EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION made as of the twenty-first
day of May, 1997, between ZIONS BANCORPORATION ("Zions Bancorp"), a Utah
corporation having its principal office in Salt Lake City, Utah, NEVADA STATE
BANK, a banking corporation organized under the laws of the State of Nevada ("NS
Bank"), SUN STATE CAPITAL CORPORATION (the "Company"), a Nevada corporation
having its principal office in Las Vegas, Nevada, and SUN STATE BANK, a banking
corporation organized under the laws of the State of Nevada ("SS Bank")
W I T N E S S E T H T H A T:
WHEREAS, Zions Bancorp is a bank holding company which desires to
affiliate with the Company and, in addition, to cause the merger of its
subsidiary, NS Bank, with the subsidiary of the Company, SS Bank, with NS Bank
to be the resulting banking corporation; and
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 SS Bank and the areas served by the Company and SS Bank to become
affiliated with Zions Bancorp and to cause the merger of SS Bank with and into
NS Bank (the "Bank Merger");
WHEREAS, the respective boards of directors of NS Bank and SS Bank have
determined that it would be in the best interests of NS Bank or SS Bank, as the
case may be, its shareholders and customers, for NS Bank and SS Bank to merge
with each other;
WHEREAS, the respective Boards of Directors of the Company and Zions
Bancorp have agreed to the merger (the "Merger") of the Company with and into
Zions Bancorp pursuant to the provisions of section 92A.005 et seq. of the
Nevada Revised Statutes and section 16-10a-1101 et seq. of the Utah Business
Corporation Act; and to cause the Bank Merger pursuant to the provisions of
section 666.015 et seq. of the Nevada Revised Statutes and section 92A.005 et
seq. of the Nevada Revised Statutes; and
WHEREAS, the parties intend that the Merger and the Bank Merger 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) Zions Bancorp and the Company will execute a merger agreement
(the "Merger Agreement") substantially in the form of Exhibit I annexed hereto.
Subject to the provisions of the Merger Agreement, the Company will be merged
with and into Zions Bancorp (the "Merger"), and Zions Bancorp shall be the
surviving corporation. The shares of 1992 Series Preferred Stock of the Company
(the "Company Preferred Stock") and the shares of common stock 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 respectively provided in section
1.2(b)(i) and 1.2(b)(ii) hereof.
(b) Zions Bancorp and the Company will respectively cause NS Bank
and SS Bank to execute a merger agreement (the "Bank Merger Agreement")
substantially in the form of Exhibit II annexed hereto. Immediately following
the effectiveness of the Merger, and subject to the provisions of the Bank
Merger Agreement, SS Bank will be merged with and into NS Bank (the "Bank
Merger"), and NS Bank shall be the surviving banking corporation. The shares of
common stock of SS Bank shall be canceled.
1.2. Consideration for Merger.
(a) Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth in this Subparagraph (a).
Additional terms may be defined elsewhere herein.
(i) Average Closing Price. The average (rounded to the nearest
xxxxx) of each Daily Sales Price over the Pricing Period.
(ii) Daily Sales Price. For any trading day, 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.
(iii) Dissenting Shares. The shares of Company Common Stock
held by those shareholders of the Company who have timely and properly exercised
their dissenters' rights in accordance with all applicable laws (the "Appraisal
Laws").
(iv) Pricing Period. The twenty consecutive trading days
ending on and including the fifth trading day preceding the Effective Date,
except that if prior to the fifth trading day preceding the Effective Date Zions
Bancorp shall have publicly announced its entry into a definitive agreement
providing for a change in control (which for purposes of this paragraph means a
sale of more than 50 percent of the voting stock of Zions Bancorp to an
unaffiliated person, or a sale of more than 50 percent of the voting stock of
Zions First National Bank ("Zions Bank") to an unaffiliated person, or a merger
or consolidation or a sale of all or substantially all of the assets of Zions
Bancorp or Zions Bank with or to an unaffiliated person in a transaction in
which individuals who constitute the board of directors of Zions Bancorp or
Zions Bank, as the case may be, prior to the transaction cease to constitute at
least a majority thereof following the transaction), then the Pricing Period
shall be the twenty consecutive trading days ending on and including the trading
day preceding such public announcement.
-2-
(v) Purchase Price. The sum of the amounts described in
subsections (A) through (E) of this section 1.2(a)(v), reduced by the amounts
described in subsections (F) through (H) of this section 1.2(a)(v).
(A) Base Purchase Price. $37,000,000.
(B) Earn-Out. The consolidated net undistributed income of the
Company during the period beginning on May 1, 1997 and ending on the close of
business on the last day of the calendar month preceding the effective date of
the Merger (the "Effective Date"), calculated in accordance with generally
accepted accounting principles. For the purpose of calculating consolidated net
undistributed income of the Company, (I) the effect of 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), all of
which shall be determined in accordance with generally accepted accounting
principles, shall be excluded except as mutually agreed by the parties hereto;
and (II) any loss, net of taxes, resulting from operating transactions
recommended by the Company to Zions Bancorp as likely to produce economic
benefits to the Company and approved in writing by Zions Bancorp prior to their
effectuation shall be excluded. It is understood that the amount calculated
under this section 1.2(a)(v)(B) may be a negative number and that the effect of
summing such a negative number would be a reduction in the Purchase Price.
(C) Prorated Earn-Out. The product of the daily average of the
consolidated net undistributed income of the Company during the period and
calculated in the manner prescribed in section 1.2(a)(v)(B) hereof (first
reduced, however, solely for purposes of performing calculations under this
section 1.2(a)(v)(C), by the expenses of the Company between May 1, 1997 and the
close of business on the last day of the calendar month preceding the Effective
Date (net of any applicable tax benefit or expense) with respect to (I)
attorneys, accountants, investment bankers, consultants, brokers and finders,
and other third parties who have or will have rendered services to the Company
or SS Bank in connection with the Merger, and (II) Third Party Termination
Costs, which for purposes of this Agreement mean damages, penalties, liquidated
damages, termination fees, break-up fees, topping fees, expense-reimbursement
provisions, repurchases of stock options, fees in settlement of actual or
threatened litigation, and other similar costs and related expenses incurred to
resolve outstanding claims or relationships with any party other than Zions
Bancorp and NS Bank in connection with a potential change in control) times the
number of days in the month of the Effective Date which precede the Effective
Date. It is understood that the amount calculated under this section
1.2(a)(v)(C) may be a negative number and that the effect of summing such a
negative number would be a reduction in the Purchase Price.
(D) Option-Exercise Proceeds. The aggregate contributions to
capital of the Company caused by the payments accompanying the exercise of any
stock options after April 30, 1997.
(E) Proceeds of Sale of Treasury Shares. The proceeds to the
Company of sales of shares out of the treasury after April 30, 1997, net of the
cost to the Company of purchases of shares into the treasury after April 30,
1997. It is understood that the amount calculated under this section
-3-
1.2(a)(v)(E) may be a negative number and that the effect of summing such a
negative number would be a reduction in the Purchase Price.
(F) Reduction for Extraordinary Dividends. The excess of the
dividends and distributions declared or paid by the Company with respect to all
classes of its capital stock between January 1, 1997 and April 30, 1997 over the
dividends and distributions that are customarily paid by the Company to holders
of all classes of its capital stock during the January 1-April 30 period. It is
understood that the amount calculated under this section 1.2(a)(v)(F) may be a
negative number and that the effect of reducing the Purchase Price by such a
negative number would be an increase in the Purchase Price.
(G) Reduction for Transaction Fees. The consolidated net
after-tax expenses of the Company between January 1, 1997 and April 30, 1997
with respect to attorneys, accountants, investment bankers, consultants, brokers
and finders, and other third parties who have or will have rendered services to
the Company or SS Bank in connection with any potential change in control (which
for purposes of this paragraph, paragraph (H) immediately below, and section
7.10(f) of this Agreement means a potential sale of more than 50 percent of the
voting stock of the Company to an unaffiliated person, or a potential sale of
more than 50 percent of the voting stock of SS Bank to an unaffiliated person,
or a potential merger or consolidation or a potential sale of all or
substantially all of the assets of the Company or SS Bank with or to an
unaffiliated person in a transaction in which individuals who constitute the
board of directors of the Company or SS Bank, as the case may be, prior to the
transaction would cease to constitute at least a majority thereof following the
transaction), including, without limitation, the Merger and the Bank Merger.
(H) Reduction for Third Party Termination Costs. The
consolidated expenses of the Company between January 1, 1997 and April 30, 1997
with respect to Third Party Termination Costs, without the accrual of any
offsetting income tax benefit unless the accrual of such income tax benefit is
concurred in by Zions Bancorp, which concurrence will not be unreasonably
withheld.
(vi) Zions Bancorp Stock. The common stock of Zions Bancorp,
no par value.
(b) Form of Consideration. 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:
(i) Holders of Company Preferred Stock. Each holder of shares
of Company Preferred Stock shall be entitled to receive, in exchange for each
share of Company Preferred Stock held of record by such stockholder as of the
Effective Date, at his or her election except as provided herein one of the
following, or a combination of Zions Bancorp Stock and cash determined in
accordance with section 1.3:
(A) that number of shares of Zions Bancorp Stock calculated by
dividing $110 plus accrued and unpaid dividends on one share of Company
Preferred Stock by the Average Closing Price (the "Preferred Stock
Consideration"); or
-4-
(B) $110 per share plus accrued and unpaid dividends on one
share of Company Preferred Stock (the "Preferred Cash Consideration").
(ii) Holders of Company Common Stock. 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, at his or her election except as provided herein one of the following, or
a combination of Zions Bancorp Stock and cash determined in accordance with
section 1.3:
(A) that number of shares of Zions Bancorp Stock calculated by
dividing the Purchase Price by the Average Closing Price, and by further
dividing the number so reached by the number of shares of Company Common Stock
that shall be issued and outstanding at the Effective Date (the "Common Stock
Consideration"); or
(B) that amount of cash calculated by dividing the Purchase
Price by the number of shares of Company Common Stock that shall be issued and
outstanding at the Effective Date (the "Common Cash Consideration").
1.3. Elections.
(a) Certain Definitions.
(i) Stock Consideration. Preferred Stock Consideration and
Common Stock Consideration are referred to collectively in this Agreement as
"Stock Consideration."
(ii) Cash Consideration. Preferred Cash Consideration and
Common Cash Consideration are referred to collectively in this Agreement as
"Cash Consideration."
(iii) Company Stock. Company Preferred Stock and Company
Common Stock are referred to collectively in this Agreement as "Company Stock."
(b) Entitlement to Elect. Subject to the election and allocation
procedures set forth in this section, each holder of Company Stock (other than
holders of dissenting shares) will be entitled, with respect to each share of
Company Stock held by such holder, to (i) elect to receive the Stock
Consideration (a "Stock Election"), or (ii) elect to receive the Cash
Consideration (a "Cash Election"), or (iii) indicate that such holder has no
preference as between receipt of the Stock Consideration and receipt of the Cash
Consideration (a "Non-Election"). With respect to each share of Company
Preferred Stock covered by a Non-Election, a Cash Election shall be deemed to
have been made by the holder of such share.
(c) Cash Election Number. The number of shares of Company Common
Stock to be converted into the right to receive the Cash Consideration in the
Merger shall be no greater than (i) 49 percent of the sum of (A) the number of
shares of Company Common Stock issued and outstanding or held in the Company's
treasury immediately prior to the Effective Time and (B) the product of a
fraction, the numerator of which is the Preferred Cash Consideration and the
denominator of which is the Common Cash Consideration (such fraction the
"Preferred/Common Conversion Factor"), times the number of shares of Company
-5-
Preferred Stock issued and outstanding or held in the Company's treasury
immediately prior to the Effective Time, less (ii) the sum of (A) the Dissenting
Shares and (B) the quotient computed by dividing the aggregate amount of cash to
be received by holders of Company Preferred Stock pursuant to section 1.2(b)(i)
of this Agreement by the Common Cash Consideration and (C) the quotient computed
by dividing the aggregate amount of cash to be received by each shareholder of
the Company pursuant to Section 1.4 hereof by the Common Cash Consideration. The
maximum number of shares of Company Common Stock to be converted into the right
to receive the Cash Consideration, as calculated pursuant to this paragraph, is
referred to in this Agreement as the "Cash Election Number."
(d) Election -Adjustments. If the aggregate number of shares
of Company Common Stock covered by Cash Elections (the "Cash Election Shares")
exceeds the Cash Election Number, (i) all shares of Company Common Stock covered
by Stock Elections (the "Stock Election Shares") and all shares of Company
Common Stock covered by Non-Elections (the "Non-Election Shares") shall be
converted into the right to receive the Stock Consideration, and (ii) all Cash
Election Shares shall be converted into the right to receive Zions Bancorp Stock
and cash in the following manner: each Cash Election Share shall be converted
into the right to receive (A) an amount in cash, without interest, equal to the
product of (1) the Common Cash Consideration and (2) a fraction (the "Cash
Fraction"), the numerator of which shall be the Cash Election Number and the
denominator of which shall be the total number of Cash Election Shares, and (B)
a number of shares of Zions Bancorp Stock equal to the product of (1) the Common
Stock Consideration and (2) a fraction equal to one minus the Cash Fraction.
(e) Non-Election Adjustments. In the event that Section 1.3(d)
of this Agreement is not applicable, all Cash Election Shares and all shares of
Company Preferred Stock covered by Non-Elections shall be converted into the
right to receive the Common Cash Consideration and Preferred Cash Consideration,
respectively, all Stock Election Shares shall be converted into the right to
receive the Stock Consideration, and the Non-Election Shares, if any, shall be
converted into the right to receive (i) if the aggregate number of Cash Election
Shares and Non-Election Shares does not exceed the Cash Election Number, Common
Cash Consideration for each Non-Election Share and (ii) if such aggregate number
does exceed the Cash Election Number, Zions Bancorp Stock and cash in the
following manner: each Non-Election Share shall be converted into the right to
receive (i) an amount in cash, without interest, equal to the product of (x) the
Common Cash Consideration and (y) a fraction (the "Non-Election Fraction"), the
numerator of which shall be the excess of (A) the Cash Election Number over (B)
the total number of Cash Election Shares and the denominator of which shall be
the total number of Non- Election Shares and (ii) a number of shares of Zions
Bancorp Stock equal to the product of (x) the Common Stock Consideration and (y)
a fraction equal to one minus the Non-Election Fraction.
(f) Adjustments Relating to Tax Opinions. If the tax opinion
referred to in section 3.4 of this Agreement cannot be rendered (as reasonably
determined by the person that is to render such opinion and reasonably concurred
in by Duane, Morris & Heckscher), as a result of the Merger potentially failing
to satisfy continuity of interest requirements under applicable federal income
tax principles relating to reorganizations under Section 368(a) of the Code,
then Zions Bancorp shall decrease the Cash Election Number to the minimum extent
necessary to enable the relevant tax opinion or opinions, as the case may be, to
be rendered.
-6-
(g) Exercise of Election.
(i) All Cash Elections, Stock Elections, and Non-Elections
shall be made on a form designed for that purpose by the Exchange Agent
designated in section 1.6 of this Agreement (a "Form of Election") and mailed to
holders of record of shares of Company Stock as of the record date for the
meeting at which the shareholders of the Company meet to approve, ratify, and
confirm the transactions contemplated by this Agreement or such other date as
Zions Bancorp and the Company shall mutually agree (the "Election Form Record
Date"). Zions Bancorp and the Company shall make available one or more Forms of
Election as may be reasonably requested by all persons who become holders or
beneficial owners of Company Stock between the Election Form Record Date and the
close of business on the day prior to the Election Deadline.
(ii) Elections shall be made by holders of Company Stock
by mailing to the Exchange Agent a Form of Election. Any holder of Company Stock
may allocate his or her Company Stock among Cash Election Shares, Stock Election
Shares, and Non-Election Shares as he or she sees fit, that is, by electing to
allocate all to one category or by dividing his or her Company Stock among more
than one category, provided that if the sum of the shares of any holder as to
which Cash Elections, Stock Elections, and Non-Elections are made exceed the
total number of shares held by that holder, the Exchange Agent shall consider
all the elections submitted by that holder to have been not properly made and,
accordingly, subject to the procedures set forth in section 1.3(i).
(iii) To be effective, a Form of Election must be properly
completed, signed, and submitted to the Exchange Agent; and the Exchange Agent
must also have received, no later than the Election Deadline, the certificates
representing the shares of Company Stock as to which the election is being made
(or an appropriate guarantee of delivery by an appropriate trust company in the
United States or a member of a registered national securities exchange or the
National Association of Securities Dealers, Inc.).
(iv) The Exchange Agent will have the discretion to
reasonably determine whether Forms of Election have been properly completed,
signed, and submitted or revoked and to disregard immaterial defects in Forms of
Election. The decision of the Exchange Agent in such matters shall be conclusive
and binding. Zions Bancorp will not be under any obligation to notify any person
of any defect in a Form of Election submitted to the Exchange Agent, but the
Exchange Agent shall use commercially reasonable efforts to notify a holder of
any such defect.
(v) The Exchange Agent shall make all computations
contemplated by this Section 1.3, and all computations shall be conclusive and
binding on the holders of Company Stock.
(h) Election Deadline. A Form of Election must be received by
the Exchange Agent by the close of business on the tenth business day following
the Closing Date (the "Election Deadline") in order to be effective. Any holder
of Company Stock who has made an election by submitting a Form of Election to
the Exchange Agent may at any time prior to the Election Deadline change his or
her election by submitting a revised Form of Election, properly completed and
signed, that is received by the Exchange Agent prior to the Election Deadline.
Any holder of Company Stock may at any time prior to the Election Deadline
revoke his
-7-
or her election and withdraw his or her certificates deposited with the Exchange
Agent by written notice to the Exchange Agent received by the close of business
on the day prior to the Election Deadline. As soon as practicable after the
Election Deadline, the Exchange Agent shall determine the allocation of the cash
portion of the Merger Consideration and the stock portion of the Merger
Consideration and shall notify Zions Bancorp of its determination.
(i) Deemed Non-Election. For the purposes hereof, a holder of
Company Common Stock (including a holder of Dissenting Shares who shall have
failed to perfect, or shall have effectively withdrawn or lost, his or her right
to dissent from the Merger under the Appraisal Laws) who does not submit a Form
of Election which is received by the Exchange Agent prior to the Election
Deadline shall be deemed to have made a Non-Election. If the Exchange Agent
shall determine that any purported Cash Election or Stock Election was not
properly made, such purported Cash Election or Stock Election shall be deemed to
be of no force and effect and the shareholder making such purported Cash
Election or Stock Election shall for purposes hereof be deemed to have made a
Non-Election.
1.4. No Fractional Shares. Zions Bancorp will not issue fractional
shares of Zions Bancorp 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 the Average Closing Price. Such fractional share
interest shall not include the right to vote or to receive dividends or any
interest thereon.
1.5. 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 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 1.6
of this Agreement) and, upon receipt of the certificates representing shares of
Company 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 1.4 hereof.
1.6. Designation of Exchange Agent. The Company and Zions Bancorp
hereby designate Zions Bank as Exchange Agent to effect the exchange
contemplated hereby. Zions Bancorp will, promptly after the Election Deadline,
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 Stock in
accordance with this Agreement.
1.7. Notice of Exchange. Promptly after the Effective Date, Zions
Bank shall mail to each holder of one or more certificates formerly representing
Company Stock, except to such holders as shall have waived the notice required
by this Section 1.7, 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.
-8-
1.8. Treatment of Stock Options. Each stock option to purchase
Company Common Stock not exercised prior to the Effective Date shall
automatically be canceled on and as of the Effective Date.
1.9 Voting Agreements. Simultaneously herewith, each person listed on
Schedule 1.9 hereof shall 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 the Company 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.
1.10. Employee Benefits. If any employee of the Company or of SS 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 SS 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 SS 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 date following the day upon which the
shareholders of the Company approve, ratify, and confirm the transactions
contemplated by this Agreement; or
2.2. Bank Shareholder Approval. The date following the day upon which
the shareholder of SS Bank approves, ratifies, and confirms the Bank Merger; 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 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 Merger; or
2.4. FDIC Approval. The first to occur of (a) the date thirty days
following the date of the order of the Federal Deposit Insurance Corporation
(the "FDIC") approving the Bank Merger, or (b) if, pursuant to section 321(b) of
the Xxxxxx Act, the FDIC 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
-9-
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 "Utah Commissioner") approving
the transactions contemplated by this Agreement; or
2.6. Nevada Commissioner Approval. The date ten days following the
date of the order of the Commissioner of Financial Institutions of the State of
Nevada (the "Nevada Commissioner") 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 FDIC, the Utah Commissioner, or the Nevada
Commissioner 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 and the Company to consummate the
Merger and the obligations of NS Bank and SS Bank to consummate the Bank Merger
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 of the business of the Company, the
business of SS Bank, and each of the branches of SS 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.
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 Merger or the Bank Merger, or which would reasonably be expected to restrict
materially the operation of the business of the Company or that of SS 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
-10-
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. Registration Statement.
(a) Effectiveness. 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 Merger (the "Registration Statement") shall have become
effective under that 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 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.
3.4. Federal Income Taxation. Zions Bancorp and the Company shall
have received a written opinion of Rothgerber, Appel, Powers & Xxxxxxx LLP, or
of McGladrey & Xxxxxx, LLP, or of another firm mutually agreeable to Zions
Bancorp and the Company, 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.
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.
4. Conditions Precedent to Performance of the Obligations of Zions
Bancorp and NS Bank.
The obligations of Zions Bancorp and NS 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 Zions Bancorp in writing unless not so permitted by law:
4.1. Approval by Shareholders of the Company and SS 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 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 Nevada.
(b) The shareholders of SS Bank shall have authorized,
ratified, and confirmed the Bank Merger by not less than the requisite
percentage of the outstanding voting stock of each class of SS Bank, in
accordance with the applicable laws of the State of Nevada.
-11-
4.2. Representations and Warranties; Performance of Obligations. All
representations and warranties of the Company and SS 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 representatives and warranties
of the Company or SS 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 SS 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 SS Bank shall
deliver to Zions Bancorp a certificate to that effect. The delivery of such
officers' certificate shall in no way diminish the warranties, representations,
covenants, and obligations of the Company and SS Bank made in this Agreement.
4.3. Opinion of Company Counsel. Zions Bancorp shall have received a
favorable opinion from Rothgerber, Appel, Powers & Xxxxxxx LLP, dated the
Effective Date, substantially in form and substance as that set forth as Exhibit
IV 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 SS Bank dated the Effective Date, substantially in form and
substance as that set forth as Exhibit V attached hereto.
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 SS 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 SS 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 December 31, 1996 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 SS Bank taken as a whole,
nor shall the Company or SS 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, except as adjusted to account
for issuances of Company Common Stock pursuant to the exercise of options
described in section 6.9 of this Agreement and the resale by the Company of
shares of Company Common Stock held in the treasury on the date of this
Agreement consistent with section 7.4(b) of this Agreement, the capital
structure of the Company and the capital structure of SS Bank shall be as stated
in section 6.9.
-12-
(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 SS 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 chairman and president and the chief financial
officer of the Company and the chairman and president and the chief financial
officer of SS 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 SS 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)
$12,649,648, (b) the amount of the quarterly cash dividend of the Company to
holders of its common stock that, pursuant to the historical practice of the
Company, would have been paid with respect to the first quarter 1997 had its
declaration not been forgone by the directors of the Company; (c) the aggregate
contributions to capital caused by the payments accompanying the exercise of any
stock options on or after December 31, 1996, and (d) the proceeds of the resale
by the Company of shares of Company Common Stock subscribed for or held in the
treasury on the date of this Agreement consistent with section 7.4(b) of this
Agreement.
4.8. Loan Loss Reserve. On and as of the Effective Date, the
aggregate reserve for loan losses of SS Bank as determined in accordance with
generally accepted accounting principles shall not be less than $1,865,790.
4.9. CRA Rating. The CRA rating of SS Bank shall be no lower than
"satisfactory."
4.10. Termination of EDS Contract. The Company and SS Bank shall have
terminated the contract with EDS for data processing services, such termination
to have been carried out in a manner consistent with the objectives of section
11.2(b) of this Agreement and to be effective no later than the Effective Date.
4.11. Employment Agreement. Xxxx Xxxxxxx shall have entered into an
employment agreement with NS Bank substantially in form and substance as that
set forth as Exhibit VI attached hereto.
5. Conditions Precedent to Performance of Obligations of the Company and
SS Bank.
-13-
The obligations of the Company and SS 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 NS Bank. The shareholders of NS Bank
shall have authorized, ratified, and confirmed the Bank Merger by not less than
the requisite percentage of the outstanding voting stock of each class of NS
Bank, in accordance with the applicable laws of the State of Nevada.
5.2. Representations and Warranties; Performance of Obligations. All
representations and warranties of Zions Bancorp and NS 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 Zions Bancorp and NS 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
Zions Bancorp or NS Bank on or prior to the Effective Date shall have been so
performed or met. On the Effective Date, either the Chairman of the Board or the
President of Zions Bancorp and either the Chairman of the Board or the President
of NS Bank shall deliver to the Company a certificate to that effect. The
delivery of such officer's certificate shall in no way diminish the warranties,
representations, covenants, and obligations of Zions Bancorp and NS Bank made in
this Agreement.
5.3. Opinion of Zions Bancorp Counsel. The Company shall have
received a favorable opinion of Duane, Morris & Heckscher, dated the Effective
Date, substantially in form and substance as that set forth as Exhibit VII
attached hereto.
5.4. No Adverse Developments. During the period from December 31,
1996 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 Chairman of the Board or the 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 or those of NS Bank 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).
6. Representations and Warranties of the Company and SS Bank.
The Company (with respect to itself and SS Bank) and SS Bank (solely
with respect to itself) each represents and warrants to Zions Bancorp and NS
Bank as follows:
6.1. Organization, Powers, and Qualification. Each of the Company and
SS Bank is a corporation which is duly organized, validly existing, and in good
-14-
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 SS 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 SS Bank in any material respect. Each of the Company and SS 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 SS Bank in any material respect.
6.2. Execution and Performance of Agreement. Each of the Company and
SS 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.
(a) Neither the Company nor SS 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 SS
Bank has received any claim or notice of violation with respect thereto;
(b) Neither the Company nor SS Bank nor any member of the
management of any 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 Deposit Insurance Corporation (the "FDIC"), any other banking or
securities authority of the United States or the State of Nevada, or any other
regulatory agency that relates to the conduct of the business of the Company or
SS 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 SS 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 SS 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 SS
Bank with respect to all such laws and regulations reasonably limit
noncompliance and detect and report noncompliance to its management; and
-15-
(d) SS 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 SS Bank; (iii) ongoing CRA training
of all personnel of SS Bank, including the members of its board of directors;
and (iv) procedures whereby all significant CRA-related activity is documented;
and SS Bank has officially designated a CRA officer who reports directly to the
board of directors and is responsible for the CRA program of SS Bank.
6.4. Compliance with Agreements. Neither the Company nor SS Bank is
in violation of any material term of any material security agreement, mortgage,
indenture, or any other contract, agreement, instrument, lease, or certificate.
The capital ratios of each of the Company and SS 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 SS 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 SS Bank. Subject to approval by
its shareholders of this Agreement, no other corporate proceedings on the part
of either the Company or SS 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 SS 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 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 SS Bank pursuant to any material agreement or
instrument under which the Company or SS 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 SS Bank in
respect of which it is an obligor; (b) if the 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 Merger, and
if the transactions contemplated by this Agreement are approved by the FDIC, the
Nevada Commissioner, and the Utah Commissioner, violate any law, statute, rule,
or regulation of any government or agency to which the Company or SS 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 SS 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
-16-
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 FDIC, the Nevada Commissioner, and the Utah Commissioner.
6.7. Compliance with BHC Act.
(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 SS Bank or over any company that directly
or indirectly has control over SS Bank.
6.8. Subsidiaries.
(a) Other than SS Bank, which is a direct, wholly-owned
subsidiary of the Company, 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 SS 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 SS Bank, or calling for or requiring the
issuance of any securities or rights convertible into or exchangeable for shares
of capital stock of SS 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 SS Bank prepared in accordance with generally accepted
accounting principles.
(b) Except as specified in the previous subsection, neither
the Company nor SS 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) 1,000,000 shares of preferred stock, $100 par value, of which 40,000 are
designated as 1992 Series Preferred Stock (the "Company Preferred Stock"), of
which Company Preferred Stock, as of the date of this Agreement, 5,719 shares
have been duly issued and are validly outstanding, fully paid, and held by
approximately 21 stockholders of record, and (ii) 10,000,000 shares of Company
Common Stock, $0.01 par value, of which, as of the date of this Agreement,
284,750 shares have been duly issued and are validly outstanding, fully paid,
and held by approximately 76 shareholders of record, and 2,750 additional shares
are issued and held in the treasury of the Company, 250 of which have been
subscribed for. The aforementioned shares of Company Preferred Stock and Company
Common Stock are the only voting securities of the Company authorized, issued,
outstanding, or subscribed for as of such date; and except as set forth in this
Section
-17-
6.9 or 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 Preferred Stock or Company
Common Stock are held by the Company as treasury shares except for the 2,750
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.
(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 Preferred Stock and 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 Preferred Stock or Company Common Stock
designated or made available for grant but not yet granted.
(c) The authorized capital stock of SS Bank consists of 400
shares of common stock, $12,500 par value (the "SS Bank Common Stock"), of
which, as of the date of this Agreement, 258 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 SS Bank Common Stock
are the only voting securities of SS 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
SS 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
SS Bank. None of the SS Bank Common Stock is subject to any restrictions upon
the transfer thereof under the terms of the corporate charter or bylaws of SS
Bank.
(d) None of the shares of Company Common Stock or SS 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 SS 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 SS
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.
(g) Holders of Company Preferred Stock have no right to vote
upon any consolidation, merger, or sale of all or substantially all of the
assets of the Company.
(h) No dividends on Company Preferred Stock are in arrears.
(i) No balance is outstanding under the $14-million line of
credit which the Company maintains secured by Small Business Administration loan
pools.
-18-
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 SS 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 SS 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 SS Bank since their respective inceptions.
These minute books accurately reflect all transactions 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 SS 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 SS Bank.
6.11. Books and Records. The books and records of each of the Company
and SS 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 SS Bank
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. The Company and SS Bank have made all accruals in amounts
which fairly report income and expense in the proper periods in accordance with
generally accepted accounting principles. Each of the Company and SS 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 SS Bank:
(a) All regulatory approvals received since January 1, 1992,
of the Company and SS 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
SS 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;
-19-
(c) All material contracts, agreements, leases, mortgages, and
commitments, except those entered into in the ordinary course of business, to
which the Company or SS 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;
(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 SS 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 SS 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 SS Bank operates its businesses or is authorized to operate its
businesses, or with respect to which the Company or SS 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 SS 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 and state tax returns filed by the Company or
SS Bank for the years 1991 through 1996, a copy of the most recent audit
examination of each of the Company and SS Bank by the Internal Revenue Service
("IRS"), if any, a copy of the most recent state revenue agency examination, if
any, of each of the Company and SS Bank, and all tax rulings with respect to the
Company or SS Bank received from the IRS since January 1, 1988.
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, March 31, 1997, and April 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 generally
accepted accounting principles applied in all material respects, and (b) are in
accordance with the books and records of the Company and SS Bank which have been
maintained in accordance with generally accepted accounting principles or the
requirements of financial institution regulatory authorities, as the case may
be, 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
generally accepted 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) SS 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 generally
accepted accounting principles applied in all material respects or, to the
extent different from generally accepted accounting principles, accounting
principles mandated by the applicable instructions to such Consolidated Reports
of Condition or Consolidated Reports of Income.
(b) No adjustments are required to be made to the equity
capital account of SS 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 quarterly reports on Forms FR Y-9C and FR Y-9LP as filed with
the Board of Governors as of March 31, 1997.
6.15. Absence of Undisclosed Liabilities. At April 30, 1997, neither
the Company nor SS 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) for unfunded loan commitments made by
the Company or SS 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)
accrued in accordance with generally accepted accounting principles and unpaid
at December 31, 1996. Since December 31, 1996, neither the Company nor SS Bank
has incurred or paid any obligation or liability that would be material (on a
consolidated basis) to the Company, except (y) for obligations incurred or paid
in connection with transactions by it in the ordinary course of its business
consistent with past practices, or (z) as expressly contemplated herein.
6.16. Absence of Certain Developments. Since December 31, 1996,
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 SS 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 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 SS Bank
of any regular dividend, special dividend, or other distribution with respect to
any class of capital stock of the Company or SS Bank, other than customary cash
dividends paid by the Company or SS Bank whose amounts have not exceeded past
practice and the intervals between which dividends have not been more frequent
than past practice;
-21-
(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 SS 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 SS Bank
nor any substantial amendment or termination of any material contract outside
the ordinary course of business to which the Company or SS Bank is a party, nor
any other transaction by the Company or SS Bank involving an amount in excess of
$50,000 other than for fair value in the ordinary course of its business. Since
December 31, 1996, except as set forth on Schedule 6.16 hereof, (x) each of the
Company and SS 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
December 31, 1996; 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 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) All federal, state, local, and foreign tax returns and
reports (including, without limitation, all income tax, unemployment
compensation, social security, payroll, sales and use, excise, privilege,
property, ad valorem, franchise, license, school, and any other tax under laws
of the United States or any state or municipal or political subdivision thereof)
required to be filed by or on behalf of the Company or SS 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 to the
best information and belief of the management of the Company and SS Bank and
properly reflect its taxes for the periods covered thereby. All taxes 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 SS Bank, except as reserved against in
the Company Financial Statements. All federal, state, and local taxes,
assessments, interest, additions, deficiencies, fees, penalties, and other
governmental charges or impositions due with respect to completed and settled
examinations or concluded litigation have been properly accrued or paid.
-22-
(b) Neither the Company nor SS 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 federal, state, local, or foreign taxes
are due from the Company or SS 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) Deferred taxes of the Company and SS Bank have been
provided for in accordance with generally accepted accounting principles as in
effect on the date of this Agreement.
(e) The deductions of SS Bank for bad debts taken and the
reserve of SS 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
Nevada 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 SS Bank.
(g) The Company and SS Bank have timely filed all information
returns required by sections 6041, 6041A, 6042, 6045, 6049, 6050H, and 6050J of
the Code and have exercised due diligence in obtaining certified taxpayer
identification numbers as required pursuant to Treasury Regulations ss.
35a.9999.
(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.
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 $12,500,000.
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 SS Bank
issued by the FDIC and the Nevada Commissioner. 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 SS 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 FDIC, (c)
the United States Department of the Treasury, (d) the Nevada Commissioner, and
(e)
-23-
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 SS
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
SS Bank (collectively, "Insiders") has any ongoing material transaction with the
Company or SS 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 SS Bank not in the ordinary course
of business; and (c) all other extensions of credit by the Company or SS 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 SS Bank are registered or required to be registered under the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
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 SS Bank has been served with process or
otherwise been given notice) or, to the best of the knowledge of the Company and
SS 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. Neither the Company nor SS
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 SS Bank, no such proceeding is threatened.
6.26. Federal Deposit Insurance.
(a) The deposits held by SS 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 SS
Bank has paid all assessments and filed all related reports and statements
required under the Federal Deposit Insurance Act.
-24-
(b) SS 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 SS Bank are insured by the Savings Association
Insurance Fund of the FDIC ("SAIF"), and SS Bank pays no insurance assessments
to the SAIF.
6.27. Other Insurance. Schedule 6.27 hereof lists each policy of
insurance carried by the Company and SS Bank, including blanket bond coverage.
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 SS Bank is in default with respect to any such policy
which is material to it.
6.28. Labor Matters. Neither the Company nor SS Bank is a party to or
bound by any collective bargaining contracts with respect to any employees of
the Company or SS Bank. Since their respective inceptions there has not been,
nor to the best of the knowledge of the Company and SS 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 SS 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 SS Bank is
aware of any attempts to organize a collective bargaining unit to represent any
of its employee groups.
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 SS Bank
for the employees or former employees of the Company or SS 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 SS Bank has any liability
with respect to any pension plan qualified under section 401 of the Code.
Neither the Company nor SS Bank sponsors or maintains any defined benefit plan
and has never sponsored or maintained any defined benefit plan.
-25-
(c) All "employee benefit plans," as defined in section 3(3)
of ERISA, that cover one or more employees employed by the Company or SS 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 December 31, 1996, neither the
Company nor SS 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, SS 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 SS Bank has incurred any liability
under section 4201 of ERISA for a complete or partial withdrawal from a
multi-employer plan.
(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 SS 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 SS 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 SS Bank is engaged in any unfair labor practice. As of the date
hereof, no dispute exists between the Company or SS 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 SS Bank.
6.31. Fiduciary Activities. SS 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. SS
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, SS 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) Neither the Company nor SS 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
-26-
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) Neither the Company, SS Bank, nor, to the best of the
knowledge of either of them, any borrower of the Company or of SS Bank has
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 SS Bank or, to the best of the knowledge of either of
them, any borrower of the Company or of SS 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 SS Bank (collectively, the "Company Real Estate") has
been used by the Company or SS 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 SS 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 SS 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 SS Bank on, upon, or into any of the Company Real
Estate. In addition, to the best of the knowledge of the Company and SS Bank,
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 SS Bank (collectively, the
"Collateral Real Estate"), neither the Company nor SS 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.
-27-
(e) As used in this Section 6.32, each of the terms "Company"
and "SS Bank" includes the applicable entity and any partnership or joint
venture in which it has an interest.
6.33. Intangible Property. To the best of the knowledge of the
Company and SS Bank, each of the Company and SS 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. To the best of the knowledge of the Company
and SS Bank, no material product or service offered and no material trademark,
service xxxx, or similar right used by the Company or SS Bank infringes any
rights of any other person, and, as of the date hereof, neither the Company nor
SS 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 SS 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 SS Bank, its real and personal property and
other assets, including without limitation those properties and assets reflected
in the Company Financial Statements as of December 31, 1996, or acquired by the
Company or SS Bank subsequent to the date thereof. The leases pursuant to which
the Company and SS 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 SS 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 SS 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 SS Bank,
each loan, lease, and discount reflected as an asset of the Company in the
Company Financial Statements as of December 31, 1996, 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 $50,000 is
subject to any asserted defense, offset, or counterclaim known to the Company or
SS Bank.
(b) Except as set forth on Schedule 6.35 hereof, neither the
Company nor SS Bank holds any loans or loan-participation interests purchased
from, or participates in any loans originated by, any person other than the
Company or SS Bank.
6.36. Material Contracts. Neither the Company nor SS Bank nor any of
the assets, businesses, or operations of any 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 by it without penalty,
other than (a) the agreements set forth on Schedule 6.36 hereof, and (b)
agreements,
-28-
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 SS Bank
to any of its officers, directors, consultants, or other management officials
and any officer, director, 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 SS Bank or any other event affecting the
ownership, control, or management of the Company or SS Bank; and
(b) all employment and severance contracts, agreements, and
arrangements between the Company or SS 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 SS 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. Neither the Company nor SS 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 SS 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. [reserved]
6.42. Internal Controls. Each of the Company and SS 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 generally accepted accounting principles or,
in the case of SS Bank and to the extent different from generally accepted
accounting principles, accounting principles mandated by the FDIC. The controls
contain self-monitoring mechanisms, and appropriate actions are taken on
significant deficiencies as they are identified.
-29-
6.43. Dividends. Neither the Company nor SS 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.
6.44. Brokers and Advisers. Except as set forth on Schedule 6.44
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 SS 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 SS Bank, and
(b) neither the Company nor SS 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.
6.45. Interest Rate Risk Management Instruments. Neither the Company
nor SS Bank is a party to, and none of its properties or assets may be bound by,
any interest-rate swaps, caps, floors, or options agreements or other
interest-rate risk management arrangements.
6.46. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by the Company or SS 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, liabilities, financial
condition, results of operations, or prospects of the Company or SS 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 or NS Bank or solely
by Zions Bancorp or NS Bank and third parties hereto, are true, correct, and
complete copies thereof and include all amendments, supplements, and
modifications thereto and all waivers thereunder.
6.47. Regulatory and Other Approvals. As of the date hereof, neither
the Company nor SS 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 SS 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 SS 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 SS Bank as such business is carried on
immediately prior to the Effective Date.
-30-
7. Covenants of the Company and SS Bank.
The Company (on behalf of itself and SS Bank) and SS Bank (on behalf
of itself) each hereby covenants and agrees as follows:
7.1. Rights of Access. In addition and not in limitation of any other
rights of access provided to Zions Bancorp and NS Bank herein, until the
Effective Date the Company and SS Bank will give to Zions Bancorp and NS Bank
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 NS Bank, and such
information with respect to their business affairs and properties as Zions
Bancorp or NS Bank from time to time may reasonably request; provided that
copies of documents may be redacted to remove material whose disclosure is, in
the judgment of independent counsel to the company, inconsistent with the
fiduciary obligations of the directors of the Company or SS Bank.
7.2. Corporate Records, Contracts, etc.
(a) The Company and SS Bank will make available to Zions
Bancorp and NS Bank 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.
(b) The Company and SS Bank will make available copies of all
contracts or agreements involving amounts in excess of $25,000 to which the
Company or SS 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 SS Bank will furnish to Zions Bancorp and
NS Bank the following information with respect to properties owned by the
Company and SS Bank: (i) a brief description and location of each parcel of real
property owned by the Company or SS Bank, (ii) a brief description of real
property covered by lease or other rental arrangements to which the Company or
SS 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 SS 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 SS 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
January 1, 1997 and the Effective Date which it customarily prepared during the
period between January 1, 1995 and December 31, 1996 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
-31-
accordance with generally accepted accounting principles applied in all material
respects (except that Consolidated Reports of Condition and Consolidated Reports
of Income required to be filed by SS Bank under federal law may be prepared in
accordance with the official instructions applicable thereto at the time of
filing).
(b) The Company and SS 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 SS Bank, as the case
may be; provided that the copies so provided may be redacted to remove material
whose disclosure is, in the judgment of independent counsel to the company,
inconsistent with the fiduciary obligations of the directors of the Company or
SS Bank.
7.4. Extraordinary Transactions. Without the prior written consent of
Zions Bancorp, neither the Company nor SS 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 SS 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 (except for
issuances of Company Common Stock already subscribed for or upon exercise of
stock options outstanding on the date of this Agreement or issued subsequent to
the date of this Agreement consistently with the next parenthetical phrase of
this sentence, and except for the sale to one or more officers or employees of
the Company or SS Bank, in such amounts and in a manner which are in every case
consistent with past practice of the Company, of shares of Company Common Stock
held in the treasury on December 31, 1996), or grant any options to acquire such
additional securities (except pursuant to stock option plans in existence on the
date of this Agreement and in amounts and on terms which are in every case
consistent with past practice of the Company and which, in any event, will not
cover more than 8,400 shares of Company Common Stock); (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 tity
of SS 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
-32-
exceed 4.5 percent per annum of the aggregate payroll as of January 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 SS Bank.
7.5. Preservation of Business. Each of the Company and SS 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 December 31,
1996, 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 1995 and 1996, 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.
7.6. Comfort Letter. At the time of the effectiveness of the
Registration Statement, but prior to the mailing of the proxy materials, and at
the Effective Date, the Company shall furnish Zions Bancorp with a letter from
McGladrey & Xxxxxx, LLP, in form and substance acceptable to Zions Bancorp,
stating that (a) they are independent accountants with respect to the Company
within the meaning of the 1933 Act and the published rules and regulations
thereunder, (b) in their opinion the consolidated financial statements of the
Company included in the Registration Statement and examined by them comply as to
form in all material respects with the applicable accounting requirements of the
1933 Act and the published rules and regulations thereunder, and (c) a reading
of the Company's audited consolidated financial statements and the latest
available unaudited consolidated financial statements of the Company and
unaudited financial statements of SS Bank and inquiries of certain officials of
the Company and SS Bank responsible for financial and accounting matters as to
transactions and events since the date of the most recent consolidated statement
of condition included in their most recent audit report with respect to the
Company did not cause them to believe that (i) the Company's audited
consolidated financial statements and such latest available unaudited
consolidated financial statements are not stated on a basis consistent with that
followed in the Company's audited consolidated financial statements; or (ii)
except as disclosed
-33-
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 most
recent Company audited consolidated financial statements. The letter shall also
cover such other matters pertaining to the Company's and SS Bank's financial
data and statistical information included in the Registration Statement as may
reasonably be requested by Zions Bancorp.
7.7. 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. 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 the shares of Zions Bancorp Stock to be received by such
person in the Merger except in compliance with the applicable provisions of the
1933 Act and the rules and regulations thereunder.
7.8. Inconsistent Activities. Unless and until the Merger has been
consummated or this Agreement has been terminated in accordance with its terms,
neither the Company nor SS 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 SS 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 SS 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 Merger, or the Bank Merger, the
Company and SS Bank shall immediately give notice thereof to Zions Bancorp.
7.9. [reserved]
7.10. Certain Accruals. As of or before the close of business on the
last day of the calendar month preceding the Effective Date, the Company shall
have accrued the following items of expense or income, net of any applicable tax
benefit or expense:
(a) the benefit liability of SS Bank under the Sun State Bank
Salary Continuation Plan, with respect to each executive of SS Bank covered
thereby, through the Effective Date;
(b) the cost of having terminated the EDS Contract as required
by section 4.10 of this Agreement, and the cost of complying with section
11.2(b) of this Agreement;
-34-
(c) the expense or income accompanying the conforming of the
reserve for loan and lease losses of SS Bank to the requirements of section 4.8
of this Agreement and generally accepted accounting principles;
(d) the cost of (i) continuation or extension after the
Effective Date of any existing directors and officers liability insurance policy
covering the errors and omissions of directors and officers of the Company or SS
Bank preceding the Effective Date, and (ii) continuation or extension after the
Effective Date of any other errors and omissions, liability, or property and
casualty insurance policy providing coverage to any directors, officers or
employees of the Company or SS Bank preceding the Effective Date;
(e) the expense, through the Effective Date, of the attorneys,
accountants, investment bankers, consultants, brokers and finders, and other
third parties who will have rendered services to the Company or SS Bank through
the Effective Date; and
(f) the expenses of the Company and SS Bank from May 1, 1997
through the Effective Date with respect to Third Party Termination Costs,
including reasonable provision for any such costs and related expenses which
foreseeably may be incurred by the Company or SS Bank following the Effective
Date, in all cases without the accrual of any offsetting income tax benefit
unless the accrual of such income tax benefit is concurred in by Zions Bancorp,
which concurrence will not be unreasonably withheld.
8. Representations and Warranties of Zions Bancorp and NS Bank.
Zions Bancorp (with respect to itself and NS Bank) and NS Bank
(solely with respect to itself) each represents and warrants to the Company and
SS Bank as follows:
8.1. Organization, Powers, and Qualification. Each of Zions Bancorp
and NS 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 Zions Bancorp and NS 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 its operation and properties in any
material respect. Each of Zions Bancorp and NS Bank 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
and NS Bank has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its respective terms.
-35-
8.3. Binding Obligations; Due Authorization. This Agreement
constitutes the valid, legal, and binding obligations of each of Zions Bancorp
and NS 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 Zions
Bancorp and NS Bank. No other corporate proceedings on the part of either 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 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 Zions
Bancorp or NS Bank. 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 or NS Bank 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 Merger is approved by the Board of Governors under the
BHC, or if the Board of Governors waives its jurisdiction over the Merger, and
if the transactions contemplated by this Agreement are approved by the FDIC, the
Nevada Commissioner, and the Utah Commissioner, violate any law, statute, rule,
or regulation of any government or agency to which Zions Bancorp or NS Bank 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 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 FDIC, the Nevada Commissioner, and the
Utah Commissioner.
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
or NS Bank in connection with the transactions contemplated by this Agreement or
based upon any agreement or arrangement made by or on behalf of either of them.
(b) Neither Zions Bancorp nor NS 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.
-36-
8.6. Books and Records. The books and records of each of Zions
Bancorp and NS 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 Zions Bancorp and NS
Bank 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 and NS Bank 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
and NS Bank 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 March 31, 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.
8.8. Absence of Certain Developments. Since March 31, 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 or solely by the
Company and third parties
-37-
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 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 Merger will be settled as soon
thereafter as shall be reasonable under the circumstances; and then
(c) The Bank Merger 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 March 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
SS Bank contained in Section 6 hereof was materially incorrect when made, or
(ii)
-38-
in the event of a material breach or material failure by the Company or SS Bank
of any covenant or agreement of the Company or SS 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 SS 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 or
NS Bank 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 or
NS Bank of any covenant or agreement of Zions Bancorp or NS 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 Zions Bancorp or NS Bank,
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 Merger has become
inadvisable or impracticable by reason of the institution of litigation by the
federal government or the government of the State of Nevada 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, NS Bank the Company, or SS 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 confidentiality agreement contained in that section shall
survive such termination, and (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 in the amount of $1,000,000 to the other
party or parties hereto that are not affiliated with it.
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 the board of directors of such party, 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 board of directors or officer taking such
action, such waiver will not have a materially adverse effect on the benefits
intended hereunder 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.
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 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.
(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
-39-
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.
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. 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
Company, (ii) 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 (iii) the costs
referred to in Section 7.10 shall be deemed to be incurred on behalf of the
Company.
11.2. Mutual Cooperation.
(a) General. Subject to the terms and conditions herein
provided, each party shall use its best efforts, and shall cooperate fully with
the other party, in carrying out the provisions of this Agreement and in making
all filings and obtaining all necessary governmental approvals, and shall
execute and deliver, or cause to be executed and delivered, such governmental
notifications and additional documents and instruments and do or cause to be
done all additional things necessary, proper, or advisable under applicable law
to consummate and make effective the transactions contemplated hereby.
(b) Data Processing Conversion. Prior to the Effective Date,
the parties shall cooperate, and shall make all reasonable efforts to cause
their respective data processing service providers to cooperate, to complete all
reasonable steps for an orderly transfer of all applicable data tapes and
processing information, and to facilitate an electronic and systematic
conversion of all applicable data regarding SS Bank to NS Bank's own system of
electronic data processing by the next business day following the Effective
Date. Each party shall bear its own costs associated with the transfer of tapes
and information and the conversion of data. Prior to the Effective Date, SS Bank
will provide all test tapes and reports necessary to complete the transfer and
will provide a test tape and deconversion reports within fifteen days of the
date of this Agreement, a preliminary tape and set of deconversion reports six
weeks prior to the Effective Date, and an updated preliminary tape and set of
deconversion reports no more than two weeks prior to the Effective Date. SS Bank
shall also arrange the delivery to NS Bank at the main office of NS Bank (or at
such other location as has been designated in writing by NS Bank no later than
five business days before the Effective Date) no later than 6:00 a.m. Pacific
time on the day immediately following the Effective Date, two duplicate final
data processing conversion file packages and deconversion reports in an industry
standard format.
-40-
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, NS Bank, the Company, SS 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, NS Bank, the Company,
SS Bank, nor their respective subsidiaries shall use any of such information for
any other purpose, including, without limitation, the competitive detriment of
the other party. Zions Bancorp and NS Bank, on the one hand, and the Company and
SS 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.
11.5. Claims of Brokers.
(a) Each of the Company and SS Bank shall indemnify, defend,
and hold Zions Bancorp and NS 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 the transactions contemplated by this Agreement or based upon
any agreement or arrangement made by it or on its behalf with respect to Zions
Bancorp or NS Bank.
(b) Each of Zions Bancorp and NS Bank shall indemnify, defend,
and hold the Company and SS 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 SS 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
-41-
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 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 December 31, 1996, 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 December 31, 1996, 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
-42-
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) During the twenty consecutive trading days ending on and
including the fifth trading day preceding the Effective Date, except such days
within such period as are not within the Pricing Period, Zions Bancorp shall not
repurchase Zions Bancorp Stock in the open market unless done both (i) in
connection with, and consistently with established patterns of stock repurchases
with regard to, a dividend reinvestment plan, employee stock savings plan,
employee investment savings plan, 401(k) plan, or similar plan, and (ii)
following the receipt of favorable advice from independent securities counsel
for Zions Bancorp.
(c) Following the Effective Date neither Zions Bancorp nor NS
Bank will take any action to abrogate or diminish any right accorded under the
articles of incorporation or by-laws of the Company or SS Bank as they existed
immediately prior to the Effective Date to any person who, on or prior to the
Effective Date, was a director or officer of the Company or SS 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 and by-laws of
the Company or SS Bank to any person who, on or prior to the Effective Date, was
a director or officer of the Company or SS Bank shall survive the Effective Date
and, following the Merger and the Bank Merger, to the extent permitted by law,
Zions Bancorp and NS Bank 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 SS 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.
-43-
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, NS Bank, the
Company, SS Bank, and their respective shareholders, any rights or remedies
under or by reason of this Agreement. Nothing in this Agreement express or
implied is intended or shall be construed to make shareholders or former
shareholders of the Company, in their capacities as shareholders or former
shareholders, liable for any damages incurred by Zions Bancorp, NS Bank or any
other person for whose benefit the Company or SS Bank has made or makes any
representation, warranty, covenant, or agreement hereunder.
11.13. Survival of Representations, Warranties, and Covenants. Except
as otherwise provided in this Agreement, the respective representations,
warranties, and covenants of each party to this Agreement shall not survive the
Effective Date. If either party should breach a representation, warranty, or
covenant contained in this Agreement through fraud, deliberate
misrepresentation, or other intentional tortious conduct, or through gross
negligence, then the representation, warranty, or covenant so breached shall be
deemed to have survived for six years following 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. Officers' Certificates. Each certificate executed and
delivered by an officer of a party pursuant to this Agreement shall be deemed to
have been executed and delivered by such officer in his or her capacity as an
officer of the party on whose behalf the certificate is executed and delivered,
and not in his or her personal capacity, and such officer shall have no personal
liability by reason of his or her execution or delivery of any such certificate
in the absence of fraud, deliberate misrepresentation, other intentional
tortious conduct, or gross negligence on the part of that officer.
11.15. 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.
11.16. 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
-44-
receipt requested, postage prepaid. All communications shall be addressed to the
appropriate address of each party as follows:
If to Zions Bancorp or NS Bank:
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
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to the Company or SS Bank:
Sun State Capital Corporation
0000 Xxxx Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xx. Xxxx Xxxxxxx
President and Chief Executive Officer
With a required copy to:
Xxxxxxx X. Xxxxx, III, Esq.
Rothgerber, Appel, Powers & Xxxxxxx LLP
Suite 3000, One Xxxxx Center
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
All such notices shall be deemed to have been given on the date
delivered, transmitted, or mailed in the manner provided above.
11.17. 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 Xxxxx County, Nevada 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 Nevada. 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.
-45-
11.18. 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.
11.19. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.
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
NEVADA STATE BANK
Attest:__________________________ By:_____________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx III
Senior Vice President President and
and Secretary Chief Executive Officer
SUN STATE CAPITAL CORPORATION
Attest:__________________________ By:_____________________________
Xxxx Xxxxxxx
President and
Chief Executive Officer
SUN STATE BANK
Attest:__________________________ By:_____________________________
Xxxx Xxxxxxx
President and
Chief Executive Officer
-46-
)
State of Utah )
) ss.
County of Salt Lake )
)
On this twenty-first day of May, 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
-47-
)
State of Nevada )
) ss.
County of Xxxxx )
)
On this twenty-first day of May, 1997, before me personally appeared
Xxxxxx X. Xxxxxxx III, to me known to be the President and Chief Executive
Officer of Nevada State Bank, 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
-48-
)
State of Nevada )
) ss.
County of Xxxxx )
)
On this twenty-first day of May, 1997, before me personally appeared
Xxxx Xxxxxxx, to me known to be the President and Chief Executive Officer of Sun
State Capital Corporation and the President and Chief Executive Officer of Sun
State Bank, 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
-49-
The undersigned members of the Board of Directors of Sun State Capital
Corporation (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 Sun State
Bank.
____________________________ _____________________________
____________________________ _____________________________
____________________________ _____________________________
____________________________ ______________________________
-50-
EXHIBIT I
MERGER AGREEMENT
AGREEMENT OF MERGER
This Agreement of Merger is made and entered into as of
[_______________], 1997, between ZIONS BANCORPORATION ("Zions Bancorp"), a
corporation organized under the laws of the State of Utah, and SUN STATE CAPITAL
CORPORATION (the "Company"), a corporation organized under the laws of the State
of Nevada. Zions Bancorp and the Company are hereinafter sometimes individually
called a "Constituent Corporation" and collectively called the "Constituent
Corporations."
RECITALS
Zions Bancorp is a corporation duly organized, validly existing and in
good standing under the laws of the State of Utah. As of [_______________],
1997, the authorized capital stock of Zions Bancorp consisted of [__________]
shares of Common Stock, no par value, of which [_______] shares were issued and
outstanding; no shares of capital stock were held in its treasury on such date.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada. As of [_______________],
1997, the authorized capital stock of the Company consisted of (i) 1,000,000
shares of preferred stock, $100 par value, of which 40,000 were designated as
1992 Series Preferred Stock (the "Company Preferred Stock"), of which [_______]
were issued and outstanding, and non of which were held in its treasury on such
date; and (ii) 10,000,000 shares of Company Common Stock, $0.01 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.
Zions Bancorp and the Company have entered into an Agreement and Plan
of Reorganization, dated May 21, 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 Zions Bancorp (the "Merger") in accordance with this
Agreement of Merger (the "Agreement").
The Boards of Directors of each of Zions Bancorp 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 Zions Bancorp and the Company,
by resolutions duly adopted, have approved the Plan of Reorganization. The
Boards of Directors of each of Zions Bancorp and the Company, by resolutions
duly adopted, have approved this Agreement. The Board of Directors of the
Company has directed that this Agreement, and authorization for the transactions
contemplated hereby, be submitted to stockholders of the Company for approval.
Pursuant to section 16-10a-1103 of the Utah Business Corporation Act, approval
by the shareholders of Zions Bancorp is not required.
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"), or
cash, or a combination of Zions Bancorp Stock and cash, 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 Zions Bancorp. The Company shall be
merged with and into Zions Bancorp on the date and at the time to be specified
in the Articles of Merger to be filed with the Division of Corporations and
Commercial Code of the State of Utah pursuant to section 16-10a-1105 of the Utah
Business Corporation Act and the Secretary of State of the State of Nevada
pursuant to section 92A.200 of the Nevada General Corporation Law (such date and
time being referred to herein as the "Effective Date").
1.2. Effect of the Merger. At the Effective Date:
(a) The Company and Zions Bancorp shall be a single
corporation, which shall be Zions Bancorp. Zions Bancorp 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 Utah 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. 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 Zions Bancorp as they
exist immediately prior to the Effective Date shall be the Articles of
Incorporation of the Surviving Corporation until later amended pursuant to Utah
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
-2-
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 and the amount of cash 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 Zions Bancorp and
otherwise to carry out the purposes of this Agreement.
(b) If, at any time after the Effective Date, Zions Bancorp
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 Zions Bancorp its right, title, or interest in or
under any of the rights, properties, or assets of the Company acquired or to be
acquired by Zions Bancorp 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 Zions Bancorp
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 Zions Bancorp and otherwise to carry out the purposes of this
Agreement; and the proper officers and directors of Zions Bancorp 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 Zions
Bancorp as of the Effective Date shall be [__________] shares of Common Stock,
no par value.
2.2. By-Laws. The By-Laws of Zions Bancorp as they exist immediately
prior to the Effective Date shall be the By-Laws of Zions Bancorp until later
amended pursuant to Utah law.
ARTICLE III
3.1. Manner of Converting Shares.
(a) Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth in this Subparagraph (a).
Additional terms may be defined elsewhere herein.
(i) Average Closing Price. The average (rounded to
the nearest xxxxx) of each Daily Sales Price over the Pricing Period.
-3-
(ii) Daily Sales Price. For any trading day, 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.
(iii) Dissenting Shares. The shares of Company Common
Stock held by those shareholders of the Company who have timely and properly
exercised their dissenters' rights in accordance with all applicable laws (the
"Appraisal Laws").
(iv) Pricing Period. The twenty consecutive trading
days ending on and including the fifth trading day preceding the Effective Date,
except that if prior to the fifth trading day preceding the Effective Date Zions
Bancorp shall have publicly announced its entry into a definitive agreement
providing for a change in control (which for purposes of this paragraph means a
sale of more than 50 percent of the voting stock of Zions Bancorp to an
unaffiliated person, or a sale of more than 50 percent of the voting stock of
Zions First National Bank ("Zions Bank") to an unaffiliated person, or a merger
or consolidation or a sale of all or substantially all of the assets of Zions
Bancorp or Zions Bank with or to an unaffiliated person in a transaction in
which individuals who constitute the board of directors of Zions Bancorp or
Zions Bank, as the case may be, prior to the transaction cease to constitute at
least a majority thereof following the transaction), then the Pricing Period
shall be the twenty consecutive trading days ending on and including the trading
day preceding such public announcement.
(v) Purchase Price. The sum of the amounts described
in subsections (A) through (E) of this section 3.1(a)(v), reduced by the amounts
described in subsections (F) through (H) of this section 3.1(a)(v).
(A) Base Purchase Price. $37,000,000.
(B) Earn-Out. The consolidated net
undistributed income of the Company during the period beginning on May 1, 1997
and ending on the close of business on the last day of the calendar month
preceding the Effective Date, calculated in accordance with generally accepted
accounting principles. For the purpose of calculating consolidated net
undistributed income of the Company, (I) the effect of 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), all of
which shall be determined in accordance with generally accepted accounting
principles, shall be excluded except as mutually agreed by the parties hereto;
and (II) any loss, net of taxes, resulting from operating transactions
recommended by the Company to Zions Bancorp as likely to produce economic
benefits to the Company and approved in writing by Zions Bancorp prior to their
effectuation shall be excluded. It is understood that the amount calculated
under this section 3.1(a)(v)(B) may be a negative number and that the effect of
summing such a negative number would be a reduction in the Purchase Price.
-4-
(C) Prorated Earn-Out. The product of the
daily average of the consolidated net undistributed income of the Company during
the period and calculated in the manner prescribed in section 3.1(a)(v)(B)
hereof (first reduced, however, solely for purposes of performing calculations
under this section 3.1(a)(v)(C), by the expenses of the Company between May 1,
1997 and the close of business on the last day of the calendar month preceding
the Effective Date (net of any applicable tax benefit or expense) with respect
to (I) attorneys, accountants, investment bankers, consultants, brokers and
finders, and other third parties who have or will have rendered services to the
Company or SS Bank in connection with the Merger, and (II) Third Party
Termination Costs, which for purposes of this Agreement mean damages, penalties,
liquidated damages, termination fees, break-up fees, topping fees,
expense-reimbursement provisions, repurchases of stock options, fees in
settlement of actual or threatened litigation, and other similar costs and
related expenses incurred to resolve outstanding claims or relationships with
any party other than Zions Bancorp and its subsidiary, Nevada State Bank, in
connection with a potential change in control) times the number of days in the
month of the Effective Date which precede the Effective Date. It is understood
that the amount calculated under this section 3.1(a)(v)(C) may be a negative
number and that the effect of summing such a negative number would be a
reduction in the Purchase Price.
(D) Option-Exercise Proceeds. The aggregate
contributions to capital of the Company caused by the payments accompanying the
exercise of any stock options after April 30, 1997.
(E) Proceeds of Sale of Treasury Shares. The
proceeds to the Company of sales of shares out of the treasury after April 30,
1997, net of the cost to the Company of purchases of shares into the treasury
after April 30, 1997. It is understood that the amount calculated under this
section 3.1(a)(v)(E) may be a negative number and that the effect of summing
such a negative number would be a reduction in the Purchase Price.
(F) Reduction for Extraordinary Dividends.
The excess of the dividends and distributions declared or paid by the Company
with respect to all classes of its capital stock between January 1, 1997 and
April 30, 1997 over the dividends and distributions that are customarily paid by
the Company to holders of all classes of its capital stock during the January
1-April 30 period. It is understood that the amount calculated under this
section 3.1(a)(v)(F) may be a negative number and that the effect of reducing
the Purchase Price by such a negative number would be an increase in the
Purchase Price.
(G) Reduction for Transaction Fees. The
consolidated net after-tax expenses of the Company between January 1, 1997 and
April 30, 1997 with respect to attorneys, accountants, investment bankers,
consultants, brokers and finders, and other third parties who have or will have
rendered services to the Company or its subsidiary, Sun State Bank, in
connection with any potential change in control (which for purposes of this
paragraph and paragraph (H) immediately below means a potential sale of more
than 50 percent of the voting stock of the Company to an unaffiliated person, or
a potential sale of more than 50 percent of the voting stock of Sun State Bank
to an unaffiliated person, or a potential merger or consolidation or a potential
sale of all or substantially all of the assets of the Company or Sun State Bank
with or to an unaffiliated person in a transaction in which individuals who
constitute the board of directors of the Company or Sun State Bank, as the case
may be, prior to the
-5-
transaction would cease to constitute at least a majority thereof following the
transaction), including, without limitation, the Merger and the merger of Sun
State Bank with and into Nevada State Bank.
(H) Reduction for Third Party Termination
Costs. The consolidated expenses of the Company between January 1, 1997 and
April 30, 1997 with respect to Third Party Termination Costs, without the
accrual of any offsetting income tax benefit unless the accrual of such income
tax benefit is concurred in by Zions Bancorp, which concurrence will not be
unreasonably withheld.
(vi) Zions Bancorp Stock. The common stock of Zions
Bancorp, no par value.
(b) Form of Consideration. Subject to the terms, conditions,
and limitations set forth herein, upon surrender of his or her certificate or
certificates:
(i) Holders of Company Preferred Stock. Each holder
of shares of Company Preferred Stock shall be entitled to receive, in exchange
for each share of Company Preferred Stock held of record by such stockholder as
of the Effective Date, at his or her election except as provided herein one of
the following, or a combination of Zions Bancorp Stock and cash determined in
accordance with section 3.2 of this Agreement:
(A) that number of shares of Zions Bancorp
Stock calculated by dividing $110 plus accrued and unpaid dividends on one share
of Company Preferred Stock by the Average Closing Price (the "Preferred Stock
Consideration"); or
(B) $110 per share plus accrued and unpaid
dividends on one share of Company Preferred Stock (the "Preferred Cash
Consideration").
(ii) Holders of Company Common Stock. 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, at his or her election except as provided herein one of the
following, or a combination of Zions Bancorp Stock and cash determined in
accordance with section 3.2 of this Agreement:
(A) that number of shares of Zions Bancorp
Stock calculated by dividing the Purchase Price by the Average Closing Price,
and by further dividing the number so reached by the number of shares of Company
Common Stock that shall be issued and outstanding at the Effective Date (the
"Common Stock Consideration"); or
(B) that amount of cash calculated by
dividing the Purchase Price by the number of shares of Company Common Stock that
shall be issued and outstanding at the Effective Date (the "Common Cash
Consideration").
-6-
3.2. Elections.
(a) Certain Definitions.
(i) Stock Consideration. Preferred Stock
Consideration and Common Stock Consideration are referred to collectively in
this Agreement as "Stock Consideration."
(ii) Cash Consideration. Preferred Cash Consideration
and Common Cash Consideration are referred to collectively in this Agreement as
"Cash Consideration."
(iii) Company Stock. Company Preferred Stock and
Company Common Stock are referred to collectively in this Agreement as "Company
Stock."
(b) Entitlement to Elect. Subject to the election and
allocation procedures set forth in this section, each holder of Company Stock
(other than holders of dissenting shares) will be entitled, with respect to each
share of Company Stock held by such holder, to (i) elect to receive the Stock
Consideration (a "Stock Election"), or (ii) elect to receive the Cash
Consideration (a "Cash Election"), or (iii) indicate that such holder has no
preference as between receipt of the Stock Consideration and receipt of the Cash
Consideration (a "Non-Election"). With respect to each share of Company
Preferred Stock covered by a Non-Election, a Cash Election shall be deemed to
have been made by the holder of such share.
(c) Cash Election Number. The number of shares of Company
Common Stock to be converted into the right to receive the Cash Consideration in
the Merger shall be no greater than (i) 49 percent of the sum of (A) the number
of shares of Company Common Stock issued and outstanding or held in the
Company's treasury immediately prior to the Effective Time and (B) the product
of a fraction, the numerator of which is the Preferred Cash Consideration and
the denominator of which is the Common Cash Consideration (such fraction the
"Preferred/Common Conversion Factor"), times the number of shares of Company
Preferred Stock issued and outstanding or held in the Company's treasury
immediately prior to the Effective Time, less (ii) the sum of (A) the Dissenting
Shares and (B) the quotient computed by dividing the aggregate amount of cash to
be received by holders of Company Preferred Stock pursuant to section 3.1(b)(i)
of this Agreement by the Common Cash Consideration and (C) the quotient computed
by dividing the aggregate amount of cash to be received by each shareholder of
the Company pursuant to Section 3.3 hereof by the Common Cash Consideration. The
maximum number of shares of Company Common Stock to be converted into the right
to receive the Cash Consideration, as calculated pursuant to this paragraph, is
referred to in this Agreement as the "Cash Election Number."
(d) Election -Adjustments. If the aggregate number of shares
of Company Common Stock covered by Cash Elections (the "Cash Election Shares")
exceeds the Cash Election Number, (i) all shares of Company Common Stock covered
by Stock Elections (the "Stock Election Shares") and all shares of Company
Common Stock covered by Non-Elections (the "Non-Election Shares") shall be
converted into the right to receive the Stock Consideration, and (ii) all Cash
Election Shares shall be converted into the right to receive Zions Bancorp Stock
and cash in the following manner: each Cash Election Share shall be converted
into the right to receive (A) an amount in cash, without interest, equal to the
product
-7-
of (1) the Common Cash Consideration and (2) a fraction (the "Cash Fraction"),
the numerator of which shall be the Cash Election Number and the denominator of
which shall be the total number of Cash Election Shares, and (B) a number of
shares of Zions Bancorp Stock equal to the product of (1) the Common Stock
Consideration and (2) a fraction equal to one minus the Cash Fraction.
(e) Non-Election Adjustments. In the event that Section 3.2(d)
of this Agreement is not applicable, all Cash Election Shares and all shares of
Company Preferred Stock covered by Non-Elections shall be converted into the
right to receive the Common Cash Consideration and Preferred Cash Consideration,
respectively, all Stock Election Shares shall be converted into the right to
receive the Stock Consideration, and the Non-Election Shares, if any, shall be
converted into the right to receive (i) if the aggregate number of Cash Election
Shares and Non-Election Shares does not exceed the Cash Election Number, Common
Cash Consideration for each Non-Election Share and (ii) if such aggregate number
does exceed the Cash Election Number, Zions Bancorp Stock and cash in the
following manner: each Non-Election Share shall be converted into the right to
receive (i) an amount in cash, without interest, equal to the product of (x) the
Common Cash Consideration and (y) a fraction (the "Non-Election Fraction"), the
numerator of which shall be the excess of (A) the Cash Election Number over (B)
the total number of Cash Election Shares and the denominator of which shall be
the total number of Non- Election Shares and (ii) a number of shares of Zions
Bancorp Stock equal to the product of (x) the Common Stock Consideration and (y)
a fraction equal to one minus the Non-Election Fraction.
(f) Adjustments Relating to Tax Opinions. If the tax opinion
referred to in section 3.4 of the Plan of Reorganization cannot be rendered (as
reasonably determined by the person that is to render such opinion and
reasonably concurred in by Duane, Morris & Heckscher), as a result of the Merger
potentially failing to satisfy continuity of interest requirements under
applicable federal income tax principles relating to reorganizations under
Section 368(a) of the Code, then Zions Bancorp shall decrease the Cash Election
Number to the minimum extent necessary to enable the relevant tax opinion or
opinions, as the case may be, to be rendered.
(g) Exercise of Election.
(i) All Cash Elections, Stock Elections, and
Non-Elections shall be made on a form designed for that purpose by the Exchange
Agent designated in section 3.5 of this Agreement (a "Form of Election") and
mailed to holders of record of shares of Company Stock as of the record date for
the meeting at which the shareholders of the Company meet to approve, ratify,
and confirm the transactions contemplated by this Agreement or such other date
as Zions Bancorp and the Company shall mutually agree (the "Election Form Record
Date"). Zions Bancorp and the Company shall make available one or more Forms of
Election as may be reasonably requested by all persons who become holders or
beneficial owners of Company Stock between the Election Form Record Date and the
close of business on the day prior to the Election Deadline.
(ii) Elections shall be made by holders of Company
Stock by mailing to the Exchange Agent a Form of Election. Any holder of Company
Stock may allocate his or her Company Stock among Cash Election Shares, Stock
Election Shares, and Non-Election Shares as he or she sees fit, that is, by
electing to allocate all to one category or by dividing his or her Company Stock
among more
-8-
than one category, provided that if the sum of the shares of any holder as to
which Cash Elections, Stock Elections, and Non-Elections are made exceed the
total number of shares held by that holder, the Exchange Agent shall consider
all the elections submitted by that holder to have been not properly made and,
accordingly, subject to the procedures set forth in section 3.2(i).
(iii) To be effective, a Form of Election must be
properly completed, signed, and submitted to the Exchange Agent; and the
Exchange Agent must also have received, no later than the Election Deadline, the
certificates representing the shares of Company Stock as to which the election
is being made (or an appropriate guarantee of delivery by an appropriate trust
company in the United States or a member of a registered national securities
exchange or the National Association of Securities Dealers, Inc.).
(iv) The Exchange Agent will have the discretion to
reasonably determine whether Forms of Election have been properly completed,
signed, and submitted or revoked and to disregard immaterial defects in Forms of
Election. The decision of the Exchange Agent in such matters shall be conclusive
and binding. Zions Bancorp will not be under any obligation to notify any person
of any defect in a Form of Election submitted to the Exchange Agent, but the
Exchange Agent shall use commercially reasonable efforts to notify a holder of
any such defect.
(v) The Exchange Agent shall make all computations
contemplated by this Section 3.2, and all computations shall be conclusive and
binding on the holders of Company Stock.
(h) Election Deadline. A Form of Election must be received by
the Exchange Agent by the close of business on the tenth business day following
the Closing Date (the "Election Deadline") in order to be effective. Any holder
of Company Stock who has made an election by submitting a Form of Election to
the Exchange Agent may at any time prior to the Election Deadline change his or
her election by submitting a revised Form of Election, properly completed and
signed, that is received by the Exchange Agent prior to the Election Deadline.
Any holder of Company Stock may at any time prior to the Election Deadline
revoke his or her election and withdraw his or her certificates deposited with
the Exchange Agent by written notice to the Exchange Agent received by the close
of business on the day prior to the Election Deadline. As soon as practicable
after the Election Deadline, the Exchange Agent shall determine the allocation
of the cash portion of the Merger Consideration and the stock portion of the
Merger Consideration and shall notify Zions Bancorp of its determination.
(i) Deemed Non-Election. For the purposes hereof, a holder of
Company Common Stock (including a holder of Dissenting Shares who shall have
failed to perfect, or shall have effectively withdrawn or lost, his or her right
to dissent from the Merger under the Appraisal Laws) who does not submit a Form
of Election which is received by the Exchange Agent prior to the Election
Deadline shall be deemed to have made a Non-Election. If the Exchange Agent
shall determine that any purported Cash Election or Stock Election was not
properly made, such purported Cash Election or Stock Election shall be deemed to
be of no force and effect and the shareholder making such purported Cash
Election or Stock Election shall for purposes hereof be deemed to have made a
Non-Election.
-9-
3.3. No Fractional Shares. Zions Bancorp will not issue fractional
shares of Zions Bancorp 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 the Average Closing Price. Such fractional share
interest shall not include the right to vote or to receive dividends or any
interest thereon.
3.4. 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 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 3.5
of this Agreement) and, upon receipt of the certificates representing shares of
Company 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 3.3 hereof.
3.5. Designation of Exchange Agent. The Company and Zions Bancorp
hereby designate Zions Bank as Exchange Agent to effect the exchange
contemplated hereby. Zions Bancorp will, promptly after the Election Deadline,
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 Stock in
accordance with this Agreement.
3.6. Notice of Exchange. Promptly after the Effective Date, Zions
Bank shall mail to each holder of one or more certificates formerly representing
Company Stock, except to such holders as shall have waived the notice required
by this Section 3.6, 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.
3.7. Treatment of Stock Options. Each stock option to purchase
Company Common Stock not exercised prior to the Effective Date shall
automatically be canceled on and as of the Effective Date.
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,
-10-
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 Xxxxx County, Nevada 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 Nevada. 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.
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
Zions Bancorp 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.
-11-
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
SUN STATE CAPITAL CORPORATION
Attest:_______________________ By:____________________________
Xxxx Xxxxxxx
President and
Chief Executive Officer
-12-
)
State of Utah )
) ss.
County of Salt Lake )
)
On this ________ day of [____________], 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
-13-
)
State of Nevada )
) ss.
County of Xxxxx )
)
On this ________ day of [____________], 1997, before me personally
appeared Xxxx Xxxxxxx, to me known to be the President and Chief Executive
Officer of Sun State Capital Corporation, 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
-14-
EXHIBIT II
BANK MERGER AGREEMENT
AGREEMENT OF MERGER
This Agreement of Merger is made and entered into as of
[_______________], 1997, between NEVADA STATE BANK ("NS Bank"), a banking
corporation organized under the laws of the State of Nevada, and SUN STATE BANK
("SS Bank"), a banking corporation organized under the laws of the State of
Nevada. NS Bank and SS Bank are hereinafter sometimes individually called a
"Constituent Corporation" and collectively called the "Constituent
Corporations."
RECITALS
NS Bank is a banking corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada. As of [_______________],
1997, the authorized capital stock of NS Bank consisted of [__________] shares
of Common Stock, no par value, of which [_______] shares were issued and
outstanding; no shares of capital stock were held in its treasury on such date.
SS Bank is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. As of [_______________], 1997,
the authorized capital stock of SS Bank consisted of 400 shares of Common Stock,
$12,500 par value (the "SS Bank Common Stock"), of which 258 shares were issued
and outstanding; no shares of capital stock were held in its treasury on such
date.
NS Bank and SS Bank have entered into an Agreement and Plan of
Reorganization, dated May 21, 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
SS Bank with and into NS Bank (the "Merger") in accordance with this Agreement
of Merger (the "Agreement").
The Boards of Directors of each of NS Bank and SS Bank deem the Merger
advisable and in the best interests of each banking corporation and its
stockholders. The Boards of Directors of each of NS Bank and SS Bank, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of NS Bank and SS Bank, by resolutions duly adopted, have
approved this Agreement. The Boards of Directors of each of NS Bank and SS Bank
have directed that this Agreement, and authorization for the transactions
contemplated hereby, be submitted to stockholders of SS Bank for approval.
At the Effective Date (as defined in Section 1.1 below) shares of SS
Bank Common Stock shall be canceled 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 SS Bank into NS Bank. SS Bank shall be merged with and
into NS Bank 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 Nevada pursuant
to section 92A.200 of the Nevada General Corporation Law (such date and time
being referred to herein as the "Effective Date").
1.2. Effect of the Merger. At the Effective Date:
(a) SS Bank and NS Bank shall be a single banking corporation,
which shall be NS Bank. NS Bank is hereby designated as the surviving
corporation in the Merger and is hereinafter sometimes called the "Surviving
Corporation."
(b) The separate existence of SS Bank 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 Nevada General
Corporation Law.
(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. The Surviving Corporation expressly assumes and agrees to perform all
of the liabilities and obligations of SS Bank. 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 NS Bank as they exist
immediately prior to the Effective Date shall be the Articles of Incorporation
of the Surviving Corporation until later amended pursuant to Nevada 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 SS Bank Common Stock shall, without further action,
cease to be an issued and existing share.
1.3. Acts to Carry Out This Merger Plan.
(a) SS Bank 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 NS Bank and otherwise to carry
out the purposes of this Agreement.
-2-
(b) If, at any time after the Effective Date, NS Bank 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 NS Bank its right, title, or interest in or under any of
the rights, properties, or assets of SS Bank acquired or to be acquired by NS
Bank as a result of, or in connection with, the Merger, or (ii) otherwise carry
out the purposes of this Agreement, SS Bank and its proper officers and
directors shall be deemed to have granted to NS Bank 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 NS Bank
and otherwise to carry out the purposes of this Agreement; and the proper
officers and directors of NS Bank are fully authorized in the name of SS Bank or
otherwise to take any and all such action.
1.4. Approvals. This Agreement is subject to the approvals of the
Commissioner of Financial Institutions of the State of Nevada and of the Federal
Deposit Insurance Corporation and to the approval of the shareholders of the
Constituent Banks, in accordance with applicable law.
ARTICLE II
2.1. Capitalization. The authorized shares of capital stock of NS Bank
as of the Effective Date shall be [__________] shares of Common Stock, par value
$[_____] per share..
2.2. By-Laws. The By-Laws of NS Bank as they exist immediately prior
to the Effective Date shall be the By-Laws of NS Bank until later amended
pursuant to Nevada law.
ARTICLE III
3.1. Cancellation of Shares. At the Effective Date, the currently
outstanding [______] shares of common stock of NS Bank, each of $[______] par
value, will remain outstanding as shares of the $[______] par value common stock
of the Surviving Corporation, and the holders of such stock shall retain their
present rights. At the Effective Time, each share of SS Bank Common Stock
outstanding shall be canceled.
3.2. Treatment of Stock Options. Each stock option to purchase capital
stock of SS Bank shall automatically be canceled on and as of the Effective
Date.
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.
-3-
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 Xxxxx County, Nevada 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 Nevada. 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.
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.
4.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of NS
Bank and SS 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.
-4-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NEVADA STATE BANK
Attest:__________________________ By:__________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx III
Senior Vice President President and
and Secretary Chief Executive Officer
SUN STATE BANK
Attest:__________________________ By:___________________________
Xxxx Xxxxxxx
President and
Chief Executive Officer
-5-
)
State of Nevada )
) ss.
County of Xxxxx )
)
On this ________ day of [____________], 1997, before me personally
appeared Xxxxxx X. Xxxxxxx III, to me known to be the President and Chief
Executive Officer of Nevada State Bank, 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
-6-
)
State of Nevada )
) ss.
County of Xxxxx )
)
On this ________ day of [____________], 1997, before me personally
appeared Xxxx Xxxxxxx, to me known to be the President and Chief Executive
Officer of Sun State Bank, 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
-7-
EXHIBIT III
VOTING AGREEMENT
May 21, 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 Sun State
Capital Corporation (the "Company") (the "Agreement"). The Agreement provides
for the merger of the Company with and into Zions Bancorp (the "Merger") and the
conversion of outstanding shares of Company Stock into Zions Bancorp Common
Stock and cash 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 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
Zions Bancorporation
May 21, 1997
Page 2
voting of 10% 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 Sun State
Bank, 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, 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,
__________________________
Accepted and Agreed to:
ZIONS BANCORPORATION
By:____________________________
Title:_________________________
Zions Bancorporation
May 21, 1997
Page 3
Name of Shareholder:
Shares of Common Stock of Sun State Capital Corporation
Beneficially Owned
As of May 21, 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 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
OPINION OF ROTHGERBER, APPEL, POWERS & XXXXXXX LLP
[____________________], 1997
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Nevada State Bank
000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000-0000
Re: Merger of Sun State Capital Corporation With Zions
Bancorporation, In Exchange for Stock of Zions
Bancorporation and Cash; Merger of Sun State Bank With
Nevada State Bank
Mesdames and Gentlemen:
We are special counsel to Sun State Capital Corporation, a corporation
organized under the laws of the State of Nevada with its head office located at
Las Vegas, County of Xxxxx, State of Nevada ("the Company"), and its
wholly-owned subsidiary, Sun State Bank, a banking corporation organized under
the laws of the State of Nevada with its head office located at Las Vegas,
County of Xxxxx, State of Nevada ("SS Bank"), in connection with the merger (the
"Merger") of the Company with and into 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") 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
May 21, 1997 (the "Agreement") and an Agreement of Merger dated as of
[____________], 1997 (the "Merger Agreement"), and in connection with the merger
(the "Bank Merger") of SS Bank with and into Nevada State Bank, a banking
corporation organized under the laws of the State of Nevada with its head office
located at Las Vegas, County of Xxxxx, State of Nevada and a wholly-owned
subsidiary of Zions Bancorp ("NS Bank") pursuant to the Agreement and an
Agreement of Merger dated as of [____________], 1997 (the "Bank Merger
Agreement") (the Agreement, the Merger Agreement, and the Bank Merger Agreement
to be referred to collectively as the "Agreements").
This opinion is provided to you pursuant to Section 4.3 of the
Agreement.
Zions Bancorporation
Nevada State Bank
[____________________], 1997
Page 2
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 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 and by-laws of the
Company and SS Bank; the minutes of certain meetings of the board of directors
of the Company and SS Bank; and such other corporate documents and corporate
records of the Company and SS 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 SS 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 and NS 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 the Company and SS Bank had the corporate power and authority
to enter into and perform all obligations thereunder and, as to such parties
other than the Company and SS Bank, 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.
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 Nevada 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 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.
Zions Bancorporation
Nevada State Bank
[____________________], 1997
Page 3
(ii) SS Bank is duly organized, validly existing and in good
standing under the laws of the State of Nevada 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 SS 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 SS Bank have been duly and validly
authorized and issued and are fully paid and non-assessable. All shares of SS
Bank held of record by the Company are owned directly by the Company free and
clear of any adverse claims.
(b) Execution and Performance of Agreements. Each of the Company and SS
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 SS 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 SS Bank or
the observance or performance by the Company or SS 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 SS 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 by-laws of the Company
or SS Bank, or any agreement or instrument to which the Company or SS Bank is a
party (or which is binding on either of them or its assets) or by which the
Company or SS 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 SS Bank, has been duly executed and
delivered by each of the Company and SS Bank, and constitutes a valid, legal,
and binding obligation of the Company and SS 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,
Zions Bancorporation
Nevada State Bank
[___________________], 1997
Page 4
or receiver, of banks or savings associations 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 SS 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 SS 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 SS 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 SS 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.
(g) 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.
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
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 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,
EXHIBIT V
OPINION OF COMPANY AND SS BANK LITIGATION COUNSEL
[____________________], 1997
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Nevada State Bank
000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000-0000
Re: Merger of Sun State Capital Corporation With Zions
Bancorporation, In Exchange for Stock of Zions Bancorporation
and Cash; Merger of Sun State Bank With Nevada State Bank
Mesdames and Gentlemen:
We are special counsel to Sun State Capital Corporation, a corporation
organized under the laws of the State of Nevada with its head office located at
Las Vegas, County of Xxxxx, State of Nevada ("the Company"), and its
wholly-owned subsidiary, Sun State Bank, a banking corporation organized under
the laws of the State of Nevada with its head office located at Las Vegas,
County of Xxxxx, State of Nevada ("SS Bank"), in connection with the merger (the
"Merger") of the Company with and into 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") 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
May 21, 1997 (the "Agreement") and an Agreement of Merger dated as of
[____________], 1997 (the "Merger Agreement"), and in connection with the merger
(the "Bank Merger") of SS Bank with and into Nevada State Bank, a banking
corporation organized under the laws of the State of Nevada with its head office
located at Las Vegas, County of Xxxxx, State of Nevada and a wholly-owned
subsidiary of Zions Bancorp ("NS Bank") pursuant to the Agreement and an
Agreement of Merger dated as of [____________], 1997 (the "Bank Merger
Agreement") (the Agreement, the Merger Agreement, and the Bank Merger Agreement
to be referred to collectively as the "Agreements").
We have been requested by the Company and SS Bank to furnish to you our opinion
pursuant to Section 4.4 of the Agreement.
Zions Bancorporation
Nevada State Bank
[____________________], 1997
Page 2
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 SS 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 and NS 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. 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 SS 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 SS 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 SS
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.
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,
EXHIBIT VI
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
[___] day of [__________], 1997, by and between XXXX XXXXXXX ("Executive") and
NEVADA STATE BANK, a Nevada banking corporation, having its principal office in
Las Vegas, Nevada ("NS Bank")
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 May 21, 1997, by and between Zions Bancorporation ("Zions Bancorp"), NS Bank,
Sun State Capital Corporation ("the Company"), and Sun State Bank, provides that
the Company will be merged into Zions Bancorp and that Sun State Bank will be
merged with and into NS Bank;
WHEREAS, Executive is the President and Chief Executive Officer of each
of the Company and SS Bank;
WHEREAS, NS Bank 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 4.11 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) NS Bank hereby agrees to employ Executive, and Executive hereby
agrees to serve as [______________________________] of NS Bank during the Term
of Employment. Executive shall have such duties, responsibilities, and authority
of an executive nature as shall be set forth in the bylaws of NS Bank on the
date of this Agreement or as may otherwise be determined by NS Bank.
(b) Executive shall devote his full working time and best efforts to
the performance of his responsibilities and duties hereunder. During the Term of
Employment, Executive shall not, without the prior written consent of the Board
of Directors of NS Bank, render services as an employee, independent contractor,
or otherwise, whether or not compensated, to any person or entity other than NS
Bank 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 charitable organizations, (ii) manage
his personal investments, and (iii) with the prior permission of the Board of
Directors of NS Bank, 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 date hereof (the "Commencement Date") and continuing
until the Termination Date, which shall mean the earliest to occur of:
(i) December 31, 1999, unless the Term of Employment shall be
extended by mutual written agreement of Executive and NS Bank;
(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 NS Bank "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 NS Bank, or with respect to any of their
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 NS Bank;
(C) Executive's willful neglect, failure, or refusal
to carry out his duties hereunder in a reasonable manner; or
(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 NS Bank or any of its
affiliates for which Executive is assigned material responsibilities or duties;
or
(v) Executive's resignation from his position as
[___________________] of NS Bank; or
(vi) the termination of Executive's employment by NS Bank
"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 salary (as hereinafter defined) payable pursuant to
section 3(a)(i) hereof which shall have accrued as of the Termination Date; and
-2-
(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 sections 3(b) or (c) hereof, any right to reimbursement
for expenses accrued as of the Termination Date payable pursuant to section 3(h)
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(e) 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 second
anniversary of the Commencement Date, salary payable at the rate established
pursuant to section 3(a)(i) hereof for the year in which the Termination Date
occurs, in a manner consistent with the normal payroll practices of NS Bank with
respect to executive personnel as presently in effect or as they may be modified
by NS Bank 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 sections 3(b) or (c) hereof, any right to reimbursement
for expenses accrued as of the Termination Date payable pursuant to section 3(h)
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(e) hereof.
3. Compensation. For the services to be performed by Executive for NS
Bank under this Agreement, Executive shall be compensated in the following
manner:
(a) Salary and Bonus.
(i) Salary. During the Term of Employment NS Bank shall pay
Executive a salary, the amount of which shall be reviewed at least annually, but
which in any event shall not be less than the aggregate salary paid to Executive
by SS Bank as of December 31, 1996. Salary shall be payable in accordance with
the normal payroll practices of NS Bank with respect to executive personnel as
presently in effect or as they may be modified by NS Bank from time to time.
(ii) Discretionary Bonuses. During the Term of Employment and
beginning with respect to the calendar year ending as of December 31, 1997,
Executive shall be considered annually by the Executive Compensation Committee
of the Board of Directors of Zions Bancorp for a discretionary bonus payment by
NS Bank made in accordance with the compensation policies of Zions Bancorp as
presently in effect or as they may be modified by Zions Bancorp from time to
time.
(b) Value-Sharing Plan and Incentive Stock Option Plan. During the Term
of Employment, Executive shall be entitled to receive units of participation
under the Value-Sharing Plan and stock options under the Incentive Stock Option
Plan of Zions Bancorp, as each is in effect as of the Commencement Date or as
may be modified by Zions Bancorp from time to time, in such amounts and upon
such terms as may be prescribed by the Executive Compensation Committee of the
Board of Directors of Zions Bancorp at its sole discretion.
-3-
(c) Employee Benefit Plans or Arrangements. During the Term of
Employment, subject to the following sentence, 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.
(d) 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 SS Bank at December 31,
1996.
(e) Withholding. All compensation to be paid to Executive hereunder
shall be subject to required withholding and other taxes.
(f) 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 NS Bank and their affiliates
and the like are deemed by Zions Bancorp and NS Bank to be and are in fact
confidential business information either of Zions Bancorp or NS Bank or their
affiliates or are entrusted to third parties. Such confidential information
includes but is not limited to procedures, methods, sales relationships
developed while in the service of Zions Bancorp or NS Bank or their 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 NS Bank
or their affiliates, and compositions, ideas, plans, and methods belonging to or
related to the affairs of Zions Bancorp or NS Bank or their affiliates. In this
regard, each of Zions Bancorp and NS Bank asserts proprietary rights in all of
its business information and that of NS Bank and that of their 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 Zions Bancorp or NS Bank, nor shall he use to the
detriment of Zions Bancorp or NS Bank or their affiliates or use in any business
-4-
or on behalf of any business competitive with or substantially similar to any
business of Zions Bancorp or NS Bank or their affiliates, any confidential
business information obtained during the course of his employment by NS Bank.
The foregoing shall not be construed as restricting Executive from disclosing
such information to the employees of NS Bank or its affiliates.
(b) Executive hereby agrees that from the Commencement Date until the
fifth anniversary of the Commencement Date, Executive will not (i) engage in the
banking business other than on behalf of NS Bank or its affiliates within the
Designated 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
NS Bank or its affiliates) engaged in the banking business in the Designated
Area, or (iii) directly or indirectly solicit or otherwise intentionally cause
any employee, officer, or member of the respective Boards of Directors of NS
Bank or Zions Bancorp or any of their 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 NS Bank and Zions Bancorp in the event of a breach of any of the
provisions of this section 4 (the "Designated Provisions") and that NS Bank and
Zions Bancorp 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 NS Bank or Zions Bancorp may
have, NS Bank and Zions Bancorp shall be entitled to the entry of a preliminary
and permanent injunction (including, without limitation, specific performance)
by a court of competent jurisdiction in Xxxxx County, Nevada, 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.
(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 NS Bank and Zions Bancorp, to the
fullest extent permitted by applicable law, the benefits intended by this
section 4.
(e) As used herein, "Designated Area" shall mean the Nevada counties of
Xxxxx and Washoe.
-5-
5. Life Insurance. In light of the unusual abilities and experience of
Executive, NS Bank and Zions Bancorp in their 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 NS Bank and Zions Bancorp may choose. NS Bank or
Zions Bancorp 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 NS Bank or Zions Bancorp, 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 NS
Bank or Zions Bancorp has applied for insurance.
6. Representations and Warranties.
(a) Executive represents and warrants to NS Bank 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 shall indemnify, defend, and hold harmless NS Bank and
Zions Bancorp for, from, and against any and all losses, claims, suits, damages,
expenses, or liabilities, including court costs and counsel fees, which NS Bank
or Zions Bancorp has incurred or to which NS Bank or Zions Bancorp 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) hereof to be true and correct when
made.
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 Zions Bancorp:
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
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
-6-
If to Executive:
Xx. Xxxx Xxxxxxx
[___________________________]
[___________________________]
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 Nevada, without giving
effect to the principles of conflict of law thereof. The parties hereby
designate Xxxxx County, Nevada, 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 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 Nevada. Each of the parties irrevocably and unconditionally waives and
agrees, to the fullest extent permitted by law, not to plead any objection that
he or 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 NS Bank and Executive relating to the subject matter
hereof. Any previous agreements or understandings between the parties hereto or
between Executive and the Company or SS Bank 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.
-7-
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 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 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 Nevada. 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.
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 NS
Bank or Zions Bancorp 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.
-8-
IN WITNESS WHEREOF, the parties hereto executed or caused this
Agreement to be executed as of the day and year first above written.
NEVADA STATE BANK
Attest:__________________________ By:___________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx III
Senior Vice President President and
and Secretary Chief Executive Officer
XXXX XXXXXXX
Witness:_________________________ ______________________________
-9-
EXHIBIT VII
OPINION OF DUANE, MORRIS & HECKSCHER
[____________________], 1997
Sun State Capital Corporation
0000 Xxxx Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Sun State Bank
0000 Xxxx Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Re: Merger of Sun State Capital Corporation With Zions
Bancorporation, In Exchange for Stock of Zions Bancorporation
and Cash; Merger of Sun State Bank With Nevada State Bank
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"), and its wholly-owned
subsidiary, Nevada State Bank, a banking corporation organized under the laws of
the State of Nevada with its head office located at Las Vegas, County of Xxxxx,
State of Nevada ("NS Bank"), in connection with the merger (the "Merger") of Sun
State Capital Corporation, a corporation organized under the laws of the State
of Nevada with its head office located at Las Vegas, County of Xxxxx, State of
Nevada (the "Company"), with and into Zions Bancorp 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 May
21, 1997 (the "Agreement") and an Agreement of Merger dated as of
[____________], 1997 (the "Merger Agreement"), and in connection with the merger
(the "Bank Merger") of Sun State Bank, a banking corporation organized under the
laws of the State of Nevada with its head office located at Las Vegas, County of
Xxxxx, State of Nevada and a wholly-owned subsidiary of the Company ("SS Bank"),
with and into NS Bank pursuant to the Agreement and an Agreement of Merger dated
as of [____________], 1997 (the "Bank Merger Agreement") (the Agreement, the
Merger Agreement, and the Bank Merger Agreement to be referred to collectively
as the "Agreements").
This opinion is provided to you pursuant to Section 5.2 of the
Agreement.
Sun State Capital Corporation
Sun State Bank
[____________________], 1997
Page 2
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 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 and by-laws of Zions
Bancorp and NS Bank; the minutes of certain meetings of the board of directors
of Zions Bancorp and NS Bank; and such other corporate documents and corporate
records of Zions Bancorp and NS Bank as we have deemed necessary or appropriate
for the purpose of rendering the following opinions. We have also examined
documents dated (i) [________________], 1997 of the Federal Reserve Bank of San
Francisco (the "Reserve Bank") approving the application of Zions Bancorp to
merge with the Company and thereby acquire control of SS Bank; (ii)
[________________], 1997 of the Commissioner of Financial Institutions of the
State of Nevada approving the merger of the Company and Zions Bancorp and the
merger of SS Bank with and into NS Bank; (iii) [_________________], 1997 of the
Federal Deposit Insurance Corporation approving the application of NS Bank to
merge with SS Bank; and (iv) [________________], 1997 of the Department of
Financial Institutions of the State of Utah concurring in the opinion of Duane,
Morris & Heckscher as special counsel to Zions Bancorp and NS Bank that the
Merger is authorized for Zions Bancorp pursuant to Utah Code Xxx. ss. 7-1-702(l)
and that, by operation of Utah Code Xxx. ss. 7-1-502, the approval of the
Department of Financial Institutions of the State of Utah is not required prior
to the consummation of the Merger. In addition, we have interviewed officers of
Zions Bancorp and NS 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 the Company and SS 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 and NS Bank had the corporate power and
authority to enter into and perform all obligations thereunder and, as to such
parties other than Zions Bancorp and NS Bank, 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. In rendering the opinion set forth in paragraph (e)
hereof, we have assumed that neither the Company nor SS Bank is subject to any
order or directive from, or memorandum of understanding or similar supervisory
Sun State Capital Corporation
Sun State Bank
[____________________], 1997
Page 3
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) NS Bank is a banking corporation which is duly organized,
validly existing, and in good standing under the laws of the State of Nevada 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 NS Bank 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 and
NS 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) Compliance with Corporate Documents. Neither the execution,
delivery, or performance by Zions Bancorp or NS Bank 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 by-laws of Zions Bancorp or NS Bank.
(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 and NS Bank, has been duly executed and
delivered by each of Zions Bancorp and NS Bank, and constitutes a valid, legal,
and binding obligation of Zions Bancorp and NS 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 or savings associations the accounts of which
are insured by the FDIC in particular, or by general equitable principles
(regardless of whether
Sun State Capital Corporation
Sun State Bank
[____________________], 1997
Page 4
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 Zions Bancorp or NS Bank 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 Reserve Bank, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, the Commissioner of Financial
Institutions of the State of Nevada, 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 and NS 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 bank or savings association
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 Merger Agreement, when issued pursuant to and in
accordance with the Agreement and the 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.
(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
Sun State Capital Corporation
Sun State Bank
[____________________], 1997
Page 5
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,
