and correct copy of
which has been previously made available by Golden State to Parent Holdings.
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3.8. Absence of Certain Changes or Events. (a) Except as may be set
forth in Section 3.8(a) of the Golden State Disclosure Schedule, or as
disclosed in any Golden State Report (as defined in Section 3.12) filed with
the SEC or the OTS prior to the date of this Agreement, since June 30, 1997,
(i) neither Golden State nor any of its Subsidiaries has incurred any
liability, except in the ordinary course of their business consistent with
their past practices, and (ii) no event has occurred which has caused, or is
reasonably likely to cause, individually or in the aggregate, a Material
Adverse Effect on Golden State.
(b) Except as set forth in Section 3.8(b) of the Golden State
Disclosure Schedule or as disclosed in any Golden State Report filed with the
SEC or the OTS prior to the date of this Agreement, since June 30, 1997, Golden
State and its Subsidiaries have carried on their respective businesses in the
ordinary course consistent with their past practices.
(c) Except as set forth in Section 3.8(c) of the Golden State
Disclosure Schedule, since December 31, 1997, neither Golden State nor any of
its Subsidiaries has (i) increased the wages, salaries, compensation, pension,
or other fringe benefits or perquisites payable
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to any executive officer, employee, or director from the amount thereof in
effect as of December 31, 1997 (which amounts have been previously made
available to Parent Holdings), granted any severance or termination pay,
entered into any contract to make or grant any severance or termination pay, or
paid any bonus, (ii) suffered any strike, work stoppage, slow-down, or other
labor disturbance, (iii) been a party to a collective bargaining agreement,
contract or other agreement or understanding with a labor union or
organization, or (iv) had any union organizing activities.
3.9. Legal Proceedings. (a) Except as set forth in Section 3.9 of the
Golden State Disclosure Schedule, neither Golden State nor any of its
Subsidiaries is a party to any, and there are no pending or, to Golden State's
knowledge, threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations of any nature
against Golden State or any of its Subsidiaries or challenging the validity or
propriety of the transactions contemplated by any of the Golden State Documents
or the Bank Merger Agreement.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon
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Golden State, any of its Subsidiaries or the assets of Golden State or any of
its Subsidiaries.
3.10. Taxes. (a) Except as set forth in Section 3.10 of the Golden
State Disclosure Schedule, each of Golden State and its Subsidiaries has or
will have prior to the Effective Time (i) duly and timely filed (including
applicable extensions granted without penalty) or there has been filed on its
behalf, all Tax Returns (as hereinafter defined) required to be filed at or
prior to the Effective Time, and such Tax Returns are true, correct and
complete, and (ii) paid (or there has been paid on its behalf) in full or made
provision in the financial statements of Golden State (in accordance with GAAP)
for all Taxes (as hereinafter defined) due or claimed to be due from it by any
taxing authority with respect to all periods ending on or before the Effective
Time. No deficiencies for any Taxes have been proposed, asserted, assessed or
threatened in writing against or with respect to Golden State or any of its
Subsidiaries which have not been finally resolved. Except as set forth in
Section 3.10 of the Golden State Disclosure Schedule, (i) there are no liens
for Taxes upon the assets of either Golden State or any of its Subsidiaries
except for statutory liens for current Taxes not yet due
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or liens for Taxes that are being contested in good faith, as to the fact or
the amount of liability, by appropriate proceedings and that have been reserved
against in accordance with GAAP, (ii) neither Golden State nor any of its
Subsidiaries has requested any extension of time within which to file any Tax
Returns in respect of any tax year which have not since been filed and no
request for waivers or extensions of the time to assess or collect any Taxes
are pending or outstanding, (iii) with respect to each taxable period of Golden
State and its Subsidiaries through and including December 31, 1992, the federal
and state income Tax Returns of Golden State and its Subsidiaries have been
audited by the Internal Revenue Service or appropriate state tax authorities
or the time for assessing and collecting Taxes with respect to such taxable
period has closed and such taxable period is not subject to review, (iv)
neither Golden State nor any of its Subsidiaries has filed or been included in
a combined, consolidated or unitary income Tax Return for any tax year that is
open for the purpose of assessing a deficiency other than one in which Golden
State, GFB or GLENFED, INC., the former parent of GFB, is the parent of the
group filing such Tax Return, (v) neither Golden State nor any of its
Subsidiaries is a
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party to, is bound by or has an obligation under, any Tax sharing agreement,
Tax indemnification agreement or similar contract or arrangement providing for
the allocation or sharing of Taxes (other than the allocation of federal income
taxes as provided by Treasury Regulation Section 1.1552-1(a)(1) under the
Code), (vi) neither Golden State nor any of its Subsidiaries has filed a
consent pursuant to Section 341(f) of the Code, (vii) no power of attorney
which is currently in force has been granted by or with respect to Golden State
or any Subsidiary thereof with respect to any matter relating to Taxes, and
(viii) no closing agreement pursuant to Section 7121 of the Code (or any
predecessor provision) or any similar provision of any state, local or foreign
law has been entered into by or with respect to Golden State or its
Subsidiaries.
(b) For the purposes of this Agreement, "Tax" or "Taxes" shall mean
all taxes, charges, fees, levies, penalties or other assessments imposed by any
United States federal, state, local or foreign taxing authority, including, but
not limited to income, excise, property, sales, transfer, franchise, payroll,
withholding, social security or other taxes, including any interest,
penalties or additions attributable thereto.
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(c) For purposes of this Agreement, "Tax Return" shall mean any
return, report, information return or other document (including any related or
supporting information) with respect to Taxes.
3.11. Employees. (a) Section 3.11(a) of the Golden State Disclosure
Schedule sets forth a true and correct list of each deferred compensation plan,
incentive compensation plan, equity compensation plan, "welfare" plan, fund
or program (within the meaning of section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")); "pension" plan, fund or
program (within the meaning of section 3(2) of ERISA); each employment,
termination or severance agreement; and each other employee benefit plan, fund,
program, agreement or arrangement, in each case, that is sponsored, maintained
or contributed to or required to be contributed to as of the date of this
Agreement (the "Plans") by Golden State, any of its Subsidiaries or by any
trade or business, whether or not incorporated (an "ERISA Affiliate"), all of
which together with Golden State would be deemed a "single employer" within the
meaning of Section 4001 of ERISA, for the benefit of any employee or former
employee of Golden State, any Subsidiary of Golden State or any ERISA
Affiliate.
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(b) Golden State has heretofore made available to Parent Holdings true
and complete copies of each of the Plans and all related documents, including
but not limited to (i) the actuarial report for such Plan (if applicable) for
each of the last two years, and (ii) the most recent determination letter from
the Internal Revenue Service (if applicable) for such Plan.
(c) Except as set forth in Section 3.11(c) of the Golden State
Disclosure Schedule, (i) each of the Plans has been operated and administered
in accordance with its terms and applicable law, including but not limited to
ERISA and the Code, (ii) each of the Plans intended to be "qualified" within
the meaning of Section 401(a) of the Code either (1) has received a favorable
determination letter from the IRS, or (2) is or will be the subject of an
application for a favorable determination letter, and the Company is not aware
of any circumstances likely to result in the revocation or denial of any such
favorable determination letter, (iii) with respect to each Plan which is
subject to Title IV of ERISA, the present value of accrued benefits under such
Plan, based upon the actuarial assumptions used for funding purposes in the
most recent actuarial report prepared by such Plan's actuary with respect to
such
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Plan, did not, as of its latest valuation date, exceed the then current
value of the assets of such Plan allocable to such accrued benefits, (iv) no
Plan provides welfare benefits, including without limitation death or medical
benefits (whether or not insured), with respect to current or former employees
of Golden State, its Subsidiaries beyond their retirement or other termination
of service, other than coverage mandated by applicable law or benefits the full
cost of which is borne by the current or former employee (or his beneficiary),
(v) no liability under Title IV of ERISA has been incurred by Golden State, its
Subsidiaries or any ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a risk to Golden State, its Subsidiaries or an
ERISA Affiliate of incurring a material liability thereunder, (vi) no Plan is a
"multiemployer pension plan," as such term is defined in Section 3(37) of
ERISA, (vii) all contributions or other amounts payable by Golden State, its
Subsidiaries or any ERISA Affiliate as of the Effective Time with respect to
each Plan in respect of current or prior plan years have been paid or accrued
in accordance with generally accepted accounting practices and Section 412 of
the Code, (viii) neither Golden State nor its Subsidiaries has engaged in
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a transaction in connection with which Golden State or its Subsidiaries could
reasonably be expected to be subject to either a civil penalty assessed
pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section
4975 or 4976 of the Code, (ix) there are no pending, or, to the best knowledge
of Golden State, threatened or anticipated claims (other than routine claims
for benefits) by, on behalf of or against any of the Plans or any trusts
related thereto and (x) the consummation of the transactions contemplated by
this Agreement or the Bank Merger Agreement, either alone or in conjunction
with another event, including a termination of employment, will not (A)
entitle any current or former employee or officer of Golden State or any ERISA
Affiliate to severance pay, termination pay or any other payment or benefit,
except as expressly provided in this Agreement or (B) accelerate the time of
payment or vesting or increase the amount or value of compensation or benefits
due any such employee or officer.
3.12. SEC Reports. Golden State has previously made available (to the
extent filed prior to the date hereof) to Parent Holdings an accurate and
complete copy of each (a) final registration statement, prospectus, report,
schedule and definitive proxy statement
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filed since June 30, 1995 by GFB or Golden State with the OTS or the SEC, as
the case may be, pursuant to the Securities Act of 1933, as amended (the
"Securities Act") or the Exchange Act (the "Golden State Reports") and (b)
communication mailed by GFB or Golden State, as the case may be, to its
stockholders since June 30, 1995, and no such registration statement,
prospectus, report, schedule, proxy statement or communication contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances in which they were made, not misleading,
except that information as of a later date shall be deemed to modify
information as of an earlier date. Each of GFB and Golden State has timely
filed all Golden State Reports and other documents required to be filed by such
party under the Securities Act and the Exchange Act, and, as of their
respective dates, all Golden State Reports complied with the published rules
and regulations of the OTS and the SEC, as applicable, with respect thereto.
3.13. Golden State Information. The information relating to Golden
State and its Subsidiaries to be contained in the Proxy Statement, or in any
other document filed with any other regulatory agency in connection
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herewith, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circum stances in which they are made, not misleading. The Proxy Statement
(except for such portions thereof that relate only to Parent Holdings or any of
its Subsidiaries) will comply with the provisions of the Exchange Act and the
rules and regulations thereunder.
3.14. Compliance with Applicable Law. Golden State and each of its
Subsidiaries hold, and have at all times held, all licenses, franchises,
permits and authorizations necessary for the lawful conduct of their
respective businesses under and pursuant to all, and have complied with and are
not in default in any respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental Entity relating to
Golden State or any of its Subsidiaries, and neither Golden State nor any of
its Subsidiaries knows of, or has received notice of, any violations of any of
the above.
3.15. Certain Contracts. (a) Except as set forth in Section 3.15(a) of
the Golden State Disclosure Schedule and except for this Agreement, the Stock
Option Agreement, the Bank Merger Agreement and the Management
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Agreement, neither Golden State nor any of its Subsidiaries is a party to or
bound by any contract, arrangement, commitment or understanding (whether
written or oral) (i) with respect to the employment of any directors, offi
cers, employees or consultants, (ii) which, upon the consummation of the
transactions contemplated by this Agreement or the Bank Merger Agreement, will
(either alone or upon the occurrence of any additional acts or events) result
in any payment or benefits (whether of severance pay or otherwise) becoming
due, or the acceleration or vesting of any rights to any payment or benefits,
from Golden State, GFB, the Surviving Bank or any of their respective
Subsidiaries to any director, officer or employee thereof, (iii) which is a
material contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC)
to be performed after the date of this Agreement that has not been filed or
incorporated by reference in the Golden State Reports, (iv) which is a
consulting agreement (including data processing, software programming and
licensing contracts) not terminable on 60 days or less notice involving the
payment of more than $100,000 per annum, or (v) which materially restricts the
conduct of any line of business by Golden State or any of its Subsidiaries.
Each contract, arrangement, commitment
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or understanding of the type described in this Section 3.15(a), whether or not
set forth in Section 3.15(a) of the Golden State Disclosure Schedule, is
referred to herein as a "Golden State Contract". Golden State has previously
delivered or made available to Parent Holdings true and correct copies of each
Golden State Contract.
(b) Except as set forth in Section 3.15(b) of the Golden State
Disclosure Schedule, (i) each Golden State Contract is valid and binding and in
full force and effect, (ii) Golden State and each of its Subsidiaries has
performed all obligations required to be performed by it to date under each
Golden State Contract, (iii) no event or condition exists which constitutes or,
after notice or lapse of time or both, would constitute, a default on the part
of Golden State or any of its Subsidiaries under any Golden State Contract, and
(iv) no other party to any Golden State Contract is, to the knowledge of Golden
State, in default in any respect thereunder.
3.16. Agreements with Regulatory Agencies. Except as set forth in
Section 3.16 of the Golden State Disclosure Schedule, neither Golden State nor
any of its Subsidiaries is subject to any cease-and-desist or other order
issued by, or is a party to any written agreement,
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consent agreement or memorandum of understanding with, or is a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
or has adopted any board resolutions at the request of (each, whether or not
set forth on Section 3.16 of the Golden State Disclosure Schedule, a
"Regulatory Agreement"), any Regulatory Agency or other Governmental Entity
that restricts the conduct of its business or that in any manner relates to its
capital adequacy, its credit policies, its management or its business, nor has
Golden State or any of its Subsidiaries been advised by any Regulatory Agency
or other Governmental Entity that it is considering issuing or requesting any
Regulatory Agreement.
3.17. State Takeover Laws; Charter Provision. The provisions of
Section 203 of the DGCL and Article Seventh of Golden State's Certificate of
Incorporation will not, assuming the accuracy of the representations contained
in Section 4.15 hereof, apply to this Agreement, the Bank Merger Agreement or
the Option Agreement or any of the transactions contemplated hereby or thereby.
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3.18. Environmental Matters. Except as set forth in Section 3.18 of
the Golden State Disclosure Schedule:
(a) Each of Golden State and its Subsidiaries, the Participation
Facilities and the Loan Properties (each as hereinafter defined) are, and have
been, in compliance with all applicable federal, state and local laws including
common law, regulations and ordinances and with all applicable decrees, orders
and contractual obligations relating to pollution or the discharge of, or
exposure to Hazardous Materials (as hereinafter defined) in the environment or
workplace ("Environmental Laws");
(b) There is no suit, claim, action or proceeding, pending or, to the
knowledge of Golden State, threatened, before any Governmental Entity or other
forum in which Golden State, any of its Subsidiaries, any Participation
Facility or any Loan Property, has been or, with respect to threatened
proceedings, may be, named as a defendant (x) for alleged noncompliance
(including by any predecessor), with any Environmental Laws, or (y) relating to
the release, threatened release or exposure to any Hazardous Material whether
or not occurring at or on a site owned, leased or operated by Golden State or
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any of its Subsidiaries, any Participation Facility or any Loan Property;
(c) During the period of (x) Golden State's or any of its
Subsidiaries' ownership or operation of any of their respective current or
former properties, (y) Golden State's or any of its Subsidiaries'
participation in the management of any Participation Facility, or (z) to the
knowledge of Golden State, Golden State's or any of its Subsidiaries' holding
of a security interest in a Loan Property, there has been no release of
Hazardous Materials in, on, under or affecting any such property that has had
or would reasonably be expected to have, individually or in the aggregate with
such other events, a Material Adverse Effect on Golden State; and
(d) The following definitions apply for purposes of this Section 3.18:
(x) "Hazardous Materials" means any chemicals, pollutants, contaminants,
wastes, toxic substances, petroleum or other regulated substances or materials,
(y) "Loan Property" means any property in which Golden State or any of its
Subsidiaries holds a security interest, and, where required by the context,
said term means the owner or operator of such property; and (z) "Participation
Facility" means any facility in which Golden State or any of its Subsidiaries
partici-
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pates in the management and, where required by the context, said term means
the owner or operator of such property.
3.19. Derivative Transactions. Except as set forth in Section 3.19 of
the Golden State Disclosure Schedule, since June 30, 1997, neither Golden State
nor any of its Subsidiaries has engaged in transactions in or involving
forwards, futures, options on futures, swaps or other derivative instruments
except (i) as agent on the order and for the account of others, or (ii) as
principal for purposes of hedging interest rate risk on U.S. dollar-denominated
securities and other financial instruments. None of the counterparties to any
contract or agreement with respect to any such instrument is in default with
respect to such contract or agreement and no such contract or agreement, were
it to be a Loan (as defined below) held by Golden State or any of its
Subsidiaries, would be classified as "Other Loans Specially Mentioned",
"Special Mention", "Substandard", "Doubtful", "Loss", "Classified",
"Criticized", "Credit Risk Assets", "Concerned Loans" or words of similar
import. The financial position of Golden State and its Subsidiaries on a
consolidated basis under or with respect to each such instrument has been
reflected in the books and records of
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Golden State and such Subsidiaries in accordance with GAAP consistently
applied, and no open exposure of Golden State or any of its Subsidiaries with
respect to any such instrument (or with respect to multiple instruments with
respect to any single counterparty) exists as of the date hereof.
3.20. Opinion. Prior to the execution of this Agreement, Golden State
received an opinion from CS First Boston to the effect that, as of the date
thereof and based upon and subject to the matters set forth therein, the
consideration to be paid by Golden State pursuant to this Agreement is fair to
the stockholders of Golden State from a financial point of view. Such opinion
has not been amended or rescinded as of the date of this Agreement.
3.21. Approvals. As of the date of this Agreement, Golden State knows
of no reason why all regulatory approvals required for the consummation of the
transactions contemplated hereby should not be obtained.
3.22. Loan Portfolio. (a) Section 3.22 of the Golden State Disclosure
Schedule sets forth the aggregate principal amount of all written or oral loan
agreements, notes or borrowing arrangements (including, without limitation,
leases, credit enhancements, commit-
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ments, guarantees and interest-bearing assets) (collectively, "Loans"), other
than Loans the unpaid principal balance of which does not exceed $1,000,000,
under the terms of which the obligor is, as of December 31, 1997, over 90 days
delinquent in payment of principal or interest or in default of any other
provision and, except as disclosed in Section 3.22, neither Golden State nor
any of its Subsidiaries is a party to any Loan with any director, executive
officer or five percent or greater stockholder of Golden State or any of its
Subsidiaries, or to the knowledge of Golden State, any person, corporation or
enterprise controlling, controlled by or under common control with any of the
foregoing. Section 3.22 of the Golden State Disclosure Schedule sets forth as
of December 31, 1997 (i) all of the Loans in original principal amount in
excess of $1,000,000 of Golden State or any of its Subsidiaries that as of the
date of this Agreement are classified by Golden State as "Special Mention",
"Substandard", "Doubtful", "Loss", or words of similar import, together with
the principal amount of and accrued and unpaid interest on each such Loan and
the identity of the borrower thereunder, (ii) by category of Loan (i.e.,
commercial, consumer, etc.), all of the Loans of Golden State and its
Subsidiaries that as of the date
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of this Agreement are classified as such, together with the aggregate principal
amount of such Loans by category and (iii) each asset of Golden State that as
of the date of this Agreement is classified as "Other Real Estate Owned" and
the book value thereof.
(b) Each Loan in original principal amount in excess of $1,000,000 (i)
is evidenced by notes, agreements or other evidences of indebtedness which are
true, genuine and what they purport to be, (ii) to the extent secured, has been
secured by valid liens and security interests which have been perfected and
(iii) is the legal, valid and binding obligation of the obligor named therein,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
3.23. Reorganization. As of the date of this Agreement, Golden State
has no reason to believe that any of the Mergers or the Subsidiary Merger will
fail to qualify as a reorganization under Section 368(a) of the Code.
3.24. Material Interests of Certain Persons. Except as disclosed in
the Golden State Reports filed
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prior to the date of this Agreement, no officer or director of Golden State,
or any "associate" (as such term is officer or director, has any material
interest in any material contract or property (real or personal), tangible or
intangible, used in or pertaining to the business of Golden State.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT HOLDINGS
Subject to Article II, Parent Holdings hereby represents and warrants
to Golden State and Merger Sub as follows:
4.1. Corporate Organization. (a) Parent Holdings is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. Parent Holdings has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is
now being conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
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such licensing or qualification necessary. Parent Holdings is duly registered
as a savings and loan holding company under the HOLA. The Third Restated
Certificate of Incorporation and the By-laws of Parent Holdings, copies of
which have previously been made available to Golden State, are true and correct
copies of such documents as in effect as of the date of this Agreement.
(b) FNH is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. CFB is a stock savings bank
duly organized, validly existing and in good standing under the laws of the
United States of America. The deposit accounts of CFB are insured by the FDIC
through the SAIF to the fullest extent permitted by law, and all premiums and
assessments required in connection therewith have been paid when due. Each of
Parent Holdings's other Subsidiaries is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation. Each
Subsidiary of Parent Holdings has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is
now being conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character
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or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary. The articles of organization and
by-laws of CFB, copies of which have previously been made available to Golden
State, are true and correct copies of such documents as in effect as of the
date of this Agreement.
(c) The minute books of Parent Holdings and each of its Subsidiaries
contain true and correct records of all meetings and other corporate actions
held or taken since December 31, 1995 of their respective stockholders and
Boards of Directors (including committees of their respective Boards of
Directors).
4.2. Capitalization. (a) As of the date of this Agreement, (i) the
authorized capital stock of Parent Holdings consists of 1,000 shares of Parent
Holdings Common Stock and no shares of preferred stock and (ii) the authorized
capital stock of FNH consists of 800 shares of FNH Class A Common Stock, 200
shares of FNH Class B Common Stock and 24,000 shares of preferred stock, par
value $1.00 per share ("FNH Preferred Stock"), of which 10,000 shares have been
designated as Series A Cumulative Perpetual Preferred Stock (the "FNH Series A
Preferred Stock"), and 2,000 shares have been designated as Series B Cumulative
Perpetual Preferred Stock (the
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"FNH Series B Preferred Stock"). As of the date of this Agreement, there were
(i) 1,000 shares of Parent Holdings Common Stock and no shares of preferred
stock of Parent Holdings issued and outstanding, and no shares of Parent
Holdings Common Stock held in its treasury and (ii) 800 shares of FNH Class A
Common Stock, 200 shares of FNH Class B Common Stock, 1,666.667 shares of FNH
Series A Preferred Stock and 45.32 shares of FNH Series B Preferred Stock
issued and outstanding. As of the date of this Agreement, no shares of capital
stock of Parent Holdings or FNH were reserved for issuance. All of the issued
and outstanding shares of Parent Holdings Common Stock, FNH Class A Common
Stock, FNH Class B Common Stock and FNH Preferred Stock have been duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. As of the date of this Agreement, except as set forth on Section
4.2(a) of the Parent Holdings Disclosure Schedule, neither Parent Holdings nor
FNH has or is bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of capital stock of Parent Holdings or FNH or any other
equity securities of Parent
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Holdings or FNH or any securities representing the right to purchase or
otherwise receive any shares of capital stock of Parent Holdings or FNH or
any other equity securities of Parent Holdings or FNH.
(b) Section 4.2(b) of the Parent Holdings Disclosure Schedule sets
forth a true and correct list of all of the Subsidiaries of Parent Holdings.
Except as set forth in Section 4.2(b) of the Parent Holdings Disclosure
Schedule, Parent Holdings owns, directly or indirectly, all of the issued and
outstanding shares of capital stock of each of the Subsidiaries of Parent
Holdings, free and clear of all liens, charges, encumbrances and security
interests whatsoever, and all of such shares are duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. No Subsidiary of Parent
Holdings has or is bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of capital stock or any other equity security of such
Subsidiary or any securities representing the right to purchase or otherwise
receive any shares of capital stock or any other equity security of such
Subsidiary.
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4.3. Authority; No Violation. (a) Each of Parent Holdings and FNH has
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly approved by the Board of Directors of each of Parent
Holdings and FNH, by the sole stockholder of Parent Holdings and by Parent
Holdings and Ford as the stockholders of FNH, and no other corporate
proceedings on the part of either Parent Holdings or FNH are necessary to
approve this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by each of
Parent Holdings and FNH and (assuming due authorization, execution and delivery
by each of Golden State and Merger Sub) this Agreement constitutes a valid and
binding obligation of each of Parent Holdings and FNH, enforceable against
each of Parent Holdings and FNH in accordance with its terms, except as
enforcement may be limited by general principles of equity whether applied in a
court of law or a court of equity and by bankruptcy, insolvency and similar
laws affecting creditors' rights and remedies generally.
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(b) CFB has full corporate power and authority to execute and deliver
the Bank Merger Agreement and the Management Agreement and to consummate the
transactions contemplated thereby. The execution and delivery of the Bank
Merger Agreement and the Management Agreement and the consummation of the
transactions contemplated thereby will be duly and validly approved by the
Board of Directors of CFB. Upon the due and valid approval of the Bank Merger
Agreement by FNH as the sole stockholder of CFB, and by the Board of Directors
of CFB, no other corporate proceedings on the part of CFB will be necessary to
consummate the transactions contemplated thereby. Each of the Bank Merger
Agreement and the Management Agreement, upon execution and delivery by CFB,
will be duly and validly executed and delivered by CFB and will (assuming due
authorization, execution and delivery by the GFB) constitute a valid and
binding obligation of CFB, enforceable against CFB in accordance with its
terms, except as enforcement may be limited by general principles of equity
whether applied in a court of law or a court of equity and by bankruptcy,
insolvency and similar laws affecting creditors' rights and remedies generally.
(c) Except as set forth in Section 4.3(c)
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of the Parent Holdings Disclosure Schedule, neither the execution and delivery
of this Agreement by Parent Holdings or FNH or the Bank Merger Agreement and
the Management Agreement by CFB, nor the consummation by Parent Holdings, FNH
or CFB, as applicable, of the transactions contemplated hereby or thereby, nor
compliance by Parent Holdings, FNH or CFB with any of the terms or provisions
hereof or thereof, will (i) violate any provision of the Certificate of
Incorporation or By-Laws of Parent Holdings, or the certificate of
incorporation or by-laws or similar governing documents of any of its
Subsidiaries or (ii) assuming that the consents and approvals referred to in
Section 4.4 are duly obtained, (x) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to Parent
Holdings or any of its Subsidiaries or any of their respective properties or
assets, or (y) violate, conflict with, result in a breach of any provision of
or the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any lien, pledge,
security interest, charge or other encum-
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brance upon any of the respective properties or assets of Parent Holdings or
any of its Subsidiaries under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, license, lease, agreement
or other instrument or obligation to which Parent Holdings or any of its
Subsidiaries is a party, or by which they or any of their respective properties
or assets may be bound or affected.
4.4. Consents and Approvals. Except for (a) the filing of applications
and notices, as applicable, with the OTS under the HOLA and the Bank Merger
Act, and approval of such applications and notices, (b) the filing with the SEC
of the Proxy Statement, (c) the approval and adoption of this Agreement and the
Parent Plan of Merger by the requisite vote of the stockholders of Golden
State, (d) approval of the listing of the Golden State Common Stock to be
issued in the Merger on the NYSE, (e) the filing of the Certificates of Merger
with the Secretary, (f) filings required by the Bank Merger Agreement, (g) the
approval of the Bank Merger Agreement by the sole stockholder of CFB, and (h)
such filings, authorizations or approvals as may be set forth in Section 4.4 of
the Parent Holdings Disclosure Schedule, no consents or approvals of or filings
or registrations with any Govern-
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mental Entity or with any third party are cessary in connection with (1) the
execution and delivery by Parent Holdings and FNH of this Agreement, (2) the
consummation by Parent Holdings and FNH of the Mergers and the other
transactions contemplated hereby, (3) the execution and delivery by CFB of the
Bank Merger Agreement and the Management Agreement and the consummation of the
transactions contemplated by the Management Agreement, and (4) the
consummation of CFB of the transactions contemplated by the Bank Merger
Agreement.
4.5. Reports. Parent Holdings and each of its Subsidiaries have timely
filed all reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file since
December 31, 1995 with any Regulatory Agency, and have paid all fees and
assessments due and payable in connection therewith. Except for normal
examinations conducted by a Regulatory Agency in the regular course of the
business of Parent Holdings and its Subsidiaries, and except as set forth in
Section 4.5 of Parent Holdings Disclosure Schedule, no Regulatory Agency has
initiated any proceeding or, to the knowledge of Parent Holdings, investigation
into the business or operations of Parent Holdings or any of its Subsidiaries
since December 31,
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1995. There is no unresolved violation, criticism, or exception by any
Regulatory Agency with respect to any report or statement relating to any
examinations of Parent Holdings or any of its Subsidiaries.
4.6. Financial Statements. Parent Holdings has previously made
available to Golden State copies of (a) the consolidated statements of
financial condition of Parent Holdings and its Subsidiaries as of December 31
for the fiscal years 1995 and 1996 and the related consolidated statements of
operations, stockholder's equity and cash flows for the fiscal years 1994
through 1996, inclusive, as reported in Parent Holdings' Annual Report on Form
10-K for the fiscal year ended December 31, 1996 filed with the SEC under the
Exchange Act, in each case accompanied by the audit report of KPMG Peat Marwick
LLP, independent public accountants with respect to Parent Holdings, and (b)
the unaudited consolidated statements of financial condition of Parent Holdings
and its Subsidiaries as of September 30, 1997 and September 30, 1996 and the
related unaudited consolidated statements of operations, stockholder's equity
and cash flows for the nine-month periods then ended as reported in Parent
Holdings' Quarterly Report on Form 10-Q for the period ended September 30, 1997
filed with the SEC under the Ex-
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change Act. The December 31, 1996 consolidated statement of financial position
of Parent Holdings (including the related notes, where applicable) fairly
presents the consolidated financial position of Parent Holdings and its
Subsidiaries as of the date thereof, and the other financial statements
referred to in this Section 4.6 (including the related notes, where applicable)
fairly present, and the financial statements to be filed by Parent Holdings
with the SEC after the date hereof will fairly present (subject, in the case of
the unaudited statements, to recurring audit adjustments normal in nature and
amount), the results of the consolidated operations and changes in
stockholder's equity and consolidated financial position of Parent Holdings
and its Subsidiaries for the respective fiscal periods or as of the respective
dates therein set forth; each of such statements (including the related notes,
where applicable) complies, and the financial statements to be filed by Parent
Holdings with the SEC after the date hereof will comply, with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto; and each of such statements (including the related notes,
where applicable) has been, and the financial statements to be filed by Parent
Holdings with
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the SEC after the date hereof will be, prepared in accordance with GAAP
consistently applied during the periods involved, except as indicated in the
notes thereto or, in the case of unaudited statements, as permitted by Form
10-Q. The books and records of Parent Holdings and its Subsidiaries have been,
and are being, maintained in accordance with GAAP and any other applicable
legal and accounting requirements.
4.7. Broker's Fees. Neither Parent Holdings nor any Subsidiary of
Parent Holdings, nor any of their respective officers or directors, has
employed any broker or finder or incurred any liability for any broker's fees,
commissions or finder's fees in connection with any of the transactions
contemplated by this Agreement, the Option Agreement or the Bank Merger
Agreement, except that Parent Holdings has engaged, and will pay a fee or
commission to, Goldman, Sachs & Co. ("Goldman Sachs") in accordance with the
terms of a letter agreement between Goldman Sachs and Parent Holdings, a true
and correct copy of which has been previously made available by Parent Holdings
to Golden State.
4.8. Absence of Certain Changes or Events. (a) Except as may be set
forth in Section 4.8 of the Parent Holdings Disclosure Schedule, or as
disclosed in
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any Parent Holdings Report (as defined in Section 4.12) filed with
the SEC or the OTS prior to the date of this Agreement, since December 31,
1996, (i) neither Parent Holdings nor any of its Subsidiaries has incurred any
liability, except in the ordinary course of their business consistent with
their past practices, and (ii) no event has occurred which has caused, or is
reasonably likely to cause, individually or in the aggregate, a Material
Adverse Effect on Parent Holdings.
(b) Except as set forth in Section 4.8(b) of the Parent Holdings
Disclosure Schedule or as disclosed in any Parent Holdings Report filed with
the SEC or the OTS prior to the date of this Agreement, since September 30,
1997, Parent Holdings and its Subsidiaries have carried on their respective
businesses in the ordinary course consistent with their past practices.
(c) Except as set forth in Section 4.8(c) of the Parent Holdings
Disclosure Schedule, since December 31, 1997, neither Parent Holdings nor any
of its Subsidiaries has (i) increased the wages, salaries, compen sation,
pension, or other fringe benefits or perquisites payable to any executive
officer, employee, or director from the amount thereof in effect as of December
31, 1997 (which amounts have been previously made available to
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Golden State), granted any severance or termination pay, entered into any
contract to make or grant any severance or termination pay, or paid any bonus,
(ii) suffered any strike, work stoppage, slow-down, or other labor disturbance,
(iii) been a party to a collective bargaining agreement, contract or other
agreement or understanding with a labor union or organization, or (iv) had
any union organizing activities.
4.9. Legal Proceedings. (a) Except as set forth in Section 4.9 of the
Parent Holdings Disclosure Schedule, neither Parent Holdings nor any of its
Subsidiaries is a party to any and there are no pending or, to the knowledge
of Parent Holdings, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of
any nature against Parent Holdings or any of its Subsidiaries or challenging
the validity or propriety of the transactions contemplated by this Agreement or
the Bank Merger Agreement.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction imposed upon Parent Holdings, any of its Subsidiaries or the assets
of Parent Holdings or any of its Subsidiaries.
4.10. Taxes. Except as set forth in Section
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4.10 of the Parent Holdings Disclosure Schedule, each of Parent Holdings and
its Subsidiaries has or will have prior to the Effective Time (i) duly and
timely filed (including applicable extensions granted without penalty), or
there has been filed on its behalf, all Tax Returns required to be filed at or
prior to the Effective Time, and such Tax Returns are true, correct and
complete, and (ii) paid, or there has been paid on its behalf, in full or made
provision in the financial statements of Parent Holdings (in accordance with
GAAP) for all Taxes due or claimed to be due from it by any taxing authority
with respect to all periods ending on or before the Effective Time. No
deficiencies for any Taxes have been proposed, asserted, assessed or threatened
in writing against or with respect to Parent Holdings or any of its
Subsidiaries. Except as set forth in Section 4.10 of the Parent Holdings
Disclosure Schedule, (i) there are no liens for Taxes upon the assets of either
Parent Holdings or any of its Subsidiaries except for statutory liens for
current Taxes not yet due or liens for Taxes that are being contested in good
faith, as to the fact or the amount of liability, by appropriate proceedings
and that have been reserved against in accordance with GAAP, (ii) neither
Parent Holdings nor any of its Subsidiaries has
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requested any extension of time within which to file any Tax Returns in respect
of any fiscal year which have not since been filed and no request for waivers
or extensions of the time to assess or collect any Taxes are pending or
outstanding, (iii) with respect to each taxable period of Parent Holdings and
its Subsidiaries, the federal and state income Tax Returns of Parent Holdings
and its Subsidiaries have been audited by the Internal Revenue Service or
appropriate state tax authorities or the time for assessing and collecting
Taxes with respect to such taxable period has closed and such taxable period is
not subject to review, (iv) neither Parent Holdings nor any of its Subsidiaries
has filed or been included in a combined, consolidated or unitary income Tax
Return other than one in which Parent Holdings is the parent of the group
filing such Tax Return, (v) neither Parent Holdings nor any of its Subsidiaries
is a party to, is bound by, or has an obligation under, any Tax sharing
agreement, Tax indemnification agreement or similar contract or arrangement
providing for the allocation or sharing of Taxes (other than the allocation of
federal income taxes as provided by Regulation 1.1552-1(a)(1) under the Code),
(vi) neither Parent Holdings nor any of its Subsidiaries has filed a consent
pursuant to Section 341(f) of the
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Code, (vii) no power of attorney which is currently in force has been granted
by or with respect to Parent Holdings or any Subsidiary thereof with respect to
any matter relating to Taxes; and (viii) no closing agreement pursuant to
Section 7121 of the Code (or any predecessor provision) or any similar
provision of any state, local or foreign Law has been entered into by or with
respect to the Parent Holdings or its Subsidiaries. California Federal
Preferred Capital Corporation ("CFPCC") (formerly First Nationwide Preferred
Capital Corporation) was formed in 1996 and included in the 1996 consolidated
federal income tax return of the affiliated group of which Mafco Holdings Inc.
is the common parent and (i) has been at all times since January 1, 1997, and
at the Effective Time will be, a "real estate investment trust" ("REIT") as
defined in Section 856(a) of the Code, (ii) has met at all times since January
1, 1997, and at the Effective Time will meet, the requirements of Section
857(a) of the Code, (iii) has not been at any time since January 1, 1997, and
at the Effective Time will not be, described in Section 856(c)(7) of the Code,
(iv) has not had at any time since January 1, 1997, and at the Effective Time
will not have had, any "net income derived from prohibited transactions" within
the meaning of Section
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857(b)(6) of the Code and (v) has not, and at the Effective Time will not
have, issued any stock or securities as part of a multiple party financing
transaction described in Internal Revenue Service Notice 97-21, 1997-11 I.R.B.
2.
4.11. Employees. (a) Section 4.11(a) of the Parent Holdings Disclosure
Schedule sets forth a true and complete list of each deferred compensation
plan, incentive compensation plan, equity compensation plan, "welfare" plan,
fund or program (within the meaning of section 3(1) of the ERISA); "pension"
plan, fund or program (within the meaning of section 3(2) of ERISA); each
employment, termination or severance agreement; and each other employee benefit
plan, fund, program, agreement or arrangement, in each case, that is sponsored,
maintained or contributed to or required to be contributed to as of the date of
this Agreement (the "Parent Holdings Plans") by Parent Holdings, any of its
Subsidiaries or by any trade or business, whether or not incorporated, which is
owned by Parent Holdings or any of its Subsidiaries (a "Parent Holdings ERISA
Affiliate"), all of which together with Parent Holdings would be deemed a
"single employer" within the meaning of Section 4001 of ERISA, for the benefit
of any employee or former employee of Parent
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Holdings, any Subsidiary of Parent Holdings or any Parent Holdings ERISA
Affiliate.
(b) Parent Holdings has heretofore made available to Golden State each
of the Parent Holdings Plans and all related documents, including but not
limited to (i) the actuarial report for such Parent Holdings Plan (if
applicable) for each of the last two years and (ii) the most recent
determination letter from the Internal Revenue Service (if applicable) for
such Parent Holdings Plan.
(c) Except as set forth in Section 4.11(c) of the Parent Holdings
Disclosure Schedule, (i) each of the Parent Holdings Plans has been operated
and administered in all material respects in accordance with its terms and
applicable law, including but not limited to ERISA and the Code, (ii) each of
the Parent Holdings Plans intended to be "qualified" within the meaning of
Section 401(a) of the Code either (1) has received a favorable determination
letter from the IRS, or (2) is or will be the subject of an application for a
favorable determination letter, and Parent Holdings is not aware of any
circumstances likely to result in the revocation or denial of any such
favorable determination letter, (iii) with respect to each Parent Holdings Plan
which is sub-
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ject to Title IV of ERISA, the present value of accrued benefits under such
Parent Holdings Plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such Parent Holdings
Plan's actuary with respect to such Parent Holdings Plan, did not, as of its
latest valuation date, exceed the then current value of the assets of such
Parent Holdings Plan allocable to such accrued benefits, (iv) no Parent
Holdings Plan provides welfare benefits, including without limitation death or
medical benefits (whether or not insured), with respect to current or former
employees of Parent Holdings or its Subsidiaries beyond their retirement or
other termination of service, other than (w) coverage mandated by applicable
law or (x) benefits the full cost of which is borne by the current or former
employee (or his beneficiary), (v) no liability under Title IV of ERISA has
been incurred (directly or indirectly) by Parent Holdings, its Subsidiaries or
any Parent Holdings ERISA Affiliate that has not been satisfied in full, and
no condition exists that presents a risk to Parent Holdings, its Subsidiaries
or a Parent Holdings ERISA Affiliate of incurring (directly or indirectly) a
material liability thereunder, (vi) no Parent Holdings Plan is a "multiemployer
pension plan," as such
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term is defined in Section 3(37) of ERISA, (vii) all contributions or other
amounts payable by Parent Holdings, its Subsidiaries or any ERISA Affiliate as
of the Effective Time with respect to each Parent Holdings Plan in respect of
current or prior plan years have been paid or accrued in accordance with GAAP
and Section 412 of the Code, (viii) neither Parent Holdings nor its
Subsidiaries has engaged in a transaction in connection with which Parent
Holdings or its Subsidiaries could reasonably be expected to be subject to
either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a
tax imposed pursuant to Section 4975 or 4976 of the Code, (ix) there are no
pending, or, to the best knowledge of Parent Holdings, threatened or
anticipated claims (other than routine claims for benefits) by, on behalf of or
against any of the Parent Holdings Plans or any trusts related thereto and (x)
the consummation of the transactions contemplated by this Agreement or the
Bank Merger Agreement, either alone or in conjunction with another event,
including a termination of employment, will not (A) entitle any current or
former employee or officer of Parent Holdings, any of its Subsidiaries or any
Parent Holdings ERISA Affiliate to severance pay, termination pay or any other
payment or benefit, except as expressly
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provided in this Agreement or (B) accelerate the time of payment or vesting or
increase in the amount or value of compensation or benefits due any such
employee or officer.
4.12. SEC Reports. Parent Holdings has previously made available to
Golden State (to the extent filed prior to the date hereof) a true and complete
copy of each (a) final registration statement, prospectus, report, schedule
and definitive proxy statement filed since December 31, 1995 by Parent Holdings
or any of its Subsidiaries with the SEC or the OTS pursuant to the Securities
Act or the Exchange Act (the "Parent Holdings Reports") and (b) communication
mailed by Parent Holdings or any of its Subsidiaries to its shareholders since
December 31, 1995, and no such registration statement, prospectus, report,
schedule, proxy statement or communication contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading, except that information
as of a later date shall be deemed to modify information as of an earlier date.
Parent Holdings and each of its Subsidiaries has timely filed all Parent
Holdings Reports
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and other documents required to be filed by it under the Securities Act and the
Exchange Act, and, as of their respective dates, all Parent Holdings Reports
complied with the published rules and regulations of the OTS and SEC, as
applicable, with respect thereto.
4.13. Parent Holdings Information. The information relating to Parent
Holdings and its Subsidiaries which is provided by Parent Holdings to Golden
State for inclusion in the Proxy Statement, or in any other document filed
with any other regulatory agency in connection herewith, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances in which they
are made, not misleading.
4.14. Compliance with Applicable Law. Parent Holdings and each of its
Subsidiaries holds, and has at all times held, all licenses, franchises,
permits and authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and have complied with and are not in
default in any respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental Entity relating to
Parent Holdings or any of its Subsidiaries, and neither Parent Holdings nor any
of its Subsidiaries knows
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of, or has received notice of violation of, any violations of any of the
above.
4.15. Ownership of Golden State Common Stock; Affiliates and
Associates. (a) Except for the Option Agreement, neither Parent Holdings nor
any of its affiliates or associates (as such terms are defined under the
Exchange Act) (i) beneficially owns, directly or indirectly, or (ii) is a
party to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of, in each case, any shares of capital
stock of Golden State (other than shares held in a fiduciary capacity or in
respect of a debt previously contracted).
(b) Neither Parent Holdings nor any of its Subsidiaries is an
"affiliate" (as such term is defined in DGCL ss. 203(c)(1)) or an "associate"
(as such term is defined in DGCL ss. 203(c)(2)) of Golden State or a "Related
Person" (as such term is defined in Article Seventh of Golden State's
Certificate of Incorporation).
4.16. Agreements with Regulatory Agencies. Except as set forth in
Section 4.16 of the Parent Holdings Disclosure Schedule, neither Parent
Holdings nor any of its Subsidiaries is subject to any cease-and-desist or
other order issued by, or is a party to any written
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agreement, consent agreement or memorandum of understanding with, or is a
party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary supervisory
letter from, or has adopted any board resolutions at the request of (each,
whether or not set forth in Section 4.16 of the Parent Holdings Disclosure
Schedule, a "Parent Holdings Regulatory Agreement"), any Regulatory Agency or
other Governmental Entity that restricts the conduct of its business or that in
any manner relates to its capital adequacy, its credit policies, its management
or its business, nor has Parent Holdings or any of its Subsidiaries been
advised by any Regulatory Agency or other Governmental Entity that it is
considering issuing or requesting any Parent Holdings Regulatory Agreement.
4.17. Approvals. As of the date of this Agreement, Parent Holdings
knows of no reason why all regulatory approvals required for the consummation
of the transactions contemplated hereby (including, without limitation, the
Mergers and the Subsidiary Merger) should not be obtained.
4.18. Reorganization. As of the date of this Agreement, Parent
Holdings has no reason to believe that
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any of the Mergers or the Subsidiary Merger will fail to qualify as a
reorganization under Section 368(a) of the Code.
4.19. Certain Contracts. (a) Except as set forth in Section 4.19(a) of
the Parent Holdings Disclosure Schedule and except for this Agreement, the
Stock Option Agreement, the Bank Merger Agreement and the Management Agreement,
neither Parent Holdings nor any of its Subsidiaries is a party to or bound by
any contract, arrangement, commitment or understanding (whether written or
oral) (i) with respect to the employment of any directors, officers, employees
or consultants, (ii) which, upon the consummation of the transactions
contemplated by this Agreement or the Bank Merger Agreement, will (either alone
or upon the occurrence of any additional acts or events) result in any payment
or benefits (whether of severance pay or otherwise) becoming due, or the
acceleration or vesting of any rights to any payment or benefits, from Golden
State, GFB, Parent Holdings, the Surviving Bank or any of their respective
Subsidiaries to any director, officer or employee thereof, (iii) which is a
material contract (as defined in Item 601(b)(10) of Regulation S-K of the SEC)
to be performed after the date of this Agreement that has not been filed or
incorporated
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by reference in the Parent Holdings Reports, (iv) which is a consulting
agreement (including data processing, software programming and licensing
contracts) not terminable on 60 days or less notice involving the payment of
more than $100,000 per annum, or (v) which materially restricts the conduct of
any line of business by Parent Holdings or any of its Subsidiaries. Each
contract, arrangement, commitment or understanding of the type described in
this Section 4.19(a), whether or not set forth in Section 4.19(a) of the Parent
Holdings Disclosure Schedule, is referred to herein as a "Parent Holdings
Contract". Parent Holdings has previously delivered or made available to Golden
State true and correct copies of each Parent Holdings Contract.
(b) Except as set forth in Section 4.19(b) of the Parent Holdings
Disclosure Schedule, (i) each Parent Holdings Contract is valid and binding and
in full force and effect, (ii) Parent Holdings and each of its Subsidiaries has
performed all obligations required to be performed by it to date under each
Parent Holdings Contract, (iii) no event or condition exists which constitutes
or, after notice or lapse of time or both, would constitute, a default on the
part of Parent Holdings or any of its Subsidiaries under any Parent Holdings
Con-
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tract, and (iv) no other party to any Parent Holdings Contract is, to the
knowledge of Parent Holdings, in default in any respect thereunder.
4.20. Environmental Matters. Except as set forth in Section 4.20 of
the Parent Holdings Disclosure Schedule:
(a) Each of Parent Holdings and its Subsidiaries, the Participation
Facilities and the Loan Properties (each as hereinafter defined) are, and have
been, in compliance with all Environmental Laws;
(b) There is no suit, claim, action or proceeding, pending or, to the
knowledge of Parent Holdings, threatened, before any Governmental Entity or
other forum in which Parent Holdings, any of its Subsidiaries, any
Participation Facility or any Loan Property, has been or, with respect to
threatened proceedings, may be, named as a defendant (x) for alleged
noncompliance (including by any predecessor), with any Environmental Laws, or
(y) relating to the release, threatened release or exposure to any Hazardous
Material whether or not occurring at or on a site owned, leased or operated by
Parent Holdings or any of its Subsidiaries, any Participation Facility or any
Loan Property;
(c) During the period of (x) Parent
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Holdings' or any of its Subsidiaries' ownership or operation of any of their
respective current or former properties, (y) Parent Holdings' or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(z) to the knowledge of Parent Holdings, Parent Holdings' or any of its
Subsidiaries' holding of a security interest in a Loan Property, there has been
no release of Hazardous Materials in, on, under or affecting any such property
that has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent Holdings; and
(d) The following definitions apply for purposes of this Section 4.20:
(x) "Loan Property" means any property in which Parent Holdings or any of its
Subsidiaries holds a security interest, and, where required by the context,
said term means the owner or operator of such property; and (y) "Participation
Facility" means any facility in which Parent Holdings or any of its
Subsidiaries participates in the management and, where required by the context,
said term means the owner or operator of such property.
4.21. Derivative Transactions. Except as set forth in Section 4.21 of
the Parent Holdings Disclosure Schedule, since December 31, 1997, neither
Parent Hold-
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ings nor any of its Subsidiaries has engaged in transactions in or
involving forwards, futures, options on futures, swaps or other derivative
instruments except (i) as agent on the order and for the account of others, or
(ii) as principal for purposes of hedging interest rate risk on U.S.
dollar-denominated securities and other financial instruments. None of the
counterparties to any contract or agreement with respect to any such instrument
is in default with respect to such contract or agreement and no such contract
or agreement, were it to be a Loan (as defined below) held by Parent Holdings
or any of its Subsidiaries, would be classified as "Other Loans Specially
Mentioned", "Special Mention", "Substandard", "Doubtful", "Loss", "Classified",
"Criticized", "Credit Risk Assets", "Concerned Loans" or words of similar
import. The financial position of Parent Holdings and its Subsidiaries on a
consolidated basis under or with respect to each such instrument has been
reflected in the books and records of Parent Holdings and such Subsidiaries in
accordance with GAAP consistently applied, and neither Parent Holdings nor any
of its Subsidiaries has any open exposure with respect to any such instrument
(or with respect to multiple instruments with respect to any single
counterparty) as of the date hereof.
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4.22. Loan Portfolio. (a) Section 4.22 of the Parent Holdings
Disclosure Schedule sets forth the aggregate principal amount of all written or
oral loan agreements, notes or borrowing arrangements (including, without
limitation, leases, credit enhancements, commitments, guarantees and
interest-bearing assets) (collectively, "Loans"), other than Loans the unpaid
principal balance of which does not exceed $1,000,000, under the terms of which
the obligor is, as of December 31, 1997, over 90 days delinquent in payment of
principal or interest or in default of any other provision and, except as
disclosed in Section 4.22, neither Parent Holdings nor any of its Subsidiaries
is a party to any Loan with any director, executive officer or five percent or
greater stockholder of Parent Holdings or any of its Subsidiaries, or to the
knowledge of Parent Holdings, any person, corporation or enterprise
controlling, controlled by or under common control with any of the foregoing.
Section 4.22 of the Parent Holdings Disclosure Schedule sets forth as of
December 31, 1997 (i) all of the Loans in original principal amount in excess
of $1,000,000 of Parent Holdings or any of its Subsidiaries that as of the date
of this Agreement are classified by Parent Holdings as "Special Mention",
"Substandard", "Doubtful", "Loss",
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or words of similar import, together with the principal amount of and accrued
and unpaid interest on each such Loan and the identity of the borrower
thereunder, (ii) by category of Loan (i.e., commercial, consumer, etc.), all of
the Loans of Parent Holdings and its Subsidiaries that as of the date of this
Agreement are classified as such, together with the aggregate principal amount
of such Loans by category and (iii) each asset of Parent Holdings that as of
the date of this Agreement is classified as "Other Real Estate Owned" and the
book value thereof.
(b) Each Loan in original principal amount in excess of $1,000,000 (i)
is evidenced by notes, agreements or other evidences of indebtedness which are
true, genuine and what they purport to be, (ii) to the extent secured, has been
secured by valid liens and security interests which have been perfected and
(iii) is the legal, valid and binding obligation of the obligor named therein,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
4.23. Material Interests of Certain Persons. Except as disclosed in
the Parent Holdings Reports filed
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prior to the date of this Agreement, no officer or director of Parent
Holdings, or any "associate" (as such term is defined in Rule 12b-2 under the
Exchange Act) of any such officer or director, has any material interest in any
material contract or property (real or personal), tangible or intangible, used
in or pertaining to the business of Parent Holdings.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.1. Covenants Relating to Conduct of Business. During the period
from the date of this Agreement and continuing until the Effective Time, except
as expressly contemplated or permitted by this Agreement, the Bank Merger
Agreement, the Management Agreement or the Option Agreement or with the prior
written consent of the other parties hereto, each of Golden State and Parent
Holdings shall, and shall cause its Subsidiaries to, carry on their respective
businesses in the ordinary course consistent with past practice. Without
limiting the generality of the foregoing, and except as set forth on Section
5.1 of the applicable Disclosure Schedule or as otherwise contemplated by this
Agreement, the Bank Merger Agreement, the Management Agreement or the Option
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Agreement or consented to in writing by the other parties hereto, neither
Golden State nor Parent Holdings shall, and neither of them shall permit any of
its Subsidiaries to:
(a) declare or pay any dividends on, or make other distributions in
respect of, any of its capital stock, other than (1) in the case of Golden
State, dividends payable on the outstanding shares of Series A Preferred Stock
in accordance with the provisions of the certificate of designations for such
preferred stock, (2) in the case of Parent Holdings and its Subsidiaries,
dividends payable on the outstanding shares of preferred stock in accordance
with the provisions of the applicable charter, certificate of incorporation or
certificate of designations for such preferred stock, (3) in the case of any
Subsidiary of Golden State or Parent Holdings, as applicable, the payment of
dividends to the extent necessary to enable its direct and indirect parent
companies to pay all preferred stock dividends and all principal and interest
payments on its outstanding debt obligations, to enable FNH to redeem its
outstanding shares of FNH Preferred Stock as permitted by Section
5.1(b)(ii)(D), to fund the cash settlement of Golden State Options (as defined
herein) contemplated by Section
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6.5 hereof, or to enable CFPCC to maintain its status as a REIT, and (4) any
payments made to holders of the CALGZs, CALGLs or LTWs in accordance with the
terms of such securities;
(b) (i) split, combine or reclassify any shares of its capital stock
or, other than the LTWs, issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, except upon the exercise or fulfillment of rights or options
issued or existing pursuant to employee benefit plans, programs or
arrangements, all to the extent outstanding and in existence on the date of
this Agreement and in accordance with their present terms, or (ii) repurchase,
redeem or otherwise acquire (except for the acquisition of shares in a
fiduciary capacity or in respect of a debt previously contracted) any shares of
its capital stock or the capital stock of any of its Subsidiaries, or any
securities convertible into or exercisable for any shares of its capital stock
or the capital stock of any of its Subsidiaries, or any CALGZs, CALHZs or
LTWs, except (A) in the case of Golden State, for repurchases by Golden State
of Golden State Common Stock made prior to the commencement of the 30
trading-day period contemplated by the defini-
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tion of "Average Daily Price" and in an amount not to exceed the aggregate
number of shares of Golden State Common Stock issued pursuant to the Redfed
Merger Agreement, (B) in addition to the repurchases contemplated by the
preceding clause (A), Golden State may use all proceeds obtained through the
exercise of outstanding Golden State Options, Five-Year Warrants and Seven Year
Warrants to repurchase shares of its Common Stock, (C) Golden State may redeem
its outstanding shares of Golden State Preferred Stock in accordance with the
terms of the Certificate of Designations relating thereto, and (D) FNH may
redeem its outstanding shares of FNH Series A Preferred Stock and FNH Series B
Preferred Stock;
(c) issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or any securities
convertible into or exercisable for, or any rights, warrants or options to
acquire, any such shares, or enter into any agreement with respect to any of
the foregoing, other than the issuance of the LTWs and the issuance of Golden
State Common Stock pursuant to (i) stock options or similar rights to acquire
Golden State Common Stock granted pursuant to the Golden State Option Plans and
outstanding prior to the date of this Agreement, in each case in
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accordance with their present terms, (ii) the CENFED Merger Agreement and the
Redfed Merger Agreement, (iii) the exercise of Five-Year Warrants or Seven-Year
Warrants outstanding prior to the date of this Agreement and in each case in
accordance with their present terms, (iv) the conversion of shares of Series A
Preferred Stock in accordance with their terms, and (v) the exercise of LTWs in
accordance with their terms;
(d) amend its Certificate of Incorporation, By-laws or other similar
governing documents;
(e) authorize or permit any of its officers, directors, employees or
agents to directly or indirectly solicit, initiate or encourage any inquiries
relating to, or the making of any proposal which constitutes, a "takeover
proposal" (as defined below), or recommend or endorse any takeover proposal, or
participate in any discussions or negotiations, or provide third parties with
any nonpublic information, relating to any such inquiry or proposal or
otherwise facilitate any effort or attempt to make or implement a takeover
proposal; provided, however, that a party hereto may communicate information
about any such takeover proposal to its stockholders if, in the judgment of
such party's Board of Directors, based upon the advice of outside counsel, such
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communication is required under applicable law. Golden State and Parent
Holdings shall immediately cease and cause to be terminated any existing
activities, discussions or negotiations previously conducted with any parties
other than the parties hereto and their representatives with respect to any of
the foregoing. Each party shall take all actions necessary or advisable to
inform the appropriate individuals or entities referred to in the first
sentence hereof of the obligations undertaken in this Section 5.1(e). Golden
State will notify Parent Holdings, and Parent Holdings will notify Golden
State, immediately if any such inquiries or takeover proposals are received by,
any such information is requested from, or any such negotiations or discussions
are sought to be initiated or continued with, such party, and such party will
promptly inform the other in writing of all of the relevant details with
respect to the foregoing. As used in this Agreement, "takeover proposal" shall
mean any tender or exchange offer, proposal for a merger, consolidation or
other business combination involving Golden State or Parent Holdings or any
Subsidiary thereof or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets of,
Golden State or Parent Holdings or any Subsid-
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iary thereof other than the transactions contemplated or permitted by this
Agreement, the Bank Merger Agreement and the Option Agreement;
(f) make any capital expenditures other than those which (i) are made
in the ordinary course of business or are necessary to maintain existing assets
in good repair and (ii) in any event are in an amount of no more than
$10,000,000 in the aggregate (excluding, in the case of Parent Holdings or any
Subsidiary, capital expenditures made in connection with the consummation of
the transactions contemplated hereby);
(g) enter into any new line of business;
(h) other than as contemplated by the CENFED Merger Agreement and the
Redfed Merger Agreement, acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business organization or
division thereof or otherwise acquire any assets, which would be material,
individually or in the aggregate, to such party and its Subsidiaries, other
than in connection with foreclosures, settlements in lieu of foreclosure or
troubled loan or debt restructurings in the ordinary
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course of business consistent with past practice;
(i) take any action that is intended to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue in any material respect, or that is intended or may reasonably be
expected to result in any of the conditions to the Mergers set forth in Article
VII not being satisfied;
(j) change its methods of accounting in effect at September 30, 1997,
except as required by changes in GAAP or regulatory accounting principles as
concurred to by such party's independent auditors;
(k) (i) except as required by applicable law or as required to
maintain qualification pursuant to the Code, adopt, amend, renew or terminate
any employee benefit plan or any agreement, arrangement, plan or policy between
such party and one or more of its current or former directors, officers or
employees or (ii) except for normal increases in the ordinary course of
business consistent with past practice or except as required by applicable law,
increase in any manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any Plan or agreement as
in effect as of the date hereof (including, without limitation, the granting of
stock options, stock appreci-
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ation rights, restricted stock, restricted stock units or performance units or
shares);
(l) other than activities in the ordinary course of business
consistent with past practice, sell, lease, encumber, assign or otherwise
dispose of, or agree to sell, lease, encumber, assign or otherwise dispose of,
any of its material assets, properties or other rights or agreements;
(m) other than (i) as a result of the CENFED Merger or the Redfed
Merger or as required to fund the cash settlement of Golden State Options
contemplated by Section 6.5 hereof or (ii) in the ordinary course of business
consistent with past practice, incur any indebtedness for borrowed money or
assume, guarantee, endorse or otherwise as an accommodation become responsible
for the obligations of any other individual, corporation or other entity;
(n) other than in connection with the CENFED Merger and the Redfed
Merger, file any application to relocate or terminate the operations of any
banking office;
(o) create, renew, amend or terminate or give notice of a proposed
renewal, amendment or termination of, any material contract, agreement or
lease for
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goods, services or office space to which such party or any of its
Subsidiaries is a party or by which such party or any of its Subsidiaries or
their respective properties is bound, other than the renewal in the ordinary
course of business of any lease or contract the term of which expires prior to
the Closing Date;
(p) other than in prior consultation with the other parties hereto,
restructure or materially change its investment securities portfolio or its gap
position, through purchases, sales or otherwise, or the manner in which the
portfolio is classified or reported;
(q) take or cause to be taken any action which would disqualify the
Mergers or the Bank Merger as tax free reorganizations under Section 368(a) of
the Code;
(r) reduce, or authorize the reduction of, the exercise, conversion or
"strike" price of any of any warrants, options or other rights to acquire any
of its securities; or
(s) agree to do any of the foregoing.
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. Regulatory Matters. (a) Golden State shall promptly prepare and
file with the SEC the Proxy Statement and shall thereafter mail the Proxy
Statement to its stockholders. Golden State shall also use its reasonable best
efforts to obtain all necessary state securities law or "Blue Sky" permits and
approvals required to carry out the transactions contemplated by this
Agreement and the Bank Merger Agreement, and Parent Holdings shall furnish all
information concerning Parent Holdings as may be reasonably requested in
connection with any such action.
(b) The parties hereto shall cooperate with each other and use their
reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including without limitation the Mergers and the Subsidiary Merger).
Each of Parent Holdings and Golden State shall have the right to review in
advance,
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and to the extent practicable each will consult the other on, in each
case subject to applicable laws relating to the exchange of information, all
the information relating to Parent Holdings or Golden State, as the case may
be, and any of their respective Subsidiaries, which appears in any filing made
with, or written materials submitted to, any third party or any Governmental
Entity in connection with the transactions contemplated by this Agreement,
provided, however, that nothing contained herein shall be deemed to provide
either party with a right to review any information (other than pro forma
financial information or financial projections) provided to any Governmental
Entity on a confidential basis in connection with the transactions contemplated
hereby. In exercising the foregoing right, each of the parties hereto shall act
reasonably and as promptly as practicable. The parties hereto agree that they
will consult with each other with respect to the obtaining of all permits,
consents, approvals and authorizations of all third parties and Governmental
Entities necessary or advisable to consummate the transactions contemplated by
this Agreement and each party will keep the other appraised of the status of
matters relating to completion of the transactions contemplated herein.
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(c) Each of Parent Holdings and Golden State shall, upon request,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may be
reasonably necessary or advisable in connection with the Proxy Statement or any
other statement, filing, notice or application made by or on behalf of Parent
Holdings, Golden State or any of their respective Subsidiaries to any
Governmental Entity in connection with the Mergers and the other transactions
contemplated by this Agreement.
(d) Each of Parent Holdings and Golden State shall promptly furnish
the other with copies of written communications received by it or any of its
Subsidiaries, Affiliates or Associates (as such terms are defined in Rule 12b-2
under the Exchange Act as in effect on the date of this Agreement) from, or
delivered by any of the foregoing to, any Governmental Entity in respect of the
transactions contemplated hereby.
6.2. Access to Information. (a) Upon reasonable notice and subject to
applicable laws relating to the exchange of information, each of Parent
Holdings and Golden State shall, and shall cause its Subsidiaries to, afford to
the officers, employees, accountants, counsel
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and other representatives of the other party, access, during normal business
hours during the period prior to the Effective Time, to all its properties,
books, contracts, commitments, records, officers, employees, ac countants,
counsel and other representatives and, during such period, it shall, and shall
cause its Subsidiaries to, make available to the other party all information
concerning its business, properties and personnel as the other party may
reasonably request. Neither Parent Holdings nor Golden State nor any of their
respective Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of such party's customers, jeopardize any attorney-client privilege or
contravene any law, rule, regulation, order, judgment, decree, fiduciary duty
or binding agreement entered into prior to the date of this Agreement. The
parties hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
(b) All information furnished by any party hereto or its Subsidiaries
(the "Delivering Party") to any other party hereto or its Subsidiaries (the
"Receiving Party") or their representatives pursuant hereto
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shall be treated as the sole property of the Delivering Party and, if the
Mergers shall not occur, the Receiving Party and its representatives shall
return to the Delivering Party all of such written information and all
documents, notes, summaries or other materials containing, reflecting or
referring to, or derived from, such information. The Receiving Party shall, and
shall use its reasonable best efforts to cause its representatives to, keep
confidential all such information, and shall not directly or indirectly use
such information for any competitive or other commercial purpose. The
obligation to keep such information confidential shall continue for five years
from the date the proposed Merger is abandoned and shall not apply to (i) any
information which (x) was already in the Receiving Party's possession prior to
the disclosure thereof by the Delivering Party; (y) was then generally known to
the public; or (z) was disclosed to the Receiving Party by a third party not
bound by an obligation of confidentiality or (ii) disclosures made as required
by law. It is further agreed that, if in the absence of a protective order
(which the Receiving Party shall use reasonable best efforts to obtain) or the
receipt of a waiver hereunder the Receiving party is nonetheless, in the
opinion of its counsel, compelled to
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disclose information concerning the Delivering Party to any tribunal or
governmental body or agency or else stand liable for contempt or suffer other
censure or penalty, the Receiving Party may disclose such information to such
tribunal or governmental body or agency without liability hereunder.
(c) No investigation by either of the parties or their respective
representatives shall affect the representations, warranties, covenants or
agreements of the other party set forth herein.
6.3. Stockholder Meeting. Golden State shall take all steps necessary
to duly call, give notice of, convene and hold a meeting of its stockholders to
be held as soon as is reasonably practicable after the date of this Agreement
for the purpose of voting upon the approval and adoption of this Agreement and
the Parent Plan of Merger. Golden State shall, through its Board of Directors,
recommend to its stockholders approval of this Agreement and the Parent Plan of
Merger and such other matters as may be submitted to its stockholders in
connection with this Agreement.
6.4. Legal Conditions to Merger. Each of Parent Holdings and Golden
State shall, and shall cause its Subsidiaries to, use its reasonable best
efforts (a)
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to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements which may be imposed on such party
or its Subsidiaries with respect to the Mergers or the SubsidIary Merger and,
subject to the conditions set forth in Article VII hereof, to consummate the
transactions contemplated by this Agreement and (b) to obtain (and to
cooperate with the other party to obtain) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity and any other third
party which is required to be obtained by Parent Holdings or Golden State or
any of their respective Subsidiaries in connection with the Mergers and the
Subsidiary Merger and the other transactions contemplated by this Agreement,
and to comply with the terms and conditions of such consent, authorization,
order or approval.
6.5. Cash-out of Stock Options. Each holder of an option to purchase
Golden State Common Stock (a "Golden State Option") granted under Golden
State's Stock Option and Long-Term Performance Incentive Plan or under existing
stock option plans of CENFED or Redfed which are assumed by Golden State in
connection with the CENFED Merger and the Glenfed Merger, respectively
(collectively, the "Golden State Option Plans") which is out-
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standing and unexercised on the day immediately prior to the Closing Date may
elect, by giving written notice to Golden State on or prior to the second
business day prior to the Closing Date, to surrender such Golden State Option
in exchange for a lump sum cash payment in an amount equal to the sum of (x)(i)
the Average Daily Price less the per share exercise price of such Golden State
Option, multiplied by (ii) the number of shares of Golden State Common Stock
covered by such Golden State Option, plus (y) at the election of the holder
thereof, either (i) one LTW in respect of each share of Golden State Common
Stock underlying such Golden State Option, or (ii) the product of the number of
shares of Golden State Common Stock underlying such Golden State Option and the
Average Daily LTW Price, whereupon such Golden State Option shall terminate and
be of no further force and effect. All such cash payments shall be paid by
Golden State on the day immediately prior to the Closing Date.
6.6. Employee Benefit Plans; Existing Agreements. (a) As soon as
practicable following the Effec tive Time, the employees of GFB (the "GFB
Employees") shall be entitled to participate in the employee benefit plans of
CFB in which similarly situated employees of CFB participate, to the same
extent as similarly-situated
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employees of CFB (it being understood that inclusion of GFB Employees in CFB's
employee benefit plans may occur at different times with respect to different
plans).
(b) With respect to each CFB Plan that is an "employee benefit plan,"
as defined in Section 3(3)of ERISA, for purposes of determining eligibility to
participate, vesting, and entitlement to benefits, including for severance
benefits and vacation entitlement (but not for accrual of pension benefits),
service with GFB shall be treated as service with CFB; provided however, that
such service shall not be recognized to the extent that such recognition would
result in a duplication of bene fits. Such service also shall apply for
purposes of satisfying any waiting periods, evidence of insurability
requirements, or the application of any preexisting condition limitations. GFB
Employees shall be given credit for amounts paid under a corresponding benefit
plan during the same period for purposes of applying deductibles, copayments
and out-of-pocket maximums as though such amounts had been paid in accordance
with the terms and conditions of the CFB Plan.
(c) Following the Effective Time, the Surviving Corporation shall
honor and shall cause CFB to honor in accordance with their terms all
employment,
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severance and other compensation agreements and arrangements
existing on or prior to the execution of this Agreement which are between
Golden State or GFB and any director, officer or employee thereof and which
have been disclosed in the Golden State Disclosure Schedule and previously have
been delivered to Parent Holdings (provided that nothing in this Section
6.6(c) shall be deemed to adversely affect the rights of any party to or
beneficiary of any such employment, severance and compensation agreements and
arrangements under the same, whether or not disclosed in the Golden State
Disclosure Schedule or previously delivered to Parent Holdings).
Notwithstanding anything to the contrary contained in this Agreement, Parent
Holdings or the Surviving Corporation, as the case may be, shall take and
shall cause CFB to take all actions necessary to effect the items set forth in
Section 6.6 of the Golden State Disclosure Schedule, and Section 6.6 of the
Golden State Disclosure Schedule shall be deemed incorporated into this
Section 6.6(c).
6.7. Indemnification. (a) In the event of any threatened or actual
claim, action, suit, proceeding or investigation, whether civil, criminal or
administrative, including, without limitation, any such claim, action, suit,
proceeding or investigation in which any
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person who is now, or has been at any time prior to the date of this Agreement,
or who becomes prior to the Effective Time, a director or officer or employee
of Golden State or any of its Subsidiaries (the "Indemnified Parties") is, or
is threatened to be, made a party based in whole or in part on, or arising in
whole or in part out of, or pertaining to (i) the fact that he is or was a
director, officer or employee of Golden State, any of the Subsidiaries of
Golden State or any of their respective predecessors or (ii) this Agreement or
any of the transactions contemplated hereby, whether in any case asserted or
arising before or after the Effective Time, the par ties hereto agree to
cooperate and use their best efforts to defend against and respond thereto. It
is understood and agreed that after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless, as and to the extent permitted
by Delaware law, each such Indemnified Party against any losses, claims,
damages, liabili ties, costs, expenses (including reasonable attorney's fees
and expenses in advance of the final disposition of any claim, suit, proceeding
or investigation to each Indemnified Party to the fullest extent permitted by
law upon receipt of any undertaking required by applicable law), judgments,
fines and amounts paid in settlement in
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connection with any such threatened or actual claim, action, suit, proceeding
or investigation, and in the event of any such threatened or actual claim,
action, suit, proceeding or investigation (whether asserted or arising before
or after the Effective Time), the Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with the Surviving
Corporation; provided, however, that (1) the Surviving Corporation shall have
the right to assume the defense thereof and upon such assumption the Surviving
Corporation shall not be liable to any Indemnified Party for any legal expenses
of other counsel or any other expenses subsequently incurred by any
Indemnified Party in connection with the defense thereof, except that if the
Surviving Corporation elects not to assume such defense or counsel for the
Indemnified Parties reasonably advises that there are issues which raise
conflicts of interest between the Surviving Corporation and the Indemnified
Parties, the Indemnified Parties may retain counsel reasonably satisfactory to
them after consultation with the Surviving Corporation, and the Surviving
Corporation shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties, (2) the Surviving Corporation shall in all cases be
obligated pursuant to this paragraph to
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pay for only one firm of counsel for all Indemnified Parties (except that if
counsel for the Indemnified Parties reasonably advises that there are issues
that raise conflicts of interest among the Indemnified Parties, the
Indemnified Parties may retain separate counsel paid for by the Surviving
Corporation to the extent reasonably necessary to remove such conflicts), (3)
the Surviving Corporation shall not be liable for any settle ment effected
without its prior written consent (which consent shall not be unreasonably
withheld) and (4) the Surviving Corporation shall have no obligation hereunder
to any Indemnified Party when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law. Any Indemnified Party
wishing to claim Indemnification under this Section 6.7, upon learning of any
such claim, action, suit, proceeding or investigation, shall notify promptly
the Surviving Corporation thereof, provided that the failure to so notify shall
not affect the obligations of the Surviving Corporation under this Section 6.7
except to the extent such failure to notify prejudices the Surviving
Corporation. The Surviving Corporation's
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obligations under this Section 6.7 shall continue in full force and effect for
a period of six (6) years from the Effective Time; provided, however, that all
rights to indemnification in respect of any claim (a "Claim") asserted or made
within such period shall continue until the final disposition of such Claim.
(b) Parent Holdings shall use its reasonable best efforts to cause
the persons serving as officers and directors of Golden State immediately
prior to the Effective Time to be covered for a period of six (6) years from
the Effective Time by annual policies of directors' and officers' liability
insurance of at least the same coverage and amounts and containing terms and
conditions which are not less advantageous to such direc tors and officers of
Golden State than the terms and conditions of the existing policy of Golden
State with respect to acts or omissions occurring prior to the Effective Time
which were committed by such officers and directors in their capacity as such;
provided that Parent Holdings shall not be required as to any such policy to
pay premiums in excess of 300% of the amount currently expended annually be
Golden State to obtain such insurance, and if such insurance cannot be
obtained for such premium Parent Holdings shall obtain for such persons
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the maximum coverage that may be obtained for such premiums.
(c) In the event the Surviving Corporation or any of its successors
or assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of the
Surviving Corporation assume the obligations set forth in this section.
(d) The provisions of this Section 6.7 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
6.8. Additional Agreements. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement or the Bank Merger Agreement or to vest the Surviving
Corporation or the Surviving Bank with full title to all properties, assets,
rights, approvals, immunities and franchises of any of the parties to the
Mergers or the Subsidiary Merger, the proper officers and directors of each
party to this Agreement and their
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respective Subsidiaries shall take all such necessary action as may be
reasonably requested by the Surviving Corporation.
6.9. Advice of Changes. Each of Parent Holdings and Golden State
shall promptly advise the other party of any change or event having a Material
Adverse Effect on it or which it believes would or would be reasonably likely
to cause or constitute a material breach of any of its representations,
warranties or covenants contained herein.
6.10. Execution and Authorization of Bank Merger Agreement. As soon as
reasonably practicable after the date of this Agreement, (a) FNH shall (i)
cause the Board of Directors of CFB to approve the Bank Merger Agreement, (ii)
cause CFB to execute and deliver the Bank Merger Agreement, and (iii) approve
the Bank Merger Agreement as the sole stockholder of CFB, and (b) GFC shall (i)
cause the Board of Directors of GFB to approve the Bank Merger Agreement, (ii)
cause GFB to execute and deliver the Bank Merger Agreement, and (iii) approve
the Bank Merger Agreement as the sole stockholder of GFB. The Bank Merger
Agreement shall contain terms that are normal and customary in light of the
transactions contemplated hereby and such additional terms as are necessary
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to carry out the purposes of this Agreement.
6.11. Board of Directors. Golden State shall use its best efforts to
obtain on or prior to the Closing Date the signed resignations of all of the
directors of Golden State and each of its Subsidiaries other than five
directors (the "GSB Directors") who shall remain on the Board of Directors of
Golden State following the Effective Time. The five GSB Directors remaining on
the Board of Directors of Golden State following the Effective Time shall be
apportioned among the three classes of Golden State directors such that at
least one but no more than two of such five directors shall serve in each of
the three classes of director following the Effective Time. Effective as of the
Closing Date, Golden State shall cause its Board of Directors to be expanded to
fifteen members and to appoint ten persons designated by the Board of Directors
of Parent Holdings to fill the vacancies on Golden State's Board of Directors
resulting from the aforementioned resignations and such increase as of the
Effective Time. From and after the Effective Time until the earlier of a Change
in Control (as defined in the Management Agreement) or the resolution of all
matters relating to the Glendale Litigation and the LTWs, the Surviving
Corporation shall continue to elect each
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GSB Director to the Board of Directorsof the Surviving Bank and to include each
GSB Director or his successor as designated by such GSB Directors on the list
of nominees for director presented by the Board of Directors of the Surviving
Corporation at any annual meeting of stockholders of the Surviving Corporation
at which such GSB Director's term shall expire, and, subject to the Management
Agreement, the Surviving Corporation shall cause each GSB Director while such
GSB Director is serving on the Board of Directors of the Surviving Corporation
or the Surviving Bank to be appointed as a member of the Glendale Committee
(as defined in the Management Agreement) and shall maintain such Glendale
Committee as contemplated by the Management Agreement. The provisions of the
immediately preceding sentence shall be enforceable by each such GSB Director
and any such successor.
6.12. Registration Rights Agreement. On or prior to the Closing Date,
Golden State shall enter into the Registration Rights Agreement.
6.13. Distribution and Listing of LTWs; Amendment of Certificate of
Incorporation. Golden State shall take all actions necessary, and shall use its
reasonable best efforts, to cause the issuance and distribution of the LTWs to
the stockholders of Golden State as soon as
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practicable following the date hereof and shall use its best efforts to cause
the LTWs to be listed on the NYSE or Nasdaq. The terms of the LTWs shall be
substantially as set forth on Annex E to this Agreement. Golden State shall use
its reasonable best efforts to effect an amendment to its Certificate of
Incorporation to increase the total number of shares of Golden State Common
Stock authorized thereunder to 250,000,000. From and after the Effective Time,
the Surviving Corporation shall honor the LTWs in accordance with their terms.
6.14. Tax Sharing Agreement. (a) For any taxable period ending after
the Effective Time, (i) Golden State shall, at the Effective Time, replace
Mafco Holdings Inc. under the tax sharing agreement entered into on January
1st, 1994, between Mafco Holdings Inc., FNH, and First Madison Bank, FSB, the
predecessor of CFB (the "Tax Sharing Agreement") and will assume all of the
rights and obligations of Mafco Holdings Inc. under the Tax Sharing Agreement
with respect to such taxable periods; (ii) Merger Sub shall, at the Effective
Time, replace FNH under the Tax Sharing Agreement and will assume all of the
rights and obligations of FNH under the Tax Sharing Agreement with respect to
such taxable periods; and (iii) CFB shall continue to be bound by the Tax
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Sharing Agreement.
(b) For any taxable period ending on or before the Effective Time (i)
Merger Sub shall be at the Effective Time the successor to FNH pursuant to the
Tax Sharing Agreement, and will assume all of the rights and obligations of FNH
under the Tax Sharing Agreement; and (ii) CFB and MAFCO Holdings, Inc. shall
continue to be bound by the Tax Sharing Agreement.
6.15. Transfer and Similar Taxes. Each party to this Agreement, shall
promptly pay all sales, use, privilege, transfer, documentary, gains, stamp,
duties, recording and similar Taxes and fees (including any penalties, interest
or additions) imposed upon such party incurred in connection with the
transactions contemplated by this Agreement (collectively, the "Transfer
Taxes"), and each such party shall, at its own expense, procure any stock
transfer stamps required by, and accurately file all necessary Tax Returns and
other documentation with respect to, any Transfer Tax.
6.16. Purchases of Golden State Securities. Parent Holdings shall not,
and shall cause its Subsidiaries not to, purchase or otherwise acquire,
directly or indirectly (other than in a fiduciary capacity or in respect of a
debt previously contracted or as contem-
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plated by the Option Agreement), any shares of capital stock of Golden State
(x) during the period beginning fourteen days prior to the 30 trading-day
period contemplated by the definition of "Average Daily Price" in Section 1.3
of this Agreement and ending on the Closing Date, or (y) at any time prior to
the Closing Date, if the purchase price paid in such transaction would be more
than $30.00 per share.
6.17. Stock Exchange Listing. Golden State shall use its reasonable
best efforts to cause the shares of Golden State Common Stock to be issued
pursuant to this Agreement to be approved for listing on the NYSE, subject to
official notice of issuance.
6.18. Certain Agreements of FGH, Parent Holdings and Ford. (a) FGH
represents and warrants that FGH is the record or beneficial owner of 100% of
the outstanding shares of Parent Holdings Common Stock (the "Parent Shares")
and that FGH is the lawful owner of all such shares, free and clear of all
liens, charges, encumbrances, voting agreements (other than as set forth
below) and commitments of every kind. Parent Holdings and Ford represent and
warrant that Parent Holdings and Ford are the lawful record or beneficial
owners of 800 shares of FNH Class A Common Stock and 200 shares of FNH
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Class B Common Stock (collectively, the "FNH Shares"), respectively, free and
clear of all liens, charges, encumbrances, voting agreements and commitments of
every kind.
(b) FGH agrees that, prior to the Effective Time, FGH will not, and
will use its reasonable best efforts to cause any affiliate thereof not to,
contract to sell, sell or otherwise transfer or dispose of any of the Parent
Shares, or the FNH Shares owned by Parent Holdings, and Ford agrees that, prior
to the Effective Time, Ford will not, and will use its reasonable best efforts
to cause any affiliate thereof not to, contract to sell, sell or otherwise
transfer or dispose of any of the FNH Shares owned by Ford, or in each case any
interest therein or securities convertible thereinto or any voting rights with
respect thereto, other than pursuant to the Mergers or with Golden State's
prior written consent.
(c) Each of FGH and Ford represents and warrants that it is not the
beneficial or record owner, directly or indirectly, of any shares of capital
stock of Golden State (other than those held by a subsidiary in a fiduciary
capacity or in respect of a debt previously contracted or, in the case of FGH,
pursuant to the Option
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Agreement). Each of Ford and FGH agrees that it shall not, and shall use its
reasonable best efforts to cause its affiliates (other than those affiliates
that are parties to this Agreement) not to, purchase or otherwise acquire,
directly or indirectly (other than in a fiduciary capacity or in respect of a
debt previously contracted or as contemplated by the Option Agreement), any
shares of Golden State Common Stock (i) during the period beginning fourteen
days prior to the 30 trading-day period contemplated by the definition of
"Average Daily Price" in Section 1.3 of this Agreement and ending on the
Closing Date, or (y) at any time prior to the Closing Date, if at a purchase
price in excess of $30.00 per share.
(d) FGH agrees that all of the Parent Shares beneficially owned
thereby, or over which FGH has voting power or control, directly or indirectly,
will be voted in favor of this Agreement and the Parent Plan of Merger and the
transactions contemplated thereby, and against any proposal by a party other
than Golden State for a business combination, merger, consolidation or similar
transaction.
6.19. Bank Charter Amendment. Prior to the Effective Time, Parent
Holdings shall use its commer-
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cially reasonable efforts to cause CFB to amend its federal stock charter for
the purposes of granting to the holders of preferred stock of CFB and to the
holders of the CALGZs and the CALGLs voting rights not to exceed in the
aggregate 10% of the voting power of all voting securities of CFB.
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to Each Party's Obligation To Effect the Mergers. The
respective obligation of each party hereto to effect the Mergers shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. This Agreement and the Parent Plan of Merger
shall have been approved and adopted by the requisite votes of the holders of
the outstanding capital stock of Golden State under applicable law and the
Certificate of Incorporation and By-laws of Golden State.
(b) Other Approvals. All regulatory approvals required to consummate
the transactions contemplated hereby (including the Mergers and the Subsidiary
Merger) shall have been obtained and shall remain in full
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force and effect and all statutory waiting periods in respect thereof shall
have expired (all such approvals and the expiration of all such waiting periods
being referred to herein as the "Requisite Regulatory Approvals").
(c) No Injunctions or Restraints; Illegality. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other legal
restraint or prohibition (an "Injunction") preventing the consummation of the
Mergers, the Subsidiary Merger or any of the other transactions contemplated by
this Agreement or the Bank Merger Agreement shall be in effect. No statute,
rule, regulation, order, injunction or decree shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits, restricts
or makes illegal consummation of the Mergers or the Subsidiary Merger.
(d) Amendment to Certificate of Incorporation. Golden State shall
have effected an amendment to its Certificate of Incorporation to increase the
total number of shares of Golden State Common Stock authorized thereunder to
250,000,000.
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7.2. Conditions to Obligations of Parent Holdings and FNH. The
obligation of Parent Holdings and FNH to effect the Mergers is also subject to
the satisfaction or waiver by Parent Holdings and FNH at or prior to the
Effective Time of the following conditions:
(a) Representations and Warranties. (i) Subject to Section 2.2, the
representations and warranties of Golden State set forth in this Agreement
(other than those set forth in Sections 3.2 and 3.17) shall be true and correct
as of the date of this Agreement and (except to the extent such representations
and warranties speak as of an earlier date) as of the Closing Date as though
made on and as of the Closing Date; and (ii) the representations and warranties
of Golden State set forth in Sections 3.2 and 3.17 of this Agreement shall be
true and correct in all material respects (without giving effect to Section 2.2
of this Agreement) as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date. Parent Holdings
shall have received a certificate signed on behalf of Golden State by the
Chief Executive Officer and the Chief Financial Officer of Golden State to the
foregoing effect.
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(b) Performance of Obligations of Golden State and Merger Sub. Golden
State and Merger Sub shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or prior
to the Closing Date, and Parent Holdings shall have received a certificate
signed on behalf of Golden State by the Chief Executive Officer and the Chief
Financial Officer of Golden State to such effect.
(c) No Pending Governmental Actions. No proceeding initiated by any
Governmental Entity seeking an Injunction shall be pending.
(d) Federal Tax Opinion. Parent Holdings shall have received an
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to Parent Holdings
("Parent Holdings's Counsel"), dated the Effective Date, in form and substance
reasonably satisfactory to Parent Holdings, substantially to the effect that,
on the basis of facts, representations and assumptions set forth in such
opinion which are consistent with the state of facts existing at the Effective
Time, the Mergers and Subsidiary Merger will be treated as reorganizations
within the meaning of Section 368(a) of the Code and that, accordingly, for
federal income tax purposes:
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(i) No gain or loss will be recognized by Golden State,
Merger Sub, Parent Holdings or FNH as a result of the Mergers;
(ii) No gain or loss will be recognized by CFB or GFB as a
result of the Subsidiary Merger (except to the extent CFB or GFB
may be required to recognize income due to the recapture of bad
debt reserves as a result of the Subsidiary Merger); and
(iii) No gain or loss will be recognized by the
shareholders of Parent Holdings or FNH solely as a result of the
receipt of Golden State Common Stock at the Effective Time in
exchange for Parent Holdings Common Stock or FNH Class B Common
Stock pursuant to the Mergers.
In rendering such opinion, Parent Holding's Counsel may require and rely upon
representations and covenants, including those contained in certificates of
officers of Parent Holdings, FNH, CFB, Golden State, Merger Sub, GFB and
others, including FGH and Ford, reasonably satisfactory in form and substance
to such counsel.
(e) Board of Directors. Golden State shall have received the director
resignations, and the Golden State Board of Directors shall have been expanded,
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in each case as contemplated by Section 6.11, and the vacancies resulting from
such resignations and expansion shall have been filled as contemplated by
Section 6.11.
(f) Registration Rights Agreement. Golden State shall have executed
the Registration Rights Agreement.
(g) Distribution of LTWs. Golden State shall have issued and
distributed to its stockholders the LTWs as contemplated by Section 6.13.
(h) Listing of Shares. The shares of Golden State Common Stock to be
issued upon consummation of the Mergers pursuant to Section 1.3 shall have been
authorized for listing on the NYSE, subject to official notice of issuance.
7.3. Conditions to Obligations of Golden State and Merger Sub. The
obligations of Golden State and Merger Sub to effect the Mergers are also
subject to the satisfaction or waiver by Golden State and Merger Sub at or
prior to the Effective Time of the following conditions:
(a) Representations and Warranties. (i) Subject to Section 2.2, the
representations and warranties of Parent Holdings, Ford and FGH set forth in
this Agreement (other than those representations of Parent
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Holdings, FGH and Ford set forth in Sections 4.2 and 6.18) shall be true and
correct as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date; and (ii) the representations
and warranties of Parent Holdings, Ford and FGH set forth in Sections 4.2 and
6.18 of this Agreement shall be true and correct in all material respects
(without giving effect to Section 2.2 of this Agreement) as of the date of this
Agreement and (except to the extent such representations and warranties speak
as of an earlier date) as of the Closing Date as though made on and as of the
Closing Date. Golden State shall have received a certificate signed on behalf
of Parent Holdings by the Executive Vice President and any Vice President of
Parent Holdings to the foregoing effect.
(b) Performance of Obligations of Parent Holdings and FNH. Parent
Holdings and FNH shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the
Closing Date, and Golden State shall have received a certificate signed on
behalf of Parent Holdings by the Executive Vice President and any Vice Presi-
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dent of Parent Holdings to such effect.
(c) No Pending Governmental Actions. No proceeding initiated by any
Governmental Entity seeking an Injunction shall be pending.
(d) Federal Tax Opinion. Golden State shall have received an opinion
of Wachtell, Lipton, Rosen & Katz ("Golden State's Counsel"), in form and
substance reasonably satisfactory to Golden State, dated the date of the
Effective Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing at the Effective Time, the Mergers and the
Subsidiary Merger will be treated as reorganizations within the meaning of
Section 368(a) of the Code and that accordingly for federal income tax
purposes:
(i) No gain or loss will be recognized by Golden
State, Merger Sub, Parent Holdings or FNH as a result of the Mergers;
(ii) No gain or loss will be recognized by CFB or
GFB as a result of the Subsidiary Merger (except to the extent CFB or
GFB may be required to recognize income due to the recapture of bad
debt reserves as a result of
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the Subsidiary Merger); and
(iii) No gain or loss will be recognized by the
shareholders of Parent Holdings or FNH solely as a result of the
receipt of Golden State Common Stock at the Effective Time in exchange
for Parent Holdings Common Stock or FNH Class B Common Stock pursuant
to the Mergers.
In rendering such opinion, Golden State's Counsel may require and rely upon
representations and covenants, including those contained in certificates of
officers of Parent Holdings, FNH, CFB, Merger Sub, GFB and others, including
FGH and Ford, reasonably satisfactory in form and substance to such counsel.
(e) Distribution of LTWs. Golden State shall have issued and
distributed to its stockholders the LTWs as contemplated by Section 6.13.
ARTICLE VIII
TERMINATION AND AMENDMENT
8.1. Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval of the matters
presented in connection with the Mergers by the stockholders of
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Golden State:
(a) by mutual consent of Golden State and Parent Holdings in a written
instrument, if the Board of Directors of each so determines by a vote of a
majority of the members of its entire Board;
(b) by either Golden State or Parent Holdings upon written notice to
the other party (i) 60 days after the date on which any request or application
for a Requisite Regulatory Approval shall have been denied or withdrawn at the
request or recommendation of the Governmental Entity which must grant such
Requisite Regulatory Approval, unless within the 60-day period following such
denial or withdrawal a petition for rehearing or an amended application has
been filed with the applicable Governmental Entity, provided, however, that no
party shall have the right to terminate this Agreement pursuant to this Section
8.1(b)(i) if such denial or request or recommendation for withdrawal shall be
due to the failure of the party seeking to terminate this Agreement to perform
or observe the covenants and agreements of such party set forth herein or (ii)
if any Governmental Entity of competent jurisdiction shall have issued a final
nonappealable order enjoining or otherwise prohibiting the Mergers or the
Subsidiary Merger;
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(c) by either Parent Holdings or Golden State if the Mergers shall not
have been consummated on or before December 31, 1998, unless the failure of the
Closing to occur by such date shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe the covenants and agreements
of such party set forth herein;
(d) by either Parent Holdings or Golden State (provided that if the
terminating party is Golden State, Golden State shall not be in material breach
of any of its obligations under Section 6.3) if any approval of the
stockholders of Golden State required for the consummation of the Mergers shall
not have been obtained by reason of the failure to obtain the required vote at
a duly held meeting of such stockholders or at any adjournment or postponement
thereof;
(e) by either Parent Holdings or Golden State (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have
been a material breach of any of the representations or warranties set forth in
this Agreement on the part of the other party, which breach is not cured within
thirty days following written notice to the party committing such
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breach, or which breach, by its nature, cannot be cured prior to the Closing;
provided, however, that neither party shall have the right to terminate this
Agreement pursuant to this Section 8.1(e) unless the breach of representation
or warranty, together with all other such breaches, would entitle the party
receiving such representation not to consummate the transactions contemplated
hereby under Section 7.2(a) (in the case of a breach of representation or
warranty by Golden State) or Section 7.3(a) (in the case of a breach of
representation or warranty by Parent Holdings); or
(f) by either Parent Holdings or Golden State (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have
been a material breach of any of the covenants or agreements set forth in this
Agreement on the part of the other party, which breach shall not have been
cured within thirty days following receipt by the breaching party of written
notice of such breach from the other party hereto, or which breach, by its
nature, cannot be cured prior to the Closing.
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8.2. Effect of Termination; Expenses. In the event of termination of
this Agreement by either Parent Holdings or Golden State as provided in Section
8.1, this Agreement shall forthwith become void and have no effect except (i)
Sections 6.2(b), 8.2 and 9.4 shall survive any termination of this Agreement,
(ii) that notwithstanding anything to the contrary contained in this Agreement,
no party shall be relieved or released from any liabilities or damages arising
out of its willful breach of any provision of this Agreement, and (iii) in the
event that both an Initial Triggering Event and a Subsequent Triggering Event
(each as defined in the Option Agreement) shall have occurred prior to the
occurrence of an Exercise Termination Event (as defined in the Option
Agreement), then, in addition to any rights which Parent Holdings may have
under the Option Agreement, Golden State shall pay to Parent Holdings a cash
termination fee of $50 million. Such fee shall be payable in immediately
available funds on or before the second business day following the occurrence
of the Subsequent Triggering Event. Subject to the foregoing, the fee payable
pursuant to this Section 8.2 shall be payable by Golden State regardless of
any prior or subsequent termination of this Agreement.
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8.3. Amendment. Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or authorized
by their respective Boards of Directors, at any time before or after approval
of the matters presented in connection with the Mergers by the stockholders of
Golden State. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
8.4. Extension; Waiver. At any time prior to the Effective Time, each
of the parties hereto, by action taken or authorized by its Board of Directors,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of any of the other parties hereto, (b)
waive any inaccuracies in the representations and warranties contained herein
or in any document delivered pursuant hereto and (c) waive compliance with any
of the agreements or conditions contained herein. Any agreement on the part of
a party hereto to any such extension or waiver shall be valid only if set forth
in a written instrument signed on behalf of such party, but such extension or
waiver or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate
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as a waiver of, or estoppel with respect to, any subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
9.1. Closing. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") will take place at 10:00 a.m. on the
first day which is (a) the last business day of a month and (b) at least two
business days after the satisfaction or waiver (subject to applicable law) of
the latest to occur of the conditions set forth in Article VII hereof (other
than those conditions which relate to actions to be taken at the Closing)(the
"Closing Date"), at the offices of CFB, unless another time, date or place is
agreed to in writing by the parties hereto. At the Closing, upon surrender by
FGH and Ford of the certificates representing the Parent Shares and FNH Shares
owned by them, Golden State shall issue, or cause to be issued, to each of FGH
and Ford, in the manner specified by them, certificates representing the shares
of Golden State Common Stock which they shall be entitled to receive pursuant
to Section 1.3 of this Agreement.
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9.2. Alternative Structure. Notwithstanding anything to the contrary
contained in this Agreement, prior to the Effective Time, Parent Holdings shall
be entitled to revise the structure of the Mergers and/or the Subsidiary Merger
and related transactions provided that each of the transactions comprising such
revised structure shall (i) fully qualify as, or fully be treated as part of,
one or more tax-free reorganizations within the meaning of Section 368(a) of
the Code, and not change the amount of consideration to be received by the
stockholders of Parent Holdings and FNH, (ii) be capable of consummation in as
timely a manner as the structure contemplated herein and (iii) not otherwise be
materially prejudicial to the interests of the stockholders of Golden State.
This Agreement and any related documents shall be appropriately amended in
order to reflect any such revised structure.
9.3. Nonsurvival of Representations, Warranties and Agreements. None
of the representations, warranties, covenants and agreements in this Agreement
or in any instrument delivered pursuant to this Agreement (other than pursuant
to the Option Agreement and the Management Agreement which shall terminate in
accordance with their respective terms) shall survive the Effective
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Time, except for those covenants and agreements contained herein and therein
which by their terms apply in whole or in part after the Effective Time.
9.4. Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such cost or expense, provided, however, that nothing
contained herein shall limit either party's rights to recover any liabilities
or damages arising out of the other party's willful breach of any provision of
this Agreement.
9.5. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation), mailed by registered or certified mail (return
receipt requested) or delivered by an express courier (with confirmation) to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent Holdings, FNH or FGH, to:
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
Attention: General Counsel
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with a copy to:
Skadden, Arps Slate, Meagher
& Flom LLP
919 Third Avenue
New York, New York 10022
Attn: Fred B. White, III, Esq.
(b) if to Golden State and Merger Sub, to:
Golden State Bancorp Inc.
414 North Central Avenue
Glendale, California 91203
Attention: Chief Executive Officer
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 W. 52nd Street
New York, New York 10019
Attn: Edward D. Herlihy, Esq.
(c) if to Ford, to:
Hunter's Glen/Ford, Ltd.
c/o Gerald J. Ford
California Federal Bank
200 Crescent Court, Suite 1350
Dallas, Texas 75201
9.6. Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be
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deemed to be followed by the words "without limitation". The phrases "the date
of this Agreement", "the date hereof" and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to February 4, 1998.
9.7. Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
9.8. Entire Agreement. This Agreement (including the documents and
the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, other than the
Parent Plan of Merger, the FNH Plan of Merger, the Bank Merger Agreement, the
Management Agreement and the Option Agreement.
9.9. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law.
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9.10. Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that the provisions contained in
Section 6.2(b) of this Agreement were not performed in accordance with its
specific terms or was otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches
of Section 6.2(b) of this Agreement and to enforce specifically the terms and
provisions thereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
9.11. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
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9.12. Publicity. Except as otherwise required by law or the rules of
the NYSE or Nasdaq, if applicable, so long as this Agreement is in effect,
neither Parent Holdings nor Golden State shall, or shall permit any of its
Subsidiaries to, issue or cause the publication of any press release or other
public announcement with respect to, or otherwise make any public statement
concerning, the transactions contemplated by this Agreement without the
consent of the other party, which consent shall not be unreasonably withheld.
Without limiting the foregoing, the parties shall cooperate in any investor or
analyst presentation or conferences in respect of the transactions contemplated
by this Agreement.
9.13. Assignment; No Third Party Beneficiaries. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors
and assigns. Except as otherwise expressly provided in this Agreement and in
the documents expressly incorporated herein, this Agreement (including the
documents
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and instruments referred to herein) is not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
GOLDEN STATE BANCORP INC.
By /s/ Stephen J. Trafton
----------------------------------------
Name: Stephen J. Trafton
Title: Chairman, President and
Chief Executive Officer
GOLDEN STATE FINANCIAL CORPORATION
By /s/ Stephen J. Trafton
----------------------------------------
Name: Stephen J. Trafton
Title: Chairman, President and
Chief Executive Officer
FIRST NATIONWIDE (PARENT)
HOLDINGS INC.
By /s/ Howard Gittis
----------------------------------------
Name: Howard Gittis
Title: Vice Chairman
FIRST NATIONWIDE HOLDINGS INC.
By /s/ Howard Gittis
----------------------------------------
Name: Howard Gittis
Title: Vice Chairman
FIRST GIBRALTAR HOLDINGS INC.
By /s/ Howard Gittis
----------------------------------------
Name: Howard Gittis
Title: Vice Chairman
HUNTER'S GLEN/FORD, LTD.
By /s/ Gerald J. Ford
----------------------------------------
Name: Gerald J. Ford
Title: General Partner
<PAGE>
Exhibit 2.2
AMENDMENT NO. 1
AMENDMENT NO. 1, dated as of July 13, 1998, by and among
First Nationwide (Parent) Holdings Inc., a Delaware corporation, First
Nationwide Holdings Inc., a Delaware corporation, Golden State Bancorp Inc., a
Delaware corporation, Golden State Financial Corporation, a Delaware
corporation, First Gibraltar Holdings Inc., a Delaware corporation, and
Hunter's Glen/Ford Ltd., Texas limited partnership (collectively, the
"Parties"), to the Agreement and Plan of Reorganization (the "Agreement"),
dated as of February 4, 1998, by and among the Parties. Capitalized terms which
are not otherwise defined herein shall have the meanings set forth in the
Agreement.
WHEREAS, in accordance with Section 8.3 of the Agreement, the
Parties desire to amend the Agreement as set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and
intending to be legally bound hereby, the Parties hereby agree as follows:
1. Section 1.6(c)(ii)(C) of the Agreement is hereby amended
by adding the following new language at the end of subsection (3) thereof after
the words "Effective Date" but before the period:
,plus
(4) if the closing of the sale of
assets and the assumption of liabilities contemplated by the Purchase
and Sale Agreement, dated as of March 29, 1998, by and between CFB and
Union Planters Bank of Florida(the "Florida Branch Sale"), occurs on
or before the Effective Date, then for the first Taxable Period
immediately following the Effective Date, any federal income tax
savings resulting from the Florida Branch Sale. For this purpose, the
amount of federal income tax savings resulting from the Florida Branch
Sale shall be an amount equal to (i) the product of the amount of the
gain recognized by CFB for federal income tax purposes as a result of
the Florida Branch Sale and the highest marginal federal income tax
rate applicable to corporations for the taxable year in which the
<PAGE>
Florida Branch Sale occurs, less (ii) the amount of any federal income
taxes actually paid as a result of such sale (including any payment in
lieu of federal income taxes under the Tax Sharing Agreement(as
defined in Section 6.14)) by CFB.
2. Section 1.6(c)(ii)(A) of the Agreement is hereby amended
by adding the following new sentence at the end of such section:
In the calculation of the Tax Benefits there shall be
excluded any deductions resulting from or arising in
connection with the refinancing of all of the long-term debt
of FNH and Parent Holdings and the purchasing of all of the
preferred stock of CFB, in each case outstanding as of the
date hereof, pursuant to the refinancing transactions
contemplated to be consummated immediately after the
consummation of the transactions contemplated by this
Agreement, or any transactions with substantially similar
purpose or effect.
3. Section 6.7(b) of the Agreement is hereby deleted in its
entirety and replaced with the following new Section 6.7(b):
Parent Holdings shall use its reasonable best efforts to
cause the persons serving as officers and directors of
Golden State immediately prior to the Effective Time to be
covered for a period of six (6) years from the Effective Time
(the "Coverage Period") by the directors' and officers'
liability insurance policy maintained by Golden State (except
that effective as of the Effective Time the single aggregate
coverage limit shall be increased to $100 million, and
provided that Parent Holdings may substitute for such
policy, as amended pursuant hereto, policies of directors'
and officers' liability insurance of at least the same
coverage and amounts and containing terms and conditions which
are not less advantageous to such directors and officers of
Golden State than the terms and conditions of such policy, as
amended pursuant hereto) with respect to acts and omissions
occurring prior to the Effective Time
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which were committed by such officers and directors in their
capacity as such; provided that Parent Holdings shall not be
required as to any such policy to pay premiums in excess of
300% of the amount currently expended annually by Golden
State to obtain such insurance, and if such insurance cannot
be obtained for such premium Parent Holdings shall obtain for
such persons the maximum coverage that may be obtained for
such premiums. It is the understanding of the parties hereto
that the obligations of Parent Holdings contemplated by the
preceding sentence are expected to be satisfied through the
purchase by Parent Holdings, by means of the payment of a
single premium prior to the Effective Time, of a directors'
and officers' liability insurance policy with a single
aggregate coverage limit of $100 million, and shall be so
satisfied for so long as such policy remains in effect during
the Coverage Period.
4. Section 6.14(a)(ii) and Section 6.14(b)(i) of the
Agreement are hereby amended by deleting the words "Merger Sub" and inserting
instead the words "New FNH".
5. All references to "this Agreement" in the Agreement shall
be deemed to refer to the Agreement as amended hereby.
6. Each of the Parties represents to the other that (i) it
has full corporate (or partnership) power and authority to execute and deliver
this Amendment and, subject to the terms and conditions set forth in the
Agreement, to consummate the transactions contemplated hereby, (ii) the
execution and delivery of this Amendment by such party have been duly and
validly approved by the Board of Directors of such party and no other corporate
proceedings on the part of such party are necessary in connection with the
execution and delivery of this Amendment by such party, and (iii) this
Amendment has been duly and validly executed and delivered by such party and
constitutes a valid and binding obligation of such party, enforceable against
such party in accordance with its terms.
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<PAGE>
7. Except as expressly amended by this Amendment, the
Agreement is hereby ratified and confirmed in all respects.
8. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
be considered one and the same agreement, and shall become effective when
counterparts have been signed by each of the Parties and delivered to the
other Parties, it being understood that all Parties need not sign the same
counterpart.
9. This Amendment shall be governed and construed in
accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law provisions.
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<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Amendment to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
GOLDEN STATE BANCORP INC.
By: /s/ Richard A. Fink
-------------------------------
Name: Richard A. Fink
Title: Vice Chairman
GOLDEN STATE FINANCIAL CORPORATION
By: /s/ Richard A. Fink
-------------------------------
Name: Richard A. Fink
Title: Vice President
FIRST NATIONWIDE (PARENT)
HOLDINGS INC.
By: /s/ Glenn P. Dickes
-------------------------------
Name: Glenn P. Dickes
Title: Vice President
FIRST NATIONWIDE HOLDINGS INC.
By: /s/ Glenn P. Dickes
-------------------------------
Name: Glenn P. Dickes
Title: Vice President
FIRST GIBRALTAR HOLDINGS INC.
By: /s/ Glenn P. Dickes
-------------------------------
Name: Glenn P. Dickes
Title: Vice President
HUNTER'S GLEN/FORD, LTD.
By: /s/ Gerald J. Ford
-------------------------------
Name: Gerald J. Ford
Title: General Partner
<PAGE>
Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of September 11, 1998, among
Golden State Bancorp Inc., a Delaware corporation (the "Company"), Hunter's
Glen/Ford, Ltd., a limited partnership organized under the laws of the State of
Texas ("Ford"), and First Gibraltar Holdings Inc., a Delaware corporation
("FGH" and, together with Ford, the "Stockholders").
WHEREAS, the Company, the Stockholders, First Nationwide (Parent)
Holdings Inc., a Delaware corporation, First Nationwide Holdings Inc., a
Delaware corporation, and Golden State Financial Corporation, a Delaware
corpora tion, have entered into an Agreement and Plan of Reorganization, dated
as of February 4, 1998, as amended (the "Merger Agreement"), pursuant to which,
among other things, the Company will issue to the Stockholders shares of its
common stock, par value $1.00 per share (the "Common Stock");
WHEREAS, the Board of Directors of the Company has authorized the
officers of the Company to execute and deliver this Agreement in the name and
on behalf of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties to this Agreement hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Holder" means any of Ford, FGH and any other person that owns
Registrable Securities, including their respective successors and assigns who
acquire Registrable Securities, directly or indirectly, from Ford, FGH or such
other person, respectively. For purposes of this Agreement, the Company may
deem and treat the registered holder of a Registrable Security as the Holder
and absolute owner thereof, and the Company shall not be affected by any notice
to the contrary.
<PAGE>
"Registrable Securities" means (a) any shares of Common Stock
issued in accordance with Section 1.3 of the Merger Agreement upon consummation
of the Mergers, (b) any shares of Common Stock issued as contingent
consideration in accordance with Section 1.6 of the Merger Agreement at any
time following consummation of the Mergers, (c) any shares of Common Stock
acquired by Ford or FGH in the open market at a time when such party is deemed
to be an "affiliate" (as such term is defined under Rule 144 under the
Securities Act) of the Company and (d) any securities issued or issuable in
respect of the Common Stock referred to in clauses (a), (b) and (c) above, by
way of stock dividend or stock split or in connec tion with a combination of
shares, recapitalization, reclassification, merger or consolidation, and any
other securities issued pursuant to any other pro rata distri bution with
respect to such Common Stock. For purposes of this Agreement, a Registrable
Security ceases to be a Registrable Security when (x) it has been effec tively
registered under the Securities Act and sold or distributed to the public in
accordance with an effective registration statement covering it (and has not
been reacquired in the manner described in clause (c) above), or (y) it is sold
or distributed to the public pursuant to Rule 144 (or any successor or similar
provision) under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
2. Demand Registration. (a) If at any time any Holder shall request
the Company in writing to register under the Securities Act all or a part of
the Registrable Securities held by such Holder (a "Demand Registration"), the
Company shall use all reasonable efforts to cause to be filed and declared
effective as soon as reasonably practicable (but in no event later than the
45th day after such Holder's request is made) a registration statement
providing for the sale of all such Registrable Securities by such Holder. The
Company agrees to use its reasonable efforts to keep any such registration
statement continuously effective and usable for resale of Registrable
Securities for so long as the Holder whose Registrable Securities are included
therein shall request. The Company shall be obligated to file registration
statements pursuant to this Section 2(a) until all Registrable Securities have
ceased to be Registrable Securities. Each registration statement filed pursuant
to this Section 2(a) is hereinafter referred to as a "Demand Registration
Statement." The Company may, if permitted by law, effect any registration
pursuant to this Section 2(a) by the filing of a registration statement on Form
S-3. However, if such
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registration involves an underwritten public offering and the managing
underwriter(s) at any time shall notify the Company in writing that, in the
sole judgment of such managing under writer(s), inclusion of some or all of the
information required in a more detailed form specified in such notice is of
material importance to the success of the public offering of such Registrable
Securities, the Company shall use all reasonable efforts to supplement or amend
the registration statement to include such information.
(b) The Company agrees (i) not to effect any public or private
sale, distribution or purchase of any of its securities which are the same as
or similar to the Registrable Securities, including a sale pursuant to
Regulation D under the Securities Act, during the 15-day period prior to, and
during the 45-day period beginning on, the closing date of each underwritten
offering under any Demand Registration Statement, and (ii) to use reasonable
efforts to cause each holder of its securities purchased from the Company, at
any time on or after the date of this Agreement (other than in a registered
public offering) to agree not to effect any public sale or distribution of any
such securities during such period, including a sale pursuant to Rule 144 under
the Securities Act.
(c) The Company may postpone for a reasonable period of time, not
to exceed 30 days, the filing or the effectiveness of any Demand Registration
Statement if (i) the Board of Directors of the Company in good faith determines
that (A) such registration would have a material adverse effect on any plan or
proposal by the Company with respect to any financing, acquisition,
recapitalization, reorganiza tion or other material transaction, or (B) the
Company is in possession of material non-public information that, if publicly
disclosed, would result in a material disrup tion of a major corporate
development or transaction then pending or in progress or in other material
adverse consequences to the Company, and (ii) the Company so notifies the
Holder(s) within five days after the Holder(s) requests such registration. The
Company's right to defer the filing of a registration statement pursuant to the
provisions of the preceding sentence may not be exercised more than once during
any 12 month period.
(d) If at any time any Holder of Registrable Securities to be
covered by a Demand Registration Statement desires to sell Registrable
Securities in an underwritten offering, such Holder shall have the right to
select any nationally recognized investment banking firm(s) to administer the
offering, subject to the ap proval of the Company, which approval shall not be
unreasonably withheld, and the Company shall enter into underwriting agreements
with the underwriter(s) of such
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offering, which agreements shall contain such representations and warranties by
the Company, and such other terms, conditions and indemnities as are at the
time customarily contained in underwriting agreements for similar offerings and
the Company shall take or cause to be taken all such other actions as are
reasonably requested by the managing underwriter(s) in order to expedite or
facilitate the regis tration and disposition of the Registrable Securities,
including, without limitation, causing management to participate in "road show"
presentations.
3. Incidental Registration. Subject to the terms and conditions set
forth in this Section 3, if the Company proposes at any time to register any
common equity securities (the "Initially Proposed Shares") under the Securities
Act for sale, whether or not for its own account, pursuant to an underwritten
offering, the Company will promptly give written notice to the Holders of its
intention to effect such registration (such notice to specify, among other
things, the proposed offering price, the kind and number of securities proposed
to be registered and the distribution arrangements, including identification of
the underwriter(s)), and the Holders shall be entitled to include in such
registration statement, as a part of such underwritten offering, such number of
shares (the "Holder Shares") to be sold for the account of the Holders (on the
same terms and conditions as the Initially Proposed Shares) as shall be
specified in a request in writing delivered to the Company within 15 days after
the date upon which the Company gave the aforementioned notice.
The Company's obligations to include Holder Shares in a
registration statement pursuant to this Section 3 is subject to each of the
following limitations, conditions and qualifications:
i) If, at any time after giving written notice of its
intention to effect a registration of any of its common equity
securities and prior to the effective date of any registration
statement filed in connection with such registration, the Company
shall determine for any reason not to register all of such shares,
the Company may, at its election, give written notice of such
determination to the Holders and thereupon it shall be relieved of
its obliga tion to use any efforts to register any Holder Shares in
connection with such aborted registration (but not from its
obligation to pay the Registration Expenses (as defined herein) in
connection therewith).
ii) If the managing underwriter(s) of such offering
shall notify in writing the Company and each Holder who shall have
requested the inclu sion of Registrable Securities in such
underwritten offering that, in the
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<PAGE>
good faith judgment of such managing underwriter(s), the
distribution of all or a specified portion of the Holder Shares
would materially interfere with the registration and sale, in
accordance with the intended method thereof, of the Initially
Proposed Shares, then the number of Holder Shares to be included in
such registration statement shall be reduced to such number, if
any, that, in the good faith judgment of such managing
underwriter(s), can be included without such interference. If, as a
result of the cutback provisions of the preceding sentence, the
Holders are not entitled to include all of the Holder Shares in
such registration, such Holders may elect to withdraw their request
to include Holder Shares in such registration.
If the Company shall so request in writing, each Holder agrees not
to effect any public or private sale or distribution of any Registrable
Securities (other than the Holder Shares) during the 15-day period prior to and
during the 45-day period beginning on, the closing date of any underwritten
public offering of shares of Common Stock made for the Company's own account.
4. Registration Procedures. (a) Whenever the Company is required to
use all reasonable efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to the terms and conditions of
Section 2(a) or 3 (such Registrable Securities being hereinafter referred to as
"Subject Shares"), the Company will use all reasonable efforts to effect the
registration and sale of the Subject Shares in accordance with the intended
method of disposition thereof. Without limiting the generality of the
foregoing, the Company will as soon as practicable:
i) furnish to each Holder of Subject Shares (a
"Participating Holder") and to each managing underwriter, if any, a
reasonable time in ad vance of their filing with the SEC, any
registration statement, amendment or supplement thereto, and any
prospectus used in connection therewith, and each Participating
Holder shall have the opportunity to object to any informa tion
pertaining to such Participating Holder and its plan of
distribution that is contained therein and the Company will make
the corrections reasonably re quested by such Participating Holder
with respect to such information prior to filing any such
registration statement or any amendment or supplement thereto; and
furnish a copy of any and all transmittal letters or other corre
spondence with the SEC or any other governmental agency or
self-regulatory body or other body having jurisdiction (including
any domestic or foreign securities exchange) relating to such
offering of Registrable Securities;
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ii) prepare and file with the SEC a registration
statement with respect to the Subject Shares in form and substance
satisfactory to the Partici pating Holders, and use all reasonable
efforts to cause such registration state ment to become effective
as soon as possible;
iii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used
in connec tion therewith as may be necessary to keep such
registration statement effective for the applicable period and to
comply with the provisions of the Securities Act with respect to
the disposition of all Subject Shares and other securities covered
by such registration statement;
iv) furnish each Participating Holder and each managing
underwriter, if any, without charge, such number of copies of such
registra tion statement, each amendment and supplement thereto (in
each case includ ing all exhibits thereto and documents
incorporated by reference therein) and the prospectus included in
such registration statement (including each preliminary prospectus
and prospectus supplement) and any other prospectus filed under
Rule 424 promulgated under the Securities Act relating to the
Registrable Securities and such other documents as such
Participating Holder or such underwriter may reasonably request;
v) after the filing of the registration statement,
promptly notify each Participating Holder and each managing
underwriter, if any, of any stop order issued or, to the knowledge
of the Company, threatened to be issued by the SEC;
vi) use all reasonable efforts to register or qualify
the Subject Shares covered by such registration statement under the
securities or blue sky laws of such jurisdictions (including any
foreign country or any political subdivision thereof) as the
managing underwriter(s) shall reasonably recom mend, and do any and
all other acts and things which may be reasonably necessary or
advisable to enable the Participating Holders to consummate the
disposition in such jurisdictions of the Subject Shares covered by
such registration statement, except that the Company shall not for
any such purpose be required to (A) qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is
not so qualified, (B) subject itself to taxation in any
jurisdiction wherein it is not so subject, or (C) consent to
general service of process in any such jurisdiction or otherwise
take any
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action that would subject it to the general jurisdiction of the
courts of any jurisdiction in which it is not so subject;
vii) promptly inform each Participating Holder and the
managing underwriter(s), if any (x) in the case of any offering of
the Regis trable Securities in respect of which a registration
statement is filed under the Securities Act, of the date on which a
registration statement or any post-effec tive amendment thereto has
been filed and when the same has become effec tive and, if
applicable, of the date of filing a Rule 430A prospectus, (y) of
any written comments from the SEC with respect to any filing
referred to in clause (x) and of any request by the SEC, any
securities exchange, govern ment agency, self-regulatory body or
other body having jurisdiction for any amendment of or supplement
to any registration statement or preliminary prospectus or
prospectus included therein or any offering memorandum or other
offering document relating to such offering or (z) of the receipt
by the Company of any notification with respect to the suspension
of the qualifica tion of any Registrable Securities for sale under
the applicable securities or blue sky laws of any jurisdiction;
viii) otherwise use its reasonable efforts to comply
with all applicable rules and regulations of the SEC;
ix) provide a transfer agent and registrar for all
Registrable Securities covered by such registration statement not
later than the effective date of such registration statement;
x) furnish, at the Company's expense, unlegended
certificates representing ownership of the securities being sold in
such denominations as shall be requested and instruct the transfer
agent to release any stop transfer orders with respect to the
Subject Shares being sold;
xi) notify each Participating Holder at any time when a
prospectus relating to the Subject Shares is required to be
delivered under the Securities Act of the happening of any event as
a result of which the prospec tus included in such registration
statement contains any untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein
(in the case of the prospectus or any preliminary prospectus, in
light of the circumstances under which they were made) not
misleading, and the Company will, as promptly as practicable
thereafter, prepare and file with
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the SEC and furnish a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of Subject Shares
such prospectus will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein (in the case of the
prospectus or any preliminary prospectus, in light of the
circumstances under which they were made) not misleading;
xii) enter into customary agreements (including an
underwrit ing agreement in customary form in the case of an
underwritten offering) and make such representations and warranties
to the sellers and underwriter(s) as in form and substance and
scope are customarily made by issuers to under writers in
underwritten offerings and take such other actions as the Holders
or the managing underwriter(s) or agent, if any, reasonably require
in order to expedite or facilitate the disposition of such Subject
Shares. A Participating Holder may, at its option, require that any
or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of
such underwriter(s) also be made to and for the benefit of the
Participating Holder, and that any or all of the conditions
precedent to the obligations of such underwriter(s) under such
underwriting agreement also be conditions precedent to the
obligations of the Participating Holder;
xiii) make available for inspection by the
Participating Holders, any underwriter or agent participating in
any disposition pursuant to such registration statement, and any
attorney, accountant or other similar professional advisor retained
by any such Participating Holders or under writer (collectively,
the "Inspectors"), all pertinent financial and other re cords,
pertinent corporate documents and properties of the Company (collec
tively, the "Records"), as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all
information reasonably requested by any such Inspector in
connection with such registration statement;
xiv) make available senior management personnel of the
Company to participate in, and cause them to cooperate with the
under writer(s) in connection with, "road show" and other customary
marketing activities, including "one-on-one" meetings with
prospective purchasers of the Subject Shares;
8
<PAGE>
xv) obtain for delivery to the Company, the
underwriter(s) or their agent, with copies to the Participating
Holders, a "cold comfort" letter from the Company's independent
public accountants in customary form and covering such matters of
the type customarily covered by "cold comfort" letters as the
Participating Holders or the managing underwriter(s) reasonably
request;
xvi) obtain for delivery to the Participating Holders
and the underwriter(s) or their agent an opinion or opinions from
counsel for the Company in customary form and reasonably
satisfactory to the Participating Holders, underwriters or agents
and their counsel;
xvii) make available to its security holders earnings
state ments, which need not be audited, satisfying the provisions
of Section 11(a) of the Securities Act no later than 90 days after
the end of the 12-month period beginning with the first month of
the Company's first quarter commencing after the effective date of
the registration statement, which earnings statements shall cover
said 12-month period;
xviii) make every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the
effectiveness of such registration statement at the earliest
possible moment;
xix) cause the Subject Shares to be registered with or
ap proved by such other governmental agencies or authorities
(including foreign governmental agencies and authorities) as may be
necessary to enable the sellers thereof or the underwriters(s), if
any, to consummate the disposition of such Subject Shares;
xx) cooperate with the Holders and the managing under
writer(s), if any, or any other interested party (including any
interested broker-dealer) in making any filings or submission
required to be made, and the furnishing of all appropriate
information in connection therewith, with the National Association
of Securities Dealers, Inc. ("NASD");
xxi) cause its subsidiaries to take action necessary to
effect the registration of the Subject Shares contemplated hereby,
including filing any required financial information;
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xxii) effect the listing of the Subject Shares on the
New York Stock Exchange or such other national securities exchange
or over-the-counter market on which shares of the Common Stock
shall then be listed; and
xxiii) take all other steps necessary to effect the
registration of the Subject Shares contemplated hereby.
(b) The Holders shall provide (in writing and signed by
the Holders and stated to be specifically for use in the related registration
statement, preliminary prospectus, prospectus or other document incident
thereto) all such information and materials and take all such action as may be
required in order to permit the Company to comply with all applicable
requirements of the SEC and any applicable state securities laws and to obtain
any desired acceleration of the effective date of any registration statement
prepared and filed by the Company pursuant to this Agreement.
(c) The Holders shall, if requested by the Company or
the managing underwriter(s) in connection with any proposed registration and
distribu tion pursuant to this Agreement, (i) agree to sell the Subject Shares
on the basis provided in any underwriting arrangements entered into in
connection therewith and (ii) complete and execute all questionnaires, powers
of attorney, indemnities, underwriting agreements and other documents customary
in similar offerings; provided, however, that in no event shall a Participating
Holder be required to make any representations or warranties to or agreements
with the Company or the under writer(s) other than representations, warranties
or agreements regarding the Par ticipating Holder and its ownership of the
securities being registered on its behalf and its intended method of
distribution and any other representation required by law.
(d) Upon receipt of any notice from the Company that
the Company has become aware that the prospectus (including any preliminary
prospec tus) included in any registration statement filed pursuant to Section
2(a) or Section 3, as then in effect, contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, the Holders shall
forthwith discontinue disposition of Subject Shares pursuant to the
registration statement covering the same until the Holders' receipt of copies
of a supplemented or amended prospectus and, if so directed by the Company,
deliver to the Company (at the Company's expense) all copies other than
permanent file copies then in the Holder's possession, of the prospectus
covering the
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<PAGE>
Subject Shares that was in effect prior to such amendment or supplement.
(e) The Company shall pay all Registration Expenses.
For purposes of this Agreement, "Registration Expenses" shall mean all expenses
inci dent to the Company's performance of or compliance with its obligations
under this Agreement to effect the registration of Registrable Securities
pursuant to Section 2(a) or Section 3 of this Agreement, and the disposition of
such securities, including, without limitation, all registration, filing,
qualification and other fees and expenses of complying with securities or blue
sky laws, transfer agents and registrars' fees, all word processing,
duplicating and printing expenses, the fees and disbursements of counsel for
the Company and of its independent public accountants, including the expenses
of any special audits or "cold comfort" letters required by or incident to such
performance and compliance, but excluding underwriting discounts and com
missions in respect of Registrable Securities and the fees and disbursements of
any counsel retained by the Participating Holders (which underwriting discounts
and commissions and fees and disbursements of counsel shall be paid by the
Participating Holders).
(f) In connection with any sale of Subject Shares that
are registered pursuant to this Agreement, the Company and the Holders shall
enter into an agreement providing for indemnification of the Holders by the
Company, and indemnification of the Company by the Holders, on terms customary
for such agreements at that time (it being understood that any disputes arising
as to what is customary shall be resolved by counsel to the underwriter(s)).
5. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be effective (a) upon hand
delivery or delivery by telecopy or facsimile at the address or number desig
nated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such
delivery (if deliv ered other than on a business day during normal business
hours where such notice is to be received) or (b) on the third business day
following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:
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If to the Company, to:
Golden State Bancorp Inc.
135 Main Street, 20th Floor
San Francisco, California 94105
Attn: Chief Financial Officer
Telecopy: (415) 904-1499
If to FGH, to:
MacAndrews & Forbes Holdings Inc.
35 East 62nd Street
New York, New York 10021
Attn: General Counsel
Telecopy: (212) 572-5056
If to Ford, to:
Hunter's Glen/Ford, Ltd.
c/o Gerald J. Ford
California Federal Bank
200 Crescent Court, Suite 1350
Dallas, Texas 75201
Telecopy: (214) 871-5199
If to any other Holder,
to such name at such address as such Holder shall have
indicated in a written notice delivered to the other parties
to this Agreement.
Any party hereto may from time to time change its address for notices under
this Section 5 by giving at least 10 days' notice of such changes to the other
parties hereto.
6. Waivers. No waiver by any party of any default with respect to
any provision, condition or requirement hereof shall be deemed to be a
continuing waiver in the future thereof or a waiver of any other provision,
condition or require ment hereof; nor shall any delay or omission of any party
to exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.
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7. Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
8. Successors and Assigns; Amendments. This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
assigns, including without limitation and without the need for an express
assignment each subsequent Holder of any Registrable Securities. Except as
provided in this Section 8, neither the Company nor any Holder shall assign
this Agreement or any rights hereunder without the prior written consent of the
other parties hereto; provided, that in connection with a bona fide pledge by
the Holder of any Registrable Securities, the Holder may assign its rights
under this Agreement to the beneficiary of such pledge. The assignment by a
party of this Agreement or any rights hereunder shall not affect the
obligations of such party hereunder. This Agreement may not be amended except
by a written instrument executed by the parties hereto.
9. No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
10. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware without regard to the principles of conflicts of laws.
11. Entire Agreement. This Agreement contains the entire agreement
of the parties hereto in respect of the subject matter hereof and supersedes
all prior agreements and understandings between the parties with respect to the
subject matter hereof.
12. Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counter part.
13. Available Information. If at any time the Company is required
to file reports in compliance with either Section 13 or Section 15(d) of the
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Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company
will comply with all rules and regulations of the SEC applicable in connection
with the use of Rule 144 or Rule 144A promulgated under the Securities Act and
will, upon the re quest of any Holder, take such other actions and furnish the
Holder with information as the Holder may reasonably request in order to avail
itself of such rule or any other rule or regulation of the SEC allowing the
Holder to sell any Registrable Securities without registration, and will, at
its expense, forthwith upon the request of the Holder, deliver to such party a
certificate, signed by the Company's principal finan cial officer, stating (a)
the Company's name, address and telephone number (includ ing area code), (b)
the Company's Internal Revenue Service identification number, (c) the Company's
SEC file number, (d) the number of shares of each class of stock outstanding as
shown by the most recent report or statement published by the Company, and (e)
whether the Company has filed the reports required to be filed under the
Exchange Act for a period of at least 90 days prior to the date of such
certificate and in addition has filed the most recent annual report required to
be filed thereunder or as to such matters as would then be required to
establish compliance with Rule 144 or any successor rule or rules under the
Securities Act. If at any time the Company is not required to file reports in
compliance with either Section 13 or Section 15(d) of the Exchange Act, the
Company at its expense will, forthwith upon the written request of the Holder,
make available adequate current public information with respect to the Company
within the meaning of paragraph (c)(2) of Rule 144.
14. Injunctions. Irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
its specific terms or were otherwise breached. Therefore, the parties hereto
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court having jurisdiction, such remedy being in
addition to any other remedy to which they may be entitled at law or in equity.
15. Severability. If any term or provisions of this Agreement is
held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the re mainder of the terms and provisions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term or provision.
16. Further Assurances. Subject to the specific terms of this
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<PAGE>
Agreement, each Holder and the Company shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions,
as may be reasonably required in order to effectuate the purposes of this
Agreement and to consummate the transactions contemplated hereby.
17. No Other Registration Rights. The Company represents and
warrants to each Stockholder that there is not in effect on the date of this
Agreement any agreement by the Company (other than this Agreement) pursuant to
which any holders of securities of the Company have a right to cause the
Company to register or qualify such securities under the Securities Act or any
securities or blue sky laws of any jurisdiction.
18. Recapitalization, Exchanges, etc., Affecting the Company's
Capital Stock. The provisions of this Agreement shall apply to the full extent
set forth herein with respect to any and all shares of capital stock of the
Company or any successor or assign of the Company (whether by merger,
consolidation, sale of assets or otherwise), or at the election of a Holder,
any person who controls any of the fore going, which may be issued in respect
of, in exchange for or in substitution of, the Registrable Securities.
19. Defined Terms. All capitalized terms used herein but not
defined shall have the meanings ascribed to such terms in the Merger Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agree ment
to be duly executed by their respective authorized officers as of the date
hereof.
GOLDEN STATE BANCORP INC.
By: /s/ John Haynes
----------------------------------
Name: John Haynes
Title: Chief Financial Officer
FIRST GIBRALTAR HOLDINGS INC.
By: /s/ Glenn P. Dickes
----------------------------------
Name: Glenn P. Dickes
Title: Vice President
HUNTER'S GLEN/FORD, LTD.
By: /s/ Gerald J. Ford
----------------------------------
Name: Gerald J. Ford
Title: General Partner
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Exhibit 99.1
Agreement Pursuant to Rule 13d-1(f) filed herewith
Pursuant to Rule 13d-1(f) of Regulation 13D-G of the General
Rules and Regulations of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, the undersigned agree that the
statement to which this Exhibit is attached is filed on behalf of each of them
in the capacities set forth below.
MAFCO HOLDINGS INC.
By: /s/ Glenn P. Dickes
--------------------------------
Name: Glenn P. Dickes
Title: Senior Vice President
FIRST GIBRALTAR HOLDINGS INC.
By: /s/ Glenn P. Dickes
--------------------------------
Name: Glenn P. Dickes
Title: Vice President
FORD DIAMOND CORPORATION
By: /s/ Gerald J. Ford
--------------------------------
Name: Gerald J. Ford
Title: President
HUNTER'S GLEN/FORD, LTD.
By: /s/ Gerald J. Ford
--------------------------------
Name: Gerald J. Ford
Title: General Partner
