EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION made as of the nineteenth day
of December, 1997, among ZIONS BANCORPORATION ("Zions Bancorp"), a Utah
corporation having its principal office in Salt Lake City, Utah, VAL COR
BANCORPORATION, INC. ("Val Cor"), a Colorado corporation having its principal
office in Cortez, Colorado, VALLEY NATIONAL BANK OF XXXXXX ("Valley"), a
national banking association organized under the laws of the United States, SBT
BANKSHARES, INC. (the "Company"), a Colorado corporation having its principal
office in Colorado Springs, Colorado, and STATE BANK AND TRUST OF COLORADO
SPRINGS (the "Bank"), a banking corporation organized under the laws of the
State of Colorado
W I T N E S S E T H T H A T :
WHEREAS, the Company is a bank holding company and the sole shareholder
of the Bank;
WHEREAS, Zions Bancorp is a bank holding company and the sole
shareholder of Val Cor;
WHEREAS, Val Cor is a bank holding company which owns in excess of 99
percent of the outstanding capital stock of Valley as of the date of this
Agreement;
WHEREAS, Zions Bancorp and Val Cor each desire to affiliate with the
Company through the merger of the Company with and into Val Cor, with Val Cor to
be the surviving corporation (the "Holding Company Merger") and, in addition, to
cause the consolidation of the Bank and Valley into a new national banking
association (the "Consolidated Association") (the consolidation of the Bank and
Valley into the Consolidated Association hereinafter referred to as the "Bank
Consolidation");
WHEREAS, the Board of Directors of the Company has determined that it
would be in the best interests of the Company, its shareholders, its customers
and those of the Bank and the areas served by the Company and the Bank to become
affiliated with Zions Bancorp through the Holding Company Merger and to cause
the Bank Consolidation;
WHEREAS, the respective boards of directors of Valley and the Bank have
determined that it would be in the best interests of Valley or the Bank, as the
case may be, its shareholders and customers, for Valley and the Bank to
consolidate into the Consolidated Association;
WHEREAS, the respective Boards of Directors of Zions Bancorp, Val Cor,
and the Company have agreed, subject in the case of the Company to the receipt
of necessary shareholder approvals, to cause the Holding Company Merger pursuant
to the provisions of section 0-000-000 et seq. of the Colorado Business
Corporation Act; and, subject in the case of Valley to the receipt of necessary
shareholder approvals, to cause the Bank Consolidation pursuant to the
provisions of the Act of November 7, 1918, as amended (12 U.S.C. ss. 215);
WHEREAS, the respective Boards of Directors of Valley and the Bank have
agreed, subject in the case of Valley to the receipt of necessary shareholder
approvals, to cause the Bank Consolidation pursuant to the provisions of the Act
of November 7, 1918; and
WHEREAS, the parties intend that the Holding Company Merger and the Bank
Consolidation (the Holding Company Merger and the Bank Consolidation hereinafter
referred to together as the "Combinations") qualify as one or more tax-free
reorganizations under section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code");
NOW, THEREFORE, in consideration of these premises and the mutual
agreements hereinafter set forth, the parties agree as follows:
1. Combinations.
1.1. Form of Combinations.
(a) Val Cor and the Company will execute a merger agreement (the
"Holding Company Merger Agreement") substantially in the form of Exhibit I
annexed hereto. Subject to the provisions of the Holding Company Merger
Agreement, the Company will be merged with and into Val Cor in the Holding
Company Merger and Val Cor shall be the surviving corporation. The shares of
common stock, $5.00 par value, of the Company (the "Company Common Stock") shall
be canceled and immediately converted into the right to receive, subject to the
terms, conditions, and limitations set forth herein, such consideration as is
provided in section 1.2(a) hereof.
(b) Valley and the Bank will execute a consolidation agreement (the
"Bank Consolidation Agreement") substantially in the form of Exhibit II annexed
hereto. Immediately following the effectiveness of the Holding Company Merger,
and subject to the provisions of the Bank Consolidation Agreement, the Bank and
Valley will be consolidated into the Consolidated Association in the Bank
Consolidation. The shares of common stock of the Bank and Valley shall be
canceled and immediately converted into the right to receive, subject to the
terms, conditions, and limitations set forth herein, such shares in the
Consolidated Association provided in section 1.2(b) hereof.
1.2. Consideration for Mergers.
(a) Subject to the terms, conditions, and limitations set forth
herein, upon surrender of his or her certificate or certificates in accordance
with Section 1.1 hereof:
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(i) each holder of shares of Company Common Stock shall be
entitled to receive, in exchange for each share of Company Common Stock held of
record by such stockholder as of the Effective Date, that number of shares of
the common stock of Zions Bancorp, no par value (the "Zions Bancorp Stock")
calculated by dividing the product of the Consideration Number and the Collar
Factor by the sum of the number of shares of Company Common Stock that shall be
issued and outstanding at the Effective Date and the Option Equivalent Number;
(ii) each holder of shares of Bank Common Stock shall be
entitled to receive, in exchange for each share of Bank Common Stock held of
record by such stockholder as of the Effective Date, that number of shares of
the common stock of Consolidated Association, $5.00 par value (the "Consolidated
Association Common Stock") calculated by, first, dividing the tangible book
value of Valley by the number of shares of Valley Common Stock that shall be
issued and outstanding at the Effective Date, and second, dividing the tangible
book value of the Bank by the number so reached, and third, dividing the number
so reached by the total number of shares of Bank Common Stock that shall be
issued and outstanding at the Effective Date; and
(iii) each holder of Valley Common Stock shall be entitled to
receive, in exchange for each share of Valley Common Stock held of record by
such stockholder as of the Effective Date, one share of Consolidated Association
Common Stock.
(b) As used in paragraph (a) of this section 1.2:
(i) the term "Consideration Number" means 625,000, except that
if the total shareholders equity of the Company at December 31, 1997, determined
in accordance with paragraph (c) of this section 1.2, shall be less than
$5,000,000, then the "Consideration Number" shall be the difference between
625,000 and the number calculated by dividing the difference between $5,000,000
and the total shareholders equity of the Company at December 31, 1997,
determined in accordance with paragraph (c) of this section 1.2, by $40.00;
(ii) if the average (rounded to the nearest xxxxx) of the last
reported sale price or, if no such reported sale takes place, the mean
(unrounded) of the closing bid and asked prices of Zions Bancorp Stock in the
over-the-counter market as such prices are reported by the automated quotation
system of the National Association of Securities Dealers, Inc., or in the
absence thereof by such other source upon which Zions Bancorp and the Company
shall mutually agree, for each of the fifteen trading days ending on the fifth
trading day before the Effective Date (the "Average Closing Price") is:
(A) less than $34.00, the Collar Factor shall be a
fraction the numerator
of which is $34.00 and the denominator of which is the Average Closing Price;
(B) more than $46.00, the Collar Factor shall be a
fraction the numerator of which is $46.00 and the denominator of which is the
Average Closing Price; and
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(C) not less than $34.00 and not more than $46.00, the
Collar Factor shall be One;
(iii) the term "Option Equivalent Number" means the number
reached by summing the following values as calculated for each option to
purchase one share of Company Common Stock which is outstanding and unexercised
at the Effective Date: (A) the difference between the Value-Per-Share Factor and
the exercise price of that option (or, if a greater number, zero) divided by (B)
the Value-Per-Share Factor; and
(iv) the term "Value-Per-Share Factor" means a number of dollars
and cents calculated by means of the following equation--
"Value-Per-Share Factor" = ( V + ( O x P )
--------------
( O + S )
--where:
(A) V equals the product of the Consideration Number, the
Collar Factor, and the Average Closing Price;
(B) O equals the number of shares of Company Common Stock
that are subject to a stock option (whether vested or unvested) to be purchased,
which option is outstanding and unexercised at the Effective Date;
(C) P equals the per-share average of the exercise prices
of all stock options (whether vested or unvested) to purchase shares of Company
Common Stock, which options are outstanding and unexercised at the Effective
Date; and
(D) S equals the number of shares of Company Common Stock
that shall be issued and outstanding at the Effective Date.
(c) Total shareholders equity of the Company at December 31, 1997
shall be determined for purposes of paragraph (b) of this section 1.2 in
accordance with generally accepted accounting principles, except that:
(i) the credit to shareholders equity caused by any
undistributed gain, net of taxes, derived from activities or transactions which
are not in the ordinary course of its banking operations (such as, without
limitation, the sale of securities or loans, of capital assets, or of lines of
business, but excluding the sale of securities in connection with the ongoing
securities-sale program carried out by the Company or the Bank with Xxxxxxx
Xxxxx), all of which shall be determined in accordance with generally accepted
accounting principles, occurring between October 1, 1997 and December 31, 1997,
shall be excluded;
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(ii) the unrealized gain or loss on available-for-sale
securities of the Company or the Bank, net of tax, which is recorded as an
adjustment to shareholders equity pursuant to Statement of Financial Accounting
Standards No. 115 shall be excluded; and
(iii) the expense, through the Effective Date, net of taxes, of
the investment bankers, consultants, brokers and finders who will have rendered
services to the Company or the Bank through the Effective Date (except the
services of attorneys and accountants rendering services in such capacities)
shall be recognized as an expense of the Company during the period between
October 1, 1997 and December 31, 1997, except to the extent that any of the same
shall have been recognized as an expense of the Company prior to September 30,
1997.
1.3. No Fractional Shares.
(a) Zions Bancorp will not issue fractional shares of its stock. In
lieu of fractional shares of Zions Bancorp Stock, if any, each shareholder of
the Company who is entitled to a fractional share of Zions Bancorp Stock shall
receive an amount of cash equal to the product of such fraction times $40.00.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.
(b) Consolidated Association will not issue fractional shares of
its stock. In lieu of fractional shares of Consolidated Association Common
Stock, if any, each shareholder of the Bank or of Valley who is entitled to a
fractional share of Consolidated Association Common Stock shall receive an
amount of cash equal to the product of such fraction times the tangible book
value per share of Valley Common Stock immediately preceding the Effective Date.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.
1.4. Dividends; Interest.
(a) No shareholder of the Company will be entitled to receive
dividends on his or her Zions Bancorp Stock until he or she exchanges his or her
certificates representing Company Common Stock for Zions Bancorp Stock. Any
dividends declared on Zions Bancorp Stock (which stock is to be delivered
pursuant to this Agreement) to holders of record on or after the Effective Date
shall be paid to the Exchange Agent (as designated in Section 1.5 of this
Agreement) and, upon receipt of the certificates representing shares of Company
Common Stock, the Exchange Agent shall forward to the former shareholders
entitled to receive Zions Bancorp Stock (i) certificates representing their
shares of Zions Bancorp Stock, (ii) dividends declared thereon subsequent to the
Effective Date (without interest) and (iii) the cash value of any fractional
shares determined in accordance with Section 1.3(a) hereof.
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(b) No shareholder of the Bank or of Valley will be entitled to
receive dividends on his or her Consolidated Association Common Stock until he
or she exchanges his or her certificates representing Bank Common Stock or
Valley Common Stock, as the case may be, for Consolidated Association Common
Stock. Any dividends declared on Consolidated Association Common Stock (which
stock is to be delivered pursuant to this Agreement) to holders of record on or
after the Effective Date shall be paid to the Exchange Agent (as designated in
Section 1.5 of this Agreement) and, upon receipt of the certificates
representing shares of Bank Common Stock or Valley Common Stock, as the case may
be, the Exchange Agent shall forward to the former shareholders entitled to
receive Consolidated Association Common Stock (i) certificates representing
their shares of Consolidated Association Common Stock, (ii) dividends declared
thereon subsequent to the Effective Date (without interest) and (iii) the cash
value of any fractional shares determined in accordance with Section 1.3(b)
hereof.
1.5. Designation of Exchange Agent.
(a) The parties of this Agreement hereby designate Zions First
National Bank, a national banking association with its head office located in
Salt Lake City, Utah ("Zions Bank") as Exchange Agent to effect the exchanges
contemplated hereby.
(b) Zions Bancorp will, promptly after the Effective Date, issue
and deliver to Zions Bank the share certificates representing shares of Zions
Bancorp Stock and the cash to be paid to holders of Company Common Stock in
accordance with this Agreement.
(c) Consolidated Association will, promptly after the Effective
Date, issue and deliver to Zions Bank the share certificates representing shares
of Consolidated Association Common Stock and the cash to be paid to holders of
Bank Common Stock and Valley Common Stock in accordance with this Agreement.
1.6. Notice of Exchange. Within five business days after the Effective
Date, Zions Bank shall mail to each holder of one or more certificates formerly
representing Company Common Stock, Bank Common Stock or Valley Common Stock, as
the case may be, except to such holders as shall have waived the notice required
by this Section 1.6, a notice specifying the Effective Date and notifying such
holder to surrender his or her certificate or certificates to Zions Bank for
exchange. Such notice shall be mailed to holders by regular mail at their
addresses on the records of the Company, the Bank or Valley, as the case may be.
1.7. Treatment of Stock Options. Each stock option (whether vested or
unvested) to purchase Company Common Stock not exercised prior to the Effective
Date shall automatically be converted into an option to purchase, on the same
terms as the option to purchase Company Common Stock, and with the same dates of
exercisability and of expiration, that number of shares of Zions Bancorp Stock
equal to the number of shares of Company Common Stock which the holder of such
option would be entitled to receive under Section 1.2 of this Agreement had such
option
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been exercised immediately preceding the Effective Date. The applicable
per-share option price in effect immediately prior to the Effective Date shall
be adjusted to an amount equal to the quotient obtained by dividing that option
price by the number of shares of Zions Bancorp Stock which the holder of one
share of Company Common Stock would be entitled to receive under Section 1.2 of
this Agreement.
1.8. Voting Agreements. Simultaneously herewith, each shareholder of the
Company who is listed on Schedule 1.8 annexed hereto shall each enter into an
agreement with Zions Bancorp, substantially in form and substance as that set
forth as Exhibit III attached hereto, in which he or she agrees to vote all
shares of Company Common Stock which may be voted, or whose vote may be
directed, by him or her, in favor of the transactions contemplated by this
Agreement at the meeting of shareholders at which such transaction shall be
considered.
1.9. Employee Benefits. If any employee of the Company or of the Bank
becomes a participant in any employment benefit plan, practice, or policy of
Zions Bancorp, such employee shall be given credit under such plan, practice, or
policy for all service prior to the Effective Date with the Company or the Bank
for purposes of eligibility and vesting, but not for benefit accrual purposes,
for which such service is taken into account or recognized, provided that there
be no duplication of such benefits as are provided under any employee benefit
plans, practices, or policies of the Company or the Bank that continue in effect
following the Effective Date.
2. Effective Date.
The Effective Date shall be the date which is the latest of:
2.1. Shareholder Approval. The day upon which the shareholders of the
Company approve, ratify, and confirm the Holding Company Merger; or
2.2. Bank Shareholder Approval. The day upon which the shareholders of
Bank approve, ratify, and confirm the Bank Consolidation; or
2.3. Federal Reserve Approval. The first to occur of (a) the date thirty
days following the date of the order of the Board of Governors of the Federal
Reserve System or the Federal Reserve Bank of San Francisco acting pursuant to
authority delegated to it by the Board of Governors of the Federal Reserve
System (collectively, the "Board of Governors") approving the Holding Company
Merger, or (b) if, pursuant to section 321(a) of the Xxxxxx Community
Development and Regulatory Improvement Act of 1994 (the "Xxxxxx Act"), the Board
of Governors shall have prescribed a shorter period of time with the concurrence
of the Attorney General of the United States, the date on which such shorter
period of time shall elapse, or (c) the date ten days following the date on
which the Board of Governors indicates its waiver of jurisdiction over the
Holding Company Merger; or
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2.4. OCC Approval. The first to occur of (a) the date thirty days
following the date of the order of the Office of the Comptroller of the Currency
(the "OCC") approving the Bank Consolidation, or (b) if, pursuant to section
321(b) of the Xxxxxx Act, the OCC shall have prescribed a shorter period of time
with the concurrence of the Attorney General of the United States, the date on
which such shorter period of time shall elapse; or
2.5. Utah Commissioner Approval. If such an order shall be required by
law, the date ten days following the date of the order of the Commissioner of
Financial Institutions of the State of Utah (the "Commissioner") approving the
transactions contemplated by this Agreement; or
2.6. Colorado Division Approval. If such an order shall be required by
law, the date ten days following the date of the order of the Colorado State
Banking Board (the "Banking Board") approving the transactions contemplated by
this Agreement; or
2.7. Other Regulatory Approvals. The date upon which any other material
order, approval, or consent of a federal or state regulator of financial
institutions or financial institution holding companies authorizing consummation
of the transactions contemplated by this Agreement is obtained or any waiting
period mandated by such order, approval, or consent has run; or
2.8. Expiration of Stays. Ten days after any stay of the approvals of
any of the Board of Governors, the OCC, the Commissioner, or the Banking Board
of the transactions contemplated by this Agreement or any injunction against
closing of said transactions is lifted, discharged, or dismissed; or
2.9. Mutual Agreement. Such other date as shall be mutually agreed to by
Zions Bancorp and the Company.
3. Conditions Precedent to Performance of Obligations of the Parties.
The obligations of Zions Bancorp, Val Cor, and the Company to consummate
the Holding Company Merger and the obligations of Valley and the Bank to
consummate the Bank Consolidation shall be subject to the conditions that on or
before the Effective Date:
3.1. Regulatory Approvals. Orders, consents, and approvals, in form and
substance reasonably satisfactory to Zions Bancorp and the Company, shall have
been entered by the requisite governmental authorities, granting the authority
necessary for consummation of the transactions contemplated by this Agreement
and the operation by Zions Bancorp and Val Cor of the business of the Company,
the business of the Bank, and each of the branches of the Bank, pursuant to the
provisions of applicable law; and all other requirements prescribed by law or by
the rules and regulations of any other regulatory authority having jurisdiction
over such transactions shall have been satisfied.
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3.2. Absence of Litigation. No action, suit, or proceeding shall have
been instituted or shall have been threatened before any court or other
governmental body or by any public authority to restrain, enjoin, or prohibit
the Holding Company Merger or the Bank Consolidation, or which would reasonably
be expected to restrict materially the operation of the business of the Company
or that of the Bank or the exercise of any rights with respect thereto or to
subject either of the parties hereto or any of their subsidiaries, directors, or
officers to any liability, fine, forfeiture, divestiture, or penalty on the
ground that the transactions contemplated hereby, the parties hereto, or their
subsidiaries, directors, or officers have breached or will breach any applicable
law or regulation or have otherwise acted improperly in connection with the
transactions contemplated hereby and with respect to which the parties hereto
have been advised by counsel that, in the opinion of such counsel, such action,
suit, or proceeding raises substantial questions of law or fact which could
reasonably be decided materially adversely to either party hereto or its
subsidiaries, directors, or officers.
3.3. Accounting Treatment. It shall have been determined to the
satisfaction of Zions Bancorp (a) as of the date of the effective date of the
registration statement to be filed by Zions Bancorp with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of 1933 (the
"Securities Act") in connection with the registration of the shares of Zions
Bancorp Stock to be used as consideration in connection with the Holding Company
Merger (the "Registration Statement") that the reorganization contemplated by
this Agreement should be treated for accounting purposes as a "pooling of
interests" in accordance with APB Opinion No. 16, and (b) as of the Effective
Date that the reorganization contemplated by this Agreement will be treated for
accounting purposes as a "pooling of interests" in accordance with APB Opinion
No. 16, and Zions Bancorp shall have received letters to each of the above
effects from KPMG Peat Marwick, certified public accountants.
3.4. Registration Statement.
(a) Effectiveness. The Registration Statement shall have become
effective under the Securities Act, the Zions Bancorp Stock to be issued in the
Holding Company Merger shall have thereby been registered under the Securities
Act, and Zions Bancorp shall have received all required state securities laws or
"blue sky" permits and other required authorizations or confirmations of the
availability of exemptions from registration requirements necessary to issue
Zions Bancorp Stock in the Holding Company Merger.
(b) Absence of Stop-Order. Neither the Registration Statement nor
any such required permit, authorization, or confirmation shall be subject to a
stop-order or threatened stop-order by the SEC or any state securities
authority.
3.5. Adverse Legislation. Subsequent to the date of this Agreement no
legislation shall have been enacted and no regulation or other governmental
requirement shall have been adopted or imposed that renders or will render
consummation of any of the material transactions contemplated by this Agreement
impossible.
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4. Conditions Precedent to Performance of the Obligations of Zions Bancorp,
Val Cor, and Valley.
The obligations of Zions Bancorp, Val Cor, and Valley hereunder are
subject to the satisfaction, on or prior to the Effective Date, of all the
following conditions, compliance with which or the occurrence of which may be
waived in whole or in part by Zions Bancorp in writing unless not so permitted
by law:
4.1. Approval by Shareholders of the Company and the Bank.
(a) The shareholders of the Company, acting pursuant to a proxy
statement in form and substance satisfactory to Zions Bancorp and its counsel,
shall have authorized, ratified, and confirmed the Holding Company Merger by not
less than the requisite percentage of the outstanding voting stock of each class
of the Company, in accordance with the applicable laws of the State of Colorado.
(b) The shareholder of the Bank shall have authorized, ratified,
and confirmed the Bank Consolidation by not less than the requisite percentage
of the outstanding voting stock of each class of the Bank, in accordance with
the applicable laws of the State of Colorado.
4.2. Representations and Warranties; Performance of Obligations. All
representations and warranties of the Company and the Bank contained in this
Agreement shall be true and correct in all material respects as of the Effective
Date with the same effect as if such representations and warranties had been
made or given at and as of such date, except that representations and warranties
of the Company or the Bank contained in this Agreement which specifically relate
to an earlier date shall be true and correct in all material respects as of such
earlier date. All covenants and obligations to be performed or met by the
Company or the Bank on or prior to the Effective Date shall have been so
performed or met. On the Effective Date, the president and chief executive
officer and the chief financial officer of each of the Company and the Bank
shall deliver to Zions Bancorp a certificate to that effect, substantially in
form and substance as that set forth as Exhibit IV attached hereto. The delivery
of such certificates shall in no way diminish the warranties, representations,
covenants, and obligations of the Company and the Bank made in this Agreement.
4.3. Opinion of Company Counsel. Zions Bancorp shall have received a
favorable opinion from XxXxxxx & Xxxxx, L.L.P., dated the Effective Date,
substantially in form and substance as that set forth as Exhibit V attached
hereto.
4.4. Opinion of Company Litigation Counsel. Zions Bancorp shall have
received a favorable opinion from legal counsel handling litigation matters for
the Company and the Bank, dated the Effective Date, substantially in form and
substance as that set forth as Exhibit VI attached hereto.
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4.5. Delivery of Branch Authorizations. The Company shall have delivered
to Zions Bancorp originals or certified copies of all of the regulatory
authorizations entitling the Bank to operate each of its branch offices,
together with a certification by the president and chief executive officer and
the chief financial officer of the Bank dated the Effective Date, certifying
that such branch certificates have not been revoked or threatened to be revoked
and that such certificates are in full force and effect.
4.6. No Adverse Developments.
(a) During the period from September 30, 1997 to the Effective
Date, (i) there shall not have been any material adverse change in the financial
position or results of operations of the Company or the Bank taken as a whole,
nor shall the Company or the Bank have sustained any material loss or damage to
its properties, whether or not insured, which materially affects its ability to
conduct its business; and (ii) none of the events described in clauses (a)
through (f) of Section 6.16 of this Agreement shall have occurred, and each of
the practices and conditions described in clauses (x) through (z) of that
section shall have been maintained.
(b) As of the Effective Date, the capital structure of the Company
and the capital structure of the Bank shall be as stated in section 6.9.
(c) As of the Effective Date, other than liabilities incurred in
the ordinary course of business subsequent to December 31, 1996, there shall be
no liabilities of the Company or the Bank which are material to the Company on a
consolidated basis which were not reflected on the consolidated statement of
condition of the Company as of December 31, 1996 or in the related notes to the
consolidated statement of condition of the Company as of December 31, 1996.
(d) No adverse action shall have been instituted or threatened by
any governmental authority, or referred by a governmental authority to another
governmental authority, for the enforcement or assessment of penalties for the
violation of any laws of regulations relating to equal credit opportunity, fair
housing, or fair lending.
(e) Zions Bancorp shall have received a certificate dated the
Effective Date, signed by the president and the chief financial officer of the
Company and the president and the chief financial officer of the Bank,
certifying to the matters set forth in paragraphs (a), (b), (c), and (d) of this
section 4.6. The delivery of such officers' certificate shall in no way diminish
the warranties and representations of the Company or those of the Bank made in
this Agreement.
4.7. Consolidated Net Worth. On and as of the Effective Date, the
consolidated net worth of the Company as determined in accordance with generally
accepted accounting principles shall not be less than the sum of (a) $4,499,551
and (b) the aggregate contributions to capital caused by the payments
accompanying the exercise of any stock options on or after September 30, 1997.
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4.8. Loan Loss Reserve. On and as of the Effective Date, the aggregate
reserve for loan losses of the Bank as determined in accordance with generally
accepted accounting principles or, to the extent different from generally
accepted accounting principles, accounting principles mandated or expressly
permitted by the Board of Governors ("Applicable Accounting Principles") shall
not be less than $587,397.
4.9. CRA Rating. The CRA rating of the Bank shall be no lower than
"satisfactory."
4.10. Employment Agreements. Xxxx X. Xxxxxxx shall have entered into an
employment agreement with Valley substantially in form and substance as that set
forth as Exhibit VII attached hereto.
4.11. Federal Income Taxation. Zions Bancorp shall have received a
written opinion of Duane, Morris & Heckscher LLP, applying existing law, that
the reorganization contemplated by this Agreement shall qualify as one or more
reorganizations under section 368(a)(1) of the Code and the regulations and
rulings promulgated thereunder.
4.12. Comfort Letter. At each of the time of the effectiveness of the
Registration Statement, but prior to the mailing of the proxy materials, and the
Effective Date, Zions Bancorp shall have received a letter from the chief
financial officer of the Company, in form and substance acceptable to Zions
Bancorp, stating that a reading of the latest available consolidated financial
statements of the Company and financial statements of the Bank did not cause him
or her to believe that (i) the Company's consolidated financial statements are
not stated on a basis consistent with that followed in the Company's
consolidated financial statements for the most recent fiscal year end; or (ii)
except as disclosed in the letter, at a specified date not more than five
business days prior to the date of such letter, there was any change in the
Company's capital stock or any change in consolidated long-term debt or any
decrease in the consolidated net assets of the Company as compared with the
respective amounts shown in the Company's consolidated financial statements for
the most recent fiscal year end. Each letter shall also cover such other matters
pertaining to the Company's and the Bank's financial data and statistical
information included in the Registration Statement as may reasonably be
requested by Zions Bancorp.
4.13. Preemptive Rights. The holders of all of the outstanding shares of
Company Common Stock shall have executed and delivered, or caused to be
delivered, to Zions Bancorp such documents, in form and substance satisfactory
to Zions Bancorp, waiving all preemptive rights granted to them under the
articles of incorporation of the Company and the Colorado Revised Statutes to be
offered, to subscribe to, or to acquire shares of common stock, rights,
warrants, privileges, and options to purchase or receive common stock,
securities and obligations of any kind convertible into common stock, or any
other equity interest or right to an equity interest in the Company, now or
hereafter authorized.
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4.14. Consent to Transfer of Lease. The landlord of the facility at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx which the Bank currently uses as
its head office shall have executed and delivered to Valley an appropriate
estoppel certificate and a written consent to the assignment and assumption by
the Bank of the lease of such facility, the form and substance of both of which
shall be reasonably acceptable to Valley.
4.15. Bank Stock Loan. NationsBank, N.A. shall have delivered to the
Company and the Bank, in form and substance reasonably acceptable to Zions
Bancorp, the written consent of NationsBank, N.A. to the transactions
contemplated by this Agreement, the assumption or discharge by Val Cor of the
loan that is the subject of that certain loan agreement dated as of April 15,
1997 between NationsBank, N.A., the Company, and the Bank, and the release of
the shares of the stock of the Bank which secure such loan. The parties to this
Agreement agree to use their best efforts to procure such consent, or to obtain
such other result as shall effect the payment of such loan and the release of
the shares of the stock of the Bank which secure such loan, in good faith and in
a timely manner.
5. Conditions Precedent to Performance of Obligations of the Company and
the Bank.
The obligations of the Company and the Bank hereunder are subject to the
satisfaction, on or prior to the Effective Date, of all the following
conditions, compliance with which or the occurrence of which may be waived in
whole or in part by the Company in writing unless not so permitted by law:
5.1. Approval by Shareholders of Valley. The shareholders of Valley
shall have authorized, ratified, and confirmed the Bank Consolidation by not
less than the requisite percentage of the outstanding voting stock of each class
of Valley, in accordance with the applicable laws of the United States.
5.2 Representations and Warranties; Performance of Obligations. All
representations and warranties of Zions Bancorp, Val Cor, and Valley contained
in this Agreement shall be true and correct in all material respects as of the
Effective Date with the same effect as if such representations and warranties
had been made or given at and as of such date, except that representations and
warranties of Zions Bancorp, Val Cor, and Valley contained in this Agreement
which specifically relate to an earlier date shall be true and correct in all
material respects as of such earlier date. All covenants and obligations to be
performed or met by Zions Bancorp, Val Cor, or Valley on or prior to the
Effective Date shall have been so performed or met. On the Effective Date,
either the President or an Executive Vice President of Zions Bancorp and either
the Chairman of the Board or the President of each of Val Cor and Valley shall
deliver to the Company a certificate to that effect, substantially in form and
substance as that set forth as Exhibit IV attached hereto. The delivery of such
officer's certificate shall in no way diminish the warranties, representations,
covenants, and obligations of Zions Bancorp, Val Cor, and Valley made in this
Agreement.
- 13 -
5.3. Opinion of Zions Bancorp Counsel. The Company shall have received a
favorable opinion of Duane, Morris & Heckscher LLP, dated the Effective Date,
substantially in form and substance as that set forth as Exhibit VIII attached
hereto.
5.4. No Adverse Developments. During the period from September 30, 1997
to the Effective Date, there shall not have been any material adverse change in
the financial position or results of operations of Zions Bancorp nor shall Zions
Bancorp have sustained any material loss or damage to its properties, whether or
not insured, which materially affects its ability to conduct its business; and
the Company shall have received a certificate dated the Effective Date signed by
either the President of Zions Bancorp or an Executive Vice President of Zions
Bancorp to the foregoing effect. The delivery of such officer's certificate
shall in no way diminish the warranties and representations of Zions Bancorp
made in this Agreement.
5.5. Status of Zions Bancorp Stock. Zions Bancorp Stock shall be listed
on the National Association of Securities Dealers' Automated Quotation System
(or else shall become listed on a national securities exchange).
5.6. Federal Income Taxation. The Company shall have received a written
opinion of XxXxxxx & Xxxxx, L.L.P., applying existing law, that the
reorganization contemplated by this Agreement shall qualify as one or more
reorganizations under section 368(a)(1) of the Code and the regulations and
rulings promulgated thereunder.
6. Representations and Warranties of the Company and the Bank.
The Company (with respect to the Company and the Bank) and the Bank
(solely with respect to itself) each represent and warrant to Zions Bancorp, Val
Cor, and Valley as follows:
6.1. Organization, Powers, and Qualification. Each of the Company and
the Bank is a corporation which is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted. Each of the Company and the Bank owns or possesses in the
operation of its business all franchises, licenses, permits, branch
certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect the operation and properties of the
Company or the Bank in any material respect. Each of the Company and the Bank is
duly qualified and licensed to do business and is in good standing in every
jurisdiction with respect to which the failure to be so qualified or licensed
could result in material liability or adversely affect the operation and
properties of the Company or the Bank in any material respect.
- 14 -
6.2. Execution and Performance of Agreement. Each of the Company and the
Bank has all requisite corporate power and authority to execute and deliver this
Agreement and to perform its respective terms.
6.3. Absence of Violations. Except as set forth on Schedule 6.3 hereof:
(a) neither the Company nor the Bank is in violation of its
respective charter documents or bylaws, nor of any applicable federal, state, or
local law or ordinance nor any order, rule, or regulation of any federal, state,
local, or other governmental agency or body, in any material respect, or in
default with respect to any order, writ, injunction, or decree of any court, or
in default under any order, license, regulation, or demand of any governmental
agency, any of which violations or defaults could reasonably be expected to have
a materially adverse effect on its business, properties, liabilities, financial
position, results of operations, or prospects; and neither the Company nor the
Bank has received any claim or notice of violation with respect thereto;
(b) neither the Company nor the Bank nor any member of the
management of either of them is a party to any assistance agreement, supervisory
agreement, memorandum of understanding, consent order, cease and desist order or
condition of any regulatory order or decree with or by the Board of Governors,
the Federal Reserve Bank of Kansas City, the Federal Deposit Insurance
Corporation (the "FDIC"), any other banking or securities authority of the
United States or the State of Colorado, or any other regulatory agency that
relates to the conduct of the business of the Company or the Bank or their
assets; and except as previously disclosed to Zions Bancorp in writing, no such
agreement, memorandum, order, condition, or decree is pending or threatened;
(c) each of the Company and the Bank has established policies and
procedures to provide reasonable assurance of compliance in a safe and sound
manner with the federal banking, credit, housing, consumer protection, and civil
rights laws and with all other laws applicable to the operations of the Company
and the Bank and the regulations adopted under each of those laws, so that
transactions be executed and assets be maintained in accordance with such laws
and regulations; and the policies and practices of each of the Company and the
Bank with respect to all such laws and regulations reasonably limit
noncompliance and detect and report noncompliance to its management; and
(d) the Bank has established a CRA policy which provides for (i)
goals and objectives consistent with CRA; (ii) a methodology for
self-assessment by the board of directors of the Bank; (iii) ongoing CRA
training of all personnel of the Bank, including the members of its board of
directors; and (iv) procedures whereby all significant CRA-related activity is
documented; and the Bank has officially designated a CRA officer who reports
directly to the board of directors and is responsible for the CRA program of the
Bank.
6.4. Compliance with Agreements. Neither the Company nor the Bank is in
violation of any material term of any material security agreement, mortgage,
indenture, or any other contract,
- 15 -
agreement, instrument, lease, or certificate. The capital ratios of each of the
Company and the Bank comply fully with all terms of all currently outstanding
supervisory and regulatory requirements and with the conditions of all
regulatory orders and decrees.
6.5. Binding Obligations; Due Authorization. Subject to the approval of
its shareholders, this Agreement constitutes valid, legal, and binding
obligations of each of the Company and the Bank, enforceable against it in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar law, or by general principles of
equity. The execution, delivery, and performance of this Agreement and the
transactions contemplated thereby have been duly and validly authorized by the
board of directors of each of the Company and the Bank. Subject to approval by
its shareholders of this Agreement, no other corporate proceedings on the part
of either the Company or the Bank are necessary to authorize this Agreement or
the carrying out of the transactions contemplated hereby.
6.6. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated thereby, or the
compliance with or fulfillment of the terms thereof will conflict with, or
result in a breach of any of the terms, conditions, or provisions of, or
constitute a default under the organizational documents or bylaws of the Company
or the Bank. Such execution, consummation, or fulfillment will not (a) conflict
with, or result in a material breach of the terms, conditions, or provisions of,
or constitute a material violation, conflict, or default under, or, except as
set forth on Schedule 6.6 hereof, give rise to any right of termination,
cancellation, or acceleration with respect to, or result in the creation of any
lien, charge, or encumbrance upon, any property or assets of the Company or the
Bank pursuant to any material agreement or instrument under which the Company or
the Bank is obligated or by which any of its properties or assets may be bound,
including without limitation any material lease, contract, mortgage, promissory
note, deed of trust, loan, credit arrangement, or other commitment or
arrangement of the Company or the Bank in respect of which it is an obligor; (b)
if the Holding Company Merger is approved by the Board of Governors under the
Bank Holding Company Act of 1956, as amended (the "BHC Act"), or if the Board of
Governors waives its jurisdiction over the Holding Company Merger, and if the
Bank Consolidation is approved by the OCC, the Commissioner, and the Banking
Board, violate any law, statute, rule, or regulation of any government or agency
to which the Company or the Bank is subject and which is material to its
operations; or (c) violate any judgment, order, writ, injunction, decree, or
ruling to which the Company or the Bank or any of its properties or assets is
subject or bound. None of the execution or delivery of this Agreement, the
consummation of the transactions contemplated thereby, or the compliance with or
fulfillment of the terms thereof will require any authorization, consent,
approval, or exemption by any person which has not been obtained, or any notice
or filing which has not been given or done, other than approval of or waiver of
jurisdiction over the transactions contemplated by this Agreement by the Board
of Governors, the OCC, the Commissioner, and the Banking Board.
6.7. Compliance with BHC Act.
- 16 -
(a) The Company is registered as a bank holding company under the
BHC Act. All of the activities and investments of the Company conform to the
requirements applicable generally to bank holding companies under the BHC Act
and the regulations of the Board of Governors adopted thereunder.
(b) No corporation or other entity, other than the Company, is
registered or is required to be registered as a bank holding company under the
BHC Act by virtue of its control over the Bank or over any company that directly
or indirectly has control over the Bank.
6.8. Subsidiaries.
(a) Other than the Bank, which is a direct, wholly-owned subsidiary
of the Company, and other than as set forth on Schedule 6.8 hereof, the Company
does not have any direct or indirect subsidiaries and does not directly or
indirectly own, control, or hold with the power to vote any shares of the
capital stock of any company (except shares held by the Bank for the account of
others in a fiduciary or custodial capacity in the ordinary course of its
business). There are no outstanding subscriptions, options, warrants,
convertible securities, calls, commitments, or agreements calling for or
requiring the issuance, transfer, sale, or other disposition of any shares of
the capital stock of the Bank, or calling for or requiring the issuance of any
securities or rights convertible into or exchangeable for shares of capital
stock of the Bank. There are no other direct or indirect subsidiaries of the
Company which are required to be consolidated or accounted for on the equity
method in the consolidated financial statements of the Company or the financial
statements of the Bank prepared in accordance with generally accepted accounting
principles.
(b) Except as specified in the previous subsection, neither the
Company nor the Bank has a direct or indirect equity or ownership interest which
represents 5 percent or more of the aggregate equity or ownership interest of
any entity (including, without limitation, corporations, partnerships, and joint
ventures).
6.9. Capital Structure.
(a) The authorized capital stock of the Company consists of (i)
200,000 shares of Company Common Stock, of which, as of the date of this
Agreement, 78,592 shares have been duly issued and are validly outstanding,
fully paid, and held by approximately 25 shareholders of record, and 37,933
additional shares are issued and held in the treasury of the Company. The
aforementioned shares of Company Common Stock are the only voting securities of
the Company authorized, issued, or outstanding as of such date; and except as
set forth on Schedule 6.9 hereof, no subscriptions, warrants, options, rights,
convertible securities, or similar arrangements or commitments in respect of
securities of the Company are authorized, issued, or outstanding which would
enable the holder thereof to purchase or otherwise acquire shares of any class
of capital stock of the Company. No shares of Company Common Stock are held by
the Company as treasury shares except for the 37,933 shares of Company Common
Stock aforesaid. None of the Company Common Stock is subject to any restrictions
upon the transfer thereof under the terms of the corporate charter or bylaws of
the Company.
- 17 -
(b) Schedule 6.9 hereof lists all options to purchase Company
securities currently outstanding and, for each such option, the date of
issuance, date of exercisability, exercise price, type of security for which
exercisable, and date of expiration. Schedule 6.9 hereof further lists all
shares of Company Common Stock reserved for issuance pursuant to stock option
plans, agreements, or arrangements but not yet issued and all options upon
shares of Company Common Stock designated or made available for grant but not
yet granted.
(c) The authorized capital stock of the Bank consists of 100,000
shares of common stock, $60,558.29 par value (the "Bank Common Stock"), of
which, as of the date of this Agreement, 19.81562 shares have been duly issued
and are validly outstanding, fully paid, and all of which are held of record and
beneficially by the Company. The aforementioned shares of Bank Common Stock are
the only voting securities of the Bank authorized, issued, or outstanding as of
such date; and no subscriptions, warrants, options, rights, convertible
securities, or similar arrangements or commitments in respect of securities of
the Bank are authorized, issued, or outstanding which would enable the holder
thereof to purchase or otherwise acquire shares of any class of capital stock of
the Bank. None of the Bank Common Stock is subject to any restrictions upon the
transfer thereof under the terms of the corporate charter or bylaws of the Bank.
(d) Except as set forth on Schedule 6.9 hereof, none of the shares
of Company Common Stock or Bank Common Stock has been issued in violation of the
preemptive rights of any shareholder.
(e) As of the date hereof, to the best of the knowledge of the
Company and the Bank, and except for this Agreement, there are no shareholder
agreements, or other agreements, understandings, or commitments relating to the
right of any holder or beneficial owner of more than 1 percent of the issued and
outstanding shares of any class of the capital stock of either the Company or
the Bank to vote or to dispose of his or its shares of capital stock of that
entity.
(f) The Company has not granted any shareholders' rights to dissent
from any merger.
6.10. Articles of Incorporation, Bylaws, and Minute Books. The copies of
the articles of incorporation and all amendments thereto and of the bylaws, as
amended, of the Company and the Bank that have been provided to Zions Bancorp
and certified by the Company as complete and true copies are true, correct, and
complete copies thereof. The minute books of the Company and the Bank which have
been made available to Zions Bancorp for its continuing inspection until the
Effective Date contain accurate minutes of all meetings and accurate consents in
lieu of meetings of the board of directors (and any committee thereof) and of
the shareholders of the Company and the Bank since their respective inceptions.
These minute books accurately reflect all transactions
- 18 -
referred to in such minutes and consents in lieu of meetings and disclose all
material corporate actions of the shareholders and boards of directors of the
Company and the Bank and all committees thereof. Except as reflected in such
minute books, there are no minutes of meetings or consents in lieu of meetings
of the board of directors (or any committee thereof) or of shareholders of the
Company or the Bank.
6.11. Books and Records. The books and records of each of the Company
and the Bank fairly reflect the transactions to which it is a party or by which
its properties are subject or bound. Such books and records have been properly
kept and maintained and are in compliance in all material respects with all
applicable legal and accounting requirements. Each of the Company and the Bank
follows Applicable Accounting Principles applied on a consistent basis in the
preparation and maintenance of its books of account and financial statements,
including but not limited to the application of the accrual method of accounting
for interest income on loans, leases, discounts, and investments, interest
expense on deposits and all other liabilities, and all other items of income and
expense. The Company and the Bank have made all accruals in amounts which fairly
report income and expense in the proper periods in accordance with Applicable
Accounting Principles. Each of the Company and the Bank has filed all material
reports and returns required by any law or regulation to be filed by it.
6.12. Regulatory Approvals and Filings, Contracts, Commitments, etc. The
Company has made or will, no later than ten business days after the date hereof,
make available to Zions Bancorp or grant to Zions Bancorp continuing access
until the Effective Date to originals or copies of the following documents
relating to the Company and the Bank:
(a) All regulatory approvals received since January 1, 1992, of the
Company and the Bank relating to all bank and nonbank acquisitions or the
establishment of de novo operations;
(b) All employment contracts, election contracts, retention
contracts, deferred compensation, non-competition, bonus, stock option,
profit-sharing, pension, retirement, consultation after retirement, incentive,
insurance arrangements or plans (including medical, disability, group life or
other insurance plans), and any other remuneration or fringe benefit
arrangements applicable to employees, officers, or directors of the Company or
the Bank, accompanied by any agreements, including trust agreements, embodying
such contracts, plans, or arrangements, and all employee manuals and memoranda
relating to employment and benefit policies and practices of any nature
whatsoever (whether or not distributed to employees or any of them), and any
actuarial reports and audits relating to such plans;
(c) All material contracts, agreements, leases, mortgages, and
commitments, except those entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound; or, if any of the same
be oral, true, accurate, and complete written summaries of all such oral
contracts, agreements, leases, mortgages, and commitments;
- 19 -
(d) All material contracts, agreements, leases, mortgages, and
commitments, whether or not entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound and which require the
consent or approval of third parties to the execution and delivery of this
Agreement or to the consummation or performance of any of the transactions
contemplated thereby, or, if any of the same be oral, true, accurate, and
complete written summaries of all such oral contracts, agreements, leases,
mortgages, and commitments;
(e) All deeds, leases, contracts, agreements, mortgages, and
commitments, whether or not entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound and which relate to
land, buildings, fixtures, or other real property upon or within which the
Company or the Bank operates its businesses or is authorized to operate its
businesses, or with respect to which the Company or the Bank has any application
pending for authorization to operate its businesses;
(f) Any pending application, including any documents or materials
related thereto, which has been filed by the Company or the Bank with any
federal or state regulatory agency with respect to the establishment of a new
office or the acquisition or establishment of any additional banking or
nonbanking subsidiary; and
(g) All federal, state, and local tax returns, including any
amended returns, filed by the Company or the Bank for the years 1991 through
1996, a copy of the most recent audit examination of each of the Company and the
Bank by the Internal Revenue Service ("IRS"), and a copy of all correspondence
or other documents with respect to any examination that has not yet been
resolved, a copy of the most recent state or local tax agency examination, if
any, of each of the Company and the Bank, and a copy of all correspondence or
other documents with respect to any examination that has not yet been resolved,
and all tax rulings, closing agreements, settlement agreements, or similar
documents with respect to the Company or the Bank received from or entered into
with the IRS or any other taxing authority since January 1, 1988 or that would
have continuing effect after the Effective Date.
6.13. Financial Statements. The Company has furnished to Zions Bancorp
its consolidated statement of condition as of each of December 31, 1994,
December 31, 1995, December 31, 1996, and September 30, 1997, and its related
consolidated statement of income, consolidated statement of changes in financial
position, and consolidated statement of changes in stockholders' equity for each
of the periods then ended, and the notes thereto (collectively, the "Company
Financial Statements"). All of the Company Financial Statements, including the
related notes, (a) were prepared in accordance with Applicable Accounting
Principles applied in all material respects, and (b) are in accordance with the
books and records of the Company and the Bank which have been maintained in
accordance with Applicable Accounting Principles, and (c) fairly reflect the
consolidated financial position of the Company as of such dates, and the
consolidated results of operations of the Company for the periods ended on such
dates, and do not fail to disclose any material extraordinary or out-of-period
items, and (d) reflect, in accordance with Applicable Accounting Principles
applied in all material respects, adequate provision for, or reserves against,
the possible loan losses of the Company as of such dates.
- 20 -
6.14. Call Reports; Bank Holding Company Reports.
(a) The Bank has made available to Zions Bancorp its Consolidated
Reports of Condition and Consolidated Reports of Income for the calendar
quarters dated March 31, 1995 and thereafter. All of such Consolidated Reports
of Condition and Consolidated Reports of Income, including the related schedules
and memorandum items, were prepared in accordance with Applicable Accounting
Principles applied in all material respects.
(b) No adjustments are required to be made to the equity capital
account of the Bank as reported on any of the Consolidated Reports of Condition
referred to in Subsection 6.14(a) hereof, in any material amount, in order to
conform such equity capital account to equity capital as would be determined in
accordance with generally accepted accounting principles as of such date.
(c) The Company has furnished to Zions Bancorp (i) its annual
report on Form FR Y-6 as filed with the Board of Governors as of December 31,
1996, and (ii) its semi-annual report on Form FR Y-9SP as filed with the Board
of Governors as of June 30, 1997.
6.15. Absence of Undisclosed Liabilities. At September 30, 1997, neither
the Company nor the Bank had any obligation or liability of any nature (whether
absolute, accrued, contingent, or otherwise, and whether due or to become due)
which was material, or which when combined with all similar obligations or
liabilities would have been material, to the Company, except (a) as disclosed in
the Company Financial Statements, or (b) as set forth on Schedule 6.15 hereof,
or (c) for unfunded loan commitments made by the Company or the Bank in the
ordinary course of their business consistent with past practice. The amounts set
up as current liabilities for taxes in the Company Financial Statements are
sufficient for the payment of all taxes (including, without limitation, federal,
state, local, and foreign excise, franchise, property, payroll, income, capital
stock, and sales and use taxes and any interest, penalties, or additions to tax
with respect thereto ("Tax" or "Taxes") accrued in accordance with Applicable
Accounting Principles and unpaid at September 30, 1997. Since September 30,
1997, neither the Company nor the Bank has incurred or paid any obligation or
liability that would be material (on a consolidated basis) to the Company,
except (x) for obligations incurred or paid in connection with transactions by
it in the ordinary course of its business consistent with past practices, or (y)
as set forth on Schedule 6.15 hereof, or (z) as expressly contemplated herein.
6.16. Absence of Certain Developments. Since September 30, 1997, except
as set forth on Schedule 6.16 hereof, there has been (a) no material adverse
change in the condition, financial or otherwise, or to the assets, properties,
liabilities, or businesses of the Company and the Bank, (b) no material
deterioration in the quality of the consolidated loan portfolio of the Company,
and no material increase in the consolidated level of nonperforming assets or
non-accrual loans at the
- 21 -
Company or in the level of its consolidated provision for credit losses or its
consolidated reserve for possible credit losses; (c) no declaration, setting
aside, or payment by the Company or the Bank of any regular dividend, special
dividend, or other distribution with respect to any class of capital stock of
the Company or the Bank, other than customary cash dividends paid by the Company
or the Bank whose amounts have not exceeded past practice and the intervals
between which dividends have not been more frequent than past practice; (d) no
repurchase by the Company of any of its capital stock; (e) no material loss,
destruction, or damage to any material property of the Company or the Bank,
which loss, destruction, or damage is not covered by insurance; and (f) no
material acquisition or disposition of any asset, nor any material contract
outside the ordinary course of business entered into by the Company or the Bank
nor any substantial amendment or termination of any material contract outside
the ordinary course of business to which the Company or the Bank is a party, nor
any other transaction by the Company or the Bank involving an amount in excess
of $25,000 other than for fair value in the ordinary course of its business.
Since September 30, 1997, except as set forth on Schedule 6.16 hereof, (x) each
of the Company and the Bank has conducted its business only in the ordinary
course of such business and consistent with past practice; (y) the Company, on a
consolidated basis, has maintained the quality of its loan portfolio and that of
each of its major components at approximately the same level as existed at
September 30, 1997; and (z) the Company, on a consolidated basis, has
administered its investment portfolio pursuant to essentially the same policies
and procedures as existed during 1995 and 1996 and the first nine months of
1997, and has taken no action to lengthen the average maturity of the investment
portfolio, or of any significant category thereof, to any material extent.
6.17. Reserve for Possible Credit Losses. The Company's consolidated
reserve for possible credit losses is adequate to absorb reasonably anticipated
losses in the consolidated loan and lease portfolios of the Company, in view of
the size and character of such portfolios, current economic conditions, and
other pertinent factors. Management periodically reevaluates the adequacy of
such reserve based on portfolio performance, current economic conditions, and
other factors.
6.18. Tax Matters.
(a) Except as set forth on Schedule 6.18 hereof, all Tax returns
and reports required to be filed by or on behalf of the Company or the Bank have
been timely filed with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to be filed, or
requests for extensions have been timely filed, granted, and have not expired
for periods ending on or before December 31, 1996, and all returns filed are
complete and accurate and properly reflect its Taxes for the periods covered
thereby. All Taxes shown or required to be shown on filed returns have been
paid. As of the date hereof, there is no audit examination, deficiency, or
refund litigation or tax claim or any notice of assessment or proposed
assessment by the IRS or any other taxing authority, or any other matter in
controversy with respect to any Taxes that might result in a determination
adverse to the Company or the Bank, except as reserved against in the Company
Financial Statements. All Taxes due with respect to completed and settled
examinations or concluded litigation have been properly accrued or paid.
- 22 -
(b) Neither the Company nor the Bank has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due that is currently in effect.
(c) To the extent any Taxes are due from, but have not yet been
paid by, the Company or the Bank for the period or periods beginning January 1,
1997 or thereafter through and including the Effective Date, adequate provision
on an estimated basis has been or will be made for the payment of such taxes by
establishment of appropriate tax liability accounts on the last monthly
financial statements of the Company prepared before the Effective Date.
(d) Except as set forth on Schedule 6.18 hereof, deferred Taxes of
the Company and the Bank have been provided for in accordance with Applicable
Accounting Principles as in effect on the date of this Agreement.
(e) The deductions of the Bank for bad debts taken and the reserve
of the Bank for loan losses for federal income tax purposes at December 31,
1996, were not greater than the maximum amount permitted under the provisions of
section 585 of the Code.
(f) Other than liens arising under the laws of the State of
Colorado with respect to taxes assessed and not yet due and payable, there are
no tax liens on any of the properties or assets of the Company or the Bank.
(g) The Company and the Bank (A) have timely filed all information
returns or reports required to be filed with respect to Taxes, including but not
limited to those required by sections 6041, 6041A, 6042, 6045, 6049, 6050H, and
6050J of the Code, (B) have properly and timely provided to all persons, other
than taxing authorities, all information reports or other documents (for
example, Form 1099s, Form W-2s, and so forth) required to be provided to such
persons under applicable law, and (C) have exercised due diligence in obtaining
certified taxpayer identification numbers as required under applicable law.
(h) The taxable year end of the Company for federal income tax
purposes is, and since the inception of the Company has continuously been,
December 31.
(i) The Company and the Bank have in all material respects
satisfied all federal, state, local, and foreign withholding tax requirements
including but not limited to income, social security, and employment tax
withholding.
(j) Neither the Company nor the Bank (A) is, or has been, a member
of a group filing a consolidated, combined, or unitary tax return, other than a
group the common parent of which is or was the Company, or (B) has any liability
for the Taxes of any person (other than the Company and the Bank) under Treas.
Reg. Sec. 1.1502-6 (or any similar provision of state, local, or foreign law),
as a transferee or successor, by contract, or otherwise.
- 23 -
6.19. Consolidated Net Worth. The consolidated net worth of the Company
on the date of this Agreement, as determined in accordance with generally
accepted accounting principles, is not less than $4,499,551.
6.20. Examinations. To the extent consistent with law, the Company has
heretofore disclosed to Zions Bancorp relevant information contained in the most
recent safety-and-soundness, compliance, Community Reinvestment Act, and other
Reports of Examination with respect to the Company issued by the Board of
Governors and the most recent safety-and-soundness, compliance, Community
Reinvestment Act, and other Reports of Examination with respect to the Bank
issued by each of the Division and the Federal Reserve Bank of Kansas City. Such
information so disclosed consists of all material information with respect to
the financial, operational, and legal condition of the entity under examination
which is included in such reports, and does not omit or will not omit any
information necessary to make the information disclosed not misleading.
6.21. Reports. Since January 1, 1994, each of the Company and the Bank
has effected all registrations and filed all reports and statements, together
with any amendments required to be made with respect thereto, which it was
required to effect or file with (a) the Board of Governors, (b) the Federal
Reserve Bank of Kansas City, (c) the FDIC, (d) the United States Department of
the Treasury, (e) the Colorado Division of Banking or the Banking Board, as the
case may be, and (f) any other governmental or regulatory authority or agency
having jurisdiction over its operations. Each of such registrations, reports,
and documents, including the financial statements, exhibits, and schedules
thereto, does not contain any statement which, at the time and in the light of
the circumstances under which it was made, is false or misleading with respect
to any material fact or which omits to state any material fact necessary in
order to make the statements contained therein not false or misleading.
6.22. FIRA Compliance and Other Transactions with Affiliates. Except as
set forth on Schedule 6.22 hereof, (a) none of the officers, directors, or
beneficial holders of 5 percent or more of the common stock of the Company or
the Bank and no person "controlled" (as that term is defined in the Financial
Institutions Regulatory and Interest Rate Control Act of 1978) by the Company or
the Bank (collectively, "Insiders") has any ongoing material transaction with
the Company or the Bank on the date of this Agreement; (b) no Insider has any
ownership interest in any business, corporate or otherwise, which is a party to,
or in any property which is the subject of, business arrangements or
relationships of any kind with the Company or the Bank not in the ordinary
course of business; and (c) all other extensions of credit by the Company or the
Bank to any Insider have heretofore been disclosed in writing by the Company to
Zions Bancorp.
6.23. SEC Registered Securities. No equity or debt securities of the
Company or the Bank are registered or required to be registered under the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
- 24 -
6.24. Legal Proceedings. Except as disclosed in the Company Financial
Statements or as set forth on Schedule 6.24 hereof, there is no claim, action,
suit, arbitration, investigation, or other proceeding pending before any court,
governmental agency, authority or commission, arbitrator, or "impartial
mediator" (of which the Company or the Bank has been served with process or
otherwise been given notice) or, to the best of the knowledge of the Company and
the Bank , threatened or contemplated against or affecting it or its property,
assets, interests, or rights, or any basis therefor of which notice has been
given, which, if adversely determined, would have a material adverse effect
(financial or otherwise) on the business, operating results, or financial
condition of the Company or which otherwise could prevent, hinder, or delay
consummation of the transactions contemplated by this Agreement.
6.25. Absence of Governmental Proceedings. Except as set forth on
Schedule 6.25 hereof, neither the Company nor the Bank is a party defendant or
respondent to any pending legal, equitable, or other proceeding commenced by any
governmental agency and, to the best of the knowledge of the Company and the
Bank, no such proceeding is threatened.
6.26. Federal Deposit Insurance.
(a) The deposits held by the Bank are insured within statutory
limits by the Bank Insurance Fund of the FDIC pursuant to the provisions of the
Federal Deposit Insurance Act, as amended (12 U.S.C. ss. 1811 et seq.), and the
Bank has paid all assessments and filed all related reports and statements
required under the Federal Deposit Insurance Act.
(b) The Bank is a member of and pay insurance assessments to the
Bank Insurance Fund of the FDIC ("BIF"), and its deposits are insured by the
BIF. None of the deposits of the Bank are insured by the Savings Association
Insurance Fund of the FDIC ("SAIF"), and the Bank pays no insurance assessments
to the SAIF.
6.27. Other Insurance. Each of the Company and the Bank carries
insurance with reputable insurers, including blanket bond coverage, in such
amounts as are reasonable to cover such risks as are customary in relation to
the character and location of its properties and the nature of its businesses.
All such policies of insurance are in full force and effect, and no notice of
cancellation has been received. All premiums to date have been paid in full.
Neither the Company nor the Bank is in default with respect to any such policy
which is material to it.
6.28. Labor Matters. Neither the Company nor the Bank is a party to or
bound by any collective bargaining contracts with respect to any employees of
the Company or the Bank. Since their respective inceptions there has not been,
nor to the best of the knowledge of the Company and the Bank was there or is
there threatened, any strike, slowdown, picketing, or work stoppage by any union
or other group of employees against the Company or the Bank or any of its
premises, or any other labor trouble or other occurrence, event, or condition of
a similar character. As of the date hereof, neither the Company nor the Bank is
aware of any attempts to organize a collective bargaining unit to represent any
of its employee groups.
- 25 -
6.29. Employee Benefit Plans.
(a) Schedule 6.29 hereto contains a list or brief descriptions of
all pension, retirement, stock purchase, stock bonus, stock ownership, stock
option, performance share, stock appreciation right, phantom stock, savings, or
profit-sharing plans, any employment, deferred compensation, consultant, bonus,
or collective bargaining agreement, or group insurance contract or any other
incentive, welfare, life insurance, death or survivor's benefit, health
insurance, sickness, disability, medical, surgical, hospital, severance, layoff
or vacation plans, contracts, and arrangements or employee benefit plans or
agreements sponsored, maintained, or contributed to by the Company or the Bank
for the employees or former employees of the Company or the Bank. The Company
has previously made available and will continue to make available to Zions
Bancorp for its continuing review until the Effective Date true, complete, and
accurate copies of all plans and arrangements listed on Schedule 6.29, together
with (i) the most recent actuarial and financial report prepared with respect to
any such plans which constitute "qualified plans" under section 401(a) of the
Code, and (ii) the most recent annual reports, if any, filed with any government
agency and all IRS rulings and determination letters and any open requests for
such rulings and letters that pertain to any such plan.
(b) Except for liabilities to the Pension Benefit Guaranty
Corporation ("PBGC") pursuant to section 4007 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), all of which have been fully paid,
and except for liabilities to the IRS under section 4971 of the Code, all of
which have been fully paid, neither the Company nor the Bank has any liability
with respect to any pension plan qualified under section 401 of the Code.
Neither the Company nor the Bank sponsors or maintains any defined benefit plan
and has never sponsored or maintained any defined benefit plan.
(c) All "employee benefit plans," as defined in section 3(3) of
ERISA, that cover one or more employees employed by the Company or the Bank
(each individually a "Plan" and collectively the "Plans"), comply in all
material respects with ERISA and, where applicable for tax-qualified or
tax-favored treatment, with the Code. As of September 30, 1997, neither the
Company nor the Bank had any material liability under any Plan which is not
reflected on the Company Financial Statements as of such date (other than such
normally unrecorded liabilities under the Plans for sick leave, holiday,
education, bonus, vacation, incentive compensation, and anniversary awards,
provided that such liabilities are not in any event material). None of the
Plans, the Company, the Bank, nor any trustee or administrator of the Plans has
ever engaged in a "prohibited transaction" with respect to the Plans within the
meaning of section 406 of ERISA or, where applicable, section 4975 of the Code
for which no exemption is applicable, nor have there been any "reportable
events" within section 4043 of ERISA for which the thirty-day notice therefor
has not been waived. Neither the Company nor the Bank has incurred any liability
under section 4201 of ERISA for a complete or partial withdrawal from a
multi-employer plan.
- 26 -
(d) No action, claim, or demand of any kind has been brought or
threatened by any potential claimant or representative of such a claimant under
any plan, contract, or arrangement referred to in Subsection (a) of this
section, where the Company or the Bank may be either (i) liable directly on such
action, claim, or demand; or (ii) obligated to indemnify any person, group of
persons, or entity with respect to such action, claim, or demand which is not
fully covered by insurance maintained with reputable, responsible financial
insurers or by a self-insured plan.
6.30. Employee Relations. As of the date hereof, each of the Company and
the Bank is, to the best of its knowledge, in compliance in all material
respects with all federal and state laws, regulations, and orders respecting
employment and employment practices (including Title VII of the Civil Rights Act
of 1964), terms and conditions of employment, and wages and hours; and neither
the Company nor the Bank is engaged in any unfair labor practice. As of the date
hereof, except as set forth on Schedule 6.30 hereof, no dispute exists between
the Company or the Bank and any of its employee groups regarding any employee
organization, wages, hours, or conditions of employment which would materially
interfere with the business or operations of the Company or the Bank.
6.31. Fiduciary Activities. The Bank is duly qualified and registered
and in good standing in accordance with the laws of each jurisdiction in which
it is required to so qualify or register as a result of or in connection with
its fiduciary or custodial activities as conducted as of the date hereof. The
Bank is duly registered under and in compliance with all requirements of the
federal Investment Advisers Act of 1940 as amended, or is exempt from
registration thereunder and from compliance with the requirements thereof. Since
January 1, 1994, the Bank has conducted, and currently is conducting, all
fiduciary and custodial activities in all material respects in accordance with
all applicable law.
6.32. Environmental Liability.
(a) Except as set forth on Schedule 6.32 hereof, neither the
Company nor the Bank is in material violation of any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters, including
those arising under the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the
Federal Water Pollution Control Act, the Federal Clean Air Act, the Toxic
Substances Control Act or any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment ("Environmental
Laws").
(b) Except as set forth on Schedule 6.32 hereof, neither the
Company, the Bank, nor, to the best of the knowledge of either of them, any
borrower of the Company or of the Bank has
- 27 -
received notice that it has been identified by the United States Environmental
Protection Agency as a potentially responsible party under CERCLA with respect
to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B,
nor has the Company or the Bank or, to the best of the knowledge of either of
them, any borrower of the Company or of the Bank received any notification that
any hazardous waste, as defined by 42 U.S.C. ss. 6903(5), any hazardous
substances, as defined by 42 U.S.C. ss. 9601(14), any "pollutant or
contaminant," as defined by 42 U.S.C. ss. 9601(33), or any toxic substance,
hazardous materials, oil, or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") that it has disposed of has been
found at any site at which a federal or state agency is conducting a remedial
investigation or other action pursuant to any Environmental Law.
(c) No portion of any real property at any time owned or leased by
the Company or the Bank (collectively, the "Company Real Estate") has been used
by the Company or the Bank for the handling, processing, storage or disposal of
Hazardous Substances in a manner which violates any Environmental Laws and, to
the best of the knowledge of the Company and the Bank, no underground tank or
other underground storage receptacle for Hazardous Substances is located on any
of the Company Real Estate. In the course of its activities, neither the Company
nor the Bank has generated or is generating any hazardous waste on any of the
Company Real Estate in a manner which violates any Environmental Laws. There has
been no past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping (collectively, a "Release") of Hazardous Substances by the Company or
the Bank on, upon, or into any of the Company Real Estate. In addition, to the
best of the knowledge of the Company and the Bank, except as set forth on
Schedule 6.32 hereof, there have been no such Releases on, upon, or into any
real property in the vicinity of any of the Company Real Estate that, through
soil or groundwater contamination, may be located on any of such Company Real
Estate.
(d) With respect to any real property at any time held as
collateral for any outstanding loan by the Company or the Bank (collectively,
the "Collateral Real Estate"), except as set forth on Schedule 6.32 hereof,
neither the Company nor the Bank has since January 1, 1988 received notice from
any borrower thereof or third party, and has no knowledge, that such borrower
has generated or is generating any hazardous waste on any of the Collateral Real
Estate in a manner which violates any Environmental Laws or that there has been
any Release of Hazardous Substances by such borrower on, upon, or into any of
the Collateral Real Estate, or that there has been any Release on, upon, or into
any real property in the vicinity of any of the Collateral Real Estate that,
through soil or groundwater contamination, may be located on any of such
Collateral Real Estate.
(e) As used in this Section 6.32, each of the terms "Company" and
"Bank" includes the applicable entity and any partnership or joint venture in
which it has an interest.
6.33. Intangible Property. Except as set forth on Schedule 6.33 hereof,
to the best of the knowledge of the Company and the Bank:
- 28 -
(a) each of the Company and the Bank owns or possesses the right,
free of the claims of any third party, to use all material trademarks, service
marks, trade names, copyrights, patents, and licenses currently used by it in
the conduct of its business; and
(b) no material product or service offered and no material
trademark, service xxxx, or similar right used by the Company or the Bank
infringes any rights of any other person, and, as of the date hereof, neither
the Company nor the Bank has received any written or oral notice of any claim of
such infringement.
6.34. Real and Personal Property. Except for property and assets
disposed of in the ordinary course of business, each of the Company and the Bank
possesses good and marketable title to and owns, free and clear of any mortgage,
pledge, lien, charge, or other encumbrance or other third party interest of any
nature whatsoever which would materially interfere with the business or
operations of either the Company or the Bank, its real and personal property and
other assets, including without limitation those properties and assets reflected
in the Company Financial Statements as of September 30, 1997, or acquired by the
Company or the Bank subsequent to the date thereof. The leases pursuant to which
the Company and the Bank lease real or personal property are valid and effective
in accordance with their respective terms; and there is not, under any such
lease, any material existing default or any event which, with the giving of
notice or lapse of time or otherwise, would constitute a material default. The
real and personal property leased by either the Company or the Bank is free from
any adverse claim which would materially interfere with its business or
operation taken as a whole. The material properties and equipment owned or
leased by the Company and the Bank are in normal operating condition, free from
any known defects, except such minor defects as do not materially interfere with
the continued use thereof in the conduct of its normal operations.
6.35. Loans, Leases, and Discounts.
(a) To the best of the knowledge of the Company and the Bank, each
loan, lease, and discount reflected as an asset of the Company in the Company
Financial Statements as of September 30, 1997, or acquired since that date, is
the legal, valid, and binding obligation of the obligor named therein,
enforceable in accordance with its terms; and no loan, lease, or discount having
an unpaid balance (principal and accrued interest) in excess of $25,000 is
subject to any asserted defense, offset, or counterclaim known to the Company or
the Bank.
(b) Except as set forth on Schedule 6.35 hereof, neither the
Company nor the Bank holds any loans or loan-participation interests purchased
from, or participates in any loans originated by, any person other than the
Company or the Bank.
6.36. Material Contracts. Neither the Company nor the Bank nor any of
the assets, businesses, or operations of either of them is as of the date hereof
a party to, or is bound or affected by, or receives benefits under any material
agreement, arrangement, or commitment not cancelable
- 29 -
by it without penalty, other than (a) the agreements set forth on Schedule 6.36
hereof, and (b) agreements, arrangements, or commitments entered into in the
ordinary course of its business consistent with past practice, or, if there has
been no past practice, consistent with prudent banking practices.
6.37. Employment and Severance Arrangements. Schedule 6.37 hereof sets
forth
(a) all employment contracts granted by the Company or the Bank to
any of its officers, directors, shareholders, consultants, or other management
officials and any officer, director, shareholder, consultant, or management
official of any affiliate providing for increased or accelerated compensation
in the event of a change of control with respect to the Company or the Bank or
any other event affecting the ownership, control, or management of the Company
or the Bank; and
(b) all employment and severance contracts, agreements, and
arrangements between the Company or the Bank and any officer, director,
consultant, or other management official of any of them.
6.38. Material Contract Defaults. All contracts, agreements, leases,
mortgages, or commitments referred to in Section 6.12(c) hereof are valid and in
full force and effect on the date hereof. As of the date of this Agreement and
as of the Effective Date, neither the Company nor the Bank is or will be in
default in any material respect under any material contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or by which its assets, business, or operations may be bound or
affected or under which it or its assets, business, or operations receive
benefits; and there has not occurred any event that with the lapse of time or
the giving of notice or both would constitute such a default.
6.39. Capital Expenditures. Except as set forth on Schedule 6.39 hereof,
neither the Company nor the Bank has any outstanding commitments in the nature
of capital expenditures which in the aggregate exceed $25,000.
6.40. Repurchase Agreements. With respect to all agreements pursuant to
which the Company or the Bank has purchased securities subject to an agreement
to resell, it has a valid, perfected first lien or security interest in the
securities securing the agreement, and the value of the collateral securing each
such agreement equals or exceeds the amount of the debt secured by such
collateral under such agreement.
6.41. Internal Controls. Each of the Company and the Bank maintains
internal controls to provide reasonable assurance to its board of directors and
officers that its assets are safeguarded, its records and reports are prepared
in compliance with all applicable legal and accounting requirements and with its
internal policies and practices, and applicable federal, state, and local laws
and regulations are complied with. These controls extend to the preparation of
its financial statements to provide reasonable assurance that the statements are
presented fairly in conformity with Applicable Accounting Principles. The
controls contain self-monitoring mechanisms, and appropriate actions are taken
on significant deficiencies as they are identified.
- 30 -
6.42. Dividends. Neither the Company nor the Bank has paid any dividend
to its shareholders which caused its regulatory capital to be less than the
amount then required by applicable law, or which exceeded any other limitation
on the payment of dividends imposed by law, agreement, or regulatory policy.
6.43. Brokers and Advisers. Except as set forth on Schedule 6.43 hereof,
(a) there are no claims for brokerage commissions, finder's fees, or similar
compensation arising out of or due to any act of the Company or the Bank in
connection with the transactions contemplated by this Agreement or based upon
any agreement or arrangement made by or on behalf of the Company or the Bank,
and (b) neither the Company nor the Bank has entered into any agreement or
understanding with any party relating to financial advisory services provided or
to be provided with respect to the transactions contemplated by this Agreement.
6.44. Interest Rate Risk Management Instruments.
(a) Schedule 6.44 contains a true, correct, and complete list of
all interest-rate swaps, caps, floors, and options agreements and other
interest-rate risk management arrangements to which the Company or the Bank is a
party or by which any of its properties or assets may be bound.
(b) All interest rate swaps, caps, floors, and option agreements
and other interest rate risk management arrangements to which the Company or the
Bank is a party or by which any of its properties or assets may be bound were
entered into in the ordinary course of its business and, to the best of its
knowledge, in accordance with prudent banking practice and applicable rules,
regulations, and regulatory policies and with counterparties believed to be
financially responsible at the time and are legal, valid, and binding
obligations enforceable in accordance with their terms (except as may be limited
by bankruptcy, insolvency, moratorium, reorganization, or similar laws affecting
the rights of creditors generally and the availability of equitable remedies),
and are in full force and effect. The Company and the Bank have duly performed
in all material respects of all of their respective obligations thereunder to
the extent that such obligations to perform have accrued; and to the best of the
knowledge of the Company and the Bank, there are no breaches, violations or
defaults or allegations or assertions of such by any party thereunder.
6.45. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by the Company or the Bank
hereunder or in connection with this Agreement or any of the transactions
contemplated thereunder contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Company which reasonably might
materially adversely affect the business, assets,
- 31 -
liabilities, financial condition, results of operations, or prospects of the
Company or the Bank which has not been disclosed in the Company Financial
Statements or a certificate delivered to Zions Bancorp by the Company. Copies of
all documents referred to in this Agreement, unless prepared solely by Zions
Bancorp, Val Cor, or Valley or solely by Zions Bancorp, Val Cor, or Valley and
third parties hereto, are true, correct, and complete copies thereof and include
all amendments, supplements, and modifications thereto and all waivers
thereunder.
6.46. Regulatory and Other Approvals. As of the date hereof, except as
set forth on Schedule 6.46 hereof, neither the Company nor the Bank is aware of
any reason why all material consents and approvals shall not be procured from
all regulatory agencies having jurisdiction over the transactions contemplated
by this Agreement, as shall be necessary for (a) consummation of the
transactions contemplated by this Agreement, and (b) the continuation after the
Effective Date of the business of the Company and the Bank as such business is
carried on immediately prior to the Effective Date, free of any conditions or
requirements which, in the reasonable opinion of the Company, could have a
material adverse effect upon the business, operations, activities, earnings, or
prospects of the Company. As of the date hereof, neither the Company nor the
Bank is aware of any reason why all material consents and approvals shall not be
procured from all other persons and entities whose consent or approval shall be
necessary for (y) consummation of the transactions contemplated by this
Agreement, or (z) the continuation after the Effective Date of the business of
the Company and the Bank as such business is carried on immediately prior to the
Effective Date.
7. Covenants of the Company and the Bank.
The Company (on behalf of itself and the Bank) and the Bank (on behalf
of itself) each hereby covenant and agree as follows:
7.1. Rights of Access. In addition and not in limitation of any other
rights of access provided to Zions Bancorp, Val Cor, and Valley herein, until
the Effective Date the Company and the Bank will give to Zions Bancorp, Val Cor,
and Valley and to their representatives, including their certified public
accountants, KPMG Peat Marwick, full access during normal business hours to all
of the property, documents, contracts, books, and records of the Company and the
Bank, and such information with respect to their business affairs and properties
as Zions Bancorp, Val Cor, or Valley from time to time may reasonably request.
7.2. Corporate Records, Contracts, etc.
(a) The Company and the Bank will make available to Zions Bancorp,
Val Cor, and Valley copies of their respective articles of incorporation and
bylaws, and will make available their respective minute books, all of which
shall be certified to be complete and true copies.
- 32 -
(b) The Company and the Bank will make available copies of all
contracts or agreements involving amounts in excess of $25,000 to which the
Company or the Bank is a party, including but not limited to data processing
contracts, service contracts, contracts to purchase or lease real property or
equipment, guaranties, employment contracts, and insurance contracts pertaining
to fire, accident, indemnity, fidelity, health, life, hospitalization, or other
employee benefits.
(c) The Company and the Bank will furnish to Zions Bancorp, Val
Cor, and Valley the following information with respect to properties owned by
the Company and the Bank: (i) a brief description and location of each parcel of
real property owned by the Company or the Bank, (ii) a brief description of real
property covered by lease or other rental arrangements to which the Company or
the Bank is a party, including a copy of the relevant leases; and (iii) a brief
description of personal property with a value in excess of $25,000 covered by
lease or other rental arrangements to which the Company or the Bank is a party,
including a copy of the relevant leases.
7.3. Monthly and Quarterly Financial Statements; Minutes of Meetings and
Other Materials.
(a) The Company and the Bank will continue to prepare all of the
monthly and quarterly financial statements and financial reports to regulatory
authorities for the months and quarterly periods ending between October 1, 1997
and the Effective Date which it customarily prepared during the period between
January 1, 1995 and September 30, 1997 and shall promptly provide Zions Bancorp
with copies of all such financial statements and reports. Such financial
statements and reports shall be verified by the chief financial officer of the
reporting entity. All of such financial statements and reports, including the
related notes, schedules, and memorandum items, will have been prepared in
accordance with Applicable Accounting Principles applied in all material
respects.
(b) The Company and the Bank shall promptly provide Zions Bancorp
with (i) copies of all of its periodic reports to directors and to shareholders,
whether or not such reports were prepared or distributed in connection with a
meeting of the board of directors or a meeting of the shareholders, prepared or
distributed between the date of this Agreement and the Effective Date, and (ii)
complete copies of all minutes of meetings of its board of directors and
shareholders which meetings take place between the date of this Agreement and
the Effective Date, certified by the secretary or cashier or an assistant
secretary or assistant cashier of the Company or the Bank, as the case may be.
7.4. Extraordinary Transactions. Without the prior written consent of
Zions Bancorp, neither the Company nor the Bank will, on or after the date of
this Agreement: (a) declare or pay any cash dividends or property dividends with
respect to any class of its capital stock, with the exception of customary
periodic cash dividends paid by the Company or the Bank to holders of its common
stock at such intervals and in such amounts as are in every case consistent with
the amounts and intervals characteristic of that payer; (b) declare or
distribute any stock dividend, authorize a stock split, or authorize, issue or
make any distribution of its capital stock or any other securities
- 33 -
(except for issuances of Company Common Stock upon exercise of stock options
outstanding on the date of this Agreement), or grant any options to acquire such
additional securities; (c) merge into, consolidate with, or sell its assets to
any other corporation or person, or enter into any other transaction or agree to
effect any other transaction not in the ordinary course of its business except
as explicitly contemplated herein, or engage in any discussions concerning such
a possible transaction except as explicitly contemplated herein; (d) convert the
charter or form of entity of the Bank from that in existence on the date of this
Agreement to any other charter or form of entity; (e) make any direct or
indirect redemption, purchase, or other acquisition of any of its capital stock;
(f) except in the ordinary course of its business or to accomplish the
transactions contemplated by this Agreement, incur any liability or obligation,
make any commitment or disbursement, acquire or dispose of any property or
asset, make any contract or agreement, or engage in any transaction; (g) other
than in the ordinary course of business, subject any of its properties or assets
to any lien, claim, charge, option, or encumbrance; (h) except for increases in
the ordinary course of business in accordance with past practices, which
together with all other compensation rate increases do not exceed 4.5 percent
per annum of the aggregate payroll as of October 1, 1997, increase the rate of
compensation of any employee or enter into any agreement to increase the rate of
compensation of any employee; (i) create or modify any pension or profit sharing
plan, bonus, deferred compensation, death benefit, or retirement plan, or the
level of benefits under any such plan, nor increase or decrease any severance or
termination pay benefit or any other fringe benefit; (j) enter into any
employment or personal services contract with any person or firm, including
without limitation any contract, agreement, or arrangement described in Section
6.37(a) hereof, except directly to facilitate the transactions contemplated by
this Agreement; nor (k) purchase any loans or loan-participation interests from,
or participate in any loans originated by, any person other than the Company or
the Bank.
7.5. Preservation of Business. Each of the Company and the Bank will (a)
carry on its business and manage its assets and properties diligently and
substantially in the same manner as heretofore; (b) maintain the ratio of its
loans to its deposits at approximately the same level as existed at September
30, 1997, as adjusted to allow for seasonal fluctuations of loans and deposits
of a kind and amount experienced traditionally by it; (c) manage its investment
portfolio in substantially the same manner and pursuant to substantially the
same investment policies as in 1997, and will take no action to change the
percentage which its investment portfolio bears to its total assets, or to
lengthen the average maturity of its investment portfolio, or of any significant
category thereof, to any material extent; (d) continue in effect its present
insurance coverage on all properties, assets, business, and personnel; (e) use
its best efforts to preserve its business organization intact; except as
otherwise consented to by Zions Bancorp, to keep available its present
employees; and to preserve its present relationships with customers and others
having business dealings with it; (f) not do anything and not fail to do
anything which will cause a breach of or default in any contract, agreement,
commitment, or obligation to which it is a party or by which it may be bound;
(g) not amend its articles of incorporation or bylaws; and (h) not grant or
expand any shareholders' rights to dissent from any merger.
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7.6. Affiliates' Agreements. The Company will furnish to Zions Bancorp a
list of all persons known to the Company who at the date of the Company's
special meeting of shareholders to vote upon the transactions contemplated by
this Agreement may be deemed to be "affiliates" of the Company within the
meaning of Rule 145 under the 1933 Act and for purposes of qualifying the
Holding Company Merger for "pooling of interests" accounting treatment. The
Company will use its best efforts to cause each such "affiliate" of the Company
to deliver to Zions Bancorp not later than thirty days prior to the Effective
Date a written agreement providing that such person will not sell, pledge,
transfer or otherwise dispose of (a) the shares of Company Common Stock
beneficially owned by such person, or the shares of Zions Bancorp Stock to be
received by such person in the Holding Company Merger (the "Company Merger
Shares") or any other shares of Zions Bancorp Stock held by such person during
the period commencing thirty days prior to the Effective Date and ending at such
time as financial results covering at least thirty days of post-Holding Company
Merger combined operations have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies or (b) the
Company Merger Shares except in compliance with the applicable provisions of the
1933 Act and the rules and regulations thereunder.
7.7. Inconsistent Activities. Unless and until the Holding Company
Merger has been consummated or this Agreement has been terminated in accordance
with its terms, neither the Company nor the Bank will (a) solicit or encourage,
directly or indirectly, any inquiries or proposals to acquire more than 1
percent of the Company Common Stock or any capital stock of the Bank or any
significant portion the assets of either of them (whether by tender offer,
merger, purchase of assets, or other transactions of any type); (b) afford any
third party which may be considering any such transaction access to its
properties, books or records except as required by mandatory provisions of law;
(c) enter into any discussions or negotiations for, or enter into any agreement
or understanding which provides for, any such transaction, or (d) authorize or
permit any of its directors, officers, employees or agents to do or permit any
of the foregoing. If the Company or the Bank becomes aware of any offer or
proposed offer to acquire any shares of its capital stock or any significant
portion of its assets (regardless of the form of the proposed transaction) or of
any other matter which could adversely affect this Agreement, the Holding
Company Merger, or the Bank Merger, the Company and the Bank shall immediately
give notice thereof to Zions Bancorp.
8. Representations and Warranties of Zions Bancorp, Val Cor, and Valley.
Zions Bancorp (with respect to itself, Val Cor, and Valley), Val Cor
(with respect to itself and Valley), and Valley (solely with respect to itself)
each represent and warrant to the Company and the Bank as follows:
8.1. Organization, Powers, and Qualification. Each of Zions Bancorp, Val
Cor, and Valley is a corporation which is duly organized, validly existing, and
in good standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
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as now conducted. Each of Zions Bancorp, Val Cor, and Valley owns or possesses
in the operation of its business all franchises, licenses, permits, branch
certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect its operation and properties in any
material respect. Each of Zions Bancorp, Val Cor, and Valley is duly qualified
and licensed to do business and is in good standing in every jurisdiction in
which such qualification or license is required or with respect to which the
failure to be so qualified or licensed could result in material liability or
adversely affect its operation and properties in any material respect.
8.2. Execution and Performance of Agreement. Each of Zions Bancorp, Val
Cor, and Valley has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its respective terms.
8.3. Binding Obligations; Due Authorization. This Agreement constitutes
the valid, legal, and binding obligations of each of Zions Bancorp, Val Cor, and
Valley enforceable against it in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
similar law, or by general principles of equity. The execution, delivery, and
performance of this Agreement and the transactions contemplated thereby have
been duly and validly authorized by the board of directors of each of Zions
Bancorp, Val Cor, and Valley. No other corporate proceedings on the part of any
of them are necessary to authorize this Agreement or the carrying out of the
transactions contemplated hereby.
8.4. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated hereby, or the
compliance with or fulfillment of the terms hereof will conflict with, or result
in a breach of any of the terms, conditions, or provisions of, or constitute a
default under the organizational documents or bylaws of Zions Bancorp, Val Cor,
or Valley. None of such execution, consummation, or fulfillment will (a)
conflict with, or result in a material breach of the terms, conditions, or
provisions of, or constitute a material violation, conflict, or default under,
or give rise to any right of termination, cancellation, or acceleration with
respect to, or result in the creation of any lien, charge, or encumbrance upon,
any of the property or assets of Zions Bancorp, Val Cor, or Valley pursuant to
any material agreement or instrument under which it is obligated or by which any
of its properties or assets may be bound, including without limitation any
material lease, contract, mortgage, promissory note, deed of trust, loan, credit
arrangement or other commitment or arrangement of it in respect of which it is
an obligor, or (b) if the Holding Company Merger is approved by the Board of
Governors under the BHC, or if the Board of Governors waives its jurisdiction
over the Holding Company Merger, and if the transactions contemplated by this
Agreement are approved by the OCC, the Commissioner, and the Banking Board,
violate any law, statute, rule, or regulation of any government or agency to
which Zions Bancorp, Val Cor, or Valley is subject and which is material to its
operations, or (c) violate any judgment, order, writ, injunction, decree, or
ruling to which it or any of its properties or assets is subject or bound. None
of the execution or delivery of this Agreement, the consummation of the
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transactions contemplated thereby, or the compliance with or fulfillment of the
terms thereof will require any authorization, consent, approval, or exemption by
any person which has not been obtained, or any notice or filing which has not
been given or done, other than approval of or waiver of jurisdiction over the
transactions contemplated by this Agreement by the Board of Governors, the OCC,
the Commissioner, and the Banking Board.
8.5. Brokers and Advisers.
(a) There are no claims for brokerage commissions, finder's fees,
or similar compensation arising out of or due to any act of Zions Bancorp, Val
Cor, or Valley in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by or on behalf of any
of them.
(b) None of Zions Bancorp, Val Cor, nor Valley has entered into any
agreement or understanding with any party relating to financial advisory
services provided or to be provided with respect to the transactions
contemplated by this Agreement.
8.6. Books and Records. The books and records of each of Zions Bancorp,
Val Cor, and Valley fairly reflect the transactions to which it is a party or by
which its properties are subject or bound. Such books and records have been
properly kept and maintained and are in compliance in all material respects with
all applicable legal and accounting requirements. Each of Zions Bancorp, Val
Cor, and Valley follows generally accepted accounting principles applied on a
consistent basis in the preparation and maintenance of its books of account and
financial statements, including but not limited to the application of the
accrual method of accounting for interest income on loans, leases, discounts,
and investments, interest expense on deposits and all other liabilities, and all
other items of income and expense. Each of Zions Bancorp, Val Cor, and Valley
has made all accruals in amounts which accurately report income and expense in
the proper periods in accordance with generally accepted accounting principles.
Each of Zions Bancorp, Val Cor, and Valley has filed all material reports and
returns required by any law or regulation to be filed by it.
8.7. Financial Statements. Zions Bancorp has furnished to the Company
its consolidated statement of condition as of each of December 31, 1994,
December 31, 1995, December 31, 1996, and September 30, 1997, and its related
consolidated statement of income, consolidated statement of changes in financial
position, and consolidated statement of changes in stockholders' equity for each
of the periods then ended, and the notes thereto (collectively, the "Zions
Bancorp Financial Statements"). All of the Zions Bancorp Financial Statements,
including the related notes, (a) were prepared in accordance with generally
accepted accounting principles applied in all material respects, and (b) are in
accordance with the books and records of Zions Bancorp which have been
maintained in accordance with generally accepted accounting principles, and (c)
fairly reflect the consolidated financial position of Zions Bancorp as of such
dates, and the consolidated results of operations of Zions Bancorp for the
periods ended on such dates, and do not fail to disclose any material
extraordinary or out-of-period items, and (d) reflect, in accordance with
generally accepted accounting principles applied in all material respects,
adequate provision for, or reserves against, the possible loan losses of Zions
Bancorp as of such dates.
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8.8. Absence of Certain Developments. Since September 30, 1997, there
has been (a) no material adverse change in the condition, financial or
otherwise, assets, properties, liabilities, or businesses of Zions Bancorp, and
(b) no material deterioration in the quality of the loan portfolio of Zions
Bancorp or of any major component thereof, and no material increase in the level
of nonperforming assets or nonaccrual loans at Zions Bancorp or in the level of
its provision for credit losses or its reserve for possible credit losses.
8.9. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by it hereunder or in
connection with this Agreement or any of the transactions contemplated
thereunder contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein, in
light of the circumstances under which they were made, not misleading. There is
no fact known to it which might materially adversely affect its business,
assets, liabilities, financial condition, results of operations, or prospects
which has not been disclosed in the Zions Bancorp Financial Statements or a
certificate delivered by it to the Company. Copies of all documents referred to
in this Agreement, unless prepared solely by the Company and the Bank or solely
by the Company and the Bank and third parties hereto, are true, correct, and
complete copies thereof and include all amendments, supplements, and
modifications thereto and all waivers thereunder.
9. Closing.
9.1. Place and Time of Closing. Closing shall take place at the offices
of Zions Bancorp, One South Main Street, Suite 1380, Salt Lake City, Utah, or
such other place as the parties choose, commencing at 10:00 a.m., local time, on
the Effective Date, provided that all conditions precedent to the obligations of
the parties hereto to close have then been met or waived.
9.2. Events To Take Place at Closing. At the Closing, the following
actions will be taken:
(a) such certificates and other documents as are required by this
Agreement to be executed and delivered on or prior to the Effective Date and
have not been so executed and delivered, and such other certificates and
documents as are mutually deemed by the parties to be otherwise desirable for
the effectuation of the Closing, will be so executed and delivered; and then
(b) the Holding Company Merger and the issuance of shares incident
thereto shall be effected; provided, however, that the administrative and
ministerial aspects of the issuance of shares incident to the Holding Company
Merger will be settled as soon thereafter as shall be reasonable under the
circumstances; and then
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(c) the Bank Consolidation shall be effected.
10. Termination, Damages for Breach, Waiver, and Amendment.
10.1. Termination by Reason of Lapse of Time. This Agreement may be
terminated by any party on or after July 31, 1998, by instrument duly authorized
and executed and delivered to the other parties, unless the Effective Date shall
have occurred on or before such date.
10.2. Grounds for Termination. This Agreement may be terminated by
written notice of termination at any time before the Effective Date (whether
before or after action by shareholders of the Company):
(a) by mutual consent of the parties hereto;
(b) by Zions Bancorp, upon written notice to the Company given at
any time (i) if any of the representations and warranties of the Company or the
Bank contained in Section 6 hereof was materially incorrect when made, or (ii)
in the event of a material breach or material failure by the Company or the Bank
of any covenant or agreement of the Company or the Bank contained in this
Agreement which has not been, or cannot be, cured within thirty days after
written notice of such breach or failure is given to the Company or the Bank, as
the case may be;
(c) by the Company, upon written notice to Zions Bancorp given at
any time (i) if any of the representations and warranties of Zions Bancorp, Val
Cor, or Valley contained in Section 8 hereof was materially incorrect when made,
or (ii) in the event of a material breach or material failure by Zions Bancorp,
Val Cor, or Valley of any covenant or agreement of Zions Bancorp, Val Cor, or
Valley contained in this Agreement which has not been, or cannot be, cured
within thirty days after written notice of such breach or failure is given to
Zions Bancorp, Val Cor, or Valley, as the case may be; or
(d) by either Zions Bancorp or the Company upon written notice
given to the other if the board of directors of either Zions Bancorp or the
Company shall have determined in its sole judgment made in good faith, after due
consideration and consultation with counsel, that the Holding Company Merger has
become inadvisable or impracticable by reason of the institution of litigation
by the federal government or the government of the State of Colorado or the
State of Utah to restrain or invalidate the transactions contemplated by this
Agreement.
10.3. Effect of Termination. In the event of the termination and
abandonment hereof pursuant to the provisions of Section 10.1 or Section 10.2,
this Agreement shall become void and have no force or effect, without any
liability on the part of Zions Bancorp, Val Cor, Valley, the Company, the Bank,
or their respective directors or officers or shareholders, in respect of this
Agreement. Notwithstanding the foregoing, (a) as provided in Section 11.4 of
this Agreement, the
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confidentiality agreement contained in that section shall survive such
termination; (b) if such termination is a result of any of the representations
and warranties of a party being materially incorrect when made or a result of
the material breach or material failure by a party of a covenant or agreement
hereunder, such party whose representations and warranties were materially
incorrect or who materially breached or failed to perform its covenant or
agreement shall be liable to the other party or parties hereto that are not
affiliated with it to the extent of the actual, reasonable out-of-pocket
expenses, not to exceed $500,000, incurred by the other party or parties not
affiliated with it in connection with the negotiation and preparation of this
Agreement and the carrying out of the transactions contemplated hereby; and (c)
if a Trigger Event should occur, the Company shall be liable (and in the event
that the Bank or its board of directors shall have participated in the Trigger
Event, the Company and the Bank shall be jointly and severally liable) to Zions
Bancorp in the amount of $1,000,000. As used in this Section 10.3, "Trigger
Event" shall mean any of the following: (w) the board of directors of the
Company or the board of directors of the Bank shall have authorized the
execution of an agreement with any person or group of persons other than Zions
Bancorp or an affiliate of Zions Bancorp (a "Third Party") pursuant to which
such Third Party will acquire, merge or consolidate with, or acquire all or
substantially all of the assets of, the Company or the Bank, or engage in a
substantially similar transaction; (x) the board of directors of the Company or
the board of directors of the Bank shall have supported an offer or proposal by
any Third Party to acquire, merge or consolidate with the Company or the Bank,
or acquire all or substantially all of the assets of the Company or the Bank (or
to engage in a substantially similar transaction); (y) unless such
recommendation is required, in the reasonable opinion of independent corporate
counsel to the Company, for the board of directors of the Company to discharge
its fiduciary duties, the board of directors of the Company or the board of
directors of the Bank shall have recommended to the shareholders of the Company
that they not approve this Agreement; or (z) the shareholders of the Company, at
the meeting of shareholders called to vote on this Agreement, fail to approve
this Agreement by the vote required by applicable law and the articles of
incorporation of the Company and, within six months thereafter, the board of
directors of the Company or the Board of Directors of the Bank shall have either
authorized the execution of an agreement with a Third Party pursuant to which
such Third Party will acquire, merge or consolidate with, or acquire all or
substantially all of the assets of, the Company or the Bank, or engage in a
substantially similar transaction, or supported an offer or proposal by any
Third Party to acquire, merge or consolidate with the Company or the Bank, or
acquire all or substantially all of the assets of the Company or the Bank (or to
engage in a substantially similar transaction).
10.4. Waiver of Terms or Conditions. Any of the terms or conditions of
this Agreement may be waived at any time prior to the Effective Date by the
party which is, or whose shareholders are, entitled to the benefit thereof, by
action taken by that party (if an individual) or by the board of directors of
such party (if a corporation), or by its chairman, or by its president; provided
that such waiver shall be in writing and shall be taken only if, in the judgment
of the party, board of directors, or officer taking such action, such waiver
will not have a materially adverse effect on the benefits intended hereunder to
it or to the shareholders of its or his corporation; and the other parties
hereto may rely on the delivery of such a waiver as conclusive evidence of such
judgment and the validity of the waiver.
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10.5. Amendment.
(a) Anything herein or elsewhere to the contrary notwithstanding,
to the extent permitted by law, this Agreement and the exhibits hereto may be
amended, supplemented, or interpreted at any time prior to the Effective Date by
written instrument duly authorized and executed by each of the parties hereto;
provided, however, that this Agreement may not be amended after the action by
shareholders of the Company or shareholders of Valley in any respect that would
prejudice the economic interests of such Company shareholders or Valley
shareholders, as the case may be, or any of them, except as specifically
provided herein or by like action of such shareholders.
(b) If Zions Bancorp and the Company should mutually determine
(following receipt of advice of legal or other counsel) that it has become
inadvisable or inexpedient to effectuate the transactions contemplated by this
Agreement through means of a sequence of mergers such as is contemplated herein,
then the parties hereto agree to effect such change in the form of transaction
as described especially in Sections 1.1 and 9.2 of this Agreement by written
instrument in amendment of this Agreement.
(c) The parties to this Agreement acknowledge that Valley is a
party to an unrelated agreement and plan of reorganization pursuant to which
Valley is scheduled to be merged with and into The First National Bank in
Alamosa, a national banking association with its head office located in Alamosa,
County of Alamosa, State of Colorado (the "Alamosa Merger"). The parties hereto
agree that nothing in this Agreement shall preclude or condition the right of
Valley to participate in the Alamosa Merger. The parties hereto further agree
that, if the Alamosa Merger shall have occurred prior to the Effective Date,
then the parties hereto agree to effect such change in the form of transaction,
by written instrument in amendment of this Agreement and of such other
agreements between or among the parties hereto or any of them as shall be
implicated herein, as shall be necessary or advisable to cause the Bank to merge
into the resulting bank in the Alamosa Merger.
11. General Provisions.
11.1. Allocation of Costs and Expenses. Except as provided in this
Section, each party hereto shall pay its own fees and expenses, including
without limitation the fees and expenses of its own counsel and its own
accountants and tax advisers, incurred in connection with this Agreement and the
transactions contemplated thereby. Each party hereto shall also pay the fees and
expenses which it is deemed to have incurred by virtue of the next sentence of
this Section. For purposes of this Section, (i) the cost of printing and
delivering the proxy statement and other material to be transmitted to
shareholders of the Company shall be deemed to be incurred on behalf of the
- 41 -
Company, (ii) the cost of printing and delivering the proxy statement or
information statement and other materials to be transmitted to shareholders of
Valley shall be deemed to be incurred on behalf of Valley, and (iii) the cost of
registering under federal and state securities laws the stock of Zions Bancorp
to be received by the shareholders of the Company shall be deemed to be incurred
on behalf of Zions Bancorp, and (iv) the cost of procuring the regulatory
approvals, orders, and waivers described in sections 2.3, 2.4, 2.5, and 2.6
shall be deemed to be incurred on behalf of Zions Bancorp.
11.2. Mutual Cooperation. Subject to the terms and conditions herein
provided, each party shall use its best efforts, and shall cooperate fully with
the other party, in: (a) carrying out the provisions of this Agreement, (b)
expeditiously making all filings and obtaining all necessary governmental
approvals, and (c) expeditiously executing and delivering, or causing to be
executed and delivered, such governmental notifications and additional documents
and instruments and doing or causing to be done all additional things necessary,
proper, or advisable under applicable law to consummate and make effective the
transactions contemplated hereby. Each party shall promptly provide to the other
party or parties not affiliated with it a copy of the publicly available portion
of each substantive regulatory application, notice, or waiver request it shall
file with any regulatory authority in connection with the transactions
contemplated by this Agreement and a copy of the publicly available portion of
each substantive item of correspondence between it and any regulatory authority
with whom such an application, notice, or waiver request has been filed,
provided that the correspondence relates primarily to such application, notice,
or waiver request. Each party shall promptly apprise the other party of material
developments in connection with the processing of such applications, notice, and
waiver requests that are likely to affect the date of receipt of any approval,
consent, or waiver required in connection with the transactions contemplated by
this Agreement.
11.3. Form of Public Disclosures. Zions Bancorp and the Company shall
mutually agree in advance upon the form and substance of all public disclosures
concerning this Agreement and the transactions contemplated hereby.
11.4. Confidentiality. Zions Bancorp, Val Cor, Valley, the Company, the
Bank, and their respective subsidiaries shall use all information that each
obtains from the other pursuant to this Agreement solely for the effectuation of
the transactions contemplated by this Agreement or for other purposes consistent
with the intent of this Agreement. Neither Zions Bancorp, Val Cor, Valley, the
Company, the Bank, nor their respective subsidiaries shall use any of such
information for any other purpose, including, without limitation, the
competitive detriment of any other party. Zions Bancorp, Val Cor, and Valley, on
the one hand, and the Company and the Bank, on the other hand, shall maintain as
strictly confidential all information each of them learns from the other and
shall, at any time, upon the request of the other, return promptly to it all
documentation provided by it or made available to third parties. Each of the
parties may disclose such information to its respective affiliates, counsel,
accountants, tax advisers, and consultants. The confidentiality agreement
contained in this Section 11.4 shall remain operative and in full force and
effect, and shall survive the termination of this Agreement.
- 42 -
11.5. Claims of Brokers.
(a) Each of the Company and the Bank shall indemnify, defend, and
hold Zions Bancorp, Val Cor, and Valley harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its or his acts in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or him or on its
or his behalf with respect to Zions Bancorp, Val Cor, or Valley.
(b) Each of Zions Bancorp, Val Cor, and Valley shall indemnify,
defend, and hold the Company and the Bank harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its acts in connection with any of the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or on its behalf
with respect to the Company or the Bank.
11.6. Information for Applications and Registration Statement.
(a) Each party represents and warrants that all information
concerning it which is included in any statement and application (including the
Registration Statement) made to any governmental agency in connection with the
transactions contemplated by this Agreement shall not, with respect to such
party, omit any material fact required to be stated therein or necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading. The party so representing and warranting will indemnify, defend,
and hold harmless the other, each of its directors and officers, each
underwriter and each person, if any, who controls the other within the meaning
of the Securities Act, for, from and against any and all losses, claims, suits,
damages, expenses, or liabilities to which any of them may become subject under
applicable laws (including, but not limited to, the Securities Act and the
Exchange Act) and rules and regulations thereunder and will reimburse them for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any actions whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any such application or statement 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 in order to make the statements
therein not misleading, but only insofar as any such statement or omission was
made in reliance upon and in conformity with information furnished in writing by
the representing and warranting party expressly for use therein. Each party
agrees at any time upon the request of the other to furnish to the other a
written letter or statement confirming the accuracy of the information contained
in any proxy statement, registration statement, report, or other application or
statement, and confirming that the information contained in such document was
furnished expressly for use therein or, if such is not the case, indicating the
inaccuracies contained in such document or draft or indicating the
- 43 -
information not furnished expressly for use therein. The indemnity agreement
contained in this Section 11.6(a) shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any of the other
parties, and shall survive the termination of this Agreement or the consummation
of the transactions contemplated thereby.
(b) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement contained in Section 11.6(a) of
this Agreement is for any reason held by a court of competent jurisdiction to be
unenforceable as to any or every party, then the parties in such circumstances
shall contribute to the aggregate losses, claims, damages and liabilities
(including any investigation, legal and other expenses incurred in connection
with, and any amounts paid in settlement of, any action, suit or proceeding or
any claims asserted) to which any party may be subject in such proportion as the
court of law determines based on the relative fault of the parties.
11.7. Standard of Materiality.
(a) For purposes of Sections 4, 6, and 7 of this Agreement, the
terms "material" and "materially," when used with reference to items normally
expressed in dollars, shall be deemed to refer to amounts individually and in
the aggregate in excess of 3 percent of the shareholders' equity of the Company
as of September 30, 1997, as determined in accordance with generally accepted
accounting principles.
(b) For purposes of Sections 5 and 8 of this Agreement, the terms
"material" and "materially," when used with reference to items normally
expressed in dollars, shall be deemed to refer to amounts individually and in
the aggregate in excess of 3 percent of the shareholders' equity of Zions
Bancorp as of September 30, 1997, as determined in accordance with generally
accepted accounting principles.
(c) For other purposes and, notwithstanding subsections (a) and (b)
of this section 11.7, when used anywhere in this Agreement with explicit
reference to any of the federal securities laws or to the Registration
Statement, the terms "material" and "materially" shall be construed and
understood in accordance with standards of materiality as judicially determined
under the federal securities laws.
11.8. Covenants of Zions Bancorp.
(a) From the date hereof to the Effective Date, Zions Bancorp
shall, contemporaneously with the filing with the SEC of any periodic or current
report pursuant to section 13 of the Exchange Act, deliver a copy of such report
to the Company.
(b) Following the Effective Date neither Val Cor nor Valley will
take any action to abrogate or diminish any right accorded under the articles of
incorporation, bylaws, or resolutions of the board of directors of the Company
or the Bank as they existed immediately prior to the
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Effective Date to any person who, on or prior to the Effective Date, was a
director or officer of the Company or the Bank to indemnification from or
against losses, expenses, claims, demands, damages, liabilities, judgments,
fines, penalties, costs, expenses (including without limitation reasonable
attorneys fees) and amounts paid in settlement pertaining to or incurred in
connection with any threatened or actual action, suit, claim, or proceeding
(whether civil, criminal, administrative, arbitration, or investigative) arising
out of events, matters, actions, or omissions occurring on or prior to the
Effective Date. To the extent not provided by the foregoing, following the
Effective Date and to the extent permitted by law, all rights to such
indemnification accorded under the articles of incorporation, bylaws, and
resolutions of the board of directors of the Company or the Bank to any person
who, on or prior to the Effective Date, was a director or officer of the Company
or the Bank shall survive the Effective Date and, following the Holding Company
Merger and the Bank Consolidation, to the extent permitted by law, Val Cor and
Valley will honor such obligations in accordance with their terms with respect
to events, acts, or omissions occurring prior to the Effective Date.
11.9. Adjustments for Certain Events. Anything in this agreement to the
contrary notwithstanding, all prices per share and exchange ratios referred to
in this Agreement shall be appropriately adjusted to account for stock
dividends, split-ups, mergers, recapitalizations, combinations, conversions,
exchanges of shares or the like, but not for normal and recurring cash dividends
declared or paid in a manner consistent with the established practice of the
payer.
11.10. Stock Repurchases. The Company and the Bank acknowledge that from
time to time Zions Bancorp repurchases shares of its common stock in the open
market in accordance with market conditions. Nothing in this Agreement shall be
construed to abridge the right of Zions Bancorp to continue to do so in
compliance with Exchange Act rules and regulations and pursuant to advice of
independent securities counsel for Zions Bancorp.
11.11. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.
11.12. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to their commitments to one
another and their undertakings vis-a-vis one another on the subject matter
hereof. Any previous agreements or understandings among the parties regarding
the subject matter hereof are merged into and superseded by this Agreement.
Nothing in this Agreement express or implied is intended or shall be construed
to confer upon or to give any person, other than Zions Bancorp, Val Cor, Valley,
the Company, the Bank, and their respective shareholders, any rights or remedies
under or by reason of this Agreement.
- 45 -
11.13. Survival of Representations, Warranties, and Covenants. The
respective representations, warranties, and covenants of each party to this
Agreement are hereby declared by the other parties to have been relied on by
such other parties and shall survive the Effective Date. Each party shall be
deemed to have relied upon each and every representation and warranty of the
other parties regardless of any investigation heretofore or hereafter made by or
on behalf of such party.
11.14. Section Headings. The section and subsection headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.
11.15. Notices. All notices, consents, waivers, or other communications
which are required or permitted hereunder shall be in writing and deemed to have
been duly given if delivered personally or by messenger, transmitted by telex or
telegram, by express courier, or sent by registered or certified mail, return
receipt requested, postage prepaid. All communications shall be addressed to the
appropriate address of each party as follows:
If to Zions Bancorp, Val Cor, or Valley:
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
With a required copy to:
Xxxxx X. Xxxxxx, Esq.
Duane, Morris & Heckscher LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
- 46 -
If to the Company or the Bank:
SBT Bankshares, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
Chairman, President and Chief Executive Officer
With a required copy to:
Xxxx X. Xxxxxx, Esq.
XxXxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
All such notices shall be deemed to have been given on the date
delivered, transmitted, or mailed in the manner provided above.
11.16. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah to be the proper jurisdiction and venue
for any suit or action arising out of this Agreement. Each of the parties
consents to personal jurisdiction in such venue for such a proceeding and agrees
that it may be served with process in any action with respect to this Agreement
or the transactions contemplated thereby by certified or registered mail, return
receipt requested, or to its registered agent for service of process in the
state of Utah. Each of the parties irrevocably and unconditionally waives and
agrees, to the fullest extent permitted by law, not to plead any objection that
it may now or hereafter have to the laying of venue or the convenience of the
forum of any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.
11.17. Knowledge of a Party. References in this Agreement to the
knowledge of a party shall mean the knowledge possessed by any of such parties
or the present executive officers of such party including, without limitation,
information which is or has been in the books and records of such party.
11.18. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.
- 47 -
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ZIONS BANCORPORATION
Attest: By:
----------------------------- ----------------------------
Xxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
Senior Vice President President and
and Secretary Chief Executive Officer
VAL COR BANCORPORATION, INC.
Attest: By:
----------------------------- ----------------------------
Xxxxx X. Xxxxxxx
President and
Chief Executive Officer
VALLEY NATIONAL BANK OF XXXXXX
Attest: By:
----------------------------- ----------------------------
R. Xxxxx Xxxxxxxx
Executive Vice President and
Chief Executive Officer
- 48 -
SBT BANKSHARES, INC.
Attest: By:
----------------------------- ----------------------------
Xxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
STATE BANK AND TRUST OF COLORADO
SPRINGS
Attest: By:
----------------------------- ----------------------------
Xxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
- 49 -
------------------------------------------------
)
State of Utah )
) ss.
County of Salt Lake )
)
------------------------------------------------
On this nineteenth day of December, 1997, before me personally
appeared Xxxxxx X. Xxxxxxx, to me known to be the President and Chief Executive
Officer of Zions Bancorporation, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed is the corporate seal of said corporation.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
--------------------------------
Notary Public
- 50 -
------------------------------------------------
)
State of Colorado )
) ss.
County of Montezuma )
)
------------------------------------------------
On this nineteenth day of December, 1997, before me personally
appeared Xxxxx X. Xxxxxxx, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and R. Xxxxx Xxxxxxxx, to me known to
be the Executive Vice President and Chief Executive Officer of Valley National
Bank of Xxxxxx, and acknowledged said instrument to be the free and voluntary
act and deed of each of said corporations, for the uses and purposes therein
mentioned, and on oath each stated that he was authorized to execute said
instrument and that the respective seals affixed are the respective corporate
seals of said corporations.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
--------------------------------
Notary Public
- 51 -
------------------------------------------------
)
State of Colorado )
) ss.
County of El Paso )
)
------------------------------------------------
On this nineteenth day of December, 1997, before me personally
appeared Xxxx X. Xxxxxxx, to me known to be the Chairman, President and Chief
Executive Officer of SBT Bankshares, Inc. and the Chairman, President and Chief
Executive Officer of State Bank and Trust of Colorado Springs, and acknowledged
said instrument to be the free and voluntary act and deed of each of said
corporations, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument and that the seals affixed are
the respective corporate seals of said corporations.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
--------------------------------
Notary Public
- 52 -
The undersigned members of the Board of Directors of SBT Bankshares,
Inc. (the "Company"), acknowledging that Zions Bancorporation ("Zions Bancorp")
has relied upon the action heretofore taken by the board of directors in
entering into the Agreement, and has required the same as a prerequisite to
Zions Bancorp's execution of the Agreement, do individually and as a group
agree, subject to their fiduciary duties to shareholders, to support the
Agreement and to recommend its adoption by the other shareholders of the
Company.
The undersigned do hereby, individually and as a group, until the
Effective Date or termination of the Agreement, further agree to refrain from
soliciting or, subject to their fiduciary duties to shareholders, negotiating or
accepting any offer of merger, consolidation, or acquisition of any of the
shares or all or substantially all of the assets of the Company or State Bank
and Trust of Colorado Springs.
--------------------------------- --------------------------------
--------------------------------- --------------------------------
--------------------------------- --------------------------------
--------------------------------- --------------------------------
- 53 -
SCHEDULE 1.8
Xxxx Family Limited Liability Corporation
Xxxx Xxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx
Xxx Xxxxxxxxx
Xxxx X. Xxxxxxx
Ashton Xxxxx Xxxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
EXHIBIT I
HOLDING COMPANY MERGER AGREEMENT
AGREEMENT OF MERGER
This Agreement of Merger is made and entered into as of
[__________________], 1997, between VAL COR BANCORPORATION, INC. ("Val Cor"), a
corporation organized under the laws of the State of Colorado, and SBT
BANKSHARES, INC. (the "Company"), a corporation organized under the laws of the
State of Colorado. Val Cor and the Company are hereinafter sometimes
individually called a "Constituent Corporation" and collectively called the
"Constituent Corporations."
RECITALS
Val Cor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [_______________], 1998,
the authorized capital stock of Val Cor consisted of [________] shares of Common
Stock, [_______] par value, of which [_________] shares were issued and
outstanding; no shares of capital stock were held in its treasury on such date.
All of the capital stock of Val Cor is owned of record and beneficially by Zions
Bancorporation, a corporation organized under the laws of the State of Utah
("Zions Bancorp").
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado. As of [_____________]
1998, the authorized capital stock of the Company consisted of [_________]
shares of Company Common Stock, [______] par value (the "Company Common Stock"),
of which [_________] shares were issued and outstanding; no shares of capital
stock were held in its treasury on such date.
Val Cor and the Company have entered into an Agreement and Plan of
Reorganization, dated December 19, 1997 (the "Plan of Reorganization"), setting
forth certain representations, warranties, and agreements in connection with the
transactions therein and herein contemplated, which contemplates the merger of
the Company with and into Val Cor (the "Merger") in accordance with this
Agreement of Merger (the "Agreement").
The Boards of Directors of each of Val Cor and the Company deem the
Merger advisable and in the best interests of each corporation and its
stockholders. The Boards of Directors of each of Val Cor and the Company, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of Val Cor and the Company, by resolutions duly adopted,
have approved this Agreement. The Boards of Directors of each of Val Cor and the
Company have directed that this Agreement, and authorization for the
transactions contemplated hereby, be submitted to stockholders of Val Cor and
the Company respectively for approval.
At the Effective Date (as defined in Section 1.1 below) shares of
Company Common Stock shall be converted into the right to receive shares of the
common stock of Zions Bancorp, no par value (the "Zions Bancorp Stock"), as
provided herein.
In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:
ARTICLE I
1.1. Merger of the Company into Val Cor. The Company shall be merged
with and into Val Cor on the date and at the time to be specified in the
Articles of Merger to be filed with the Secretary of State of the State of
Colorado pursuant to section 0-000-000 of the Colorado Business Corporation Act
(such date and time being referred to herein as the "Effective Date"), provided
that the necessary shareholder approvals have been received.
1.2. Effect of the Merger. At the Effective Date:
(a) The Company and Val Cor shall be a single corporation, which
shall be Val Cor. Val Cor is hereby designated as the surviving corporation in
the Merger and is hereinafter sometimes called the "Surviving Corporation."
(b) The separate existence of the Company shall cease.
(c) The Surviving Corporation shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a corporation organized under the Colorado Business
Corporation Act.
(d) The Surviving Corporation shall thereupon and thereafter
possess all of the rights, privileges, immunities, and franchises, of a public
as well as of a private nature, of each of the Constituent Corporations; and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares and all other choses in action, and all and
every other interest of and belonging to or due to each of the Constituent
Corporations shall be taken and deemed to be transferred to and vested in the
Surviving Corporation without further act or deed; and the title to any real
estate, or any interest therein, vested in either of the Constituent
Corporations shall not revert or be in any way impaired by reason of the Merger.
(e) The Surviving Corporation shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Corporations; and any claim existing or action or proceeding pending by or
against either of the Constituent Corporations may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted in
its place.
- 2 -
The Surviving Corporation expressly assumes and agrees to perform all of the
Company's liabilities and obligations. Neither the rights of creditors nor any
liens upon the property of either Constituent Corporation shall be impaired by
the Merger.
(f) The Articles of Incorporation of Val Cor as they exist
immediately prior to the Effective Date shall be the Articles of Incorporation
of the Surviving Corporation until later amended pursuant to Colorado law.
(g) At the Effective Date and until surrendered for exchange and
payment, each outstanding stock certificate which, prior to the Effective Date,
represents shares of Company Common Stock shall, without further action, cease
to be an issued and existing share and shall be converted into a right to
receive from Zions Bancorp, and shall for all purposes represent the right to
receive, upon surrender of the certificate representing such shares, the number
of shares of Zions Bancorp Stock specified in Article III; provided that, with
respect to any matters relating to stock certificates representing Company
Common Stock, Zions Bancorp may rely conclusively upon the record of
stockholders maintained by the Company containing the names and addresses of the
holders of record of the Company's Common Stock at the Effective Date.
1.3. Acts to Carry Out This Merger Plan.
(a) The Company and its proper officers and directors shall and
will do all such acts and things as may be necessary or proper to vest, perfect,
or confirm title to such property or rights in Val Cor and otherwise to carry
out the purposes of this Agreement.
(b) If, at any time after the Effective Date, Val Cor shall
consider or be advised that any further assignments or assurances in law or any
other acts are necessary or desirable to (i) vest, perfect, or confirm, of
record or otherwise, in Val Cor its right, title, or interest in or under any of
the rights, properties, or assets of the Company acquired or to be acquired by
Val Cor as a result of, or in connection with, the Merger, or (ii) otherwise
carry out the purposes of this Agreement, the Company and its proper officers
and directors shall be deemed to have granted to Val Cor an irrevocable power of
attorney to execute and deliver all such proper deeds, assignments, and
assurances in law and to do all acts necessary or proper to vest, perfect, or
confirm title to and possession of such rights, properties, or assets in Val Cor
and otherwise to carry out the purposes of this Agreement; and the proper
officers and directors of Val Cor are fully authorized in the name of the
Company or otherwise to take any and all such action.
ARTICLE II
2.1. Capitalization. The authorized shares of capital stock of Val Cor
as of the Effective Date shall be [_______] shares of Common Stock, [_____] par
value.
- 3 -
2.2. Bylaws. The Bylaws of Val Cor as they exist immediately prior to
the Effective Date shall be the Bylaws of Val Cor until later amended pursuant
to Colorado law.
ARTICLE III
3.1. Manner of Converting Shares.
(a) Subject to the terms, conditions, and limitations set forth
herein, upon surrender of his or her certificate or certificates, each holder of
shares of Company Common Stock shall be entitled to receive, in exchange for
each share of Company Common Stock held of record by such stockholder as of the
Effective Date, that number of shares of Zions Bancorp Stock calculated by
dividing the product of the Consideration Number and the Collar Factor by the
sum of the number of shares of Company Common Stock that shall be issued and
outstanding at the Effective Date and the Option Equivalent Number.
(b) As used in paragraph (a) of this section 3.1:
(i) the term "Consideration Number" means 625,000, except
that if the total shareholders equity of the Company at December 31, 1997,
determined in accordance with paragraph (c) of this section 3.1, shall be less
than $5,000,000, then the "Consideration Number" shall be the difference between
625,000 and the number calculated by dividing the difference between $5,000,000
and the total shareholders equity of the Company at December 31, 1997,
determined in accordance with paragraph (c) of this section 3.1, by $40.00;
(ii) if the average (rounded to the nearest xxxxx) of the
last reported sale price or, if no such reported sale takes place, the mean
(unrounded) of the closing bid and asked prices of Zions Bancorp Stock in the
over-the-counter market as such prices are reported by the automated quotation
system of the National Association of Securities Dealers, Inc., or in the
absence thereof by such other source upon which Zions Bancorp and the Company
shall mutually agree, for each of the fifteen trading days ending on the fifth
trading day before the Effective Date (the "Average Closing Price") is:
(A) less than $34.00, the Collar Factor shall be a
fraction the numerator of which is $34.00 and the denominator of which is the
Average Closing Price;
(B) more than $46.00, the Collar Factor shall be a
fraction the numerator of which is $46.00 and the denominator of which is the
Average Closing Price; and
(C) not less than $34.00 and not more than $46.00, the
Collar Factor shall be One;
- 4 -
(iii) the term "Option Equivalent Number" means the number
reached by summing the following values as calculated for each option to
purchase one share of Company Common Stock which is outstanding and unexercised
at the Effective Date: (A) the difference between the Value-Per-Share Factor and
the exercise price of that option (or, if a greater number, zero) divided by (B)
the Value-Per-Share Factor; and
(iv) the term "Value-Per-Share Factor" means a number of
dollars and cents calculated by means of the following equation--
"Value-Per-Share Factor" = ( V + ( O x P )
---------------
( O + S )
--where:
(A) V equals the product of the Consideration Number,
the Collar Factor, and the Average Closing Price;
(B) O equals the number of shares of Company Common
Stock that are subject to a stock option (whether vested or unvested) to be
purchased, which option is outstanding and unexercised at the Effective Date;
(C) P equals the per-share average of the exercise
prices of all stock options (whether vested or unvested) to purchase shares of
Company Common Stock, which options are outstanding and unexercised at the
Effective Date; and
(D) S equals the number of shares of Company Common
Stock that shall be issued and outstanding at the Effective Date.
(c) Total shareholders equity of the Company at December 31, 1997
shall be determined for purposes of paragraph (b) of this section 3.1 in
accordance with generally accepted accounting principles, except that:
(i) the credit to shareholders equity caused by any
undistributed gain, net of taxes, derived from activities or transactions which
are not in the ordinary course of its banking operations (such as, without
limitation, the sale of securities or loans, of capital assets, or of lines of
business, but excluding the sale of securities in connection with the ongoing
securities-sale program carried out by the Company or the Bank with Xxxxxxx
Xxxxx), all of which shall be determined in accordance with generally accepted
accounting principles, occurring between October 1, 1997 and December 31, 1997,
shall be excluded;
- 5 -
(ii) the unrealized gain or loss on available-for-sale
securities of the Company or the Bank, net of tax, which is recorded as an
adjustment to shareholders equity pursuant to Statement of Financial Accounting
Standards No. 115 shall be excluded; and
(iii) the expense, through the Effective Date, net of taxes,
of the investment bankers, consultants, brokers and finders who will have
rendered services to the Company or the Bank through the Effective Date (except
the services of attorneys and accountants rendering services in such capacities)
shall be recognized as an expense of the Company during the period between
October 1, 1997 and December 31, 1997, except to the extent that any of the same
shall have been recognized as an expense of the Company prior to September 30,
1997.
3.2. No Fractional Shares. Zions Bancorp will not issue fractional
shares of its stock. In lieu of fractional shares of Zions Bancorp Stock, if
any, each shareholder of the Company who is entitled to a fractional share of
Zions Bancorp Stock shall receive an amount of cash equal to the product of such
fraction times $40.00. Such fractional share interest shall not include the
right to vote or to receive dividends or any interest thereon.
3.3. Dividends; Interest. No shareholder of the Company will be
entitled to receive dividends on his or her Zions Bancorp Stock until he or she
exchanges his or her certificates representing Company Common Stock for Zions
Bancorp Stock. Any dividends declared on Zions Bancorp Stock (which stock is to
be delivered pursuant to this Agreement) to holders of record on or after the
Effective Date shall be paid to the Exchange Agent (as designated in Section 3.4
of this Agreement) and, upon receipt of the certificates representing shares of
Company Common Stock, the Exchange Agent shall forward to the former
shareholders entitled to receive Zions Bancorp Stock (i) certificates
representing their shares of Zions Bancorp Stock, (ii) dividends declared
thereon subsequent to the Effective Date (without interest) and (iii) the cash
value of any fractional shares determined in accordance with Section 3.2 hereof.
3.4. Designation of Exchange Agent.
(a) The parties of this Agreement hereby designate Zions First
National Bank, a national banking association with its head office located in
Salt Lake City, Utah ("Zions Bank") as Exchange Agent to effect the exchanges
contemplated hereby.
(b) Zions Bancorp will, promptly after the Effective Date, issue
and deliver to Zions Bank the share certificates representing shares of Zions
Bancorp Stock and the cash to be paid to holders of Company Common Stock in
accordance with this Agreement.
3.5. Notice of Exchange. Within five business days after the Effective
Date, Zions Bank shall mail to each holder of one or more certificates formerly
representing Company Common Stock, except to such holders as shall have waived
the notice required by this Section 3.5, a notice specifying the Effective Date
and notifying such holder to surrender his or her certificate or certificates to
Zions Bank for exchange. Such notice shall be mailed to holders by regular mail
at their addresses on the records of the Company.
- 6 -
3.6. Treatment of Stock Options. Each stock option (whether vested or
unvested) to purchase Company Common Stock not exercised prior to the Effective
Date shall automatically be converted into an option to purchase, on the same
terms as the option to purchase Company Common Stock, and with the same dates of
exercisability and of expiration, that number of shares of Zions Bancorp Stock
equal to the number of shares of Company Common Stock which the holder of such
option would be entitled to receive under Section 3.1 of this Agreement had such
option been exercised immediately preceding the Effective Date. The applicable
per-share option price in effect immediately prior to the Effective Date shall
be adjusted to an amount equal to the quotient obtained by dividing that option
price by the number of shares of Zions Bancorp Stock which the holder of one
share of Company Common Stock would be entitled to receive under Section 3.1 of
this Agreement.
ARTICLE IV
4.1. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.
4.2. Section Headings. The section and subsection headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.
4.3. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah to be the proper jurisdiction and venue
for any suit or action arising out of this Agreement. Each of the parties
consents to personal jurisdiction in such venue for such a proceeding and agrees
that it may be served with process in any action with respect to this Agreement
or the transactions contemplated thereby by certified or registered mail, return
receipt requested, or to its registered agent for service of process in the
State of Utah. Each of the parties irrevocably and unconditionally waives and
agrees, to the fullest extent permitted by law, not to plead any objection that
it may now or hereafter have to the laying of venue or the convenience of the
forum of any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.
- 7 -
4.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.
4.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto, provided
that this Agreement may not be amended after the action by shareholders of the
Company in any respect that would prejudice the economic interests of such
Company shareholders, or any of them, except as specifically provided herein or
by like action of such shareholders.
4.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of Val
Cor and the Company at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
VAL COR BANCORPORATION, INC.
Attest: By:
----------------------- ----------------------------
Xxxxx X. Xxxxxxx
President and
Chief Executive Officer
SBT BANKSHARES, INC.
Attest: By:
----------------------- ----------------------------
Xxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
- 8 -
-----------------------------------------
)
State of Colorado )
) ss.
County of Montezuma )
)
-----------------------------------------
On this [__________] day of December, 1997, before me personally
appeared Xxxxx X. Xxxxxxx, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and acknowledged said instrument to be
the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument and that the seal affixed is the corporate seal of said
corporation.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
--------------------------------
Notary Public
- 9 -
-----------------------------------------
)
State of Colorado )
) ss.
County of El Paso )
)
-----------------------------------------
On this [_________] day of December, 1997, before me personally
appeared Xxxx X. Xxxxxxx, to me known to be the Chairman, President and Chief
Executive Officer of SBT Bankshares, Inc., and acknowledged said instrument to
be the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument and that the seal affixed is the corporate seal of said
corporation.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
--------------------------------
Notary Public
- 10 -
EXHIBIT II
BANK CONSOLIDATION AGREEMENT
AGREEMENT OF CONSOLIDATION
This Agreement of Consolidation is made and entered into as of
[____________], 1998, between VALLEY NATIONAL BANK OF XXXXXX ("Valley"), a
national banking association organized under the laws of the United States, and
STATE BANK AND TRUST OF COLORADO SPRINGS (the "Bank"), a banking corporation
organized under the laws of the State of Colorado. Valley and the Bank are
hereinafter sometimes individually called a "Constituent Association" and
collectively called the "Constituent Associations."
RECITALS
Valley is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. As of
[____________], 1998, the authorized capital stock of Valley consisted of
600,000 shares of Common Stock, $5.00 par value ("Valley Common Stock"), of
which 354,000 shares were issued and outstanding; no shares of capital stock
were held in its treasury on such date.
The Bank is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [_____________], 1998,
the authorized capital stock of the Bank consisted of [________] shares of Bank
Common Stock, [_______] par value (the "Bank Common Stock"), of which [________]
shares were issued and outstanding; no shares of capital stock were held in its
treasury on such date.
Valley and the Bank have entered into an Agreement and Plan of
Reorganization, dated December 19, 1997 (the "Plan of Reorganization"), setting
forth certain representations, warranties, and agreements in connection with the
transactions therein and herein contemplated, which contemplates the
consolidation of the Bank with Valley into a new national banking association
(the "Consolidated Association") (the consolidation of the Bank and Valley into
the Consolidated Association hereinafter referred to as the "Bank
Consolidation") in accordance with this Agreement of Consolidation (the
"Agreement").
The Boards of Directors of each of Valley and the Bank deem the
Consolidation advisable and in the best interests of each association and its
stockholders. The Boards of Directors of each of Valley and the Bank, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of Valley and the Bank, by resolutions duly adopted, have
approved this Agreement. The Boards of Directors of each of Valley and the Bank
have directed that this Agreement, and authorization for the transactions
contemplated hereby, be submitted to stockholders of Valley and the Bank
respectively for approval.
At the Effective Date (as defined in Section 1.1 below) shares of Bank
Common Stock and Valley Common Stock shall be converted into the right to
receive shares of the common stock of Consolidated Association, $5.00 par value
(the "Consolidated Association Common Stock"), as provided herein.
In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:
ARTICLE I
1.1. Consolidation of the Bank with Valley. The Bank shall be
consolidated with Valley into the Consolidated Association the date and at the
time to be specified in the Articles of Consolidation to be filed with the
Comptroller of the Currency pursuant to the National Bank Act (such date and
time being referred to herein as the "Effective Date"), provided that the
necessary shareholder approvals have been received.
1.2. Effect of the Merger. At the Effective Date:
(a) The Bank and Valley shall be consolidated into a single
association, which shall be Consolidated Association under a new national bank
charter issued by the Comptroller of the Currency pursuant to the National Bank
Act
(b) The separate existence of the Bank and Valley shall
cease.
(c) The currently outstanding 354,000 shares of Valley Common
Stock shall be canceled and immediately converted into the right to receive,
subject to the terms and conditions set forth hereinafter, shares in the
Consolidated Association. Each holder of the shares of Valley Common Stock shall
be entitled to receive, in exchange for each share of Valley Common Stock held
of record by such shareholder as of the Effective Date, one share of
Consolidated Association Common Stock.
(d) The currently outstanding [_______] shares of Bank Common
Stock shall be canceled and immediately converted into the right to receive,
subject to the terms and conditions set forth hereinafter, shares in the
Consolidated Association. Each holder of shares of Bank Common Stock shall be
entitled to receive, in exchange for each share of Bank Common Stock held of
record by such stockholder as of the Effective Date, that number of shares of
Consolidated Association Common Stock calculated by, first, dividing the
tangible book value of Valley by the number of shares of Valley Common Stock
that shall be issued and outstanding at the Effective Date, and second, dividing
the tangible book value of the Bank by the number so reached, and third,
dividing the number so reached by the total number of shares of Bank Common
Stock that shall be issued and outstanding at the Effective Date.
- 2 -
(e) Consolidated Association will not issue fractional shares
of its stock. In lieu of fractional shares of Consolidated Association Common
Stock, if any, each shareholder of the Bank or of Valley who is entitled to a
fractional share of Consolidated Association Common Stock shall receive an
amount of cash equal to the product of such fraction times the tangible book
value per share of Valley Common Stock immediately preceding the Effective Date.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.
(f) The Consolidated Association shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a national banking association organized under the
National Bank Act.
(g) The Consolidated Association shall thereupon and
thereafter possess all of the rights, privileges, immunities, and franchises, of
a public as well as of a private nature, of each of the Constituent
Associations; and all property, real, personal and mixed, and all debts due on
whatever account, including subscriptions to shares and all other choses in
action, and all and every other interest of and belonging to or due to each of
the Constituent Associations shall be taken and deemed to be transferred to and
vested in the Consolidated Association without further act or deed; and the
title to any real estate, or any interest therein, vested in either of the
Constituent Associations shall not revert or be in any way impaired by reason of
the Consolidation.
(h) The Consolidated Association shall thenceforth be
responsible and liable for all the liabilities and obligations of each of the
Constituent Associations; and any claim existing or action or proceeding pending
by or against either of the Constituent Associations may be prosecuted as if the
Consolidation had not taken place, or the Consolidated Association may be
substituted in its place. The Consolidated Association expressly assumes and
agrees to perform all of the liabilities and obligations of the Consolidated
Association. Neither the rights of creditors nor any liens upon the property of
either Constituent Association shall be impaired by the Consolidation.
(i) The name of the Consolidated Association shall be
"[__________]."
(j) The business of the Consolidated Association shall be
conducted at its main office at [________] and at its legally established
branches.
(k) The authorized shares of capital stock of the
Consolidated Association shall be [_______] shares of Common Stock, $5.00 par
value.
(l) At and after the Effective Date, the Board of Directors
of the Consolidated Association will be composed of the following persons:
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[______________________]
[______________________]
[______________________]
[______________________]
[______________________]
[______________________]
[______________________]
[______________________]
The Board of Directors of the Consolidated Association as so
constituted shall serve until the next annual meeting or until such time as
their successors have been elected and have qualified.
(m) At and after the Effective Date, the Articles of Association of
the Consolidated Association shall read in their entirety as set forth in
Attachment A hereto until later amended pursuant to the laws of the United
States and the provisions hereof.
(n) At and after the Effective Date, the Bylaws of the Consolidated
Association shall read in their entirety as set forth in Attachment B hereto
until later amended pursuant to the laws of the United States and the provisions
thereof.
1.3. Acts to Carry Out This Consolidation Plan.
(a) The Bank and its proper officers and directors and Valley and
its proper officers and directors shall and will do all such acts and things as
may be necessary or proper to vest, perfect, or confirm title to such property
or rights in the Consolidated Association and otherwise to carry out the
purposes of this Agreement.
ARTICLE II
2.1. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.
2.2. Section Headings. The section and subsection headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.
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2.3. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah to be the proper jurisdiction and venue
for any suit or action arising out of this Agreement. Each of the parties
consents to personal jurisdiction in such venue for such a proceeding and agrees
that it may be served with process in any action with respect to this Agreement
or the transactions contemplated thereby by certified or registered mail, return
receipt requested, or to its registered agent for service of process in the
State of Utah. Each of the parties irrevocably and unconditionally waives and
agrees, to the fullest extent permitted by law, not to plead any objection that
it may now or hereafter have to the laying of venue or the convenience of the
forum of any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.
2.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.
2.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto.
2.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of
Valley and the Bank at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
VALLEY NATIONAL BANK OF XXXXXX
Attest: By:
------------------------- -----------------------------
R. Xxxxx Xxxxxxxx
Executive Vice President and
Chief Executive Officer
STATE BANK AND TRUST OF COLORADO
SPRINGS
Attest: By:
------------------------- -----------------------------
Xxxx X. Xxxxxxx
Chairman, President and
Chief Executive Officer
- 6 -
--------------------------------------------
)
State of Colorado )
) ss.
County of Montezuma )
)
--------------------------------------------
On this [____________] day of [____________], 1998, before me
personally appeared R. Xxxxx Xxxxxxxx, to me known to be the Executive Vice
President and Chief Executive Officer of Valley National Bank of Xxxxxx, and
acknowledged said instrument to be the free and voluntary act and deed of said
association, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument and that the seal affixed is
the corporate seal of said association.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
--------------------------------
Notary Public
- 7 -
--------------------------------------------
)
State of Colorado )
) ss.
County of El Paso )
)
--------------------------------------------
On this [____________] day of [___________], 1998, before me
personally appeared Xxxx X. Xxxxxxx, to me known to be the Chairman, President
and Chief Executive Officer of State Bank and Trust of Colorado Springs, and
acknowledged said instrument to be the free and voluntary act and deed of said
association, for the uses and purposes therein mentioned, and on oath stated
that he was authorized to execute said instrument and that the seal affixed is
the corporate seal of said association.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
------------------------------------
Notary Public
- 8 -
ATTACHMENT A
ARTICLES OF ASSOCIATION
[______________________]
Denver, Colorado
For the purpose of organizing an association to carry on the business
of banking under the laws of the United States, the undersigned does enter into
the following Articles of Association:
FIRST. The title of this association shall be [________________].
SECOND. The main office of the association shall be in Denver, County
of Denver, State of Colorado. The general business of the association shall be
conducted at its main office and its branches.
THIRD. The board of directors of this association shall consist of not
less than five nor more than twenty-five shareholders, the exact number to be
fixed and determined from time to time by resolution of a majority of the full
board of directors or by resolution of the shareholders at any annual or special
meeting thereof. Each director, during full term of his or her directorship,
shall own a minimum of $1,000 aggregate par value of stock of this association
or a minimum par market value or equity interest of $1,000 of stock in the bank
holding company controlling this association. Any vacancy in the board of
directors may be filled by action of the directors or the shareholders of the
association.
FOURTH. There shall be an annual meeting of the shareholders to elect
directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place the
board of directors may designate, on the day of each year specified therefor in
the bylaws, but if no election is held on that day, it may be held on any
subsequent day according to such lawful rules as may be prescribed by the board
of directors.
Nominations for election to the board of directors may be made by the
board of directors or by any stockholder of any outstanding class of capital
stock of the bank entitled to vote for election of directors. Nominations other
than those made by or on behalf of the existing bank management shall be made in
writing and be delivered or mailed to the president of the bank and to the
Comptroller of the Currency, Washington, D.C., not less than 14 days nor more
than 50 days prior to any meeting of stockholders called for the election of
directors, provided, however, that if less than 21 days notice of the meeting is
given to shareholders, such nomination shall be mailed or delivered to the
president of the bank and to the Comptroller of the Currency not later than the
close of business on the seventh day following the day on which the notice of
meeting was mailed. Such notification shall contain the following information to
the extent known to the notifying shareholder:
o The name and address of each proposed nominee.
o The principal occupation of each proposed nominee.
o The total number of shares of capital stock of the bank that
will be voted for each proposed nominee.
o The name and residence address of the notifying shareholder.
o The number of shares of capital stock of the bank owned by
the notifying shareholder. Nominations not made in accordance
herewith may, in his/her discretion, be disregarded by the
chairperson of the meeting, and upon his/her instructions,
the vote tellers may disregard all votes cast for each such
nominee.
FIFTH. The authorized amount of capital stock of this association
shall be [_________] shares of common stock of the par value of Five Dollars
($5.00) each; but said capital stock may be increased or decreased from time to
time, according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the
association shall have any pre-emptive or preferential right of subscription to
any shares of any class of stock of the association, whether now or hereafter
authorized, or to any obligations convertible into stock of the association,
issued or sold, nor any right of subscription to any thereof other than such, if
any, as the board of directors, in its discretion, may from time to time
determine and at such price as the board of directors may from time to time fix.
If the capital stock is increased by a stock dividend, each
shareholder shall be entitled to his proportionate amount of such increase in
accordance with the number of shares of capital stock owned by him at the time
the increase is authorized by the shareholders, unless another time subsequent
to the date of the shareholders' meeting is specified in a resolution adopted by
the shareholders at the time the increase is authorize.
The association, at any time and from time to time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of the
shareholders.
SIXTH. The board of directors shall appoint one of its members
president of this association, who shall be chairperson of the board, unless the
board appoints another director to be the chairperson. The board of directors
shall have the power to appoint one or more vice chairpersons and vice
presidents; and to appoint a cashier and such other officers and employees as
may be required to transact the business of this association.
The board of directors shall have the power to:
o Define the duties of the officers and employees of the
association.
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o Fix the salaries to be paid to the officers and employees.
o Dismiss officers and employees.
o Require bond from officers and employees and to fix the
penalty thereof.
o Regulate the manner in which any increase of the capital of
the association shall be made.
o Manage and administer the business and affairs of the
association.
o Make all bylaws that it may be lawful for the board to make.
o Generally to perform all acts that are legal for a board of
directors to perform.
SEVENTH. The board of directors shall have the power to change the
location of the main office to any other place within the limits of Denver,
Colorado, without the approval of the shareholders, and shall have the power to
establish or change the location of any branch or branches of the association to
any other location, without the approval of the shareholders.
EIGHTH. The corporate existence of this association shall continue
until terminated according to the laws of the United States.
NINTH. The board of directors of this association, or any one or more
shareholders owning, in the aggregate, not less than 25 percent of the stock of
this association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States or the bylaws of the
association, a notice of the time, place, and purpose of every annual and
special meeting of the shareholders shall be given by first-class mail, postage
prepaid, mailed at least 10 days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
association.
TENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.
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IN WITNESS WHEREOF, I have herewith set my hand this _______ day of
______, 1998.
VAL COR BANCORPORATION, INC.
By:
---------------------------------
Xxxxx X. Xxxxxxx
President and
Chief Executive Officer
ATTEST: ___________________________
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ATTACHMENT B
BYLAWS OF
[____________________]
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1.1. Annual Meeting. The regular annual meeting of the
shareholders to elect directors and transact whatever other business may
properly come before the meeting, shall be held at the main office of the
association, [ ], City of Denver, State of Colorado, or such other place as the
board of directors may designate, at 3:00 p.m. local time on the third Tuesday
in February of each year, or if that date falls on a legal holiday in the State
of Colorado, on the next following banking day or at such other time as may be
determined by the board of directors of the association. Notice of the meeting
shall be mailed, postage prepaid, at least 10 days and no more than 60 days
prior to the date thereof, addressed to each shareholder at his or her address
appearing on the books of the association, unless notice of the meeting is
waived by such shareholder. If, for any cause, an election of directors is not
made on that date, or in the event of a legal holiday, on the next following
banking day, the board of directors shall order the election to be held on some
subsequent date as soon thereafter as practicable, according to the provisions
of law; and notice thereof shall be given in the manner provided for the annual
meeting. If, for any cause, the directors fail to fix the date, shareholders
representing two thirds of the shares of the association may fix the date.
Section 1.2. Special Meetings. Except as otherwise specifically
provided by statute, special meetings of the shareholders may be called for any
purpose at any time by the board of directors or by any one or more shareholders
owning, in the aggregate, not less than 25 percent of the stock of the
association. Every such special meeting, unless otherwise provided by law, shall
be called by mailing, postage prepaid, not less than 10 days prior to the date
fixed for the meeting, to each shareholder at the address appearing on the books
of the association a notice stating the purpose of the meeting, unless notice of
the meeting is waived by such shareholder.
The board of directors may fix a record date for determining
shareholders entitled to notice and to vote at any meeting. The record date for
determining shareholders entitled to demand a special meeting is the date the
first shareholder signs a demand for the meeting describing the purpose or
purposes for which it is to be held.
A special meeting may be called by the shareholders of the association
to amend the bylaws irrespective of whether the bylaws may be amended by the
board in the absence of shareholder approval.
Section 1.3. Nominations of Directors. Nominations for election to the
board of directors may be made by the board of directors or by any stockholder
of any outstanding class of capital stock of the association entitled to vote
for the election of directors. Nominations, other than those made by or on
behalf of the existing management of the association, shall be made in writing
and shall be delivered or mailed to the president of the association and to the
Comptroller of the Currency, Washington, D.C., not less than 14 days nor more
than 50 days prior to any meeting of shareholders called for the election of
directors, provided, however, that if less than 21 days' notice of the meeting
is given to shareholders, such nomination shall be mailed or delivered to the
president of the association and to the Comptroller of the Currency not later
than the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder:
(1) The name and address of each proposed nominee.
(2) The principal occupation of each proposed nominee.
(3) The total number of shares of capital stock of the association
that will be voted for each proposed nominee.
(4) The name and residence address of the notifying shareholder.
(5) The number of shares of capital stock of the association owned by
the notifying shareholder.
Nominations not made in accordance wherewith may, in his or her
discretion, be disregarded by the chairman of the meeting, and upon his or her
instructions, the vote tellers may disregard all votes cast for each such
nominee.
Section 1.4. Judges of Election. Every election of directors shall be
managed by three judges, who shall be appointed from among the shareholders by
the board of directors. The judges of election shall hold and conduct the
election at which they are appointed to serve. After the election, they shall
file with the cashier a certificate signed by them, certifying the result
thereof and the names of the directors elected. The judges of election, at the
request of the chairman of the meeting, shall act as tellers of any other vote
by ballot taken at such meeting, and shall certify the results thereof.
Section 1.5. Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and filed with the records of the meeting. Proxies with rubber
stamped facsimile signatures may be used and unexecuted proxies may be counted
upon receipt of a confirming telegram from the shareholder. Proxies meeting the
above requirements submitted at any time during a meeting shall be accepted.
- 2 -
Section 1.6. Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law, or by the shareholders or
directors pursuant to Section 9.2, but less than a quorum may adjourn any
meeting, from time to time, and the meeting may be held, as adjourned, without
further notice. A majority of the votes cast shall decide every question or
matter submitted to the shareholders at any meeting, unless otherwise provided
by law or by the articles of association, or by the shareholders or directors
pursuant to Section 9.2.
Section 1.7. Action Without a Meeting. Any action permitted or
required to be taken at a meeting of the stockholders, or of a class of
stockholders, may be taken without a meeting, if a consent or consents in
writing setting forth the action so taken shall be signed by all of the
stockholders who would be entitled to vote at a meeting for such purpose and
shall be filed with the secretary of the association.
Section 1.8. Bank Holding Company as Sole Shareholder. In the event
that all shares of the association are owned by a bank holding company, such
shareholder shall be deemed hereunder to waive the receipt of notice of the
annual meeting and any special meeting of shareholders of the association, or of
any adjournment thereof, otherwise required pursuant to Sections 1.1 and 1.2
hereof, respectively, without further action of any kind by such shareholder or
the association.
ARTICLE II
DIRECTORS
Section 2.1. Board of Directors. The board of directors (hereinafter
referred to as the "board") shall have the power to manage and administer the
business and affairs of the association. Except as expressly limited by law, all
corporate powers of the association shall be vested in and may be exercised by
the board.
Section 2.2. Number. The board shall consist of not less than five nor
more than 25 shareholders, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full board or by resolution of a majority of the shareholders at any
meeting thereof or by shareholder action in lieu thereof; provided, however,
that a majority of the full board of directors of the association may not
increase the number of directors to a number which (a) exceeds by more than two
the number of directors last elected by shareholders where such number was 15 or
less; and (b) exceeds by more than four the number of directors last elected by
shareholders where such number was 16 or more; but in no event shall the number
of directors exceed 25.
Section 2.3. Organization Meeting. The secretary, upon receiving the
certificate of the judges of the result of any election, shall notify the
directors-elect of their election and of the time at which they are required to
meet at the main office of the association to organize the new board and elect
and appoint officers of the association for the succeeding year. Such meeting
shall be held
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on the day of the election or as soon thereafter as practicable, and, in any
event, within 30 days thereof. If, at the time fixed for such meeting, there
shall not be a quorum, the directors present may adjourn the meeting, from time
to time, until a quorum is obtained.
Section 2.4. Regular Meetings. The regular meetings of the board of
directors shall be held, without notice, on the third Tuesday of each month at
the main office or other such place as the board may designate. When any regular
meeting of the board falls upon a holiday, the meeting shall be held on the next
banking business day unless the board shall designate another day.
Section 2.5. Special Meetings. Special meetings of the board of
directors may be called by the chairperson, any vice chairperson or the
president of the association, at the request of three or more directors or at
the request of one or more shareholders owning, in the aggregate, not less than
25 percent of the stock of the association. Each member of the board of
directors shall be given notice stating the time and place by telegram, letter,
facsimile or in person, of each special meeting.
Section 2.6. Quorum. A majority of the director positions on the board
shall constitute a quorum at any meeting, except when otherwise provided by law,
or the bylaws, but a less number may adjourn any meeting, from time to time, and
the meeting may be held, as adjourned, without further notice. If the number of
directors is reduced below the number that would constitute a quorum, no
business may be transacted, except selecting directors to fill vacancies in
conformance with Section 2.7.
If a quorum is present, the board of directors may take action through
the vote of a majority of the directors who are in attendance.
Section 2.7. Vacancies. When any vacancy occurs among the directors, a
majority of the remaining members of the board, according to the laws of the
United States, may appoint a director to fill such vacancy at any regular
meeting of the board, or at a special meeting called for that purpose at which a
quorum is present, or if the directors remaining in office constitute fewer than
a quorum of the board, by the affirmative vote of a majority of all the
directors remaining in office, or by shareholders at a special meeting called
for that purpose, in conformance with Section 2.2 of this article, or by
shareholder action in lieu of such meeting. At any such shareholder meeting,
each shareholder entitled to vote shall have the right to multiply the number of
votes he or she is entitled to cast by the number of vacancies being filled and
cast the product for a single candidate or distribute the product among two or
more candidates.
A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date) may be filled before the vacancy occurs
but the new director may not take office until the vacancy occurs.
Section 2.8. Directors' Fees. Fees to be paid to members of the board
for attendance at regular and special meetings will be set by board resolution.
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Section 2.9. Director's Business with Association. In the interest of
complete objectivity during board deliberations, a director must absent himself
or herself when that director's business with the association is being discussed
and voted upon.
Section 2.10. Term. The directors of the association shall hold office
for one year or until their successors are elected and have qualified.
ARTICLE III
COMMITTEES OF THE BOARD
Section 3.1. Appointment of Committees. The board of directors may
appoint, from time to time, from its own members, committees of one or more
persons, for such purposes and with such powers as the board may determine.
Provisions of the articles of association and bylaws governing place of meeting,
notice of meeting, quorum and voting requirements of the board of directors
apply to all committees approved by the board and their members. The board must
formally ratify written policies authorized by each committee appointed by it
before such policies may become effective.
Notwithstanding the foregoing, a committee may not:
(1) Authorize distributions of assets or dividends.
(2) Approve action required to be approved by shareholders.
(3) Fill vacancies on the board of directors or any of its committees.
(4) Amend articles of association.
(5) Adopt, amend or repeal bylaws.
(6) Authorize or approve issuance or sale or contract for sale of
shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares.
Section 3.2. Fees of Committee Members. Fees to be paid to members of
committees of the board for attendance at regular and special meetings will be
set by board resolution.
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ARTICLE IV
OFFICERS AND EMPLOYEES
Section 4.1. Chairperson of the Board. The board of directors shall
appoint one of its members to be the chairperson of the board (the
"chairperson") to serve at its pleasure. Such person shall preside at all
meetings of the board of directors and of the shareholders. The chairperson
shall supervise the carrying out of the policies adopted or approved by the
board; shall have general executive powers, as well as the specific powers
conferred by these bylaws; and shall also have and may exercise such further
powers and duties as from time to time may be conferred upon, or assigned by the
board of directors.
Section 4.2. Vice Chairperson of the Board. The board of directors
shall have the right to appoint one or more of its members to be vice
chairperson of the board (the "vice chairperson"), to serve at the pleasure of
the board. The vice chairperson shall preside at all meetings of the board and
the shareholders in the absence of the chairperson. The vice chairperson shall
also have and may exercise all powers and duties as from time to time may be
conferred upon or assigned to the vice chairperson by the board.
Section 4.3. President. The board of directors shall appoint one of
its members to be the president of the association. In the absence of the
chairperson and the vice chairperson, the president shall preside at any meeting
of the board or the shareholders. The president shall have general executive
powers, and shall have and may exercise any and all other powers and duties
pertaining by law, regulation, or practice, to the office of president, or
imposed by these bylaws. The president shall also have and may exercise such
further powers and duties as from time to time may be conferred, or assigned by
the board of directors.
Section 4.4. Executive Vice Presidents. The board may appoint one or
more executive vice presidents. The executive vice presidents shall have and
exercise such duties as may be delegated or conferred by the board of directors,
and one of them may be designated by the board to exercise the duties of the
president in the event of the absence and unavailability of the president.
Section 4.5. Senior Vice Presidents. The board of directors may
appoint one or more senior vice presidents. Each senior vice president shall
have such powers and duties as may be assigned by the board of directors, the
chairperson, any vice chairperson or the president.
Section 4.6. Vice Presidents. The board of directors may appoint one
or more vice presidents. Each vice president shall have such powers and duties
as may be assigned to the vice president by the board or the chairperson, any
vice chairperson, president or any executive vice president.
Section 4.7. Secretary. The board of directors shall appoint a
secretary or other designated officer who shall be secretary of the board and of
the association, and shall keep accurate minutes of all meetings. The secretary
shall attend to the giving of all notices required by these bylaws; shall
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be custodian of the corporate seal, records, documents and papers of the
association; shall provide for the keeping of proper records of all transactions
of the association; shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the office of secretary, or
imposed by these bylaws; and shall also perform such other duties as may be
assigned from time to time, by the board.
Section 4.8. Other Officers. The board of directors may appoint one or
more cashiers, controllers, second vice presidents, assistant vice presidents,
trust officers, assistant secretaries, assistant cashiers, assistant
controllers, managers and assistant managers of branches and such other officers
and attorneys-in-fact as from time to time may appear to the board to be
required or desirable to transact the business of the association. Such officers
shall respectively exercise such powers and perform such duties as pertain to
their several offices, or as may be conferred upon, or assigned to, them by the
board of directors, the chairperson, any vice chairperson, the president or any
executive vice president. The board may authorize an officer to appoint one or
more officers or assistant officers.
Section 4.9. Holding of More Than One Office. Any person may hold more
than one office, except that the office of president and the office of secretary
may not be held by the same person.
Section 4.10. Tenure of Office. The president and all other officers
shall hold office for the current year for which the board was elected, unless
they shall resign, become disqualified, or be removed; and any vacancy occurring
in the office of president shall be filled promptly by the board of directors.
Section 4.11. Resignation. An officer may resign at any time by
delivering notice to the association. A resignation is effective when the notice
is given unless the notice specifies a later effective date.
Section 4.12. Clerks and Agents. The board empowers the president and
such officers as the president may designate to appoint paying tellers,
receiving tellers, note tellers, vault custodians, bookkeepers and other clerks,
agents and employees as they may deem advisable for the prompt and orderly
transaction of the business of the association, and to define their duties,
conditions of employment, fix salaries to be paid and dismiss them.
ARTICLE V
TRUST DEPARTMENT
Section 5.1. Trust Department. There shall be a department of the
association known as the Trust Department which shall perform the fiduciary
responsibilities of the association.
Section 5.2. Trust Officer. There shall be a trust officer of this
association whose duties shall be to manage, supervise and direct all fiduciary
activities. Such persons shall do or cause to
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be done all things necessary or proper in carrying on the fiduciary business of
the association according to provisions of law and applicable regulations; and
shall act pursuant to opinion of counsel where such opinion is deemed necessary.
Opinions of counsel shall be retained on file in connection with all important
matters pertaining to fiduciary activities. The trust officer shall be
responsible for all assets and documents held by the association in connection
with fiduciary matters.
The board of directors may appoint other trust officers as it may deem
necessary, with such duties as may be assigned.
Section 5.3. Trust Audit and Investment Committee. There shall be a
trust audit and investment committee of this association composed of three or
more members, exclusive of any active officers of the association, who shall be
capable and experienced directors or officers of the association.
(a) Audits. The trust audit and investment committee shall, at least
once during each calendar year and within fifteen months of the last such audit
make suitable audits of the association's fiduciary activities or cause suitable
audits to be made by auditors responsible only to the board of directors, and at
such time shall ascertain whether fiduciary powers have been administered
according to law, Part 9 of the Regulations of the Comptroller of the Currency,
and sound fiduciary principles.
(b) Investments. All investments of funds held in a fiduciary capacity
shall be made, retained or disposed of only with the approval of the trust audit
and investment committee, and the committee shall keep minutes of all its
meetings, showing the disposition of all matters considered and passed upon by
it. The committee shall, promptly after the acceptance of an account for which
the association has investment responsibilities, review the assets thereof, to
determine the advisability of retaining or disposing of such assets. The
committee shall conduct a similar review at least once during each calendar year
thereafter and within fifteen months of the last such review. A report of all
such reviews, together with the action taken as a result thereof, shall be noted
in the minutes of the committee.
Section 5.4. Trust Department Files. There shall be maintained by the
association all fiduciary records necessary to assure that its fiduciary
responsibilities have been properly undertaken and discharged.
Section 5.5. Trust Investments. Funds held in a fiduciary capacity
shall be invested according to the instrument establishing the fiduciary
relationship and local law. Where such instrument does not specify the character
and class of investments to be made and does not vest in the association a
discretion in the matter, funds held pursuant to such instrument shall be
invested in investments in which corporate fiduciaries may invest under local
law.
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ARTICLE VI
STOCK AND STOCK CERTIFICATES
Section 6.1. Transfers. Shares of stock shall be transferable on the
books of the association, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder by
such transfer shall in proportion to his or her shares, succeed to all rights of
the prior holder of such shares. The board of directors may impose conditions
upon the transfer of the stock reasonably calculated to simplify the work of the
association with respect to stock transfers, voting at shareholder meetings, and
related matters and to protect it against fraudulent transfers.
Section 6.2. Stock Certificates. Certificates of stock shall bear the
signature of the president (which may be engraved, printed or impressed), and
shall be signed manually or by facsimile process by the secretary, assistant
secretary, cashier, assistant cashier, or any other officer appointed by the
board of directors for that purpose, to be known as an authorized officer, and
the seal of the association shall be engraved thereon. Each certificate shall
recite on its face that the stock represented thereby is transferable only upon
the books of the association properly endorsed.
The board of directors may adopt or use procedures for replacing lost,
stolen, or destroyed stock certificates as permitted by law.
ARTICLE VII
CORPORATE SEAL
The president, the secretary or any assistant secretary, or other
officer thereunto designated by the board of directors, shall have authority to
affix the corporate seal to any document requiring such seal, and to attest the
same. Such seal shall be substantially in the following form:
(impression)
( of )
( Seal )
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1. Fiscal Year. The fiscal year of the association shall be
the calendar year.
Section 8.2. Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions,
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settlements, petitions, schedules, accounts, affidavits, bonds, undertakings,
proxies and other instruments or documents may be signed, executed,
acknowledged, verified, delivered or accepted on behalf of the association by
the chairperson, any vice chairperson, the president, any executive vice
president, senior vice president or vice president or the secretary, or the
cashier, or, if in connection with exercise of fiduciary powers of the
association, by any of those officers or by any trust officer. Any such
instruments may also be executed, acknowledged, verified, delivered or accepted
on behalf of the association in such other manner and by such other officers as
the board of directors may from time to time direct. The provisions of this
section 8.2 are supplementary to any other provision of these bylaws.
Section 8.3. Records. The articles of association, the bylaws and the
proceedings of all meetings of the shareholders, the board of directors, and
standing committees of the board, shall be recorded in appropriate minute books
provided for that purpose. The minutes of each meeting shall be signed by the
secretary or other officer appointed to act as secretary of the meeting.
Section 8.4. Banking Hours. The main office of the association and the
branches will be open during hours designated by the board of directors. The
main office and all branches will be closed on Sundays and days recognized by
the State of Colorado and by the laws of the United States as legal holidays.
Section 8.5. Payment of Xxxxxx. Any funds paid to accomplish the
release, whether or not achieved, of a director, officer or other employee of
the association (or any subsidiary of the association) or any member of his or
her family as the result of a xxxxxx demand, shall be considered as an expense
to the association in its efforts to safeguard the lives of any director,
officer or other employee which the association considers to be its obligation.
In no way shall such funds so paid be considered as remuneration to the person
so ransomed, nor to the person receiving the xxxxxx demand.
Section 8.6. Law to Govern Corporate Procedure. The corporate
procedures to be followed by the association shall be those prescribed in the
Utah Business Corporation Act, Utah Code Xxx. ss. 16-10a-101, et seq., or in any
successor provision of law (the "Utah Business Corporation Act") except to the
extent inconsistent with the federal banking laws of the United States or the
regulations or legal interpretations of the Comptroller of the Currency adopted
thereunder. To the extent of any inconsistency between any provision of these
bylaws and any provision of the Utah Business Corporation Act, the relevant
provision of that act shall govern.
Section 8.7. Indemnification of Directors, Officers, Employees and
Agents. The directors, officers, employees and agents of the association shall
be indemnified to the fullest extent permitted, and within the parameters
established, by the Utah Business Corporation Act, as such rights may be limited
or restricted by Section 18(k) of the Federal Deposit Insurance Act or any
successor provision of law, or by the regulations and legal interpretations
adopted by the Federal Deposit Insurance Corporation thereunder.
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ARTICLE IX
BYLAWS
Section 9.1. Inspection. A copy of the bylaws, with all amendments,
shall at all times be kept in a convenient place at the main office of the
association, and shall be open for inspection to all shareholders during banking
hours.
Section 9.2. Amendments. The bylaws may be amended, altered or
repealed, at any regular meeting of the board of directors, by a vote of a
majority of the total number of the directors except as provided below. The
association's shareholders may amend or repeal the bylaws even though the bylaws
also may be amended or repealed by its board of directors.
I, ________________, certify that: (1) I am the duly constituted
secretary of [_____________], and secretary of its board of directors, and as
such officer am the official custodian of its records; (2) the foregoing bylaws
are the bylaws of the association, and all of them are now lawfully in force and
effect.
I have hereunto affixed my official signature and the seal of the
association, in the City of Denver, State of Colorado, on this _____________ day
of ______________, 1998.
________________________
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EXHIBIT III
VOTING AGREEMENT
December 19, 1997
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Mesdames and Gentlemen:
The undersigned understands that Zions Bancorporation ("Zions
Bancorp") is about to enter into an Agreement and Plan of Reorganization with
SBT Bankshares, Inc. (the "Company") (the "Agreement"). The Agreement provides
for the merger of the Company with and into Val Cor Bancorporation, Inc., a
wholly-owned subsidiary of Zions Bancorp (the "Merger") and the conversion of
outstanding shares of Company Stock into Zions Bancorp Common Stock and cash in
lieu of fractional shares in accordance with the formula therein set forth.
In order to induce Zions Bancorp to enter into the Agreement, and
intending to be legally bound hereby, the undersigned, subject to the conditions
hereinafter stated, represents, warrants, and agrees that at the Company
Shareholders' Meeting contemplated by Section 4.1 of the Agreement and Plan of
Reorganization (the "Meeting"), and any adjournment thereof, the undersigned
will, in person or by proxy, vote or cause to be voted in favor of the Agreement
and the Merger the shares of Company Common Stock beneficially owned by the
undersigned individually or, to the extent of the undersigned's proportionate
voting interest, jointly with other persons, as well as, to the extent of the
undersigned's proportionate voting interest, any other shares of Company Common
Stock over which the undersigned may hereafter acquire beneficial ownership in
such capacities (collectively, the "Shares"). Subject to the final paragraph of
this agreement, the undersigned further agrees that he will use his best efforts
to cause any other shares of Company Common Stock over which he has or shares
voting power to be voted in favor of the Agreement and the Merger.
The undersigned further represents, warrants, and agrees that
beginning upon the authorization and execution of the Agreement by the Company
until the earlier of (i) the consummation of the Merger or (ii) the termination
of the Agreement in accordance with its terms, the undersigned will not,
directly or indirectly:
(a) vote any of the Shares, or cause or permit any of the Shares to be
voted, in favor of any other sale of control, merger, consolidation, plan of
liquidation, sale of assets, reclassification, or other transaction involving
the Company or any of its subsidiaries which would have the effect of assisting
or facilitating the acquisition of control by any person other than Zions
Bancorp or an
Zions Bancorporation
December 19, 1997
Page 2
affiliate thereof over the Company or any substantial portion of its assets or
assisting or facilitating the acquisition of control by any person other than
Zions Bancorp or an affiliate, or the Company or a wholly-owned subsidiary of
the Company, of any subsidiary of the Company or any substantial portion of its
assets. As used herein, the term "control" means (1) the ability to direct the
voting of 10 percent or more of the outstanding voting securities of a person
having ordinary voting power in the election of directors or in the election of
any other body having similar functions or (2) the ability to direct the
management and policies of a person, whether through ownership of securities,
through any contract, arrangement, or understanding or otherwise.
(b) voluntarily sell or otherwise transfer any of the Shares, or cause
or permit any of the Shares to be sold or otherwise transferred (i) pursuant to
any tender offer, exchange offer, or similar proposal made by any person other
than Zions Bancorp or an affiliate thereof, (ii) to any person seeking to obtain
control (as the term "control" is defined in paragraph (a), above) of the
Company, any of its subsidiaries or any substantial portion of the assets of the
Company or any subsidiary thereof or to any other person (other than Zions
Bancorp or an affiliate thereof) under circumstances where such sale or transfer
may reasonably be expected to assist a person seeking to obtain such control,
(iii) for the purpose of avoiding the obligations of the undersigned under this
agreement, or (iv) to any transferee unless such transferee expressly agrees in
writing to be bound by the terms of this agreement in all events.
It is understood and agreed that this agreement relates solely to the
capacity of the undersigned as a shareholder or other beneficial owner of the
Shares and does not prohibit the undersigned, if a member of the Board of
Directors of the Company or a member of the Board of Directors of State Bank and
Trust of Colorado Springs, from acting, in his or her capacity as a director, as
the undersigned may determine to be appropriate in light of the obligations of
the undersigned as a director. It is further understood and agreed that the term
"Shares" shall not include any securities beneficially owned by the undersigned
as a trustee or fiduciary for another (unless such other person is affiliated
with the undersigned or is bound by an agreement with Zions Bancorp
substantially similar to this agreement), and that this agreement is not in any
way intended to affect the exercise by the undersigned of the undersigned's
fiduciary responsibility in respect of any such securities.
Very truly yours,
________________________________
Zions Bancorporation
December 19, 1997
Page 3
Accepted and Agreed to:
ZIONS BANCORPORATION
By:___________________________
Title:________________________
Zions Bancorporation
December 19, 1997
Page 4
Name of Shareholder:
Shares of Common Stock of SBT Bankshares, Inc.
Beneficially Owned
As of December 19, 1997
Name(s) of Number of
Record Owner(s) Beneficial Ownership 1/ Shares
--------------- ----------------------- ------
----------
1/ For purposes of this Agreement, shares are beneficially owned by the
shareholder named above if held in any capacity other than a fiduciary capacity
(other than a revocable living trust and other than a fiduciary capacity on
behalf of a person who is affiliated with the shareholder or is bound by an
agreement with Zions Bancorp substantially similar to this agreement) and if the
shareholder named above has the power (alone or, in the case of shares held
jointly with his or her spouse, together with his or her spouse) to direct the
voting of such shares.
EXHIBIT IV
FORM OF OFFICER'S CERTIFICATE
CERTIFICATE
PURSUANT TO SECTION [4.2] [5.2] OF
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, [____________], [________] of [_______________],
pursuant to Section [ ] of the Agreement and Plan of Reorganization, dated as of
December 19, 1997, by and among Zions Bancorporation, Val Cor Bancorporation,
Inc., Valley National Bank of Cortez, SBT Bankshares, Inc., and State Bank and
Trust of Colorado Springs (the "Agreement"), does hereby certify that as of the
date hereof:
(a) Subject to paragraph (b) below, all representations and warranties
of [_________________] contained in the Agreement are true and correct in all
material respects as though made or given as of the date hereof.
(b) All representations and warranties of [_____________] which
specifically relate to an earlier date were true and correct in all material
respects as of such earlier date.
(c) All covenants and obligations to be performed or met by
[____________] on or prior to the date hereof have been performed or met.
IN WITNESS WHEREOF, the undersigned officer of [______________] has
hereunto set his hand as of the [_______]th day of [_____________], 1998.
EXHIBIT V
OPINION OF XxXXXXX & XXXXX, L.L.P.
[__________________], 1998
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Val Cor Bancorporation, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Valley National Bank of Cortez
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Re: Merger of SBT Bankshares, Inc. With Val Cor Bancorporation, Inc., In
Exchange for Stock of Zions Bancorporation; Consolidation of State
Bank and Trust of Colorado Springs With Valley National Bank of
Cortez
Mesdames and Gentlemen:
We are special counsel to SBT Bankshares, Inc., a Colorado corporation
(the "Company"), and its subsidiary, State Bank and Trust of Colorado Springs, a
banking corporation organized under the laws of the State of Colorado with its
head office located at Colorado Springs, County of El Paso, State of Colorado
(the "Bank"), in connection with the merger (the "Holding Company Merger") of
the Company with Val Cor Bancorporation, Inc. ("Val Cor"), in exchange for which
shareholders of the Company will receive shares of the common stock of Zions
Bancorporation ("Zions Bancorp") and cash, and the consolidation (the "Bank
Consolidation") of the Bank with Valley National Bank of Xxxxxx ("Valley"),
pursuant to an Agreement and Plan of Reorganization dated December 19, 1997 (the
"Agreement") and certain additional agreements whose execution is contemplated
in the Agreement, including the Agreement of Consolidation by and between Val
Cor
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[_______________], 1998
Page 2
and the Company (the "Holding Company Merger Agreement") and the Agreement of
Consolidation by and between the Bank and Valley (the "Bank Consolidation
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Consolidation Agreement to be referred to collectively as the "Agreements").
This opinion is provided to you pursuant to Section 4.3 of the
Agreement.
In our capacity as special counsel, we have participated in the
preparation of a Registration Statement filed with the Securities and Exchange
Commission on Form S-4 covering the shares of Zions Bancorp stock to be issued
in connection with the Holding Company Merger (the "Registration Statement")
including the Prospectus/Proxy Statement for the shareholders of the Company
(the "Prospectus/Proxy Statement"). In addition, in rendering the opinions that
follow, we have examined the Agreements and the exhibits and schedules appended
thereto; the articles of incorporation and bylaws of the Company and the
articles of incorporation or association and bylaws of the Bank; the minutes of
certain meetings of the respective boards of directors of the Company and the
Bank; and such other corporate documents and corporate records of the Company
and the Bank as we have deemed necessary or appropriate for the purpose of
rendering the following opinions. In addition, we have interviewed officers of
the Company and the Bank and undertaken and performed such other procedures as
we have deemed necessary or appropriate for the purpose of rendering the
following opinions. In these regards, we have examined and relied upon
representations of Zions Bancorp, Val Cor, and Valley contained in the
Agreements, and, where we have deemed appropriate, representations or
certifications of officers or public officials.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties, other than (a) the Company, (b) the Bank, and (c) those persons or
entities waiving rights pursuant to the waivers of preemptive rights delivered
to Zions Bancorp pursuant to Section 4.13 of the Agreement (the "Waiving
Shareholders") who are not natural persons, had the corporate power and
authority to enter into and perform all obligations thereunder and, as to all
parties other than the Company and the Bank and the Waiving Shareholders, we
have also assumed the execution and delivery of such documents and the validity
and binding effect and enforceability thereof. We have also assumed that the
Agreements have not been otherwise amended by oral or written agreement or by
conduct of the parties thereto. We have assumed that the certifications and
representations dated earlier than the date hereof on which we have expressed
reliance herein continue to remain accurate, insofar as material to our
opinions, from such earlier date through the date hereof. To the extent that the
opinions set forth herein address matters which
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[___________________], 1998
Page 3
are governed by the law of any jurisdiction other than the state of Colorado, we
have assumed that the law of such jurisdiction is identical to that of Colorado,
including federal law applicable within Colorado.
Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:
(a) Organization, Powers and Qualifications.
(i) The Company is a corporation which is duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has all requisite corporate power and authority to own and operate its
properties and assets, to lease properties used in its business, and to carry on
its business as now conducted. The Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended. All outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued, and are fully paid and non-assessable.
(ii) The Bank is duly organized, validly existing and in good
standing under the laws of the State of Colorado and has all requisite corporate
power and authority to own and operate its properties and assets, to lease
properties used in its business, and to carry on its business as now conducted.
The deposit accounts of the Bank are insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation (the "FDIC") and, to the best of our
knowledge, no proceedings for the termination of such insurance are pending or
threatened. All outstanding shares of capital stock of the Bank have been duly
and validly authorized and issued and are fully paid and non-assessable. All
issued and outstanding shares of the Bank are held of record by the Company
directly, free and clear of any adverse claims.
(b) Execution and Performance of Agreements. Each of the Company and
the Bank has the corporate power and authority to execute, deliver, and perform
each of the Agreements to which it is a party and to carry out the terms thereof
and the transactions contemplated thereby.
(c) Absence of Violations. To the best of our knowledge, neither the
Company nor the Bank is in violation of its articles of incorporation or its
bylaws, or any law, regulation, ordinance, order, or restriction imposed by the
United States, any state, municipality, or other political subdivision or agency
thereof, or any order of any court or other competent tribunal having
jurisdiction over it in respect of the conduct of its business or the ownership
of its properties, which, either individually or in the aggregate with all such
other violations, would materially and adversely affect the business,
operations, or condition (financial or otherwise) of the Company or the Bank or
the
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[___________________], 1998
Page 4
observance or performance by the Company or the Bank of the terms of any of the
Agreements to which it is a party.
(d) Compliance with Corporate Documents and Agreements. Neither the
execution, delivery, or performance by either the Company or the Bank of any of
the Agreements to which it is a party nor the consummation of the transactions
contemplated therein will violate, conflict with, constitute a breach of or
default under the respective articles of incorporation or bylaws of the Company
or the Bank, or any agreement or instrument to which the Company or the Bank is
a party (or which is binding on either of them or its assets) or by which the
Company or the Bank is bound, and will not result in the creation of any lien
on, or security interest in, any of the assets of either of them.
(e) Binding Obligations; Due Authorization. Each of the Agreements to
which it is a party has been duly authorized by all necessary corporate action
on the part of each of the Company and the Bank, has been duly executed and
delivered by each of the Company and the Bank, and constitutes a valid, legal,
and binding obligation of the Company and the Bank, enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship, or
similar laws or judicial decisions relating to or affecting creditors' rights
generally or the rights of creditors, or of the FDIC as insurer, regulator,
conservator, or receiver, of banks the accounts of which are insured by the FDIC
in particular, or by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law) as to whose
availability we express no opinion. No other corporate proceedings on the part
of either the Company or the Bank are necessary to authorize any of the
Agreements to which it is a party or the carrying out of the transactions
contemplated thereby.
(f) Absence of Default. Except for those consents (including, but not
limited to, approvals, licenses, registrations, or declarations) that have been
obtained, the execution and delivery by the Company and the Bank of each of the
Agreements to which it is a party and consummation of the transactions
contemplated thereby do not require the approval or consent of any governmental
authority or third party. The execution and delivery by the Company and the Bank
of each of the Agreements to which it is a party, the consummation of the
transactions contemplated thereby, and the compliance with and fulfillment of
the terms thereof by the Company and the Bank will not require any
authorization, consent, approval, or exemption by any person which has not been
obtained or any notice or filing which has not been given or done.
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[___________________], 1998
Page 5
(g) Preemptive Rights. Each of the waivers of preemptive rights
delivered to Zions Bancorp pursuant to Section 4.13 of the Agreement (the
"Waivers") by Waiving Shareholders other than natural persons has been duly
authorized by all necessary corporate or other action on the part of each such
Waiving Shareholder. Each of the Waivers has been duly executed and delivered by
the respective Waiving Shareholder and constitutes a valid, legal, and binding
obligation of the respective Waiving Shareholder, enforceable against him, her,
or it in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, receivership,
conservatorship, or similar laws or judicial decisions relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or at law) as to
whose availability we express no opinion. No other corporate or other
proceedings on the part of any Waiving Shareholder that is not a natural person
are necessary to authorize any Waiver to which it is a signatory.
(h) Compliance with Securities Laws. The Prospectus/Proxy Statement
complies on its face as to form in all material respects with the requirements
of the federal securities laws and published rules and regulations of the
Securities and Exchange Commission as of the date thereof.
With respect to that opinion designated "(c)" above, our knowledge of
the matters therein addressed is limited to that derived from conversations with
such officers of the Company and the Bank as we have deemed appropriate and our
examination of the articles of incorporation and bylaws of the Company and the
Bank, Reports of Examination of the Company and the Bank by the Federal Reserve
Board dated [________] and [___________] respectively, the Report of Examination
of the Bank by the Division of Financial Institutions of the State of Colorado
dated [____________], all legal and compliance files of the Company and the
Bank, reports by independent accountants for the Company and the Bank since
December 31, 1995 (as identified by officers of the Company and/or the Bank),
and records of pending litigation in the United States District Court for the
District of Colorado and in the District Court for the County of El Paso, State
of Colorado. The opinions expressed herein with respect to these matters should
not be construed as representing or implying that our knowledge or our opinions
based thereon, extend to any matters outside the scope of examination
specifically identified above.
In connection with our participation in the preparation of the
Prospectus/Proxy Statement, we have not independently verified the accuracy,
completeness, or fairness of the statements contained therein or of documents
incorporated by reference therein, and we make no representation to you as to
the accuracy or completeness of statements of fact contained or incorporated by
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[___________________], 1998
Page 6
reference in the Prospectus/Proxy Statement or the Registration Statement.
Nothing, however, has come to our attention that would lead us to believe that
the Prospectus/Proxy Statement as of its issue date or the date hereof, or the
Registration Statement as of the effective date or the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements and schedules and other financial and statistical data
included or incorporated by reference therein, as to which we make no statement)
or that any event has occurred which should have been set forth in an amendment
or supplement to the Prospectus/Proxy Statement or Registration Statement which
has not been set forth in such amendment or supplement.
This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.
Respectfully submitted,
EXHIBIT VI
OPINION OF COMPANY AND BANK LITIGATION COUNSEL
[______________], 1998
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Val Cor Bancorporation, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Valley National Bank of Xxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Re: Merger of SBT Bankshares, Inc. With Val Cor Bancorporation, Inc.,
In Exchange for Stock of Zions Bancorporation
Mesdames and Gentlemen:
We are special counsel to SBT Bankshares, Inc., a Colorado corporation
(the "Company"), and its subsidiary, State Bank and Trust of Colorado Springs, a
banking corporation organized under the laws of the State of Colorado with its
head office located at Colorado Springs, County of El Paso, State of Colorado
(the "Bank"), in connection with the merger (the "Holding Company Merger") of
the Company with Val Cor Bancorporation, Inc. ("Val Cor"), in exchange for which
shareholders of the Company will receive shares of the common stock of Zions
Bancorporation ("Zions Bancorp") and cash, and the consolidation (the "Bank
Consolidation") of the Bank with Valley National Bank of Cortez ("Valley"),
pursuant to an Agreement and Plan of Reorganization dated December 19, 1997 (the
"Agreement") and certain additional agreements whose execution is contemplated
in the Agreement, including the Agreement of Consolidation by and between Val
Cor
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[___________________], 1998
Page 2
and the Company (the "Holding Company Merger Agreement") and the Agreement of
Consolidation by and between the Bank and Valley (the "Bank Consolidation
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Consolidation Agreement to be referred to collectively as the "Agreements"). We
have been requested by the Company and the Bank to furnish to you our opinion
pursuant to Section 4.4 of the Agreement.
In rendering the opinion that follows, we have examined the Agreements
and such other documents and records as we have deemed necessary or appropriate
for the purpose of rendering the following opinion. In addition, we have
interviewed officers of the Company and the Bank and undertaken and performed
such other procedures as we have deemed necessary or appropriate for the purpose
of rendering the following opinion. In these regards, we have examined and
relied upon representations of Zions Bancorp, Val Cor, and Valley contained in
the Agreements, and, where we have deemed appropriate, representations or
certifications of officers or public officials.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. We have also assumed that the Agreements have not been otherwise amended
by oral or written agreement or by conduct of the parties thereto. We have
assumed that the certifications and representations dated earlier than the date
hereof on which we have expressed reliance herein continue to remain accurate,
insofar as material to our opinions, from such earlier date through the date
hereof.
Based on the foregoing, and solely in reliance thereon, we are of the
opinion that: (a) there is no action, suit, or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or threatened,
against the Company or the Bank which might result in any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs, or business prospects of the Company or the Bank, or which might
materially and adversely affect the properties or assets thereof or which might
prevent, hinder or delay the consummation of the transactions contemplated in
the Agreements; and (b) all pending legal or governmental proceedings to which
the Company or the Bank is a party or to which any of its property or assets is
the subject, including ordinary routine litigation incidental to its business,
are, considered in the aggregate, not material.
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[___________________], 1998
Page 3
This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.
Respectfully submitted,
EXHIBIT VII
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this [______________] day of [______________________], 1998, by and between XXXX
X. XXXXXXX ("Executive") and [__________________________________], a national
banking association organized under the laws of the United States
("[_____________________]").
W I T N E S S E T H T H A T :
WHEREAS, the Agreement and Plan of Reorganization (the "Plan") dated
as of December 19, 1997 by and among Zions Bancorporation, a Utah corporation
having its principal office in Salt Lake City, Utah, Val Cor Bancorporation,
Inc., a Colorado corporation having its principal office in Cortez, Colorado,
Valley National Bank of Cortez, a national banking association organized under
the laws of the United States, SBT Bankshares, Inc., a Colorado corporation
having its principal office in Colorado Springs, Colorado, and State Bank and
Trust of Colorado Springs, a banking corporation organized under the laws of the
State of Colorado (the "Bank"), provides that the Bank will be consolidated with
[____________] to form a new national banking association ("Consolidated
Association");
WHEREAS, Executive is Chairman, President and Chief Executive Officer
of the Bank;
WHEREAS, Consolidated Association desires to secure the employment of
Executive upon consummation of the transactions contemplated in the Plan;
WHEREAS, Executive is desirous of entering into the Agreement for such
periods and upon the terms and conditions set forth herein; and
WHEREAS, to assist in achieving the objectives of the transactions
described in the Plan, section 4.10 of the Plan contemplates that Executive will
enter into an employment agreement as a condition to the consummation of the
transactions described therein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the parties agree as follows:
1. Employment; Responsibilities and Duties.
(a) Consolidated Association hereby agrees to employ Executive, and
Executive hereby agrees to serve as [_____________] of Consolidated Association
and of any depository institution which is successor-in-interest thereto
("Consolidated Association" hereafter to include any depository institution
which is successor-in-interest thereto) during the Term of Employment. Executive
shall have such duties, responsibilities, and authority as shall be set forth in
the bylaws of Consolidated Association on the date of this Agreement or as may
otherwise be determined by Consolidated Association.
(b) Executive shall devote his full working time and best efforts to
the performance of his responsibilities and duties hereunder and to the
retention of the customer relationships to which the Bank has been a party prior
to the date of this Agreement. During the Term of Employment, Executive shall
not, without the prior written consent of the Board of Directors of Consolidated
Association, render services as an employee, independent contractor, or
otherwise, whether or not compensated, to any person or entity other than
Consolidated Association or its affiliates; provided that Executive may, where
involvement in such activities does not individually or in the aggregate
significantly interfere with the performance by Executive of his duties or
violate the provisions of section 4 hereof, (i) render services to civic and
charitable organizations, (ii) manage his personal investments, and (iii) with
the prior permission of the Board of Directors of Consolidated Association, hold
such other directorships or part-time academic appointments or have such other
business affiliations as would otherwise be prohibited under this section 1.
2. Term of Employment.
(a) The term of this Agreement ("Term of Employment") shall be the
period commencing on the effective date of the Plan as established pursuant to
Section 2 thereof (the "Commencement Date") and continuing until the Termination
Date, which shall mean the earliest to occur of:
(i) the third anniversary of the Commencement Date, unless the
Term of Employment shall be extended by mutual written agreement of Executive
and Consolidated Association;
(ii) the death of Executive;
(iii) Executive's inability to perform his duties hereunder, as a
result of physical or mental disability as reasonably determined by the personal
physician of Executive, for a period of at least 180 consecutive days or for at
least 180 days during any period of twelve consecutive months during the Term of
Employment; or
(iv) the discharge of Executive by Consolidated Association "for
cause," which shall mean one or more of the following:
(A) any willful or gross misconduct by Executive with respect
to the business and affairs of Consolidated Association, or with respect to any
of its affiliates for which Executive is assigned material responsibilities or
duties;
(B) the conviction of Executive of a felony (after the
earlier of the expiration of any applicable appeal period without perfection of
an appeal by Executive or the denial of any appeal as to which no further appeal
or review is available to Executive) whether or not committed in the course of
his employment by Consolidated Association;
(C) Executive's willful neglect, failure, or refusal to carry
out his duties hereunder in a reasonable manner; or
- 2 -
(D) the breach by Executive of any representation or warranty
in section 6(a) hereof or of any agreement contained in section 1, 4, 5, or 6(b)
hereof, which breach is material and adverse to Consolidated Association or any
of its affiliates for which Executive is assigned material responsibilities or
duties; or
(v) Executive's resignation from his position as [ ] of
Consolidated Association; or
(vi) the termination of Executive's employment by Consolidated
Association "without cause," which shall be for any reason other than those set
forth in subsections (i), (ii), (iii), or (iv) of this section 2(a), at any
time, upon the thirtieth day following notice to Executive.
(b) In the event that the Term of Employment shall be terminated for
any reason other than that set forth in section 2(a)(vi) hereof, Executive shall
be entitled to receive, upon the occurrence of any such event:
(i) any cash compensation (as hereinafter set forth) payable
pursuant to section 3(a)(i) hereof which shall have accrued as of the
Termination Date; and
(ii) such rights as Executive shall have accrued as of the
Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.
(c) In the event that the Term of Employment shall be terminated for
the reason set forth in section 2(a)(vi) hereof, Executive shall be entitled to
receive:
(i) for the period commencing on the date immediately following
the Termination Date and ending upon and including the third anniversary of the
Commencement Date, cash compensation payable at the rate established pursuant to
section 3(a)(i) hereof, in a manner consistent with the normal payroll practices
of Consolidated Association with respect to executive personnel as presently in
effect or as they may be modified by Consolidated Association from time to time;
and
(ii) such rights as Executive may have accrued as of the
Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.
3. Compensation. For the services to be performed by Executive for
Consolidated Association under this Agreement, Executive shall be compensated in
the following manner:
- 3 -
(a) Cash Compensation.
(i) During the Term of Employment Consolidated Association shall
pay Executive cash compensation which shall not be less than the sum of the
aggregate annualized salary paid to Executive by the Bank as of September 30,
1997 and the annual bonus awarded to Executive by the Bank with respect to 1997.
Cash compensation shall be payable in accordance with the normal payroll
practices of Consolidated Association with respect to executive personnel as
presently in effect or as they may be modified by Consolidated Association from
time to time.
(ii) During the Term of Employment Executive shall be eligible to
be considered for cash-compensation increases, upon review, in accordance with
the compensation policies of Zions Bancorp with respect to executive personnel
as presently in effect or as they may be modified by Zions Bancorp from time to
time.
(b) Employee Benefit Plans or Arrangements. During the Term of
Employment, Executive shall be entitled to participate in all employee benefit
plans of Zions Bancorp, as presently in effect or as they may be modified by
Zions Bancorp from time to time, under such terms as may be applicable to
officers of Executive's rank employed by Zions Bancorp or its subsidiaries,
including, without limitation, plans providing retirement benefits, medical
insurance, life insurance, disability insurance, and accidental death or
dismemberment insurance.
(c) Vacation and Sick Leave. During the Term of Employment, Executive
shall be entitled to paid annual vacation periods and sick leave in accordance
with the policies of Zions Bancorp as in effect as of the Commencement Date or
as may be modified by Zions Bancorp from time to time as may be applicable to
officers of Executive's rank employed by Zions Bancorp or its subsidiaries, but
in no event less than that provided to Executive by the Bank at September 30,
1997.
(d) Withholding. All compensation to be paid to Executive hereunder
shall be subject to required withholding and other taxes.
(e) Expenses. During the Term of Employment, Executive shall be
reimbursed for reasonable travel and other expenses incurred or paid by
Executive in connection with the performance of his services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as may from time to time be requested, in accordance with
such policies of Zions Bancorp as are in effect as of the Commencement Date and
as may be modified by Zions Bancorp from time to time, under such terms as may
be applicable to officers of Executive's rank employed by Zions Bancorp or its
subsidiaries.
4. Confidential Business Information; Non-Competition.
(a) Executive acknowledges that certain business methods, creative
techniques, and technical data of Zions Bancorp and Consolidated Association and
their affiliates and the like are deemed by Consolidated Association to be and
are in fact confidential business information either of Zions Bancorp or
Consolidated Association or their affiliates. Such confidential information
- 4 -
includes but is not limited to procedures, methods, sales relationships
developed while in the service of Consolidated Association or its affiliates,
knowledge of customers and their requirements, marketing plans, marketing
information, studies, forecasts, and surveys, competitive analyses, mailing and
marketing lists, new business proposals, lists of vendors, consultants, and
other persons who render service or provide material to Zions Bancorp or
Consolidated Association or their affiliates, and compositions, ideas, plans,
and methods belonging to or related to the affairs of Zions Bancorp or
Consolidated Association or their affiliates. In this regard, Consolidated
Association asserts proprietary rights in all of its business information and
that of its affiliates except for such information as is clearly in the public
domain. Notwithstanding the foregoing, information that would be generally known
or available to persons skilled in Executive's fields shall be considered to be
"clearly in the public domain" for the purposes of the preceding sentence.
Executive agrees that he will not disclose or divulge to any third party, except
as may be required by his duties hereunder, by law, regulation, or order of a
court or government authority, or as directed by Consolidated Association, nor
shall he use to the detriment of Consolidated Association or its affiliates or
use in any business or on behalf of any business competitive with or
substantially similar to any business of Zions Bancorp or Consolidated
Association or their affiliates, any confidential business information obtained
during the course of his employment by Consolidated Association. The foregoing
shall not be construed as restricting Executive from disclosing such information
to the employees of Zions Bancorp or Consolidated Association or their
affiliates.
(b) Executive hereby agrees that from the Commencement Date until the
second anniversary of the Termination Date, Executive will not (i) engage in the
banking business other than on behalf of Zions Bancorp or Consolidated
Association or their affiliates within the Market Area (as hereinafter defined),
(ii) directly or indirectly own, manage, operate, control, be employed by, or
provide management or consulting services in any capacity to any firm,
corporation, or other entity (other than Zions Bancorp or Consolidated
Association or their affiliates) engaged in the banking business in the Market
Area, or (iii) directly or indirectly solicit or otherwise intentionally cause
any employee, officer, or member of the respective Boards of Directors of
Consolidated Association or any of its affiliates to engage in any action
prohibited under (i) or (ii) of this section 4(b); provided that the ownership
by Executive as an investor of not more than five percent of the outstanding
shares of stock of any corporation whose stock is listed for trading on any
securities exchange or is quoted on the automated quotation system of the
National Association of Securities Dealers, Inc., or the shares of any
investment company as defined in section 3 of the Investment Company Act of
1940, as amended, shall not in itself constitute a violation of Executive's
obligations under this section 4(b).
(c) Executive acknowledges and agrees that irreparable injury will
result to Consolidated Association in the event of a breach of any of the
provisions of this section 4 (the "Designated Provisions") and that Consolidated
Association will have no adequate remedy at law with respect thereto.
Accordingly, in the event of a material breach of any Designated Provision, and
in addition to any other legal or equitable remedy Consolidated Association may
have, Consolidated Association shall be entitled to the entry of a preliminary
and permanent injunction (including, without limitation, specific performance)
by a court of competent jurisdiction in Salt Lake County, Utah, Denver County,
Colorado, or elsewhere, to restrain the violation or breach thereof by Executive
or any affiliates, agents, or any other persons acting for or with Executive in
any capacity whatsoever, and Executive submits to the jurisdiction of such court
in any such action.
- 5 -
(d) It is the desire and intent of the parties that the provisions of
this section 4 shall be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this section 4 shall be
adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. In
addition, should any court determine that the provisions of this section 4 shall
be unenforceable with respect to scope, duration, or geographic area, such court
shall be empowered to substitute, to the extent enforceable, provisions similar
hereto or other provisions so as to provide to Consolidated Association, to the
fullest extent permitted by applicable law, the benefits intended by this
section 4.
(e) As used herein, "Market Area" shall mean El Paso County, Colorado.
5. Life Insurance. In light of the unusual abilities and experience of
Executive, Consolidated Association in its discretion may apply for and procure
as owner and for its own benefit insurance on the life of Executive, in such
amount and in such form as Consolidated Association may choose. Consolidated
Association shall make all payments for such insurance and shall receive all
benefits from it. Executive shall have no interest whatsoever in any such policy
or policies but, at the request of Consolidated Association, shall submit to
medical examinations and supply such information and execute such documents as
may reasonably be required by the insurance company or companies to which
Consolidated Association has applied for insurance.
6. Representations and Warranties.
(a) Executive represents and warrants to Consolidated Association that
his execution, delivery, and performance of this Agreement will not result in or
constitute a breach of or conflict with any term, covenant, condition, or
provision of any commitment, contract, or other agreement or instrument,
including, without limitation, any other employment agreement, to which
Executive is or has been a party.
(b) Executive represents and warrants to Consolidated Association that
the sum of the aggregate annualized salary paid to Executive by the Bank as of
September 30, 1997 and the annual bonus awarded to Executive by the Bank with
respect to 1997 does not exceed $[__________].
(c) Executive shall indemnify, defend, and hold harmless Consolidated
Association for, from, and against any and all losses, claims, suits, damages,
expenses, or liabilities, including court costs and counsel fees, which
Consolidated Association has incurred or to which Consolidated Association may
become subject, insofar as such losses, claims, suits, damages, expenses,
liabilities, costs, or fees arise out of or are based upon any failure of any
representation or warranty of Executive in section 6(a) or section 6(b) hereof
to be true and correct when made.
- 6 -
7. Notices. All notices, consents, waivers, or other communications
which are required or permitted hereunder shall be in writing and deemed to have
been duly given if delivered personally or by messenger, transmitted by telex or
telegram, by express courier, or sent by registered or certified mail, return
receipt requested, postage prepaid. All communications shall be addressed to the
appropriate address of each party as follows:
If to Consolidated Association:
[____________________________]
[____________________________]
[____________________________]
[____________________________]
Attention: Chief Executive Officer
With a required copy to:
Xxxxx X. Xxxxxx, Esq.
Duane, Morris & Heckscher LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to Executive:
Xx. Xxxx X. Xxxxxxx
000 Xxxx Xxxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
With a required copy to:
Xxxxxx X. Xxxx, Esq.
Berniger, Berg, Diver, Xxxxxxx & Xxxx-Xxxxx, LLC
00 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
All such notices shall be deemed to have been given on the date delivered,
transmitted, or mailed in the manner provided above.
8. Assignment. Neither party may assign this Agreement or any rights
or obligations hereunder without the consent of the other party.
9. Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Utah, without giving effect
to the principles of conflict of law thereof. The parties hereby designate Salt
Lake County, Utah and Denver County, Colorado
- 7 -
to be proper jurisdictions and venues for any suit or action arising out of this
Agreement. Each of the parties consents to personal jurisdiction in each of such
venues for such a proceeding and agrees that he or it may be served with process
in any action with respect to this Agreement or the transactions contemplated
thereby by certified or registered mail, return receipt requested, or to its
registered agent for service of process in the state of Utah or Colorado. Each
of the parties irrevocably and unconditionally waives and agrees, to the fullest
extent permitted by law, not to plead any objection that it may now or hereafter
have to the laying of venue or the convenience of the forum of any action or
claim with respect to this Agreement or the transactions contemplated thereby
brought in the courts aforesaid.
10. Entire Agreement. This Agreement constitutes the entire
understanding between Consolidated Association and Executive relating to the
subject matter hereof. Any previous agreements or understandings between the
parties hereto or between Executive and the Bank or any of its affiliates or
Consolidated Association or any of its affiliates regarding the subject matter
hereof, including without limitation the terms and conditions of employment,
compensation, benefits, retirement, competition following employment, and the
like, are merged into and superseded by this Agreement. Neither this Agreement
nor any provisions hereof can be modified, changed, discharged, or terminated
except by an instrument in writing signed by the party against whom any waiver,
change, discharge, or termination is sought.
11. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal, or unenforceable for any reason
whatsoever:
(a) the validity, legality, and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable) shall not in any way be affected or impaired thereby;
and
(b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section of this Agreement
containing any such provisions held to be invalid, illegal, or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal, or unenforceable.
12. Arbitration. Subject to the right of each party to seek specific
performance (which right shall not be subject to arbitration), if a dispute
arises out of or related to this Agreement, or the breach thereof, such dispute
shall be referred to arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). A dispute subject to the
provisions of this section will exist if either party notifies the other party
in writing that a dispute subject to arbitration exists and states, with
reasonable specificity, the issue subject to arbitration (the "Arbitration
Notice"). The parties agree that, after the issuance of the Arbitration Notice,
the parties will try in good faith to resolve the dispute by mediation in
accordance with the Commercial Rules of Arbitration of AAA between the date of
the issuance of the Arbitration Notice and the date the dispute is set for
arbitration. If the dispute is not settled by the date set for arbitration, then
any controversy or claim arising out of this Agreement or the breach hereof
shall be resolved by binding
- 8 -
arbitration and judgment upon any award rendered by arbitrator(s) may be entered
in a court having jurisdiction. Any person serving as a mediator or arbitrator
must have at least ten years' experience in resolving commercial disputes
through arbitration. In the event any claim or dispute involves an amount in
excess of $100,000, either party may request that the matter be heard by a panel
of three arbitrators; otherwise all matters subject to arbitration shall be
heard and resolved by a single arbitrator. The arbitrator or arbitrators shall
be seated in Denver, Colorado. The arbitrator or arbitrators shall have the same
power to compel the attendance of witnesses and to order the production of
documents or other materials and to enforce discovery as could be exercised by a
United States District Court judge sitting in the District of Colorado. In the
event of any arbitration, each party shall have a reasonable right to conduct
discovery to the same extent permitted by the Federal Rules of Civil Procedure,
provided that such discovery shall be concluded within ninety days after the
date the matter is set for arbitration. The arbitrator or arbitrators shall have
the power to award reasonable attorney's fees to a party. Any provision in this
Agreement to the contrary notwithstanding, this section shall be governed by the
Federal Arbitration Act and the parties have entered into this Agreement
pursuant to such Act.
13. Costs of Litigation. In the event litigation is commenced to
enforce any of the provisions hereof, or to obtain declaratory relief in
connection with any of the provisions hereof, the prevailing party shall be
entitled to recover reasonable attorney's fees. In the event this Agreement is
asserted in any litigation as a defense to any liability, claim, demand, action,
cause of action, or right asserted in such litigation, the party prevailing on
the issue of that defense shall be entitled to recovery of reasonable attorney's
fees.
14. Affiliation. A company will be deemed to be "affiliated" with
Zions Bancorp, Consolidated Association, or the Bank according to the definition
of "Affiliate" set forth in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended.
15. Headings. The section and subsection headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto executed or caused this
Agreement to be executed as of the day and year first above written.
[____________________________]
Attest: By:
----------------------------- ------------------------------
- 9 -
XXXX X. XXXXXXX
Witness:
--------------------------- ------------------------------
EXHIBIT VIII
OPINION OF DUANE, MORRIS & HECKSCHER LLP
[___________________], 1998
SBT Bankshares, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
State Bank and Trust of Colorado Springs
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Re: Merger of SBT Bankshares, Inc. With Val Cor Bancorporation, Inc., In
Exchange for Stock of Zions Bancorporation
Mesdames and Gentlemen:
We are special counsel to Zions Bancorporation, a corporation
organized under the laws of the State of Utah with its head office located at
Salt Lake City, County of Salt Lake, State of Utah ("Zions Bancorp"), its
wholly-owned subsidiary, Val Cor Bancorporation, Inc., a corporation organized
under the laws of the State of Colorado with its head office located at Cortez,
County of Montezuma, State of Colorado ("Val Cor"), and its subsidiary, Valley
National Bank of Cortez, a national banking association organized under the laws
of the United States with its head office located at Cortez, County of
Montezuma, State of Colorado ("Valley"), in connection with the merger (the
"Holding Company Merger") of SBT Bankshares, Inc., a corporation organized under
the laws of the State of Colorado with its head office located at Colorado
Springs, County of El Paso, State of Colorado (the "Company"), with and into Val
Cor in exchange for which shareholders of the Company will receive shares of the
common stock of Zions Bancorp and cash pursuant to an Agreement and Plan of
Reorganization dated December 19, 1997 (the "Agreement") and an Agreement of
Merger dated as of [__________], 1998 (the "Holding Company Merger Agreement"),
and in connection with the consolidation (the "Bank Consolidation") of State
Bank and Trust of
SBT Bankshares, Inc.
State Bank and Trust of Colorado Springs
[____________________], 1998
Page 2
Colorado Springs, a banking corporation organized under the laws of the State of
Colorado, with its head office located at Colorado Springs, County of El Paso,
State of Colorado and a wholly-owned subsidiary of the Company (the "Bank"),
with Valley pursuant to the Agreement and an Agreement of Consolidation dated as
of [___________], 1998 (the "Bank Consolidation Agreement") (the Agreement, the
Holding Company Merger Agreement, and the Bank Consolidation Agreement to be
referred to collectively as the "Agreements").
This opinion is provided to you pursuant to Section 5.3 of the
Agreement.
In our capacity as special counsel, we have participated in the
preparation of a Registration Statement filed with the Securities and Exchange
Commission on Form S-4 covering the shares of Zions Bancorp stock to be issued
in connection with the Holding Company Merger (the "Registration Statement")
including the Prospectus/Proxy Statement for the shareholders of the Company
(the "Prospectus/Proxy Statement"). In addition, in rendering the opinions that
follow, we have examined executed copies of the Agreements and the exhibits and
schedules appended thereto; the articles of incorporation or association and
bylaws of Zions Bancorp, Val Cor, and Valley; the minutes of certain meetings of
the board of directors of Zions Bancorp, Val Cor, and Valley; and such other
corporate documents and corporate records of Zions Bancorp, Val Cor, and Valley
as we have deemed necessary or appropriate for the purpose of rendering the
following opinions. We have also examined [ set forth regulatory approvals,
consents and waivers ]. In addition, we have interviewed officers of Zions
Bancorp, Val Cor, and Valley and undertaken and performed such other procedures
as we have deemed necessary or appropriate for the purpose of rendering the
following opinions. In these regards, we have examined and relied upon
representations of the Company and the Bank contained in the Agreements, and,
where we have deemed appropriate, representations or certifications of officers
or public officials.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than Zions Bancorp, Val Cor, and Valley had the corporate power
and authority to enter into and perform all obligations thereunder and, as to
such parties other than Zions Bancorp, Val Cor, and Valley, we have also assumed
the execution and delivery of such documents and the validity and binding effect
and enforceability thereof. We have also assumed that the Agreements have not
been otherwise amended by oral or written agreement or by conduct of the parties
thereto. We have assumed that the certifications and representations dated
earlier than the date hereof on which we have expressed reliance herein continue
to remain accurate, insofar as material to our opinions, from such earlier date
through the date hereof. To the extent that the opinions set forth herein
address matters which are governed by the law of any jurisdiction other
SBT Bankshares, Inc.
State Bank and Trust of Colorado Springs
[____________________], 1998
Page 3
than the state of New York, we have assumed that the law of such jurisdiction is
identical to that of New York, including federal law applicable within New York.
In rendering the opinion set forth in paragraph (e) hereof, we have assumed that
neither the Company nor the Bank is subject to any order or directive from, or
memorandum of understanding or similar supervisory agreement entered into with,
any bank regulatory authority which would necessitate the receipt of approvals
or consents from any such bank regulatory authority prior to consummation of the
transactions contemplated in the Agreements other than those approvals and
consents contemplated in the Agreement and Plan of Reorganization and those
generally applicable to such transactions.
Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:
(a) Organization, Powers and Qualifications.
(i) Zions Bancorp is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of Utah and
has the corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted.
(ii) Val Cor is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Colorado and has
the corporate power and authority to own and operate its properties and assets,
to lease properties used in its business, and to carry on its business as now
conducted.
(iii) Valley is a national banking association which is duly
organized, validly existing, and in good standing under the laws of the United
States and has the corporate power and authority to own and operate its
properties and assets, to lease properties used in its business, and to carry on
its business as now conducted. The deposit accounts of Valley are insured by the
Bank Insurance Fund of the Federal Deposit Insurance Corporation and, to the
best of our knowledge, no proceedings for the termination of such insurance are
pending or threatened.
(b) Execution and Performance of Agreements. Each of Zions Bancorp,
Val Cor, and Valley has the corporate power and authority to execute, deliver,
and perform each of the Agreements to which it is a party and to carry out the
terms thereof and the transactions contemplated thereby.
(c) Compliance with Corporate Documents. Neither the execution,
delivery, or performance by Zions Bancorp, Val Cor, or Valley of the Agreements
nor the consummation of the transactions contemplated therein will violate,
conflict with, or constitute a breach of or default under the respective
articles of incorporation or association or bylaws of Zions Bancorp, Val Cor, or
Valley.
SBT Bankshares, Inc.
State Bank and Trust of Colorado Springs
[____________________], 1998
Page 4
(d) Binding Obligations; Due Authorization. Each of the Agreements to
which it is a party has been duly authorized by all necessary corporate action
on the part of each of Zions Bancorp, Val Cor, and Valley, has been duly
executed and delivered by each of Zions Bancorp, Val Cor, and Valley, and
constitutes a valid, legal, and binding obligation of Zions Bancorp, Val Cor, or
Valley, as the case may be, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship, or similar laws or judicial decisions
relating to or affecting creditors' rights generally or the rights of creditors,
or of the FDIC as insurer, regulator, conservator or receiver, of banks the
accounts of which are insured by the FDIC in particular, or by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) as to whose availability we express no opinion. No other
corporate proceedings on the part of any of Zions Bancorp, Val Cor, or Valley
are necessary to authorize any of the Agreements to which it is a party or the
carrying out of the transactions contemplated thereby.
(e) Regulatory Approvals. All approvals or waivers required to be
obtained from the Federal Reserve Bank of San Francisco, the Board of Governors
of the Federal Reserve System, the Comptroller of the Currency, the Colorado
State Banking Board, and the Department of Financial Institutions of the State
of Utah to consummate the transactions contemplated by the Agreement have been
obtained. Except for those approvals or waivers, the execution and delivery by
Zions Bancorp, Val Cor, and Valley of each of the Agreements to which it is a
party and consummation of the transactions contemplated thereby do not require
the approval or consent of any bank regulatory authority.
(f) Issuance of Zions Bancorp Common Stock. The shares of the Common
Stock of Zions Bancorp, no par value, to be issued by Zions Bancorp pursuant to
the Agreement and the Holding Company Merger Agreement, when issued pursuant to
and in accordance with the Agreement and the Holding Company Merger Agreement,
will be duly authorized and legally issued, fully paid, and non-assessable.
(g) Compliance with Securities Laws.
(i) The Registration Statement has become effective under the
Securities Act of 1933, as amended (the "Act"), and, to the best of our
knowledge, no stop order proceedings with respect thereto have been instituted
or are pending or threatened under the Act with respect to the Registration
Statement.
SBT Bankshares, Inc.
State Bank and Trust of Colorado Springs
[____________________], 1998
Page 5
(ii) The Registration Statement complies on its face as to form in
all material respects with the requirements of the federal securities laws and
published rules and regulations of the Securities and Exchange Commission as of
the date thereof.
In connection with our participation in the preparation of the
Registration Statement, we have not independently verified the accuracy,
completeness, or fairness of the statements contained therein or of documents
incorporated by reference therein, and we make no representation to you as to
the accuracy or completeness of statements of fact contained or incorporated by
reference in the Registration Statement or the Prospectus/Proxy Statement.
Nothing, however, has come to our attention that would lead us to believe that
the Registration Statement as of the effective date or the date hereof, or the
Prospectus/Proxy Statement as of the issue date or the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements and schedules and other financial and statistical data
included or incorporated by reference therein, as to which we make no statement)
or that any event has occurred which should have been set forth in an amendment
or supplement to the Registration Statement or Prospectus/Proxy Statement and
which has not been set forth in such amendment or supplement.
This opinion is given to you for your sole benefit in connection with
the transactions contemplated in the Agreements, and no other person or entity
is entitled to rely thereon, nor may copies be delivered or furnished to any
other party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior written consent.
Very truly yours,
