Exhibit 3.1
BANC OF CALIFORNIA, INC.
SECOND AMENDED AND RESTATED BYLAWS
(October 28, 2014)
I.
STOCKHOLDERS
1.01.
Annual Meeting
. An annual meeting of the stockholders, for the election of directors to succeed those whose terms expire
and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board of Directors shall each year fix. Failure to hold an annual meeting does not invalidate
the Corporation’s existence or affect any otherwise valid corporate act.
1.02.
Special Meetings
. Subject to the rights
of the holders of any class or series of preferred stock of the Corporation, special meetings of stockholders of the Corporation may be called by the President, by the Chief Executive Officer or by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies on the Board of Directors (hereinafter, the “Whole Board”). Special meetings of the stockholders shall be called by the
Secretary at the request of stockholders only on the written request of stockholders entitled to cast at least a majority of all the votes entitled to be cast at the meeting. Such written request will state the purpose or purposes of the meeting and
the matters proposed to be acted upon at the meeting, and shall be delivered at the home office of the Corporation addressed to the Chief Executive Officer or the Secretary. The Secretary shall inform the stockholders who make the request of the
reasonable estimated cost of preparing and mailing a notice of the meeting and, upon payment of these costs to the Corporation, notify each stockholder entitled to notice of the meeting. The Board of Directors shall have the sole power to fix
(1) the record date for determining stockholders entitled to request a special meeting of stockholders and the record date for determining stockholders entitled to notice of and to vote at the special meeting and (2) the date, time and
place of the special meeting.
1.03.
Notice of Meetings
. Not less than ten nor more than 90 days before each
stockholders’ meeting, the Secretary shall give written notice of the meeting to each stockholder entitled to vote at the meeting and to each other stockholder entitled to notice of the meeting. The notice shall state the time and place of the
meeting and, if the meeting is a special meeting or notice of the purpose is required by statute, the purpose of the meeting. Notice is given to a stockholder when it is personally delivered to the stockholder, left at the stockholder’s usual
place of business, mailed to the stockholder at his or her address as it appears on the records of the Corporation, or transmitted to the stockholder by electronic mail to any electronic mail address of the stockholder or by any other electronic
means. Notwithstanding the foregoing provisions, each person who is entitled to notice waives notice if such person, before or after the meeting, signs a waiver of the notice which is filed with the records of the stockholders’ meeting, or is
present at the meeting in person or by proxy.
1.04.
Adjournment
. A meeting of stockholders convened on the date for which it was
called may be adjourned from time to time without further notice to a date not more than 120 days after the original record date. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.
1.05.
Quorum; Voting
. At any meeting of the stockholders, the presence in person or by proxy of stockholders entitled to cast
one third of all the votes entitled to be cast at the meeting constitutes a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Where a separate vote by a class or classes is required,
a majority of the shares of such class or classes, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter.
If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date or time.
1.06.
General Right to Vote;
Proxies
. Unless the Charter provides for a greater or lesser number of votes per share or limits or denies voting rights, each outstanding share of stock, regardless of class, is entitled to one vote on each matter submitted to a vote at a
meeting of stockholders. In all elections for directors, directors shall be determined by a plurality of the votes cast, and except as otherwise required by law or as provided in the Corporation’s Charter, all other matters shall be determined
by a majority of the votes cast at the meeting.
A stockholder may vote the stock the stockholder owns of record either in person or by proxy. A
stockholder may sign a writing authorizing another person to act as proxy. Signing may be accomplished by the stockholder or the stockholder’s authorized agent signing the writing or causing the stockholder’s signature to be affixed to the
writing by any reasonable means, including facsimile signature. A stockholder may authorize another person to act as proxy by transmitting, or authorizing the transmission of a telegram, cablegram, datagram, electronic mail or other means of
electronic transmission to the person authorized to act as proxy or to a proxy solicitation firm, proxy support service organization, or other person authorized by the person who will act as proxy to receive the transmission. Unless a proxy provides
otherwise, it is not valid more than 11 months after its date. A proxy is revocable by a stockholder at any time without condition or qualification unless the proxy states that it is irrevocable and the proxy is coupled with an interest. A proxy may
be made irrevocable for so long as it is coupled with an interest. The interest with which a proxy may be coupled includes an interest in the stock to be voted under the proxy or another general interest in the Corporation or its asset or
liabilities.
1.07.
Conduct of Business
. Such person as the Board of Directors may have designated or, in the absence of
such a person, the Chief Executive Officer of the Corporation shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such
person as the chairman appoints. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or
her in order.
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Nominations of persons for election to the Board of Directors and the proposal of business to be considered by
the stockholders may be made at an annual meeting of stockholders (a) pursuant to the Corporation’s notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any stockholder of the Corporation who was a
stockholder of record at the time of giving notice provided for in Section 1.09, who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 1.09. Nominations of persons for election to the Board
of Directors and the proposal of business to be considered by the stockholders may be made at a special meeting of stockholders only pursuant to the Corporation’s notice of meeting. The chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in Section 1.09 and, if any proposed nomination or business is not in compliance with
Section 1.09, to declare that such defective nomination or proposal be disregarded.
1.08.
Conduct of Voting
. The Board
of Directors shall, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, to act at the meeting or any adjournment thereof and make a written report thereof, in accordance with applicable law. At all
meetings of stockholders, the proxies and ballots shall be received, and all questions touching the qualification of voters, the validity of proxies and the acceptance or rejection of votes not otherwise specified by these Bylaws, the
Corporation’s Charter or law, shall be decided or determined by the inspector of elections. All voting, including on the election of directors but excepting where otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefor by a stockholder entitled to vote or his or her proxy, a stock vote shall be taken. Every stock vote shall be taken by ballot, each of which shall state the name of the stockholder or proxy voting and such other information as may be
required under the procedure established for the meeting. Every vote taken by ballot shall be counted by an inspector or inspectors appointed by the chairman of the meeting. No candidate for election as a director at a meeting shall serve as an
inspector at such meeting.
1.09.
Stockholder Proposals
.
A. For any stockholder proposal to be presented in connection with an annual meeting of stockholders of the Corporation (including proposals
made under rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), including any nomination or proposal relating to the nomination of a director to be elected to the Board of Directors of the Corporation, the
stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than 120
days or more than 150 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from
such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 150th day prior to such annual meeting and not later than the close of business on the later of the 120th day prior to such annual meeting or the
tenth day following the day on which notice of the date of such annual meeting was mailed or public announcement of the date of such annual meeting is first made. No adjournment or postponement of an annual meeting shall commence a new period for
the giving of notice of a stockholder proposal hereunder.
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B. To be in proper form, unless waived in writing by the Board of Directors, a stockholder’s
notice to the Secretary must:
1. set forth, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made, (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner and the Control Persons of such beneficial owner; (ii) the class and number of
shares of stock of the Corporation which are, directly or indirectly, owned beneficially and of record by such stockholder and such beneficial owner and the Control Persons of such beneficial owner; (iii) any option, warrant, convertible
security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the Corporation or with a value derived in whole or in part
from the value of any class of shares of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly
or indirectly owned beneficially by such stockholder or such beneficial owner and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the Corporation;
(iv) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or such beneficial owner has a right to vote any shares of any security of the Corporation; (v) any short interest in any security of
the Corporation (for purposes of this Section 1.09 a person shall be deemed to have a short interest in a security if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the
opportunity to profit or share in any profit derived from any decrease in the value of the subject security); (vi) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or such beneficial owner that are
separated or separable from the underlying shares of the Corporation; (vii) any proportionate interest in shares of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such
stockholder or such beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; (viii) any performance-related fees (other than an asset-based fee) that such stockholder or such
beneficial owner or any Control Person of such beneficial owner is entitled to, based on any increase or decrease in the value of shares of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without
limitation, any such interests held by members of such stockholder’s immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner, if any, not later than ten days after the record
date for the meeting to disclose such ownership as of the record date); (ix) any pending or threatened legal proceeding in which such stockholder or such beneficial owner or any Control Person of such beneficial owner is a party or participant
involving the Corporation or any of its officers or directors, or any affiliate of the Corporation; (x) any other material relationship between such stockholder or such beneficial owner or any Control Person of such beneficial owner, on the one
hand, and the Corporation, any affiliate of the Corporation or any principal competitor of the Corporation (including among others any bank, bank holding company, financial holding company, depository, registered investment advisor or mortgage
company), on the other hand; (xi) to the extent known to such stockholder or such beneficial owner, the name(s) of any other stockholder(s) of the Corporation (whether holders of record or beneficial owners) that support the business that the
stockholder proposes to bring before the meeting or the nominees whom the stockholder proposes to nominate for election or reelection to the Board of Directors, as applicable; (xii) a confirmation or a certified
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representation or attestation of the Board of Governors of the Federal Reserve System or of such stockholder and their outside counsel, that such stockholder and such beneficial owner and all
Control Persons of such beneficial owner, if any, is not a bank holding company registered under the Bank Holding Company Act of 1956, as amended (the “
Act
”), and that the proposed nomination by the stockholder for election or
reelection to the Board of Directors will not violate the Act or any regulation promulgated under the Act; (xiii) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy
statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules
and regulations promulgated thereunder; (xiv) a representation of such stockholder and such beneficial owner, if any, that such person (or a qualified representative thereof) intends to appear in person at the meeting to bring such business
before the meeting; and (xv) any change to items (i) through (xi) above (including the date, nature and amount of each such change) since the date of the meeting of the Board of Directors immediately preceding the date of such notice.
2. set forth, as to each person whom the stockholder proposes to nominate for election or reelection as a director (i) all
information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s
written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (ii) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings
during the past three years, and any other material relationships, between or among such stockholder, the beneficial owner, if any, on whose behalf the nomination is made or any Control Person of such beneficial owner, and their respective
affiliates, partners, members, clients and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand,
including, without limitation, all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if
any, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant;
3. include, as to each person whom the stockholder proposes to nominate for election or reelection as a director, a completed and signed
questionnaire, representation and agreement required by Section 1.09(C). The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such
proposed nominee to serve as an independent director of the Corporation or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee;
4. set forth, as to each stockholder making a nomination or proposal, the beneficial owner, if any, on whose behalf the nomination or proposal
is made, Control Person of such beneficial owner, proposed nominee and each of their respective affiliates and persons acting in concert therewith (collectively, the “
Subject Persons
”): (i) the background, name and address of
each Subject Person; (ii) a certified representation or attestation by each Subject Person meets
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each of the qualifications set forth in Section 2.11 and (iii) the signed and notarized written consent of each Subject Person permitting the Corporation to conduct a full background
screening (including through the use of a third-party screening service);
5. set forth, as to any other business that the stockholder
proposes to bring before the meeting, (i) a brief description of the business desired to be brought before the meeting; (ii) the reasons for conducting such business at the meeting; (iii) any material interest in such business of such
stockholder and of the beneficial owner, if any, on whose behalf the proposal is made; and a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons
(including their names) in connection with the proposal of such business by such stockholder; and
6. update and supplement such notice,
if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 1.09 shall be true and correct as of the record date for notice of the meeting and as of the date that is ten business days prior
to the meeting or any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the Secretary at the principal executive offices of the Corporation within five days of the event triggering
such update and supplement but in no instance later than five business days after the record date for notice of the meeting (in the case of the update and supplement required to be made as of such record date), and not later than eight business days
prior to the date for the meeting or, if practicable, any adjournment or postponement thereof (and, if not practicable, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update
and supplement required to be made as of ten business days prior to the meeting or any adjournment or postponement thereof), provided, that this Section 1.09(B)(6) shall not permit any such stockholder(s) to change any proposed business or
nominee (or add any proposed business or nominee), as the case may be.
C. To be eligible to be a nominee of a stockholder of the
Corporation for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice under this Section 1.09) to the Secretary at the principal executive offices
of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the
Secretary upon written request) and a written representation and agreement (in the form provided by the Secretary upon written request) that such person: (1) is not and will not become a party to (i) any agreement, arrangement or
understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not
been disclosed to the Corporation or (ii) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law;
(2) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with
service or action as a director that has not been disclosed therein; (3) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a
director of the Corporation,
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and will comply with all applicable publicly disclosed corporate governance, conflict of interest, code of business conduct and ethics, confidentiality and stock ownership and trading policies
and guidelines of the Corporation; and (4) will provide an irrevocable resignation from the Board of Directors to be effective if such person is no longer in compliance with (1), (2) or (3) above while a member of the Board of
Directors, and will provide an irrevocable recusal from participation in proceedings of the Board of Directors or any committee thereof during such time that the Board of Directors is considering whether to accept such director’s resignation in
such circumstances. In the event the Corporation becomes aware that a director is no longer in compliance with (1), (2) or (3) above, the Board of Directors will promptly convene to determine whether to accept the director’s
resignation. The Board of Directors may consider any factors they deem relevant in determining whether to accept a director’s resignation under this Section 1.09(C). Such resignation shall be effective only upon acceptance of such
resignation by approval of two-thirds (2/3) of the Whole Board.
D. Unless otherwise required by law, if the stockholder (or a
qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present the nomination or proposal in compliance with the stockholder’s representation required by
Section 1.09(B)(1)(xiv), such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes hereof, to be
considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing complying with Section 1.06 to act for such stockholder as proxy at
the meeting of stockholders and such person must produce such writing, or a reliable reproduction thereof, at the meeting of stockholders.
E. Only such persons who are nominated in accordance with the procedures set forth in this Section 1.09 (other than persons who are
nominated by the Board of Directors) shall be eligible to serve as directors, and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this
Section 1.09. Except as otherwise provided by law, the Charter or these Bylaws, the chairman of the meeting shall have the power to determine all matters relating to the conduct of the meeting, including, but not limited to, determining whether
a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.09 and, if any proposed nomination or business is not in compliance
with this Section 1.09, to declare that such defective proposal or nomination shall be disregarded; provided that upon the request of a member of the Board of Directors, such determination shall be made by a majority of the Board of Directors
upon the recommendation of the committee of the Board that serves as the governance committee.
F. Notwithstanding the foregoing
provisions of this Section 1.09, all director nominations are subject to any required regulatory approval(s) and to the director qualifications set forth in Section 2.11, and a proposed director will not be entitled to vote on any matter
or otherwise take any action in the capacity of a director until all required regulatory approvals, if any, have been obtained. In addition, notwithstanding the foregoing provisions of this Section 1.09, a stockholder shall also comply with all
applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 1.09; provided, however, that any references in these Bylaws to the Exchange Act or the rules
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promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations or proposals as to any other business to be considered pursuant to this
Section 1.09. Nothing in this Section 1.09 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.
G. The term “Control Person” shall mean, with respect to any third person, any director or officer of such third person or person
with discretion to vote, buy or sell equity interests of the Company on behalf of such third person; any person that beneficially owns five percent or more of the equity interests of such third person; and any other person that exercises control
over such third person (including, by way of example, the general partner of a limited partnership, the managing member of a limited liability company and the persons that control such general partner or managing member, as applicable). The term
“beneficial owner” and correlative terms shall have the meaning set forth in Rule 13d-3 under the Exchange Act.
1.10.
Informal Action by Stockholders
. Any action required or permitted to be taken at a meeting of stockholders may be taken without a meeting if there is filed with the records of the stockholders’ meetings a unanimous written consent
which sets forth the action and is signed by each stockholder entitled to vote on the matter and a written waiver of any right to dissent signed by each stockholder entitled to notice of the meeting but not entitled to vote at the meeting.
1.11.
List of Stockholders
. At each meeting of stockholders, a full, true and complete list of all stockholders entitled to vote
at such meeting, showing the number and class of shares held by each and certified by the transfer agent for such class or by the Secretary, shall be furnished by the Secretary.
II.
BOARD OF DIRECTORS
2.01.
Function of Directors, Number and Term of Office
. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. The number of directors of the Corporation may be changed from time to time from the number provided in the Charter, exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the entire Board of Directors, to a number not exceeding 15 and not less than the minimum number of directors permitted by the Maryland General Corporation Law (the “MGCL”), but the action may not affect the tenure of office of
any director. The Board of Directors shall annually elect a Chairman of the Board from among its members and shall designate, when present, the Chairman of the Board or the Chief Executive Officer (if the Chief Executive Officer is a director) to
preside at its meetings.
The directors, other than those who may be elected by the holders of any class or series of preferred stock, shall be divided
into three classes, as nearly equal in number as reasonably possible, with the term of office of the first class to expire at the first annual meeting of stockholders, the term of office of the second class to expire at the annual meeting of
stockholders one year thereafter and the term of office of the third class to expire at the annual meeting of stockholders two years thereafter, with each director to hold office until his or her
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successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the first annual meeting, directors elected to succeed those directors whose terms
expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each director to hold office until his or her successor shall have been duly elected and qualified.
2.02.
Vacancies and Newly Created Directorships
. Subject to the rights of the holders of any class or series of preferred or
other stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled by a majority vote of the directors then in office, though less than a quorum, and, by virtue of the Corporation’s election made in its Charter to be subject to Section 3-804(c)(3) of the MGCL, any
director so chosen shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until a successor is elected and qualified. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
Any director or the entire Board of Directors may be removed only in accordance with the
provisions of the Corporation’s Charter.
2.03.
Regular Meetings
. Regular meetings of the Board of Directors shall be
held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors. A notice of each regular meeting shall not be required. Any regular meeting
of the Board of Directors may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting other than by announcement.
2.04.
Special Meetings
. Special meetings of the Board of Directors may be called by one-third (1/3) of the directors then
in office (rounded up to the nearest whole number) or by the Chairman of the Board and shall be held at such place, on such date, and at such time as they or he or she shall fix. Notice of the place, date, and time of each such special meeting shall
be given to each director by whom it is not waived by mailing written notice not less than five days before the meeting or by telegraphing or telexing or by facsimile or electronic transmission of the same not less than 24 hours before the meeting.
Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. No notice of any meeting of the Board of Directors need be given to any director who attends except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened, or to any director who, in writing executed and filed with the records of the meeting either before or after the holding
thereof, waives such notice. Any special meeting of the Board of Directors may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting other than by announcement.
2.05.
Quorum
. At any meeting of the Board of Directors, a majority of the authorized number of directors then constituting the
Board shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof.
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2.06.
Participation in Meetings by Conference Telephone
. Members of the Board of
Directors, or of any committee thereof, may participate in a meeting of the Board of Directors or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each
other at the same time, but only with the prior approval of the Chairman of the Board or the Lead Independent Director in the case of a meeting of the Board of Directors or the chairman of the applicable committee in the case of a meeting of such
committee, in which case such participation shall constitute presence in person at such meeting.
2.07.
Conduct of Business
.
At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board of Directors may from time to time determine, and all matters shall be determined by the vote of a majority of the directors present, except
as otherwise provided in these Bylaws, the Corporation’s Charter or required by law. Action may be taken by the Board of Directors without a meeting if a unanimous written consent which sets forth the action is signed by each member of the
Board of Directors, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.
2.08.
Powers
. The Board of Directors may, except as otherwise required by law, these Bylaws or the Corporation’s Charter, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, including,
without limiting the generality of the foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance with
law;
(2) To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine;
(3) To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in connection therewith;
(4) To remove any officer of the
Corporation with or without cause, and from time to time to devolve the powers and duties of any officer upon any other person for the time being;
(5) To confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for directors, officers, employees and
agents of the Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine; and
(8) To adopt
from time to time regulations, not inconsistent with these Bylaws, for the management of the Corporation’s business and affairs.
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2.09.
Compensation of Directors
. Directors, as such, may receive, pursuant to
resolution of the Board of Directors, fixed fees (and expenses, if any) and other compensation for their services as directors, including, without limitation, their services as members of committees of the Board of Directors.
2.10.
Presumption of Assent
. A director of the Corporation who is present at a meeting of the Board of Directors at which action
on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her dissent or abstention shall be entered in the minutes of the meeting or unless he or she shall file his or her written dissent to such action
with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by certified mail, return receipt requested, to the Secretary of the Corporation within 24 hours after the adjournment of the
meeting. Such right to dissent shall not apply to a director who votes in favor of such action or failed to make his dissent known at the meeting.
2.11.
Qualifications
. No person shall be eligible for election or appointment to the Board of Directors if such person
(i) has, within the previous 10 years, been the subject of supervisory action by a financial regulatory agency that resulted in a cease and desist order or an agreement or other written statement subject to public disclosure under 12 U.S.C.
1818(u), or any successor provision, (ii) has been convicted of a crime involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding one year under state or federal law, (iii) is currently charged in any
information, indictment, or other complaint with the commission of or participation in such a crime or (iv) serves on the board of directors of a competitor (including among others any bank, bank holding company, financial holding company,
depository, registered investment advisor or mortgage company that is not affiliated with the Company) without the prior written approval of the Board of Directors. No person shall be eligible for election to the Board of Directors if such person is
the nominee or representative of a person or group that includes a person who is ineligible for election to the Board of Directors under this Section 2.11. The Board of Directors shall have the power to construe and apply the provisions of this
Section 2.11 and to make all determinations necessary or desirable to implement such provisions, including but not limited to determinations as to whether a person is a nominee or representative of a person or a group and whether a person is
included in a group.
III.
COMMITTEES
3.01.
Committees of the Board of Directors
. The Board of Directors may appoint from among its members an Executive Committee and other committees composed of one or more directors and delegate to these committees any of the powers of the Board
of Directors, except the power to issue stock other than as provided in the next sentence, recommend to the stockholders any action which requires stockholder approval (other than the election of directors), amend these Bylaws, or approve any merger
or share exchange which does not require stockholder approval. If the Board of Directors has given general authorization for the issuance of stock providing for or establishing a method or procedure for determining the maximum number of shares to be
issued, a committee of the Board of Directors, in accordance with that general authorization or any stock option or other plan or program adopted by the Board of Directors, may authorize or fix the terms of stock subject to classification or
reclassification and
11
the terms on which any stock may be issued, including all terms and conditions required or permitted to be established or authorized by the Board of Directors under Sections 2-203 and 2-208 of
the MGCL. Any committee so designated may exercise the power and authority of the Board of Directors if the resolution which designated the committee or a supplemental resolution of the Board of Directors shall so provide. In the absence or
disqualification of any member of any committee in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint
another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.
3.02.
Conduct
of Business
. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to
members of all meetings, one-third (1/3) of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority
vote of the members present. Action may be taken by any committee without a meeting if a unanimous written consent is signed by each member of the committee, and the writing or writings are filed with the minutes of the proceedings of such
committee.
3.03.
Nominating/Governance Committee
. The Board of Directors may appoint a Nominating/Governance Committee of
the Board, consisting of not less than three members. The Nominating/Governance Committee shall have authority (i) to review any nominations for election to the Board of Directors made by a stockholder of the Corporation pursuant to Sections
1.07 and 1.09 of these Bylaws and (ii) to recommend to the Board of Directors nominees for election to the Board of Directors to replace those directors whose terms expire at the annual meeting of stockholders next ensuing.
IV.
OFFICERS
4.01.
Generally
.
1. The Board of Directors as soon as may be practicable after the annual meeting of stockholders shall choose a President, a Secretary and a
Treasurer and from time to time may choose such other officers as it may deem proper. Any number of offices may be held by the same person, except no person may serve concurrently as both President and Vice President of the Corporation.
2. The term of office of all officers shall be until the next annual election of officers and until their respective successors are chosen,
but any officer may be removed from office at any time by the affirmative vote of a majority of the authorized number of directors then constituting the Board of Directors.
3. All officers chosen by the Board of Directors shall each have such powers and duties as generally pertain to their respective offices,
subject to the specific provisions of this Article
12
IV. Such officers shall also have such powers and duties as from time to time may be conferred by the Board of Directors or by any committee thereof.
4.02.
Chief Executive Officer
. The Chief Executive Officer, subject to the control of the Board of Directors, shall have general
power over the management and oversight of the administration and operation of the Corporation’s business and general supervisory power and authority over its policies and affairs. The Chief Executive Officer shall see that all orders and
resolutions of the Board of Directors and of any committee thereof are carried into effect.
Each meeting of the stockholders and of the Board of
Directors shall be presided over by such officer as has been designated by the Board of Directors or, in his or her absence, by such officer or other person as is chosen at the meeting. The Secretary or, in his or her absence, the General Counsel of
the Corporation or such officer as has been designated by the Board of Directors or, in his or her absence, such officer or other person as is chosen by the person presiding, shall act as secretary of each such meeting.
4.03.
President
. The President, subject to the control of the Board of Directors, shall act in an executive capacity as shall be
directed from time to time by the Board of Directors or the Chief Executive Officer, and shall have such powers and perform such other duties as the Board of Directors or the Chief Executive Officer may determine from time to time (which may
include, without limitation, assisting the Chief Executive Officer in the management and oversight of the administration and operation of the Corporation’s business and the supervision of its policies and affairs), with such limitations on such
powers or performance of duties as either of the foregoing shall prescribe.
4.04.
Vice President
. The Vice President or
Vice Presidents, if any, shall perform the duties of the President in the President’s absence or during his or her disability to act. In addition, the Vice Presidents shall perform the duties and exercise the powers usually incident to their
respective offices and/or such other duties and powers as may be properly assigned to them from time to time by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President.
4.05.
Secretary
. The Secretary or an Assistant Secretary shall issue notices of meetings, shall keep their minutes, shall have
charge of the seal and the corporate books, shall perform such other duties and exercise such other powers as are usually incident to such offices and/or such other duties and powers as are properly assigned thereto by the Board of Directors, the
Chairman of the Board, the Chief Executive Officer or the President.
4.06.
Treasurer
. The Treasurer shall have charge of
all monies and securities of the Corporation, other than monies and securities of any division of the Corporation which has a treasurer or financial officer appointed by the Board of Directors, and shall keep regular books of account. The funds of
the Corporation shall be deposited in the name of the Corporation by the Treasurer with such banks or trust companies or other entities as the Board of Directors from time to time shall designate. The Treasurer shall sign or countersign such
instruments as require his or her signature, shall perform all such duties and have all such powers as are usually incident to such office and/or such other duties and powers as are properly assigned to him or her by the Board of Directors, the
Chairman of the Board, the Chief Executive Officer or the President, and
13
may be required to give bond, payable by the Corporation, for the faithful performance of his duties in such sum and with such surety as may be required by the Board of Directors.
4.07.
Assistant Secretaries and Other Officers
. The Board of Directors may appoint one or more assistant secretaries and one or
more assistants to the Treasurer, or one appointee to both such positions, which officers shall have such powers and shall perform such duties as are provided in these Bylaws or as may be assigned to them by the Board of Directors, the Chairman of
the Board, the Chief Executive Officer or the President.
4.08.
Action with Respect to Securities of Other Corporations
.
Unless otherwise directed by the Board of Directors, the President, the Chief Executive Officer, or any other officer of the Corporation authorized by the Chief Executive Officer, shall have power to vote and otherwise act on behalf of the
Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this Corporation may hold securities and otherwise to exercise any and all rights and powers which
this Corporation may possess by reason of its ownership of securities in such other Corporation.
V.
STOCK
5.01.
Certificates of Stock; Uncertificated Shares
. The Board of Directors may determine to issue certificated or uncertificated shares of capital stock and other securities of the Corporation. For certificated stock, each stockholder is
entitled to certificates which represent and certify the shares of stock he or she holds in the Corporation. Each stock certificate shall include on its face the name of the Corporation, the name of the stockholder or other person to whom it is
issued, and the class of stock and number of shares it represents. It shall also include on its face or back (a) a statement of any restrictions on transferability and a statement of the designations and any preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the stock of each class which the Corporation is authorized to issue, of the differences in the relative rights and
preferences between the shares of each series of a preferred or special class in series which the Corporation is authorized to issue, to the extent they have been set, and of the authority of the Board of Directors to set the relative rights and
preferences of subsequent series of a preferred or special class of stock or (b) a statement which provides in substance that the Corporation will furnish a full statement of such information to any stockholder on request and without charge.
Such request may be made to the Secretary or to the Corporation’s transfer agent. Upon the issuance of uncertificated shares of capital stock, the Corporation shall send the stockholder a written statement of the same information required above
on stock certificates. Each stock certificate shall be in such form, not inconsistent with law or with the Corporation’s Charter, as shall be approved by the Board of Directors or any officer or officers designated for such purpose by
resolution of the Board of Directors. Each stock certificate shall be signed by the Chief Executive Officer, President or a Vice President, and countersigned by the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer. Each
certificate may be sealed with the actual corporate seal or a facsimile of it or in any other form and the signatures may be either manual or facsimile signatures. A certificate is valid and may be issued whether or not an officer
14
who signed it is still an officer when it is issued. A certificate may not be issued until the stock represented by it is fully paid.
5.02.
Transfers of Stock
. Upon surrender to the Corporation or the transfer agent of the Corporation of a stock certificate or
uncertificated shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate or uncertificated shares to the person entitled thereto, cancel the old
certificate or uncertificated shares and record the transaction upon its books.
The Corporation shall be entitled to treat the holder of record of any
share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice
thereof, except as otherwise provided by the laws of the State of Maryland and subject to Section 5.05 of these Bylaws.
Notwithstanding the
foregoing, transfers of shares of any class of stock will be subject in all respects to the Charter of the Corporation and all of the terms and conditions contained therein.
5.03.
Record Dates or Closing of Transfer Books
. The Board of Directors may, and shall have sole power to, set a record date or
direct that the stock transfer books be closed for a stated period for the purpose of making any proper determination with respect to stockholders, including which stockholders are entitled to notice of a meeting, vote at a meeting, receive a
dividend, or be allotted other rights. The record date may not be prior to the close of business on the day the record date is fixed nor, subject to Section 1.04, more than 90 days before the date on which the action requiring the determination
will be taken; the transfer books may not be closed for a period longer than 20 days; and, in the case of a meeting of stockholders, the record date or the closing of the transfer books shall be at least ten days before the date of the meeting.
5.04.
Stock Ledger
. The Corporation shall maintain a stock ledger which contains the name and address of each stockholder and
the number of shares of stock of each class which the stockholder holds. The stock ledger may be in written form or in any other form which can be converted within a reasonable time into written form for visual inspection. The original or a
duplicate of the stock ledger shall be kept at the offices of a transfer agent for the particular class of stock or, if none, at the principal executive offices of the Corporation.
5.05.
Certification of Beneficial Owners
. The Board of Directors may adopt by resolution a procedure by which a stockholder of
the Corporation may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of
stockholders who may certify; the purpose for which the certification may be made; the form of certification and the information to be contained in it; if the certification is with respect to a record date or closing of the stock transfer books, the
time after the record date or closing of the stock transfer books within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or
desirable. On receipt of a certification which complies with the procedure adopted by the Board of Directors in accordance with this Section, the person specified in the certification is, for
15
the purpose set forth in the certification, the holder of record of the specified stock in place of the stockholder who makes the certification.
5.06.
Lost Stock Certificates
. The Board of Directors of the Corporation may determine the conditions for issuing a new stock
certificate or uncertificated shares in place of a stock certificate which is alleged to have been lost, stolen, or destroyed, or the Board of Directors may delegate such power to any officer or officers of the Corporation. In their discretion, the
Board of Directors or such officer or officers may require the owner of the certificate alleged to have been lost, stolen or destroyed to give a bond, with sufficient surety, to indemnify the Corporation against any loss or claim arising as a result
of the issuance of a new certificate or uncertificated shares. In their discretion, the Board of Directors or such officer or officers may refuse to issue such new certificate or uncertificated shares without the order of a court having jurisdiction
over the matter.
5.07.
Regulations
. The issue, transfer, conversion and registration of shares of stock shall be governed
by such other regulations as the Board of Directors may establish.
VI.
FINANCE
6.01.
Checks, Drafts, Etc
. All checks, drafts and orders for the payment of money, notes and other evidences of indebtedness, issued in the name of the Corporation, shall, unless otherwise provided by resolution of the Board of Directors, be
signed by the Chairman of the Board, the Chief Executive Officer, the President, a Vice President, an Assistant Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary.
6.02.
Annual Statement of Affairs
. The Chief Executive Officer or Chief Accounting Officer shall prepare annually a full and
correct statement of the affairs of the Corporation, to include a balance sheet and a financial statement of operations for the preceding fiscal year. The statement of affairs shall be submitted at the annual meeting of the stockholders and, within
20 days after the meeting, placed on file at the Corporation’s principal executive offices.
6.03.
Fiscal Year
. The
fiscal year of the Corporation shall be the 12 calendar months ending on December 31 in each year.
6.04.
Dividends
. If
declared by the Board of Directors or a duly authorized committee of the Board of Directors at any meeting thereof, the Corporation may pay dividends on its shares in cash, property, or in shares of the capital stock of the Corporation, unless such
dividend is contrary to law or to a restriction contained in the Corporation’s Charter.
6.05.
Loans
. No loans shall be
contracted on behalf of the Corporation and no evidence of indebtedness shall be issued in its name unless authorized by the Board of Directors. Such authority may be general or confined to specific instances.
6.06.
Deposits
. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the
Corporation in any of its duly authorized depositories as the Board of Directors may select.
16
VII.
MISCELLANEOUS
7.01.
Facsimile Signatures
. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as
authorized by the Board of Directors or a committee thereof.
7.02.
Corporate Seal
. The Board of Directors may provide a
suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by
an Assistant Secretary or Assistant Treasurer.
7.03.
Reliance upon Books, Reports and Records
. Each director, each member
of any committee designated by the Board of Directors, and each officer and agent of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the
Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any advisor, accountant, appraiser or other experts
or consultants selected by the Board of Directors or officers of the Corporation, regardless of whether such expert or consultant may also be a director.
7.04.
Notices
. Except as otherwise specifically provided in these Bylaws or required by law, all notices required to be given to
any stockholder, director, officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mail, postage paid, by sending such notice by
prepaid telegram or mailgram or by sending such notice by facsimile machine or other electronic transmission. Any such notice shall be addressed to such stockholder, director, officer, employee or agent at his or her last known address as the same
appears on the books of the Corporation. The time when such notice is received, if hand delivered or dispatched, if delivered through the mail, by telegram or mailgram or by facsimile machine or other electronic transmission, shall be the time of
the giving of the notice.
7.05.
Waivers
. A written waiver of any notice, signed by a stockholder, director, officer,
employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, director, officer, employee or agent. Neither the business nor the
purpose of any meeting need be specified in such a waiver.
7.06.
Time Periods
. In applying any provision of these Bylaws
which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall
be excluded and the day of the event shall be included.
17
VIII.
AMENDMENTS
The Bylaws of
the Corporation may be adopted, amended or repealed as provided in Article 9 of the Corporation’s Charter.
18
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT (this “
Agreement
”), dated as of October 30, 2014, is made by and among Banc of
California, Inc., a Maryland corporation (the “
Company
”), and the investors named on
Exhibit A
hereto (collectively, the “
Investor
”) (each of the Company and the Investor a “Party” and,
collectively, the “
Parties
”).
WITNESSETH
WHEREAS, the Parties entered into a Securities Purchase Agreement on April 22, 2014 (the “
SPA
”), pursuant to which the
Company agreed, subject to the terms and conditions set forth therein, to sell to the Investor shares of its voting common stock, par value $0.01 per share (the “
Common Stock
”);
WHEREAS, pursuant to Section 7(a)(i) of the SPA, the Parties have agreed to terminate the SPA;
WHEREAS, the Investor currently holds 1,200,564 shares of Common Stock, and is not a “substantial holder” for purposes of applicable
New York Stock Exchange (the “
NYSE
”) regulations;
WHEREAS, the Investor desires to consummate an acquisition of
approximately $10,000,000 in Common Stock on pricing terms equal to those contemplated by the SPA;
WHEREAS, the Investor further desires
to increase its overall position in the Common Stock to approximately 9.9% of the outstanding Common Stock at a price per share equal to the closing price of the Common Stock on October 27, 2014;
WHEREAS, the Company is offering for sale shares of Common Stock, to the Investor, subject to the terms set forth herein; and
WHEREAS, the Investor desires to purchase from the Company the Investor Shares (as defined herein) on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
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1.
|
Definitions
. As used herein, the following terms have the meanings indicated:
|
“
Person
” shall mean any individual, partnership, limited liability company, joint venture, firm, corporation, association,
trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.
“
Governmental Entity
” shall mean any governmental or regulatory authorities, agencies, courts, commissions, stock exchange or
market, or other entities.
“
Material Adverse Effect
” means any event, circumstance, development,
occurrence, change in or effect that, individually or in the aggregate, is materially adverse to, or would reasonably be expected to have a materially adverse effect on, the business, assets, liabilities, properties, results of operations or
financial condition of the Company and its subsidiaries taken as a whole.
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2.
|
Termination of SPA
. The Parties hereby agree to terminate the SPA.
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3.
|
Purchase of Common Stock
.
|
(a) Subject and pursuant to the terms set forth in this
Agreement, the Company agrees that it will issue and sell to the Investor and the Investor agrees that it will purchase from the Company an aggregate of (i) 1,076,000 shares of Common Stock at a price of $9.78 per share and (ii) 824,000
shares of Common Stock at a price of $11.55 per share (collectively, such shares, the “
Investor Shares
”), to be allocated among the Investor in the amounts set forth on
Exhibit A
. The aggregate purchase price of the Investor
Shares (the “
Aggregate Purchase Price
”) shall be $20,040,480.
(b) In consideration for the Investor’s commitment
hereunder, the Company shall pay to Investor in cash at Closing (defined below) an equity support payment of $538,000 (the “
Equity Support Payment
”).
(c) The closing of the purchase and sale of the Investor Shares (the “Closing”) will occur substantially concurrently with the
consummation of the transactions contemplated by the Purchase and Assumption Agreement, dated April 22, 2014, between Banc of California, National Association and Banco Popular North America (the “
Branch Purchase Agreement
”)
that is expected to occur on November 7, 2014 (the date on which such closing occurs, the “Closing Date”), subject to the satisfaction or waiver (to the extent permitted by applicable law) of the conditions specified in Section 6
(other than those conditions that by their nature can only be satisfied at the Closing but subject to their satisfaction as of the Closing), or such other date or time as the parties may agree upon in writing.
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4.
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Deliveries at Closing
.
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(a)
Deliveries by the Investor
. At the Closing, the
Investor shall deliver to the Company the Aggregate Purchase Price by wire transfer of immediately available funds to an account designated by the Company, which funds will be delivered to the Company in consideration of the Investor Shares issued
to the Investor at the Closing.
(b)
Deliveries by the Company
. At the Closing, the Company shall deliver (i) to
Cede & Co., or such other nominee as may be designated by The Depository Trust Company (“
DTC
”), one or more global securities representing the Investor Shares and (ii) to the Investor a copy of the irrevocable
instructions to Registar and Transfer Company, in its capacity as transfer agent for the Common Stock (“
RTC
”), instructing RTC to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian
system the number of shares of Common Stock equal to the Investor Shares to the participant designated by the Investor prior to the Closing.
2
(c) At the Closing, the Company shall deliver to the Investor the Equity Support Payment and
shall reimburse the Investor for its expenses pursuant to Section 7(d).
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5.
|
Representations and Warranties
.
|
(a)
Investor Representations and
Warranties
. The Investor represents, warrants and agrees as follows:
(1) Investor acknowledges that it has sole responsibility
for its own due diligence investigation and its own investment decision, and that in connection with its investment decision, Investor has not relied on any representation or information not set forth in this Agreement or in any document filed
by the Company with or furnished to the Securities and Exchange Commission (the “
Commission
”). The Investor acknowledges that it has had an opportunity to conduct such review and analysis of the business, assets, condition,
operations and prospects of the Company and its subsidiaries, both direct and indirect, including an opportunity to ask such questions of management (for which it has received such answers) and to review such information maintained by the Company,
in each case as the Investor considers sufficient for the purpose of purchasing the Investor Shares. The Investor further acknowledges that it has had such an opportunity to consult with its own counsel, financial and tax advisers and other
professional advisers as it believes is sufficient for the purpose of purchasing the Investor Shares.
(2) The execution and delivery of
this Agreement by Investor and the performance of this Agreement and the consummation by Investor of the transactions contemplated hereby have been duly authorized by all necessary (corporate, partnership or limited liability in the case of a
corporation, partnership or limited liability company) action of Investor, and this Agreement, when duly executed and delivered by the Parties, will constitute a valid and legally binding instrument, enforceable in accordance with its terms against
Investor, except as enforcement hereof may be limited by the effect of any applicable bankruptcy, insolvency, reorganization or similar laws or court decisions affecting enforcement of creditors’ rights generally and except as enforcement
hereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).
(3) Except as set forth on
Exhibit A
hereto, as of the date of this Agreement (before giving effect to the sale of the Investor Shares
contemplated hereby), the Investor is not and will not be the beneficial owner of any shares of Common Stock, securities convertible into or exchangeable for Common Stock or any other equity or equity-linked security of the Company. The Investor is
acting independently with respect to the purchase of the Investor Shares contemplated hereby, this Agreement and the other transactions contemplated thereby, and the Investor is not acting as part of a group or in concert with any other person or
entity. The Investor is not party to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, in each case, any shares of Common Stock or other securities of the Company or any option, warrant or
other right to acquire any of the foregoing. The Investor has not disposed of or transferred any shares of Common Stock over the period of thirty (30) days preceding the date of this Agreement.
3
(4) Assuming the accuracy of the Company’s representation in Section 5(b)(29), the
Investor is not deemed a “substantial security holder” of the Company for purposes of NYSE Listing Rule 312.03.
(5) At
Closing, the Investor will have available funds to complete the purchase of the Investor Shares on the terms and conditions contemplated by this Agreement.
(6) There is no broker, finder or other party that is entitled to receive from the Investor any brokerage or finder’s fee or other fee
or commission as a result of sale of the Investor Shares contemplated by this Agreement.
(b)
Company Representations and
Warranties
. Except as may be publicly disclosed by the Company in the reports filed by it with or furnished to the Commission prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents under the
heading “Risk Factors” as well as any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that, in each case, are similarly nonspecific and are predictive or forward-looking in nature),
the Company hereby represents and warrants to the Investor, as of the date hereof and at the Closing, as follows:
(1)
Compliance with
Registration Requirements
. The Company is permitted to use the Registration Statement on
Form S-3
(No. 333-192518), as amended (the “
Registration Statement
”) to register and sell
the Investor Shares. The Registration Statement, including any Rule 462(b) Registration Statement, and any post-effective amendment thereto has become effective under the Securities Act of 1933, as amended (the “
1933 Act
”), and
no stop order suspending the effectiveness of the Registration Statement, including any Rule 462(b) Registration Statement, or any post-effective amendment thereto has been issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and the Company has complied with any requests on the part of the Commission for additional information with respect to the Registration Statement.
At the respective times the Registration Statement, including any Rule 462(b) Registration Statement, and any post-effective
amendments thereto became effective, at each deemed effective date with respect to the Investor Shares pursuant to Rule 430B(f)(2), at the Closing, and at each additional time of purchase, if any, the Registration Statement, including any
Rule 462(b) Registration Statement, and any amendments thereto complied, complies and will comply, as the case may be, in all material respects with the requirements of the 1933 Act and Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the “
1933 Act Regulations
”).
(2)
Incorporated Documents
. The documents incorporated by
reference in the Registration Statement and the final base prospectus and any prospectus supplement filed in connection with the transactions contemplated hereby, including the documents incorporated by reference therein (collectively, the
“
Prospectus
”), at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Securities Exchange Act of 1934, as amended (the “
1934
4
Act
”), and the rules and regulations of the Commission thereunder (the “
1934 Act Regulations
”).
(3)
Independent Accountants
. The accountants who certified the financial statements included in the Registration Statement and the
Prospectus are independent public accountants as required by the 1933 Act and the 1933 Act Regulations and, to the Company’s knowledge, are not and have not been in violation of the auditor independence requirements of the Sarbanes Oxley Act of
2002 and the related rules and regulations of the Commission (the “
Sarbanes-Oxley Act
”) in respect of the entity whose financial statements it audited.
(4)
Financial Statements
. The financial statements included or incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, present fairly, in all material respects, the financial condition, results of operations and cash flows of the Company and its consolidated subsidiaries, at the dates indicated and their
respective statements of operations, stockholders’ equity and cash flows for the periods specified. Such financial statements have been prepared in compliance with the requirements of the 1933 Act and the 1934 Act and in conformity with
accounting principles generally accepted in the United States of America (“
GAAP
”) applied on a consistent basis throughout the periods involved. Any selected financial data and the summary financial information included or
incorporated by reference in the Registration Statement and the Prospectus present fairly, in all material respects, the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement and the Prospectus. The unaudited pro forma consolidated financial statements and the related notes thereto included or incorporated by reference in the Registration Statement and the
Prospectus present fairly, in all material respects, the pro forma consolidated results of operations and the financial position of the Company for the periods specified and have been prepared in accordance with Rules 11-01 and 11-02 of Regulation
S-X and the Commission’s rules and guidelines with respect to pro forma financial statements, and the assumptions used in the preparation thereof are reasonable. No other financial statements or schedules are required under the 1933 Act, the
1933 Act Regulations, the 1934 Act or the 1934 Act Regulations to be included or incorporated by reference in the Registration Statement or the Prospectus. To the extent applicable, all disclosures contained in the Registration Statement or the
Prospectus regarding “non-GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the 1934 Act, the 1934 Act Regulations and Item 10 of Regulation S-K under the
1933 Act, as applicable, in all material respects.
(5)
No Material Adverse Effect
. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (A) there has been no Material Adverse Effect, (B) as of the date hereof, there have been no liabilities or obligations incurred,
direct or contingent, nor transactions entered into by the Company or any of its subsidiaries, other than (i) the Branch Purchase Agreement, (ii) the Securities Purchase Agreement, dated April 22, 2014, by and among the Company and
OCM BOCA INVESTOR, LLC (the “
Oaktree Purchase Agreement
”), (iii) this Agreement or (iv) those in the ordinary course of business, which are not material with respect to the Company and its subsidiaries considered as one
enterprise and (C) except for
5
regular quarterly dividends on the common stock and preferred stock of the Company in amounts per share that are consistent with past practice, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital stock;
provided
,
however
, that Investor hereby agrees and acknowledges that, for all purposes under this Agreement (including this Section 5), no breach or
violation of any representation, warranty, covenant or other term of this Agreement shall be deemed, or may in any way be claimed, to have occurred as a result of the matters disclosed (including the “material weakness” and the related
underlying facts and circumstances) in the Company’s reports filed with the Commission prior to the date hereof.
(6)
Internal
Accounting Controls
. Each of the Company and its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or
specific authorizations, (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (C) access to assets is permitted only in accordance with
management’s general or specific authorization and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Since the date of
the Company’s latest audited financial statements incorporated by reference in the Registration Statement and the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
(7)
Disclosure
Controls
. The Company has established and maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e)
and
15d-15(e)
under the
1934 Act). Such disclosure controls and procedures (A) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s Chief Executive Officer and its
Chief Financial Officer by others within those entities and (B) are effective to perform the functions for which they were established. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have not been
advised that there is (1) any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal controls or (2) any material weaknesses in internal controls. Since the date of the
most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to
material weaknesses. The principal executive officer (or the equivalent) and principal financial officer (or the equivalent) of the Company have made all certifications required by the Sarbanes-Oxley Act, and the statements made in each such
certification are accurate; the Company, its subsidiaries and to the Company’s knowledge, its directors and officers, are each in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act.
(8)
Regulatory Matters
. The Company, Banc of California, National Association and, to the knowledge of the Company, the Company’s
other subsidiaries, are in compliance in all material respects with all laws administered by and regulations of any governmental authority applicable to it or to them (including, without limitation, all regulations and orders of, or agreements with,
the Board of Governors of the Federal Reserve System, the
6
Office of the Comptroller of the Currency, the California Department of Financial Institutions and the Federal Deposit Insurance Corporation, the Equal Credit Opportunity Act, the Fair Housing
Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act, all other applicable fair lending laws or other laws relating to discrimination and the Bank Secrecy Act and Title III of the U.S.A. Patriot Act), the failure to comply with
which would have a Material Adverse Effect. Except as disclosed in the Registration Statement and the Prospectus, neither the Company nor any of its subsidiaries is subject or is party to, or has received any notice or advice that any of them may
become subject or party to any investigation with respect to, any corrective, suspension or cease-and-desist order, agreement, consent agreement, memorandum of understanding or other regulatory enforcement action, proceeding or order with or by, or
is a party to any commitment letter or similar undertaking to, or is subject to any directive by, or has been a recipient of any supervisory letter from, or has adopted any board resolutions at the request of, any Regulatory Agency (as defined
below) that currently relates to or restricts in any material respect the conduct of their business or that in any manner relates to their capital adequacy, credit policies or management (each, a “
Regulatory Agreement
”), nor has the
Company or any of its subsidiaries been advised by any Regulatory Agency that it is considering issuing or requesting any such Regulatory Agreement. There is no unresolved violation, criticism or exception by any Regulatory Agency with respect to
any report or statement relating to any examinations of the Company or any of its subsidiaries which, in the reasonable judgment of the Company, is expected to result in a Material Adverse Effect. As used herein, the term “
Regulatory
Agency
” means any federal or state agency charged with the supervision or regulation of depositary institutions or holding companies of depositary institutions, or engaged in the insurance of depositary institution deposits, or any court,
administrative agency or commission or other Governmental Entity, authority or instrumentality having supervisory or regulatory authority with respect to the Company or any of its subsidiaries.
(9)
Regulatory Compliance
. The deposit accounts in the Company’s subsidiary banks are insured up to the applicable limits by the
Deposit Insurance Fund of the Federal Deposit Insurance Corporation (the “
FDIC
”) to the fullest extent permitted by law and the rules and regulations of the FDIC, and no proceeding for the revocation or termination of such insurance
is pending or, to the knowledge of the Company, threatened or contemplated.
(10)
Good Standing of the Company
. The Company has
been duly organized and is validly existing as a corporation in good standing under the laws of the State of Maryland and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus and to enter into and perform its obligations under this Agreement and the Investor Shares. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse
Effect. The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended.
(11)
Good
Standing of Subsidiaries
. Banc of California, National Association is the only “significant subsidiary” of the Company (as such term is defined in
Rule 1-02
of
Regulation S-X)
(a “
Significant Subsidiary
”) and it has corporate power and
7
authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect. Banc of California, National Association is a national bank with a national bank charter issued by the Office of the Comptroller of the Currency and its charter is in full force and effect.
Except as otherwise disclosed in the Registration Statement and the Prospectus, all of the issued and outstanding shares of capital stock of Banc of California, National Association have been duly authorized and validly issued, are fully paid and
non-assessable
and are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, and none of the outstanding shares of
capital stock of Banc of California, National Association were issued in violation of any preemptive or similar rights of any securityholder of Banc of California, National Association.
(12)
Authorization of Agreement
. This Agreement has been duly authorized, executed and delivered by the Company. When duly executed by
the Investor, this Agreement will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors’ rights generally, and the application of equitable principles relating to the availability of remedies, and subject to 12 U.S.C. § 1818(b)(6)(D) (or any successor statute) and similar bank
regulatory powers and to the application of principles of public policy, and except as rights to indemnity or contribution, including but not limited to, indemnification provisions set forth in Section 7(c) of this Agreement, may be limited by
federal or state securities law and the public policy underlying such laws.
(13)
Authorization of the Investor Shares
. The
Investor Shares to be issued and sold by the Company to the Investor hereunder have been duly authorized by the Company and when issued and delivered to and paid for by the Investor at the Closing in accordance with the terms of this Agreement, will
be validly issued, will be issued in compliance with federal and state securities laws and will be free of statutory, and will not be issued in violation of any contractual, preemptive rights, rights of first refusal and similar rights.
(14)
Description of the Investor Shares
. The Investor Shares will conform in all material respects to the respective statements
relating thereto contained in the Registration Statement and the Prospectus.
(15)
Absence of Defaults and Non-contravention
.
Neither the Company nor any of its subsidiaries is in violation of its charter or bylaws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any
subsidiary is subject, except for such violations or defaults that would not result in a Material Adverse Effect. No event of default under that certain indenture, dated as of April 23,
8
2012, between the Company and U.S. Bank National Association, as trustee, as supplemented by a supplemental indenture entered into by the Company and the trustee on April 23, 2012
(collectively, the “
Indenture
”), or default with notice and/or lapse of time that would constitute an event of default in respect of the Company’s 7.50% Senior Notes due April 15, 2020 (the “
Notes
”) has
occurred and is continuing. The execution, delivery and performance of this Agreement, the issue and sale of the Investor Shares by the Company and the performance by the Company of all of its obligations under this Agreement and the consummation of
the transactions contemplated herein and compliance by the Company with its obligations hereunder have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, (i) any indenture, mortgage, deed of trust, loan agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) the provisions of the charter, bylaws or other organizational documents of the Company or any of its subsidiaries or (iii) any
statute or any order, rule or regulation of any Governmental Entity having jurisdiction over the Company or any of its subsidiaries or any of their property, assets or operations except, with respect to clauses (i) and (iii), for those
conflicts, breaches, defaults, Repayment Events, liens, charges or encumbrances that would not, singly or in the aggregate, result in a Material Adverse Effect. As used herein, a “
Repayment Event
” means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company
or any of its subsidiaries.
(16)
Accuracy of Exhibits
. There are no contracts or documents which are required to be described in
the Registration Statement and the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required.
(17)
Absence of Labor Dispute
. No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of the principal suppliers, manufacturers, customers or contractors of the Company or any of its subsidiaries,
which, in either case, would result in a Material Adverse Effect.
(18)
Absence of Proceedings
. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or Governmental Entity, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any of its subsidiaries, which
(A) is required to be disclosed in Registration Statement (other than as disclosed therein), (B) might result in a Material Adverse Effect or (C) might materially and adversely affect the assets or operations of the Company or any of
its subsidiaries or the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder or under the Investor Shares. The aggregate of all pending legal or governmental proceedings to
which the Company or any of its
9
subsidiaries is a party or of which any of their respective assets or operations is the subject which are not described in the Registration Statement and the Prospectus, including ordinary
routine litigation incidental to the business, would not result in a Material Adverse Effect.
(19)
Possession of Intellectual
Property
. The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent licenses, trademarks, service marks and trade names necessary to carry on their businesses as presently conducted and the
Company and its subsidiaries have not received any notice of infringement of or conflict with asserted rights of others with respect to any patents, patent licenses, trademarks, service marks or trade names that, in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a Material Adverse Effect. Neither the Company nor any of its subsidiaries has infringed or is infringing on the intellectual property of a third party, and, except as are described in the
Registration Statement and the Prospectus, neither the Company nor any of its subsidiaries has received notice of a claim by a third party to the contrary, except where such infringement would not, singly or in the aggregate, result in a Material
Adverse Effect.
(20)
Possession of Licenses and Permits
. The Company and its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, “
Governmental Licenses
”) issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them,
except where the failure so to possess would not, singly or in the aggregate, result in a Material Adverse Effect. The Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the
failure to so comply would not, singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not, singly or in the aggregate, result in a Material Adverse Effect. Neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such Governmental Licenses which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect.
(21)
Title to Property
. The Company and its subsidiaries have good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (A) are described in the
Registration Statement and the Prospectus or (B) would not have a Material Adverse Effect. All of the leases and subleases material to the business of the Company and its subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the Registration Statement and the Prospectus, are in full force and effect, and neither the Company nor any subsidiary has any notice of any material claim of any sort that has been asserted
by anyone adverse to the rights of the Company or any subsidiary under any such lease or sublease or affecting or questioning the rights of the Company or such subsidiary to the continued possession of the leased or subleased premises under any such
lease or sublease and that, in any such case, would have a Material Adverse Effect.
10
(22)
Absence of Further Requirements
. No filing with, or consent, approval,
authorization, order, license, registration, qualification or decree of or with any Governmental Entity is necessary or required in connection with the due authorization, execution and delivery of this Agreement or for the offering, issuance, sale
or delivery of the Investor Shares, the performance by the Company of its obligations hereunder or the consummation by the Company of the transactions contemplated by this Agreement, except the registration of the Investor Shares under the 1933 Act,
which shall have been effected prior to the Closing (or, with respect to any Rule 462 Registration Statement, will be effected in accordance with Rule 462(b) under the 1933 Act) or as expressly contemplated by this Agreement or as may be required
under the (i) rules and regulations of the NYSE and the Financial Industry Regulatory Authority (“
FINRA
”) or (ii) securities or Blue Sky laws of the various states and other jurisdictions in connection with the purchase
and receipt of the Investor Shares by the Investor.
(23)
Investment Company Act
. The Company is not required, and upon the
issuance and sale of the Investor Shares as herein contemplated and the application of the net proceeds therefrom as described in the Registration Statement and the Prospectus will not be required, to register as an “investment company”
under the Investment Company Act of 1940, as amended.
(24)
Environmental Laws
. The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(“
Environmental Laws
”), (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not
received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except where such non-compliance with Environmental Laws,
failure to receive required permits, licenses or other approvals, or liability would not have a Material Adverse Effect.
(25)
NYSE
. The Company has filed with the NYSE a Notification of Listing of Additional Shares or equivalent form with respect to the Investor Shares required by the rules of the NYSE.
(26)
Exchange Listing
. The Company will cause the Investor Shares that are shares of Common Stock to be approved for listing on the
NYSE, subject to official notice of issuance.
(27)
Contracts
. Except for (i) the Small Business Lending Fund-Securities
Purchase Agreement, dated as of August 30, 2011, between the Company and the Secretary of the Treasury, relating to the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series A, issued on that date pursuant to the Small Business
Lending Fund program of the U.S. Department of the Treasury, (ii) the subscription agreements between the Company and each of the investors in the Company’s common stock offering completed on November 1, 2010 and (iii) the
Securities Purchase Agreement, dated as of December 3, 2013, by and among the Company, Patriot Financial Partners, L.P. and Patriot Financial Partners
11
Parallel, L.P., there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement
under the 1933 Act with respect to any securities of the Company or to require the Company to include such securities with the Investor Shares registered pursuant to the Registration Statement. Neither the Company nor any of its subsidiaries has
sent or received any communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in the Prospectus, or referred to or described in, or filed as an exhibit to, the Registration
Statement, and no such termination or non-renewal has been threatened by the Company or any of its subsidiaries or, to the Company’s knowledge, any other party to any such contract or agreement.
(28)
Insurance
. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the business in which they are engaged; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor
any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at
a cost that would not have a Material Adverse Effect.
(29)
Capitalization
. The authorized capital stock of the Company consists
of (i) 446,863,844 shares of Common Stock of which, as of September 30, 2014 (the “
Company Capitalization Date
”), 29,662,724 shares were issued, 28,023,701 shares were outstanding and 1,639,023 shares were held in
treasury; (ii) 3,136,156 shares of Class B non-voting non-convertible common stock, par value $0.01 per share (the “
Class B Non-Voting Common Stock
”), of which, as of the Company Capitalization Date, 602,783 shares were
issued and outstanding; and (iii) 50,000,000 shares of preferred stock, par value $0.01 per share, of which, as of the Company Capitalization Date, 1,652,000 shares were issued and outstanding. As of the Company Capitalization Date,
2,274,070 shares of Common Stock were reserved for issuance upon exercise of warrants, upon exercise of options granted as employment inducement awards or as founders options and under the Company’s equity compensation plans, and 59,900
restricted stock units were issued and outstanding. The authorized capital stock of the Company conforms and will conform in all material respects as to legal matters to the description thereof contained in the Registration Statement and the
Prospectus. The shares of Common Stock outstanding prior to the issuance of the Investor Shares have been duly authorized, are validly issued, fully paid and non-assessable, have been issued in compliance with applicable securities laws and were not
issued in violation of any preemptive or similar rights.
(30)
Dividends
. Except as otherwise would not have a Material Adverse
Effect, no subsidiary of the Company is subject to any material direct or indirect prohibition on paying any dividends to the Company, on making any other distribution on such subsidiary’s capital stock, on repaying to the Company any loans or
advances to such subsidiary from the Company or on transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company, except as described in the Registration Statement and the Prospectus.
12
(31)
Taxes
. All tax returns required to be filed by the Company or any of its
subsidiaries have been timely filed, and all taxes and other assessments of a similar nature (whether imposed directly or through withholding) including any interest, additions to tax or penalties applicable thereto due or claimed to be due from
such entities have been timely paid, other than those being contested in good faith and for which adequate reserves have been provided or which if not paid, would not individually or in the aggregate, result in a Material Adverse Effect.
(32)
Foreign Corrupt Practices Act
. Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent employee or affiliate of the Company or any of its subsidiaries, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder, and the Company and its subsidiaries have instituted and maintain policies and procedures designed to ensure continued compliance therewith, including without limitation a system of internal
accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(33)
Derivative Financial Instruments
. Any and all material swaps, caps, floors, futures, forward contracts, option agreements (other
than stock options issued to the Company’s employees, directors, agents or consultants) and other derivative financial instruments, contracts or arrangements, whether entered into for the account of the Company or one of its subsidiaries or for
the account of a customer of the Company or one of its subsidiaries, were entered into in the ordinary course of business and in accordance with applicable laws, rules, regulations and policies of all applicable regulatory agencies and with
counterparties believed by the Company to be financially responsible at the time. The Company and each of its subsidiaries have duly performed in all material respects all of their obligations thereunder to the extent that such obligations to
perform have accrued, and there are no breaches, violations or defaults or allegations or assertions of such by any party thereunder which would, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(34)
ERISA
. Each of the Company, the Company’s subsidiaries and their respective “ERISA Affiliates” (as defined below)
are in compliance in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (collectively,
“
ERISA
”). No “reportable event” (as defined in ERISA) has occurred with respect to any “employee benefit plan” (as defined in ERISA) for which the Company, any of the Company’s subsidiaries or their
respective ERISA Affiliates would have any liability. None of the Company, the Company’s subsidiaries or their respective ERISA Affiliates have incurred, or expect to incur, material liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the
13
United States Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (collectively, the “
Code
”). Each “employee benefit
plan” for which the Company, any of the Company’s subsidiaries or any of their respective ERISA Affiliates would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material
respects and, to the Company’s knowledge, nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification. “
ERISA Affiliate
” means, with respect to the Company or any of its
subsidiaries, any member of any group of organizations described in Sections 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA of which the Company or such subsidiary is a member.
(35)
Certain Transactions
. Neither the Company nor any of its subsidiaries has participated in any reportable transaction, as defined
in Treasury Regulation Section 1.6011-(4)(b)(1).
(36)
Unlawful Payments
. None of the Company, any of the Company’s
subsidiaries or, to the knowledge of the Company, any affiliate of the Company or any of its subsidiaries has: (A) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity; (B) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; or (C) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(37)
Relationships
. No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one
hand, and the directors, officers, shareholders, customers or suppliers of the Company or any of its subsidiaries, on the other hand, that is required by the 1933 Act or the regulations thereof to be described in the Registration Statement and the
Prospectus and that is not so described.
(38)
Pending Procedures and Examinations
. The Registration Statement is not the
subject of a pending proceeding or examination under Section 8(d) or 8(e) of the 1933 Act, and the Company is not the subject of a pending proceeding under Section 8A of the 1933 Act in connection with the offering of the Investor Shares.
(39)
Broker Fees
. There is no broker, finder or other party that is entitled to receive from the Company any brokerage or
finder’s fee or other fee or commission as a result of sale of the Investor Shares contemplated by this Agreement.
(40)
Authorization of Branch Purchase Agreement and the Oaktree Purchase Agreement
. Each of the Branch Purchase Agreement and the Oaktree Purchase Agreement has been duly authorized, executed and delivered by the Company and, assuming the due
execution and delivery by the other party thereto, constitutes a valid and legally binding agreement of the Company, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors’ rights generally or by general equitable principles.
14
(a) The obligation of the Investor to consummate the Closing shall be
subject to the condition that all representations and warranties and other statements of the Company shall be true and correct as of the date of this Agreement and the date of the Closing (except those representations and warranties that by their
terms speak specifically as of the date of this Agreement or some other date shall be true and correct as of such date), except for such failures to be so true and correct (without giving effect to any qualification as to materiality or Material
Adverse Effect contained therein) as would not have, individually in the aggregate, a Material Adverse Effect; the condition that the Company shall have performed in all material respects all of its obligations hereunder theretofore to be performed
(without giving effect to any qualification as to materiality or Material Adverse Effect contained therein); and the condition that since the date hereof no Material Adverse Effect shall have occurred and be continuing with respect to either
(x) the Company or (y) the Company after giving effect to the transactions contemplated by the Branch Purchase Agreement.
(b)
The obligation of the Company to consummate the Closing shall be subject to the condition that all representations and warranties and other statements of the Investor shall be true and correct as of the date of this Agreement and the date of the
Closing (except those representations and warranties that by their terms speak specifically as of the date of this Agreement or some other date shall be true and correct as of such date); and the condition that the Investor shall have performed all
of its obligations hereunder theretofore to be performed.
(c) The obligation of each of the Investor and the Company to consummate the
Closing shall be subject to the following additional conditions:
(1) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the transactions contemplated hereby or prohibit the Investor from owning or voting any of the Investor Shares;
(2) the purchase by the Investor of the Investor Shares shall not (i) require the Investor or any of its affiliates to file a prior
notice under the Change in Bank Control Act, or otherwise seek prior approval or non-objection of any state or federal banking regulator; (ii) require the Investor or any of its affiliates to become a bank holding company; or (iii) cause
the Investor, together with any other person whose securities of the Company would be aggregated with the Investor’s securities of the Company for purposes of any bank regulation or law, to collectively be deemed to own, control or have the
power to vote securities which (assuming, for this purpose only, full conversion and/or exercise of such securities by the Investor and such other persons) would represent more than 9.9% of any class of voting securities of the Company outstanding
on the date of the Closing (after giving effect to the purchase of the Investor Shares contemplated hereby); and
(3) the conditions set
forth in Section 10 of the Branch Purchase Agreement, other than the condition set forth in Section 10.3(e) of the Branch Purchase Agreement with respect to the Company’s acceptance of the proceeds of the Acceptable Financing (as
defined in the Branch Purchase Agreement), shall have been satisfied or waived.
15
(a)
Efforts
. Subject to the terms and conditions of this Agreement,
each of the Parties will use its reasonable best efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or desirable, or advisable under applicable laws, so as to permit
consummation of the transactions contemplated hereby as promptly as practicable and shall use reasonable best efforts to cooperate with the other party to that end.
(b)
Withholding
. The Company shall be entitled to deduct and withhold from amounts payable to the Investor in respect of the Investor
Shares such amounts as it is required to deduct and withhold under applicable law. To the extent that amounts are so withheld by the Company, such withheld amounts shall be paid by the Company to the appropriate governmental authority and shall be
treated for all purposes as having been paid to the Investor in respect of which such deduction and withholding was made by the Company. The Company shall send to the Investor a certified copy of the original official receipt received by the Company
in case any such payment to a governmental authority is made. Prior to the Investor receiving any Investor Shares, the Investor shall deliver to the Company a duly executed Internal Revenue Service (“
IRS
”) Form W-9 or the
appropriate IRS Form W-8, as applicable, and such other IRS forms as may be reasonably requested by the Company from time to time. The Investor shall update all such IRS forms, as appropriate, from time to time upon reasonable request by the
Company.
(c)
Indemnification
.
(1) Subject to the other provisions of this Section 7(c), from and after the Closing, the Company (the “
Indemnifying
Party
” ) shall indemnify, defend and hold harmless the Investor and such party’s directors, officers and employees (collectively, the “
Indemnitees
”) from and against, and reimburse any Indemnitee for claims, costs,
expenses, losses, damages, liabilities, awards, judgments, costs and expenses (including reasonable attorneys’ and consultant fees and expenses) (“
Damages
”) that such Indemnitee may suffer or incur, or become subject to,
relating to, resulting from or arising out of the following (without duplication): (i) the breach of any representations or warranties made by the Company in Section 5(b) as of the date hereof or as of the date of the Closing (or with
respect to representations and warranties that are made as of a specific date, as of such date); and (ii) the breach or failure by the Indemnifying Party to perform, or cause to be performed, any of its covenants or obligations contained in
this Agreement.
(2) Notwithstanding any other provision to the contrary, other than Damages arising from fraud (including, without
limitation, under Rule 10b-5 of the Securities Exchange Act of 1934) or willful misconduct: (i) the Company shall not be liable for any Damages under Section 7(c)(1)(i) relating to, resulting from or arising out of a breach of a
representation or warranty made by the Company unless and until the aggregate amount of all Damages which may be recovered pursuant to Section 7(c)(1)(i) exceeds 3.0% of the Aggregate Purchase Price (the “
Indemnity Threshold
”);
and (ii) the aggregate amount of Damages under Section 7(c)(1)(i) relating to, resulting from or arising out of a breach of a representation or warranty made by the Company for which the Company shall be liable hereunder shall not exceed
100.0% of the Aggregate Purchase Price.
16
(3) An Indemnitee that may be entitled to be indemnified under this Section 7(c) shall
promptly notify the Indemnifying Party in writing of any event, occurrence, matter or pending or threatened suit, claim or demand (each, an “
Action
”) that the Indemnitee has determined has given or would reasonably be expected to
give rise to a right of indemnification under this Agreement (including a pending or threatened Action asserted by a third party against any Indemnitee, such Action being a “
Third-Party Claim
”), describing in reasonable detail the
facts and circumstances with respect to the subject matter of such Action;
provided
that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Section 7(c) except to the extent
the Indemnifying Party is prejudiced by such failure. The Indemnifying Party shall be entitled to defend all Third-Party Claims upon notice to the Indemnitee(s). In the event that the Indemnifying Party elects to conduct the defense of any
Third-Party Claim, the Indemnifying Party shall keep the Indemnitee(s) informed of all material developments relating to any such Third-Party Claim, and the Indemnitee will cooperate with the Indemnifying Party as may be reasonably requested by the
Indemnifying Party. An Indemnitee may not consent to entry of any judgment or enter into any settlement in respect of a Third-Party Claim without the Indemnifying Party’s written consent to such judgment or settlement.
(4) With respect to each indemnification obligation contained in this Section 7(c), all Damages shall be net of any third-party
insurance proceeds that have been actually recovered by the Indemnitee(s) in connection with the facts giving rise to the right of indemnification. If an Indemnitee receives third-party insurance proceeds in respect of Damages that have been
indemnified by the Indemnifying Party hereunder, the Indemnitee shall promptly remit such amount to the Indemnifying Party.
(5)
Notwithstanding any other provision of this Agreement to the contrary, other than any Damages arising from fraud (including, but not limited to, under Rule 10b-5 of the Securities Exchange Act of 1934) or willful misconduct, in no event shall the
Indemnifying Party have any liability to any Indemnitee for any indirect, special, incidental, consequential, punitive, exemplary, treble or other special damages.
(6) Except for claims based on fraud (including, but not limited to, under Rule 10b-5 of the Securities Exchange Act of 1934) or willful
misconduct, the remedies provided for in this Section 7(c) shall be the sole and exclusive remedy for breaches by the Company or the Investor, as applicable, of this Agreement.
(7) If, in any agreement to issue and sell Common Stock, or any security, right, option or warrant or right divided by the number of shares
of Common Stock, entered into by the Company after the date hereof and prior to the Closing, the Company agrees to indemnify the purchaser thereunder on terms more favorable to such purchaser than the terms of this Section 7(c), the Company
shall notify the Investor of such terms and offer to amend this Agreement to provide the Investor indemnification on such more favorable terms.
(d)
Expenses
. The Company shall pay to Investor the amount of $100,000 as reimbursement for the Investor’s reasonable
out-of-pocket expenses, including reasonable attorney’s fees and expenses, incurred in connection with the SPA, this Agreement and the transactions contemplated hereby whether or not the Closing occurs.
17
(a)
Termination
. This Agreement may be terminated (i) by
mutual agreement of the parties hereto; or (ii) by the Investor, if the Closing shall not have occurred by midnight, Eastern Time, at the end of the day on January 31, 2015.
(b)
Effects of Termination
. In the event of any termination of this Agreement as provided in Section 8(a), this Agreement (other
than this Section 8(b) and Section 9, which shall remain in full force and effect) shall become void and of no further force and effect; provided that nothing herein shall relieve any party from liability for willful and material breach of
this Agreement.
(a)
Survival
. None of the representations, warranties, covenants
and agreements set forth in this Agreement shall survive the Closing, except for (i) the representations and warranties in Section 5, which shall survive the Closing in full force and effect until the date that is one (1) year after
the date of the Closing, at which time they shall terminate, and (ii) those covenants and agreements contained in this Agreement that by their terms apply or are to be performed in whole or in part after the Closing.
(b)
Binding Agreement; Assignment
. This Agreement shall be binding upon, and shall inure solely to the benefit of, each of the
Parties, and each of their respective heirs, executors, administrators, successors and permitted assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The Investor may not assign any of these rights
or obligations hereunder to any other person or entity without the prior written consent of the Company.
(c)
Entire
Agreement
. This Agreement, including the exhibits hereto, constitutes the entire understanding between the Parties with respect to the subject matter hereof and may be amended only by written execution by each of the Parties. Upon
execution by the Company and the Investor, this Agreement shall be binding on such parties.
(d)
Governing Law
. THIS AGREEMENT
SHALL BE ENFORCED, GOVERNED AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PRINCIPLES.
(e)
Treatment of Equity Support Payment
. The Company agrees to treat the Equity Support Payment for federal income tax purposes as an
adjustment to the Aggregate Purchase Price.
(f)
Notices
. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Company shall be directed to it at its principal executive offices located at 18500 Von Karman Avenue, Suite 1100, Irvine,
California 92612, attention of Chief Executive Officer, with a copy, which shall not constitute notice, to Wachtell,
18
Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York 10019-6150, attention of Matthew M. Guest, Esq. Notices to the Investor shall be directed to the addresses as set forth on
Exhibit A
hereto, or at such other address or addresses as may have been furnished to the Company in writing.
(g)
Counterparts
. This Agreement may be executed in any number of counterparts and by the Parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one
in the same agreement.
(h)
Headings
. Section headings herein are for convenience only and shall not affect the construction
hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
19
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
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BANC OF CALIFORNIA, INC.
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|
|
|
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|
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By:
|
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/s/ Steven A. Sugarman
|
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Name:
|
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Steven A. Sugarman
|
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Title:
|
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Chief Executive Officer
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INVESTOR:
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PATRIOT FINANCIAL PARTNERS, L.P.
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By:
|
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/s/ W. Kirk Wycoff
|
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|
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Name:
|
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W. Kirk Wycoff
|
|
|
|
Title:
|
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Managing Partner
|
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PATRIOT FINANCIAL PARTNERS PARALLEL, L.P.
|
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|
|
|
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|
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By:
|
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/s/ W. Kirk Wycoff
|
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|
|
Name:
|
|
W. Kirk Wycoff
|
|
|
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Title:
|
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Managing Partner
|
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|
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PATRIOT FINANCIAL PARTNERS II, L.P.
|
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|
|
|
|
|
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By:
|
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/s/ W. Kirk Wycoff
|
|
|
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Name:
|
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W. Kirk Wycoff
|
|
|
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Title:
|
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Managing Partner
|
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PATRIOT FINANCIAL PARTNERS PARALLEL II, L.P.
|
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|
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By:
|
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/s/ W. Kirk Wycoff
|
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Name:
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W. Kirk Wycoff
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Title:
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Managing Partner
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[Signature Page to Securities Purchase Agreement]
Exhibit A
Investor
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Name and Address of Investor
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Number of Investor
Shares to be
purchased at
$9.78 per share
|
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Number of Investor
Shares to be
purchased at
$11.55 per share
|
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Total
|
|
|
Patriot Financial Partners, L.P.
Cira
Centre
2929 Arch Street
27
th
Floor
Philadelphia, Pennsylvania 19104-2868
|
|
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211,821
|
|
|
|
162,212
|
|
|
|
374,033
|
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|
|
|
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Patriot Financial Partners Parallel, L.P.
Cira
Centre
2929 Arch Street
27
th
Floor
Philadelphia, Pennsylvania 19104-2868
|
|
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36,592
|
|
|
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28,022
|
|
|
|
64,614
|
|
|
|
|
|
|
|
Patriot Financial Partners II, L.P.
Cira
Centre
2929 Arch Street
27
th
Floor
Philadelphia, Pennsylvania 19104-2868
|
|
|
681,899
|
|
|
|
522,198
|
|
|
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1,204,097
|
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|
|
|
|
|
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Patriot Financial Partners Parallel II, L.P.
Cira Centre
2929 Arch Street
27
th
Floor
Philadelphia, Pennsylvania 19104-2868
|
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145,688
|
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|
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111,568
|
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|
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257,256
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Total
|
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1,076,000
|
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|
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824,000
|
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|
|
1,900,000
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Number of shares of Common Stock beneficially owned by Investor as of the date hereof: 1,200,564.
Exhibit 14.1
CODE OF BUSINESS CONDUCT AND ETHICS
BANC OF CALIFORNIA, INC.
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1.
|
Overview of the Code of Business Conduct and Ethics (the or this “Code”)
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This Code is intended to deter wrongdoing and promote honest and
ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. The Code is also intended to avoid conflicts of interest, or the appearance of conflicts, by requiring
appropriate disclosure to supervisors of any material transaction or relationship that reasonably could be expected to give rise to a conflict. The Code is also intended to promote full, fair, accurate, timely and understandable disclosure in
documents Banc of California, Inc. (the “Corporation”) files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in all other public communications made by the Corporation. The Code is also intended to
promote compliance with applicable governmental laws, rules and regulations; prompt internal reporting to designated persons of violations of the Code; and accountability for adherence to the Code.
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1.2
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Application of the Code
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The Code applies to all Corporation directors, officers and
employees, including directors, officers and employees of the Corporation’s subsidiaries and affiliates. References in the Code to the “Corporation” include the Corporation’s subsidiaries and affiliates unless the context
indicates otherwise. The Code applies to all employee decisions and activities within the scope of employment, or when representing the Corporation in any capacity. A copy of the Code will be included in the orientation package provided to new
employees. Following review of the Code, new employees will be asked to sign a written confirmation that they have reviewed the Code in its entirety, and agree to adhere to its provisions. Existing employees will be asked to review the Code
annually. All Corporation directors will be required to execute a binding agreement on behalf of themselves and their respective affiliates to adhere to all provisions of this Code at the time of, and as a condition to, their initial nomination and
annually thereafter. All Corporation employees, officers and directors should be familiar with the requirements of the Code, and should encourage employees to apply the Code to their daily activities and decisions, and to seek guidance from the
appropriate individuals when additional information or explanation is needed.
Copies of the Code may be obtained from several sources,
including the Employee Handbook, the Corporation’s intranet, and the Human Resources Department.
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1.3
|
Reporting Violations of the Code
|
Any known or suspected violation of the Code,
including actions or failures to act, must be promptly reported to your supervisor or the General Counsel. This includes violations or possible violations involving you, another employee (including officers) or a director. Any
18500 Von Karman Ave.
—
Suite 1100
—
Irvine, CA 92612
—
949.236.5250
—
bancofcal.com
violation of law, rule or regulation applicable to the Corporation and/or corporate policy, including, without limitation, the Corporation’s Insider Trading Policy, is also a violation of
this Code. Violations of the Code may result in disciplinary action, up to and including immediate termination of employment.
Concerns
regarding questionable accounting, internal accounting controls or auditing matters may be directed to the Chairman of the Audit Committee at (855) 554-2053 by leaving a confidential message.
All concerns or complaints will be promptly investigated and appropriate action taken. The General Counsel will document the results of the
investigation in a report to the Board of Directors in order to ensure a fair process is utilized in determining whether a violation of the Code has occurred. No person expressing concerns or complaints will be subject to any disciplinary or other
adverse action by the Corporation absent a knowingly false report. All concerns or complaints may be made anonymously and will remain confidential, except as otherwise required by law or legal process. Please provide sufficient information to allow
us to properly investigate your concerns. The Corporation will retain a record of all concerns and complaints, and the results of its investigations, for five years.
If you need additional explanation regarding a particular provision
of the Code, or if you need guidance in a specific situation, including whether a conflict or potential conflict of interest may exist, please contact your immediate supervisor. If you are uncomfortable speaking to your immediate supervisor, or if
you require additional guidance after having consulted with your supervisor, you are encouraged to contact the General Counsel. Directors in need of guidance also may contact the Senior Vice President of Human Resources, as well as the
Corporation’s General Counsel.
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2.
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Principles and Standards of Conduct
|
One of the most valued assets of the Corporation is its reputation for
integrity as determined by the personal conduct of its directors, officers and employees, and how that conduct may be perceived by the public. The ethical management of both personal and business affairs is most important to all directors, officers
and employees in order to avoid situations that might lead to a conflict, or even suspicion of a conflict, between personal interest and responsibility to the Corporation. Your position should never be used directly or indirectly for private gain,
for advancement of personal interests or to obtain favors or benefits for oneself, customers, or suppliers.
The following is a statement
of policy regarding standards of conduct expected from directors, officers and employees of the Corporation. This statement supplements the standards of conduct provided in the Employee Handbook, including the policies on ethics, confidentiality,
and conflicts of interest.
Page 2 of 9
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2.2
|
Conflicts of Interest
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A “conflict of interest” occurs when an
individual’s private interest interferes in any way – or even appears to interfere – with the interests of the Corporation as a whole. A conflict situation can arise when an employee, officer or director takes action or has interests
that may make it difficult to perform his or her work for the Corporation objectively and effectively. Conflicts of interest also arise when an employee, officer or director, or a member of his or her family, receives improper personal benefits as a
result of his or her position with the Corporation.
It is the Corporation’s policy that directors, officers and employees may not
engage in conduct which will conflict with the interests of the Corporation. It is important to avoid even the appearance of a conflict of interest, since the appearance of a conflict of interest can be as damaging as an actual conflict, whether to
the reputation of the Corporation or the individual.
No statement of policy can address all situations which may present a conflict of
interest for directors, officers or employees. The Corporation must rely on the character, integrity and judgment of its directors, officers and employees to avoid those situations which may create a conflict of interest, or the appearance of a
conflict. In situations not specifically addressed in this Code, or in instances where you need additional guidance or explanation regarding a particular situation, you are encouraged to seek guidance as provided in Section 1.4 of this Code.
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2.3
|
Confidential and Insider Information
|
Confidentiality is a fundamental principle of the
financial services business. In the course of performing your duties, you may acquire confidential information. Confidential information includes all non-public information that might be of use to competitors or harmful to the Corporation or its
customers, if disclosed. Confidential information, in any form, obtained through business or personal contacts with customers, prospective customers, suppliers, or other employees shall be used solely for the Corporation’s purposes. Information
reflecting favorably or adversely upon the current or future value of any business enterprise should not be used in any manner for personal gain or for advantage to a third party. This information must not be revealed to unauthorized persons or
discussed with others within the Corporation unless their duties require this information. In addition, the use of confidential information about one customer to further the private interests of another customer is unethical and possibly illegal.
Some specific examples of confidential information include:
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•
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Information regarding the Corporation’s and its subsidiaries’ strategic plans, regulatory initiatives and certain community plans and programs;
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•
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The identity of customers and potential customers and their personal, business and financial information;
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•
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Non-public business and financial information of the Corporation;
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•
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Personal information regarding any employee of the Corporation;
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Page 3 of 9
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•
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Personal or non-public business information regarding any supplier, vendor or agent of the Corporation;
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•
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Information related to, including the identity of, potential candidates for mergers and acquisitions;
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•
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Information regarding the Corporation’s sales strategies, plans or proposals;
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•
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Information related to computer software programs, whether proprietary or standard;
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•
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Information related to documentation systems, information databases, customized hardware or other information systems and technological developments;
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•
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Manuals, processes, policies, procedures, compositions, opinion letters, ideas, innovations, inventions, formulas and other proprietary information belonging to the Corporation or related to the Corporation’s
activities;
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•
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Security information, including without limitation, policies and procedures, passwords, personal identification numbers (PINs) and electronic access keys;
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•
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Communications by, to and from regulatory agencies; and
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•
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Certain communications with or from attorneys for the Corporation, whether internal or external.
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This caution on confidential information does not preclude releasing certain customer information when authorized by the customer or to the
government when appropriate. Guidance from the Senior Vice President of Human Resources should be sought in all such cases. Disclosure of confidential information to attorneys, accountants and other professionals working on behalf of the
Corporation, as well as regulatory examiners, may also be appropriate.
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2.4
|
Material Inside Information
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Generally, material inside information is defined as any
information that is confidential in nature, and that a reasonable investor would likely consider important in deciding whether to buy, sell, or hold the Corporation’s securities. Trading in the Corporation’s securities while being aware of
material inside information or disclosing such information to others who in turn may trade on the basis of that information could result in substantial civil and criminal penalties for all persons involved. For this reason, the conduct of both
employees and directors, as well as their affiliates, is properly the subject of insider trading restrictions. The Corporation has a separate Insider Trading Policy applicable to all directors, officers and employees and their affiliates. The
following types of information, if not generally known or publicly disclosed, should be considered material inside information and treated according to the provisions of this Code and the Corporation’s Insider Trading Policy:
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•
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Proposals or plans for mergers and acquisitions;
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Page 4 of 9
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•
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Earnings estimates or results, whether for the month, quarter or year;
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•
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New product innovation, development or implementation;
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•
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Major litigation, adverse regulatory proceeding or material threat of either event;
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•
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Significant operational issues, including changes in non-performing assets;
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•
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Significant expansion of operations, whether geographic or otherwise, or the curtailment of current or future planned operations; and
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•
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Any other information which, if known, would likely influence the decisions of investors.
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2.5
|
Personal Investments and Financial Affairs
|
Directors, officers and employees of the
Corporation, like any other individuals, may make personal investments in corporate stock, real estate, etc. Such investments, however, shall not be made as a result of confidential information that is also material inside information obtained
through your position with the Corporation. Particular care should be taken with original or new stock issues. Confidential information about the Corporation and its customers and suppliers acquired by directors, officers and employees in the course
of their duties is to be used solely for the Corporation’s purpose and not as a basis for personal investment by directors, officers and employees or their immediate families. In making personal investments, all directors, officers and
employees should be guided by a keen awareness of potential conflict. In addition, personal investments should not influence a director’s, officer’s or employee’s judgment or action in the conduct of the Corporation’s business.
Directors should also seek to avoid any compensation or financial arrangements with any person or entity that could reasonably be expected to impact their ability to independently make decisions in the interest of all of the Corporation’s
stockholders, or which might otherwise influence their decisions as directors. Any arrangement that could pose these issues must be promptly disclosed in full to the Board of Directors.
It is expected that all directors, officers and employees will conduct their personal financial affairs in a manner that will not reflect
adversely upon the Corporation or on their personal standing in the community.
It is illegal for anyone to offer or promise anything of value to an
employee, officer, director or agent of a financial institution with the intent to influence or reward the person in connection with any business or transaction of the financial institution. It is also illegal for an employee, officer, director or
agent of a financial institution to solicit or accept anything of value from any person intending to be influenced or rewarded in connection with any business or transaction of the financial institution.
Page 5 of 9
No employee or director of the Corporation shall accept anything of value from a customer of the
Corporation or a vendor to the Corporation other than the following:
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•
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Gifts based on a family relationship or gifts of a reasonable value based on a personal relationship where that relationship is the obvious motivating factor for the gift;
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•
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Advertising or promotional material with a value of less than $100;
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•
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Gifts with a value of less than $100 related to commonly recognized events such as a promotion, religious holiday, wedding or retirement;
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•
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Acceptance of customary hospitality (business luncheons, dinners, golf outings, ball games, etc.) where it is directly related to Corporation activities and provided that the expense would be paid for by the Corporation
if not paid for by another party. Any entertainment beyond that scope or of a frequent nature (more than twice a year by the same party) must be pre-authorized by the Senior Vice President of Human Resources;
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Discounts or rebates on merchandise or services that do not exceed those available to other customers of the merchant; or
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Awards for recognition of service or accomplishment from civic, charitable, educational or religious organizations.
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If an employee, officer or director receives or anticipates receiving a benefit from a Corporation customer or vendor and is unsure whether
acceptance of the gift is in compliance with this policy, a written disclosure should be made to the Senior Vice President of Human Resources. The Board of Directors may approve the acceptance of the benefit if the acceptance is otherwise consistent
with this policy.
Directors, officers and employees and members of their immediate families should never borrow personally from customers
or suppliers unless these entities are engaged directly in the lending business, and then only under normal conditions with respect to interest rates, terms, security, and repayment programs that are available to any borrower.
Outside activities that might constitute a conflict of interest or
interfere with performance, or compromise a director’s, officer’s or employee’s position, are to be avoided. Employee activities such as full-time outside employment; the rendering of investment, legal or accounting services;
membership on corporate boards of directors; seeking of an elective political position; or appointment to government bodies should be reviewed and approved the by Senior Vice President of Human Resources prior to such undertakings. As in the past,
we continue to encourage active participation on the part of directors, officers and employees in service clubs and organizations fostering the betterment of the community, and the active use of various social memberships in maintaining a proper
image of our organization within the community.
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2.8
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Corporate Opportunities
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Directors, officers and employees owe a duty to the Corporation
to advance its legitimate interests when the opportunity to do so arises. Accordingly, directors, officers and employees must avoid conflicts involving business opportunities which may arise as a result of their service or employment with the
Corporation. The following are brief guidelines regarding improper business opportunities or relationships which are prohibited and which must be reported if known or suspected. These guidelines are not intended to be the only business situations
that may involve a conflict of interest.
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Taking for yourself personally an opportunity that is discovered through the use of corporate property, information or position or otherwise personally accepting a business opportunity that belongs to the Corporation.
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Using corporate property, information or position for personal gain.
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Engaging in a business opportunity that competes with the Corporation, whether directly or indirectly.
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2.9
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Compliance with Laws, Rules and Regulations
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All directors, officers and employees of
the Corporation are required to comply with the requirements of this Code, all policies of the Corporation and applicable laws, rules and regulations, including, without limitation, the insider trading laws. Directors, officers and employees must
also comply with the procedures implementing and effectuating the Corporation’s policies. Failure to comply with the Corporation’s policies and procedures may result in disciplinary action, up to and including immediate termination of
employment.
Each director, officer and employee should endeavor to deal fairly with
the Corporation’s customers, suppliers, competitors and employees. No director, officer or employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts
or any other unfair dealing practice.
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2.11
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Use of Corporate Assets
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All directors, officers and employees should protect the
Corporation’s assets to ensure their efficient use and protect against theft, carelessness and waste. The Corporation understands that from time to time, a director, officer or employee may use Corporation assets, such as photocopiers,
computers, secretarial time, Corporation time, telephone and facilities, etc., for personal use which is only incidental or represents minor uses of Corporation property. Although the Corporation does not encourage the use of Corporation property
for personal reasons or benefit, the Corporation understands and acknowledges that minor or incidental use by a director, officer or employee may unavoidably occur. This Code discourages minor or incidental use of Corporation assets for personal
purposes. Excessive use of Corporation assets for personal purposes may result in disciplinary action.
Page 7 of 9
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2.12
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Accounting Practices
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All directors, officers and employees are expected to observe and
comply with generally accepted accounting principles, the system of internal controls and disclosure controls and procedures established by the Corporation requiring that corporate books and records accurately and fairly reflect in reasonable detail
the financial condition and results of operations of the Corporation. Corporation policies are intended to promote full, fair, accurate, timely and understandable disclosure in reports and documents filed with or submitted to the SEC and in the
Corporation’s public statements. In furtherance of these requirements, employees must practice the following:
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No false, misleading or artificial entries shall be made on corporate books, records and reports for any reason.
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No undisclosed or unrecorded corporate funds or assets shall be established for any purpose.
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No payments from corporate funds or other assets shall be approved or be made with the intention or understanding that any part of such payment will be used for any purpose other than that described by the documents
supporting the payment. All payments must be supported with appropriately approved purchase orders, invoices or receipts, expense reports or other customary documents, all in accordance with established policy.
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3.
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Administration and Waivers
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This Code will be administered and monitored by the Corporation’s
Senior Vice President of Human Resources. General questions and requests for additional information on this Code should be directed to the Senior Vice President of Human Resources, who may be contacted at (949) 236-5310.
Any requests for waivers of the Code for employees who are not executive
officers should be directed through to your supervisor or the Human Resources Department. Requests for waivers for directors and executive officers should be directed to the Board of Directors through the Corporate Secretary. A majority vote of the
Board of Directors is required to waive the applicability of the Code for a director or executive officer. Any waiver granted to directors or executive officers, including the principal accounting officer, and the reasons for granting the waiver,
and any change in the Code applicable to directors and executive officers, including the principal accounting officer, must be promptly (within four business days) disclosed to the public as required by law, SEC rule or regulation or other rule or
regulation, or the New York Stock Exchange Listed Company Manual.
Page 8 of 9
ACKNOWLEDGMENT OF CODE OF BUSINESS CONDUCT AND ETHICS
ALL BANC OF CALIFORNIA, INC. DIRECTORS AND EMPLOYEES MUST READ THIS CODE OF BUSINESS CONDUCT AND ETHICS AND FILL OUT AND RETURN THIS PORTION
TO THE HUMAN RESOURCES DEPARTMENT WITHIN ONE WEEK OF RECEIPT.
I have received a copy of Banc of California, Inc.’s Code of Business
Conduct and Ethics. I have carefully read and understand its contents and agree to follow the rules stated therein.
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Director/Employee Signature
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Date
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Name
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Page 9 of 9
