-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FImxQ3cfIRQp7XvdxWy7XFG1D7ga2wnt9T3jbJ9igMZX8HK4pOzuwM0t2Wetahb3 eMRnO/zykuKLcGml6ubukA== 0000898430-97-002986.txt : 19970724 0000898430-97-002986.hdr.sgml : 19970724 ACCESSION NUMBER: 0000898430-97-002986 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970723 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GBC BANCORP CENTRAL INDEX KEY: 0000351710 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 953586596 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-30269 FILM NUMBER: 97644200 BUSINESS ADDRESS: STREET 1: 800 W. 6TH STREET STREET 2: 15TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90017 BUSINESS PHONE: 2139724172 MAIL ADDRESS: STREET 1: 800 W. 6TH ST STREET 2: 15TH FL CITY: LOS ANGELES STATE: CA ZIP: 90017 S-3/A 1 AMENDMENT #1 TO FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 23, 1997 REGISTRATION NO. 333-30269 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- GBC BANCORP (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ---------------- CALIFORNIA 95-3586596 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
800 WEST SIXTH STREET LOS ANGELES, CALIFORNIA 90017 (213) 972-4104 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES) ---------------- PETER LOWE CHIEF FINANCIAL OFFICER 800 WEST SIXTH STREET LOS ANGELES, CALIFORNIA 90017 (213) 972-4104 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) ---------------- COPIES TO: STANLEY F. FARRAR WILLIAM T. QUICKSILVER SULLIVAN & CROMWELL MANATT, PHELPS & PHILLIPS, LLP 444 SOUTH FLOWER STREET 11355 W. OLYMPIC BOULEVARD LOS ANGELES, CALIFORNIA 90071 LOS ANGELES, CALIFORNIA 90064 (213) 955-8000 (310) 312-4000
---------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: After the effective date of this Registration Statement, as determined by market conditions. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. [_] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- PROPOSED PROPOSED MAXIMUM MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION REGISTERED PER UNIT OFFERING PRICE FEE - ------------------------------------------------------------------------------------------- % Subordinated Notes due 2007................ 100% $40,000,000 $12,121.21 - ------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE OR UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A + +REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE + +SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY + +OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT + +BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR + +THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE + +SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE + +UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF + +ANY SUCH STATE. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subject to completion, dated July 23, 1997 PROSPECTUS dated , 1997 $40,000,000 [LOGO OF GBC BANCORP] % SUBORDINATED NOTES DUE 2007 Interest on the % Subordinated Notes due 2007 (the "Notes") issued by GBC Bancorp (the "Company") is payable on the 15th day of October, January, April and July of each year, commencing October 15, 1997. The Notes mature on , 2007. The Notes are not redeemable prior to , 2002. Thereafter, the Notes are redeemable, in whole or in part, at the option of the Company at the redemption prices set forth in this Prospectus plus accrued interest to the date of redemption. The Notes have no sinking fund. The Notes will be issued only in fully registered book-entry form in denominations of $1,000 and any integral multiple thereof. The Notes will be unsecured general obligations of the Company and will be pari passu with the Company's existing subordinated debt and subordinated to all future Senior Indebtedness (as defined herein) of the Company. There is no limitation in the Indenture on the Company's ability to create or incur Senior Indebtedness or indebtedness ranking on a parity with the Notes. The Notes have been approved for listing on the New York Stock Exchange subject to official notice of issuance. Although the Underwriters have each indicated an intention to make a market in the Notes, no Underwriter is obligated to make a market in the Notes and any market making may be discontinued at any time at the sole discretion of such Underwriter. See "Description of Notes" and "Underwriting." Payment of principal of the Notes may be accelerated only in the case of certain events relating to the bankruptcy, insolvency or reorganization of the Company. There is no right to acceleration in the case of a default in the payment of interest on the Notes or in the performance of any other covenant of the Company. See "Description of Notes." SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS. THE NOTES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, ANY OTHER GOVERNMENTAL AGENCY OR OTHERWISE. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ---------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------- PRICE TO UNDERWRITING PROCEEDS TO PUBLIC DISCOUNT(1) COMPANY(2) - ---------------------------------------------------------------------------------------------- Per Note....................... 100.00% % % - ---------------------------------------------------------------------------------------------- Total.......................... $ $ $ - ---------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------
(1) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (2) Before deducting expenses payable by the Company estimated at $ . The Notes are being offered by the Underwriters named herein subject to prior sale and when, as and if delivered to and accepted by the Underwriters. It is expected that the Notes will be ready for delivery in book-entry form only through the facilities of The Depository Trust Company (the "Depositary") in New York, on or about , 1997 against payment therefor in immediately available funds. PIPER JAFFRAY INC. KEEFE, BRUYETTE & WOODS, INC. OPPENHEIMER & CO., INC. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the Public Reference Room of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the Commission: Chicago Regional Office, Citicorp Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661; and New York Regional Office, Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such material can also be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically. The address of the website is http://www.sec.gov. The Company's common stock is traded on the Nasdaq National Market. Reports and other information concerning the Company can be inspected at the National Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006. The Company has filed with the Commission a registration statement on Form S-3 (herein, together with all exhibits and amendments thereto, called the "Registration Statement") under the Securities Act of 1933, as amended, with respect to the securities covered by this Prospectus. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is made to the Registration Statement. Copies of the Registration Statement, including any amendments and exhibits thereto, can be inspected and copied at the offices of the Commission as set forth above. Statements contained in this Prospectus as to the contents of any contract or any other document are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents of the Company which have been previously filed with the Commission are hereby incorporated by reference in this Prospectus: (a) the Company's Annual Report on Form 10-K for the Fiscal Year Ended December 31, 1996; (b) the Company's Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1997; and (c) the Company's Proxy Statement dated March 24, 1997. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the termination of the offering hereunder shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained herein or in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom a copy of this Prospectus is delivered, upon the oral or written request of any such person, a copy of all documents which are incorporated by reference in this Prospectus, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference in such documents). Requests for such copies should be directed to Amy Lin, GBC Bancorp, 800 West Sixth Street, Los Angeles, California 90017, telephone number (213) 972-4268. CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES OFFERED HEREBY. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF SECURITIES TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING." 2 - ------------------------------------------------------------------------------- SUMMARY The following summary is qualified in its entirety by the more detailed information and consolidated financial information appearing elsewhere in this Prospectus or incorporated herein by reference. Unless the context clearly suggests otherwise, and except as described under the caption "Description of Notes," references to the Company include the Company and its subsidiaries. In addition to the historical information contained herein, certain statements in this Prospectus constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995 (the "Reform Act") which involve risks and uncertainties. The Company's actual results may differ significantly from those discussed herein. Factors that might cause such a difference include, but are not limited to, those discussed under the caption "Risk Factors" as well as those discussed elsewhere in this Prospectus or in documents incorporated by reference herein. See "Risk Factors--Forward-Looking Statements." THE COMPANY GBC Bancorp (the "Company") is a bank holding company based in Los Angeles, California, which operates through its principal subsidiary, General Bank (the "Bank"), a California state-chartered commercial bank. The Bank serves primarily small to medium-sized businesses and high net worth individuals through fifteen branch offices located in the greater Los Angeles, San Diego and Silicon Valley areas of California. The primary emphasis of the Bank is on commercial and real estate lending, real estate construction lending and to a lesser extent, residential mortgage lending. Substantially all of the Bank's funding is comprised of retail and commercial deposits generated within its market areas. At March 31, 1997, the Company had consolidated assets of $1.4 billion, deposits of $1.2 billion and stockholders' equity of $119.3 million. The Bank has focused on servicing the Asian community, primarily persons of Taiwanese and Chinese descent. Consistent with this strategy, the Bank emphasizes building long-term relationships with its customers and providing specialized products and services for these markets. Generally the Bank's customers have a need for both commercial and residential real estate loans to finance their businesses and homes. In addition, many of the Bank's customers have operations both in the U.S. and in their home countries and, therefore, require ongoing trade financing and other international banking services to conduct business between the two locations. The Bank's specialized services for its customers include an International Banking Division which provides expertise on trade-related banking matters, a Small Business Administration ("SBA") department which makes SBA guaranteed loans to assist smaller businesses and a High Technology Division that services venture-backed, early stage, emerging growth companies in the high technology market. In concert with the High Technology Division, the Company established GBC Venture Capital, Inc. in 1996 to invest in technology ventures, thereby providing a full range of financing services to its technology customers. The Bank's funding strategy focuses on servicing its high net worth customers and their businesses through its fifteen branch offices. Given the nature of its customers, a significant amount of its funding is in the form of certificates of deposit of $100,000 or more, nearly all of which mature in one year or less. At December 31, 1996, approximately half of the funds represented by such certificates of deposit were maintained by the Bank for three years or more. The Company believes its success in retaining such funds is a result of its customers' strong ties to the Bank and their desire for personal service. The Company expects to continue its growth by expanding its core business and by leveraging its product competencies and its experience in dealing with niche customer markets. The principal components of the Company's strategy are to: . Grow core customer base: As a leading lending institution for the Taiwanese and Chinese communities in California, the Company believes that it can maintain its existing business with this core customer base and build its customer base among the growing Taiwanese and Chinese populations of California. ------------------------------------------------------------------------------- 3 - ------------------------------------------------------------------------------- . Continue geographic expansion: The Company plans to explore other geographic regions with a high concentration of persons of Taiwanese and Chinese descent and where there is need for trade-related international banking. The Company believes that the elimination of many barriers to interstate branching should enable it to expand more efficiently to other such markets. . Further develop core product competencies: Through services provided to its core customer base, the Company has developed expertise in providing construction lending, commercial and real estate lending, trade-related international banking and lending to technology companies. The Company believes that it can continue to market such products to customers outside of its core customer base. For example, a substantial amount of the Company's construction loans as of March 31, 1997, were to non- Taiwanese or Chinese customers. . Enter new customer markets: Within California, the Company believes there are growing concentrations of other ethnic groups whose members have similar characteristics to those of the Company's core customer base, such as high net worth, as well as similar needs, such as trade- related international banking needs, a need for real estate lending and a desire to conduct business in their native language. The Company believes that it has the experience and product expertise to serve new customer markets. The Company is a California corporation with its principal executive offices at 800 West Sixth Street, Los Angeles, California 90017, and its telephone number is (213) 972-4104. - ------------------------------------------------------------------------------- 4 - -------------------------------------------------------------------------------- THE OFFERING Notes offered.................... $40,000,000 principal amount of % Subordinated Notes due 2007. Denominations.................... $1,000 and integral multiples thereof. Maturity......................... , 2007 Interest payment dates........... Interest on the Notes is payable quarterly commencing October 15, 1997 and on the 15th day of each January, April, July and October thereafter. The first interest payment will represent interest from the date of issuance of the Notes through October 14, 1997. Sinking fund..................... None. Optional redemption.............. The Notes may not be redeemed prior to , 2002. The Company may elect to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' prior written notice, at any time on or after , 2002 and prior to , 2003 at 102% of the principal amount thereof, on or after , 2003 and prior to , 2004 at 101% of the principal amount thereof and on or after , 2004, at 100% of the principal amount thereof, in each case plus accrued interest to the date of redemption. See "Description of Notes-- Redemption at Option of the Company." Covenants........................ The indenture under which the Notes will be issued (the "Indenture"), among other things, restricts the ability of the Company under certain circumstances to pay cash dividends or to make other capital distributions. See "Description of Notes-- Restriction on Dividends and Other Distributions." The Indenture does not limit the ability of the Company or its subsidiaries to incur additional indebtedness. Limited rights of acceleration... Payment of principal of the Notes may be accelerated only in case of certain events involving the bankruptcy, insolvency or reorganization of the Company which constitute an Acceleration Event (as defined). There is no right of acceleration in the case of a default in the payment of principal of or interest on the Notes or the performance of any other covenant of the Company in the Indenture. See "Description of Notes--Acceleration Events." Subordination.................... The Notes will be unsecured general obligations of the Company and will be subordinated to all existing and future Senior Indebtedness (as defined) of the Company in the manner and to the extent described herein. As of March 31, 1997, the Company had no outstanding Senior Indebtedness, and had $15 million of outstanding subordinated debentures ranking pari passu with the Notes. There is no limitation in the Indenture on the Company's ability to create or incur Senior Indebtedness or indebtedness ranking on a parity with the Notes. See "Description of Notes--Subordination." - -------------------------------------------------------------------------------- 5 - -------------------------------------------------------------------------------- Use of proceeds.................. The net proceeds of this offering will be used for general corporate purposes, which may include repayment of the Company's $15 million of outstanding subordinated debentures, repurchases by the Company of its common stock and possible future acquisitions. The Notes are expected to be treated as Tier 2 capital for regulatory purposes. As Tier 2 capital, the Notes are expected to strengthen further the capital structure of the Company. See "Use of Proceeds." Listing.......................... The Notes have been approved for listing on the New York Stock Exchange subject to official notice of issuance. Trustee.......................... BNY Western Trust Company.
- -------------------------------------------------------------------------------- 6 - ------------------------------------------------------------------------------- SUMMARY CONSOLIDATED FINANCIAL INFORMATION The following summary consolidated financial information of the Company and its subsidiaries as of and for the years ended December 31, 1996, 1995, 1994, 1993 and 1992 has been derived from the Company's audited consolidated financial statements. The following summary consolidated financial information for the three months ended March 31, 1997 and 1996 has been derived from the Company's unaudited consolidated quarterly financial statements which, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation. The summary consolidated financial information should be read in conjunction with the Company's audited consolidated financial statements and related notes incorporated herein by reference. The consolidated financial information for the three months ended March 31, 1997 is not necessarily indicative of the operating results to be expected for the entire year.
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, ---------------------- -------------------------------------------------------- 1997 1996 1996 1995 1994 1993 1992 ---------- ---------- ---------- ---------- ---------- --------- --------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) STATEMENT OF INCOME DATA: Interest income......... $ 25,734 $ 23,284 $ 97,641 $ 85,126 $ 72,782 $ 65,159 $ 65,731 Interest expense........ 11,050 10,666 43,661 37,418 28,889 24,997 28,441 ---------- ---------- ---------- ---------- ---------- --------- --------- Net interest income..... 14,684 12,618 53,980 47,708 43,893 40,162 37,290 Provision for credit losses................. 1,000 1,500 4,500 18,570 16,194 9,300 3,830 ---------- ---------- ---------- ---------- ---------- --------- --------- Net interest income after provision for credit losses.......... 13,684 11,118 49,480 29,138 27,699 30,862 33,460 Non-interest income..... 1,524 1,832 6,073 6,042 5,936 8,286 4,420 Non-interest expense.... 6,790 6,588 27,337 26,104 24,310 22,012 18,283 ---------- ---------- ---------- ---------- ---------- --------- --------- Income before income taxes.................. 8,418 6,362 28,216 9,076 9,325 17,136 19,597 Provision for income taxes.................. 2,674 2,053 9,179 1,427 1,796 5,196 6,585 ---------- ---------- ---------- ---------- ---------- --------- --------- Net income.............. $ 5,744 $ 4,309 $ 19,037 $ 7,649 $ 7,529 $ 11,940 $ 13,012 ========== ========== ========== ========== ========== ========= ========= Earnings per common share: Net income............. $ 0.82 $ 0.62 $ 2.67 $ 1.14 $ 1.12 $ 1.76 $ 1.94 Average common shares outstanding............ 6,983,000 6,997,000 7,135,000 6,729,000 6,693,000 6,774,000 6,707,000 SELECTED OPERATING RATIOS AND OTHER DATA: Return on average assets(1).............. 1.73% 1.38% 1.46% 0.70% 0.76% 1.32% 1.59% Return on average common stockholders' equity(1).............. 19.55 17.06 17.93 8.13 8.34 14.47 18.25 Net interest margin(1)(2)........... 4.67 4.25 4.36 4.59 4.74 4.74 4.86 Net charge-offs to average loans and leases(1).............. 1.33 1.59 0.96 5.10 1.01 1.00 0.48 Efficiency Ratio (3).... 41.90 45.60 45.50 48.60 48.80 45.40 43.80 Ratio of earnings to fixed charges(4): Excluding interest on deposits.............. 9.42x 5.64x 6.38x 2.37x 2.44x 3.16x 4.91x Including interest on deposits.............. 1.68x 1.52x 1.57x 1.17x 1.24x 1.53x 1.61x BALANCE SHEET DATA: Assets.................. $1,353,577 $1,365,719 $1,352,115 $1,204,506 $1,081,602 $ 957,260 $ 861,252 Loans and leases, net... 592,158 464,994 582,507 451,891 474,276 489,394 435,880 Securities(5)........... 553,720 662,429 532,095 540,694 440,511 310,979 336,139 Deposits................ 1,199,920 1,208,763 1,201,513 1,046,200 934,020 790,575 697,020 Subordinated debt....... 15,000 15,000 15,000 15,000 15,000 15,000 15,000 Stockholders' equity.... 119,260 101,266 116,636 99,477 87,683 86,438 76,209 Book value per common share.................. 17.57 15.12 17.24 14.89 13.17 13.00 11.51
- ------------------------------------------------------------------------------- 7 - -------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, ---------------- ------------------------------------------- 1997 1996 1996 1995 1994 1993 1992 ------- ------- ------- ------- ------- ------- ------- (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) SELECTED ASSET QUALITY DATA: Loans 90 days or more past due and still accruing............... $ 5,109 $ 9 $ 6,779 $ 9 $ 999 $ 4,059 $ 87 Non-accrual loans....... 9,096 27,539 11,719 43,712 46,672 22,033 15,965 Restructured loans(6)... 22,240 20,103 23,125 10,151 20,865 11,898 -- ------- ------- ------- ------- ------- ------- ------- Total non-performing loans.................. 36,445 47,651 41,623 53,872 68,536 37,990 16,052 Other real estate owned ("OREO"), net.......... 15,866 10,452 12,988 7,686 5,051 15,541 14,713 ------- ------- ------- ------- ------- ------- ------- Total non-performing assets................. $52,311 $58,103 $54,611 $61,558 $73,587 $53,531 $30,765 ======= ======= ======= ======= ======= ======= ======= SELECTED FINANCIAL CONDITION RATIOS: Non-accrual loans to loans and leases, net.. 1.54% 5.92% 2.01% 9.67% 9.84% 4.50% 3.66% Non-performing assets to total assets........... 3.86 4.25 4.04 5.11 6.80 5.59 3.57 Non-performing assets to loans and leases, net and OREO, net.......... 8.60 12.22 9.17 13.39 15.35 10.60 6.83 Allowance for credit losses to total loans and leases............. 2.49 3.37 2.69 3.53 4.60 2.37 1.68 Allowance for credit losses to non-accrual loans.................. 167.17 59.21 138.31 38.15 49.33 54.36 47.00 Allowance for credit losses to non- performing loans....... 41.72 34.22 38.94 30.95 33.60 31.53 46.74 Regulatory capital ratios: Tier 1 risk-based capital............... 12.51 12.77 11.97 13.83 13.21 11.93 11.77 Total risk-based capital............... 14.23 14.40 13.69 15.51 15.34 14.44 14.81 Leverage ratio......... 8.98 8.00 8.74 8.27 8.69 8.96 8.67
- -------- (1) Annualized for the three-month periods ended March 31, 1997 and 1996. (2) Tax-exempt interest income is not adjusted to a fully taxable equivalent basis. (3) Non-interest expense divided by the sum of net interest income plus non- interest income. (4) For purposes of computing the ratio on earnings to fixed charges, earnings represents income before income taxes, extraordinary items and fixed charges. Fixed charges represents interest expense, and net rental expense. The portion of rents applicable to interest has been deemed immaterial and is not included in fixed charges. (5) Includes securities available for sale and securities held to maturity. (6) A loan is categorized as restructured if the original interest rate on such loan, the repayment terms, or both, are modified due to a deterioration in the financial condition of the borrower. Restructured loans which are non-accrual loans are not included in the balance of restructured loans. The weighted average yield of the restructured loans (on accrual status) as of March 31, 1997, was 10.23%. - ------------------------------------------------------------------------------- 8 RISK FACTORS Prospective investors should consider, among other things, the following factors in connection with a decision to purchase the Notes. SOURCE OF PAYMENTS TO HOLDERS OF NOTES As a holding company without significant assets other than its equity interest in the Bank, the Company's ability to pay the principal of and interest on the Notes depends primarily upon the cash dividends it receives from the Bank. The Notes mature on , 2007, and there is no sinking fund or other mandatory provision for earlier retirement. Dividend payments from the Bank are subject to regulatory limitations, generally based on current and retained earnings, imposed by the California Financial Code. Payment of dividends is also subject to regulatory restrictions if such dividends would impair the capital of the Bank. No assurance can be given that the Bank will be able to pay dividends in the future in amounts sufficient to pay principal and interest on the Notes. Substantially all of the consolidated assets of the Company are held by the Bank, and, in the event of liquidation of both the Company and the Bank, creditors of the Bank, including depositors, would have first claim to such assets before holders of the Notes. At December 31, 1996, the Bank had outstanding indebtedness and other liabilities, including deposits, of approximately $1.2 billion. ECONOMIC CONDITIONS AND GEOGRAPHIC CONCENTRATION The Company's operations are located in California and concentrated primarily in Southern California. As a result of the geographic concentration, the Company's results depend largely upon economic conditions in this area. A deterioration in economic conditions in the Company's market areas, particularly in the real estate industry, could have a material adverse impact on the quality of the Company's loan portfolio and the demand for its products and services, and accordingly, its results of operations. CREDIT QUALITY A significant source of risk for the Company arises from the possibility that losses will be sustained because borrowers, guarantors and related parties may fail to perform in accordance with the terms of their loans. The Company has adopted underwriting and credit monitoring procedures and credit policies, including the establishment and review of the allowance for credit losses, that management believes are appropriate to minimize this risk by assessing the likelihood of nonperformance, tracking loan performance and diversifying the Company's credit portfolio. Such policies and procedures, however, may not prevent unexpected losses that could materially adversely affect the Company's results of operations. Because a high percentage of the Company's credit portfolio is secured by real estate, a diminution in value of the real estate market could adversely affect the Company's results of operations. DEPENDENCE ON KEY PERSONNEL The Company's success depends substantially on certain members of its senior management, in particular Li-Pei Wu, Chairman, President and Chief Executive Officer of the Bank. Mr. Wu serves as Chairman, President and CEO pursuant to an Employment Agreement which contains a seven year term that commenced on January 1, 1992 and ends September 9, 1998. Thereafter, the agreement may be renewed at Mr. Wu's option for a successive 12-month period. There would likely be a difficult transition period if the services of Mr. Wu were lost to the Company. There is no assurance that the Company will be able to retain its current key personnel or attract additional qualified key persons as needed. INTEREST RATES Banking companies' earnings depend largely on the relationship between the cost of funds, primarily deposits, and the yield on earning assets. This relationship, known as the interest rate spread, is subject to 9 fluctuation and is affected by economic and competitive factors which influence interest rates, the volume and mix of interest-earning assets and interest-bearing liabilities, and the level of non-performing assets. The Company is subject to interest rate risk to the degree that its interest bearing liabilities reprice or mature more slowly or more rapidly or on a different basis than its interest earning assets. Given the Company's current volume and mix of interest-bearing liabilities and interest earning assets, the Company's interest rate spread could be expected to increase during times of rising interest rates and, conversely, to decline during times of falling interest rates. Although the Company believes its current level of interest rate sensitivity is reasonable, declines in interest rates may have an adverse effect on the Company's results of operations. COMPETITION The banking and financial services business in California generally, and in the Bank's market areas specifically, is highly competitive. The increasingly competitive environment is a result primarily of changes in regulation, changes in technology and product delivery systems, and the accelerating pace of consolidation among financial services providers. The Bank competes for loans, deposits and customers for financial services with other commercial banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market funds, credit unions, and other nonbank financial service providers. The Bank's profitability is directly impacted by its ability to competitively price loans and accept deposits in relation to its competitors' abilities to provide the same or similar services. Many of these competitors are much larger in total assets and capitalization, have greater access to capital markets and offer a broader array of financial services than the Bank. There can be no assurance that the Bank will be able to compete effectively in its markets, and the results of operations of the Company could be adversely affected if circumstances affecting the nature or level of competition change. LIMITED RIGHT OF ACCELERATION OF NOTES Payment of principal of or interest on the Notes may be accelerated only in the case of the bankruptcy, insolvency or reorganization of the Company. There is no right of acceleration in the case of a default in the payment of principal or interest on the Notes or in the performance of any other covenant of the Company, or upon a change in control of the Company. There has been and continues to be merger, acquisition and consolidation activity in the banking and financial services industry. The Company has from time to time received inquiries relating to a potential acquisition. The Company hired an investment banking firm in December 1996 to provide financial advisory and investment banking services in connection with mergers and acquisitions, including a potential sale of the Company. Although the Company is not currently in negotiations with any potential purchaser, there can be no assurance that the Company will not in the future undergo a change in control through acquisition or otherwise. See "Description of Notes--Acceleration Events." LIMITED COVENANTS The covenants in the Indenture are limited. The covenants do not protect holders of the Notes in the event of a material adverse change in the Company's financial condition or results of operations and do not limit the ability of the Company or any subsidiary to incur additional indebtedness. Therefore, the provisions of the Indenture should not be considered a significant factor in evaluating whether the Company will be able to comply with its obligations under the Notes. See "Description of Notes." SUBORDINATION OF NOTES The payment of principal of and interest on the Notes is unsecured and is subordinated in right of payment to all Senior Indebtedness of the Company, as defined in the Indenture. As a result, in the event of the dissolution, liquidation or reorganization of the Company, the holders of Notes would not receive payment until the holders of Senior Indebtedness were fully satisfied. As of March 31, 1997, the Company had no outstanding Senior Indebtedness and had $15 million of outstanding subordinated debentures ranking pari passu with the Notes. 10 There is no limitation in the Indenture on the Company's ability to create or incur Senior Indebtedness or indebtedness ranking on a parity with the Notes. In addition, because substantially all of the consolidated assets of the Company are held by the Bank, the Notes are structurally subordinated to the liabilities of the Bank, which at March 31, 1997 were approximately $1.2 billion. See "--Source of Payments to Holders of Notes" and "Description of Notes--Subordination." ABSENCE OF EXISTING PUBLIC MARKET; MARKET PRICES There is no existing market for the Notes. Application has been made to list the Notes on the New York Stock Exchange, but there can be no assurance that an active and liquid trading market will develop or that a continued listing will be available. Although the Underwriters have each indicated an intention to make a market in the Notes, none of the Underwriters is obligated to make a market in the Notes and any market making may be discontinued at any time at the sole discretion of such Underwriter. If the Notes are traded after their original issuance, they may trade at a discount to their principal amount. REGULATION The Company, as a bank holding company, is subject to extensive regulation by the Board of Governors of the Federal Reserve System. This regulation limits the manner in which the Company conducts its businesses and obtains financing and is designed primarily to protect depositors and not to benefit holders of securities of financial institutions. The Bank is subject to extensive regulation and supervision by the California Commissioner of Financial Institutions, and the Federal Deposit Insurance Corporation (the "FDIC"). The Company is subject to periodic examinations by the bank regulatory authorities. As a result of the FDIC's examination of the Bank in 1994, the Bank entered into a Memorandum of Understanding ("MOU") with the FDIC, which was revised in 1995. In April, 1996, the FDIC terminated the MOU based upon the results of a safety and soundness examination. There can be no assurance that the FDIC will not require the Bank to enter into another memorandum of understanding or take other supervisory actions with respect to the Bank in the future. The banking industry is subject to rapidly changing laws and regulations, as well as changing political conditions. There can be no assurance that implementation of and changes in laws and regulations affecting banking will not adversely affect the Company, and therefore its ability to meet the debt service requirements on the Notes. FORWARD-LOOKING STATEMENTS Certain statements contained in this Prospectus, including, without limitation, statements containing the words "believes," "intends," "expects" and words of similar import, constitute, "forward-looking statements" within the meaning of the Reform Act. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economics and business conditions in those areas in which the Company operates; demographic changes; competition; fluctuations in interest rates; changes in business strategy or development plans; changes in governmental regulation; credit quality; and other factors referenced in this Prospectus or in documents incorporated by reference herein, including, without limitation, under the captions "Summary," and "Risk Factors." Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments. 11 RECENT DEVELOPMENTS Second Quarter Earnings. For the three months ended June 30, 1997 the Company reported net income of $6.5 million, or $0.92 per share, compared to $4.7 million, or $0.66 per share, for the same period of 1996. Net income for the six months ended June 30, 1997 was $12.2 million, or $1.75 per share, up $3.2 million or 36% from the same period of 1996. The increase in net income for the six months ended June 30, 1997 was primarily due to an increase in net interest income, combined with a lower provision for credit losses. Net interest income was $15.2 million for the second quarter of 1997, up 14.3% from the same period of 1996, while no provision for credit losses was recorded in the second quarter of 1997. For the six months ended June 30, 1997, net interest income rose $4.0 million, or 15.3%, from the same period of 1996, while the provision for credit losses was $1 million, as compared to $2.5 million for the first six months of 1996. The increase in net interest income was due to an increase in the net interest spread and an increase in average earning assets. Total non-performing assets, defined as non-accrual loans and net other real estate owned, totaled $24.6 million at June 30, 1997, as compared with $24.7 million at December 31, 1996. The annualized return on equity for the three months ended June 30, 1997 was 21.2%, as compared to 18.2% for the same period in 1996. For the six months ended June 30, 1997, the return on equity was 20.4%, as compared with 17.6% for the same period of 1996. Total deposits at June 30, 1997 were $1.3 billion, up $58.6 million from March 31, 1997 and up $57.0 million from December 31, 1996. Total assets at June 30, 1997 were $1.4 billion, up $71 million from March 31, 1997 and up $72 million from December 31, 1996. USE OF PROCEEDS The net proceeds to the Company from the sale of the Notes offered hereby (after deducting the underwriting discount and the estimated expenses of the offering) are estimated to be $ . The Company intends to use a portion of the net proceeds for general corporate purposes, which may include the repayment of the Company's $15 million of outstanding subordinated debentures, repurchases of the Company's common stock and possible future acquisitions. The Company's outstanding subordinated debentures have a stated maturity of September 1, 2000 and bear interest at a rate of 10.52%. Although the Company has no contractual right to prepay the subordinated debentures, the Company is currently negotiating prepayment with the holder of such debentures. Any such prepayment would require a prepayment premium which would be paid with a portion of the net proceeds. Pending their ultimate application, the net proceeds may be loaned to the Bank or invested in short term investment grade financial instruments. The Notes are expected to be treated as Tier 2 capital for regulatory purposes. As Tier 2 capital, the Notes will help to strengthen further the capital structure of the Company. 12 CAPITALIZATION The following table sets forth the consolidated capitalization of the Company and its subsidiaries at March 31, 1997, and as adjusted to give effect to the sale of the $40,000,000 principal amount of Notes offered hereby and the application of the estimated net proceeds therefrom. At March 31, 1997, the Company had other funding liabilities consisting of deposits of $1.2 billion. This table should be read in conjunction with the consolidated financial statements of the Company incorporated herein by reference.
MARCH 31, 1997 ------------------------ ACTUAL AS ADJUSTED(1) -------- -------------- (IN THOUSANDS) Borrowings: Subordinated debt(2)................................ $ 15,000 $ 15,000 Notes offered hereby................................ 0 40,000 -------- -------- Total borrowings.................................. 15,000 55,000 -------- -------- Stockholders' equity: Common Stock, no par or stated value, 20,000,000 shares authorized; 6,786,589 shares outstanding(3).................... 47,729 47,729 Securities valuation allowance, net of tax.......... (2,108) (2,108) Retained earnings................................... 73,646 73,646 Foreign currency translation adjustments............ (7) (7) -------- -------- Total stockholders' equity........................ 119,260 119,260 -------- -------- Total capitalization............................ $134,260 $174,260 ======== ========
- -------- (1) If the Company is successful in negotiating the prepayment of the outstanding subordinated debt, total borrowings and total capitalization as of March 31, 1997, as adjusted to give effect to the sale of the Notes and such prepayment, would be $40,000,000 and $159,260,000, respectively (without giving effect to any premium payable in connection with such repayment). See "Use of Proceeds." (2) The principal of the subordinated debt is payable in four installments of $3,750,000 each on September 1 of 1997, 1998, 1999 and 2000. (3) Does not include 642,960 shares of common stock issuable upon exercise of outstanding employee stock options issued under the Company's 1988 stock option plan, 308,500 shares of common stock issuable upon exercise of outstanding stock options issued under the Company's contingency stock option plan and 444,860 shares reserved for future grant under the Company's 1988 stock option plan. 13 MANAGEMENT The following table sets forth certain information about the executive officers of the Company and the Bank, and the directors of the Company. EXECUTIVE OFFICERS
AGE AT EXECUTIVE DECEMBER 31, OFFICER NAME 1996 SINCE POSITION/BACKGROUND ---- ------------ --------- ------------------- Li-Pei Wu.......... 62 1982 President and Chief Executive Officer of the Company and the Bank since May 1982, Chairman of the Board of the Company and the Bank since 1984. Peter Wu, Ph.D.(1). 48 1979 Chief Operating Officer of the Bank since 1995, Executive Vice President of the Company and Secretary of the Company and the Bank since 1979. Peter Lowe......... 55 1994 Executive Vice President and Chief Financial Officer of the Company and the Bank since 1994; prior thereto, Executive Vice President and Chief Financial Officer of Manufacturers Bank from 1990 to 1993. Eddie Chang........ 41 1995 Senior Vice President and Manager of the Real Estate Department since January 1996. From July 1995 to January 1996 Manager of the Real Estate Department. From July 1994 to July 1995 self-employed. From 1992 to July 1994, Senior Vice President and Manager of the Real Estate Department. Gloria Chen........ 54 1997 Senior Vice President and Relationship Manager in the Corporate Lending Department since May 1997; prior thereto, Senior Vice President and Manager of the International Department at Preferred Bank from 1992 to 1997. Sue Lai............ 44 1997 Senior Vice President of the Corporate Lending Department since April 1997, Manager of the Corporate Lending Department since 1994, in various capacities with the Bank since 1991. Johnny Lee......... 34 1997 Senior Vice President and Regional Manager of the Northern California Region since April 1997, in various positions with the Bank since 1990. Domenic Massei..... 52 1989 Senior Vice President of Operations Administration of the Bank since 1989; prior thereto, Executive Vice President and Chief Administrative Officer of Transnational Bank from 1984 to 1988. Richard Voake...... 56 1992 Senior Vice President and Credit Administrator of the Bank since 1994, Vice President and Manager of Corporate Credit Examination from 1992 to 1994. Thomas Wong, Jr.... 47 1997 Senior Vice President and Special Assistant to the Chief Executive Officer since April 1997; prior thereto, Senior Vice President and head of International Banking and Cash Management sales at Whitney National Bank from 1993 to 1996. Carl Maier......... 56 1993 Vice President and Controller of the Bank since July 1993. From October 1991 to July 1993 self- employed.
14 DIRECTORS
AGE AT DECEMBER 31, DIRECTOR NAME 1996 SINCE POSITION/BACKGROUND ---- ------------ -------- ------------------- Helen Y. Chen....... 54 1986 Vice President of Fullong Enterprise Corp. from 1974 to present. Thomas C. T. Chiu... 49 1983 Medical doctor. Chuang-I Lin, Ph.D.. 56 1983 Chairman and President of Myriad Capital, Inc., Monterey Park, CA, from 1980 to present. Ko-Yen Lin.......... 53 1986 President of T. K. Lin Investment Co., Calabasas, CA, from 1977 to present. Ting Y. Liu, Ph.D... 60 1981 Chairman of General Link Inc., Chatsworth, CA from 1994 to present and Chairman of Phoenix Hotel Group, Inc. from 1984 to present. John C. Wang(2)..... 34 1989 President of Pacific Coast Realty Services, Inc. from 1991 to present, Managing Director of South Bay Capital Corporation, Long Beach, CA from 1990 to present, and Vice President of The Wang Partnership from 1987 to present. Kenneth C. Wang(2).. 35 1991 Executive Vice President of Kenjohn Trading from 1993 to present and Executive Vice President of The Wang Partnership from 1986 to present. Chien-Te Wu(1)...... 35 1994 President from August 1993 to present, and Executive Vice President from September 1990 to July 1993, of Tone Yee Investments & Developments, Rancho Cucamonga, CA. Julian Wu, Ph.D(1).. 55 1981 General Partner of West Union Investment Co., Torrance, CA, from 1977 to present. Li-Pei Wu........... 62 1982 See "-- Executive Officers." Peter Wu, Ph.D.(1).. 48 1981 See "-- Executive Officers." Ping C. Wu(1)....... 51 1981 President of President Global Corp., Buena Park, CA, from 1975 to present. Walter Wu........... 51 1981 President of Wenix International Corp., Los Angeles, CA, from 1984 to present. Chin-Liang Yen...... 54 1983 President of San Yang Enterprises Corp. from 1986 to present.
- -------- (1) Peter Wu, Ph.D., Ping C. Wu and Chien-Te Wu are brothers and are first cousins to Julian Wu, Ph.D. (2) John C. Wang and Kenneth C. Wang are brothers. 15 DESCRIPTION OF NOTES The Notes are to be issued under an Indenture (the "Indenture"), dated as of , 1997, between the Company and BNY Western Trust Company, as trustee (the "Trustee"). The Notes are not savings accounts or deposits of the Bank and are not insured by the FDIC, any other governmental agency or otherwise. The following summaries of certain provisions of the Notes and the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the provisions of the Indenture (including the definition of certain terms in the Indenture). The form of the Indenture and the Notes have been filed with the Commission as an exhibit to the Registration Statement of which this Prospectus is a part. Wherever particular provisions or definitions are referred to, such provisions and definitions are incorporated herein by reference, and the statements made herein are qualified in their entirety by such reference. Unless otherwise indicated, capitalized terms shall have the meanings ascribed to them in the Indenture. Article and Section references are to applicable Articles and Sections of the Indenture. For purposes of the following summary, the term the "Company" excludes the Company's Subsidiaries unless otherwise provided. GENERAL The Notes offered by this Prospectus will be limited to $40,000,000 in aggregate principal amount. The Notes will be issued in registered form only, without coupons, in denominations of $1,000 and any integral multiple thereof. Interest on the Notes will accrue from the date of original issuance and will be payable on the 15th day of October, January, April and July of each year, commencing October 15, 1997, at the rate per annum stated on the cover page of this Prospectus. Interest will be payable to the person in whose name the Note is registered at the close of business on the business day next preceding such Interest Payment Date. Notwithstanding the above, in the event that the Notes are no longer in book-entry only form, the record date for such payment shall be the first day of the month in which such payment is made. (Sections 301 and 302) The Notes will mature on , 2007, unless redeemed earlier at the option of the Company. See "Redemption at Option of the Company." The Notes will not be secured by the assets of the Company or any of its Subsidiaries or otherwise and will not have the benefit of a sinking fund for the retirement of principal. In addition, the rights of the Company to participate in any distribution of assets of any Subsidiary, including the Bank, upon its liquidation or reorganization or otherwise (and thus the ability of the Holders of the Notes to benefit indirectly from such distribution) are subject to the prior claims of creditors of that Subsidiary. Claims on the Company's Subsidiaries by creditors other than the Company may include substantial obligations with respect to deposit liabilities, federal funds purchased and securities sold under repurchase agreements and other debt obligations. There are also limitations on the extent to which the Bank may pay dividends or make other payments to the Company. So long as the Company is a reporting company under the Exchange Act, the Company will furnish to Holders of the Notes annual reports of the Company containing audited consolidated financial statements and interim reports with unaudited consolidated financial data on a quarterly basis. If the Company ceases to be a reporting company under the Exchange Act, the Company will furnish to Holders of the Notes annual audited consolidated financial statements and quarterly unaudited consolidated summary income statements and retained earnings data. (Section 704) The Indenture does not contain provisions that would provide protection to Holders against a sudden and dramatic decline in credit quality resulting from takeovers, recapitalizations or similar restructurings. REDEMPTION AT OPTION OF THE COMPANY The Notes may not be redeemed prior to , 2002. The Notes are subject to redemption at the option of the Company, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' notice, commencing on , 2002, at the following redemption prices (expressed as a 16 percentage of the principal amount), plus accrued and unpaid interest to the date fixed for redemption, if redeemed during the 12-month period beginning of the year indicated:
REDEMPTION YEAR PRICE ---- ---------- 2002......................................................... 102% 2003......................................................... 101% 2004 and thereafter.......................................... 100%
The redemption price will be paid with interest accrued to the date fixed for redemption (subject to the right of the registered Holder on the Record Date for an interest payment to receive such interest). If the Company elects to redeem less than all of the Notes, the Trustee will select which Notes to redeem using such method as it shall deem fair and appropriate, including the selection for redemption of a portion of the principal amount of any Note but not less than $1,000. On and after the redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption. (Article Eleven) SUBORDINATION The Notes are subordinated, in the manner and to the extent hereinafter described, to the prior payment of all "Senior Indebtedness" of the Company. Senior Indebtedness of the Company means the principal of, premium, if any, and interest on (1) all indebtedness for money borrowed (as defined below) of the Company (including indebtedness for money borrowed of others guaranteed by the Company) other than the Notes, whether outstanding on the date of the Indenture or thereafter created, assumed or incurred, (2) any amendments, renewals, extensions, modifications and refundings of any such indebtedness, unless in either case in the instrument creating or evidencing any such indebtedness or pursuant to which it is outstanding it is provided that such indebtedness is not superior in right of payments to the Notes, and (3) Derivative Obligations (as defined below). For the purposes of such definition, "indebtedness for money borrowed" means (a) any obligation of, or any obligation, contingent or otherwise, guaranteed by, the Company for the repayment of borrowed money, whether or not evidenced by bonds, debentures, notes or other written instruments, (b) any deferred payment obligation of or any such obligation guaranteed by, the Company for the payment of the purchase price of property, assets or services and (c) any obligation of or any such obligation guaranteed by, the Company for the payment of rent or other amounts under a lease of property or assets which obligation is required to be classified and accounted for as a capitalized lease on the balance sheet of the Company under generally accepted accounting principles. Notwithstanding the foregoing, Senior Indebtedness shall not include any obligation of the Company that constitutes a trade payable or accrued liability arising in the ordinary course of business. "Derivative Obligations" are any obligations of the Company to make payment pursuant to the terms of any securities contracts and foreign currency exchange contracts, derivative instruments, such as swap agreements (including interest rate and currency and foreign exchange rate swap agreements), cap agreements, floor agreements, collar agreements, interest rate agreements, foreign exchange agreements, options, commodity futures contracts and commodity options contracts (other than obligations on account of indebtedness for money borrowed ranking pari passu with or subordinate to the Notes). (Section 101) Upon a distribution of assets, dissolution, winding up, liquidation or reorganization of the Company, if an event of default has occurred and is continuing with respect to any Senior Indebtedness or if an Acceleration Event shall have occurred and the principal of the Notes has been declared due and payable and such declaration has not been rescinded or annulled, then in any such instance all Senior Indebtedness must be paid in full before any payment of principal or interest on the Notes can be made. (Sections 1202 and 1203) However, subordination does not prevent the occurrence of an Acceleration Event or an "Event of Default" (as defined below) under the Indenture. By reason of the subordination of the Notes, in the event of liquidation of the Company, the Holders of the Notes will not receive payment until the holders of Senior Indebtedness have been satisfied. As of March 31, 1997, the Company had no outstanding Senior Indebtedness and had $15 million of outstanding subordinated 17 debentures ranking pari passu with the Notes. There is no limitation in the Indenture on the Company's creation of Senior Indebtedness or indebtedness ranking on a parity with the Notes. DENOMINATIONS, REGISTRATION AND TRANSFER The Notes will be represented by a global certificate registered in the name of the Depositary or its nominee ("Global Note"). Beneficial interests in the Notes will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary. Except as described below, Notes in certificated form will not be issued in exchange for the global certificate. Unless and until the Global Note is exchanged in whole or in part for the individual Notes represented thereby, it may not be transferred except as a whole by the Depositary for such Global Note to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by the Depositary or any nominee to a successor Depositary or any nominee of such successor. The Global Note shall be exchangeable for Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a depositary for such Global Note and no successor depositary shall have been appointed, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act, at a time when the Depositary is required to be so registered to act as such depositary or (ii) the Company in its sole discretion determines that such Global Note shall be so exchangeable. Any Global Note that is exchangeable pursuant to the preceding sentence shall be exchangeable for definitive certificates registered in such names as the Depositary shall direct. It is expected that such instructions will be based upon directions received by the Depositary from its Participants (as defined below) with respect to ownership of beneficial interests in such Global Note. In the event that Notes are issued in definitive form, such Notes will be in denominations of $1,000 and integral multiples thereof and may be transferred or exchanged at the offices described below. Payments on Notes represented by a Global Note will be made to the Depositary, as the depositary for the Notes. In the event Notes are issued in definitive form, principal and interest will be payable, the transfer of the Notes will be registrable, and Notes will be exchangeable for Notes of other denominations of a like aggregate principal amount, at the corporate office of the Trustee, or at the offices of any paying agent or transfer agent appointed by the Company, provided that payment of interest may be made at the option of the Company, the check mailed to the address of the persons entitled thereto or by wire transfer. In addition, if the Notes are issued in certificated form, the record dates for payment of interest will be the first day of the month in which such payment is to be made. Upon the issuance of the Global Note, and the deposit of such Global Note with or on behalf of the Depositary, the Depositary for such Global Note or its nominee will credit, on its book-entry registration and transfer system, the respective principal amounts of the individual Notes represented by such Global Note to the accounts of persons that have accounts with such Depositary ("Participants"). Ownership of beneficial interests in the Global Note will be limited to Participants or persons that may hold interests through Participants. Ownership of beneficial interests in the Global Note will be shown on, and the transfer of that ownership will be effected only through, records maintained by the applicable Depositary or its nominee (with respect to interests of Participants) and the records of Participants (with respect to interests of persons who hold through Participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interest in the Global Note. So long as the Depositary for the Global Note, or its nominee, is the registered owner of such Global Note such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Global Note for all purposes under the Indenture. Except as provided below, owners of beneficial interests in a Global Note will not be entitled to have any of the individual Notes represented by such Global Note registered in their names, will not receive or be entitled to receive physical delivery of any such Notes in definitive form and will not be considered the owners or holders thereof under the Indenture. 18 Payments of principal of and interest on individual Notes represented by a Global Note registered in the name of the Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner of the Global Note. None of the Company, the Trustee, any Paying Agent, or the Securities Registrar for such Notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of the Global Note representing such Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. The Company expects that the Depositary or its nominee, upon receipt of any payment of principal or interest in respect of a permanent Global Note representing the Notes, immediately will credit Participants' accounts with payments in amounts proportionate to their respective beneficial interest in the principal amount of the Global Note as shown on the records of such Depositary or its nominee. The Company also expects that payments by Participants to owners of beneficial interests in such Global Note held through such Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name." Such payments will be the responsibility of such Participants. If the Depositary is at any time unwilling, unable or ineligible to continue as depositary and a successor depositary is not appointed by the Company within 90 days, the Company will issue individual Notes in exchange for the Global Note. In addition, the Company may at any time and in its sole discretion, determine not to have the Note represented by a Global Note and, in such event, will issue individual Notes in exchange for the Global Note. Further, if the Company so specifies with respect to the Notes, an owner of a beneficial interest in a Global Note representing Notes may, on terms acceptable to the Company, the Trustee and the Depositary for such Global Note, receive individual Notes in exchange for such beneficial interests. In any such instance, an owner of a beneficial interest in a Global Note will be entitled to physical delivery of individual Notes equal in principal amount to such beneficial interest and to have such Notes registered in its name. Individual Notes so issued will be issued in denominations, unless otherwise specified by the Company, of $1,000 and integral multiples thereof. The Depositary is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. The Depositary holds securities that its Participants deposit with the Depositary. The Depositary also facilitates the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. "Direct Participants" include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. The Depositary is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the Depositary system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain custodial relationships with Direct Participants, either directly or indirectly ("Indirect Participants"). The rules applicable to the Depositary and its Participants are on file with the Commission. Purchases of Notes within the Depositary system must be made by or through Direct Participants, which will receive a credit for the Notes on the Depositary's records. The ownership interest of each actual purchaser of each Note ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from the Depositary of their purchases, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participants through which the Beneficial Owners purchased Notes. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial owners. Beneficial Owners will not receive certificates representing their ownership interests in the Notes except in the event that use of the book-entry system for the Notes is discontinued. 19 The Depositary has no knowledge of the actual Beneficial Owners of the Notes, the Depositary's records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by the Depositary to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners and the voting rights of Direct Participants, Indirect Participants and Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices will be sent to Cede & Co. as the registered holder of the Notes. If less than all of the Notes are being redeemed, the Depositary will determine by lot or pro rata the amount of the Notes of each Direct Participant to be redeemed. Interest payments on the Notes will be made by the Trustee to the Depositary. The Depositary's practice is to credit Direct Participants' accounts on the relevant payment date in accordance with their respective holdings shown on the Depositary's records unless the Depositary has reason to believe that it will not receive payments on such payment date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices and will be the responsibility of such Participant and not of the Depositary, the Trustee or the Company, subject to statutory or regulatory requirements as may be in effect from time to time. Payment of Distributions to the Depositary is the responsibility of the Trustee, disbursement of such payments to Direct Participants is the responsibility of the Depositary, and disbursements of such payments to the Beneficial Owners is the responsibility of Direct and Indirect Participants. The Depositary may discontinue providing its services as securities depositary with respect to any of the Notes at any time by giving reasonable notice to the Trustee and the Company. In the event that a successor securities depositary is not obtained, definitive Note certificates representing such Notes are required to be printed and delivered. The Company, at its option, may decide to discontinue use of the system of book-entry transfers through the Depositary (or a successor depositary). In any such event, definitive certificates for such Notes will be printed and delivered. The information in this section concerning the Depositary and the Depositary's book-entry system has been obtained from sources that the Company believes to be accurate, but the Company assumes no responsibility for the accuracy thereof. The Company has no responsibility for the performance by the Depositary or its Participants of their respective obligations as described herein or under the rules and procedures governing their respective operations. RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS The Indenture provides that the Company cannot pay cash dividends or make any other distribution on, or purchase, redeem or acquire its capital stock, except that the Company may (1) declare and pay a dividend in capital stock of the Company and (2) declare and pay dividends, purchase, redeem or otherwise acquire for value its capital stock or make other distributions in cash or property other than capital stock of the Company if the amount of such dividend, purchase or distribution, together with the amount of all previous such dividends, purchases, redemptions and distributions of capital stock after December 31, 1996, would not exceed in the aggregate the sum of (a) $38 million, plus (b) 100% of the Company's consolidated net income (or minus 100% of the Company's consolidated net loss, as the case may be), based upon audited consolidated financial statements, plus (c) 100% of the net proceeds received by the Company on account of any capital stock issued by the Company (other than to a subsidiary of the Company) after December 31, 1996. (Section 1008) CONSOLIDATION, MERGER OR TRANSFER The Indenture provides that the Company may not consolidate with, merge with, or transfer all or substantially all of its assets to another entity (other than a wholly-owned subsidiary, where the Company is the 20 surviving entity) unless such other entity assumes the Company's obligations under the Indenture and unless, after giving effect thereto, no event shall have occurred and be continuing which, after notice or lapse of time, would become a Event of Default, each insured institution controlled by the surviving corporation shall be in compliance with applicable minimum capital requirements and certain other conditions are met. (Section 801) ACCELERATION EVENTS The Indenture defines Acceleration Events as certain events involving the bankruptcy, insolvency, or reorganization of the Company. An Event of Default is defined in the Indenture as: (a) any Acceleration Event; (b) failure to pay any interest on any Note when due, continued for 15 days; (c) failure to pay principal of any Note at Maturity; and (d) failure to perform any other covenant or warranty of the Company in the Indenture, continued for 30 days after written notice as provided in the Indenture. If an Acceleration Event with respect to the Notes occurs and is continuing, either the Trustee or the Holder or Holders of at least 25% in aggregate principal amount of the Notes by notice as provided in the Indenture may declare the principal amount of all Outstanding Notes to be due and payable immediately, and upon any such declaration such principal amount shall become immediately due and payable. At any time after such a declaration of acceleration with respect to the Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee, and subject to applicable law and certain other provisions of the Indenture, the Holder or Holders of a majority in principal amount of the Outstanding Notes, by written notice to the Company and the Trustee, may, under certain circumstances, rescind and annul such acceleration. The Indenture does not provide for any right of acceleration upon an Event of Default, other than an Event of Default which is also an Acceleration Event. If an Event of Default with respect to Notes occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holder or Holders of Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Indenture or to enforce any other proper remedy. The Indenture provides that, subject to the duty of the Trustee during an Event of Default to act with the required standard of care, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any Holder of Holders unless such Holders shall have offered to the Trustee reasonable indemnity. Subject to such provision for the indemnification of the Trustee, and subject to applicable law and certain other provisions of the Indenture, the Holder or Holders of a majority in aggregate principal amount of the Outstanding Notes will have the right to direct the time, method and place of any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Notes. Any Event of Default with respect to the Notes may be waived by the Holder or Holders of a majority in aggregate principal amount of the Notes, except a failure to pay principal or interest with respect to any Note. Under the Indenture, the Company is required to furnish to the Trustee quarterly a statement by certain officers of the Company to the effect that to the best of their knowledge the Company is not in default in the fulfillment of any of its obligations under such Indenture or, if there has been such default, specifying each such default. (Section 1004). The Indenture provides that the Trustee will, within 90 days after the occurrence of a default, give to the Holder or Holders of the Notes notice of such default known to it if uncured; provided that, except in the case of default in the payment of principal of or interest on any of the Notes, the Trustee will be protected in withholding such notice if the board of directors or responsible officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holder or Holders of the Notes; and, provided further, that such notice shall not be given until 30 days after the occurrence of a default in the performance of the covenants and warranties of the Company in the Indenture other than for the payment of the principal of or interest on the Notes. The term "default" for the purpose only of this provision means the happening of any of the Events of Default specified in the Indenture, excluding any grace periods and irrespective of any notice requirements. (Section 602). 21 The Holder or Holders of a majority in principal amount of the outstanding Notes will have the right, subject to certain limitations, to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, and to waive certain defaults. (Sections 512 and 513). The Indenture provides that, in case an Acceleration Event shall occur and be continuing, the Trustee shall exercise such of its rights and powers under the Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (Section 601). Subject to certain provisions of the Indenture, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any Holder or Holders of the Notes unless they have offered to the Trustee reasonable security or indemnity against the costs, expenses, and liabilities which might be incurred by it in compliance with such request or direction. (Section 603). MODIFICATION AND WAIVER With certain limited exceptions which permit modification of the Indenture by the Company and the Trustee only, the Indenture may be modified by the Company with the consent of Holders of not less than a majority in aggregate principal amount of outstanding Notes; provided, however, that no such changes shall without the consent of the Holder of each Note affected thereby (a) change the maturity date of the principal of, or the due date of any installment of interest on, any Note, (b) reduce the principal of, or the rate of interest on, any Note, (c) change the currency in which any portion of the principal of, or interest on, any Note is payable, (d) impair the right to institute suit for the enforcement of any such payment, (e) reduce the above stated percentage of Holders of the outstanding Notes necessary to modify the Indenture, or (f) modify the foregoing requirements or reduce the percentage of outstanding Notes necessary to waive any past default. (Section 902) The Holders of a majority in aggregate principal amount of outstanding Notes may waive compliance by the Company with certain restrictive provisions of the Indenture. (Section 1011) SATISFACTION AND DISCHARGE OF INDENTURE The Indenture provides that the Company may terminate its obligations under the Indenture with respect to all Notes which will become due and payable at their Stated Maturity within one year or are to be called for redemption within one year, by delivering to the Trustee, in trust for such purpose, money, Government Obligations or both which, through the payment of interest and principal in respect thereof in accordance with their terms, will provide on the due dates of any payment of principal and interest, or a combination thereof, money in an amount sufficient to discharge the entire indebtedness of such Notes. (Section 401) THE TRUSTEE BNY Western Trust Company will serve as Trustee under the Indenture and also as the Note Registrar and Paying Agent. The Indenture contains certain limitations on the right of the Trustee, should it become a creditor of the Company, to obtain payment of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will generally be permitted to engage in other transactions with the Company. The Indenture also provides that the Company will indemnify the Trustee against loss, liability or expense incurred without negligence or bad faith on the part of the Trustee arising out of or in connection with the trust under the Indenture. (Sections 607 and 613) 22 UNDERWRITING The Underwriters named below have severally agreed, subject to the terms and conditions of the Purchase Agreement, to purchase from the Company the respective principal amount of the Notes set forth opposite their names in the table below:
PRINCIPAL UNDERWRITER AMOUNT ----------- ----------- Piper Jaffray Inc............................................. $ Keefe, Bruyette & Woods, Inc.................................. Oppenheimer & Co., Inc........................................ ----------- $40,000,000 ===========
The nature of the obligations of the Underwriters is such that if any of the Notes are purchased, all of them must be purchased. The Purchase Agreement provides that the obligations of the Underwriters thereunder are subject to approval of certain legal matters and to various other conditions. The Underwriters have advised the Company that they propose to offer the Notes to the public at the Price to Public and to selected dealers at such price less a concession of not more than % of the principal amount of the Notes. The Underwriters may allow, and such dealers may reallow, concessions not in excess of % of the principal amount of the Notes to certain other brokers and dealers. After the initial public offering, the Price to Public and other selling terms may be changed by the Underwriters. In connection with this offering, the Underwriters may engage in transactions that stabilize, maintain or otherwise affect the market price of the Notes. Specifically, the Underwriters may overallot the offering, creating a syndicate short position. The Underwriters may bid for and purchase in the open market to cover syndicate short positions. In addition, the Underwriters may bid for and purchase in the open market to stabilize the price of the Notes. These activities may stabilize or maintain the market price of the Notes above independent market levels. The Underwriters are not required to engage in these activities, and may end these activities at any time. The Notes have been approved for listing on the New York Stock Exchange subject to official notice of issuance. The Underwriters have indicated an intention to make a market in the Notes as permitted by applicable laws and regulations. No Underwriter, however, is obligated to make a market in the Notes, and any such market making may be discontinued at any time at the sole discretion of such Underwriter. There can be no assurance that an active trading market for the Notes will develop. If the Notes are traded after their initial issuance, they may trade at a discount from their principal amount. Oppenheimer & Co., Inc. provides ongoing financial advisory and investment banking services for the Company including in connection with mergers and acquisitions and related matters. See "Risk Factors--Limited Right of Acceleration of Notes." The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. 23 LEGAL OPINIONS The validity of the Notes to be offered hereby will be passed upon for the Company by Sullivan & Cromwell, Los Angeles, California. Certain legal matters will be passed upon for the Underwriters by Manatt, Phelps & Phillips, LLP, Los Angeles, California. EXPERTS The consolidated financial statements of GBC Bancorp and subsidiaries as of December 31, 1996 and 1995, and for each of the years in the three-year period ended December 31, 1996 have been incorporated by reference herein and in the Registration Statement in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, incorporated herein by reference, and upon the authority of said firm as experts in accounting and auditing. 24 NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR ITS SUBSIDIARIES OR THAT INFORMATION CONTAINED HEREIN IS CURRENT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. -------------------- TABLE OF CONTENTS
PAGE ---- Available Information...................................................... 2 Incorporation of Certain Documents by Reference............................ 2 Summary.................................................................... 3 Summary Consolidated Financial Information................................. 7 Risk Factors............................................................... 9 Recent Developments........................................................ 12 Use of Proceeds............................................................ 12 Capitalization............................................................. 13 Management................................................................. 14 Description of Notes....................................................... 16 Underwriting............................................................... 23 Legal Opinions............................................................. 24 Experts.................................................................... 24
$40,000,000 [LOGO OF GBC BANCORP] % Subordinated Notes due 2007 ----------------- P R O S P E C T U S ----------------- Piper Jaffray inc. Keefe, Bruyette & Woods, Inc. Oppenheimer & Co., Inc. , 1997 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The expenses in connection with the issuance and distribution of the securities being registered, other than underwriting discounts and commissions, are estimated as follows: Securities and Exchange Commission Registration Fee................ $ 12,121 NASD Filing Fee.................................................... 4,500 Stock Exchange Listing Fees........................................ 2,500 Transfer Agent and Registrar Fees*................................. 7,500 Legal Fees and Expenses*........................................... 75,000 Accounting Fees and Expenses*...................................... 100,000 Rating Agency Fees................................................. 35,000 Blue Sky Fees and Expenses......................................... 5,000 Printing Expenses*................................................. 25,000 Miscellaneous*..................................................... 33,379 -------- Total............................................................ $300,000 ========
- -------- * Estimated ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 317 of the California General Corporation Law (the "Corporation Law") contains provisions for the indemnification of directors and officers on terms substantially identical to those contained in the Company's Bylaws. The Company's Bylaws require the Company to indemnify its officers and directors to the fullest extent permitted by California law against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact any such person is or was an officer or director. Pursuant to California law, a corporation shall have the power to indemnify an officer or director who was or is a party or is threatened to be made a party in a proceeding by reason of his position as an officer or director if the officer or director acted in good faith, in the best interest of the corporation and with such care as an ordinarily prudent person in a like position would use under the circumstances. To the extent that a director or officer is successful on the merits in the defense of certain proceedings, the Company is required to indemnify such party against expenses actually and reasonably incurred. Otherwise, indemnification of officers and directors must be authorized by the corporation in each specific case, after a determination is made by a majority vote of a quorum of directors not parties to the proceeding, or by independent legal counsel, or the approval of a majority of the stockholders voting for such approval, or the court in which the proceeding was or is pending. Section 204(a)(11) of the Corporation Law provides for the indemnification, subject to certain limitations, of directors and officers for breach of their duty to the Company and its stockholders in excess of that expressly permitted by Section 317 of the Corporation Law. The Company's Articles of Incorporation, as amended, contain a provision implementing Section 204(a)(11). In addition, and subject to California law, the Company's Stock Option Plans (the "Plans") specifically provide that the Company and its subsidiaries shall pay the expenses incurred by, and satisfy a judgment or fine rendered or levied against, a present or former director in any action brought by a third party against such person (whether or not the Company is joined as a party defendant) to impose a liability or penalty on such person while a director arising with respect to the Plans or administration thereof or of the Company. Section 317 of the Corporation Law also provides that a corporation shall have the power to purchase and maintain insurance on behalf of any agent of the corporation against any liabilities asserted against or incurred II-1 by the agent in such capacity. The Company maintains an officers' and directors' liability insurance policy insuring the Company's officers and directors against certain liabilities and expenses incurred by them in their capacities as such, and insuring the Company under certain circumstances, in the event that indemnification payments are made by the Company to such officers and directors. Reference is made to the form of Underwriting Agreement filed as Exhibit 1.1 to the Registration Statement for Company's and the Underwriter's respective agreements to indemnify each other and to provide contribution in circumstances where indemnification is unavailable. ITEM 16. EXHIBITS. 1.1 Form of Purchase Agreement. 4.1 Form of Indenture.* 4.2 Form of Notes (included in Exhibit 4.1).* 5.1 Opinion of Sullivan & Cromwell as to the validity of the Notes.* 12.1 Statement re computation of ratios.* 23.1 Consent of KPMG Peat Marwick LLP.* 23.2 Consent of Sullivan & Cromwell (included in Exhibit 5.1).* 24.1 Power of Attorney (contained on page II-3).* 25.1 Statement of Eligibility and Qualification of Trustee on Form T-1.*
- -------- * Previously filed ITEM 17. UNDERTAKINGS (a) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933 (the "Securities Act"), each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (b) Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (c) The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Los Angeles, California, on the 23rd day of July, 1997. GBC Bancorp (Registrant) /s/ Peter Lowe By: _________________________________ Peter Lowe Executive Vice President and Chief Financial Officer KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Li-Pei Wu and Peter Lowe, as his or her true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this Registration Statement and any related Rule 462(b) registration statement or amendment thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he or she might or could do in person hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated and on July 23, 1997.
SIGNATURE TITLE --------- ----- Li-Pei Wu* President, Chief Executive Officer and ________________________________________ Director Li-Pei Wu /s/ Peter Lowe Executive Vice President and ________________________________________ Chief Financial Officer (Chief Peter Lowe Accounting Officer) Helen Chen* Director ________________________________________ Helen Chen Thomas C.T. Chiu* Director ________________________________________ Thomas C.T. Chiu Chuang-I Ling* Director ________________________________________ Chuang-I Ling Ko-Yen Lin* Director ________________________________________ Ko-Yen Lin
II-3
SIGNATURE TITLE --------- ----- Ting Y. Liu* Director ________________________________________ Ting Y. Liu John C. Wang* Director ________________________________________ John C. Wang Kenneth C. Wang* Director ________________________________________ Kenneth C. Wang Chien-Te Wu* Director ________________________________________ Chien-Te Wu Julian Wu* Director ________________________________________ Julian Wu Peter Wu* Director ________________________________________ Peter Wu Ping C. Wu* Director ________________________________________ Ping C. Wu Walter Wu* Director ________________________________________ Walter Wu Director ________________________________________ Chin-Liang Yen *By: /s/ Peter Lowe ________________________________________ Peter Lowe, Attorney-in-fact
II-4 EXHIBIT INDEX
EXHIBIT NUMBER DOCUMENT DESCRIPTION ------- -------------------- 1.1 Form of Purchase Agreement. 4.1 Form of Indenture.* 4.2 Form of Notes (included in Exhibit 4.1).* 5.1 Opinion of Sullivan & Cromwell as to the validity of the Notes.* 12.1 Statement re computation of ratios.* 23.1 Consent of KPMG Peat Marwick LLP.* 23.2 Consent of Sullivan & Cromwell (included in Exhibit 5.1).* 24.1 Power of Attorney (contained on page II-3).* 25.1 Statement of Eligibility and Qualification of Trustee on Form T-1.*
- -------- * Previously filed EX-1.1 2 FORM OF UNDERWRITING AGREEMENT $40,000,000 GBC BANCORP ____ % SUBORDINATED NOTES DUE 2007 PURCHASE AGREEMENT PIPER JAFFRAY INC. ______________, 1997 KEEFE, BRUYETTE & WOODS, INC. OPPENHEIMER & CO., INC. c/o Piper Jaffray Inc. Piper Jaffray Tower 222 South Ninth Street Minneapolis, Minnesota 55402 Ladies and Gentlemen: Pursuant to the terms of this Purchase Agreement (this "Agreement"), GBC Bancorp, a California corporation (the "Company"), proposes to sell to the underwriters named in Schedule I hereto (the "Underwriters"), an aggregate of $40,000,000 in aggregate principal amount of its ____% Subordinated Notes due 2007 (the "Notes"). The Notes are to be sold to the Underwriters, acting severally and not jointly in such amounts as are set forth in Schedule I hereto opposite the name of such Underwriter. The Notes are to be issued pursuant to an Indenture (the "Indenture"), to be dated as of __________, 1997, among the Company and BNY Western Trust Company, as trustee (the "Trustee"). The Company hereby confirms its agreement with respect to the purchase and sale of the Notes: 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and ------------------------------------- filed with the Securities and Exchange Commission (the "Commission") in conformity with the provisions of the Securities Act of 1933, as amended, and the rules and regulations (the "Rules and Regulations") of the Commission thereunder (collectively, the "Act"), a registration statement on Form S-3 (File No. 333-30269), including a preliminary prospectus and a Statement of Eligibility on Form T-1 with respect to the Trustee (File No. __________) pursuant to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), relating to the Notes; one or more amendments to such registration statement have also been so prepared and have been, or will be, so filed; and, if the Company has elected to rely upon Rule 462(b) under the Act to increase the size of the offering registered under the Act, the Company will prepare and file with the Commission a registration statement with respect to such increase pursuant to Rule 462(b). Copies of such registration statement(s) and amendments and each related preliminary prospectus have been delivered to you. 1 If the Company has elected not to rely upon Rule 430A of the Rules and Regulations, the Company has prepared and will promptly file an amendment to the registration statement and an amended prospectus (including a term sheet meeting the requirements of Rule 434 of the Rules and Regulations). If the Company has elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and file a prospectus (or a term sheet meeting the requirements of Rule 434) pursuant to Rule 424(b) that discloses the information previously omitted from the prospectus in reliance upon Rule 430A. Such registration statement as amended at the time it is or was declared effective by the Commission, and, in the event of any amendment thereto after the effective date and prior to the Closing Date (as hereinafter defined), such registration statement as so amended (but only from and after the effectiveness of such amendment), including a registration statement (if any) filed pursuant to Rule 462(b) of the Rules and Regulations increasing the size of the offering registered under the Act and information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and Regulations, is hereinafter called the "Registration Statement." The prospectus included in the Registration Statement at the time it is or was declared effective by the Commission is hereinafter called the "Prospectus," except that if any prospectus (including any term sheet meeting the requirements of Rule 434 of the Rules and Regulations provided by the Company for use with a prospectus subject to completion within the meaning of Rule 434 in order to meet the requirements of Section 10(a) of the Rules and Regulations) filed by the Company with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the Rules and Regulations or any other such prospectus provided to the Underwriters by the Company for use in connection with the offering of the Notes (whether or not required to be filed by the Company with the Commission pursuant to Rule 424(b) of the Rules and Regulations) differs from the prospectus on file at the time the Registration Statement is or was declared effective by the Commission, the term "Prospectus" shall refer to such differing prospectus (including any term sheet within the meaning of Rule 434 of the Rules and Regulations) from and after the time such prospectus is filed with the Commission or transmitted to the Commission for filing pursuant to such Rule 424(b) (and Rule 434, if applicable) or from and after the time it is first provided to the Underwriters by the Company for such use. The term "Preliminary Prospectus" as used herein means any preliminary prospectus included in the Registration Statement prior to the time it becomes or became effective under the Act and any prospectus subject to completion as described in Rule 430A or 434 of the Rules and Regulations. Any reference herein to the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act as of the date of such Prospectus. Any reference to any amendment or supplement to the Prospectus (including any supplement to the Prospectus) shall be deemed to refer to and include any documents filed after the date of such Prospectus under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated therein by reference. 2. AGREEMENT TO SELL AND PURCHASE. On the basis of the representations, ------------------------------ warranties and agreements of the Company herein contained and subject to the terms and conditions set forth herein, the Company hereby agrees to issue and sell to the Underwriters, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price of $_____ 2 per $1,000 principal amount, the aggregate principal amount of Notes set forth opposite the name of such Underwriter in Schedule I hereto (or such aggregate principal amount of Notes as such Underwriter shall be obligated to purchase pursuant to the provisions of Section 10 hereof). 3. TERMS OF PUBLIC OFFERING. The Company is advised by the Underwriters ------------------------ that the Underwriters have agreed to make a public offering of their respective portions of the Notes as soon after the Registration Statement has become effective and this Agreement has been executed as in the judgment of the Underwriters is advisable and to first offer the Notes upon the terms set forth in the Prospectus. 4. DELIVERY OF THE NOTES AND PAYMENT THEREFOR. The Notes to be purchased ------------------------------------------ by each Underwriter in book-entry form and in authorized denominations and registered in the name of the nominee of The Depository Trust Company, shall be delivered by or on behalf of the Company through the facilities of The Depository Trust Company for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by certified or official bank check or checks or wire transfer of same day funds payable to the order of the Company at the offices of Sullivan & Cromwell, 444 South Flower Street, Los Angeles, California, at 8:00 a.m., California time, on the third (or if the Notes are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time on the date of this Agreement, the fourth) business day following the date of this Agreement, (the "Closing Date"). The place of the closing and the Closing Date may be varied by agreement among the Underwriters and the Company. Delivery of the Notes may be made by credit through full fast transfer to the accounts at The Depository Trust Company designated by the Underwriters. 5. AGREEMENTS OF THE COMPANY. The Company agrees with the several ------------------------- Underwriters as follows: (i) If the Registration Statement has not already been declared effective by the Commission, the Company will use its best efforts to cause the Registration Statement and any post-effective amendments thereto to become effective as promptly as possible; the Company will notify you promptly of the time when the Registration Statement or any post-effective amendment to the Registration Statement has become effective or any supplement to the Prospectus (including any term sheet within the meaning of Rule 434 of the Rules and Regulations) has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or additional information; if the Company has elected to rely on Rule 430A of the Rules and Regulations, the Company will prepare and file a Prospectus (or term sheet within the meaning of Rule 434 of the Rules and Regulations) containing the information omitted therefrom pursuant to Rule 430A of the Rules and Regulations with the Commission within the time period required by, and otherwise in accordance with the provisions of, Rules 424(b), 430A and 434, if applicable, of the Rules and Regulations; if the Company has elected to rely upon Rule 462(b) of the Rules and Regulations to increase the size of the offering registered under the Act, the Company will prepare and file a registration statement with respect to such increase with the 3 Commission within the time period required by, and otherwise in accordance with the provisions of, Rule 462(b); the Company will prepare and file with the Commission, promptly upon your request, any amendments or supplements to the Registration Statement or Prospectus (including any term sheet within the meaning of Rule 434 of the Rules and Regulations) that, in your opinion, may be necessary or advisable in connection with the distribution of the Notes by the Underwriters; and the Company will not file any amendment or supplement to the Registration Statement or Prospectus (including any term sheet within the meaning of Rule 434 of the Rules and Regulations), other than filings made under the Exchange Act with the exception of the Company's quarterly report on Form 10-Q for the quarter ended June 30, 1997, to which you shall reasonably object by notice to the Company after having been furnished a copy a reasonable time prior to the filing. (ii) The Company will advise you, promptly after it shall receive notice or obtain knowledge thereof, of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Notes for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and the Company will promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. (iii) Within the time during which a prospectus (including any term sheet within the meaning of Rule 434 of the Rules and Regulations) relating to the Notes is required to be delivered under the Act, the Company will comply as far as it is able with all requirements imposed upon it by the Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, so far as is necessary to permit the continuance of sales of or dealings in the Notes as contemplated by the provisions hereof and the Prospectus. If during such period any event occurs as a result of which the Prospectus would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act, the Company will promptly notify you and will amend the Registration Statement or supplement the Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance. (iv) The Company will furnish to each of the Underwriters and their counsel, without charge, one signed copy of the Registration Statement and of each amendment thereto, including all exhibits thereto and documents incorporated therein by reference, and will also furnish to each of the Underwriters, without charge, such number of conformed copies of the Registration Statement and of each amendment thereto as each of the Underwriters may reasonably request. (v) The Company will not file any amendment to the Registration Statement or make any amendment or supplement to the Prospectus, other than filings made under the Exchange Act with the exception of the Company's quarterly report on Form 10-Q for the quarter 4 ended June 30, 1997, of which the Underwriters shall not previously have been advised or to which any of the Underwriters promptly after being so advised shall reasonably have objected in writing. (vi) Prior to the effective date of the Registration Statement, the Company will have delivered or will deliver to each Underwriter, without charge, copies of each form of preliminary prospectus in such quantities as such Underwriter has reasonably requested or may hereafter reasonably request for the purposes contemplated by the Act. (vii) On the effective date of the Registration Statement and thereafter from time to time during such period as in the opinion of counsel for the Underwriters a prospectus is required by law to be delivered in connection with offers or sales of the Notes by an Underwriter or a dealer, the Company will deliver to each Underwriter and dealer, without charge, as many copies of the Prospectus (and of any amendment or supplement thereto) as they may reasonably request. During such period, if any event occurs which in the judgment of the Company, or in the opinion of counsel for the Underwriters, should be set forth in the Prospectus in order to ensure that no part of the Prospectus includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances at the time the Prospectus is delivered to a purchaser, not misleading, the Company will forthwith prepare, submit to the Underwriters, file with the Commission and deliver, without charge to the several Underwriters and dealers (whose names and addresses will be furnished by the Underwriters to the Company) to whom Notes have been sold by the Underwriters or to other dealers upon request, an amendment or supplement, as appropriate, to the Prospectus so that the statements in the Prospectus, as so amended or supplemented, will comply with the standards set forth in this sentence. The Company consents to the use of such Prospectus (and of any amendments or supplements thereto) in accordance with the provisions of the Act and with the securities or Blue Sky laws of the jurisdictions described in the preliminary Blue Sky memorandum in which the Notes are lawfully offered by the several Underwriters and by all dealers to whom Notes may be sold, both in connection with the offering or sale of the Notes and for such period of time thereafter as the Prospectus is required by law to be delivered in connection therewith. In case any Underwriter is required to deliver a Prospectus (and any amendment or supplement thereto) more than nine months after the first date upon which the Notes are offered to the public, the Company will, upon the request of the Underwriters but at the expense of such Underwriter, furnish such Underwriter with reasonable quantities of a Prospectus complying with Section 10(a)(3) of the Act. (viii) The Company will cooperate with the Underwriters and counsel for the Underwriters in connection with the registration or qualification of the Notes for offer and sale by the several Underwriters and by dealers under the securities or Blue Sky laws of such jurisdictions as the Underwriters may designate and will file such consents to service of process or other documents as may be necessary in order to effect such registration or qualification; provided that in no event shall the Company be obligated (w) to qualify to do business in any jurisdiction where it is not now so qualified, (x) to file any general consent to service of process, (y) take any action 5 that would subject it to income taxation in any jurisdiction where it is not so qualified or (z) to take any action to amend its Articles of Incorporation in order to make the Company's securities eligible for registration or qualification in any state. (ix The Company will make generally available to the holders of Notes an earnings statement of the Company and its subsidiaries, which need not be audited, as soon as practicable but not later than 18 months after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including Rule 158). (x) For a period of five years after the date of this Agreement: (A) the Company will furnish to the Underwriters (1) as soon as available, a copy of each report of the Company of general interest mailed to any class of its security holders, (2) copies of all annual, quarterly reports and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K and any amendment thereto or such other similar forms as may be designated by the Commission or required to be filed by the Company pursuant to Sections 13, 14 and 15 of the Exchange Act, which the Company agrees to timely file with the Commission for so long as may be required, (3) a copy of each report furnished to or filed with any securities exchange or the National Market of the National Association of Securities Dealers Automated Quotation System ("Nasdaq National Market") and (4) from time to time, such other information concerning the Company as the Underwriters may reasonably request; and (B) if at any time during such five-year period, the Company shall cease filing with the Commission the annual, quarterly reports and current reports on Forms 10-K, 10-Q and 8-K or other similar forms referred to in clause (A) above, the Company will forward to the Underwriters (1) as soon as practicable after the end of each fiscal year, copies of a balance sheet and statements of income and retained earnings of the Company as of the end of and for such fiscal year, audited by independent public accountants, and (2) as soon as practicable after the end of each quarterly fiscal period, except for the last quarterly fiscal period in each fiscal year, a summary statement (which need not be audited) of income and retained earnings of the Company for such period, which shall also be made publicly available. If and so long as the Company shall have any subsidiaries, the financial statements referred to above shall be consolidated to the extent the accounts of the Company and such subsidiaries are consolidated, and separate financial statements shall be furnished for each significant subsidiary, as defined in Regulation S-X of the Commission, whose accounts are not so consolidated. (xi) Prior to the Closing Date, the Company will issue no press release or other public communication directly or indirectly and hold no press conference with respect to the Company or any subsidiary or this offering, without the Underwriters' prior written consent. 6 (xii) Company will pay, or reimburse if paid by the Underwriters, whether or not the transactions contemplated hereby are consummated or this Agreement is prevented from becoming effective under the provisions of Section 11 hereof or is terminated, all costs and expenses incident to the performance by it of its obligations under this Agreement including, without limiting the generality of the foregoing, (1) typesetting, printing, duplicating, and filing (and all preparation therefor) and distribution (including, without limitation, postage, air freight charges and charges for counting and packaging) of the original registration statement, the Registration Statement, each Preliminary Prospectus, the Prospectus, each amendment and/or supplement to any of the foregoing, and this Agreement and other underwriting documents and the Indenture, (2) all costs of furnishing to the several Underwriters and dealers copies of the foregoing materials, (3) the registrations or qualifications referred to in paragraph (viii) above (including reasonable fees and disbursements of counsel in connection therewith) and expenses of printing and delivering to the several Underwriters copies of the preliminary and final Blue Sky memorandum, (4) the review of the terms of the public offering of the Notes by the National Association of Securities Dealers, Inc. (the "NASD") (including the filing fees paid to the NASD in connection therewith) and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith, (5) the performance by the Company of its other obligations under this Agreement, including the fees of the Company's counsel and accountants, (6) the issuance of the Notes and the preparation and printing of the certificates representing the Notes, (7) the fees and expenses of the Trustee and any agent of the Trustee and any transfer or paying agent for the Company, (8) all travel, lodging and reasonable living expenses incurred by the Company in connection with marketing, dealer and other meetings attended by the Company and the Underwriters in marketing the Notes, (9) listing fees, if any, (10) any fees charged by security rating services for rating the Notes and (11) furnishing to the several Underwriters copies of all reports and information required by paragraph (x) above, including costs of shipping and mailing. (xiii) If the sale of the Notes provided for herein is not consummated by reason of action by the Company pursuant to Section 11 hereof which prevents this Agreement from becoming effective, or by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its part to be performed, or because any other condition of the Underwriters' obligations hereunder required to be fulfilled by the Company is not fulfilled, the Company will reimburse the several Underwriters for all out- of-pocket disbursements (including fees and disbursements of counsel) incurred by the Underwriters in connection with their investigation, preparing to market and marketing the Notes or in contemplation of performing their obligations hereunder. The Company shall not in any event be liable to any of the Underwriters for loss of anticipated profits from the transactions covered by this Agreement. (xiv) The Company will apply the net proceeds from the sale of the Notes to be sold by it under this Agreement for the purposes set forth in the Prospectus under the caption "Use of Proceeds." 7 (xv) The Company will comply (1) with all registration, filing and reporting requirements of the Exchange Act which may from time to time be applicable to the Company and (2) all provisions of all undertakings contained in the Registration Statement. (xvi) The Company will not incur any liability for any finder's or broker's fee or agent's commission in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. (xvii) The Company has not taken and will not take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, or which has constituted, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Notes. 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents --------------------------------------------- and warrants to each Underwriter that: (i) Each Preliminary Prospectus, at the time of filing thereof, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing shall not apply to statements in or omissions from any Preliminary Prospectus in reliance upon, and in conformity with, information furnished in writing to the Company by any Underwriter expressly for use in the Prospectus. (ii) As of the time the Registration Statement (or any post-effective amendment thereto) is or was declared effective by the Commission, upon the filing or first delivery to the Underwriters of the Prospectus (or any supplement to the Prospectus (including any term sheet meeting the requirements of Rule 434)) and at the Closing Date, (A) the Registration Statement and Prospectus (in each case, as so amended or supplemented) conformed or will conform in all material respects to the requirements of the Act and Regulations, (B) the Registration Statement (as so amended) did not or will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (C) the Prospectus (as so supplemented) did not or will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they are or were made, not misleading; provided, however, that this representation and warranty shall not apply to the Statement of Eligibility of the Trustee on Form T-1 filed as an Exhibit to the Registration Statement or to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Underwriter specifically for use in the preparation of the Registration Statement or the Prospectus (in each case, as amended or supplemented). The Registration Statement has been declared effective by the Commission; no stop order suspending the effectiveness of the Registration Statement has been issued; and no proceeding for that purpose has been initiated or to the Company's knowledge, threatened by the Commission. 8 (iii) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Prospectus, or any amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they are made not misleading; provided, however, that this representation and warranty shall not apply to the Statement of Eligibility of the Trustee on Form T-1 filed as an Exhibit to the Registration Statement or to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Underwriter expressly for use in the Prospectus as supplemented to relate to the Notes. (iv) The Registration Statement and Prospectus conform, and any amendments or supplements thereto will conform, in all material respects to the requirements of the Trust Indenture Act, and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date in the case of the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, provided, however, that this representation and warranty shall not apply to the Statement of Eligibility of the Trustee on Form T-1 filed as an Exhibit to the Registration Statement or to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by any Underwriter expressly for use in the Prospectus as supplemented to relate to the Securities. (v) Any contract, agreement, instrument, lease, or license required to be described in the Registration Statement or Prospectus has been properly described therein. Any contract, agreement, instrument, lease, or license required to be filed as an exhibit to the Registration Statement has been filed with the Commission as an exhibit to the Registration Statement. (vi) KPMG Peat Marwick LLP, the Company's auditors, are independent public accountants with respect to the Company as required by the Act. (vii) The consolidated financial statements and schedules of the Company and its consolidated subsidiaries and the financial information with respect to the subsidiaries of the Company included or incorporated by reference in the Registration Statement and the Prospectus 9 present fairly the financial position of the Company and its consolidated subsidiaries (including, without limitation, the reserves for credit losses) as of the dates indicated, and the results of operations, cash flows and changes in financial position of the Company and its consolidated subsidiaries for the periods specified. Such financial statements and schedules have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the entire period involved, except to the extent disclosed therein. No other financial statements are required to be included in the Registration Statement or Prospectus. (viii) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of California and is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, supervised by the Board of Governors of the Federal Reserve System (the "FRB"). The Company has all requisite corporate power and corporate authority to own or lease its property and conduct its business as described in the Registration Statement and the Prospectus and is qualified to do business as a foreign corporation in each jurisdiction in which the ownership or lease of its properties, or the conduct of its business, requires such qualification and in which the failure to be so qualified or in good standing would have a material adverse effect on the financial condition, affairs, business or prospects of the Company and the Subsidiaries (defined below) considered as a whole. The Company does not own or lease property or transact business in any other jurisdiction where the ownership of such property or the transaction of such business would require it to qualify as a foreign corporation under the laws of such jurisdiction. (ix) The Company has an authorized and outstanding capitalization as set forth in the Prospectus and the Notes conform in all material respects to the description thereof contained in the Prospectus. All of the issued and outstanding shares of capital stock of the Company and all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized, validly issued and are fully paid and non-assessable and, in the case of the Subsidiaries, are owned of record and beneficially by the Company, and, except as set forth in the Registration Statement, are free and clear of any liens, claims, security interests, pledges, charges, encumbrances, shareholders' agreements, and voting trusts or rights of others. Except as set forth in the Prospectus and other than shares of common stock issuable upon exercise of options under the Company's stock option plans, there are no options, agreements, contracts, preemptive rights, or other rights in existence (i) to acquire from the Company any shares of capital stock or (ii) to acquire from the Company or any Subsidiary any of the capital stock of any Subsidiary. (x) The Company has no direct or indirect significant subsidiaries (as such term is defined in Regulation S-X of the Commission) except for General Bank, a state bank chartered under the banking laws of the State of California (the "Bank" or a "Subsidiary"). Other than GBC Venture Capital, Inc., a California corporation, GBC Investment and Consulting Company, Inc., a California corporation, GBC Insurance Services, Inc., a California corporation, Southern Counties Escrow , a California corporation, and GBC Leasing Company, Inc., a California corporation, (each a "Subsidiary" and, together with the Bank, the "Subsidiaries"), the Company 10 owns no capital stock or other equity or ownership or proprietary interest in any corporation, partnership, association, trust or other entity. (xi) Each of the Subsidiaries has been duly organized and is validly existing as a corporation and is in good standing under the laws of its jurisdiction of incorporation or charter, has all requisite corporate power and corporate authority to own, lease and operate its properties and conduct its business as described in the Registration Statement and Prospectus. Each of the Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the ownership or lease of its properties, or the conduct of its business, requires such qualification and in which the failure to be so qualified or in good standing would have a material adverse effect on the financial condition, affairs, business or prospects of the Company and the Subsidiaries considered as a whole. The accounts of the Bank are insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation (the "FDIC") up to the maximum applicable amount in accordance with the rules and regulations of the FDIC, and no proceedings for the termination or revocation of such membership or insurance are pending, or, to the knowledge of the Company, threatened. (xii) Each of the Company and each Subsidiary has all necessary and material authorizations, approvals, licenses, certificates, permits and orders (collectively, "Permits") of and from all governmental regulatory officials and bodies to own its properties and to conduct its business as presently conducted; except in any case where the failure to possess any such Permit would not have a material adverse effect on the financial condition, affairs, business or prospects of the Company and the Subsidiaries considered as a whole. (xiii) The Indenture, which will be substantially in the form filed as an exhibit to the Registration Statement, has been duly authorized and duly qualified under the Trust Indenture Act and when executed and delivered by the Company and the Trustee, the Indenture will have been duly authorized, executed and delivered by the Company and will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally and to general principles of equity; and the Indenture conforms in all material respects to the description thereof in the Prospectus. (xiv) The Notes have been duly authorized and, when executed and authenticated in accordance with the terms of the Indenture and issued and delivered in accordance with the terms of this Agreement against payment therefor, will have been duly authorized, executed, authenticated and delivered by the Company and will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture, enforceable against the Company in accordance with their terms, subject, as to such benefit and enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally and to general principles of equity; the Notes conform in all material respects to the description thereof contained in the Prospectus and will be substantially in the form filed as an exhibit to the Registration Statement. 11 (xv) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated or contemplated therein, there has not been (A) any material adverse change in the condition (financial or otherwise), affairs, business or key personnel, property, prospects, net worth or results of operations of the Company and its Subsidiaries considered as a whole, whether or not arising in the ordinary course of business, (B) any material transaction entered into, or any material liability or obligation incurred, direct or contingent, by the Company or any Subsidiary, other than in the ordinary course of business, (C) any change in the capital stock (other than the issuance of shares of common stock upon the exercise of options under the Company's stock option plans), or material increase in the short-term debt or long-term debt of the Company or any Subsidiary, or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock of the Company or any Subsidiary (other than the issuance of options or the issuance of shares of common stock upon the exercise of options under the Company's stock option plans) or (D) any dividend or distribution of any kind declared, paid or made by the Company on its capital stock other than the dividend on the Company's common stock paid on July 15, 1997. (xvi) The Company and the Subsidiaries have good and marketable title to all properties and assets described in the Prospectus as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are referred to in the Prospectus or are not materially significant in relation to the financial condition, affairs, business or prospects of the Company and the Subsidiaries considered as a whole; all of the leases and subleases material to the business of the Company or under which the Company or any Subsidiary holds properties described in 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 which has been asserted by anyone adverse to the rights of the Company or such Subsidiary as owner or as lessee or sublessee under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company or the Subsidiary to the continued possession of the leased or subleased premises under any such lease or sublease. (xvii) Neither the Company nor any Subsidiary is in default nor will the performance of this Agreement or the issuance and sale of the Notes result in a default in the observance of any provision of its charter, certificate of incorporation or by-laws, or in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease, license or other agreement or instrument to which it is a party or by which it or any of its respective properties are subject or may be bound, which would have a materially adverse effect on the financial condition, affairs, business or prospects of the Company and the Subsidiaries considered as a whole. No consent of any party to any contract, indenture, mortgage, loan agreement, note, lease, license or other agreement or instrument to which the Company or any Subsidiary is a party, or by which it or any of its respective properties or assets are subject or may be bound, is required for the execution, delivery or performance of this Agreement, or the issuance and sale of the Notes, other than such consents which have been obtained. 12 (xviii) This Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable in accordance with its terms, except as rights to indemnity hereunder may be limited by federal or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity. The Company has full power and authority to enter into this Agreement and to authorize, issue and sell the Notes as contemplated by this Agreement. (xix) The execution and delivery by the Company of this Agreement and the Indenture, the issuance and delivery of the Notes, the consummation of the transactions contemplated herein and in the Registration Statement and compliance with the terms of this Agreement have been duly authorized by all necessary corporate action and will not result in any violation of the Articles of Incorporation or Bylaws of the Company, and will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary, or any of their respective properties, is bound, or any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any Subsidiary or any of their respective properties. (xx) No consent, approval, authorization or order of, or filing with any court, governmental authority or agency having jurisdiction over the Company or any Subsidiary is required in connection with the execution, delivery and performance of this Agreement or for the consummation of the transactions contemplated hereby, including the issuance, sale and delivery of the Notes in accordance with the terms of this Agreement and the Indenture, except such as may be required under the Act, the Securities Exchange Act of 1934, as amended, the Trust Indenture Act, the New York Stock Exchange and state securities or Blue Sky laws. (xxi) Neither the Commission nor the Blue Sky or securities authority of any jurisdiction has issued a stop order (a "Stop Order") suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus, the Prospectus, the Registration Statement, or any amendment or supplement thereto, refusing to permit the effectiveness of the Registration Statement, suspending the registration or qualification of the Notes, nor has any of such authorities instituted or, to the knowledge of the Company, threatened to institute, any proceedings with respect to a Stop Order. (xxii) Except as disclosed in the Prospectus, there is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, or any arbitrator or arbitration panel, now pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary which might result in any material adverse change in the financial condition, affairs, business, prospects, net worth or results of operations of the Company 13 and the Subsidiaries considered as a whole, or which might materially and adversely affect their properties or assets; and there is no decree, judgment or order of any kind in existence against or restraining the Company or any Subsidiary, or any of the officers, employees or directors of either, from taking any actions of any kind in connection with the business of the Company or any Subsidiary. (xxiii) The Company is and each of its Subsidiaries is in compliance with all applicable federal, state and local laws and regulations to which they are subject or that regulate the business of the Company or its Subsidiaries, where the effect of the failure to comply would be materially adverse to the financial condition, affairs, business or prospects of the Company and the Subsidiaries considered as a whole. (xxiv) The Bank owns or possesses, or can acquire on reasonable terms, trademarks, service marks and trade names necessary to conduct the business now operated by it, and the Bank has not received any notice of infringement of or conflict with asserted rights of others with respect to any trademarks, service marks or trade names which, singly or in the aggregate, if the subject of any unfavorable decision, ruling or finding, would materially adversely effect the financial condition, affairs, business or prospects of the Company and the Subsidiaries considered as a whole. (xxv) The Company and each of its Subsidiaries has filed all necessary federal and state income and franchise tax returns and paid all taxes shown as due thereon. Except as is otherwise expressly stated in the Registration Statement, the Company has no knowledge of any tax deficiency which might be asserted against it which would have a material adverse effect on the financial condition, affairs, business or prospects of the Company and the Subsidiaries considered as a whole. (xxvi) The Company and the Subsidiaries are not and do not intend to conduct their businesses in a manner which would cause any of them to be an "investment company" as defined in Section 3(a) of the Investment Company Act of 1940, as amended (the "Investment Company Act"). (xxvii) To the best of the Company's knowledge, there are no affiliations between (i) any of the Company's officers, directors or 5% or greater security holders, and (ii) any Underwriter or NASD-registered broker or dealer except as set forth in the Registration Statement or as otherwise disclosed in writing to the Underwriters. (xxviii) The Notes have been duly authorized for listing by the New York Stock Exchange upon official notice of issuance. (xxix) The Company has not distributed and will not distribute any prospectus or other offering material in connection with the offering and sale of the Notes other than any 14 Preliminary Prospectus or the Prospectus or other materials permitted by the Act to be distributed by the Company. (xxx) The Company maintains 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 generally accepted accounting principles 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 existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (xxxi) No hazardous substances, hazardous wastes, pollutants or contaminants have been deposited or disposed of in, on or under the properties of the Company or any Subsidiary (including properties owned, managed or controlled by a Subsidiary in connection with its lending operations) during the period in which the Company or any Subsidiary has owned, occupied, managed, controlled or operated such properties in material violation of any applicable law, ordinance, rule, regulation, order, judgment, decree or permit or which would require remedial action under any applicable law, ordinance, rule, regulation, order, judgment, decree or permit, except for any violation or remedial action which would not have, or could not be reasonably likely to have, singularly or in the aggregate with all such violations or remedial actions, a material adverse effect on the general affairs, condition (financial, or otherwise), business, key personnel, property, prospects, net worth or results of operations of the Company and its Subsidiaries, taken as a whole. 7. INDEMNIFICATION AND CONTRIBUTION. -------------------------------- (a) The Company agrees to indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon a untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness pursuant to Rules 430A and 434(d) under the Act, if applicable, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto (including any term sheet within the meaning of Rule 434 under the Act), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other out-of-pocket expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action 15 rises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Prospectus, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by any Underwriter specifically for use in the preparation thereof. In addition to their other obligations under this Section 7(a), the Company agrees that, as an interim measure during the pendency of any claim, action, investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged statement or omission, described in this Section 7(a), they will reimburse each Underwriter on a monthly basis for all reasonable legal fees or other out-of-pocket expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the absence of a judicial determination as to the propriety and enforceability of the Company's obligation to reimburse the Underwriters for such expenses and the possibility that such payments might later be held to have been improper by a court of competent jurisdiction. To the extent that any such payments might later be held to have been improper by a court of competent jurisdiction. To the extent that any such interim reimbursement payment is so held to have been improper, the Underwriter that received such payment shall promptly return it to the party or parties that made such payment, together with interest, compounded daily, determined on the basis of the prime rate (or other commercial lending rate for borrowers of the highest credit standing) announced from time to time by Norwest Bank Minnesota, National Association (the "Prime Rate"). Any such interim reimbursement payments which are not made to an Underwriter within 30 days of a request for reimbursement shall bear interest a the Prime Rate from the date of such request. This indemnity agreement shall be in addition to any liabilities which the Company may otherwise have. (b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Prospectus, or an amendment or supplement thereto (including any term sheet within the meaning of Rule 434 under the Act), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Prospectus, or any such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by any Underwriter specifically for use in the preparation thereof, and will reimburse the Company for any legal or other out-of-pocket expenses reasonably incurred by the Company in connection with investigating or defending against any such loss, claim, damage, liability or action. 16 (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided, however, that the failure so to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have under this Section 7 except to the extent it has been materially prejudiced by such failure and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 7. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of the indemnifying party's election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other out-of-pocket expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that if, in the sole judgment of the Underwriters, it is advisable for the Underwriters to be represented as a group by separate counsel, the Underwriters shall have the right to employ a single counsel to represent themselves, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or parties and reimbursed to the Underwriters as incurred (in accordance with the provisions of the second paragraph in subsection (a) above). An indemnifying party shall not be obligated under any settlement agreement relating to any action under this Section 7 to which it has not agreed in writing. (d) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties' relevant intent, knowledge, access 17 to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this subsection (d). The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other out-of-pocket expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. (e) The obligations of the Company under this Section 7 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 7 shall be in addition to any liability that the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company (including any person who, with his consent, is named in the Registration Statement as about to become a director of the Company), to each officer of the Company who has signed the Registration Statement and to each person, if any, who controls the Company within the meaning of the Act. 8. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The several obligations ------------------------------------------- of the Underwriters to purchase the Notes hereunder are subject to the following conditions: (a) The Registration Statement shall have become effective not later than 5:00 p.m., Eastern time, on the date hereof, or at such later date and time as shall be consented to in writing by the Underwriters, and, if the Underwriters and the Company have elected to rely upon Rule 430A under the Act, the price of the Notes and any price-related or other information previously omitted from the Registration Statement pursuant to such Rule 430A under the Act shall have been transmitted to the Commission for filing pursuant to Rule 424 (b) within the prescribed time period, and on or prior to the Closing Date, the Company shall have provided evidence satisfactory to the Underwriters of such timely filing, or a post-effective amendment providing such information shall have been promptly filed and declared effective in accordance with the requirements of Rule 430A. 18 (b) Subsequent to the effective date of the Registration Statement, (i) there shall not have occurred any change, or any material development involving a prospective change, in or affecting particularly the business or properties of the Company and the Subsidiaries, taken as a whole, not contemplated by the Prospectus, which, in the Underwriters' opinion would materially adversely affect the market for the Notes or make it impracticable or inadvisable to proceed with the offering or the delivery of the Notes, as contemplated herein and in the Prospectus, or to attempt to enforce contracts for the purchase of the Notes, and (ii) the business and operations of the Company and the Subsidiaries shall not have been materially interfered with by strike, fire, flood, accident or other calamity (whether or not insured). (c) The Underwriters shall have received from Sullivan & Cromwell, counsel for the Company, a favorable opinion dated the Closing Date and satisfactory to the Underwriters and the Underwriters' counsel to the effect that: (i) Each of the Company and the Bank has been duly organized and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation; each has all requisite corporate power and corporate authority to own, lease and operate its properties and conduct its business as described in the Registration Statement and the Prospectus. The Bank is wholly-owned by the Company and the Bank and GBC Venture Capital, Inc. are the Company's only direct subsidiaries. (ii) The Company has an authorized capitalization as set forth in the Prospectus. Each outstanding share of capital stock of the Company is duly authorized, validly issued, fully paid and non-assessable and each outstanding share of capital stock of the Bank is duly authorized, validly issued, fully paid assessable, in the manner and to the extent provided in the California Financial Code, has not been issued and is not owned or held in violation of any preemptive right of shareholders. Each outstanding share of capital stock of the Bank is owned of record and, to such counsel's knowledge, beneficially by the Company and, except as disclosed in the Registration Statement, to the knowledge of such counsel, is held free and clear of all liens, claims, security interests, pledges, charges, encumbrances, shareholders' agreements, voting trusts or claims of others. To such counsel's knowledge, except as set forth in the Prospectus, neither the Board of Directors of the Company nor any committee thereof has authorized or entered into any commitment or arrangement to issue, and neither the Board of Directors nor any committee thereof has authorized the issuance of any outstanding option, warrant or other right calling for the issuance or sale of, any share of capital stock of the Company or the Bank or any security or other instrument which by its terms is convertible into, exercisable for or exchangeable for capital stock of the Company or the Bank. To such counsel's knowledge, neither the Board of Directors nor any committee thereof of the Bank has authorized any options, agreements, contracts or other rights in existence to purchase or acquire from the Company or the Bank any issued and outstanding shares of the capital stock of the Company or the Bank. (ii) This Agreement has been duly authorized, executed and delivered by the Company. 19 (iv) The Notes have been duly and validly authorized, executed and delivered by the Company and when delivered and paid for pursuant hereto will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equitable principles. (v) The Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equitable principles. (vi) All regulatory consents, authorizations, approvals and filings required to be obtained or made by the Company under the Federal laws of the United States and the laws of the States of New York and California for the issuance, sale and delivery of the Notes by the Company to you have been obtained or made. (vii) The issuance of the Notes in accordance with the Indenture and the sale of the Notes by the Company to you pursuant to this Agreement do not, and the performance by the Company of its obligations under the Indenture, this Agreement and the Note will not (A) violate the Company's or the Bank's Articles of Incorporation or Bylaws, (B) result in a default under or breach of the agreements identified to us as material to the Company and the Subsidiaries in the Officers' Certificate, dated the date of this opinion, of Peter Lowe, Chief Financial Officer of the Company or (C) violate any Federal law of the United States or law of the States of New York or California applicable to the Company or its Subsidiaries; provided that such counsel may state that they express no opinion with respect to Federal or state securities laws, other antifraud laws and fraudulent transfer laws, and that insofar as performance by the Company of its obligations under the Indenture, this Agreement and the Notes, such counsel need express no opinion as to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights. (viii) The Registration Statement has become effective under the Act, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued, nor has any proceeding for the issuance of such an order been initiated or, to the knowledge of such counsel, threatened. (ix) Such counsel does not know of any pending or threatened litigation which would prevent the consummation of the transactions contemplated by this Agreement or the Indenture. 20 (x) The Company and the Subsidiaries are not an "investment company" or a person "controlled by" an "investment company" within the meaning of the Investment Company Act. In addition, you shall have received from Sullivan & Cromwell a letter stating that as counsel to the Company, they reviewed the Registration Statement and the Prospectus, participated in discussions with your representatives and those of the Company and its accountants, and advised the Company as to the requirements of the Act and the applicable rules and regulations thereunder; on the basis of the information that such counsel gained in the course of the performance of such services, considered in the light of their understanding of the applicable law (including the requirements of Form S-3 and the character of the prospectus contemplated thereby) and the experience they have gained through their practice under the Act, they confirm to you that, in their opinion, the Registration Statement and the Prospectus, as of the effective date of the Registration Statement, appeared on their face to be appropriately responsive in all material respects to the requirements of the Act, the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder; nothing that came to such counsel's attention in the course of such review has caused such counsel to believe that the Registration Statement or the Prospectus, as of such effective date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading; nothing that has come to such counsel's attention in the course of the limited procedures described in such letter has caused them to believe that the Prospectus, as of the date and time of delivery of such letter, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and such counsel do not know of any litigation or any governmental proceeding instituted or threatened against the Company or any of its consolidated Subsidiaries that would be required to be disclosed in the Prospectus and is not so disclosed, and do not know of any documents that are required to be filed as exhibits to the Registration Statement and are not so filed or of any documents that are required to be summarized in the Prospectus and are not so summarized. Such counsel may state that the limitations inherent in the independent verification of factual matters and the character of determinations involved in the registration process are such that they do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus except for those made under the captions "Risk Factors -- Source of Payments to Holder of Notes," "-- Limited Right of Acceleration of Notes," "--Limited Covenants," "-- Subordination of Notes" and "-- Regulation" and "Description of Notes" in the Prospectus insofar as they relate to provisions of the Indenture and the Notes therein described and the caption "Underwriting" insofar as they relate to provisions of this Agreement; that such counsel do not express any opinion or belief as to the financial statements or other financial data derived from accounting records contained in the Registration Statement or the Prospectus, or as to the statement of the eligibility and qualification of the Trustee under the Indenture; and that their letter is furnished as counsel for the Company to the several Underwriters and is solely for the benefit of the several Underwriters. 21 In rendering such opinions, such counsel may rely as to matters of fact, to the extent they deem proper on certificates of responsible officers of the Company and the Subsidiaries and on certificates of public officials. (d) The Underwriters shall have received on the Closing Date a favorable opinion dated the Closing Date from Manatt, Phelps & Phillips, LLP, counsel for the Underwriters, as to such matters as the Underwriters may reasonably require. (e) The Underwriters shall have received letters addressed to the Underwriters and dated the date hereof and the Closing Date, as the case may be, from KPMG Peat Marwick LLP, independent public accountants for the Company, substantially in the forms heretofore approved by the Underwriters and counsel for the Underwriters. (f) That (i) no Stop Order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been taken or, to the knowledge of the Company, shall be contemplated by the Commission at or prior to the Closing Date; (ii) there shall not have been any change in the capital stock of the Company or any Subsidiary nor any material increase in the short or long-term debt of the Company and its Subsidiaries taken as a whole from that set forth or contemplated in the Registration Statement and Prospectus; (iii) the Company and its Subsidiaries shall not have incurred any material liabilities or obligations, direct or contingent (whether or not in the ordinary course of business), other than those reflected in or contemplated by the Registration Statement and Prospectus; and (iv) all of the representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects on and as of the date hereof and on and as of the Closing Date as if made on and as of each such date, and the Underwriters shall have received a certificate, dated the Closing Date and in form and substance reasonably satisfactory to the Underwriters signed by the President or a Vice President and the Chief Financial Officer of the Company (or such other officers as are acceptable to the Underwriters) to the effect set forth in this Section 8(f) and in Section 8(h) hereof. (g) The Notes shall have been qualified for sale or exempted from such qualification under the securities laws of such jurisdictions as the Underwriters shall have designated prior to the time of execution of this Agreement and such qualification or exemption shall continue in effect to and including the Closing Date. (h) The Company shall not have failed at or prior to the Closing Date to have performed or complied in all material respects with any of the agreements herein contained and required to be performed or complied with by it at or prior to the Closing Date. (i) The Notes shall not have received from Duff & Phelps Credit Rating Co. a credit rating lower than BB-. 22 9. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All -------------------------------------------------- representations, warranties, and agreements of the Company herein or in certificates delivered pursuant hereto, and the agreements of the Company and the Underwriters contained in Section 7 hereof shall remain operative and in full force and effect regardless of any investigation made by the Underwriters or on the Underwriters' behalf or any controlling person thereof, or the Company or any of its officers, directors, or controlling persons and shall survive delivery of, and payment for, the Notes to and by the Underwriters hereunder. 10. EFFECTIVE DATE OF AGREEMENT. --------------------------- (a) If the Registration Statement has not yet been declared effective, this Agreement shall become effective contemporaneously with the effectiveness of the Registration Statement. Until such time as this Agreement shall have become effective, it may be terminated by the Company by notifying the Underwriters, or by the Underwriters by notifying the Company. (b) If any Underwriter shall fail or refuse to purchase Notes which it has agreed to purchase under this Agreement and the aggregate principal amount of Notes which such defaulting Underwriter agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of Notes, the other Underwriters shall be obligated, pro rata to purchase the Notes which the defaulting Underwriter agreed but failed or refused to purchase. If any Underwriter shall fail or refuse to purchase Notes and the aggregate principal amount of Notes with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Notes and arrangements satisfactory to the non-defaulting Underwriters and the Company for the purchase of such Notes are not made within 36 hours after such default, this Agreement will terminate without liability on the part of the non-defaulting Underwriters or the Company. In any such case which does not result in termination of this Agreement, either the non-defaulting Underwriters or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of its default under this Agreement. (c) Any notice under this Section 10 may be made by telecopy or telephone but shall be subsequently confirmed by letter. 11. TERMINATION OF AGREEMENT. The Underwriters shall have the right to ------------------------ terminate this Agreement at any time prior to the Closing Date by notice to the Company from the Underwriters, without liability on the Underwriters' part to the Company if, on or prior to such date, (i) the Company shall have failed, refused or been unable to perform in any material respect any agreement on its part to be performed hereunder, (ii) any other condition to the obligations of the Underwriters hereunder as provided in Section 8 is not fulfilled when and as required in any material respect, (iii) trading in securities generally on the New York Stock Exchange, the 23 American Stock Exchange or the NASD Automated Quotation System shall have been suspended or materially limited, or minimum prices shall have been established on such exchange or system by the Commission, or by such exchange or system or other regulatory body or governmental authority having jurisdiction, (iv) a general banking moratorium shall have been declared by Federal, California or New York State authorities, (v) there is an outbreak or material escalation of armed hostilities involving the United States on or after the date hereof, or there has been a declaration by the United States of a national emergency or war, the effect of which shall be, in the Underwriters' reasonable judgment, to make it inadvisable or impracticable to proceed with the public offering or delivery of the Notes on the terms and in the manner contemplated in the Prospectus as supplemented or amended prior to the occurrence of such event, (vi) in the Underwriters' reasonable opinion any material adverse change shall have occurred since the respective dates as of which information is given in the Registration Statement or the Prospectus (as supplemented or amended prior to the occurrence of such event) in the condition (financial or other) of the Company or the Subsidiaries, taken as a whole, whether or not arising in the ordinary course of business other than as set forth in the Prospectus as supplemented or amended prior to the occurrence of such event, or (vii) there shall have been such a material adverse change in general economic, political or financial conditions or if the effect of international conditions on the financial markets in the United States shall be such as, in the Underwriters' reasonable opinion, makes it inadvisable or impracticable to proceed with the delivery of the Notes as contemplated hereby. Notice of such cancellation shall be given to the Company by telecopy or telephone but shall be subsequently confirmed by letter. 12. INFORMATION FURNISHED BY UNDERWRITER. The statements set forth in the ------------------------------------ last sentence of the first paragraph on the cover page, the last paragraph of the cover page, the third sentence, in the paragraph under the caption "Risk Factors -- Absence of Existing Public Market; Market Prices", in the third and fourth paragraphs and the second and third sentence of the fifth paragraph under the caption "Underwriting" in any Preliminary Prospectus and in the Prospectus constitute the written information furnished by the Underwriter or on its behalf referred to in Section 2 and Section 6 hereof. 13. MISCELLANEOUS. Except as otherwise provided in Sections 10 and 11 ------------- hereof, notice given pursuant to any of the provisions of this Agreement shall be in writing and shall be delivered (i) if to the Company, at the office of the Company at 800 West Sixth Street, Los Angeles, California 90017, Attention: Chief Financial Officer, with a copy to Stanley F. Farrar, Esq., Sullivan & Cromwell, 444 South Flower Street, Suite 1200, Los Angeles, California 90071, or (ii) if to the Underwriters, at the offices of Piper Jaffray Inc., Piper Jaffray Tower, 222 South Ninth Street, Minneapolis, Minnesota 55402, Attention: Corporate Finance Department, with a copy to William T. Quicksilver, Esq., Manatt, Phelps & Phillips, LLP, 11355 West Olympic Boulevard, Los Angeles, California 90064, or in any case to such other address as the person to be notified may have requested in writing. 14. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure ---------------------------------------- to the benefit of and be binding upon the parties hereto and their respective successors and 24 assigns and the controlling persons, officers and directors referred to in Section 7. Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in respect of this Agreement or any provision herein contained. The term "successors and assigns" as herein used shall not include any purchaser, as such purchaser, of any of the Notes from the Underwriters. 15. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Minnesota. 16. COUNTERPARTS. This Agreement may be signed in various counterparts which together shall constitute one and the same instrument. Please confirm that the foregoing correctly sets forth the agreement among the Company and the Underwriters. Very truly yours, GBC BANCORP By: __________________________________ Name: Title: Accepted and delivered as of the date first written above PIPER JAFFRAY INC. KEEFE, BRUYETTE & WOODS, INC. OPPENHEIMER & CO., INC. By: PIPER JAFFRAY INC. By: ______________________________ Name: Managing Director 25 GBC BANCORP SCHEDULE I ---------- UNDERWRITERS
NAME PRINCIPAL - ---- AMOUNT OF NOTES Piper Jaffray, Inc................ $__________ Keefe, Bruyette & Woods, Inc...... $__________ Oppenheimer & Co., Inc............ $__________ TOTAL............................. $40,000,000 ===========
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