EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION made as of the twenty-third
day of September, 1997, among ZIONS BANCORPORATION ("Zions Bancorp"), a Utah
corporation having its principal office in Salt Lake City, Utah, VAL COR
BANCORPORATION, INC. ("Val Cor"), a Colorado corporation having its principal
office in Cortez, Colorado, VALLEY NATIONAL BANK OF XXXXXX ("Valley"), a
national banking association organized under the laws of the United States,
TRI-STATE FINANCE CORPORATION (the "Company"), a Colorado corporation having its
principal office in Denver, Colorado, and TRI-STATE BANK (the "Bank"), a banking
corporation organized under the laws of the State of Colorado
W I T N E S S E T H T H A T :
WHEREAS, the Company is a bank holding company and the sole shareholder
of the Bank;
WHEREAS, Zions Bancorp is a bank holding company and the sole
shareholder of Val Cor;
WHEREAS, Val Cor is a bank holding company which owns in excess of 99
percent of the outstanding capital stock of Valley as of the date of this
Agreement;
WHEREAS, Zions Bancorp and Val Cor each desire to affiliate with the
Company through the merger of the Company with and into Val Cor, with Val Cor to
be the surviving corporation (the "Holding Company Merger") and, in addition, to
cause the merger of the Bank with and into Valley, with Valley to be the
surviving national banking association (the "Bank Merger");
WHEREAS, the Board of Directors of the Company has determined that it
would be in the best interests of the Company, its shareholders, its customers
and those of the Bank and the areas served by the Company and the Bank to become
affiliated with Zions Bancorp through the Holding Company Merger and to cause
the Bank Merger;
WHEREAS, the respective boards of directors of Valley and the Bank have
determined that it would be in the best interests of Valley or the Bank, as the
case may be, its shareholders and customers, for Valley and the Bank to merge
with each other;
WHEREAS, the respective Boards of Directors of Zions Bancorp, Val Cor,
and the Company have agreed to cause the Holding Company Merger pursuant to the
provisions of section 0-000-000 et seq. of the Colorado Business Corporation
Act; and to cause the Bank Merger pursuant to the provisions of section 215a of
the National Bank Act (12 U.S.C. ss. 215a) and section 11-4-102 of the Colorado
Revised Statutes;
WHEREAS, the respective Boards of Directors of Valley and the Bank have
agreed to cause the Bank Merger pursuant to the provisions of section 215a of
the National Bank Act and section 11-4-102 of the Colorado Revised Statutes; and
WHEREAS, the parties intend that the Holding Company 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) Val Cor and the Company will execute a merger agreement (the
"Holding Company Merger Agreement") substantially in the form of Exhibit I
annexed hereto. Subject to the provisions of the Holding Company Merger
Agreement, the Company will be merged with and into Val Cor in the Holding
Company Merger and Val Cor shall be the surviving corporation. The shares of
Class A Common Stock, $1.00 par value, of the Company (the "Class A Common
Stock") and the shares of the Class B Common Stock, $1.00 par value, of the
Company (the "Class B Common Stock") (together, the "Company Common Stock")
shall be canceled and immediately converted into the right to receive, subject
to the terms, conditions, and limitations set forth herein, such consideration
as is provided in section 1.2(a) hereof.
(b) Valley and the Bank will execute a merger agreement (the
"Bank Merger Agreement") substantially in the form of Exhibit II annexed hereto.
Immediately following the effectiveness of the Holding Company Merger, and
subject to the provisions of the Bank Merger Agreement, the Bank will be merged
with and into Valley in the Bank Merger and Valley shall be the surviving
national banking association. The shares of common stock of the Bank shall be
canceled and immediately converted into the right to receive, subject to the
terms, conditions, and limitations set forth herein, such consideration as is
provided in section 1.2(b) hereof.
-2-
1.2. Consideration for Mergers. 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:
(a) each holder of shares of Company Common Stock shall be
entitled to receive, in exchange for each share of Company Common Stock held of
record by such stockholder as of the Effective Date, that number of shares of
the common stock of Zions Bancorp, no par value (the "Zions Bancorp Stock")
calculated by dividing 710,000 by the total number of shares of Company Common
Stock that shall be issued and outstanding at the Effective Date; and
(b) each holder of shares of the Common Stock, $100.00 par value,
of the Bank (the "Bank Common Stock") shall be entitled to receive, in exchange
for each share of Bank Common Stock held of record by such stockholders as of
the Effective Date, that number of shares of the common stock of Valley, $5.00
par value (the "Valley Common Stock") calculated by, first, dividing the
tangible book value of Valley at the close of business on the business day
before the Effective Date by the number of shares of Valley Common Stock that
shall be issued and outstanding at the Effective Date, and second, dividing the
tangible book value of the Bank at the close of business on the business day
before the Effective Date by the number so reached, and third, dividing the
number so reached by the total number of shares of Bank Common Stock that shall
be issued and outstanding at the Effective Date.
1.3. No Fractional Shares.
(a) Zions Bancorp will not issue fractional shares of its stock.
In lieu of fractional shares of Zions Bancorp Stock, if any, each shareholder of
the Company who is entitled to a fractional share of Zions Bancorp Stock shall
receive an amount of cash equal to the product of such fraction times $40.625.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.
(a) Valley will not issue fractional shares of its stock. In lieu
of fractional shares of Valley Common Stock, if any, each shareholder of the
Bank who is entitled to a fractional share of Valley Common Stock shall receive
an amount of cash equal to the product of such fraction times the tangible book
value per share of Valley Common Stock immediately preceding the Effective Date.
Such fractional share interest shall not include the right to vote or to receive
dividends or any interest thereon.
-3-
1.4. Dividends; Interest.
(a) No shareholder of the Company will be entitled to receive
dividends on his or her Zions Bancorp Stock until he or she exchanges his or her
certificates representing Company Common Stock for Zions Bancorp Stock. Any
dividends declared on Zions Bancorp Stock (which stock is to be delivered
pursuant to this Agreement) to holders of record on or after the Effective Date
shall be paid to the Exchange Agent (as designated in Section 1.5 of this
Agreement) and, upon receipt of the certificates representing shares of Company
Common Stock, the Exchange Agent shall forward to the former shareholders
entitled to receive Zions Bancorp Stock (i) certificates representing their
shares of Zions Bancorp Stock, (ii) dividends declared thereon subsequent to the
Effective Date (without interest) and (iii) the cash value of any fractional
shares determined in accordance with Section 1.3(a) hereof.
(a) No shareholder of the Bank will be entitled to receive
dividends on his or her Valley Common Stock until he or she exchanges his or her
certificates representing Bank Common Stock for Valley Common Stock. Any
dividends declared on Valley Common Stock (which stock is to be delivered
pursuant to this Agreement) to holders of record on or after the Effective Date
shall be paid to the Exchange Agent (as designated in Section 1.5 of this
Agreement) and, upon receipt of the certificates representing shares of Bank
Common Stock, the Exchange Agent shall forward to the former shareholders
entitled to receive Valley Common Stock (i) certificates representing their
shares of Valley Common Stock, (ii) dividends declared thereon subsequent to the
Effective Date (without interest) and (iii) the cash value of any fractional
shares determined in accordance with Section 1.3(b) hereof.
1.5. Designation of Exchange Agent.
(a) The parties of this Agreement hereby designate Zions First
National Bank, a national banking association with its head office located in
Salt Lake City, Utah ("Zions Bank") as Exchange Agent to effect the exchanges
contemplated hereby.
(b) Zions Bancorp will, promptly after the Effective Date, issue
and deliver to Zions Bank the share certificates representing shares of Zions
Bancorp Stock and the cash to be paid to holders of Company Common Stock in
accordance with this Agreement.
(c) Valley will, promptly after the Effective Date, issue and
deliver to Zions Bank the share certificates representing shares of Valley
Common Stock and the cash to be paid to holders of Bank Common Stock in
accordance with this Agreement.
1.6. Notice of Exchange. Promptly after the Effective Date, Zions Bank
shall mail to each holder of one or more certificates formerly representing
Company Common Stock or Bank Common Stock, as the case may be, except to such
holders as shall have waived the notice required by this Section 1.6, a notice
specifying the Effective Date and notifying such holder to surrender his or her
certificate or certificates to Zions Bank for exchange. Such notice shall be
mailed to holders by regular mail at their addresses on the records of the
Company or the Bank, as the case may be.
-4-
1.7. Treatment of Stock Options. Each stock option to purchase Company
Common Stock or Bank Common Stock not exercised prior to the Effective Date
shall automatically be canceled on and as of the Effective Date.
1.8. Voting Agreements. Simultaneously herewith, each shareholder of
the Company who is listed on Schedule 1.8 annexed hereto 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 Company Common Stock which may be voted, or whose vote may be
directed, by him or her, in favor of the transactions contemplated by this
Agreement at the meeting of shareholders at which such transaction shall be
considered.
1.9. Employee Benefits. If any employee of the Company or of the Bank
becomes a participant in any employment benefit plan, practice, or policy of
Zions Bancorp, such employee shall be given credit under such plan, practice, or
policy for all service prior to the Effective Date with the Company or the Bank
for purposes of eligibility and vesting, but not for benefit accrual purposes,
for which such service is taken into account or recognized, provided that there
be no duplication of such benefits as are provided under any employee benefit
plans, practices, or policies of the Company or the Bank that continue in effect
following the Effective Date.
2. Effective Date.
The Effective Date shall be the date which is the latest of:
2.1. Shareholder Approval. The later of (a) the day upon which the
holders of the Class A Common Stock approve, ratify, and confirm the Holding
Company Merger or (b) the day upon which the holders of the Class B Common Stock
approve, ratify, and confirm the Holding Company Merger; or
2.2. Valley Shareholder Approval. The day upon which the shareholders
of Valley approve, ratify, and confirm 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 Holding
Company Merger, or (b) if, pursuant to section 321(a) of the Xxxxxx Community
Development and Regulatory Improvement Act of 1994 (the "Xxxxxx Act"), the Board
of Governors shall have prescribed a shorter period of time with the concurrence
of the Attorney General of the United States, the date on which such shorter
period of time shall elapse, or (c) the date ten days following the date on
which the Board of Governors indicates its waiver of jurisdiction over the
Holding Company Merger; or
-5-
2.4. OCC Approval. The first to occur of (a) the date thirty days
following the date of the order of the Office of the Comptroller of the Currency
(the "OCC") approving the Bank Merger, or (b) if, pursuant to section 321(b) of
the Xxxxxx Act, the OCC shall have prescribed a shorter period of time with the
concurrence of the Attorney General of the United States, the date on which such
shorter period of time shall elapse; or
2.5. Utah Commissioner Approval. If such an order shall be required by
law, the date ten days following the date of the order of the Commissioner of
Financial Institutions of the State of Utah (the "Commissioner") approving the
transactions contemplated by this Agreement; or
2.6. Colorado Division Approval. If such an order shall be required by
law, the date ten days following the date of the order of the Colorado Division
of Banking (the "Division") approving the transactions contemplated by this
Agreement; or
2.7. Other Regulatory Approvals. The date upon which any other material
order, approval, or consent of a federal or state regulator of financial
institutions or financial institution holding companies authorizing consummation
of the transactions contemplated by this Agreement is obtained or any waiting
period mandated by such order, approval, or consent has run; or
2.8. Expiration of Stays. Ten days after any stay of the approvals of
any of the Board of Governors, the OCC, the Commissioner, or the Division of the
transactions contemplated by this Agreement or any injunction against closing of
said transactions is lifted, discharged, or dismissed; or
2.9. Mutual Agreement. Such other date as shall be mutually agreed to
by Zions Bancorp and the Company.
3. Conditions Precedent to Performance of Obligations of the Parties.
The obligations of Zions Bancorp, Val Cor, and the Company to
consummate the Holding Company Merger and the obligations of Valley Bank and the
Bank to consummate the Bank Merger shall be subject to the conditions that on or
before the Effective Date:
-6-
3.1. Regulatory Approvals. Orders, consents, and approvals, in form and
substance reasonably satisfactory to Zions Bancorp and the Company, shall have
been entered by the requisite governmental authorities, granting the authority
necessary for consummation of the transactions contemplated by this Agreement
and the operation by Zions Bancorp and Val Cor of the business of the Company,
and the operation by Valley of the business of the Bank and each of the branches
of the Bank, pursuant to the provisions of applicable law; and all other
requirements prescribed by law or by the rules and regulations of any other
regulatory authority having jurisdiction over such transactions shall have been
satisfied.
3.2. Approval by Shareholders of the Company and the Bank.
(a) The holders of the Class A Common Stock and the holders of
the Class B Common Stock, acting pursuant to a proxy statement in form and
substance satisfactory to Zions Bancorp and its counsel, shall each have
authorized, ratified, and confirmed the Holding Company Merger by not less than
the requisite percentage of the outstanding voting stock of each class of the
Company, in accordance with the applicable laws of the State of Colorado.
(b) The shareholder of the Bank shall have authorized, ratified,
and confirmed the Bank Merger by not less than the requisite percentage of the
outstanding voting stock of each class of the Bank, in accordance with the
applicable laws of the State of Colorado.
3.3. Absence of Litigation. No action, suit, or proceeding shall have
been instituted or shall have been threatened before any court or other
governmental body or by any public authority to restrain, enjoin, or prohibit
the Holding Company Merger or the Bank Merger, or which would reasonably be
expected to restrict materially the operation of the business of the Company or
that of the Bank or the exercise of any rights with respect thereto or to
subject either of the parties hereto or any of their subsidiaries, directors, or
officers to any liability, fine, forfeiture, divestiture, or penalty on the
ground that the transactions contemplated hereby, the parties hereto, or their
subsidiaries, directors, or officers have breached or will breach any applicable
law or regulation or have otherwise acted improperly in connection with the
transactions contemplated hereby and with respect to which the parties hereto
have been advised by counsel that, in the opinion of such counsel, such action,
suit, or proceeding raises substantial questions of law or fact which could
reasonably be decided materially adversely to either party hereto or its
subsidiaries, directors, or officers.
3.4. Accounting Treatment. It shall have been determined to the
satisfaction of Zions Bancorp that the reorganization contemplated by this
Agreement will be treated for accounting purposes as a "pooling of interests" in
accordance with APB Opinion No. 16, and Zions Bancorp shall have received a
letter to the above effect from KPMG Peat Marwick, certified public accountants.
-7-
3.5. 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 Holding Company 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 Holding
Company Merger.
(b) Absence of Stop-Order. Neither the Registration Statement nor
any such required permit, authorization, or confirmation shall be subject to a
stop-order or threatened stop-order by the SEC or any state securities
authority.
3.6. Federal Income Taxation. Zions Bancorp and the Company shall have
received a written opinion of Xxxxx & Xxxxxxxxx LLP, or of Duane, Morris &
Heckscher LLP, or of another firm mutually agreeable to Zions Bancorp and the
Company, applying existing law, that the Holding Company Merger and Bank Merger
contemplated by this Agreement shall each qualify as one or more reorganizations
under section 368(a)(1) of the Code and the regulations and rulings promulgated
thereunder.
3.7. 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, Val Cor, and Valley.
The obligations of Zions Bancorp, Val Cor, and Valley hereunder are
subject to the satisfaction, on or prior to the Effective Date, of all the
following conditions, compliance with which or the occurrence of which may be
waived in whole or in part by Zions Bancorp in writing unless not so permitted
by law:
4.1. Representations and Warranties; Performance of Obligations. All
representations and warranties of the Company and the Bank contained in this
Agreement shall be true and correct in all material respects as of the Effective
Date with the same effect as if such representations and warranties had been
made or given at and as of such date, except that representations and warranties
of the Company or the Bank contained in this Agreement which
-8-
specifically relate to an earlier date shall be true and correct in all material
respects as of such earlier date. All covenants and obligations to be performed
or met by the Company or the Bank on or prior to the Effective Date shall have
been so performed or met. On the Effective Date, the president and chief
executive officer and the chief financial officer of each of the Company and the
Bank shall deliver to Zions Bancorp a certificate to that effect. The delivery
of such certificates shall in no way diminish the warranties, representations,
covenants, and obligations of the Company and the Bank made in this Agreement.
4.2. Opinion of Company Special Counsel. Zions Bancorp shall have
received a favorable opinion from Xxxxx & Xxxxxxxxx LLP, dated the Effective
Date, substantially in form and substance as that set forth as Exhibit IV
attached hereto.
4.3. Opinion of Company Counsel. Zions Bancorp shall have received a
favorable opinion from Xxxxxxx & Xxxxxx, P.C., dated the Effective Date,
substantially in form and substance as that set forth as Exhibit V attached
hereto.
4.4. Opinion of Company Litigation Counsel. Zions Bancorp shall have
received a favorable opinion from legal counsel handling litigation matters for
the Company and the Bank, dated the Effective Date, substantially in form and
substance as that set forth as Exhibit VI attached hereto.
4.5. Delivery of Branch Authorizations. The Company shall have
delivered to Zions Bancorp originals or certified copies of all of the
regulatory authorizations entitling the Bank to operate each of its branch
offices, together with a certification by the president and chief executive
officer and the chief financial officer of the Bank dated the Effective Date,
certifying that such branch certificates have not been revoked or threatened to
be revoked and that such certificates are in full force and effect.
4.6. No Adverse Developments.
(a) During the period from June 30, 1997 to the Effective Date,
(i) there shall not have been any material adverse change in the financial
position or results of operations of the Company or the Bank taken as a whole,
nor shall the Company or the Bank have sustained any material loss or damage to
its properties, whether or not insured, which materially affects its ability to
conduct its business; and (ii) none of the events described in clauses (a)
through (f) of Section 6.16 of this Agreement shall have occurred, and each of
the practices and conditions described in clauses (x) through (z) of that
section shall have been maintained.
(b) As of the Effective Date, the capital structure of the
Company and the capital structure of the Bank shall be as stated in section 6.9.
-9-
(c) As of the Effective Date, other than liabilities incurred in
the ordinary course of business subsequent to December 31, 1996, there shall be
no liabilities of the Company or the Bank which are material to the Company on a
consolidated basis which were not reflected on the consolidated statement of
condition of the Company as of December 31, 1996 or in the related notes to the
consolidated statement of condition of the Company as of December 31, 1996.
(d) No adverse action shall have been instituted or threatened by
any governmental authority, or referred by a governmental authority to another
governmental authority, for the enforcement or assessment of penalties for the
violation of any laws of regulations relating to equal credit opportunity, fair
housing, or fair lending.
(e) Zions Bancorp shall have received a certificate dated the
Effective Date, signed by the president and the chief financial officer of the
Company and the president and the chief financial officer of the Bank,
certifying to the matters set forth in paragraphs (a), (b), (c), and (d) of this
section 4.6. The delivery of such officers' certificate shall in no way diminish
the warranties and representations of the Company or those of the Bank made in
this Agreement.
4.7. Consolidated Net Worth. On and as of the Effective Date, the
consolidated net worth of the Company as determined in accordance with generally
accepted accounting principles shall not be less than the sum of (a) $8,002,474
and (b) the aggregate contributions to capital caused by the payments
accompanying the exercise of any stock options on or after June 30, 1997.
4.8. Loan Loss Reserve. On and as of the Effective Date, the aggregate
reserve for loan losses of the Bank as determined in accordance with generally
accepted accounting principles shall not be less than $1,077,457.
4.9. CRA Rating. The CRA rating of the Bank shall be no lower than
"satisfactory."
4.10. Employment Agreements. Xxxxxxx X. Xxxxxx shall have entered into
an employment agreement with Valley substantially in form and substance as that
set forth as Exhibit VII attached hereto.
5. Conditions Precedent to Performance of Obligations of the Company and
the Bank.
The obligations of the Company and the Bank hereunder are subject to
the satisfaction, on or prior to the Effective Date, of all the following
conditions, compliance with which or the occurrence of which may be waived in
whole or in part by the Company in writing unless not so permitted by law:
-10-
5.1. Approval by Shareholders of Valley. The shareholders of Valley
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
Valley, in accordance with the applicable laws of the United States.
5.2. Representations and Warranties; Performance of Obligations. All
representations and warranties of Zions Bancorp, Val Cor, and Valley contained
in this Agreement shall be true and correct in all material respects as of the
Effective Date with the same effect as if such representations and warranties
had been made or given at and as of such date, except that representations and
warranties of Zions Bancorp, Val Cor, and Valley contained in this Agreement
which specifically relate to an earlier date shall be true and correct in all
material respects as of such earlier date. All covenants and obligations to be
performed or met by Zions Bancorp, Val Cor, or Valley on or prior to the
Effective Date shall have been so performed or met. On the Effective Date,
either the President or an Executive Vice President of Zions Bancorp and either
the Chairman of the Board or the President of each of Val Cor and Valley shall
deliver to the Company a certificate to that effect. The delivery of such
officer's certificate shall in no way diminish the warranties, representations,
covenants, and obligations of Zions Bancorp, Val Cor, and Valley made in this
Agreement.
5.3. Opinion of Zions Bancorp Counsel. The Company shall have received
a favorable opinion of Duane, Morris & Heckscher LLP, dated the Effective Date,
substantially in form and substance as that set forth as Exhibit VIII attached
hereto.
5.4 Fairness Opinion. The Company shall have received a favorable
opinion of The Xxxxxxx Company, Investment Bankers, dated as of the date of the
proxy statement referred to in section 3.2(a) of this Agreement, as to the
fairness, from a financial point of view, of the consideration to be paid by
Zions Bancorp in the Holding Company Merger pursuant to this Agreement.
5.5. No Adverse Developments. During the period from June 30, 1997 to
the Effective Date, there shall not have been any material adverse change in the
financial position or results of operations of Zions Bancorp nor shall Zions
Bancorp have sustained any material loss or damage to its properties, whether or
not insured, which materially affects its ability to conduct its business; and
the Company shall have received a certificate dated the Effective Date signed by
either the President of Zions Bancorp or an Executive Vice President of Zions
Bancorp to the foregoing effect. The delivery of such officer's certificate
shall in no way diminish the warranties and representations of Zions Bancorp
made in this Agreement.
5.6. 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).
-11-
6. Representations and Warranties of the Company and the Bank.
The Company (with respect to the Company and the Bank) and the Bank
(solely with respect to itself) each represent and warrant to Zions Bancorp, Val
Cor, and Valley as follows:
6.1. Organization, Powers, and Qualification. Each of the Company and
the Bank is a corporation which is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted. Each of the Company and the Bank owns or possesses in the
operation of its business all franchises, licenses, permits, branch
certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect the operation and properties of the
Company or the Bank in any material respect. Each of the Company and the Bank is
duly qualified and licensed to do business and is in good standing in every
jurisdiction with respect to which the failure to be so qualified or licensed
could result in material liability or adversely affect the operation and
properties of the Company or the Bank in any material respect.
6.2. Execution and Performance of Agreement. Each of the Company and
the Bank has all requisite corporate power and authority to execute and deliver
this Agreement and to perform its respective terms.
6.3. Absence of Violations. Except as set forth on Schedule 6.3 hereof:
(a) neither the Company nor the Bank is in violation of its
respective charter documents or bylaws, nor of any applicable federal, state, or
local law or ordinance nor any order, rule, or regulation of any federal, state,
local, or other governmental agency or body, in any material respect, or in
default with respect to any order, writ, injunction, or decree of any court, or
in default under any order, license, regulation, or demand of any governmental
agency, any of which violations or defaults could reasonably be expected to have
a materially adverse effect on its business, properties, liabilities, financial
position, results of operations, or prospects; and neither the Company nor the
Bank has received any claim or notice of violation with respect thereto;
(b) neither the Company nor the Bank nor any member of the
management of either of them is a party to any assistance agreement, supervisory
agreement, memorandum of understanding, consent order, cease and desist order or
condition of any regulatory order or decree with or by the Board of Governors,
the OCC, the Federal Deposit Insurance Corporation (the "FDIC"), any other
banking or securities authority of the United States or the State of
-12-
Colorado, or any other regulatory agency that relates to the conduct of the
business of the Company or the Bank or their assets; and except as previously
disclosed to Zions Bancorp in writing, no such agreement, memorandum, order,
condition, or decree is pending or threatened;
(c) each of the Company and the Bank has established policies and
procedures to provide reasonable assurance of compliance in a safe and sound
manner with the federal banking, credit, housing, consumer protection, and civil
rights laws and with all other laws applicable to the operations of the Company
and the Bank and the regulations adopted under each of those laws, so that
transactions be executed and assets be maintained in accordance with such laws
and regulations; and the policies and practices of each of the Company and the
Bank with respect to all such laws and regulations reasonably limit
noncompliance and detect and report noncompliance to its management; and
(d) the Bank has established a CRA policy which provides for (i)
goals and objectives consistent with CRA; (ii) a methodology for self-assessment
by the board of directors of the Bank; (iii) ongoing CRA training of all
personnel of the Bank, including the members of its board of directors; and (iv)
procedures whereby all significant CRA-related activity is documented; and the
Bank has officially designated a CRA officer who reports directly to the board
of directors and is responsible for the CRA program of the Bank.
6.4. Compliance with Agreements. Neither the Company nor the Bank is in
violation of any material term of any material security agreement, mortgage,
indenture, or any other contract, agreement, instrument, lease, or certificate.
The capital ratios of each of the Company and the Bank comply fully with all
terms of all currently outstanding supervisory and regulatory requirements and
with the conditions of all regulatory orders and decrees.
6.5. Binding Obligations; Due Authorization. Subject to the approval of
its shareholders, this Agreement constitutes valid, legal, and binding
obligations of each of the Company and the Bank, enforceable against it in
accordance with its terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar law, or by general principles of
equity. The execution, delivery, and performance of this Agreement and the
transactions contemplated thereby have been duly and validly authorized by the
board of directors of each of the Company and the Bank. Subject to approval by
its shareholders of this Agreement, no other corporate proceedings on the part
of either the Company or the Bank are necessary to authorize this Agreement or
the carrying out of the transactions contemplated hereby.
6.6. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated thereby, or the
compliance with or fulfillment of the terms thereof will conflict with, or
result in a breach of any of the terms, conditions, or provisions of, or
constitute a default under the organizational documents or bylaws of the Company
or the Bank. Such execution, consummation, or fulfillment will not (a) conflict
with,
-13-
or result in a material breach of the terms, conditions, or provisions of, or
constitute a material violation, conflict, or default under, or, except as set
forth on Schedule 6.6 hereof, give rise to any right of termination,
cancellation, or acceleration with respect to, or result in the creation of any
lien, charge, or encumbrance upon, any property or assets of the Company or the
Bank pursuant to any material agreement or instrument under which the Company or
the Bank is obligated or by which any of its properties or assets may be bound,
including without limitation any material lease, contract, mortgage, promissory
note, deed of trust, loan, credit arrangement, or other commitment or
arrangement of the Company or the Bank in respect of which it is an obligor; (b)
if the Holding Company Merger is approved by the Board of Governors under the
Bank Holding Company Act of 1956, as amended (the "BHC Act"), or if the Board of
Governors waives its jurisdiction over the Holding Company Merger, and if the
Bank Merger is approved by the OCC, the Commissioner, and the Division, violate
any law, statute, rule, or regulation of any government or agency to which the
Company or the Bank is subject and which is material to its operations; or (c)
violate any judgment, order, writ, injunction, decree, or ruling to which the
Company or the Bank or any of its properties or assets is subject or bound. None
of the execution or delivery of this Agreement, the consummation of the
transactions contemplated thereby, or the compliance with or fulfillment of the
terms thereof will require any authorization, consent, approval, or exemption by
any person which has not been obtained, or any notice or filing which has not
been given or done, other than approval of or waiver of jurisdiction over the
transactions contemplated by this Agreement by the Board of Governors, the OCC,
the Commissioner, and the Division.
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 the Bank or over any company that directly
or indirectly has control over the Bank.
6.8. Subsidiaries.
(a) Other than the Bank, which is a direct, wholly-owned
subsidiary of the Company, the Company does not have any direct or indirect
subsidiaries and does not directly or indirectly own, control, or hold with the
power to vote any shares of the capital stock of any company (except shares held
by the Bank for the account of others in a fiduciary or custodial capacity in
the ordinary course of its business). There are no outstanding subscriptions,
options, warrants, convertible securities, calls, commitments, or agreements
calling for or requiring the issuance, transfer, sale, or other disposition of
any shares of the capital stock of the Bank, or calling for or requiring the
-14-
issuance of any securities or rights convertible into or exchangeable for shares
of capital stock of the Bank. There are no other direct or indirect subsidiaries
of the Company which are required to be consolidated or accounted for on the
equity method in the consolidated financial statements of the Company or the
financial statements of the Bank prepared in accordance with generally accepted
accounting principles.
(b) Except as specified in the previous subsection, neither the
Company nor the Bank has a direct or indirect equity or ownership interest which
represents 5 percent or more of the aggregate equity or ownership interest of
any entity (including, without limitation, corporations, partnerships, and joint
ventures).
6.9. Capital Structure.
(a) The authorized capital stock of the Company consists of (i)
100,000 shares of Class A Common Stock, of which, as of the date of this
Agreement, 100,000 shares have been duly issued and are validly outstanding,
fully paid, and held by four shareholders of record, and no additional shares
are issued and held in the treasury of the Company; and (ii) 900,000 shares of
Class B Common Stock, of which, as of the date of this Agreement, 648,631 shares
have been duly issued and are validly outstanding, fully paid, and held by
approximately 54 shareholders of record, and no additional shares are issued and
held in the treasury of the Company. The aforementioned shares of Class A Common
Stock are the only voting securities of the Company authorized, issued, or
outstanding as of such date; and except as set forth on Schedule 6.9 hereof, no
subscriptions, warrants, options, rights, convertible securities, or similar
arrangements or commitments in respect of securities of the Company are
authorized, issued, or outstanding which would enable the holder thereof to
purchase or otherwise acquire shares of any class of capital stock of the
Company. No shares of Company Common Stock are held by the Company as treasury
shares. 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 Common Stock reserved for issuance pursuant to stock option
plans, agreements, or arrangements but not yet issued and all options upon
shares of Company Common Stock designated or made available for grant but not
yet granted.
(c) The authorized capital stock of the Bank consists of [______]
shares of Bank Common Stock, of which, as of the date of this Agreement, [_____]
shares have been duly issued and are validly outstanding, fully paid, and all of
which are held of record and beneficially by the Company. The aforementioned
shares of Bank Common Stock are the only
-15-
voting securities of the Bank authorized, issued, or outstanding as of such
date; and no subscriptions, warrants, options, rights, convertible securities,
or similar arrangements or commitments in respect of securities of the Bank are
authorized, issued, or outstanding which would enable the holder thereof to
purchase or otherwise acquire shares of any class of capital stock of the Bank.
None of the Bank Common Stock is subject to any restrictions upon the transfer
thereof under the terms of the corporate charter or bylaws of the Bank.
(d) None of the shares of Company Common Stock or Bank Common
Stock has been issued in violation of the preemptive rights of any shareholder.
(e) As of the date hereof, to the best of the knowledge of the
Company and the Bank, and except for this Agreement, there are no shareholder
agreements, or other agreements, understandings, or commitments relating to the
right of any holder or beneficial owner of more than 1 percent of the issued and
outstanding shares of any class of the capital stock of either the Company or
the Bank to vote or to dispose of his or its shares of capital stock of that
entity.
(f) The Company has not granted any shareholders' rights to
dissent from any merger.
(g) The shareholders of the Company who are listed on Schedule
1.8 annexed hereto may, in the aggregate, vote or direct the vote of more than
50 percent of the Class A Common Stock and more than 50 percent of the Class B
Common Stock.
6.10. Articles of Incorporation, Bylaws, and Minute Books. The copies
of the articles of incorporation and all amendments thereto and of the bylaws,
as amended, of the Company and the Bank that have been provided to Zions Bancorp
and certified by the Company as complete and true copies are true, correct, and
complete copies thereof. The minute books of the Company and the Bank which have
been made available to Zions Bancorp for its continuing inspection until the
Effective Date contain accurate minutes of all meetings and accurate consents in
lieu of meetings of the board of directors (and any committee thereof) and of
the shareholders of the Company and the Bank since their respective inceptions.
These minute books accurately reflect all transactions referred to in such
minutes and consents in lieu of meetings and disclose all material corporate
actions of the shareholders and boards of directors of the Company and the Bank
and all committees thereof. Except as reflected in such minute books, there are
no minutes of meetings or consents in lieu of meetings of the board of directors
(or any committee thereof) or of shareholders of the Company or the Bank.
6.11. Books and Records. The books and records of each of the Company
and the Bank fairly reflect the transactions to which it is a party or by which
its properties are subject or bound. Such books and records have been properly
kept and maintained and are in compliance
-16-
in all material respects with all applicable legal and accounting requirements.
Except as set forth on Schedule 6.11 hereof, each of the Company and the 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. Except as set forth on Schedule 6.11 hereof, the Company and
the 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 the Bank has filed all material reports and
returns required by any law or regulation to be filed by it.
6.12. Regulatory Approvals and Filings, Contracts, Commitments, etc.
The Company has made or will, no later than ten business days after the date
hereof, make available to Zions Bancorp or grant to Zions Bancorp continuing
access until the Effective Date to originals or copies of the following
documents relating to the Company and the Bank:
(a) All regulatory approvals received since January 1, 1992, of
the Company and the Bank relating to all bank and nonbank acquisitions or the
establishment of de novo operations;
(b) All employment contracts, election contracts, retention
contracts, deferred compensation, non-competition, bonus, stock option,
profit-sharing, pension, retirement, consultation after retirement, incentive,
insurance arrangements or plans (including medical, disability, group life or
other insurance plans), and any other remuneration or fringe benefit
arrangements applicable to employees, officers, or directors of the Company or
the Bank, accompanied by any agreements, including trust agreements, embodying
such contracts, plans, or arrangements, and all employee manuals and memoranda
relating to employment and benefit policies and practices of any nature
whatsoever (whether or not distributed to employees or any of them), and any
actuarial reports and audits relating to such plans;
(c) All material contracts, agreements, leases, mortgages, and
commitments, except those entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound; or, if any of the same
be oral, true, accurate, and complete written summaries of all such oral
contracts, agreements, leases, mortgages, and commitments;
(d) All material contracts, agreements, leases, mortgages, and
commitments, whether or not entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound and which require the
consent or approval of third parties to the execution and delivery of this
Agreement or to the consummation or performance of any of the transactions
contemplated thereby, or, if any of the same be oral, true, accurate, and
complete written summaries of all such oral contracts, agreements, leases,
mortgages, and commitments;
-17-
(e) All deeds, leases, contracts, agreements, mortgages, and
commitments, whether or not entered into in the ordinary course of business, to
which the Company or the Bank is a party or may be bound and which relate to
land, buildings, fixtures, or other real property upon or within which the
Company or the Bank operates its businesses or is authorized to operate its
businesses, or with respect to which the Company or the Bank has any application
pending for authorization to operate its businesses;
(f) Any pending application, including any documents or materials
related thereto, which has been filed by the Company or the Bank with any
federal or state regulatory agency with respect to the establishment of a new
office or the acquisition or establishment of any additional banking or
nonbanking subsidiary; and
(g) All federal, state, and local tax returns, including any
amended returns, filed by the Company or the Bank for the years 1991 through
1996, a copy of the most recent audit examination of each of the Company and the
Bank by the Internal Revenue Service ("IRS"), and a copy of all correspondence
or other documents with respect to any examination that has not yet been
resolved, a copy of the most recent state or local tax agency examination, if
any, of each of the Company and the Bank, and a copy of all correspondence or
other documents with respect to any examination that has not yet been resolved,
and all tax rulings, closing agreements, settlement agreements, or similar
documents with respect to the Company or the Bank received from or entered into
with the IRS or any other taxing authority since January 1, 1988 or that would
have continuing effect after the Effective Date.
6.13. Financial Statements. The Company has furnished to Zions Bancorp
its consolidated statement of condition as of each of December 31, 1994,
December 31, 1995, and December 31, 1996, 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, and its consolidated statement of
condition as of June 30, 1997 and its related consolidated statement of income
for the period then ended (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 the 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.
-18-
6.14. Call Reports; Bank Holding Company Reports.
(a) The Bank has made available to Zions Bancorp its Consolidated
Reports of Condition and Consolidated Reports of Income for the calendar
quarters dated March 31, 1995 and thereafter. All of such Consolidated Reports
of Condition and Consolidated Reports of Income, including the related schedules
and memorandum items, were prepared in accordance with 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 the Bank as reported on any of the Consolidated Reports of Condition
referred to in Subsection 6.14(a) hereof, in any material amount, in order to
conform such equity capital account to equity capital as would be determined in
accordance with generally accepted accounting principles as of such date.
(c) The Company has furnished to Zions Bancorp (i) its annual
report on Form FR Y-6 as filed with the Board of Governors as of December 31,
1996, and (ii) its semiannual report on Form FR Y-9SP as filed with the Board of
Governors as of June 30, 1997.
6.15. Absence of Undisclosed Liabilities. At June 30, 1997, neither the
Company nor the Bank had any obligation or liability of any nature (whether
absolute, accrued, contingent, or otherwise, and whether due or to become due)
which was material, or which when combined with all similar obligations or
liabilities would have been material, to the Company, except (a) as disclosed in
the Company Financial Statements, or (b) as set forth on Schedule 6.15 hereof,
or (c) for unfunded loan commitments made by the Company or the Bank in the
ordinary course of their business consistent with past practice. The amounts set
up as current liabilities for taxes in the Company Financial Statements are
sufficient in all material respects for the payment of all taxes (including,
without limitation, federal, state, local, and foreign excise, franchise,
property, payroll, income, capital stock, and sales and use taxes and any
interest, penalties, or additions to tax with respect thereto ("Tax" or "Taxes")
accrued in accordance with generally accepted accounting principles and unpaid
at June 30, 1997. Since June 30, 1997, neither the Company nor the Bank has
incurred or paid any obligation or liability that would be material (on a
consolidated basis) to the Company, except (x) for obligations incurred or paid
in connection with transactions by it in the ordinary course of its business
consistent with past practices, or (y) as set forth on Schedule 6.15 hereof, or
(z) as expressly contemplated herein.
6.16. Absence of Certain Developments. Since June 30, 1997, except as
set forth on Schedule 6.16 hereof, there has been (a) no material adverse change
in the condition, financial or otherwise, or to the assets, properties,
liabilities, or businesses of the Company and the Bank, (b)
-19-
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 the Bank
of any regular dividend, special dividend, or other distribution with respect to
any class of capital stock of the Company or the Bank, other than customary cash
dividends paid by the Company or the Bank whose amounts have not exceeded past
practice and the intervals between which dividends have not been more frequent
than past practice; (d) no repurchase by the Company of any of its capital
stock; (e) no material loss, destruction, or damage to any material property of
the Company or the Bank, which loss, destruction, or damage is not covered by
insurance; and (f) no material acquisition or disposition of any asset, nor any
material contract outside the ordinary course of business entered into by the
Company or the Bank nor any substantial amendment or termination of any material
contract outside the ordinary course of business to which the Company or the
Bank is a party, nor any other transaction by the Company or the Bank involving
an amount in excess of $25,000 other than for fair value in the ordinary course
of its business. Since June 30, 1997, except as set forth on Schedule 6.16
hereof, (x) each of the Company and the Bank has conducted its business only in
the ordinary course of such business and consistent with past practice; (y) the
Company, on a consolidated basis, has maintained the quality of its loan
portfolio and that of each of its major components at approximately the same
level as existed at June 30, 1997; and (z) the Company, on a consolidated basis,
has administered its investment portfolio pursuant to essentially the same
policies and procedures as existed during 1995 and 1996 and the first six months
of 1997, and has taken no action to lengthen the average maturity of the
investment portfolio, or of any significant category thereof, to any material
extent.
6.17. Reserve for Possible Credit Losses. The Company's consolidated
reserve for possible credit losses is adequate to absorb reasonably anticipated
losses in the consolidated loan and lease portfolios of the Company, in view of
the size and character of such portfolios, current economic conditions, and
other pertinent factors. Management periodically reevaluates the adequacy of
such reserve based on portfolio performance, current economic conditions, and
other factors.
6.18. Tax Matters.
(a) Except as set forth on Schedule 6.18 hereof, all Tax returns
and reports required to be filed by or on behalf of the Company or the Bank have
been timely filed with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to be filed, or
requests for extensions have been timely filed, granted, and have not expired
for periods ending on or before December 31, 1996, and all returns filed are
complete and accurate and properly reflect its Taxes for the periods covered
thereby. All Taxes shown or required to be shown on filed returns have been
paid. As of the date hereof, there is no audit
-20-
examination, deficiency, or refund litigation or tax claim or any notice of
assessment or proposed assessment by the IRS or any other taxing authority, or
any other matter in controversy with respect to any Taxes that might result in a
determination adverse to the Company or the Bank, except as reserved against in
the Company Financial Statements. All Taxes due with respect to completed and
settled examinations or concluded litigation have been properly accrued or paid.
(b) Neither the Company nor the Bank has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due that is currently in effect.
(c) To the extent any Taxes are due from, but have not yet been
paid by, the Company or the Bank for the period or periods beginning January 1,
1997 or thereafter through and including the Effective Date, adequate provision
on an estimated basis has been or will be made for the payment of such taxes by
establishment of appropriate tax liability accounts on the last monthly
financial statements of the Company prepared before the Effective Date.
(d) Except as set forth on Schedule 6.18 hereof, deferred Taxes
of the Company and the Bank have been provided for in accordance with generally
accepted accounting principles as in effect on the date of this Agreement.
(e) The deductions of the Bank for bad debts taken and the
reserve of the Bank for loan losses for federal income tax purposes at December
31, 1996, were not greater than the maximum amount permitted under the
provisions of section 585 of the Code.
(f) Other than liens arising under the laws of the State of
Colorado with respect to taxes assessed and not yet due and payable, there are
no tax liens on any of the properties or assets of the Company or the Bank.
(g) The Company and the Bank (A) have timely filed all
information returns or reports required to be filed with respect to Taxes,
including but not limited to those required by sections 6041, 6041A, 6042, 6045,
6049, 6050H, and 6050J of the Code, (B) have properly and timely provided to all
persons, other than taxing authorities, all information reports or other
documents (for example, Form 1099s, Form W-2s, and so forth) required to be
provided to such persons under applicable law, and (C) have exercised due
diligence in obtaining certified taxpayer identification numbers as required
under applicable law.
(h) The taxable year end of the Company for federal income tax
purposes is, and since the inception of the Company has continuously been,
December 31.
-21-
(i) The Company and the Bank have in all material respects
satisfied all federal, state, local, and foreign withholding tax requirements
including but not limited to income, social security, and employment tax
withholding.
(j) Neither the Company nor the Bank (A) is, or has been, a
member of a group filing a consolidated, combined, or unitary tax return, other
than a group the common parent of which is or was the Company, or (B) has any
liability for the Taxes of any person (other than the Company and the Bank)
under Treas. Reg. Sec. 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.
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 $8,002,474.
6.20. Examinations. To the extent consistent with law, the Company has
heretofore disclosed to Zions Bancorp relevant information contained in the most
recent safety-and-soundness, compliance, Community Reinvestment Act, and other
Reports of Examination with respect to the Company issued by the Board of
Governors and the most recent safety-and-soundness, compliance, Community
Reinvestment Act, and other Reports of Examination with respect to the Bank
issued by the Board of Governors. Such information so disclosed consists of all
material information with respect to the financial, operational, and legal
condition of the entity under examination which is included in such reports, and
does not omit or will not omit any information necessary to make the information
disclosed not misleading.
6.21. Reports. Since January 1, 1994, each of the Company and the Bank
has effected all registrations and filed all reports and statements, together
with any amendments required to be made with respect thereto, which it was
required to effect or file with (a) the Board of Governors, (b) the FDIC, (c)
the United States Department of the Treasury, (d) the Division, and (e) any
other governmental or regulatory authority or agency having jurisdiction over
its operations. Each of such registrations, reports, and documents, including
the financial statements, exhibits, and schedules thereto, does not contain any
statement which, at the time and in the light of the circumstances under which
it was made, is false or misleading with respect to any material fact or which
omits to state any material fact necessary in order to make the statements
contained therein not false or misleading.
6.22. FIRA Compliance and Other Transactions with Affiliates. Except as
set forth on Schedule 6.22 hereof, (a) none of the officers, directors, or
beneficial holders of 5 percent or more of the common stock of the Company or
the Bank and no person "controlled" (as that term is defined in the Financial
Institutions Regulatory and Interest Rate Control Act of 1978) by the Company or
the Bank (collectively, "Insiders") has any ongoing material transaction with
the Company or the Bank on the date of this Agreement; (b) no Insider has any
ownership interest in
-22-
any business, corporate or otherwise, which is a party to, or in any property
which is the subject of, business arrangements or relationships of any kind with
the Company or the Bank not in the ordinary course of business; and (c) all
other extensions of credit by the Company or the Bank to any Insider have
heretofore been disclosed in writing by the Company to Zions Bancorp.
6.23. SEC Registered Securities. No equity or debt securities of the
Company or the Bank are registered or required to be registered under the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act")).
6.24. Legal Proceedings. Except as disclosed in the Company Financial
Statements or as set forth on Schedule 6.24 hereof, there is no claim, action,
suit, arbitration, investigation, or other proceeding pending before any court,
governmental agency, authority or commission, arbitrator, or "impartial
mediator" (of which the Company or the Bank has been served with process or
otherwise been given notice) or, to the best of the knowledge of the Company and
the Bank, threatened or contemplated against or affecting it or its property,
assets, interests, or rights, or any basis therefor of which notice has been
given, which, if adversely determined, would have a material adverse effect
(financial or otherwise) on the business, operating results, or financial
condition of the Company or which otherwise could prevent, hinder, or delay
consummation of the transactions contemplated by this Agreement.
6.25. Absence of Governmental Proceedings. Except as set forth on
Schedule 6.25 hereof, neither the Company nor the Bank is a party defendant or
respondent to any pending legal, equitable, or other proceeding commenced by any
governmental agency and, to the best of the knowledge of the Company and the
Bank, no such proceeding is threatened.
6.26. Federal Deposit Insurance.
(a) The deposits held by the Bank are insured within statutory
limits by the Bank Insurance Fund of the FDIC pursuant to the provisions of the
Federal Deposit Insurance Act, as amended (12 U.S.C. ss. 1811 et seq.), and the
Bank has paid all assessments and filed all related reports and statements
required under the Federal Deposit Insurance Act.
(b) The Bank is a member of and pay insurance assessments to the
Bank Insurance Fund of the FDIC ("BIF"), and its deposits are insured by the
BIF. None of the deposits of the Bank are insured by the Savings Association
Insurance Fund of the FDIC ("SAIF"), and the Bank pays no insurance assessments
to the SAIF.
6.27. Other Insurance. Each of the Company and the Bank carries
insurance with reputable insurers, including blanket bond coverage, in such
amounts as are reasonable to cover such risks as are customary in relation to
the character and location of its properties and the nature of its businesses.
All such policies of insurance are in full force and effect, and no notice of
cancellation has been received. All premiums to date have been paid in full.
Neither the Company nor the Bank is in default with respect to any such policy
which is material to it.
-23-
6.28. Labor Matters. Neither the Company nor the Bank is a party to or
bound by any collective bargaining contracts with respect to any employees of
the Company or the Bank. Since their respective inceptions there has not been,
nor to the best of the knowledge of the Company and the Bank was there or is
there threatened, any strike, slowdown, picketing, or work stoppage by any union
or other group of employees against the Company or the Bank or any of its
premises, or any other labor trouble or other occurrence, event, or condition of
a similar character. As of the date hereof, neither the Company nor the Bank is
aware of any attempts to organize a collective bargaining unit to represent any
of its employee groups.
6.29. Employee Benefit Plans.
(a) Schedule 6.29 hereto contains a list or brief descriptions of
all pension, retirement, stock purchase, stock bonus, stock ownership, stock
option, performance share, stock appreciation right, phantom stock, savings, or
profit-sharing plans, any employment, deferred compensation, consultant, bonus,
or collective bargaining agreement, or group insurance contract or any other
incentive, welfare, life insurance, death or survivor's benefit, health
insurance, sickness, disability, medical, surgical, hospital, severance, layoff
or vacation plans, contracts, and arrangements or employee benefit plans or
agreements sponsored, maintained, or contributed to by the Company or the Bank
for the employees or former employees of the Company or the Bank. The Company
has previously made available and will continue to make available to Zions
Bancorp for its continuing review until the Effective Date true, complete, and
accurate copies of all plans and arrangements listed on Schedule 6.29, together
with (i) the most recent actuarial and financial report prepared with respect to
any such plans which constitute "qualified plans" under section 401(a) of the
Code, and (ii) the most recent annual reports, if any, filed with any government
agency and all IRS rulings and determination letters and any open requests for
such rulings and letters that pertain to any such plan.
(b) Except for liabilities to the Pension Benefit Guaranty
Corporation ("PBGC") pursuant to section 4007 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), all of which have been fully paid,
and except for liabilities to the IRS under section 4971 of the Code, all of
which have been fully paid, neither the Company nor the Bank has any liability
with respect to any pension plan qualified under section 401 of the Code.
Neither the Company nor the Bank sponsors or maintains any defined benefit plan
and has never sponsored or maintained any defined benefit plan.
(c) All "employee benefit plans," as defined in section 3(3) of
ERISA, that cover one or more employees employed by the Company or the Bank
(each individually a "Plan" and collectively the "Plans"), comply in all
material respects with ERISA and, where applicable
-24-
for tax-qualified or tax-favored treatment, with the Code. As of June 30, 1997,
neither the Company nor the Bank had any material liability under any Plan which
is not reflected on the Company Financial Statements as of such date (other than
such normally unrecorded liabilities under the Plans for sick leave, holiday,
education, bonus, vacation, incentive compensation, and anniversary awards,
provided that such liabilities are not in any event material). None of the
Plans, the Company, the Bank, nor any trustee or administrator of the Plans has
ever engaged in a "prohibited transaction" with respect to the Plans within the
meaning of section 406 of ERISA or, where applicable, section 4975 of the Code
for which no exemption is applicable, nor have there been any "reportable
events" within section 4043 of ERISA for which the thirty-day notice therefor
has not been waived. Neither the Company nor the Bank has incurred any liability
under section 4201 of ERISA for a complete or partial withdrawal from a
multi-employer plan.
(d) No action, claim, or demand of any kind has been brought or
threatened by any potential claimant or representative of such a claimant under
any plan, contract, or arrangement referred to in Subsection (a) of this
section, where the Company or the Bank may be either (i) liable directly on such
action, claim, or demand; or (ii) obligated to indemnify any person, group of
persons, or entity with respect to such action, claim, or demand which is not
fully covered by insurance maintained with reputable, responsible financial
insurers or by a self-insured plan.
6.30. Employee Relations. As of the date hereof, each of the Company
and the Bank is, to the best of its knowledge, in compliance in all material
respects with all federal and state laws, regulations, and orders respecting
employment and employment practices (including Title VII of the Civil Rights Act
of 1964), terms and conditions of employment, and wages and hours; and neither
the Company nor the Bank is engaged in any unfair labor practice. As of the date
hereof, except as set forth on Schedule 6.30 hereof, no dispute exists between
the Company or the Bank and any of its employee groups regarding any employee
organization, wages, hours, or conditions of employment which would materially
interfere with the business or operations of the Company or the Bank.
6.31. Fiduciary Activities. The Bank is duly qualified and registered
and in good standing in accordance with the laws of each jurisdiction in which
it is required to so qualify or register as a result of or in connection with
its fiduciary or custodial activities as conducted as of the date hereof. The
Bank is duly registered under and in compliance with all requirements of the
federal Investment Advisers Act of 1940 as amended, or is exempt from
registration thereunder and from compliance with the requirements thereof. Since
January 1, 1994, the Bank has conducted, and currently is conducting, all
fiduciary and custodial activities in all material respects in accordance with
all applicable law.
-25-
6.32. Environmental Liability.
(a) Except as set forth on Schedule 6.32 hereof, neither the
Company nor the Bank is in material violation of any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters, including
those arising under the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the
Federal Water Pollution Control Act, the Federal Clean Air Act, the Toxic
Substances Control Act or any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the environment ("Environmental
Laws").
(b) Except as set forth on Schedule 6.32 hereof, neither the
Company, the Bank, nor, to the best of the knowledge of either of them, any
borrower of the Company or of the Bank has received notice that it has been
identified by the United States Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B, nor has the Company or the Bank
or, to the best of the knowledge of either of them, any borrower of the Company
or of the Bank received any notification that any hazardous waste, as defined by
42 U.S.C. ss. 6903(5), any hazardous substances, as defined by 42 U.S.C. ss.
9601(14), any "pollutant or contaminant," as defined by 42 U.S.C. ss. 9601(33),
or any toxic substance, hazardous materials, oil, or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances") that it
has disposed of has been found at any site at which a federal or state agency is
conducting a remedial investigation or other action pursuant to any
Environmental Law.
(c) No portion of any real property at any time owned or leased
by the Company or the Bank (collectively, the "Company Real Estate") has been
used by the Company or the Bank for the handling, processing, storage or
disposal of Hazardous Substances in a manner which violates any Environmental
Laws and, to the best of the knowledge of the Company and the Bank, no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any of the Company Real Estate. In the course of its
activities, neither the Company nor the Bank has generated or is generating any
hazardous waste on any of the Company Real Estate in a manner which violates any
Environmental Laws. There has been no past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping (collectively, a "Release") of Hazardous
Substances by the Company or the Bank on, upon, or into any of the Company Real
Estate. In addition, to the best of the knowledge of the Company and the Bank,
except as set forth on Schedule 6.32 hereof, there have been no such Releases
on, upon, or into any real property in the vicinity of any of the Company Real
Estate that, through soil or groundwater contamination, may be located on any of
such Company Real Estate.
-26-
(d) With respect to any real property at any time held as
collateral for any outstanding loan by the Company or the Bank (collectively,
the "Collateral Real Estate"), except as set forth on Schedule 6.32 hereof,
neither the Company nor the Bank has since January 1, 1988 received notice from
any borrower thereof or third party, and has no knowledge, that such borrower
has generated or is generating any hazardous waste on any of the Collateral Real
Estate in a manner which violates any Environmental Laws or that there has been
any Release of Hazardous Substances by such borrower on, upon, or into any of
the Collateral Real Estate, or that there has been any Release on, upon, or into
any real property in the vicinity of any of the Collateral Real Estate that,
through soil or groundwater contamination, may be located on any of such
Collateral Real Estate.
(e) As used in this Section 6.32, each of the terms "Company" and
"Bank" includes the applicable entity and any partnership or joint venture in
which it has an interest.
6.33. Intangible Property. To the best of the knowledge of the Company
and the Bank, each of the Company and the Bank owns or possesses the right, free
of the claims of any third party, to use all material trademarks, service marks,
trade names, copyrights, patents, and licenses currently used by it in the
conduct of its business. To the best of the knowledge of the Company and the
Bank, no material product or service offered and no material trademark, service
xxxx, or similar right used by the Company or the Bank infringes any rights of
any other person, and, as of the date hereof, neither the Company nor the Bank
has received any written or oral notice of any claim of such infringement.
6.34. Real and Personal Property. Except for property and assets
disposed of in the ordinary course of business, each of the Company and the Bank
possesses good and marketable title to and owns, free and clear of any mortgage,
pledge, lien, charge, or other encumbrance or other third party interest of any
nature whatsoever which would materially interfere with the business or
operations of either the Company or the Bank, its real and personal property and
other assets, including without limitation those properties and assets reflected
in the Company Financial Statements as of June 30, 1997, or acquired by the
Company or the Bank subsequent to the date thereof. The leases pursuant to which
the Company and the Bank lease real or personal property are valid and effective
in accordance with their respective terms; and there is not, under any such
lease, any material existing default or any event which, with the giving of
notice or lapse of time or otherwise, would constitute a material default. The
real and personal property leased by either the Company or the Bank is free from
any adverse claim which would materially interfere with its business or
operation taken as a whole. The material properties and equipment owned or
leased by the Company and the Bank are in normal operating condition, free from
any known defects, except such minor defects as do not materially interfere with
the continued use thereof in the conduct of its normal operations.
-27-
6.35. Loans, Leases, and Discounts.
(a) To the best of the knowledge of the Company and the Bank,
each loan, lease, and discount reflected as an asset of the Company in the
Company Financial Statements as of June 30, 1997, or acquired since that date,
is the legal, valid, and binding obligation of the obligor named therein,
enforceable in accordance with its terms; and no loan, lease, or discount having
an unpaid balance (principal and accrued interest) in excess of $25,000 is
subject to any asserted defense, offset, or counterclaim known to the Company or
the Bank.
(b) Except as set forth on Schedule 6.35 hereof, neither the
Company nor the Bank holds any loans or loan-participation interests purchased
from, or participates in any loans originated by, any person other than the
Company or the Bank.
6.36. Material Contracts. Neither the Company nor the Bank nor any of
the assets, businesses, or operations of either of them is as of the date hereof
a party to, or is bound or affected by, or receives benefits under any material
agreement, arrangement, or commitment not cancelable by it without penalty,
other than (a) the agreements set forth on Schedule 6.36 hereof, and (b)
agreements, arrangements, or commitments entered into in the ordinary course of
its business consistent with past practice, or, if there has been no past
practice, consistent with prudent banking practices.
6.37. Employment and Severance Arrangements. Schedule 6.37 hereof sets
forth
(a) all employment contracts granted by the Company or the Bank
to any of its officers, directors, shareholders, consultants, or other
management officials and any officer, director, shareholder, consultant, or
management official of any affiliate providing for increased or accelerated
compensation in the event of a change of control with respect to the Company or
the Bank or any other event affecting the ownership, control, or management of
the Company or the Bank; and
(b) all employment and severance contracts, agreements, and
arrangements between the Company or the Bank and any officer, director,
consultant, or other management official of any of them.
6.38. Material Contract Defaults. All contracts, agreements, leases,
mortgages, or commitments referred to in Section 6.12(c) hereof are valid and in
full force and effect on the date hereof. As of the date of this Agreement and
as of the Effective Date, neither the Company nor the Bank is or will be in
default in any material respect under any material contract, agreement,
commitment, arrangement, lease, insurance policy, or other instrument to which
it is a party or by which its assets, business, or operations may be bound or
affected or under which it or its assets, business, or operations receive
benefits; and there has not occurred any event that with the lapse of time or
the giving of notice or both would constitute such a default.
-28-
6.39. Capital Expenditures. Except as set forth on Schedule 6.39
hereof, neither the Company nor the Bank has any outstanding commitments in the
nature of capital expenditures which in the aggregate exceed $25,000.
6.40. Repurchase Agreements. With respect to all agreements pursuant to
which the Company or the Bank has purchased securities subject to an agreement
to resell, it has a valid, perfected first lien or security interest in the
securities securing the agreement, and the value of the collateral securing each
such agreement equals or exceeds the amount of the debt secured by such
collateral under such agreement.
6.41. Internal Controls. Each of the Company and the Bank maintains
internal controls to provide reasonable assurance to its board of directors and
officers that its assets are safeguarded, its records and reports are prepared
in compliance with all applicable legal and accounting requirements and with its
internal policies and practices, and applicable federal, state, and local laws
and regulations are complied with. These controls extend to the preparation of
its financial statements to provide reasonable assurance that the statements are
presented fairly in conformity with generally accepted accounting principles or,
in the case of the Bank and to the extent different from generally accepted
accounting principles, accounting principles mandated by the Board of Governors.
The controls contain self-monitoring mechanisms, and appropriate actions are
taken on significant deficiencies as they are identified.
6.42. Dividends. Neither the Company nor the Bank has paid any dividend
to its shareholders which caused its regulatory capital to be less than the
amount then required by applicable law, or which exceeded any other limitation
on the payment of dividends imposed by law, agreement, or regulatory policy.
6.43. Brokers and Advisers. Except as set forth on Schedule 6.43
hereof, (a) there are no claims for brokerage commissions, finder's fees, or
similar compensation arising out of or due to any act of the Company or the Bank
in connection with the transactions contemplated by this Agreement or based upon
any agreement or arrangement made by or on behalf of the Company or the Bank,
and (b) neither the Company nor the Bank has entered into any agreement or
understanding with any party relating to financial advisory services provided or
to be provided with respect to the transactions contemplated by this Agreement.
-29-
6.44. Interest Rate Risk Management Instruments.
(a) Schedule 6.44 contains a true, correct, and complete list of
all interest-rate swaps, caps, floors, and options agreements and other
interest-rate risk management arrangements to which the Company or the Bank is a
party or by which any of its properties or assets may be bound.
(b) All interest rate swaps, caps, floors, and option agreements
and other interest rate risk management arrangements to which the Company or the
Bank is a party or by which any of its properties or assets may be bound were
entered into in the ordinary course of its business and, to the best of its
knowledge, in accordance with prudent banking practice and applicable rules,
regulations, and regulatory policies and with counterparties believed to be
financially responsible at the time and are legal, valid, and binding
obligations enforceable in accordance with their terms (except as may be limited
by bankruptcy, insolvency, moratorium, reorganization, or similar laws affecting
the rights of creditors generally and the availability of equitable remedies),
and are in full force and effect. The Company and the Bank have duly performed
in all material respects of all of their respective obligations thereunder to
the extent that such obligations to perform have accrued; and to the best of the
knowledge of the Company and the Bank, there are no breaches, violations or
defaults or allegations or assertions of such by any party thereunder.
6.45. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by the Company or the Bank
hereunder or in connection with this Agreement or any of the transactions
contemplated thereunder contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Company which reasonably might
materially adversely affect the business, assets, liabilities, financial
condition, results of operations, or prospects of the Company or the Bank which
has not been disclosed in the Company Financial Statements or a certificate
delivered to Zions Bancorp by the Company. Copies of all documents referred to
in this Agreement, unless prepared solely by Zions Bancorp, Val Cor, or Valley
or solely by Zions Bancorp, Val Cor, or Valley and third parties hereto, are
true, correct, and complete copies thereof and include all amendments,
supplements, and modifications thereto and all waivers thereunder.
6.46. Regulatory and Other Approvals. As of the date hereof, except as
set forth on Schedule 6.46 hereof, neither the Company nor the Bank is aware of
any reason why all material consents and approvals shall not be procured from
all regulatory agencies having jurisdiction over the transactions contemplated
by this Agreement, as shall be necessary for (a) consummation of the
transactions contemplated by this Agreement, and (b) the continuation after the
Effective Date of the business of the Company and the Bank as such business is
carried on immediately prior to the Effective Date, free of any conditions or
requirements which, in the reasonable opinion of the Company, could have a
material adverse effect upon the business, operations, activities, earnings, or
prospects of the Company. As of the date hereof, neither the Company nor the
Bank is aware of any reason why all material consents and approvals shall not be
procured from all other persons and entities whose consent or approval shall be
necessary for
-30-
(y) consummation of the transactions contemplated by this Agreement, or (z) the
continuation after the Effective Date of the business of the Company and the
Bank as such business is carried on immediately prior to the Effective Date.
7. Covenants of the Company and the Bank.
The Company (on behalf of itself and the Bank) and the Bank (on behalf
of itself) each hereby covenant and agree as follows:
7.1. Rights of Access. In addition and not in limitation of any other
rights of access provided to Zions Bancorp, Val Cor, and Valley herein, until
the Effective Date the Company and the Bank will give to Zions Bancorp, Val Cor,
and Valley and to their representatives, including their certified public
accountants, KPMG Peat Marwick, full access during normal business hours to all
of the property, documents, contracts, books, and records of the Company and the
Bank, and such information with respect to their business affairs and properties
as Zions Bancorp, Val Cor, or Valley from time to time may reasonably request.
7.2. Corporate Records, Contracts, etc.
(a) The Company and the Bank will make available to Zions
Bancorp, Val Cor, and Valley copies of their respective articles of
incorporation and bylaws, and will make available their respective minute books,
all of which shall be certified to be complete and true copies.
(b) The Company and the Bank will make available copies of all
contracts or agreements involving amounts in excess of $25,000 to which the
Company or the Bank is a party, including but not limited to data processing
contracts, service contracts, contracts to purchase or lease real property or
equipment, guaranties, employment contracts, and insurance contracts pertaining
to fire, accident, indemnity, fidelity, health, life, hospitalization, or other
employee benefits.
(c) The Company and the Bank will furnish to Zions Bancorp, Val
Cor, and Valley the following information with respect to properties owned by
the Company and the Bank: (i) a brief description and location of each parcel of
real property owned by the Company or the Bank, (ii) a brief description of real
property covered by lease or other rental arrangements to which the Company or
the Bank is a party, including a copy of the relevant leases; and (iii) a brief
description of personal property with a value in excess of $25,000 covered by
lease or other rental arrangements to which the Company or the Bank is a party,
including a copy of the relevant leases.
-31-
7.3. Monthly and Quarterly Financial Statements; Minutes of Meetings
and Other Materials.
(a) The Company and the Bank will continue to prepare all of the
monthly and quarterly financial statements and financial reports to regulatory
authorities for the months and quarterly periods ending between July 1, 1997 and
the Effective Date which it customarily prepared during the period between
January 1, 1995 and June 30, 1997 and shall promptly provide Zions Bancorp with
copies of all such financial statements and reports. Such financial statements
and reports shall be verified by the chief financial officer of the reporting
entity. All of such financial statements and reports, including the related
notes, schedules, and memorandum items, will have been prepared in accordance
with 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 the Bank under federal law may be prepared in
accordance with the official instructions applicable thereto at the time of
filing).
(b) The Company and the Bank shall promptly provide Zions Bancorp
with (i) copies of all of its periodic reports to directors and to shareholders,
whether or not such reports were prepared or distributed in connection with a
meeting of the board of directors or a meeting of the shareholders, prepared or
distributed between the date of this Agreement and the Effective Date, and (ii)
complete copies of all minutes of meetings of its board of directors and
shareholders which meetings take place between the date of this Agreement and
the Effective Date, certified by the secretary or cashier or an assistant
secretary or assistant cashier of the Company or the Bank, as the case may be.
7.4. Extraordinary Transactions. Without the prior written consent of
Zions Bancorp, neither the Company nor the Bank will, on or after the date of
this Agreement: (a) declare or pay any cash dividends or property dividends with
respect to any class of its capital stock, with the exception of customary
periodic cash dividends paid by the Company or the Bank to holders of its common
stock at such intervals and in such amounts as are in every case consistent with
the amounts and intervals characteristic of that payer; (b) declare or
distribute any stock dividend, authorize a stock split, or authorize, issue or
make any distribution of its capital stock or any other equity or debt
securities or debentures (except for issuances of Company Common Stock upon
exercise of stock options outstanding on the date of this Agreement), or grant
any options to acquire such additional securities; (c) merge into, consolidate
with, or sell its assets to any other corporation or person, or enter into any
other transaction or agree to effect any other transaction not in the ordinary
course of its business except as explicitly contemplated herein, or engage in
any discussions concerning such a possible transaction except as explicitly
contemplated herein; (d) convert the charter or form of entity of the Bank from
that in existence on the date of this Agreement to any other charter or form of
entity; (e) make any direct or indirect redemption, purchase, or other
acquisition of any of its capital stock; (f) except in the ordinary course of
its business or to accomplish the transactions contemplated by this Agreement
-32-
or, if not in the ordinary course of business or to accomplish the transactions
contemplated by this Agreement, in an amount not exceeding $10,000 in the
aggregate, incur any liability or obligation, make any commitment or
disbursement, any transaction; (g) other than in the ordinary course of
business, subject any of its properties or assets to any lien, claim, charge,
option, or encumbrance; (h) except for increases in the ordinary course of
business in accordance with past practices, which together with all other
compensation rate increases do not exceed 5 percent per annum of the aggregate
payroll as of July 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 or to hire one or
more tellers, customer service representatives, or similar branch personnel each
of whose annual or annualized salaries in no case shall be above $25,000 and
each of whose hiring is, in the reasonable judgment of the Bank, necessary or
advisable to provide for normal bank operations; nor (k) except with respect to
transactions initiated prior to the date of this Agreement and set forth on
Schedule 6.35 hereof, purchase any loans or loan-participation interests from,
or participate in any loans originated by, any person other than the Company or
the Bank.
7.5. Preservation of Business. Each of the Company and the Bank will
(a) carry on its business and manage its assets and properties diligently and
substantially in the same manner as heretofore; (b) maintain the ratio of its
loans to its deposits at approximately the same level as existed at June 30,
1997, as adjusted to allow for seasonal fluctuations of loans and deposits of a
kind and amount experienced traditionally by it; (c) manage its investment
portfolio in substantially the same manner and pursuant to substantially the
same investment policies as in 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.
-33-
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
Xxxxx, Xxxxx & Xxxxxx, Certified Public Accountants, 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 the Bank and inquiries of
certain officials of the Company and the 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 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 the 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 and for purposes of qualifying the
Holding Company Merger for "pooling of interests" accounting treatment. The
Company will use its best efforts to cause each such "affiliate" of the Company
to deliver to Zions Bancorp not later than thirty days prior to the Effective
Date a written agreement providing that such person will not sell, pledge,
transfer or otherwise dispose of (a) the shares of Company Common Stock
beneficially owned by such person, or the shares of Zions Bancorp Stock to be
received by such person in the Holding Company Merger (the "Company Merger
Shares") or any other shares of Zions Bancorp Stock held by such person during
the period commencing thirty days prior to the Effective Date and ending at such
time as financial results covering at least thirty days of post-Holding Company
Merger combined operations have been published within the meaning of Section
201.01 of the SEC's Codification of Financial Reporting Policies or (b) the
Company Merger Shares except in compliance with the applicable provisions of the
1933 Act and the rules and regulations thereunder.
-34-
7.8 Inconsistent Activities. Unless and until the Holding Company
Merger has been consummated or this Agreement has been terminated in accordance
with its terms, neither the Company nor the Bank will (a) solicit or encourage,
directly or indirectly, any inquiries or proposals to acquire more than 1
percent of the Company Common Stock or any capital stock of the Bank or any
significant portion the assets of either of them (whether by tender offer,
merger, purchase of assets, or other transactions of any type); (b) afford any
third party which may be considering any such transaction access to its
properties, books or records except as required by mandatory provisions of law;
(c) enter into any discussions or negotiations for, or enter into any agreement
or understanding which provides for, any such transaction, or (d) authorize or
permit any of its directors, officers, employees or agents to do or permit any
of the foregoing. If the Company or the Bank becomes aware of any offer or
proposed offer to acquire any shares of its capital stock or any significant
portion of its assets (regardless of the form of the proposed transaction) or of
any other matter which could adversely affect this Agreement, the Holding
Company Merger, or the Bank Merger, the Company and the Bank shall immediately
give notice thereof to Zions Bancorp.
8. Representations and Warranties of Zions Bancorp, Val Cor, and Valley.
Zions Bancorp (with respect to itself, Val Cor, and Valley), Val Cor
(with respect to itself and Valley), and Valley (solely with respect to itself)
each represent and warrant to the Company and the Bank as follows:
8.1. Organization, Powers, and Qualification. Each of Zions Bancorp,
Val Cor, and Valley is a corporation which is duly organized, validly existing,
and in good standing under the laws of its jurisdiction of incorporation and has
all requisite corporate power and authority to own and operate its properties
and assets, to lease properties used in its business, and to carry on its
business as now conducted. Each of Zions Bancorp, Val Cor, and Valley owns or
possesses in the operation of its business all franchises, licenses, permits,
branch certificates, consents, approvals, waivers, and other authorizations,
governmental or otherwise, which are necessary for it to conduct its business as
now conducted, except for those where the failure of such ownership or
possession would not adversely affect its operation and properties in any
material respect. Each of Zions Bancorp, Val Cor, and Valley is duly qualified
and licensed to do business and is in good standing in every jurisdiction in
which such qualification or license is required or with respect to which the
failure to be so qualified or licensed could result in material liability or
adversely affect its operation and properties in any material respect.
8.2. Execution and Performance of Agreement. Each of Zions Bancorp, Val
Cor, and Valley has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its respective terms.
-35-
8.3. Binding Obligations; Due Authorization. This Agreement constitutes
the valid, legal, and binding obligations of each of Zions Bancorp, Val Cor, and
Valley enforceable against it in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
similar law, or by general principles of equity. The execution, delivery, and
performance of this Agreement and the transactions contemplated thereby have
been duly and validly authorized by the board of directors of each of Zions
Bancorp, Val Cor, and Valley. No other corporate proceedings on the part of any
of them are necessary to authorize this Agreement or the carrying out of the
transactions contemplated hereby.
8.4. Absence of Default. None of the execution or the delivery of this
Agreement, the consummation of the transactions contemplated hereby, or the
compliance with or fulfillment of the terms hereof will conflict with, or result
in a breach of any of the terms, conditions, or provisions of, or constitute a
default under the organizational documents or bylaws of Zions Bancorp, Val Cor,
or Valley. None of such execution, consummation, or fulfillment will (a)
conflict with, or result in a material breach of the terms, conditions, or
provisions of, or constitute a material violation, conflict, or default under,
or give rise to any right of termination, cancellation, or acceleration with
respect to, or result in the creation of any lien, charge, or encumbrance upon,
any of the property or assets of Zions Bancorp, Val Cor, or Valley pursuant to
any material agreement or instrument under which it is obligated or by which any
of its properties or assets may be bound, including without limitation any
material lease, contract, mortgage, promissory note, deed of trust, loan, credit
arrangement or other commitment or arrangement of it in respect of which it is
an obligor, or (b) if the Holding Company Merger is approved by the Board of
Governors under the BHC Act, or if the Board of Governors waives its
jurisdiction over the Holding Company Merger, and if the transactions
contemplated by this Agreement are approved by the OCC, the Commissioner, and
the Division, violate any law, statute, rule, or regulation of any government or
agency to which Zions Bancorp, Val Cor, or Valley is subject and which is
material to its operations, or (c) violate any judgment, order, writ,
injunction, decree, or ruling to which it or any of its properties or assets is
subject or bound. None of the execution or delivery of this Agreement, the
consummation of the transactions contemplated thereby, or the compliance with or
fulfillment of the terms thereof will require any authorization, consent,
approval, or exemption by any person which has not been obtained, or any notice
or filing which has not been given or done, other than approval of or waiver of
jurisdiction over the transactions contemplated by this Agreement by the Board
of Governors, the OCC, the Commissioner, and the Division.
8.5. Brokers and Advisers.
(a) There are no claims for brokerage commissions, finder's fees,
or similar compensation arising out of or due to any act of Zions Bancorp, Val
Cor, or Valley in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by or on behalf of any
of them.
-36-
(b) None of Zions Bancorp, Val Cor, nor Valley has entered into
any agreement or understanding with any party relating to financial advisory
services provided or to be provided with respect to the transactions
contemplated by this Agreement.
8.6. Books and Records. The books and records of each of Zions Bancorp,
Val Cor, and Valley fairly reflect the transactions to which it is a party or by
which its properties are subject or bound. Such books and records have been
properly kept and maintained and are in compliance in all material respects with
all applicable legal and accounting requirements. Each of Zions Bancorp, Val
Cor, and Valley follows generally accepted accounting principles applied on a
consistent basis in the preparation and maintenance of its books of account and
financial statements, including but not limited to the application of the
accrual method of accounting for interest income on loans, leases, discounts,
and investments, interest expense on deposits and all other liabilities, and all
other items of income and expense. Each of Zions Bancorp, Val Cor, and Valley
has made all accruals in amounts which accurately report income and expense in
the proper periods in accordance with generally accepted accounting principles.
Each of Zions Bancorp, Val Cor, and Valley has filed all material reports and
returns required by any law or regulation to be filed by it.
8.7. Financial Statements. Zions Bancorp has furnished to the Company
its consolidated statement of condition as of each of December 31, 1994,
December 31, 1995, December 31, 1996, and June 30, 1997, and its related
consolidated statement of income, consolidated statement of changes in financial
position, and consolidated statement of changes in stockholders' equity for each
of the periods then ended, and the notes thereto (collectively, the "Zions
Bancorp Financial Statements"). All of the Zions Bancorp Financial Statements,
including the related notes, (a) were prepared in accordance with generally
accepted accounting principles applied in all material respects, and (b) are in
accordance with the books and records of Zions Bancorp which have been
maintained in accordance with generally accepted accounting principles, and (c)
fairly reflect the consolidated financial position of Zions Bancorp as of such
dates, and the consolidated results of operations of Zions Bancorp for the
periods ended on such dates, and do not fail to disclose any material
extraordinary or out-of-period items, and (d) reflect, in accordance with
generally accepted accounting principles applied in all material respects,
adequate provision for, or reserves against, the possible loan losses of Zions
Bancorp as of such dates.
8.8. Outstanding Shares. The shares of Zions Bancorp stock that are
issued and outstanding have been duly authorized and are validly issued and
outstanding, fully paid and non-assessable.
8.9. Securities Filings. Since January 1, 1994, Zions Bancorp has filed
all periodic and current reports it was required to file pursuant to section 13
of the Exchange Act. Such reports do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make such
reports, in light of the circumstances under which they were filed, not
misleading.
8.10. Absence of Certain Developments. Since June 30, 1997, there has
been (a) no material adverse change in the condition, financial or otherwise,
assets, properties, liabilities, or businesses of Zions Bancorp, and (b) no
material deterioration in the quality of the loan portfolio of Zions Bancorp or
of any major component thereof, and no material increase in the level of
nonperforming assets or nonaccrual loans at Zions Bancorp or in the level of its
provision for credit losses or its reserve for possible credit losses.
-37-
8.11. Disclosure. No representation or warranty hereunder and no
certificate, statement, or other document delivered by it hereunder or in
connection with this Agreement or any of the transactions contemplated
thereunder contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein, in
light of the circumstances under which they were made, not misleading. There is
no fact known to it which might materially adversely affect its business,
assets, liabilities, financial condition, results of operations, or prospects
which has not been disclosed in the Zions Bancorp Financial Statements or a
certificate delivered by it to the Company. Copies of all documents referred to
in this Agreement, unless prepared solely by the Company and the Bank or solely
by the Company and the Bank and third parties hereto, are true, correct, and
complete copies thereof and include all amendments, supplements, and
modifications thereto and all waivers thereunder.
9. Closing.
9.1. Place and Time of Closing. Closing shall take place at the offices
of Zions Bancorp, One South Main Street, Suite 1380, Salt Lake City, Utah, or
such other place as the parties choose, commencing at 10:00 a.m., local time, on
the Effective Date, provided that all conditions precedent to the obligations of
the parties hereto to close have then been met or waived.
9.2. Events To Take Place at Closing. At the Closing, the following
actions will be taken:
(a) Such certificates and other documents as are required by this
Agreement to be executed and delivered on or prior to the Effective Date and
have not been so executed and delivered, and such other certificates and
documents as are mutually deemed by the parties to be otherwise desirable for
the effectuation of the Closing, will be so executed and delivered; and then
(b) the Holding Company Merger and the issuance of shares
incident thereto shall be effected; provided, however, that the administrative
and ministerial aspects of the issuance of shares incident to the Holding
Company Merger will be settled as soon thereafter as shall be reasonable under
the circumstances; and then
-38-
(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 June 30, 1998, by instrument duly authorized
and executed and delivered to the other parties, unless the Effective Date shall
have occurred on or before such date.
10.2. Grounds for Termination. This Agreement may be terminated by
written notice of termination at any time before the Effective Date (whether
before or after action by shareholders of the Company):
(a) by mutual consent of the parties hereto;
(b) by Zions Bancorp, upon written notice to the Company given at
any time (i) if any of the representations and warranties of the Company or the
Bank contained in Section 6 hereof was materially incorrect when made, or (ii)
in the event of a material breach or material failure by the Company or the Bank
of any covenant or agreement of the Company or the Bank contained in this
Agreement which has not been, or cannot be, cured within thirty days after
written notice of such breach or failure is given to the Company or the Bank, as
the case may be;
(c) by the Company, upon written notice to Zions Bancorp given at
any time (i) if any of the representations and warranties of Zions Bancorp, Val
Cor, or Valley contained in Section 8 hereof was materially incorrect when made,
or (ii) in the event of a material breach or material failure by Zions Bancorp,
Val Cor, or Valley of any covenant or agreement of Zions Bancorp, Val Cor, or
Valley contained in this Agreement which has not been, or cannot be, cured
within thirty days after written notice of such breach or failure is given to
Zions Bancorp, Val Cor, or Valley, as the case may be; or
(d) by either Zions Bancorp or the Company upon written notice
given to the other if the board of directors of either Zions Bancorp or the
Company shall have determined in its sole judgment made in good faith, after due
consideration and consultation with counsel, that the Holding Company Merger has
become inadvisable or impracticable by reason of the institution of litigation
by the federal government or the government of the State of Colorado or the
State of Utah to restrain or invalidate the transactions contemplated by this
Agreement.
-39-
10.3. Effect of Termination. In the event of the termination and
abandonment hereof pursuant to the provisions of Section 10.1 or Section 10.2,
this Agreement shall become void and have no force or effect, without any
liability on the part of Zions Bancorp, Val Cor, Valley, the Company, the Bank,
or their respective directors or officers or shareholders, in respect of this
Agreement. Notwithstanding the foregoing, (a) as provided in Section 11.4 of
this Agreement, the 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 to the other party or parties hereto that
are not affiliated with it in the amount of the actual, reasonable out-of-pocket
expenses, not to exceed $250,000, incurred by the other party in connection with
the negotiation and preparation of this Agreement and the carrying out of the
transactions contemplated hereby.
10.4. Waiver of Terms or Conditions. Any of the terms or conditions of
this Agreement may be waived at any time prior to the Effective Date by the
party which is, or whose shareholders are, entitled to the benefit thereof, by
action taken by that party (if an individual) or by the board of directors of
such party (if a corporation), or by its chairman, or by its president; provided
that such waiver shall be in writing and shall be taken only if, in the judgment
of the party, board of directors, or officer taking such action, such waiver
will not have a materially adverse effect on the benefits intended hereunder to
it or to the shareholders of its or his corporation; and the other parties
hereto may rely on the delivery of such a waiver as conclusive evidence of such
judgment and the validity of the waiver.
10.5. Amendment.
(a) Anything herein or elsewhere to the contrary notwithstanding,
to the extent permitted by law, this Agreement and the exhibits hereto may be
amended, supplemented, or interpreted at any time prior to the Effective Date by
written instrument duly authorized and executed by each of the parties hereto;
provided, however, that this Agreement may not be amended after the action by
shareholders of the Company or shareholders of Valley in any respect that would
prejudice the economic interests of such Company shareholders or Valley
shareholders, as the case may be, or any of them, except as specifically
provided herein or by like action of such shareholders.
(b) If Zions Bancorp and the Company should mutually determine
(following receipt of advice of legal or other counsel) that it has become
inadvisable or inexpedient to effectuate the transactions contemplated by this
Agreement through means of a sequence of mergers such as is contemplated herein,
then the parties hereto agree to effect such change in the form of transaction
as described especially in Sections 1.1 and 9.2 of this Agreement by written
instrument in amendment of this Agreement.
-40-
(c) The parties to this Agreement acknowledge that Valley is a
party to an unrelated agreement and plan of reorganization pursuant to which
Valley is scheduled to be merged with and into The First National Bank in
Alamosa, a national banking association with its head office located in Alamosa,
County of Alamosa, State of Colorado (the "Alamosa Merger"). The parties hereto
agree that nothing in this Agreement shall preclude or condition the right of
Valley to participate in the Alamosa Merger. The parties hereto further agree
that, if the Alamosa Merger shall have occurred prior to the Effective Date,
then the parties hereto will effect such change in the form of transaction, by
written instrument in amendment of this Agreement and of such other agreements
between or among the parties hereto or any of them as shall be implicated
herein, as shall be necessary or advisable to cause the Bank to merge into the
resulting bank in the Alamosa Merger.
11. General Provisions.
11.1. Allocation of Costs and Expenses. Except as provided in this
Section, each party hereto shall pay its own fees and expenses, including
without limitation the fees and expenses of its own counsel and its own
accountants and tax advisers, incurred in connection with this Agreement and the
transactions contemplated thereby. 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 printing and delivering the proxy statement or
information statement and other materials to be transmitted to shareholders of
Valley shall be deemed to be incurred on behalf of Valley, and (iii) the cost of
registering under federal and state securities laws the stock of Zions Bancorp
to be received by the shareholders of the Company shall be deemed to be incurred
on behalf of Zions Bancorp.
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.
-41-
(b) 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 the Bank to Zions Bancorp's own system of electronic data processing.
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, the 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. The
Bank shall also arrange the delivery to Zions Bancorp at the main office of
Zions Bancorp (or at such other location as has been designated in writing by
Zions Bancorp no later than five business days before the Effective Date) no
later than 6:00 a.m. Mountain 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.
11.3. Form of Public Disclosures. Zions Bancorp and the Company shall
mutually agree in advance upon the form and substance of all public disclosures
concerning this Agreement and the transactions contemplated hereby.
11.4. Confidentiality. Zions Bancorp, Val Cor, Valley, the Company, the
Bank, and their respective subsidiaries shall use all information that each
obtains from the other pursuant to this Agreement solely for the effectuation of
the transactions contemplated by this Agreement or for other purposes consistent
with the intent of this Agreement. Neither Zions Bancorp, Val Cor, Valley, the
Company, the Bank, nor their respective subsidiaries shall use any of such
information for any other purpose, including, without limitation, the
competitive detriment of any other party. Zions Bancorp, Val Cor, and Valley, on
the one hand, and the Company and the Bank, on the other hand, shall maintain as
strictly confidential all information each of them learns from the other and
shall, at any time, upon the request of the other, return promptly to it all
documentation provided by it or made available to third parties. Each of the
parties may disclose such information to its respective affiliates, counsel,
accountants, tax advisers, and consultants. The confidentiality agreement
contained in this Section 11.4 shall remain operative and in full force and
effect, and shall survive the termination of this Agreement.
11.5. Claims of Brokers.
(a) Each of the Company and the Bank shall indemnify, defend, and
hold Zions Bancorp, Val Cor, and Valley harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its or his acts in connection with the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or him or on its
or his behalf with respect to Zions Bancorp, Val Cor, or Valley.
-42-
(b) Each of Zions Bancorp, Val Cor, and Valley shall indemnify,
defend, and hold the Company and the Bank harmless for, from, and against any
claim, suit, liability, fees, or expenses (including, without limitation,
attorneys' fees and costs of court) arising out of any claim for brokerage
commissions, finder's fees, or similar compensation arising out of or due to any
of its acts in connection with any of the transactions contemplated by this
Agreement or based upon any agreement or arrangement made by it or on its behalf
with respect to the Company or the Bank.
11.6. Information for Applications and Registration Statement.
(a) Each party represents and warrants that all information
concerning it which is included in any statement and application (including the
Registration Statement) made to any governmental agency in connection with the
transactions contemplated by this Agreement shall not, with respect to such
party, omit any material fact required to be stated therein or necessary to make
the statements made, in light of the circumstances under which they were made,
not misleading. The party so representing and warranting will indemnify, defend,
and hold harmless the other, each of its directors and officers, each
underwriter and each person, if any, who controls the other within the meaning
of the Securities Act, for, from and against any and all losses, claims, suits,
damages, expenses, or liabilities to which any of them may become subject under
applicable laws (including, but not limited to, the Securities Act and the
Exchange Act) and rules and regulations thereunder and will reimburse them for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any actions whether or not resulting in liability,
insofar as such losses, claims, damages, expenses, liabilities, or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any such application or statement or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary in order to make the statements
therein not misleading, but only insofar as any such statement or omission was
made in reliance upon and in conformity with information furnished in writing by
the representing and warranting party expressly for use therein. Each party
agrees at any time upon the request of the other to furnish to the other a
written letter or statement confirming the accuracy of the information contained
in any proxy statement, registration statement, report, or other application or
statement, and confirming that the information contained in such document was
furnished expressly for use therein or, if such is not the case, indicating the
inaccuracies contained in such document or draft or indicating the 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.
-43-
(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 June 30, 1997, as determined in accordance with generally accepted
accounting principles.
(b) For purposes of Sections 5 and 8 of this Agreement, the terms
"material" and "materially," when used with reference to items normally
expressed in dollars, shall be deemed to refer to amounts individually and in
the aggregate in excess of 3 percent of the shareholders' equity of Zions
Bancorp as of June 30, 1997, as determined in accordance with generally accepted
accounting principles.
(c) For other purposes and, notwithstanding subsections (a) and
(b) of this section 11.7, when used anywhere in this Agreement with explicit
reference to any of the federal securities laws or to the Registration
Statement, the terms "material" and "materially" shall be construed and
understood in accordance with standards of materiality as judicially determined
under the federal securities laws.
11.8. Covenants of Zions Bancorp.
(a) From the date hereof to the Effective Date, Zions Bancorp
shall, contemporaneously with the filing with the SEC of any periodic or current
report pursuant to section 13 of the Exchange Act, deliver a copy of such report
to the Company.
(b) From the date hereof to the Effective Date, Zions Bancorp
shall give to the Company and the Bank and to their representatives reasonable
access during normal business hours to such information, property, documents,
contracts, books, and records of Zions Bancorp with respect to its business
affairs and properties as the Company or the Bank from time to time may
reasonably request.
-44-
(c) Following the Effective Date none of Zions Bancorp, Val Cor,
nor Valley shall take any action to abrogate or diminish any right accorded
under the articles of incorporation or by-laws of the Company or the 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 the
Bank to indemnification from or against losses, expenses, claims, demands,
damages, liabilities, judgments, fines, penalties, costs, expenses (including
without limitation reasonable attorneys fees) and amounts paid in settlement
pertaining to or incurred in connection with any threatened or actual action,
suit, claim, or proceeding (whether civil, criminal, administrative,
arbitration, or investigative) arising out of events, matters, actions, or
omissions occurring on or prior to the Effective Date. To the extent not
provided by the foregoing, following the Effective Date and to the extent
permitted by law, all rights to such indemnification accorded under the articles
of incorporation and by-laws of the Company or the Bank to any person who, on or
prior to the Effective Date, was a director or officer of the Company or the
Bank shall survive the Effective Date and, following the Holding Company Merger
and the Bank Merger, to the extent permitted by law, Val Cor and Valley will
honor such obligations, and Zions Bancorp shall cause Val Cor and Valley and
their successors in interest, if any, to honor such obligations, in accordance
with their terms with respect to events, acts, or omissions occurring prior to
the Effective Date, and Zions Bancorp hereby guarantees, to the extent permitted
by law, that such obligations will be honored.
11.9. Adjustments for Certain Events. Anything in this agreement to the
contrary notwithstanding, all prices per share and exchange ratios referred to
in this Agreement shall be appropriately adjusted to account for stock
dividends, split-ups, mergers, recapitalizations, combinations, conversions,
exchanges of shares or the like, but not for normal and recurring cash dividends
declared or paid in a manner consistent with the established practice of the
payer.
11.10. Stock Repurchases. The Company and the Bank acknowledge that
from time to time Zions Bancorp repurchases shares of its common stock in the
open market in accordance with market conditions. Nothing in this Agreement
shall be construed to abridge the right of Zions Bancorp to continue to do so in
compliance with Exchange Act rules and regulations and pursuant to advice of
independent securities counsel for Zions Bancorp.
11.11. Name of Resulting Bank. The parties acknowledge that it is their
mutual intent that the historical business of the Bank continue to be conducted
from and after the Effective Date under a name that will suit the needs of the
Bank and its customers within its market area. The parties further acknowledge
and agree that any trade name containing a geographically based delimiter that
is inappropriate for a bank operating in Denver and Boulder, Colorado, including
without limitation any trade name containing the words "Cortez" and "Alamosa,"
will
-45-
not suit the needs of the Bank and its customers within its market area. The
parties agree that prior to or on the Effective Date and subject to the
requirements of applicable bank regulatory agencies, the surviving bank in the
Bank Merger will adopt, and Zions Bancorp and Val Cor will cause such bank to
adopt, a corporate or trade name for use in advertising, marketing, signage, and
similar purposes that is not inappropriate for a bank operating in Denver and
Boulder, Colorado.
11.12. 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.
11.13. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to their commitments to one
another and their undertakings vis-a-vis one another on the subject matter
hereof. Any previous agreements or understandings among the parties regarding
the subject matter hereof are merged into and superseded by this Agreement.
Nothing in this Agreement express or implied is intended or shall be construed
to confer upon or to give any person, other than Zions Bancorp, Val Cor, Valley,
the Company, the Bank, and their respective shareholders, any rights or remedies
under or by reason of this Agreement.
11.14. Survival of Representations, Warranties, and Covenants. The
respective representations, warranties, and covenants of each party to this
Agreement are hereby declared by the other parties to have been relied on by
such other parties and shall survive for one year following the Effective Date,
provided that if either party should breach a representation, warranty, or
covenant contained in this Agreement through fraud, deliberate
misrepresentation, or other intentional tortious conduct, 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.
11.15. 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
-46-
sent by registered or certified mail, return receipt requested, postage prepaid.
All communications shall be addressed to the appropriate address of each party
as follows:
If to Zions Bancorp, Val Cor, or Valley:
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
With a required copy to:
Xxxxx X. Xxxxxx, Esq.
Duane, Morris & Heckscher LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to the Company or the Bank:
Tri-State Finance Corporation
000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Chairman, President and Chief Executive Officer
With a required copy to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx & Xxxxxxxxx LLP
000 Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
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.
-47-
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 Salt Lake County, Utah and Denver County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt requested, or to its registered
agent for service of process in the state of Utah or Colorado. Each of the
parties irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.
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
-48-
VAL COR BANCORPORATION, INC.
Attest:____________________________ By:____________________________
Xxxxx X. Xxxxxxx
President and
Chief Executive Officer
VALLEY NATIONAL BANK OF XXXXXX
Attest:____________________________ By:____________________________
R. Xxxxx Xxxxxxxx
Executive Vice President and
Chief Executive Officer
TRI-STATE FINANCE CORPORATION
Attest:____________________________ By:____________________________
Xxxxxx X. Xxxxxx, Xx. Xxxxxxx X. Xxxxxx
Executive Vice President, Chairman, President and
Secretary and Treasurer Chief Executive Officer
-49-
TRI-STATE BANK
Attest:____________________________ By:____________________________
Xxxxxxx X. Xxxxxx
Chairman, President and
Chief Executive Officer
-50-
____________________________
)
)
State of Utah )
) ss.
County of Salt Lake )
)
____________________________)
On this twenty-third day of September, 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
-51-
____________________________
)
)
State of Colorado )
) ss.
County of Montezuma )
)
____________________________)
On this twenty-third day of September, 1997, before me personally
appeared Xxxxx X. Xxxxxxx, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and R. Xxxxx Xxxxxxxx, to me known to
be the Executive Vice President and Chief Executive Officer of Valley National
Bank of Xxxxxx, and acknowledged said instrument to be the free and voluntary
act and deed of each of said corporations, for the uses and purposes therein
mentioned, and on oath each stated that he was authorized to execute said
instrument and that the respective seals affixed are the respective corporate
seals of said corporations.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
_________________________
Notary Public
-52-
____________________________
)
)
State of Colorado )
) ss.
County of Denver )
)
____________________________)
On this twenty-third day of September, 1997, before me personally
appeared Xxxxxxx X. Xxxxxx, to me known to be the Chairman, President and Chief
Executive Officer of Tri-State Finance 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
-53-
____________________________
)
)
State of Colorado )
) ss.
County of Denver )
)
____________________________)
On this twenty-third day of September, 1997, before me personally
appeared Xxxxxxx X. Xxxxxx, to me known to be the Chairman, President and Chief
Executive Officer of Tri-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
-54-
The undersigned members of the Board of Directors of Tri-State Finance
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 Tri-State
Bank.
_____________________________ ______________________________
_____________________________ ______________________________
_____________________________ ______________________________
_____________________________ ______________________________
-55-
SCHEDULE 1.8
------------
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxxx, Xx.
Consolidated Equities, Ltd.
Xxxxx Xxxxxx
Xxxxxxxxx X. Xxxxxx Xxxxxxxx
Xxxx O. Fie
Xxxxxxx X. Xxx
J. Xxxxx XxXxxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Xx.
Xxxxx X. Xxxxxx
EXHIBIT I
HOLDING COMPANY MERGER AGREEMENT
AGREEMENT OF MERGER
This Agreement of Merger is made and entered into as of
[ ], 1997, between VAL COR BANCORPORATION, INC. ("Val Cor"), a
corporation organized under the laws of the State of Colorado, and TRI-STATE
FINANCE CORPORATION (the "Company"), a corporation organized under the laws of
the State of Colorado. Val Cor and the Company are hereinafter sometimes
individually called a "Constituent Corporation" and collectively called the
"Constituent Corporations."
RECITALS
Val Cor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [ ], 1997,
the authorized capital stock of Val Cor consisted of [ ] shares of
Common Stock, [ ] par value, of which [ ] shares were issued and
outstanding; no shares of capital stock were held in its treasury on such date.
All of the capital stock of Val Cor is owned of record and beneficially by Zions
Bancorporation, a corporation organized under the laws of the State of Utah
("Zions Bancorp").
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado. As of [ ],
1997, the authorized capital stock of the Company consisted of [____] shares of
Class A Common Stock, $1.00 par value (the "Class A Common Stock"), of which
[______] shares were issued and outstanding, and [ ] shares of Class B Common
Stock, $1.00 par value (the "Class B Common Stock"), of which [___________]
shares were issued and outstanding; no shares of capital stock were held in its
treasury on such date. The Class A Common Stock and the Class B Common Stock are
referred to collectively in this Agreement as the "Company Common Stock."
Val Cor and the Company have entered into an Agreement and Plan of
Reorganization, dated September 23, 1997 (the "Plan of Reorganization"), setting
forth certain representations, warranties, and agreements in connection with the
transactions therein and herein contemplated, which contemplates the merger of
the Company with and into Val Cor (the "Merger") in accordance with this
Agreement of Merger (the "Agreement").
The Boards of Directors of each of Val Cor and the Company deem the
Merger advisable and in the best interests of each corporation and its
stockholders. The Boards of Directors of each of Val Cor and the Company, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of Val Cor and the Company, by resolutions duly adopted,
have approved this Agreement. The Boards of Directors of each of Val Cor and the
Company have directed that this Agreement, and authorization for the
transactions contemplated hereby, be submitted to stockholders of Val Cor and
the Company respectively for approval.
At the Effective Date (as defined in Section 1.1 below) shares of
Company Common Stock shall be converted into the right to receive shares of the
common stock of Zions Bancorp, no par value (the "Zions Bancorp Stock"), as
provided herein.
In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:
ARTICLE I
1.1. Merger of the Company into Val Cor. The Company shall be merged
with and into Val Cor on the date and at the time to be specified in the
Articles of Merger to be filed with the Secretary of State of the State of
Colorado pursuant to section 0-000-000 of the Colorado Business Corporation Act
(such date and time being referred to herein as the "Effective Date").
1.2. Effect of the Merger. At the Effective Date:
(a) The Company and Val Cor shall be a single corporation,
which shall be Val Cor. Val Cor is hereby designated as the surviving
corporation in the Merger and is hereinafter sometimes called the "Surviving
Corporation."
(b) The separate existence of the Company shall cease.
(c) The Surviving Corporation shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a corporation organized under the Colorado Business
Corporation Act.
(d) The Surviving Corporation shall thereupon and thereafter
possess all of the rights, privileges, immunities, and franchises, of a public
as well as of a private nature, of each of the Constituent Corporations; and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares and all other choses in action, and all and
every other interest of and belonging to or due to each of the Constituent
Corporations shall be taken and deemed to be transferred to and vested in the
Surviving Corporation without further act or deed; and the title to any real
estate, or any interest therein, vested in either of the Constituent
Corporations shall not revert or be in any way impaired by reason of the Merger.
(e) The Surviving Corporation shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Corporations; and any claim existing or action or proceeding pending by or
against either of the Constituent Corporations may be prosecuted as if the
Merger had not taken place, or the Surviving Corporation may be substituted
-2-
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 Val Cor as they exist
immediately prior to the Effective Date shall be the Articles of Incorporation
of the Surviving Corporation until later amended pursuant to Colorado law.
(g) At the Effective Date and until surrendered for exchange
and payment, each outstanding stock certificate which, prior to the Effective
Date, represents shares of Company Common Stock shall, without further action,
cease to be an issued and existing share and shall be converted into a right to
receive from Zions Bancorp, and shall for all purposes represent the right to
receive, upon surrender of the certificate representing such shares, the number
of shares of Zions Bancorp Stock specified in Article III; provided that, with
respect to any matters relating to stock certificates representing Company
Common Stock, Zions Bancorp may rely conclusively upon the record of
stockholders maintained by the Company containing the names and addresses of the
holders of record of the Company's Common Stock at the Effective Date.
1.3. Acts to Carry Out This Merger Plan.
(a) The Company and its proper officers and directors shall
and will do all such acts and things as may be necessary or proper to vest,
perfect, or confirm title to such property or rights in Val Cor and otherwise to
carry out the purposes of this Agreement.
(b) If, at any time after the Effective Date, Val Cor shall
consider or be advised that any further assignments or assurances in law or any
other acts are necessary or desirable to (i) vest, perfect, or confirm, of
record or otherwise, in Val Cor its right, title, or interest in or under any of
the rights, properties, or assets of the Company acquired or to be acquired by
Val Cor as a result of, or in connection with, the Merger, or (ii) otherwise
carry out the purposes of this Agreement, the Company and its proper officers
and directors shall be deemed to have granted to Val Cor an irrevocable power of
attorney to execute and deliver all such proper deeds, assignments, and
assurances in law and to do all acts necessary or proper to vest, perfect, or
confirm title to and possession of such rights, properties, or assets in Val Cor
and otherwise to carry out the purposes of this Agreement; and the proper
officers and directors of Val Cor are fully authorized in the name of the
Company or otherwise to take any and all such action.
-3-
ARTICLE II
2.1. Capitalization. The authorized shares of capital stock of Val Cor
as of the Effective Date shall be [__________] shares of Common Stock,
[________] par value.
2.2. By-Laws. The By-Laws of Val Cor as they exist immediately prior to
the Effective Date shall be the By-Laws of Val Cor until later amended pursuant
to Colorado law.
ARTICLE III
3.1. Manner of Converting Shares. Subject to the terms, conditions, and
limitations set forth herein, upon surrender of his or her certificate or
certificates, each holder of shares of Company Common Stock shall be entitled to
receive, in exchange for each share of Company Common Stock held of record by
such stockholder as of the Effective Date, that number of shares of the common
stock of Zions Bancorp, no par value (the "Zions Bancorp Stock") calculated by
dividing 710,000 by the total number of shares of Company Common Stock that
shall be issued and outstanding at the Effective Date.
3.2. No Fractional Shares. Zions Bancorp will not issue fractional
shares of its stock. In lieu of fractional shares of Zions Bancorp Stock, if
any, each shareholder of the Company who is entitled to a fractional share of
Zions Bancorp Stock shall receive an amount of cash equal to the product of such
fraction times $40.625. Such fractional share interest shall not include the
right to vote or to receive dividends or any interest thereon.
3.3. Dividends; Interest. No shareholder of the Company will be
entitled to receive dividends on his or her Zions Bancorp Stock until he or she
exchanges his or her certificates representing Company Common Stock for Zions
Bancorp Stock. Any dividends declared on Zions Bancorp Stock (which stock is to
be delivered pursuant to this Agreement) to holders of record on or after the
Effective Date shall be paid to the Exchange Agent (as designated in Section 3.4
of this Agreement) and, upon receipt of the certificates representing shares of
Company Common Stock, the Exchange Agent shall forward to the former
shareholders entitled to receive Zions Bancorp Stock (i) certificates
representing their shares of Zions Bancorp Stock, (ii) dividends declared
thereon subsequent to the Effective Date (without interest) and (iii) the cash
value of any fractional shares determined in accordance with Section 3.2 hereof.
3.4. Designation of Exchange Agent.
(a) The parties of this Agreement hereby designate Zions First
National Bank, a national banking association with its head office located in
Salt Lake City, Utah ("Zions Bank") as Exchange Agent to effect the exchanges
contemplated hereby.
-4-
(b) Zions Bancorp will, promptly after the Effective Date,
issue and deliver to Zions Bank the share certificates representing shares of
Zions Bancorp Stock and the cash to be paid to holders of Company Common Stock
in accordance with this Agreement.
3.5. Notice of Exchange. Promptly after the Effective Date, Zions Bank
shall mail to each holder of one or more certificates formerly representing
Company Common Stock, except to such holders as shall have waived the notice
required by this Section 3.5, a notice specifying the Effective Date and
notifying such holder to surrender his or her certificate or certificates to
Zions Bank for exchange. Such notice shall be mailed to holders by regular mail
at their addresses on the records of the Company.
3.6. 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,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.
4.3. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah and Denver County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt requested, or to its registered
agent for service of process in the state of Utah or Colorado. Each of the
parties irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.
-5-
4.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.
4.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto, provided
that this Agreement may not be amended after the action by shareholders of the
Company in any respect that would prejudice the economic interests of such
Company shareholders, or any of them, except as specifically provided herein or
by like action of such shareholders.
4.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of Val
Cor and the Company at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.
-6-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
VAL COR BANCORPORATION, INC.
Attest:___________________________ By:_____________________________
Xxxxx X. Xxxxxxx
President and
Chief Executive Officer
TRI-STATE FINANCE CORPORATION
Attest:___________________________ By:______________________________
Xxxxxx X. Xxxxxx, Xx. Xxxxxxx X. Xxxxxx
Executive Vice President, Chairman, President and
Secretary and Treasurer Chief Executive Officer
-7-
_________________________
)
)
State of Colorado )
) ss.
County of Montezuma )
)
_________________________)
On this ________ day of [____________], 1997, before me personally
appeared Xxxxx X. Xxxxxxx, to me known to be the President and Chief Executive
Officer of Val Cor Bancorporation, Inc., and acknowledged said instrument to be
the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he was authorized to execute
said instrument and that the seal affixed is the corporate seal of said
corporation.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
________________________
Notary Public
-8-
__________________________
)
)
State of Colorado )
) ss.
County of Denver )
)
__________________________)
On this ________ day of [____________], 1997, before me personally
appeared Xxxxxxx X. Xxxxxx, to me known to be the Chairman, President and Chief
Executive Officer of Tri-State Finance 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
-9-
EXHIBIT II
BANK MERGER AGREEMENT
AGREEMENT OF MERGER
This Agreement of Merger is made and entered into as of
[_______________], 1997, between VALLEY NATIONAL BANK OF XXXXXX ("Valley"), a
national banking association organized under the laws of the United States, and
TRI-STATE BANK (the "Bank"), a banking corporation organized under the laws of
the State of Colorado. Valley and the Bank are hereinafter sometimes
individually called a "Constituent Association" and collectively called the
"Constituent Associations."
RECITALS
Valley is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. As of
[_______________], 1997, the authorized capital stock of Valley consisted of
600,000 shares of Common Stock, $5.00 par value, of which 354,000 shares were
issued and outstanding; no shares of capital stock were held in its treasury on
such date.
The Bank is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado. As of [_______________], 1997,
the authorized capital stock of the Bank consisted of [ ] shares of Bank
Common Stock, $100.00 par value (the "Bank Common Stock"), of which [__________]
shares were issued and outstanding; no shares of capital stock were held in its
treasury on such date.
Valley and the Bank have entered into an Agreement and Plan of
Reorganization, dated September 23, 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 Bank with and into Valley (the "Merger") in accordance with this Agreement
of Merger (the "Agreement").
The Boards of Directors of each of Valley and the Bank deem the Merger
advisable and in the best interests of each association and its stockholders.
The Boards of Directors of each of Valley and the Bank, by resolutions duly
adopted, have approved the Plan of Reorganization. The Boards of Directors of
each of Valley and the Bank, by resolutions duly adopted, have approved this
Agreement. The Boards of Directors of each of Valley and the Bank have directed
that this Agreement, and authorization for the transactions contemplated hereby,
be submitted to stockholders of Valley and the Bank respectively for approval.
At the Effective Date (as defined in Section 1.1 below) shares of Bank
Common Stock shall be converted into the right to receive shares of the common
stock of Valley, $5.00 par value (the "Valley Common Stock"), as provided
herein.
In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:
ARTICLE I
1.1. Merger of the Bank into Valley. The Bank shall be merged with and
into Valley on the date and at the time to be specified in the Articles of
Merger to be filed with the Comptroller of the Currency pursuant to the National
Bank Act (such date and time being referred to herein as the "Effective Date").
1.2. Effect of the Merger. At the Effective Date:
(a) The Bank and Valley shall be a single association, which
shall be Valley. Valley is hereby designated as the surviving association in the
Merger and is hereinafter sometimes called the "Surviving Association."
(b) The separate existence of the Bank shall cease.
(c) The currently outstanding 354,000 shares of common stock
of Valley, each of $5.00 par value, will remain outstanding as shares of the
$5.00 par value common stock of the Surviving Association, and the holders of
such stock shall retain their present rights.
(d) Each holder of shares of Bank Common Stock shall be
entitled to receive, in exchange for each share of Bank Common Stock held of
record by such stockholders as of the Effective Date, that number of shares of
Valley Common Stock calculated by, first, dividing the tangible book value of
Valley at the close of business on the business day before the Effective Date by
the number of shares of Valley Common Stock that shall be issued and outstanding
at the Effective Date, and second, dividing the tangible book value of the Bank
at the close of business on the business day before the Effective Date by the
number so reached, and third, dividing the number so reached by the total number
of shares of Bank Common Stock that shall be issued and outstanding at the
Effective Date.
(e) The Surviving Association will not issue fractional shares
of its stock. In lieu of fractional shares of Valley Common Stock, if any, each
shareholder of the Bank who is entitled to a fractional share of Valley Common
Stock shall receive an amount of cash equal to the product of such fraction
times the tangible book value per share of Valley Common Stock at the close of
business on the business day before the Effective Date. Such fractional share
interest shall not include the right to vote or to receive dividends or any
interest thereon.
-2-
(f) The Surviving Association shall have all the rights,
privileges, immunities, and powers and shall assume and be subject to all the
duties and liabilities of a national banking association organized under the
National Bank Act.
(g) The Surviving Association shall thereupon and thereafter
possess all of the rights, privileges, immunities, and franchises, of a public
as well as of a private nature, of each of the Constituent Associations; and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares and all other choses in action, and all and
every other interest of and belonging to or due to each of the Constituent
Associations shall be taken and deemed to be transferred to and vested in the
Surviving Association without further act or deed; and the title to any real
estate, or any interest therein, vested in either of the Constituent
Associations shall not revert or be in any way impaired by reason of the Merger.
(h) The Surviving Association shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Associations; and any claim existing or action or proceeding pending by or
against either of the Constituent Associations may be prosecuted as if the
Merger had not taken place, or the Surviving Association may be substituted in
its place. The Surviving Association expressly assumes and agrees to perform all
of the liabilities and obligations of the Bank. Neither the rights of creditors
nor any liens upon the property of either Constituent Association shall be
impaired by the Merger.
(i) The name of the Surviving Association shall be "[______]."
(j) The Articles of Association of Valley as they exist
immediately prior to the Effective Date shall be the Articles of Association of
the Surviving Association until later amended pursuant to the laws of the United
States, except that:
(i) Article FIRST of the articles of association of
the Surviving Association shall read as follows:
FIRST. The name of the Association is:
[_________________].
(ii) Article SECOND of the articles of association of
the Surviving Association shall read as follows:
SECOND. The main office of the Association shall be
in Denver, County of Denver, State of Colorado.
-3-
The general business of the Association shall be
conducted at its main office and its branches.
(iii) Article FIFTH of the articles of association of
the Surviving Association shall read as follows:
FIFTH. The authorized amount of capital stock of this
Association shall be 1,000,000 shares of common stock of the
par value of five dollars ($5.00) each; but said capital stock
may be increased or decreased from time to time, in accordance
with the provisions of the laws of the United States.
No holder of shares of the capital stock of any class
of the Association shall have any pre-emptive or preferential
right of subscription to any shares of any class of stock of
the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association,
issued or sold, nor any right of subscription to any thereof
other than such, if any, as the Board of Directors, in its
discretion, may from time to time determine and at such price
as the Board of Directors may from time to time fix.
The Association, at any time and from time to time,
may authorize an issue debt obligations, whether or not
subordinated, without the approval of the shareholders.
(iv) Article SEVENTH of the articles of association
of the Surviving Association shall read as follows:
SEVENTH. The Board of Directors shall have the power
to change the location of the main office to any other place
within the limits of Denver, Colorado, without the approval of
the shareholders but subject to the approval of the
Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of
the Association to any other location, without the approval of
the shareholders but subject to the approval of the
Comptroller of the Currency.
-4-
(k) The By-Laws of Valley as they exist immediately prior to
the Effective Date shall be the By-Laws of the Surviving Association until later
amended pursuant to the laws of the United States.
1.3. Acts to Carry Out This Merger Plan.
(a) The 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 the Surviving Association and
otherwise to carry out the purposes of this Agreement.
(b) If, at any time after the Effective Date, the Surviving
Association 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 the Surviving Association its
right, title, or interest in or under any of the rights, properties, or assets
of the Bank acquired or to be acquired by the Surviving Association as a result
of, or in connection with, the Merger, or (ii) otherwise carry out the purposes
of this Agreement, the Bank and its proper officers and directors shall be
deemed to have granted to the Surviving Association 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 the
Surviving Association and otherwise to carry out the purposes of this Agreement;
and the proper officers and directors of the Surviving Association are fully
authorized in the name of the Bank or otherwise to take any and all such action.
ARTICLE II
2.1. Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed to constitute an original, but such
counterparts together shall be deemed to be one and the same instrument and to
become effective when one or more counterparts have been signed by each of the
parties hereto. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for the other counterpart.
2.2. Section Headings. The section and subsection headings herein have
been inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof. Any reference to a "person"
herein shall include an individual, firm, corporation, partnership, trust,
government or political subdivision or agency or instrumentality thereof,
association, unincorporated organization, or any other entity.
-5-
2.3. Choice of Law and Venue. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of Utah,
without giving effect to the principles of conflict of law thereof. The parties
hereby designate Salt Lake County, Utah and Denver County, Colorado to be proper
jurisdictions and venues for any suit or action arising out of this Agreement.
Each of the parties consents to personal jurisdiction in each of such venues for
such a proceeding and agrees that it may be served with process in any action
with respect to this Agreement or the transactions contemplated thereby by
certified or registered mail, return receipt requested, or to its registered
agent for service of process in the state of Utah or Colorado. Each of the
parties irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.
2.4. Binding Agreement. This Agreement shall be binding upon the
parties and their respective successors and assigns.
2.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto.
2.6. Termination. This Agreement shall terminate and be abandoned upon
(i) termination of the Plan of Reorganization or (ii) the mutual consent of
Valley and the Bank at any time prior to the Effective Date, and there shall be
no liability on the part of either of the parties hereto (or any of their
respective officers or directors) except to the extent provided in the Plan of
Reorganization.
-6-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
VALLEY NATIONAL BANK OF XXXXXX
Attest:_______________________ By:_____________________________
R. Xxxxx Xxxxxxxx
Executive Vice President and
Chief Executive Officer
TRI-STATE BANK
Attest:_________________________ By:_____________________________
Xxxxxxx X. Xxxxxx
Chairman, President and
Chief Executive Officer
-7-
________________________
)
State of Colorado )
) ss.
County of Montezuma )
)
________________________)
On this ________ day of [____________], 1997, before me personally
appeared R. Xxxxx Xxxxxxxx, to me known to be the Executive Vice President and
Chief Executive Officer of Valley National Bank of Xxxxxx, and acknowledged said
instrument to be the free and voluntary act and deed of said association, for
the uses and purposes therein mentioned, and on oath stated that he was
authorized to execute said instrument and that the seal affixed is the corporate
seal of said association.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
_________________________
Notary Public
-8-
________________________
)
State of Colorado )
) ss.
County of Denver )
)
________________________)
On this ________ day of [____________], 1997, before me personally
appeared Xxxxxxx X. Xxxxxx, to me known to be the Chairman, President and Chief
Executive Officer of Tri-State Bank, and acknowledged said instrument to be the
free and voluntary act and deed of said association, for the uses and purposes
therein mentioned, and on oath stated that he was authorized to execute said
instrument and that the seal affixed is the corporate seal of said association.
In Witness Whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
_________________________
Notary Public
-9-
EXHIBIT III
VOTING AGREEMENT
September 23, 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 Tri-State
Finance Corporation (the "Company") (the "Agreement"). The Agreement provides
for the merger of the Company with and into Val Cor Bancorporation, Inc., a
wholly-owned subsidiary of Zions Bancorp (the "Merger") and the conversion of
outstanding shares of Company Stock into Zions Bancorp Common Stock and cash in
lieu of fractional shares in accordance with the formula therein set forth.
In order to induce Zions Bancorp to enter into the Agreement, and
intending to be legally bound hereby, the undersigned, subject to the conditions
hereinafter stated, represents, warrants, and agrees that at the Company
Shareholders' Meeting contemplated by Section 4.1 of the Agreement and Plan of
Reorganization (the "Meeting"), and any adjournment thereof, the undersigned
will, in person or by proxy, vote or cause to be voted in favor of the Agreement
and the Merger the shares of Company Common Stock beneficially owned by the
undersigned individually or, to the extent of the undersigned's proportionate
voting interest, jointly with other persons, as well as, to the extent of the
undersigned's proportionate voting interest, any other shares of Company Common
Stock over which the undersigned may hereafter acquire beneficial ownership in
such capacities (collectively, the "Shares"). Subject to the final paragraph of
this agreement, the undersigned further agrees that [he] [she] will use [his]
[her] reasonable best efforts to cause any other shares of Company Common Stock
over which [he] [she] 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:
Zions Bancorporation
September 23, 1997
Page 2
(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 voting of 10 percent or more of the outstanding voting securities
of a person having ordinary voting power in the election of directors or in the
election of any other body having similar functions or (2) the ability to direct
the management and policies of a person, whether through ownership of
securities, through any contract, arrangement, or understanding or otherwise.
(b) voluntarily sell or otherwise transfer any of the Shares, or cause
or permit any of the Shares to be sold or otherwise transferred (i) pursuant to
any tender offer, exchange offer, or similar proposal made by any person other
than Zions Bancorp or an affiliate thereof, (ii) to any person seeking to obtain
control (as the term "control" is defined in paragraph (a), above) of the
Company, any of its subsidiaries or any substantial portion of the assets of the
Company or any subsidiary thereof or to any other person (other than Zions
Bancorp or an affiliate thereof) under circumstances where such sale or transfer
may reasonably be expected to assist a person seeking to obtain such control,
(iii) for the purpose of avoiding the obligations of the undersigned under this
agreement, or (iv) to any transferee unless such transferee expressly agrees in
writing to be bound by the terms of this agreement in all events.
It is understood and agreed that this agreement relates solely to the
capacity of the undersigned as a shareholder or other beneficial owner of the
Shares and does not prohibit the undersigned, if a member of the Board of
Directors of the Company or a member of the Board of Directors of Tri-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 (unless such other person is affiliated with the
undersigned or is bound by an agreement with Zions Bancorp substantially
Zions Bancorporation
September 23, 1997
Page 3
similar to this agreement), and that this agreement is not in any way intended
to affect the exercise by the undersigned of the undersigned's fiduciary
responsibility in respect of any such securities.
Very truly yours,
__________________________
Accepted and Agreed to:
ZIONS BANCORPORATION
By:__________________________
Title:_______________________
Zions Bancorporation
September 23, 1997
Page 4
Name of Shareholder:
Shares of Common Stock of Tri-State Finance Corporation
Beneficially Owned
As of September 23, 1997
Name(s) of Number and Class of
Record Owner(s) Beneficial Ownership(1) Shares
--------------- ----------------------- -------------
--------
(1) For purposes of this Agreement, shares are beneficially owned by the
shareholder named above if held in any capacity other than a fiduciary capacity
(other than a revocable living trust and other than a fiduciary capacity on
behalf of a person who is affiliated with the shareholder or is bound by an
agreement with Zions Bancorp substantially similar to this agreement) and if the
shareholder named above has the power (alone or, in the case of shares held
jointly with his or her spouse, together with his or her spouse) to direct the
voting of such shares.
EXHIBIT IV
OPINION OF XXXXX & XXXXXXXXX LLP
[____________________], 1997
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Val Cor Bancorporation, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Valley National Bank of Cortez
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Re: Merger of Tri-State Finance Corporation With Val Cor
Bancorporation, Inc., In Exchange for Stock of Zions
Bancorporation; Merger of Valley National Bank of Xxxxxx With
Tri-State Bank
Mesdames and Gentlemen:
We are special counsel to Tri-State Finance Corporation, a Colorado
corporation (the "Company"), and its subsidiary, Tri-State Bank, a banking
corporation organized under the laws of the State of Colorado with its head
office located at Denver, County of Denver, State of Colorado (the "Bank"), in
connection with the merger (the "Holding Company Merger") of the Company with
Val Cor Bancorporation, Inc. ("Val Cor"), in exchange for which shareholders of
the Company will receive shares of the common stock of Zions Bancorporation
("Zions Bancorp") and cash, and the merger (the "Bank Merger") of the Bank with
Valley National Bank of Xxxxxx ("Valley"), pursuant to an Agreement and Plan of
Reorganization dated September 23,
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[ ], 1997
Page 2
1997 (the "Agreement") and certain additional agreements whose execution is
contemplated in the Agreement, including the Agreement of Merger by and between
Val Cor and the Company (the "Holding Company Merger Agreement") and the
Agreement of Merger by and between the Bank and Valley (the "Bank Merger
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Merger Agreement to be referred to collectively as the "Agreements").
This opinion is provided to you pursuant to Section 4.2 of the
Agreement.
In our capacity as special counsel, we have participated in the
preparation of a Registration Statement filed with the Securities and Exchange
Commission on Form S-4 covering the shares of Zions Bancorp stock to be issued
in connection with the Holding Company Merger (the "Registration Statement")
including the Prospectus/Proxy Statement for the shareholders of the Company
(the "Prospectus/Proxy Statement"). In addition, in rendering the opinions that
follow, we have examined the Agreements and the exhibits and schedules appended
thereto; the articles of incorporation and by-laws of the Company and the
articles of incorporation or association and by-laws of the Bank; the minutes of
certain meetings of the respective boards of directors of the Company and the
Bank; and such other corporate documents and corporate records of the Company
and the Bank as we have deemed necessary or appropriate for the purpose of
rendering the following opinions. In addition, we have interviewed officers of
the Company and the Bank and undertaken and performed such other procedures as
we have deemed necessary or appropriate for the purpose of rendering the
following opinions. In these regards, we have examined and relied upon
representations of Zions Bancorp, Val Cor, and Valley contained in the
Agreements, and, where we have deemed appropriate, representations or
certifications of officers or public officials.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than the Company and the 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 the 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.
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[ ], 1997
Page 3
Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:
(a) Binding Obligations; Due Authorization. Each of the Agreements to
which it is a party has been duly authorized by all necessary corporate action
on the part of each of the Company and the Bank, has been duly executed and
delivered by each of the Company and the Bank, and constitutes a valid, legal,
and binding obligation of the Company and the Bank, enforceable against it in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, receivership, conservatorship, or
similar laws or judicial decisions relating to or affecting creditors' rights
generally or the rights of creditors, or of the FDIC as insurer, regulator,
conservator, or receiver, of banks the accounts of which are insured by the FDIC
in particular, or by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law) as to whose
availability we express no opinion. No other corporate proceedings on the part
of either the Company or the Bank are necessary to authorize any of the
Agreements to which it is a party or the carrying out of the transactions
contemplated thereby.
(b) 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.
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[ ], 1997
Page 4
This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.
Respectfully submitted,
EXHIBIT V
OPINION OF XXXXXXX & XXXXXX, P.C.
[____________________], 1997
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Val Cor Bancorporation, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Valley National Bank of Cortez
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Re: Merger of Tri-State Finance Corporation With Val Cor
Bancorporation, Inc., In Exchange for Stock of Zions
Bancorporation; Merger of Valley National Bank of Xxxxxx With
Tri-State Bank
Mesdames and Gentlemen:
We are counsel to Tri-State Finance Corporation, a Colorado corporation
(the "Company"), and its subsidiary, Tri-State Bank, a banking corporation
organized under the laws of the State of Colorado with its head office located
at Denver, County of Denver, State of Colorado (the "Bank"), in connection with
the merger (the "Holding Company Merger") of the Company with Val Cor
Bancorporation, Inc. ("Val Cor"), in exchange for which shareholders of the
Company will receive shares of the common stock of Zions Bancorporation ("Zions
Bancorp") and cash, and the merger (the "Bank Merger") of the Bank with Valley
National Bank of Xxxxxx ("Valley"), pursuant to an Agreement and Plan of
Reorganization dated September 23,
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[ ], 1997
Page 2
1997 (the "Agreement") and certain additional agreements whose execution is
contemplated in the Agreement, including the Agreement of Merger by and between
Val Cor and the Company (the "Holding Company Merger Agreement") and the
Agreement of Merger by and between the Bank and Valley (the "Bank Merger
Agreement") (the Agreement, the Holding Company 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.
In rendering the opinions that follow, we have examined the Agreements
and the exhibits and schedules appended thereto; the articles of incorporation
and by-laws of the Company and the articles of incorporation or association and
by-laws of the Bank; the minutes of certain meetings of the respective boards of
directors of the Company and the Bank; and such other corporate documents and
corporate records of the Company and the Bank as we have deemed necessary or
appropriate for the purpose of rendering the following opinions. In addition, we
have interviewed officers of the Company and the Bank and undertaken and
performed such other procedures as we have deemed necessary or appropriate for
the purpose of rendering the following opinions. In these regards, we have
examined and relied upon representations of Zions Bancorp, Val Cor, and Valley
contained in the Agreements, and, where we have deemed appropriate,
representations or certifications of officers or public officials.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than the Company and the 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 the 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.
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[ ], 1997
Page 3
Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:
(a) Organization, Powers and Qualifications.
(i) The Company is a corporation which is duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has all requisite corporate power and authority to own and operate its
properties and assets, to lease properties used in its business, and to carry on
its business as now conducted. The Company is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended. All outstanding
shares of capital stock of the Company have been duly and validly authorized and
issued, and are fully paid and non-assessable.
(ii) The Bank is duly organized, validly existing and in good
standing under the laws of the State of Colorado and has all requisite corporate
power and authority to own and operate its properties and assets, to lease
properties used in its business, and to carry on its business as now conducted.
The deposit accounts of the Bank are insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation (the "FDIC") and, to the best of our
knowledge, no proceedings for the termination of such insurance are pending or
threatened. All outstanding shares of capital stock of the Bank have been duly
and validly authorized and issued and are fully paid and non-assessable. All
issued and outstanding shares of the Bank are held of record by the Company
directly, free and clear of any adverse claims.
(b) Execution and Performance of Agreements. Each of the Company and
the Bank has the corporate power and authority to execute, deliver, and perform
each of the Agreements to which it is a party and to carry out the terms thereof
and the transactions contemplated thereby.
(c) Absence of Violations. To the best of our knowledge, neither the
Company nor the Bank is in violation of its articles of incorporation or its
bylaws, or any law, regulation, ordinance, order, or restriction imposed by the
United States, any state, municipality, or other political subdivision or agency
thereof, or any order of any court or other competent tribunal having
jurisdiction over it in respect of the conduct of its business or the ownership
of its properties, which, either individually or in the aggregate with all such
other violations, would materially and adversely affect the business,
operations, or condition (financial or otherwise) of the Company or the Bank or
the observance or performance by the Company or the Bank of the terms of any of
the Agreements to which it is a party.
(d) Compliance with Corporate Documents and Agreements. Neither the
execution, delivery, or performance by either the Company or the Bank of any of
the Agreements to which it is a party nor the consummation of the transactions
contemplated therein will violate, conflict with, constitute a breach of or
default under the respective articles of incorporation or by-laws of
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[ ], 1997
Page 4
the Company or the Bank, or any agreement or instrument to which the Company or
the Bank is a party (or which is binding on either of them or its assets) or by
which the Company or the Bank is bound, and will not result in the creation of
any lien on, or security interest in, any of the assets of either of them.
(e) Absence of Default. Except for those consents (including, but not
limited to, approvals, licenses, registrations, or declarations) that have been
obtained, the execution and delivery by the Company and the Bank of each of the
Agreements to which it is a party and consummation of the transactions
contemplated thereby do not require the approval or consent of any governmental
authority or third party. The execution and delivery by the Company and the Bank
of each of the Agreements to which it is a party, the consummation of the
transactions contemplated thereby, and the compliance with and fulfillment of
the terms thereof by the Company and the Bank will not require any
authorization, consent, approval, or exemption by any person which has not been
obtained or any notice or filing which has not been given or done.
This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.
Respectfully submitted,
EXHIBIT VI
OPINION OF COMPANY AND BANK LITIGATION COUNSEL
[____________________], 1997
Zions Bancorporation
Xxx Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Val Cor Bancorporation, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Valley National Bank of Cortez
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Re: Merger of Tri-State Finance Corporation With Val Cor
Bancorporation, Inc., In Exchange for Stock of Zions
Bancorporation; Merger of Valley National Bank of Xxxxxx With
Tri-State Bank
Mesdames and Gentlemen:
We are counsel to Tri-State Finance Corporation, a Colorado corporation
(the "Company"), and its subsidiary, Tri-State Bank, a banking corporation
organized under the laws of the State of Colorado with its head office located
at Denver, County of Denver, State of Colorado (the "Bank"), in connection with
the merger (the "Holding Company Merger") of the Company with Val Cor
Bancorporation, Inc. ("Val Cor"), in exchange for which shareholders of the
Company will receive shares of the common stock of Zions Bancorporation ("Zions
Bancorp") and cash, and the merger (the "Bank Merger") of the Bank with Valley
National Bank
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[____________________], 1997
Page 2
of Cortez ("Valley"), pursuant to an Agreement and Plan of Reorganization dated
September 23, 1997 (the "Agreement") and certain additional agreements whose
execution is contemplated in the Agreement, including the Agreement of Merger by
and between Val Cor and the Company (the "Holding Company Merger Agreement") and
the Agreement of Merger by and between the Bank and Valley (the "Bank Merger
Agreement") (the Agreement, the Holding Company Merger Agreement, and the Bank
Merger Agreement to be referred to collectively as the "Agreements"). We have
been requested by the Company and the Bank to furnish to you our opinion
pursuant to Section 4.4 of the Agreement.
In rendering the opinion that follows, we have examined the Agreements
and such other documents and records as we have deemed necessary or appropriate
for the purpose of rendering the following opinion. In addition, we have
interviewed officers of the Company and the Bank and undertaken and performed
such other procedures as we have deemed necessary or appropriate for the purpose
of rendering the following opinion. In these regards, we have examined and
relied upon representations of Zions Bancorp, Val Cor, and Valley contained in
the Agreements, and, where we have deemed appropriate, representations or
certifications of officers or public officials.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. We have also assumed that the Agreements have not been otherwise amended
by oral or written agreement or by conduct of the parties thereto. We have
assumed that the certifications and representations dated earlier than the date
hereof on which we have expressed reliance herein continue to remain accurate,
insofar as material to our opinions, from such earlier date through the date
hereof.
Based on the foregoing, and solely in reliance thereon, we are of the
opinion that: (a) there is no action, suit, or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or threatened,
against the Company or the Bank which might result in any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs, or business prospects of the Company or the Bank, or which might
materially and adversely affect the properties or assets thereof or which might
prevent, hinder or delay the consummation of the transactions contemplated in
the Agreements; and (b) all pending legal or governmental proceedings to which
the Company or the Bank is a party or to which any of its property or assets is
the subject, including ordinary routine litigation incidental to its business,
are, considered in the aggregate, not material.
Zions Bancorporation
Val Cor Bancorporation, Inc.
Valley National Bank of Xxxxxx
[____________________], 1997
Page 3
This opinion is given solely for your benefit in connection with the
transactions contemplated by the Agreements, and no other person or entity is
entitled to rely thereon, nor may copies be delivered or furnished to any other
party, nor may all or portions of this opinion be quoted, circulated, or
referred to in any other document without our prior consent.
Respectfully submitted,
EXHIBIT VII
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
[____] day of [___], 1997, by and between XXXXXXX X. XXXXXX ("Executive") and
VALLEY NATIONAL BANK OF XXXXXX, a national banking association organized under
the laws of the United States ("Resulting 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 September 23, 1997 by and among Zions Bancorporation, a Utah corporation
having its principal office in Salt Lake City, Utah, Val Cor Bancorporation,
Inc., a Colorado corporation having its principal office in Cortez, Colorado,
Resulting Bank, Tri-State Finance Corporation, a Colorado corporation having its
principal office in Denver, Colorado, and Tri-State Bank, a banking corporation
organized under the laws of the State of Colorado (the "Bank"), provides that
the Bank will be merged with and into Resulting Bank;
WHEREAS, Executive is Chairman, President and Chief Executive Officer
of the Bank;
WHEREAS, Resulting 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 4.10 of the Plan contemplates that Executive will
enter into an employment agreement as a condition to the consummation of the
transactions described therein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements hereinafter set forth, the parties agree as follows:
1. Employment; Responsibilities and Duties.
(a) Resulting Bank hereby agrees to employ Executive, and Executive
hereby agrees to serve as [__________] of Resulting Bank and of any depository
institution which is successor-in-interest thereto ("Resulting Bank" hereafter
to include any depository institution which is successor-in-interest thereto)
during the Term of Employment. Executive shall have such duties,
responsibilities, and authority as shall be set forth in the bylaws of Resulting
Bank on the date of this Agreement or as may otherwise be determined by
Resulting Bank.
(b) Executive shall devote his full working time and best efforts to
the performance of his responsibilities and duties hereunder and to the
retention of the customer relationships to which the Bank has been a party prior
to the date of this Agreement. During the Term of Employment, Executive shall
not, without the prior written consent of the Board of Directors of Resulting
Bank, render services as an employee, independent contractor, or otherwise,
whether or not compensated, to any person or entity other than Resulting 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 Resulting 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) the first anniversary of the Commencement Date, unless the
Term of Employment shall be extended by mutual written agreement of Executive
and Resulting 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 Resulting 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 Resulting Bank, or with respect to any of
its affiliates for which Executive is assigned material responsibilities or
duties;
(B) the conviction of Executive of a felony (after
the earlier of the expiration of any applicable appeal period without perfection
of an appeal by Executive or the denial of any appeal as to which no further
appeal or review is available to Executive) whether or not committed in the
course of his employment by Resulting Bank;
-2-
(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 Resulting 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 Resulting Bank; or
(vi) the termination of Executive's employment by Resulting
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
(ii) such rights as Executive shall have accrued as of the
Termination Date under the terms of any plans or arrangements in which he
participates pursuant to section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.
(c) In the event that the Term of Employment shall be terminated for
the reason set forth in section 2(a)(vi) hereof, Executive shall be entitled to
receive:
(i) for the period commencing on the date immediately
following the Termination Date and ending upon and including the first
anniversary of the Commencement Date, salary payable at the rate established
pursuant to section 3(a)(i) hereof, in a manner consistent with the normal
payroll practices of Resulting Bank with respect to executive personnel as
presently in effect or as they may be modified by Resulting 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 section 3(b) hereof, any right to reimbursement for
expenses accrued as of the Termination Date payable pursuant to section 3(e)
hereof, and the right to receive the cash equivalent of paid annual leave and
sick leave accrued as of the Termination Date pursuant to section 3(c) hereof.
-3-
(d) For the period of one year after the first anniversary of the
Commencement Date, Executive shall serve as a paid consultant of Resulting Bank,
with duties that shall include efforts to retain the customer relationships of
the Resulting Bank to which Executive devoted attention during the Term of
Employment. Executive shall devote a minimum of the equivalent of one day per
week to the discharge of his responsibilities under this paragraph. In return
for performing these consultancy services, Executive shall be entitled to
receive cash compensation at a rate of $60,000 per annum; Executive shall be
entitled to no other compensation or benefits from the Resulting Bank in return
for the performance of these consultancy services.
3. Compensation. For the services to be performed by Executive for
Resulting Bank under this Agreement, Executive shall be compensated in the
following manner:
(a) Salary.
(i) During the Term of Employment Resulting Bank shall pay
Executive a salary which shall not be less than the aggregate salary paid to
Executive by the Bank as of June 30, 1997. Salary shall be payable in accordance
with the normal payroll practices of Resulting Bank with respect to executive
personnel as presently in effect or as they may be modified by Resulting Bank
from time to time.
(ii) During the Term of Employment Executive shall be eligible
to be considered for salary increases, upon review, in accordance with the
compensation policies of Zions Bancorp with respect to executive personnel as
presently in effect or as they may be modified by Zions Bancorp from time to
time.
(b) Employee Benefit Plans or Arrangements. During the Term of
Employment, Executive shall be entitled to participate in all employee benefit
plans of Zions Bancorp, as presently in effect or as they may be modified by
Zions Bancorp from time to time, under such terms as may be applicable to
officers of Executive's rank employed by Zions Bancorp or its subsidiaries,
including, without limitation, plans providing retirement benefits, medical
insurance, life insurance, disability insurance, and accidental death or
dismemberment insurance.
(c) Vacation and Sick Leave. During the Term of Employment, Executive
shall be entitled to paid annual vacation periods and sick leave in accordance
with the policies of Zions Bancorp as in effect as of the Commencement Date or
as may be modified by Zions Bancorp from time to time as may be applicable to
officers of Executive's rank employed by Zions Bancorp or its subsidiaries, but
in no event less than that provided to Executive by the Bank at June 30, 1997.
-4-
(d) Withholding. All compensation to be paid to Executive hereunder
shall be subject to required withholding and other taxes.
(e) Expenses. During the Term of Employment, Executive shall be
reimbursed for reasonable travel and other expenses incurred or paid by
Executive in connection with the performance of his services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as may from time to time be requested, in accordance with
such policies of Zions Bancorp as are in effect as of the Commencement Date and
as may be modified by Zions Bancorp from time to time, under such terms as may
be applicable to officers of Executive's rank employed by Zions Bancorp or its
subsidiaries.
4. Confidential Business Information; Non-Competition.
(a) Executive acknowledges that certain business methods, creative
techniques, and technical data of Zions Bancorp and Resulting Bank and their
affiliates and the like are deemed by Resulting Bank to be and are in fact
confidential business information either of Zions Bancorp or Resulting 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 Resulting Bank or its
affiliates, knowledge of customers and their requirements, marketing plans,
marketing information, studies, forecasts, and surveys, competitive analyses,
mailing and marketing lists, new business proposals, lists of vendors,
consultants, and other persons who render service or provide material to Zions
Bancorp or Resulting Bank or their affiliates, and compositions, ideas, plans,
and methods belonging to or related to the affairs of Zions Bancorp or Resulting
Bank or their affiliates. In this regard, Resulting Bank asserts proprietary
rights in all of its business information and that of its affiliates except for
such information as is clearly in the public domain. Notwithstanding the
foregoing, information that would be generally known or available to persons
skilled in Executive's fields shall be considered to be "clearly in the public
domain" for the purposes of the preceding sentence. Executive agrees that he
will not disclose or divulge to any third party, except as may be required by
his duties hereunder, by law, regulation, or order of a court or government
authority, or as directed by Resulting Bank, nor shall he use to the detriment
of Resulting Bank or its affiliates or use in any business or on behalf of any
business competitive with or substantially similar to any business of Zions
Bancorp or Resulting Bank or their affiliates, any confidential business
information obtained during the course of his employment by Resulting Bank. The
foregoing shall not be construed as restricting Executive from disclosing such
information to the employees of Zions Bancorp or Resulting Bank or their
affiliates.
(b) Executive hereby agrees that from the Commencement Date until the
second anniversary of the Commencement Date, Executive will not (i) engage in
the banking business other than on behalf of Zions Bancorp or Resulting Bank or
their affiliates within the Market Area (as hereinafter defined), (ii) directly
or indirectly own, manage, operate, control, be
-5-
employed by, or provide management or consulting services in any capacity to any
firm, corporation, or other entity (other than Zions Bancorp or Resulting Bank
or their affiliates) engaged in the banking business in the Market Area, or
(iii) directly or indirectly solicit or otherwise intentionally cause any
employee, officer, or member of the respective Boards of Directors of Resulting
Bank or any of its affiliates to engage in any action prohibited under (i) or
(ii) of this section 4(b); provided that the ownership by Executive as an
investor of not more than five percent of the outstanding shares of stock of any
corporation whose stock is listed for trading on any securities exchange or is
quoted on the automated quotation system of the National Association of
Securities Dealers, Inc., or the shares of any investment company as defined in
section 3 of the Investment Company Act of 1940, as amended, shall not in itself
constitute a violation of Executive's obligations under this section 4(b).
(c) Executive acknowledges and agrees that irreparable injury will
result to Resulting Bank in the event of a breach of any of the provisions of
this section 4 (the "Designated Provisions") and that Resulting Bank 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 Resulting Bank may have, Resulting Bank shall be entitled to
the entry of a preliminary and permanent injunction (including, without
limitation, specific performance) by a court of competent jurisdiction in Salt
Lake County, Utah, Denver County, Colorado, or elsewhere, to restrain the
violation or breach thereof by Executive or any affiliates, agents, or any other
persons acting for or with Executive in any capacity whatsoever, and Executive
submits to the jurisdiction of such court in any such action.
(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 Resulting Bank, to the fullest
extent permitted by applicable law, the benefits intended by this section 4.
(e) As used herein, "Market Area" shall mean the Colorado Counties of
Xxxxx, Arapahoe, Boulder, Denver, Douglas, Jefferson, and Weld.
-6-
5. Life Insurance. In light of the unusual abilities and experience of
Executive, Resulting Bank in its discretion may apply for and procure as owner
and for its own benefit insurance on the life of Executive, in such amount and
in such form as Resulting Bank may choose. Resulting Bank 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 Resulting Bank, 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 Resulting Bank has applied for
insurance.
6. Representations and Warranties.
(a) Executive represents and warrants to Resulting 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 Resulting Bank
for, from, and against any and all losses, claims, suits, damages, expenses, or
liabilities, including court costs and counsel fees, which Resulting Bank has
incurred or to which Resulting Bank 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 Resulting Bank:
[_______________________]
000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
-7-
With a required copy to:
Xxxxx X. Xxxxxx, Esq.
Duane, Morris & Heckscher LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
If to Executive:
Xx. Xxxxxxx X. Xxxxxx
[ ]
[ ]
All such notices shall be deemed to have been given on the date delivered,
transmitted, or mailed in the manner provided above.
8. Assignment. Neither party may assign this Agreement or any rights or
obligations hereunder without the consent of the other party.
9. Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Utah, without giving effect
to the principles of conflict of law thereof. The parties hereby designate Salt
Lake County, Utah and Denver County, Colorado to be proper jurisdictions and
venues for any suit or action arising out of this Agreement. Each of the parties
consents to personal jurisdiction in each of such venues for such a proceeding
and agrees that he or it may be served with process in any action with respect
to this Agreement or the transactions contemplated thereby by certified or
registered mail, return receipt requested, or to its registered agent for
service of process in the state of Utah or Colorado. Each of the parties
irrevocably and unconditionally waives and agrees, to the fullest extent
permitted by law, not to plead any objection that it may now or hereafter have
to the laying of venue or the convenience of the forum of any action or claim
with respect to this Agreement or the transactions contemplated thereby brought
in the courts aforesaid.
10. Entire Agreement. This Agreement constitutes the entire
understanding between Resulting Bank and Executive relating to the subject
matter hereof. Any previous agreements or understandings between the parties
hereto or between Executive and the Bank or any of its affiliates or Resulting
Bank or any of its affiliates regarding the subject matter hereof, including
without limitation the terms and conditions of employment, compensation,
benefits, retirement, competition following employment, and the like, are merged
into and superseded by this Agreement. Neither this Agreement nor any provisions
hereof can be modified, changed, discharged, or terminated except by an
instrument in writing signed by the party against whom any waiver, change,
discharge, or termination is sought.
-8-
11. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal, or unenforceable for any reason
whatsoever:
(a) the validity, legality, and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of any
section of this Agreement containing any such provision held to be invalid,
illegal, or unenforceable) shall not in any way be affected or impaired thereby;
and
(b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any section of this Agreement
containing any such provisions held to be invalid, illegal, or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal, or unenforceable.
12. Arbitration. Subject to the right of each party to seek specific
performance (which right shall not be subject to arbitration), if a dispute
arises out of or related to this Agreement, or the breach thereof, such dispute
shall be referred to arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"). A dispute subject to the
provisions of this section will exist if either party notifies the other party
in writing that a dispute subject to arbitration exists and states, with
reasonable specificity, the issue subject to arbitration (the "Arbitration
Notice"). The parties agree that, after the issuance of the Arbitration Notice,
the parties will try in good faith to resolve the dispute by mediation in
accordance with the Commercial Rules of Arbitration of AAA between the date of
the issuance of the Arbitration Notice and the date the dispute is set for
arbitration. If the dispute is not settled by the date set for arbitration, then
any controversy or claim arising out of this Agreement or the breach hereof
shall be resolved by binding 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 Colorado. In the event of any arbitration, each party shall have a
reasonable right to conduct discovery to the same extent permitted by the
Federal Rules of Civil Procedure, provided that such discovery shall be
concluded within ninety days after the date the matter is set for arbitration.
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.
-9-
13. Costs of Litigation. In the event litigation is commenced to
enforce any of the provisions hereof, or to obtain declaratory relief in
connection with any of the provisions hereof, the prevailing party shall be
entitled to recover reasonable attorney's fees. In the event this Agreement is
asserted in any litigation as a defense to any liability, claim, demand, action,
cause of action, or right asserted in such litigation, the party prevailing on
the issue of that defense shall be entitled to recovery of reasonable attorney's
fees.
14. Affiliation. A company will be deemed to be "affiliated" with Zions
Bancorp, Resulting Bank, or the Bank according to the definition of "Affiliate"
set forth in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended.
15. Headings. The section and subsection headings herein have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto executed or caused this
Agreement to be executed as of the day and year first above written.
VALLEY NATIONAL BANK OF XXXXXX
Attest:________________________ By:_______________________________
R. Xxxxx Xxxxxxxx
Executive Vice President and
Chief Executive Officer
XXXXXXX X. XXXXXX
Witness: ______________________ __________________________________
-10-
EXHIBIT VIII
OPINION OF DUANE, MORRIS & HECKSCHER LLP
[____________________], 1997
Tri-State Finance Corporation
000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Tri-State Bank
000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Re: Merger of Tri-State Finance Corporation With Val Cor
Bancorporation, Inc., In Exchange for Stock of Zions
Bancorporation
Mesdames and Gentlemen:
We are special counsel to Zions Bancorporation, a corporation organized
under the laws of the State of Utah with its head office located at Salt Lake
City, County of Salt Lake, State of Utah ("Zions Bancorp"), its wholly-owned
subsidiary, Val Cor Bancorporation, Inc., a corporation organized under the laws
of the State of Colorado with its head office located at Cortez, County of
Montezuma, State of Colorado ("Val Cor"), and its subsidiary, Valley National
Bank of Cortez, a national banking association organized under the laws of the
United States with its head office located at Cortez, County of Montezuma, State
of Colorado ("Valley"), in connection with the merger (the "Holding Company
Merger") of Tri-State Finance Corporation, a corporation organized under the
laws of the State of Colorado with its head office
-1-
Tri-State Finance Corporation
Tri-State Bank
[____________________], 1997
Page 2
located at Denver, County of Denver, State of Colorado (the "Company"), with and
into Val Cor in exchange for which shareholders of the Company will receive
shares of the common stock of Zions Bancorp and cash pursuant to an Agreement
and Plan of Reorganization dated September 23, 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 Tri-State Bank, a
banking corporation organized under the laws of the State of Colorado, with its
head office located at Denver, County of Denver, State of Colorado and a
wholly-owned subsidiary of the Company (the "Bank"), with Valley 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 5.3 of the
Agreement.
In our capacity as special counsel, we have participated in the
preparation of a Registration Statement filed with the Securities and Exchange
Commission on Form S-4 covering the shares of Zions Bancorp stock to be issued
in connection with the Holding Company Merger (the "Registration Statement")
including the Prospectus/Proxy Statement for the shareholders of the Company
(the "Prospectus/Proxy Statement"). In addition, in rendering the opinions that
follow, we have examined executed copies of the Agreements and the exhibits and
schedules appended thereto; the articles of incorporation or association and
by-laws of Zions Bancorp, Val Cor, and Valley; the minutes of certain meetings
of the board of directors of Zions Bancorp, Val Cor, and Valley; and such other
corporate documents and corporate records of Zions Bancorp, Val Cor, and Valley
as we have deemed necessary or appropriate for the purpose of rendering the
following opinions. We have also examined [set forth regulatory approvals,
consents and waivers]. In addition, we have interviewed officers of Zions
Bancorp, Val Cor, and Valley and undertaken and performed such other procedures
as we have deemed necessary or appropriate for the purpose of rendering the
following opinions. In these regards, we have examined and relied upon
representations of the Company and the Bank contained in the Agreements, and,
where we have deemed appropriate, representations or certifications of officers
or public officials.
We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons, and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties other than Zions Bancorp, Val Cor, and Valley had the corporate power
and authority to enter into and perform all obligations thereunder and, as to
such parties other than Zions Bancorp, Val Cor, and Valley, we have also assumed
the execution
-2-
Tri-State Finance Corporation
Tri-State Bank
[____________________], 1997
Page 3
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 the Bank is subject to any
order or directive from, or memorandum of understanding or similar supervisory
agreement entered into with, any bank regulatory authority which would
necessitate the receipt of approvals or consents from any such bank regulatory
authority prior to consummation of the transactions contemplated in the
Agreements other than those approvals and consents contemplated in the Agreement
and Plan of Reorganization and those generally applicable to such transactions.
Based on the foregoing, and solely in reliance thereon, we are of the
opinion that:
(a) Organization, Powers and Qualifications.
(i) Zions Bancorp is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of Utah and
has the corporate power and authority to own and operate its properties and
assets, to lease properties used in its business, and to carry on its business
as now conducted.
(ii) Val Cor is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of Colorado and has
the corporate power and authority to own and operate its properties and assets,
to lease properties used in its business, and to carry on its business as now
conducted.
(iii) Valley is a national banking association which is duly
organized, validly existing, and in good standing under the laws of the United
States and has the corporate power and authority to own and operate its
properties and assets, to lease properties used in its business, and to carry on
its business as now conducted. The deposit accounts of Valley are insured by the
Bank Insurance Fund of the Federal Deposit Insurance Corporation and, to the
best of our knowledge, no proceedings for the termination of such insurance are
pending or threatened.
(b) Execution and Performance of Agreements. Each of Zions Bancorp, Val
Cor, and Valley has the corporate power and authority to execute, deliver, and
perform each of the Agreements to which it is a party and to carry out the terms
thereof and the transactions contemplated thereby.
Tri-State Finance Corporation
Tri-State Bank
[____________________], 1997
Page 4
(c) Compliance with Corporate Documents. Neither the execution,
delivery, or performance by Zions Bancorp, Val Cor, or Valley of the Agreements
nor the consummation of the transactions contemplated therein will violate,
conflict with, or constitute a breach of or default under the respective
articles of incorporation or association or by-laws of Zions Bancorp, Val Cor,
or Valley.
(d) Binding Obligations; Due Authorization. Each of the Agreements to
which it is a party has been duly authorized by all necessary corporate action
on the part of each of Zions Bancorp, Val Cor, and Valley, has been duly
executed and delivered by each of Zions Bancorp, Val Cor, and Valley, and
constitutes a valid, legal, and binding obligation of Zions Bancorp, Val Cor, or
Valley, as the case may be, enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship, or similar laws or judicial decisions
relating to or affecting creditors' rights generally or the rights of creditors,
or of the FDIC as insurer, regulator, conservator or receiver, of banks the
accounts of which are insured by the FDIC in particular, or by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law) as to whose availability we express no opinion. No other
corporate proceedings on the part of any of Zions Bancorp, Val Cor, or Valley
are necessary to authorize any of the Agreements to which it is a party or the
carrying out of the transactions contemplated thereby.
(e) Regulatory Approvals. All approvals or waivers required to be
obtained from the Federal Reserve Bank of San Francisco, the Board of Governors
of the Federal Reserve System, the Comptroller of the Currency, the Colorado
Division of Banking, and the Department of Financial Institutions of the State
of Utah to consummate the transactions contemplated by the Agreement have been
obtained. Except for those approvals or waivers, the execution and delivery by
Zions Bancorp, Val Cor, and Valley of each of the Agreements to which it is a
party and consummation of the transactions contemplated thereby do not require
the approval or consent of any bank regulatory authority.
(f) Issuance of Zions Bancorp Common Stock. The shares of the Common
Stock of Zions Bancorp, no par value, to be issued by Zions Bancorp pursuant to
the Agreement and the Holding Company Merger Agreement, when issued pursuant to
and in accordance with the Agreement and the Holding Company Merger Agreement,
will be duly authorized and legally issued, fully paid, and non-assessable.
(g) Compliance with Securities Laws.
Tri-State Finance Corporation
Tri-State Bank
[____________________], 1997
Page 5
(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 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,
EXHIBIT 5
OPINION OF DUANE, MORRIS & HECKSCHER LLP
Duane, Morris & Heckscher LLP
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
(000) 000-0000
December 22, 1997
Zions Bancorporation
Suite 0000
Xxx Xxxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Gentlemen:
We have acted as counsel to Zions Bancorporation ("Zions") in
connection with the Agreement and Plan of Reorganization dated as of September
23, 1997, among Tri-State Finance Corporation (the "Company"), Tri-State Bank
(the "Bank"), Zions, Val Cor Bancorporation, Inc. ("Val Cor"), and Valley
National Bank of Xxxxxx ("Valley"), a related Plan of Merger between the Company
and Val Cor, and a related Plan of Merger between the Bank and Valley
(collectively, the "Plan of Reorganization"), whereby the Company will be merged
into Val Cor, with Val Cor being the surviving corporation (the "Holding Company
Merger") and the Bank will be merged into Valley, with Valley being the
surviving entity (the "Bank Merger"; collectively the "Reorganization"). Upon
consummation of the Reorganization, the holders of each outstanding share of
Company Common Stock will receive, in exchange for each share of Company Common
Stock, shares of Zions Common Stock, no par value ("Zions Common Stock"). Upon
the effective date of the Reorganization, the shares of Company Common Stock
will be canceled and immediately converted into the right for holders of Company
Common Stock to receive, in exchange for each share of Company Common Stock,
that number of shares of Zions Common Stock calculated by dividing the Merger
Consideration of 710,000 shares of Zions Common Stock by the total number of
shares of Company Common Stock issued and outstanding as of the Effective Date
of the Reorganization.
We are also acting as counsel to Zions in connection with the
Registration Statement on Form S-4 (the "Registration Statement") to be filed by
Zions with the Securities and Exchange Commission for the purpose of registering
under the Securities Act of 1933, as amended, the aggregate maximum of 710,000
shares of Zions Common Stock into which outstanding Company Common Stock will be
converted upon effectiveness of the Reorganization. This opinion is being
furnished for the purpose of being filed as an exhibit to the Registration
Statement.
Zions Bancorporation
December 22, 1997
Page 2
In connection with this opinion, we have examined, among other things:
(1) an executed copy of the Plan of Reorganization;
(2) a copy certified to our satisfaction of the Restated Articles
of Incorporation of Zions as in effect on the date hereof;
(3) copies certified to our satisfaction of resolutions adopted by
the Board of Directors of Zions on September 19, 1997,
including resolutions approving the Plan of Reorganization;
and
(4) such other documents, corporate proceedings, and statutes as
we considered necessary to enable us to furnish this opinion.
We have assumed for the purpose of this opinion that:
(1) the Plan of Reorganization has been duly and validly
authorized, executed, and delivered by the Company and the
Bank and such authorization remains fully effective and has
not been revised, superseded or rescinded as of the date of
this opinion; and
(2) the Reorganization will be consummated in accordance with the
terms of the Plan of Reorganization.
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, Val Cor, Valley, the Company, and the Bank had the
corporate power and authority to enter into and perform all obligations
thereunder and, as to such parties, 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 Plan of Reorganization has
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 upon the foregoing, we are of the opinion that the shares of
Zions Common Stock into which the outstanding shares of Company Common Stock
will be converted in the Reorganization will, when issued in accordance with the
terms of the Plan of Reorganization, be duly authorized, validly issued, fully
paid and nonassessable shares of Zions Common Stock.
Zions Bancorporation
December 22, 1997
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Opinions" in Proxy Statement/Prospectus forming a part of the Registration
Statement.
Very truly yours,
DUANE, MORRIS & HECKSCHER LLP
