1
EXHIBIT 10.10
AGREEMENT OF MERGER
This Agreement of Merger is made and entered into as of May
21, 1996, between ZIONS BANCORPORATION ("Zions Bancorp"), a corporation
organized under the laws of the State of Utah, and SOUTHERN ARIZONA BANCORP,
INC. (the "Company"), a corporation organized under the laws of the State of
Arizona. Zions Bancorp and the Company are hereinafter sometimes individually
called a "Constituent Corporation" and collectively called the "Constituent
Corporations."
RECITALS
Zions Bancorp is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah. As of May 1,
1996, the authorized capital stock of Zions Bancorp consisted of 30,000,000
shares of Common Stock, no par value, of which 14,483,997 shares were issued and
outstanding; no shares of capital stock were held in its treasury on such date.
The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Arizona. As of May 1, 1996,
the authorized capital stock of the Company consisted of 2,000,000 shares of
Common Stock, no par value (the "Company Common Stock"), of which 1,266,362
shares were issued and outstanding; no shares of capital stock were held in its
treasury on such date.
Zions Bancorp and its affiliate, NATIONAL BANK OF ARIZONA
("NBA"), and the Company and its affiliate, SOUTHERN ARIZONA BANK (the "Bank"),
have entered into an Agreement and Plan of Reorganization, dated January 17,
1996 (the "Plan of Reorganization"), setting forth certain representations,
warranties, and agreements in connection with the transactions therein and
herein contemplated, which contemplates the merger of the Company with and into
Zions Bancorp (the "Merger") in accordance with this Agreement of Merger (the
"Agreement"). NBA and the Bank are hereinafter sometimes collectively called the
"Affiliated Corporations."
The Boards of Directors of each of Zions Bancorp, the Company,
and the Affiliated Corporations deem the Merger advisable and in the best
interests of each corporation and its stockholders. The Boards of Directors of
each of Zions Bancorp, the Company, and the Affiliated Corporations, by
resolutions duly adopted, have approved the Plan of Reorganization. The Boards
of Directors of each of Zions Bancorp and the Company, by resolutions duly
adopted, have approved this Agreement. The Board of Directors of the Company has
directed that this Agreement, and authorization for the transactions
contemplated hereby, be submitted to stockholders of the Company for approval.
Pursuant to Utah Code Ann. Section 16-10a- 1103, approval by the shareholders of
Zions Bancorp is not required.
2
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"), and
cash, as provided herein.
In consideration of the premises and the mutual covenants and
agreements herein contained and subject to the terms and conditions of the
Agreement, the parties hereto hereby covenant and agree as follows:
ARTICLE I
1.1. Merger of the Company into Zions Bancorp. The Company
shall be merged with and into Zions Bancorp on the date and at the time to be
specified in the Articles of Merger to be filed with the Division of
Corporations and Commercial Code of the State of Utah pursuant to Utah Code Ann.
Section 16-10a-1105 and the Corporation Commission of the State of Arizona
pursuant to Ariz. Rev. Stat. Section 10-1101 (such date and time being referred
to herein as the "Effective Date").
1.2. Effect of the Merger. At the Effective Date:
(a) The Company and Zions Bancorp shall be a single
corporation, which shall be Zions Bancorp. Zions Bancorp is hereby designated as
the surviving corporation in the Merger and is hereinafter sometimes called the
"Surviving Corporation."
(b) The separate existence of the Company shall cease.
(c) The Surviving Corporation shall have all the rights,
privileges, immunities and powers and shall assume and be subject to all the
duties and liabilities of a corporation organized under the Utah Business
Corporation Act.
(d) The Surviving Corporation shall thereupon and thereafter
possess all of the rights, privileges, immunities, and franchises, of a public
as well as of a private nature, of each of the Constituent Corporations; and all
property, real, personal and mixed, and all debts due on whatever account,
including subscriptions to shares and all other choses in action, and all and
every other interest of and belonging to or due to each of the Constituent
Corporations shall be taken and deemed to be transferred to and vested in the
Surviving Corporation without further act or deed; and the title to any real
estate, or any interest therein, vested in either of the Constituent
Corporations shall not revert or be in any way impaired by reason of the Merger.
(e) The Surviving Corporation shall thenceforth be responsible
and liable for all the liabilities and obligations of each of the Constituent
Corporations; and any claim existing or
- 2 -
3
action or proceeding pending by or against either of the Constituent
Corporations may be prosecuted as if the Merger had not taken place, or the
Surviving Corporation may be substituted in its place. The Surviving Corporation
expressly assumes and agrees to perform all of the Company's liabilities and
obligations. Neither the rights of creditors nor any liens upon the property of
either Constituent Corporation shall be impaired by the Merger.
(f) The Articles of Incorporation of Zions Bancorp as they
exist immediately prior to the Effective Date shall be the Articles of
Incorporation of the Surviving Corporation until later amended pursuant to Utah
law.
(g) At the Effective Date and until surrendered for exchange
and payment, each outstanding stock certificate which, prior to the Effective
Date, represents shares of Company Common Stock shall, without further action,
cease to be an issued and existing share and, subject to the rights any holder
may have under Ariz. Rev. Stat. Sections 10-1301 through 10-1331 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 and the amount of cash
specified in Article III; provided that, with respect to any matters relating to
stock certificates representing Company Common Stock, Zions Bancorp may rely
conclusively upon the record of stockholders maintained by the Company
containing the names and addresses of the holders of record of the Company's
Common Stock at the Effective Date.
1.3. Acts to Carry Out This Merger Plan.
(a) The Company and its proper officers and directors shall
and will do all such acts and things as may be necessary or proper to vest,
perfect or confirm title to such property or rights in Zions Bancorp and
otherwise to carry out the purposes of this Agreement.
(b) If, at any time after the Effective Date, Zions Bancorp
shall consider or be advised that any further assignments or assurances in law
or any other acts are necessary or desirable to (i) vest, perfect or confirm, of
record or otherwise, in Zions Bancorp its right, title, or interest in or under
any of the rights, properties or assets of the Company acquired or to be
acquired by Zions Bancorp as a result of, or in connection with, the Merger, or
(ii) otherwise carry out the purposes of this Agreement, the Company and its
proper officers and directors shall be deemed to have granted to Zions Bancorp
an irrevocable power of attorney to execute and deliver all such proper deeds,
assignments and assurances in law and to do all acts necessary or proper to
vest, perfect or confirm title to and possession of such rights, properties or
assets in Zions Bancorp and otherwise to carry out the purposes of this
Agreement; and the proper officers and
- 3 -
4
directors of Zions Bancorp are fully authorized in the name of the Company or
otherwise to take any and all such action.
ARTICLE II
2.1. Capitalization. The authorized shares of capital stock of
Zions Bancorp as of the Effective Date shall be 30,000,000 shares of common
stock, no par value.
2.2. By-Laws. The By-Laws of Zions Bancorp as they exist
immediately prior to the Effective Date shall be the By-Laws of Zions Bancorp
until later amended pursuant to Utah law.
ARTICLE III
3.1. Manner of Converting Shares.
(a) Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth in this Subparagraph (a).
Additional terms may be defined elsewhere herein. Terms not defined herein shall
have the meanings assigned to them in the Plan of Reorganization.
(i) Average Closing Price. The average (rounded to the
nearest penny) of each Daily Sales Price of Zions Bancorp Stock for the twenty
consecutive trading days ending on and including the fifth trading day preceding
the Effective Date. Notwithstanding the foregoing, (A) if the result of the
calculation described in the previous sentence is less than $59.00, then the
Average Closing Price shall be $59.00, and (B) if the result of the calculation
described in the previous sentence is more than $72.00, then the Average Closing
Price shall be $72.00.
(ii) Benchmark Price. The sum of:
(A) $25,330,000.00;
(B) the consolidated net undistributed income of the
Company during the period beginning on October 1, 1995 and ending on the close
of business on the last day of the calendar month preceding the Effective Date,
calculated in accordance with generally accepted accounting principles in a
manner consistent with the Company Financial Statements (as defined in section
6.13 of the Plan of Reorganization). For the purpose of calculating net
undistributed income of the Company, any undistributed gain, net of taxes,
derived from activities or transactions which are not in the ordinary course of
its banking operations (such as, without limitation, the sale of securities or
loans, of capital assets, or of lines of business), all of which shall be
determined in accordance with generally accepted accounting principles, shall be
excluded
- 4 -
5
except as mutually agreed by the parties hereto. It is understood that the
amount calculated under this section 3.1(a)(ii)(B) may be a negative number and
that the effect of summing such a negative number would be a reduction in the
Benchmark Price as otherwise would be calculated under this section 3.1(a)(ii);
and
(C) if the Effective Date does not occur on the first
day of a calendar month, an amount calculated by computing the daily average of
the net undistributed income of the Company for the period and in the manner
prescribed in section 3.1(a)(ii)(B) hereof and multiplying the result of such
computation by the number of days elapsing during the period beginning on the
first day of the month in which the Effective Date occurs and ending on the day
immediately preceding the Effective Date. It is understood that the amount
calculated under this section 3.1(a)- (ii)(C) may be a negative number and that
the effect of summing such a negative number would be a reduction in the
Benchmark Price as otherwise would be calculated under this section 3.1(a)(ii).
(iii) Daily Sales Price. For any trading day, the last
reported sale price or, if no such reported sale takes place, the mean
(unrounded) of the closing bid and asked prices of Zions Bancorp Stock in the
over-the-counter market as such prices are reported by the automated quotation
system of the National Association of Securities Dealers, Inc., or in the
absence thereof by such other source upon which Zions Bancorp and the Company
shall mutually agree.
(iv) Dissenting Shares. The shares of Company Common Stock
held by those shareholders of the Company who have timely and properly exercised
their dissenters' rights in accordance with all applicable laws (the "Appraisal
Laws").
(v) Zions Bancorp Stock. The common stock of Zions
Bancorp, no par value.
(b) Form of Consideration. Subject to the terms, conditions
and limitations set forth herein, upon surrender of his or her certificate or
certificates, each holder of shares of Company Common Stock shall be entitled to
receive in the Merger, in exchange for each share of Company Common Stock held
of record by such stockholder as of the Effective Date:
(i) that number of shares of Zions Bancorp Stock
calculated by dividing the Benchmark Price by the Average Closing Price, and by
further dividing the number so reached by the number of shares of Company Common
Stock that shall be issued and outstanding at the Effective Date, and
(ii) in the event that the average (rounded to the nearest
penny) of each Daily Sales Price of Zions Bancorp Stock for the twenty
consecutive trading days ending on and including the
- 5 -
6
fifth trading day preceding the Effective Date (the "Unadjusted Average Price")
shall be less than $59.00, that amount of cash (the "Cash Component") calculated
by dividing the amount by which the Benchmark Price exceeds the product of the
Unadjusted Average Price and the number of shares of Zions Bancorp Stock
issuable under subsection (b)(i) of this section 3.1 by the 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 Zions Bancorp Stock. In lieu of fractional shares of Zions Bancorp
Stock, if any, each shareholder of the Company who is entitled to a fractional
share of Zions Bancorp Stock shall receive an amount of cash equal to the
product of such fraction times the Average Closing Price. Such fractional share
interest shall not include the right to vote or to receive dividends or any
interest thereon.
3.3. Dissenting Shares. Notwithstanding anything to the contrary
herein, each Dissenting Share whose holder, as of the Effective Date, has not
effectively withdrawn or lost his or her dissenters' rights under the Appraisal
Laws, shall not be converted into or represent a right to receive Zions Bancorp
Stock or Cash Component, but the holder thereof shall be entitled only to such
rights as are granted by the Appraisal Laws. Each holder of Dissenting Shares
who becomes entitled to payment for his or her Company Common Stock pursuant to
the provisions of the Appraisal Laws shall receive payment therefor from Zions
Bancorp (but only after the amount thereof shall have been agreed upon or
finally determined pursuant to such provisions).
3.4. Dividends; Interest. No shareholder of the Company will be
entitled to receive dividends on his or her Zions Bancorp Stock until he or she
exchanges his or her certificates representing Company Common Stock for Zions
Bancorp Stock and, if applicable, Cash Component. Any dividends declared on
Zions Bancorp Stock (which stock is to be delivered pursuant to this Agreement)
to holders of record on or after the Effective Date shall be paid to the
Exchange Agent (as designated in Section 3.5) 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),
(iii) the cash value of any fractional shares determined in accordance with
Section 3.2 hereof (without interest), and (iv) any Cash Component (without
interest).
3.5. Designation of Exchange Agent. The Company and Zions Bancorp
hereby designate Zions First National Bank, Salt Lake City, Utah ("Zions Bank")
as Exchange Agent to effect the exchange contemplated hereby. Zions Bancorp
will, promptly after the
- 6 -
7
Effective Date, issue and deliver to Zions Bank the share certificates
representing shares of Zions Bancorp Stock and the cash in lieu of fractional
shares and any Cash Component to be paid to holders of Company Common Stock in
accordance with this Agreement.
3.6. Notice of Exchange. Promptly after the Effective Date,
Zions Bancorp shall cause Zions Bank to 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 3.6, 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. Zions Bancorp shall cause Zions Bank to deliver shares and cash to such
holders who comply with the terms and conditions of the notice of exchange.
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 Yuma County, Arizona, 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 Arizona. 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
- 7 -
8
forum of any action or claim with respect to this Agreement or the transactions
contemplated thereby brought in the courts aforesaid.
4.4. Binding Agreement. This Agreement shall be binding upon
the parties and their respective successors and assigns.
4.5. Amendment. Anything herein or elsewhere to the contrary
notwithstanding, to the extent permitted by law, this Agreement may be amended,
supplemented, or interpreted at any time prior to the Effective Date by written
instrument duly authorized and executed by each of the parties hereto; provided,
however, that this Agreement may not be amended after the action by shareholders
of the Company in any respect that would prejudice the economic interests of
such Company shareholders, or any of them, except as specifically provided
herein or by like action of such shareholders.
4.6. Termination. This Agreement shall terminate and be
abandoned upon (i) termination of the Plan of Reorganization or (ii) the mutual
consent of Zions Bancorp and the Company at any time prior to the Effective
Date, and there shall be no liability on the part of either of the parties
hereto (or any of their respective officers or directors) except to the extent
provided in the Plan of Reorganization.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
[The remainder of this page intentionally left blank.]
- 8 -
9
ZIONS BANCORPORATION
Attest: By:
---------------------------------- ----------------------------------
Gary L. Anderson Harris H. Simmons
Secretary President and Chief Executive
Officer
- --------------------------------
)
State of Utah )
) ss.
)
County of Salt Lake )
)
- --------------------------------
On this _____ day of May, 1996, before me personally appeared Harris H.
Simmons, 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.
In Witness Whereof I have hereunto set my hand and affixed my official seal
the day and year first above written.
--------------------------
Notary Public
- 9 -
10
SOUTHERN ARIZONA BANCORP, INC.
Attest: By:
---------------------------- ----------------------------------------
John E. Byrd
President and Chief Executive
Officer
- --------------------------------
)
State of Arizona )
) ss.
)
County of Yuma )
)
- --------------------------------
On this ______ day of May, 1996, before me personally appeared John E.
Byrd, to me known to be the President and Chief Executive Officer of Southern
Arizona Bancorp, 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.
In Witness Whereof I have hereunto set my hand and affixed my official seal
the day and year first above written.
--------------------------
Notary Public
- 10 -