HOPE BANCORP, INC. (NASDAQ:HOPE) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement
On January23, 2017, Hope Bancorp, Inc., a Delaware corporation
(the Company), entered into an Agreement and Plan of Merger (the
Merger Agreement) with U I Financial Corp., a Washington
corporation (UI).Subject to the terms and conditions of the
Merger Agreement, which have been approved by the board of
directors of both the Company and UI, UI will merge with and into
the Company, with the Company being the surviving corporation
(the Merger).
Concurrently with or as soon as reasonably practicable after the
consummation of the Merger, UniBank, a Washington state-chartered
bank and a wholly owned subsidiary of UI (UniBank), will merge
with and into Bank of Hope, a California state-chartered bank and
a wholly owned subsidiary of the Company (Bank of Hope), with
Bank of Hope being the surviving bank (the Bank Merger), to a
separate merger agreement between UniBank and Bank of Hope.
Under the Merger Agreement, at the effective time of the Merger
(the Effective Time), each outstanding share of UI common stock
will be converted into shares of the Companys common stock based
on a value of $9.50 for the UI common stock, which value will be
subject to adjustment if UIs financial advisory and legal fees
exceed certain amounts as provided in the Merger Agreement (the
Merger Consideration). The number of shares of Company common
stock to be issued for the Merger Consideration will be based on
the 10-day trade weighted, volume weighted average price of the
Companys common stock as of the closing as determined in
accordance with the Merger Agreement (as so determined, the
Closing Stock Price); provided that:
(i) if the Closing Stock Price is less than $17.28832, the
Company may terminate the Merger Agreement unless UI Financial
elects to accept an adjustment to the Merger Consideration
through the issuance of fewer shares based on the $17.28832
instead of the lower Closing Stock Price; and
(ii) if the Closing Stock Price is greater than $25.93248, UI may
terminate the Merger Agreement unless the Company elects to
accept an adjustment to the Merger Consideration through the
issuance of additional shares based on the $25.93248 price
instead of the higher Closing Stock Price.
Each outstanding UI stock option held by an UI employee who will
be retained by the Company after the Effective Time (each, a
Covered Employee) shall cease to represent the right to acquire
shares of UI common stock and shall instead be converted
automatically into an option to acquire shares of the Companys
common stock, and such assumed options will be assumed by the
Company on substantially the same terms and conditions as were
applicable under the corresponding UI stock options. Each UI
stock option held by a UI employee who will not be a Covered
Employee shall become fully vested and be converted into the
right to receive an amount in cash equal to the product obtained
by multiplying (i)the excess, if any, of the per share Merger
Consideration over the exercise price per share of such stock
option by (ii)the total number of shares of UI common stock
subject to such stock option.
The Merger Agreement contains representations and warranties
customary for transactions of this type from the Company and UI,
and each party has agreed to customary covenants, including,
among others, covenants relating to the conduct of its business
during the interim period between the execution of the Merger
Agreement and the Effective Time and, in the case of UI, its
obligation, subject to certain exceptions, to recommend that its
shareholders adopt the Merger Agreement and its non-solicitation
obligations relating to alternative acquisition proposals.
The consummation of the Merger is subject to customary
conditions, including receipt of regulatory approvals, receipt of
the requisite approval of the shareholders of UI, the absence of
any law or order prohibiting the closing, and effectiveness of
the registration statement to be filed by the Company with
respect to the Companys common stock to be issued in the Merger,
and the absence of the occurrence of a material adverse effect
upon the Company or UI. In addition, each partys obligation to
consummate the Merger is subject to certain other conditions,
including the accuracy of the representations and warranties of
the other party and compliance of the other party with its
covenants, in each case subject to certain materiality standards.
The Merger Agreement provides certain termination rights for both
the Company and UI and further provides that a termination fee of
$2million will be payable by UI to the Company upon termination
of the Merger Agreement under certain circumstances.
The foregoing description of the Merger Agreement is qualified in
its entirety by reference to the full text of the Merger
Agreement, a copy of which is attached as Exhibit 2.1 to this
Current Report on Form 8-K and is incorporated by reference
herein. The Merger Agreement has been attached as an exhibit to
provide investors and security holders with information regarding
its terms. It is not intended to provide any other information
about the Company, UI or their respective subsidiaries,
affiliates or businesses. The representations, warranties and
covenants contained in the Merger Agreement were made only for
purposes of that agreement and as of specific dates, are solely
for the benefit of the parties to the Merger Agreement, may be
subject to limitations agreed upon by the parties, including
being qualified by confidential disclosures made for the purposes
of allocating contractual risk between the parties to the Merger
Agreement instead of establishing these matters as facts, and may
be subject to standards of materiality applicable to the parties
that differ from those applicable to investors. Investors should
not rely on the representations, warranties, or covenants or any
description thereof as characterizations of the actual state of
facts or condition of the Company, UI or any of their respective
subsidiaries or affiliates. Moreover, information concerning the
subject matter of the representations, warranties, and covenants
may change after the date of the Merger Agreement, which
subsequent information may or may not be fully reflected in
public disclosures by the Company. The Merger Agreement should
not be read alone, but should instead be read in conjunction with
the other information regarding the Company, UI, their respective
affiliates or their respective businesses, the Merger Agreement
and the Merger that will be contained in, or incorporated by
reference into, the Registration Statement on Form S-4 that will
include a proxy statement of UI and a prospectus of the Company,
as well as in the Forms 10-K, Forms 10-Q and other filings that
the Company makes with the Securities and Exchange Commission
(SEC).
Voting Agreements and Non-Compete Agreements
Concurrently with the execution and delivery of the Merger
Agreement, each UI director and the former chairman of UI entered
into a voting agreement and irrevocable proxy, to which he or she
will agree, in his or her capacity as an UI shareholder, to vote
in favor of the Merger. Concurrently with the execution and
delivery of the Merger Agreement, each UI director also entered
into a non-competition, non-disclosure and non-solicitation
agreement to which he or she agrees not to disclose confidential
information and, for a two year period after the Effective Time,
not to compete with Bank of Hope in certain Washington state
counties or solicit UI customers or employees. The UI chief
executive officer (who is also an UI director) will be bound by
the same restrictions as the other UI directors under the
non-competition, non-disclosure and non-solicitation agreement,
except that, in lieu of a two year term, the UI chief executive
officer will be subject to the non-compete restrictions for as
long as he is entitled to severance payments and for a period not
to exceed one year.
The foregoing description of the voting agreement and
non-competition, non-disclosure and non-solicitation agreement is
qualified in its entirety by reference to the full text of the
forms of voting agreement and non-competition, non-disclosure and
non-solicitation agreement, copies of which are attached as
Exhibits 99.1 and 99.2, respectively, to this Current Report on
Form 8-K and are incorporated by reference herein.
Item8.01 Other Events.
On January23, 2017, the Company and UI issued a joint press
release to announce the execution of the Merger Agreement. A copy
of the press release is attached hereto as Exhibits 99.3.The
joint press release is incorporated herein by reference and the
foregoing description is qualified in its entirety by reference
to such materials.
FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K contains statements
regarding the proposed transaction between the Company and UI,
the expected timetable for completing the transaction, future
financial and operating results, benefits and synergies of the
proposed transaction and other statements about the future
expectations, beliefs, goals, plans or prospects of the
management of each of the Company and UI. These statements are
based on current expectations, estimates, forecasts and
projections and management assumptions about the future
performance of each of the Company, UI and the combined
corporation, as well as the businesses and markets in which they
do and are expected to operate. These statements constitute
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Words such as expects,
believes, estimates, anticipates, targets, goals, projects,
intends, plans, seeks, and variations of such words and similar
expressions are intended
to identify such
forward-looking statements which are not statements of historical
fact. These forward-looking statements are not guarantees of
future performance and involve certain risks, uncertainties and
assumptions that are difficult to assess. Actual outcomes and
results may differ materially from what is expressed or
forecasted in such forward-looking statements. The closing of the
proposed transaction is subject to regulatory approval, the
approval of the shareholders of UI, and other customary closing
conditions. There is no assurance that such conditions will be
met or that the proposed transaction will be consummated within
expected time frame, or at all. If the transaction is
consummated, factors that may cause actual outcomes to differ
from what is expressed or forecasted in these forward-looking
statements include, among things: difficulties and delays in
integrating the Company and UI and achieving anticipated
synergies, cost savings and other benefits from the transaction;
higher than anticipated transaction costs; deposit attrition,
operating costs, customer loss and business disruption following
the merger, including difficulties in maintaining relationships
with employees, may be greater than expected; required
governmental approvals of the merger may not be obtained on its
proposed terms and schedule, or without regulatory constraints
that may limit growth; competitive pressures among depository and
other financial institutions may increase significantly and have
an effect on revenues; the strength of the United States economy
in general, and of the local economies in which the combined
corporation will operate, may be different than expected, which
could result in, among other things, a deterioration in credit
quality or a reduced demand for credit and have a negative effect
on the combined corporations loan portfolio and allowance for
loan losses; changes in the U.S. legal and regulatory framework;
and adverse conditions in the stock market, the public debt
market and other capital markets (including changes in interest
rate conditions) which would negatively affect the combined
corporations business and operating results.For a more complete
list and description of such risks and uncertainties, refer to
the Companys Form 10-K for the year ended December31, 2015, as
amended, as well as other filings made by the Company with the
SEC. Except as required under the U.S. federal securities laws
and the rules and regulations of the SEC, the Company disclaims
any intention or obligation to update any forward-looking
statements after the distribution of this press release, whether
as a result of new information, future events, developments,
changes in assumptions or otherwise.
Additional
Information and Where to Find It
In connection with
the proposed Merger, the Company will file with the SEC a
Registration Statement on Form S-4 that will include a proxy
statement of UI relating to the Merger and a prospectus of the
Company relating to the Companys common stock to be issued in
connection therewith, as well as other relevant documents
concerning the proposed Merger. This communication does not
constitute an offer to sell or the solicitation of an offer to
buy any securities or a solicitation of any vote or approval.
SHAREHOLDERS OF UI ARE URGED TO READ THE REGISTRATION STATEMENT
AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT
BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
The proxy
statement/prospectus, as well as other filings containing
information about the Company, are available free of charge at
the SECs Internet site (www.sec.gov). Shareholders of UI will
also be able to obtain these documents, free of charge, from the
Company at www.bankofhope.com under the tab Investor Relations
and then under the heading SEC Filings.
Item9.01
Financial Statements and Exhibits.
| (d) | Exhibits |
| 2.1 |
Agreement and Plan of Merger, dated January23, 2017, by and between Hope Bancorp, Inc. and U I Financial Corp. |
|
| 99.1 | Form of Voting Agreement. | |
| 99.2 |
Form of Non-Competition, Non-Disclosure and Non-Solicitation Agreement. |
|
| 99.3 | Joint Press Release dated January23, 2017. |
About HOPE BANCORP, INC. (NASDAQ:HOPE)
Hope Bancorp, Inc., formerly BBCN Bancorp, Inc., is the holding company of Bank of Hope. Bank of Hope is the regional Korean-American bank in the United States. Bank of Hope operates approximately 85 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and Alabama. The Bank also operates small business administration (SBA) loan production offices in Seattle, Denver, Dallas, Atlanta, Northern California, Annandale, Virginia, Portland, Oregon and Fremont, California; residential mortgage loan production offices in California, and a representative office in Seoul, Korea. Bank of Hope specializes in business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the Federal Deposit Insurance Corporation (FDIC). HOPE BANCORP, INC. (NASDAQ:HOPE) Recent Trading Information
HOPE BANCORP, INC. (NASDAQ:HOPE) closed its last trading session up +0.77 at 22.91 with 439,329 shares trading hands.