As filed with the Securities and Exchange Commission on May 20, 1996
Registration No. 333-............
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
COMPASS BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Delaware 63-0593897
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15 South 20th Street
Birmingham, Alabama 35233
(205) 933-3960
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Jerry W. Powell, Esquire
General Counsel
Compass Bancshares, Inc.
15 South 20th Street
Birmingham, Alabama 35233
(205) 933-3960
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time after this Registration Statement becomes
effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. ( )
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. (x)
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. ( )
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, please check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.
( )
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. ( )
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities to to be Aggregate Price Aggregate Registration
be Registered Registered Per Share(1) OfferingPrice(1) Fee
<S> <C> <C> <C> <C>
Common Stock,
$2.00 par value 342,930 shares $34.00 $11,659,620 $4,021
<FN>
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) on the basis of the
average of the high and low sales prices reported through the
NASDAQ National Market System on May 14, 1996.
</FN>
</TABLE>
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to
said Section 8(a), may determine.
PROSPECTUS
342,930 Shares
COMPASS BANCSHARES, INC.
Common Stock
The 342,931 shares ("Shares") of common stock, $2.00 par
value ("Common Stock"), of Compass Bancshares, Inc., a Delaware
corporation (the "Company"), offered hereby are being sold by
certain stockholders of the Company ("Selling Stockholders").
See "Selling Stockholders." The Company will not receive any of
the proceeds from the sale of the Shares by the Selling
Stockholders.
Sales of Shares by the Selling Stockholders may be effected
from time to time in one or more transactions through the NASDAQ
National Market System or any other exchange on which the Common
Stock may be admitted for trading pursuant to and in accordance
with the applicable rules thereof, in block transactions,
negotiated transactions (which may include the pledge or
hypothecation of some or all of the Shares) or a combination of any
such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at
negotiated prices. The Selling Stockholders may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933,
as amended ("Securities Act"). See "Plan of Distribution".
The Company has agreed to indemnify the Selling Stockholders
against certain civil liabilities, including liabilities under the
Securities Act.
The Common Stock of the Company is listed through the NASDAQ
National Market System under the symbol "CBSS". On May 14, 1996,
the closing sales price of the Common Stock as reported was $34-1/4
per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May __, 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, accordingly, files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other
information can be inspected and copied at the Commission's public
reference rooms located at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and the public reference facilities in the
New York Regional Office, 13th Floor, Seven World Trade Center, New
York, New York 10048, and the Chicago Regional Office, Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60621-2511. Copies of such materials can be obtained at
prescribed rates by writing to the Securities and Exchange
Commission, Public Reference Branch, 450 Fifth Street, N.W.
Washington, D.C. 20549.
The Company has filed with the Commission a Registration
Statement on Form S-3 (the "Registration Statement") under the
Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all of the information set forth
in the Registration Statement, certain parts of which have been
omitted in accordance with the rules and regulations promulgated by
the Commission. For further information with respect to the
Company and the shares offered hereby, reference is made to such
Registration Statement and to the exhibits thereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with
the Commission are incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the
year ended December 31, 1995 (File No. 0-6032);
(ii) The Company's Proxy Statement dated March 6, 1996,
relating to its annual meeting of shareholders held
on April 9, 1996 (File No. 0-6032); and
(iii) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996 (File No. 0-6032); and
(iv) The description of Compass Common Stock contained
in is Proxy Statement dated April 16, 1982,
relating to its Annual Meeting held May 17, 1982
(File No. 0-6032).
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering made
hereby shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of the filing of
such documents. Any statement contained in this Prospectus, in a
supplement to this Prospectus, or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently
filed supplement to this Prospectus or in any document that also is
or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to
each person, including any beneficial owner, to whom a copy of this
Prospectus is delivered, upon the written or oral request of any
such person, a copy of the documents incorporated by reference as
a part of the Registration Statement, other than exhibits to such
documents. Requests for such copies should be directed to the
Controller of the Company at 15 South 20th Street, Birmingham,
Alabama 35223 whose telephone number is (205) 558-5740.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale
of Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
The Selling Stockholders consist of former stockholders of
Flower Mound Bancshares, Inc. ("Flower Mound Bancshares"). The
Selling Stockholders acquired the Shares in connection with the
merger of a subsidiary of the Company into Flower Mound Bancshares
on February 1, 1996, pursuant to an Agreement and Plan of Merger
dated August 29, 1995 between the Company and Flower Mound
Bancshares (the "Merger Agreement"). In connection with the
Merger Agreement, the Company and the Selling Stockholders entered
into a Rights Agreement dated as of February 1, 1996 (the "Rights
Agreement"), pursuant to which the Company agreed to use its best
efforts to register the Shares under the Securities Act promptly
upon the request of the Selling Stockholders and to bear the
expenses of registration of the Shares. The Selling Stockholders
agreed to bear any fees and disbursements of counsel of the Selling
Stockholders and any discounts, selling commissions or other
selling expenses allocable to sales of the Shares by the Selling
Stockholders. The offering of the Shares in accordance with this
Prospectus is made pursuant to the exercise by the Selling
Stockholders of their rights under the Rights Agreement.
The table below sets forth the names of the Selling
Stockholders, the number of shares of Common Stock owned by each of
the Selling Stockholders as of May 13, 1996, the number of Shares
which may be offered by each Selling Stockholder pursuant to this
Prospectus and the number of shares of Common Stock to be owned by
the Selling Stockholders upon completion of the offering, assuming
that all of the Shares are sold and no other shares of Common Stock
are acquired by the Selling Stockholders between May 13, 1996 and
the date of the completion of the offering. Any or all of the
Shares listed below may be offered for sale by the Selling
Stockholders from time to time.
<TABLE>
<CAPTION>
Number of Number of Number of
shares shares shares to
beneficially offered for be beneficially Percentage
Selling owned prior to Selling owned of
Stockholder offering(1) Stockholders after offering(2) Class
<S> <C> <C> <C> <C>
Jack Brandenburger 16,487 16,487 0 0
W. H. Ellis 57,375 57,375 0 0
Janet Fellers 103,209 103,209 0 0
Ralph Fellers 103,209 103,209 0 0
David Hickerson 51,439 51,439 0 0
Frank Scheer 11,211 11,211 0 0
_______ _______ _____ _____
Total 342,930 342,930 0 0
_______ _______ _____ _____
_______ _______ _____ _____
<FN>
(1) Unless otherwise indicated, to the knowledge of the Company,
the persons and entities named in the table have sole voting and
sole investment power with respect to all shares of Common Stock
beneficially owned, subject to community property laws where
applicable.
(2) Assumes that all Shares offered hereby by each Selling
Stockholder are actually sold and no other shares of Common Stock
are acquired by the Selling Stockholders.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
Sales of Shares by the Selling Stockholders may be effected
from time to time in one or more transactions through the NASDAQ
National Market System or any other exchange on which the Common
Stock may be admitted for trading pursuant to and in accordance
with the applicable rules thereof, in block transactions,
negotiated transactions (which may include the pledge or
hypothecation of some or all of the Shares) or a combination of any
such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at
negotiated prices.
The Selling Stockholders may effect such transactions by
selling Shares to or through broker-dealers, and such
broker-dealers may sell the Shares as agent or may purchase such
Shares as principal and resell them for their own account pursuant
to this Prospectus. Such broker-dealers may receive compensation
in the form of underwriting documents, concessions or commissions
from the Selling Stockholders and/or purchasers of Shares from whom
they may act as agent (which compensation may be in excess of
customary commissions).
The Company has informed the Selling Stockholders that the
antimanipulative rules under the Exchange Act (Rules 10b-6 and
10b-7) may apply to their shares of Common Stock offered by this
Prospectus in the market. Also, the Company has informed the
Selling Stockholders of the need for delivery of copies of the
Prospectus in connection with any sale of securities registered
hereunder in accordance with applicable prospectus delivery
requirements.
In connection with such sales, the Selling Stockholders and
any participating brokers or dealers may be deemed to be
"underwriters" as defined in the Securities Act and any profit on
the sale by them of the Shares offered by this Prospectus and any
discounts and commissions or concessions received by them may be
deemed to be underwriting discounts and commissions under the
Securities Act. In addition, any of the Shares that qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Company will not receive any of the proceeds from the sale
by the Selling Stockholders of the Shares offered by this
Prospectus. Certain of the fees and expenses of this Registration
Statement will be borne by the Company. See "Selling
Stockholders."
In order to comply with certain state securities laws, if
applicable, the Shares offered by this Prospectus will not be sold
in a particular state unless such securities have been registered
or qualified for sale in such state or an exemption from
registration or qualification is available and complied with, and,
if so required, will only be sold in that state through registered
or licensed brokers or dealers.
The Shares originally issued by the Company to the Selling
Stockholders bear legends as to their restricted transferability.
Upon the effectiveness of the Registration Statement of which this
Prospectus is a part, and the transfer by the Selling Stockholders
of any of the Shares pursuant thereto, new certificates
representing such Shares will be issued to the transferee, free of
any such legends unless otherwise required by law.
LEGAL MATTERS
Certain legal matters in connection with the Shares offered
hereby will be passed upon for the Company by Jerry W. Powell,
Esquire, General Counsel, Secretary and employee of the Company.
As of April 30, 1996, Mr. Powell was the beneficial owner of an
aggregate of approximately 42,499 shares of Common Stock.
EXPERTS
The financial statements of the Company included in the
Company's Annual Report on Form 10-K for the year ended December
31, 1995 have been audited by KPMG Peat Marwick, independent
certified public accountants, as indicated in its report thereto,
and are incorporated by reference herein and in reliance upon the
authority of such firm as experts in accounting and auditing.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses payable by the Company in connection
with the offering described in this Registration Statement (other
than underwriting discounts and commissions) are as follows:
SEC registration fee $ 4,021
Edgar and transmission expenses 1,800
Accounting fees and expenses 1,500
Legal fees and expenses 7,000
Miscellaneous 1,000
_______
Total $15,321
_______
_______
Item 15. Indemnification of Directors and Officers.
Section 17 of Article V of the Company's By-Laws provides in
part as follows:
Without limitation, the Corporation shall indemnify any
person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is
or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding to the
full extent permitted by the General Corporation Law of
Delaware, upon such determination having been made as to his
good faith and conduct as is required by said General
Corporation Law. Expenses incurred in defending a civil or
criminal action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such
action, suit or proceeding to the extent, if any, authorized
by the Board of Directors in accordance with the provisions of
said General Corporation Law, officer, employee or agent to
repay such amount unless it shall ultimately be determined
that he is entitled to be indemnified by the Corporation.
Under Section 145 of the Delaware General Corporation Law (the
"GCL"), directors, advisory directors and officers of a Delaware
corporation are entitled to indemnification permitted by the
statute as provided in such corporation's certificate of
incorporation, by-laws, resolutions and other proper action.
In addition, Article 8 of Compass' Restated Certificate of
Incorporation, as amended, provides:
No director shall be personally liable to the Corporation
or its stockholders for monetary damages for any breach of
fiduciary duty of such director, except (i) for breach of the
director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit. No amendment
to or repeal of this Article 8 shall apply to or have any
effect on the liability or alleged liability of any director
of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment
or repeal.
This provision is identical to, and is authorized by, 1986
amendments to the GCL, Section 102(b)(7).
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the
opinion of the Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 16. Exhibits.
2.1 Agreement and Plan of Merger dated August 29, 1995
by and between Compass Bancshares, Inc. and Flower
Mound Bancshares, Inc., as amended
*3.1 Restated Certificate of Incorporation of Compass
Bancshares, Inc., dated May 17, 1982 (filed with
the December 31, 1982 Form 10-K of Compass
Bancshares, Inc. and incorporated herein by
reference) (File No. 0-6032)
*3.2 Certificate of Amendment, dated May 20, 1986, to
Restated Certificate of Incorporation of Compass
Bancshares, Inc. (filed as Exhibit 4(b) to
Registration Statement on Form S-8, Registration
No. 33-39095, and incorporated herein by reference)
(File No. 0-6032)
*3.3 Certificate of Amendment, dated May 15, 1987, to
Restated Certificate of Incorporation of Compass
Bancshares, Inc. (filed as Exhibit 3.1.2 to
Post-Effective Amendment No. 1 to Registration
Statement on Form S-4, Registration No. 33-10797,
and incorporated herein by reference) (File No.
0-6032)
*3.4 Certificate of Amendment, dated November 8, 1993,
to Restated Certificate of Incorporation of Compass
Bancshares, Inc. (filed as Exhibit 3(d) to
Registration Statement on Form S-4, Registration
No. 33-51919, and incorporated herein by reference)
(File No. 0-6032)
*3.5 Certificate of Amendment, dated September 19, 1994,
to Restated Certificate of Incorporation of
Compass Bancshares, Inc. (filed as Exhibit 3.5 to
Registration Statement on Form S-4, Registration
No. 33-55899, and incorporated herein by reference)
(File No. 0-6032)
*3.6 Bylaws of Compass Bancshares, Inc. (Amended and
Restated as of March 15, 1982) (filed with the
December 31, 1982 Form 10-K of Compass Bancshares,
Inc. and incorporated herein by reference) (File
No. 0-6032)
4.1 Rights Agreement dated February 1, 1996 by and
among Compass Bancshares, Inc. and the former
stockholders of Flower Mound Bancshares, Inc.
5.1 Opinion and consent of Jerry W. Powell, Esquire, as
to the legality of the securities being registered
23.1 Consent of KPMG Peat Marwick, LLP
23.2 Consent of Jerry W. Powell, Esquire (included in
the opinion in Exhibit 5.1)
24.1 Power of Attorney
24.2 Compass Board of Director Resolutions
* Incorporated by reference
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement;
provided, however, that paragraphs (i) and (ii) above do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Exchange Act that
are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that, in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless, in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Birmingham, the State of Alabama, on May 17, 1996.
COMPASS BANCSHARES, INC.
By: *
_______________________________________
D. Paul Jones, Jr.
Its Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
*
_______________________
D. Paul Jones, Jr. Director, Chairman and
Chief Executive Officer May 17, 1996
*
_______________________
Garrett R. Hegel Chief Financial Officer May 17, 1996
*
_______________________
Michael A. Bean Chief Accounting
Officer and Controller May 17, 1996
_______________________
Stanley M. Brock Director May __, 1996
_______________________
Charles W. Daniel Director May __, 1996
*
_______________________
W. Eugene Davenport Director May 17, 1996
*
_______________________
Marshall Durbin, Jr. Director May 17, 1996
*
_______________________
Tranum Fitzpatrick Director May 17, 1996
*
_______________________
George W. Hansberry Director May 17, 1996
*
_______________________
John S. Stein Director May 17, 1996
_______________________
Robert J. Wright Director May __, 1996
* By: /s/ Daniel B. Graves
___________________________________
(Daniel B. Graves Attorney-in-Fact)
EXHIBIT 2.1
Agreement and Plan of Merger
dated August 29, 1995 by and between
Compass Bancshares, Inc.
and
Flower Mound Bancshares, Inc., as amended
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
COMPASS BANCSHARES, INC.
AND
FLOWER MOUND BANCSHARES, INC.
Dated as of August 29, 1995
TABLE OF CONTENTS
Page
ARTICLE I....................................................... 1
THE MERGER................................................. 1
SECTION 1.1 The Merger............................ 1
SECTION 1.2 Effective Time........................ 1
SECTION 1.3 Certain Effects of the Merger......... 2
SECTION 1.4 Articles of Incorporation and
By-Laws............................... 2
SECTION 1.5 Directors and Officers................ 2
SECTION 1.6 Conversion of Shares.................. 2
SECTION 1.7 Closing............................... 4
ARTICLE II...................................................... 4
EXCHANGE OF SHARES......................................... 4
SECTION 2.1 Exchange of Shares.................... 4
ARTICLE III..................................................... 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............. 5
SECTION 3.1 Organization and Qualification........ 5
SECTION 3.2 Company Capitalization................ 6
SECTION 3.3 Bank Capitalization; Other
Securities............................ 6
SECTION 3.4 Authority Relative to the Agreement... 7
SECTION 3.5 No Violation.......................... 7
SECTION 3.6 Consents and Approvals................ 8
SECTION 3.7 Regulatory Reports.................... 8
SECTION 3.8 SEC Status; Securities Issuances...... 8
SECTION 3.9 Financial Statements.................. 8
SECTION 3.10 Absence of Certain Changes............10
SECTION 3.11 Company Indebtedness..................12
SECTION 3.12 Litigation............................12
SECTION 3.13 Tax Matters...........................12
SECTION 3.14 Employee Benefit Plans................13
SECTION 3.15 Employment Matters....................16
SECTION 3.16 Leases, Contracts and Agreements......16
SECTION 3.17 Related Company Transactions..........17
SECTION 3.18 Compliance with Laws..................17
SECTION 3.19 Insurance.............................17
SECTION 3.20 Loans.................................18
SECTION 3.21 Fiduciary Responsibilities............18
SECTION 3.22 Patents, Trademarks and Copyrights....18
SECTION 3.23 Environmental Compliance..............18
SECTION 3.24 Regulatory Actions....................20
SECTION 3.25 Title to Properties; Encumbrances.....20
SECTION 3.26 Shareholder List......................21
SECTION 3.27 Section 368 Representations...........21
SECTION 3.28 Employee Stock Options................21
SECTION 3.29 Accounting Matters....................22
SECTION 3.30 Investment Representations............22
SECTION 3.31 Representations Not Misleading........22
ARTICLE IV......................................................22
REPRESENTATIONS AND WARRANTIES OF COMPASS..................22
SECTION 4.1 Organization and Authority............22
SECTION 4.2 Authority Relative to Agreement.......22
SECTION 4.3 Financial Reports.....................23
SECTION 4.4 Capitalization........................24
SECTION 4.5 Consents and Approvals................25
SECTION 4.6 Availability of Compass Common
Stock.................................25
SECTION 4.7 Representations Not Misleading........25
ARTICLE V.......................................................25
COVENANTS OF THE COMPANY...................................25
SECTION 5.1 Affirmative Covenants of the
Company...............................25
SECTION 5.2 Negative Covenants of the Company.....27
ARTICLE VI......................................................29
ADDITIONAL AGREEMENTS......................................29
SECTION 6.1 Access To, and Information
Concerning, Properties and Records....29
SECTION 6.2 Filing of Regulatory Approvals........30
SECTION 6.3 Miscellaneous Agreements and
Consents..............................30
SECTION 6.4 Company Indebtedness..................30
SECTION 6.5 Best Good Faith Efforts...............31
SECTION 6.6 Exclusivity...........................31
SECTION 6.7 Public Announcement...................31
SECTION 6.8 Employee Benefit Plans................31
SECTION 6.9 Merger of Bank........................31
SECTION 6.10 Environmental Investigation; Right
to Terminate Agreement................31
SECTION 6.11 Cooperation on Texas Receipts.........35
SECTION 6.12 Employment Agreement..................35
SECTION 6.13 Rights Agreement......................35
SECTION 6.14 Debt Owed to Shareholders.............35
SECTION 6.15 Employee Bonuses......................35
ARTICLE VII.....................................................36
CONDITIONS TO CONSUMMATION OF THE MERGER...................36
SECTION 7.1 Conditions to Each Party's
Obligation to Effect the Merger.......36
SECTION 7.2 Conditions to the Obligations of
Compass and Compass Texas to Effect
the Merger............................36
SECTION 7.3 Conditions to the Obligations of
the Company to Effect the Merger......37
ARTICLE VIII....................................................38
TERMINATION; AMENDMENT; WAIVER.............................38
SECTION 8.1 Termination...........................38
SECTION 8.2 Effect of Termination.................39
SECTION 8.3 Amendment.............................39
SECTION 8.4 Extension; Waiver.....................39
ARTICLE IX......................................................40
SURVIVAL...................................................40
SECTION 9.1 Survival of Representations and
Warranties............................40
ARTICLE X.......................................................40
MISCELLANEOUS..............................................40
SECTION 10.1 Expenses.............................40
SECTION 10.2 Brokers and Finders..................40
SECTION 10.3 Entire Agreement; Assignment.........40
SECTION 10.4 Further Assurances...................40
SECTION 10.5 Enforcement of the Agreement.........41
SECTION 10.6 Severability.........................41
SECTION 10.7 Notices..............................41
SECTION 10.8 Governing Law and Venue..............42
SECTION 10.9 Descriptive Headings.................42
SECTION 10.10 Parties in Interest..................43
SECTION 10.11 Counterparts.........................43
SECTION 10.12 Incorporation by References..........43
SECTION 10.13 Certain Definitions..................43
ATTACHMENTS
EXHIBITS
A. Letter of Transmittal
B. Pooling of Interest Criteria
C. Pooling Transfer Restrictions Agreement
D. Investment Representations Certificate
E. Employment Agreement
F. Rights Agreement
G. Opinion of Counsel for the Company and the Bank
H. Opinion of Counsel for Compass and Compass Texas
LIST OF SCHEDULES
Schedule 3.2 Company Capitalization
Schedule 3.3 Bank Capitalization; List of Equity Ownership
Schedule 3.5 Violations of Law; Conflicts of Interest;
Share Litigation; Termination of Existence
Schedule 3.6 Company Prior Consents
Schedule 3.7 Regulatory Reports
Schedule 3.10 Absence of Material Changes or Adverse
Effects
Schedule 3.12 Company Legal Proceedings
Schedule 3.13 Tax Liabilities
Schedule 3.14(a) Employee Welfare Benefit Plans
Schedule 3.14(b) Employee Pension Benefit Plans
Schedule 3.14(f) Deferred Compensation, Bonus and Stock
Purchase Plans
Schedule 3.14(l) Additional Payments Due Under Deferred
Compensation, Bonus, Employee Welfare Benefit
Plans and Employee Pension Benefit Plans
Schedule 3.15 Employment Contracts and Collective
Bargaining Agreements
Schedule 3.16 Leases, Subleases, Contracts and Agreements;
Participations; Default of Contracts;
Marketable Title
Schedule 3.17 Related Company Transactions
Schedule 3.18 Compliance with Laws
Schedule 3.19 Insurance Policies
Schedule 3.20 Loans Exceeding Legal Lending Limit, Troubled
Loans
Schedule 3.22 Patents, Trademarks and Copyrights
Schedule 3.23 Environmental Compliance
Schedule 3.24 Regulatory Actions; Agreements
Schedule 3.25 Title to Properties; Title Policies; Property
Schedule 3.27 Company Shareholders Disposing of Stock
Schedule 3.28 Stock Option Plans
Schedule 4.2 Compass Prior Consents
Schedule 5.1(d) Insurance Policies to be Maintained
Schedule 5.1(g) Compliance with Laws Pending Merger
Schedule 5.1(j) List of Accounts and Safe Deposit Boxes
Schedule 5.1(k) List of Liabilities and Obligations of the
Company and the Bank
Schedule 5.2(l) Capital Expenditures
Schedule 6.15 Employee Bonuses
Schedule 10.13 List of Directors and Officers
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of
August 29, 1995, by and among Compass Bancshares, Inc., a Delaware
corporation ("Compass"), and Flower Mound Bancshares, Inc., a
Texas corporation ("Company").
WHEREAS, Compass desires to affiliate with the Company and its
wholly-owned subsidiary, Security Bank, a Texas state bank (the
"Bank"), and the Company and the Bank desire to affiliate with
Compass in the manner provided in this Agreement;
WHEREAS, Compass and the Company believe that the Merger (as
defined herein) of the Company with a new subsidiary of Compass to
be formed and added as a party to this Agreement after the date
hereof in the manner provided by, and subject to the terms and
conditions set forth in, this Agreement and all exhibits, schedules
and supplements hereto is desirable and in the best interests of
their respective institutions and shareholders; and
WHEREAS, the respective boards of directors of the Company and
Compass have approved this Agreement and the proposed transactions
substantially on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby
agree as follows:
ARTICLE I.
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the Texas Business
Corporation Act (the "TBCA") and the General Corporation Law of
the State of Delaware (the "GCL"), a Delaware corporation to be
formed after the date hereof, all of the capital stock of which
will be owned by Compass (such corporation being hereinafter
referred to as "Compass Texas"), shall be merged with and into
the Company (the "Merger") as soon as practicable following the
satisfaction or waiver, if permissible, of the conditions set forth
in Article VII hereof. Following the Merger, the Company shall
continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of Compass
Texas shall cease. Compass shall not be deemed a party to the
Merger for the purposes of the TBCA or the GCL.
SECTION 1.2 Effective Time. The Merger shall be
consummated by the filing by the Texas Secretary of State of
Articles of Merger, in the form required by and executed in
accordance with the relevant provisions of the TBCA, and by the
filing by the Delaware Secretary of State of a Certificate of
Merger in the form required by and executed in accordance with the
relevant provisions of the GCL and by the issuance of a Certificate
of Merger by the Secretary of State of Texas. (The date of such
issuance and filing or such other time and date as may be specified
in the Articles and Certificate of Merger shall be the "Effective
Time").
SECTION 1.3 Certain Effects of the Merger. The Merger
shall have the effects set forth in Article 5.06 of the TBCA and in
Sections 251 and 252 of the GCL.
SECTION 1.4 Articles of Incorporation and By-Laws. The
Articles of Incorporation and the By-Laws of the Company, in each
case as in effect at the Effective Time, shall be the Articles of
Incorporation and By-Laws of the Surviving Corporation.
SECTION 1.5 Directors and Officers. The directors and
officers of Compass Texas at the Effective Time shall be the
directors and officers of the Surviving Corporation and shall hold
office from the Effective Time until their respective successors
are duly elected or appointed and qualified in the manner provided
in the ArticlesEof Incorporation and By-Laws of the Surviving
Corporation, or as otherwise provided by law.
SECTION 1.6 Conversion of Shares. (a) Each share of the
Company's common stock, par value $.10 per share ("Company Common
Stock"), issued and outstanding immediately prior to the Effective
Time (the Company Common Stock is sometimes called the "Shares"),
shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and represent the right to
receive the consideration payable as set forth below (the "Merger
Consideration") to the holder of record thereof, without interest
thereon, upon surrender of the certificate representing such Share.
For the purposes of determining the number of Shares issued and
outstanding, the number of Shares issued and outstanding shall be
increased by the number and class of Shares that may be acquired
upon exercise or conversion of any warrant, option, convertible
debenture or other security entitling the holder thereof to acquire
Shares which is in effect or outstanding prior to the Effective
Time.
(b) Each holder of Company Common Stock shall receive
Merger Consideration equal to the quotient of 340,000 shares of
Compass common stock, $2.00 par value per share ("Compass Common
Stock"), subject to adjustment as set forth in subsection (c)
below, divided by the number of Shares of Company Common Stock
outstanding immediately prior to the Effective Time for each share
of Company Common Stock so held. In the event the average closing
sale price of the Compass Common Stock as reported by the NASDAQ
National Market System for the 20 days of trading preceding the
tenth business day prior to the first business day following the
last received regulatory approval from the FDIC and the FRB (all as
defined in Section 3.5) and the expiration of any applicable
waiting period with respect thereto (the "Share Determination
Market Value") is less than $26.50 per share, Compass shall either
(i) terminate this Agreement (the "Pricing Termination Option")
by written notice to the Company within ten business days after the
Share Determination Market Value of less than $26.50 per share is
capable of being determined, or (ii) agree to issue a number of
shares of Compass Common Stock equal to the quotient of $9,010,000
divided by the Share Determination Market Value, which shares of
Compass Common Stock would be in addition to the shares of Compass
Common Stock which may be issued under subsection (c) below. In
the event that Compass exercises its Pricing Termination Option or
in the event Compass fails to notify the Company of its election
pursuant to the preceding sentence within the specified ten
business day period, this Agreement shall be terminated, but the
Company shall have the right to reject such termination of the
Agreement by Compass (the "Termination Rejection") by agreeing to
accept an aggregate of 340,000 shares of Compass Common Stock.
Such Termination Rejection shall be exercised by a notice to
Compass within five business days following the earlier of (i) the
date on which the Company receives notice of Compass' exercise of
the Pricing Termination Option or (ii) the expiration of the
specified ten business day period. In the event that the Company
fails to notify Compass of its exercise of the Termination
Rejection within the five business day period after the earlier of
(i) the receipt of notice from Compass of its exercise of the
Pricing Termination Option or (ii) the expiration of the initial
ten business day period, this Agreement shall be terminated. The
aggregate number of shares of Compass Common Stock to be exchanged
for each Share, respectively, shall be adjusted appropriately to
reflect any stock dividends or splits with respect to Compass
Common Stock, when the record date or payment occurs prior to the
Effective Time.
(c) In the event the transactions contemplated by this
Agreement are not consummated on or before the record date for the
fourth quarter 1995 dividend of Compass, the Merger Consideration
shall be increased by an amount of shares of Compass Common Stock
equal to the product of 340,000 times the Compass fourth quarter
1995 dividend rate divided by the Share Determination Market Value.
Further, in the event the transactions contemplated by this
Agreement are not consummated by the record date for the first
quarter 1996 dividend of Compass, the aggregate Merger
Consideration shall be increased further by an additional amount of
shares of Compass Common Stock equal to the product of 340,000
times the Compass first quarter 1996 dividend rate divided by the
Share Determination Market Value.
(d) Compass shall not issue any certificates for any
fractional shares of Compass Common Stock otherwise issuable
pursuant to the Merger. In lieu of issuing such fractional shares,
Compass shall pay cash to any holder of Shares otherwise entitled
to receive such fractional share. Such cash payment shall be based
on the Share Determination Market Value.
SECTION 1.7 Closing. Upon the terms and subject to the
conditions hereof, and the satisfaction or waiver, if permissible,
of the conditions set forth in Article VII hereof, the Company and
Compass Texas shall execute and deliver the Articles of Merger and
the Certificate of Merger, as described in Section 1.2, and the
parties hereto shall take all such other and further actions as may
be required by law to make the Merger effective. Prior to the
filing referred to in this Section, but within ten business days
after the receipt of all regulatory approvals and the satisfaction
or waiver, if permissible, of the conditions set forth in Article
VII hereof, except as may be necessary to be extended to take into
account the time periods for the Pricing Termination Option and the
Termination Rejection set forth in Section 1.6(b), a closing (the
"Closing") will be held at the office of Liddell, Sapp, Zivley,
Hill & LaBoon, L.L.P. in Dallas, Texas (or such other place as the
parties may agree) for the purpose of confirming all of the
foregoing.
ARTICLE II.
EXCHANGE OF SHARES
SECTION 2.1 Exchange of Shares.
(a) At least 15 days prior to the Effective Time, Compass
shall deliver to each record holder (the "Shareholders") of an
outstanding certificate or certificates which as of the Effective
Time will represent Shares (the "Certificates"), a form letter of
transmittal in substantially the form of Exhibit A attached hereto
approved by the Company and Compass ("Letters of Transmittal")
(which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to Compass) and instructions for use
in effecting the surrender of the Certificates for payment
therefor. If the Shareholders provide Compass with copies of
completed Letters of Transmittal and Certificates, Compass shall
promptly, but in no event later than the fifth business day after
the delivery of such Letters of Transmittal, advise the Company
whether any defect, omission or other issue exists, regarding the
Letters of Transmittal or the Certificates, that would prevent any
Shareholder from receiving, at the Effective Time, cash and Compass
Common Stock in the amount provided for in Section 1.6. Upon
surrender to Compass of a Certificate, together with a properly
executed and completed Letter of Transmittal, the holder of such
Certificate shall be entitled to receive in exchange therefor cash
and Compass Common Stock in the amount provided in Section 1.6, and
such Certificate shall forthwith be canceled. No interest will be
paid or accrued on the cash payable upon surrender of the
Certificate and no dividend will be disbursed with respect to the
shares of Compass Common Stock until the holder's Shares are
surrendered in exchange therefor. If payment or delivery of
Compass Common Stock is to be made to a person other than the
person in whose name the Certificate surrendered is registered, it
shall be a condition of payment that the Certificate so surrendered
shall be properly endorsed or otherwise be in proper form for
transfer and that the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment and
delivery of Compass Common Stock to a person other than the
registered holder of the Certificate surrendered or establish to
the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 2.1, each Certificate shall
represent for all purposes the right to receive the Merger
Consideration without any interest thereon.
(b) After the Effective Time, the stock transfer ledger
of the Company shall be closed and there shall be no transfers on
the stock transfer books of the Company of the Shares which were
outstanding immediately prior to such time of filing. If, after
the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be promptly presented to Compass and
exchanged as provided in this Article II.
(c) At the Closing, Compass shall deliver to the
Shareholders who have submitted to Compass on or prior to the
Effective Time their Certificates, accompanied by properly executed
and completed Letters of Transmittal, cash and Compass Common Stock
in the amount provided for in Section 1.6.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby makes the representations and warranties
set forth in this Article III to Compass. The Company has
delivered to Compass the Schedules to this Agreement referred to in
this Article III on the date hereof. The Company agrees to provide
Compass and Compass Texas at the Closing with supplemental
Schedules reflecting any changes thereto between the date of such
Schedules and the date of the Closing.
SECTION 3.1 Organization and Qualification. The Company
is a Texas corporation and a bank holding company under the Bank
Holding Company Act of 1956, as amended, and is duly organized,
validly existing and in good standing under the laws of the State
of Texas and all laws, rules, and regulations applicable to bank
holding companies. The Bank is a Texas state bank, duly organized,
validly existing and in good standing under the laws of the State
of Texas, and is not a member of the Federal Reserve System. Each
of the Company and the Bank has all requisite corporate power and
authority to carry on their respective businesses as now being
conducted and to own, lease and operate their respective properties
and assets as now owned, leased or operated. Except as set forth
on ScheduleE3.17, the Company does not own or control any Affiliate
(as defined in Section 3.17) or Subsidiary (as defined in Section
10.13) other than the Bank. True and correct copies of the
Articles of Incorporation or Association and Bylaws of the Company
and the Bank, with all amendments thereto through the date of this
Agreement, have been delivered by the Company to Compass. The Bank
is duly incorporated to do business and is in good standing in the
State of Texas. The nature of the businesses of the Company and
the Bank and their respective activities, as currently conducted,
do not require them to be qualified to do business in any
jurisdiction other than the State of Texas.
SECTION 3.2 Company Capitalization. As of the date
hereof, the authorized capital stock of the Company consists solely
of 10,000 shares of Company Common Stock, of which 1,040 shares are
issued and outstanding, and none of which are held in treasury.
Except as set forth on ScheduleE3.2, there are no outstanding
subscriptions, options, convertible securities, rights, warrants,
calls, or other agreements or commitments of any kind issued or
granted by, or binding upon, the Company or the Bank to purchase or
otherwise acquire any security of or equity interest in the Company
or the Bank. Except as set forth on ScheduleE3.2, there are no
outstanding subscriptions, options, rights, warrants, calls,
convertible securities or other agreements or commitments
obligating the Company to issue any shares of the Company, or to
the knowledge of the Company, irrevocable proxies or any agreements
restricting the transfer of or otherwise relating to shares of its
capital stock of any class. All of the Shares that have been
issued have been duly authorized, validly issued and are fully paid
and non-assessable, and are free of preemptive rights. There are
no restrictions applicable to the payment of dividends on the
Shares except pursuant to the TBCA and applicable banking laws and
regulations and all dividends declared prior to the date hereof
have been paid.
SECTION 3.3 Bank Capitalization; Other Securities. All
of the issued and outstanding shares of the capital stock of the
Bank (i) are duly authorized, validly issued, fully paid and
nonassessable, (ii) are free and clear of any liens, claims,
security interests and encumbrances of any kind, and (iii) there
are no irrevocable proxies with respect to such shares and there
are no outstanding or authorized subscriptions, options, warrants,
calls, rights, or other agreements or commitments of any kind
restricting the transfer of, requiring the issuance or sale of, or
otherwise relating to any of such shares of capital stock to any
person. The Company owns, directly, all of the issued and
outstanding capital stock of the Bank. Set forth on Schedule 3.3
hereto is a list of all equity ownership by the Company or the Bank
for the account of the Company or the Bank in any other person
other than the Bank (the "Other Securities"). The Company or the
Bank owns each Other Security free and clear of any lien,
encumbrance, security interest or charge.
SECTION 3.4 Authority Relative to the Agreement. The
Company has full corporate power and authority, and no further
proceedings on the part of the Company are necessary, to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby which have been duly and validly authorized by
its Board of Directors and its Shareholders. This Agreement has
been duly executed and delivered by the Company and is a duly
authorized, valid, legally binding and enforceable obligation of
the Company, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to
creditors' rights generally and general equitable principles, and
subject to such approval of regulatory agencies and other
governmental authorities having authority over the Company as may
be required by statute or regulation. Except as set forth on
ScheduleE3.4, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated
hereby will not conflict with, or result in any violation or breach
of or default under the respective Articles of Incorporation or
Association or By-Laws of the Company or the Bank or any agreement,
document or instrument by which the Company or the Bank is
obligated or bound.
SECTION 3.5 No Violation. Except as set forth on
Schedule 3.5, neither the execution, delivery nor performance of
this Agreement in its entirety, nor the consummation of all of the
transactions contemplated hereby, following the receipt of such
approvals as may be required from the Securities and Exchange
Commission ("SEC"), the Federal Deposit Insurance Corporation
("FDIC"), the Board of Governors of the Federal Reserve System
("FRB"), and the Texas Department of Banking ("Department")
will (i) violate (with or without the giving of notice or the
passage of time), any law, order, writ, judgment, injunction,
award, decree, rule, statute, ordinance or regulation applicable to
the Company or the Bank or (ii) be in conflict with, result in a
breach or termination of any provision of, cause the acceleration
of the maturity of any debt or obligation pursuant to, constitute
a default (or give rise to any right of termination, cancellation
or acceleration) under, or result in the creation of any security
interest, lien, charge or other encumbrance upon any property or
assets of the Company or the Bank pursuant to, any terms,
conditions or provisions of any note, license, instrument,
indenture, mortgage, deed of trust or other agreement or
understanding or any other restriction of any kind or character, to
which the Company or the Bank is a party or by which any of their
assets or properties are subject or bound. Except as set forth on
Schedule 3.5, there are no proceedings pending or, to the knowledge
of the Company or the Bank, threatened, against the Company, the
Bank or involving the Shares, at law or in equity or before or by
any foreign, federal, state, municipal or other governmental court,
department, commission, board, bureau, agency, instrumentality or
other person which may result in liability to Compass or Compass
Texas upon the consummation of the transactions contemplated hereby
or which would prevent or delay such consummation. Except as set
forth in Schedule 3.5, or as contemplated hereby, the corporate
existence, business organization, assets, licenses, permits,
authorizations and contracts of the Company and the Bank will not
be terminated or impaired by reason of the execution, delivery or
performance by the Company of this Agreement or consummation by the
Company of the transactions contemplated hereby, assuming the
receipt of required regulatory approvals.
SECTION 3.6 Consents and Approvals. The Company's Board
of Directors (at a meeting called and duly held) and the Company's
shareholders by written consent have approved and adopted this
Agreement. Except as described in Schedule 3.6 hereto, no prior
consent, approval or authorization of, or declaration, filing or
registration with any person, domestic or foreign, is required of
the Company in connection with the execution, delivery and
performance by the Company of this Agreement and the transactions
contemplated hereby or the resulting change of control of the Bank,
except the filing of the Articles of Merger under the TBCA, the
Certificate of Merger under the GCL, and such approvals as may be
required from the FRB, the FDIC, and the Department.
SECTION 3.7 Regulatory Reports. Except as set forth on
ScheduleE3.7, the Company and the Bank have filed all reports,
registrations and statements, together with any amendments required
to be made thereto, that are required to be filed with the FRB, the
Department, the FDIC, or any other regulatory authority having
jurisdiction over any such persons, other than plans, reports or
information listed on Schedule 3.7.
SECTION 3.8 SEC Status; Securities Issuances. The
Company is not subject to the registration provisions of Section 12
of the Exchange Act nor the rules and regulations of the SEC
promulgated under Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), other than anti-fraud
provisions of the Exchange Act. All issuances of securities by the
Company and the Bank have been registered under the Securities Act,
the Securities Act of the State of Texas, the Texas Banking Code,
and all other applicable laws or were exempt from any such
registration requirements.
SECTION 3.9 Financial Statements. The Company has
provided Compass with a true and complete copy of (i) the unaudited
consolidated statement of financial position of the Company and the
Bank as of December 31, 1994, and the related consolidated
statements of income, shareholders' equity and changes in cash
flows for the years ended December 31, 1994 and 1993, plus
consolidating financial statements of the Bank, and (ii) the
consolidated statements of financial position of the Company and
the Bank as of June 30, 1995 and the related consolidated
statements of income, shareholders' equity and changes in cash
flows for the six-month periods ended June 30, 1995 and 1994 (such
consolidated statements of financial position and the related
consolidated statements of income, shareholders' equity and changes
in cash flows are collectively referred to herein as the
"Consolidated Financial Statements"), plus all consolidating
financial statements for the Bank (collectively, with the
Consolidated Financial Statements and the notes and schedules
thereto, referred to as the "Financial Statements"). Except as
described in the notes to the Consolidated Financial Statements,
the Consolidated Financial Statements, including the consolidated
statement of financial position and the related consolidated
statements of income, shareholders' equity and changes in cash
flows (including the related notes thereto) of the Company and the
Bank, fairly present the financial position of the Company and the
Bank as of the dates thereof and the results of operations and cash
flows of the Company and the Bank for the periods then ended, in
conformity with generally accepted accounting principles ("GAAP")
unless otherwise instructed by the instructions to the Call Reports
(as defined below), which instructions represent regulatory
accounting principles ("RAP"), in which instance such information
is presented in conformity with RAP, applied on a basis consistent
with prior periods (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments and the fact
that they do not contain all of the footnote disclosures required
by GAAP), except as otherwise noted therein, and the accounting
records underlying the Consolidated Financial Statements accurately
and fairly reflect in all material respects the transactions of the
Company and the Bank. As of their dates, the Consolidated
Financial Statements conformed, or will conform when delivered, in
all material respects with all applicable rules and regulations
promulgated by the FRB. Neither the Company nor the Bank has any
liabilities or obligations of a type which should be included in or
reflected on the Financial Statements if prepared in accordance
with GAAP, whether related to tax or non-tax matters, accrued or
contingent, due or not yet due, liquidated or unliquidated, or
otherwise, except as and to the extent disclosed or reflected in
the Financial Statements. The Company will provide Compass with
the unaudited consolidated and unconsolidated statements of
financial position of the Company and the Bank as of the end of
each month hereafter, prepared on a basis consistent with prior
periods, and promptly following their availability the Company will
provide Compass with the Reports of Condition and Statements of
Income ("Call Reports") of the Bank for all periods ending after
June 30, 1995. As of their dates, the consolidating financial
statements of the Bank conformed, or will conform when delivered,
in all material respects with all applicable rules and regulations
promulgated by the Department and the FDIC. The Company and the
Bank have no off balance sheet liabilities associated with
financial derivative products or potential liabilities associated
with financial derivative products.
SECTION 3.10 Absence of Certain Changes. Except as and
to the extent set forth on Schedule 3.10, since June 30, 1995 (the
"Balance Sheet Date"), neither the Company nor the Bank has:
(a) made any amendment to its Articles of Incorporation
or Association or Bylaws or changed the character of its business
in any material manner;
(b) suffered any Material Adverse Effect (as defined in
Section 10.13(b));
(c) entered into any agreement, commitment or transaction
except in the ordinary course of business and consistent with
prudent banking practices;
(d) except in the ordinary course of business and
consistent with prudent banking practices, incurred, assumed or
become subject to, whether directly or by way of any guarantee or
otherwise, any obligations or liabilities (absolute, accrued,
contingent or otherwise);
(e) permitted or allowed any of its property or assets to
be subject to any mortgage, pledge, lien, security interest,
encumbrance, restriction or charge of any kind (other than
statutory liens not yet delinquent) except in the ordinary course
of business and consistent with prudent banking practices;
(f) except in the ordinary course of business and
consistent with prudent banking practices, canceled any debts,
waived any claims or rights, or sold, transferred, or otherwise
disposed of any of its properties or assets;
(g) disposed of or permitted to lapse any rights to the
use of any trademark, service mark, trade name or copyright, or
disposed of or disclosed to any person other than its employees or
agents, any trade secret not theretofore a matter of public
knowledge;
(h) except for regular salary increases and bonuses
granted in the ordinary course of business within the Company's or
the Bank's 1995 budget or currently established incentive programs
or 1996 incentive programs as contemplated by Schedule 6.15, and
consistent with prior practices, granted any increase in
compensation or paid or agreed to pay or accrue any bonus,
percentage compensation, service award, severance payment or like
benefit to or for the credit of any director, officer, employee or
agent, or entered into any employment or consulting contract or
other agreement with any director, officer or employee or adopted,
amended or terminated any pension, employee welfare, retirement,
stock purchase, stock option, stock appreciation rights,
termination, severance, income protection, golden parachute,
savings or profit-sharing plan (including trust agreements and
insurance contracts embodying such plans), any deferred
compensation, or collective bargaining agreement, any group
insurance contract or any other incentive, welfare or employee
benefit plan or agreement maintained by the Company or the Bank,
for the directors, employees or former employees of the Company or
the Bank ("Employee Benefit Plan");
(i) directly or indirectly declared, set aside or paid
any dividend or made any distribution in respect to its capital
stock or redeemed, purchased or otherwise acquired, or arranged for
the redemption, purchase or acquisition of, any shares of its
capital stock or other of its securities, except for dividends paid
to the Company by the Bank;
(j) organized or acquired any capital stock or other
equity securities or acquired any equity or ownership interest in
any person (except through settlement of indebtedness, foreclosure,
the exercise of creditors' remedies or in a fiduciary capacity, the
ownership of which does not expose the Company or the Bank to any
liability from the business, operations or liabilities of such
person);
(k) issued, reserved for issuance, granted, sold or
authorized the issuance of any shares of its capital stock or
subscriptions, options, warrants, calls, rights or commitments of
any kind relating to the issuance or sale of or conversion into
shares of its capital stock;
(l) made any or acquiesced with any change in any
accounting methods, principles or practices, except as required by
changes in GAAP or RAP;
(m) experienced any Material Adverse Effect in relations
with customers or clients of the Company or the Bank;
(n) except for the transactions contemplated by this
Agreement or as otherwise permitted hereunder, entered into any
transaction, or entered into, modified or amended any contract or
commitment, other than in the ordinary course of business and
consistent with prudent banking practices; or
(o) agreed, whether in writing or otherwise, to take any
action the performance of which would change the representations
contained in this Section 3.10 in the future so that any such
representation would not be true in all material respects as of the
Closing.
SECTION 3.11 Company Indebtedness. The Company has
delivered to Compass true and complete copies of all loan documents
("Company Loan Documents") related to indebtedness of the Company
and its subsidiaries, including the Bank, other than (i) deposits
and (ii) indebtedness of the bank incurred in the ordinary course
of business and consistent with prudent banking practices
("Company Indebtedness"), and made available to Compass all
material correspondence concerning the status of Company
Indebtedness. The Company will deliver to Compass true and
complete copies of the letters of credit issued by the Bank and the
loan documents relating to the pledges in connection with treasury,
tax and loan accounts.
SECTION 3.12 Litigation. Except as set forth on Schedule
3.12, there are no actions, suits, claims, investigations, reviews
or other proceedings pending or, to the knowledge of the Company or
the Bank, threatened against the Company or the Bank or involving
any of their respective properties or assets, at law or in equity
or before or by any foreign, federal, state, municipal, or other
governmental court, department, commission, board, bureau, agency,
or other instrumentality or person or any board of arbitration or
similar entity ("Proceeding"). The Company will notify Compass
immediately in writing of any Proceedings against the Company or
the Bank.
SECTION 3.13 Tax Matters. The Company and the Bank have
duly filed all tax returns required to be filed by them involving
a tax liability or other material potential detriment for failure
to file (the "Filed Returns"). The Company and the Bank have
paid, or have established adequate reserves for the payment of, all
federal income taxes and all state and local income taxes and all
franchise, property, sales, employment, foreign or other taxes
required to be paid with respect to the periods covered by the
Filed Returns. With respect to the periods for which returns have
not yet been filed, the Company and the Bank have established
adequate reserves determined in accordance with GAAP for the
payment of all federal income taxes and all state and local income
taxes and all franchise, property, sales, employment, foreign or
other taxes. Except as described in Schedule 3.13, the Company and
the Bank have no direct or indirect liability for the payment of
federal income taxes, state and local income taxes, and franchise,
property, sales, employment or other taxes in excess of amounts
paid or reserves established. Except as set forth on
Schedule 3.13, the Company has not entered into any tax sharing
agreement or other agreement regarding the allocation of the tax
liability of the Company or the Bank or similar arrangement with
its Subsidiaries. Set forth on Schedule 3.13 are the dates of
filing of all Filed Returns and any amendments thereto which relate
to federal or state income or franchise taxes. Neither the Company
nor the Bank have filed any Internal Revenue Service ("IRS")
Forms 1139 (Application for Tentative Refund). Except as set forth
on Schedule 3.13, there are no pending questions raised in writing
by the IRS or other taxing authority for taxes or assessments of
the Company or the Bank, nor are there any outstanding agreements
or waivers extending the statutory period of limitation applicable
to any tax return of the Company or the Bank for any period. The
Company and the Bank have withheld from employee wages and paid
over to the proper governmental authorities all amounts required to
be so withheld and paid over. For the purposes of this Agreement,
the term "tax" shall include all federal, state and local taxes
and related governmental charges and any interest or penalties
payable in connection with the payment of taxes.
SECTION 3.14 Employee Benefit Plans. With respect to all
Employee Benefit Plans in which employees of the Company or the
Bank participate the following are true and correct:
(a) Schedule 3.14(a) lists each "employee welfare
benefit plan" (as defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"))
maintained by the Company or the Bank or to which the Company or
the Bank contributes or is required to contribute, including any
multiemployer welfare plan (such employee welfare benefit plans
being hereinafter collectively referred to as the "Welfare Benefit
Plans") and sets forth (i) the amount of any liability of the
Company or the Bank for contributions more than thirty days past
due with respect to each Welfare Benefit Plan as of the date hereof
and as of the end of any subsequent month ending prior to the
Closing and (ii) the annual cost attributable to each of the
Welfare Benefit Plans; no Welfare Benefit Plan provides for
continuing benefits or coverage for any participant, beneficiary or
former employee after such participant's or former employee's
termination of employment except as may be required by Section
4980B of the Internal Revenue Code of 1986, as amended (the
"Code") and Sections 601-608 of ERISA;
(b) Schedule 3.14(b) lists each "employee pension
benefit plan" (as defined in Section 3(2) of ERISA and not
exempted under Section 4(b) or 201 of ERISA) maintained by the
Company or the Bank or to which the Company or the Bank contributes
or is required to contribute, including any multiemployer plan (as
defined in Section 3(37) of ERISA) (such employee pension benefit
plans being hereinafter collectively referred to as the "Pension
Benefit Plans");
(c) All of the Pension Benefit Plans and Welfare Benefit
Plans and any related trust agreements or annuity contracts (or any
other funding instruments) comply currently, and have complied in
the past, both as to form and operation, with the provisions of
ERISA, the Code and with all other applicable laws, rules and
regulations governing the establishment and operation of the
Pension Benefit Plans and Welfare Benefit Plans; all necessary
governmental approvals relating to the establishment of the Pension
Benefit Plans have been obtained; and with respect to each Pension
Benefit Plan that is intended to be tax-qualified under Section
401(a) or 403(a) of the Code, a favorable determination letter as
to the qualification under the Code of each such Pension Benefit
Plan and each material amendment thereto has been issued by the
Internal Revenue Service (and nothing has occurred since the date
of the last such determination letter which resulted in, or is
likely to result in the revocation of such determination),
including amendments which may be required by the Tax Reform Act of
1986, the Omnibus Budget Reconciliation Acts of 1986 and 1987, the
Technical and Miscellaneous Revenue Act of 1988, the Revenue
Reconciliation Act of 1989 and the Omnibus Budget Reconciliation
Act of 1990;
(d) Each Welfare Benefit Plan and each Pension Benefit
Plan has been administered in compliance with the requirements of
the Code, ERISA and all other applicable laws, and all reports and
disclosures required by ERISA, the Code and any other applicable
laws with respect to each Welfare Benefit Plan and each Pension
Benefit Plan have been timely filed;
(e) On and after January 1, 1975, neither the Company,
the Bank nor any plan fiduciary of any Welfare Benefit Plan or
Pension Benefit Plan has engaged in any transaction in violation of
Section 406 of ERISA (for which transaction no exemption exists
under Section 408 of ERISA) or in any "prohibited transaction" as
defined in Section 4975(c)(1) of the Code (for which no exemption
exists under Section 4975(c)(2) or 4975(d) of the Code);
(f) Schedule 3.14(f) lists each deferred compensation
plan, bonus plan, stock option plan, employee stock purchase plan,
restricted stock, excess benefit plan, incentive compensation,
stock bonus, cash bonus, severance pay, golden parachute, life
insurance, all nonqualified deferred compensation arrangements,
rabbi trusts, all unfunded plans and any other employee benefit
plan, agreement, arrangement or commitment not required under a
previous subsection to be listed (other than normal policies
concerning holidays, vacations and salary continuation during short
absences for illness or other reasons) maintained by the Company or
the Bank;
(g) Neither the Company, the Bank nor any corporation or
other trade or business controlled by or under common control with
the Company (as determined under Sections 414(b) and 414(c) of the
Code) ("Common Control Entity") is, or has been within the past
five years, a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Pension Benefit Plan subject to the
provisions of Title IV of ERISA, nor has the Company, the Bank or
a Common Control Entity maintained or participated in any employee
pension benefit plan (defined in Section 3(2) of ERISA) subject to
the provision of Title IV of ERISA. In addition, neither the
Company, nor the Bank nor a Common Control Entity (i) is a party to
a collective bargaining agreement, (ii) has maintained or
contributed to, or has participated in or agreed to participate in,
a multiemployer plan (as defined in Section 3(37) of ERISA), or
(iii) has made a complete or partial withdrawal from a
multiemployer plan (as defined in Section 3(37) of ERISA) so as to
incur withdrawal liability as defined in Section 4201 of ERISA
(without regard to subsequent reduction or waiver of such liability
under Section 4207 or 4208 of ERISA);
(h) True and complete copies of each Welfare Benefit Plan
and each Pension Benefit Plan, related trust agreements or annuity
contracts (or any other funding instruments), summary plan
descriptions, each plan, agreement, arrangement, and commitment
referred to in subsection 3.14(f) of this Section, the most recent
determination letter issued by the Internal Revenue Service with
respect to each Pension Benefit Plan, the most recent application
for a determination letter from the Internal Revenue Service with
respect to each Pension Benefit Plan and Annual Reports on Form
5500 Series filed with any governmental agency for each Welfare
Benefit Plan and each Pension Benefit Plan for the two most recent
plan years, have been furnished to Compass;
(i) All Welfare Benefit Plans, Pension Benefit Plans,
related trust agreements or annuity contracts (or any other funding
instruments), and all plans, agreements, arrangements and
commitments referred to in subsection 3.14(f) of this Section are
legally valid and binding and in full force and effect and there
are no promised increases in benefits (whether expressed, implied,
oral or written) under any of these plans nor any obligations,
commitments or understandings to continue any of these plans,
(whether expressed, implied, oral or written) except as required by
Section 4980B of the Code and Sections 601-608 of ERISA;
(j) There are no claims pending with respect to, or
under, any Pension Benefit Plan, Welfare Benefit Plan or any plan,
agreement, arrangement or commitment described in subsection
3.14(f), other than routine claims for plan benefits, and there are
no disputes or litigation pending or threatened with respect to any
such plans;
(k) No action has been taken, nor has there been a
failure to take any action that would subject any person or entity
to any liability for any income, excise or other tax or penalty in
connection with any Pension Benefit Plan, Welfare Benefit Plan or
any plan, agreement, arrangement or commitment described in
subsection 3.14(f), other than for income taxes due with respect to
benefits paid; and
(l) Except as otherwise set forth in Schedule 3.14(l),
neither the execution and delivery of this Agreement nor the
consummation of the transaction contemplated hereby will (i) result
in any payment to be made by the Company or the Bank (including,
without limitation, severance, unemployment compensation, golden
parachute (defined in Section 280G of the Code), or otherwise)
becoming due to any employee, or (ii) increase any benefits
otherwise payable under any Welfare Benefit Plan, Pension Benefit
Plan, or any plan, agreements, arrangements, and commitments
referred to in subsection 3.14(f) of this Section.
SECTION 3.15 Employment Matters. Except as disclosed on
Schedule 3.15, neither the Company nor the Bank is a party to any
oral or written contracts or agreements granting benefits or rights
to employees or any collective bargaining agreement or to any
conciliation agreement with the Department of Labor, the Equal
Employment Opportunity Commission or any federal, state or local
agency which requires equal employment opportunities or affirmative
action in employment. There are no unfair labor practice
complaints pending against the Company or the Bank before the
National Labor Relations Board and no similar claims pending before
any similar state, local or foreign agency. There is no activity
or proceeding of any labor organization (or representative thereof)
or employee group to organize any employees of the Company or the
Bank, nor of any strikes, slowdowns, work stoppages, lockouts, or
threats thereof, by or with respect to any such employees. The
Company and the Bank are in compliance in all material respects
with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours,
and neither the Company nor the Bank is engaged in any unfair labor
practice.
SECTION 3.16 Leases, Contracts and Agreements. Schedule
3.16 sets forth an accurate and complete description of all leases,
subleases, licenses, contracts and agreements to which the Company
or the Bank is a party or by which the Company or the Bank is bound
which obligate or may obligate the Company or the Bank in the
aggregate for an amount in excess of $25,000 over the entire term
of any such agreement or related contracts of a similar nature
which in the aggregate obligate or may obligate the Company or the
Bank in the aggregate for an amount in excess of $25,000 over the
entire term of such related contracts (the "Contracts"). The
Company has delivered to Compass true and correct copies of all
Contracts. For the purposes of this Agreement, the Contracts shall
be deemed not to include loans made by, repurchase agreements made
by, spot foreign exchange transactions of, bankers acceptances of,
agreements with Bank customers for trust services, or deposits by
the Company or the Bank, but does include unfunded loan commitments
and letters of credit issued by the Company or the Bank where the
borrowers' total direct and indirect indebtedness to the Bank is in
excess of $25,000. Except as set forth in Schedule 3.16, no
participations or loans have been sold which have buy back,
recourse or guaranty provisions which create contingent or direct
liabilities of the Company or the Bank. All of the Contracts are
legal, valid and binding obligations of the parties to the
Contracts enforceable in accordance with their terms, subject to
the effect of bankruptcy, insolvency, reorganization, moratorium,
or other similar laws relating to creditors' rights generally and
to general equitable principles, and are in full force and effect.
Except as described in Schedule 3.16, all rent and other payments
by the Company and the Bank under the Contracts are current, there
are no existing defaults by the Company or the Bank under the
Contracts and no termination, condition or other event has occurred
which (whether with or without notice, lapse of time or the
happening or occurrence of any other event) would constitute a
default. Each of the Company and the Bank has a good and
marketable leasehold interest in each parcel of real property
leased by it free and clear of all mortgages, pledges, liens,
encumbrances and security interests.
SECTION 3.17 Related Company Transactions. Except as set
forth on Schedule 3.17, there are no agreements, instruments,
commitments, extensions of credit, tax sharing or allocation
agreements or other contractual agreements of any kind between or
among the Company, whether on its own behalf or in its capacity as
trustee or custodian for the funds of any employee benefit plan (as
defined in ERISA), and any of its Affiliates (including the Bank).
The term "Affiliate" as used in this Agreement means, with
respect to any person, any person that, directly or indirectly,
controls, is controlled by, or is under common control with, such
person in question. For the purposes of this definition,
"control" (including, with correlative meaning, the terms
"controlled by" and "under common control with") as used with
respect to any person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise.
SECTION 3.18 Compliance with Laws. Except as set forth
on Schedule 3.18, neither the Company nor the Bank is in default in
respect to or is in violation of (i) any judgment, order, writ,
injunction or decree of any court or (ii) to the knowledge of the
Company and the Bank, any statute, law, ordinance, rule, order or
regulation of any governmental department, commission, board,
bureau, agency or instrumentality, federal, state or local,
including (for purposes of illustration and not limitation) capital
and FRB reserve requirements, and loan limitations of the
Department; and the consummation of the transactions contemplated
by this Agreement will not constitute such a default or violation
as to the Company or the Bank. The Company will notify Compass
immediately when it acquires knowledge of any default under any
statute, law, ordinance, rule, order, or regulation of any
governmental department, commission, board, bureau, agency or
instrumentality, federal, state or local. The Company and the Bank
have all permits, licenses, and franchises from governmental
agencies required to conduct their businesses as they are now being
conducted.
SECTION 3.19 Insurance. The Company and the Bank have in
effect the insurance coverage (including fidelity bonds) described
in Schedule 3.19 and have had similar insurance in force for the
last 5 years. There have been no claims under such bonds within
the last 5 years and neither the Company nor the Bank is aware of
any facts which would form the basis of a claim under such bonds.
Neither the Company nor the Bank has any reason to believe, other
than due to market conditions generally applicable to banks in the
State of Texas, that the existing fidelity coverage would not be
renewed by its carrier on substantially the same terms.
SECTION 3.20 Loans. To the knowledge of the Company and
the Bank, each loan reflected as an asset in the Financial
Statements is the legal, valid and binding obligation of the
obligor of each loan, enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to creditors' rights
generally and to general equitable principles. The Bank does not
have in its portfolio any loan exceeding its legal lending limit,
and except as disclosed on Schedule 3.20, the Bank has no known
substandard, doubtful, loss, or nonperforming loans or loans more
than thirty (30) days past due.
SECTION 3.21 Fiduciary Responsibilities. The Company and
the Bank have performed in all material respects all of their
respective duties as a trustee, custodian, guardian or as an escrow
agent in a manner which complies in all respects with all
applicable laws, regulations, orders, agreements, instruments and
common law standards.
SECTION 3.22 Patents, Trademarks and Copyrights. Except
as set forth in Schedule 3.22, neither the Company nor the Bank
require the use of any material patent, patent application,
invention, process, trademark (whether registered or unregistered),
trademark application, trade name, service mark, copyright, or any
material trade secret for the business or operations of the Company
or the Bank. The Company and the Bank own or are licensed or
otherwise have the right to use the items listed in Schedule 3.22.
SECTION 3.23 Environmental Compliance. Except as set
forth in Schedule 3.23:
(a) To the knowledge of the Company or the Bank, the
Company, the Bank and any property owned or operated by them are in
compliance with all applicable Environmental Laws (as defined in
Section 10.14(c)) and have obtained and are in compliance with all
permits, licenses and other authorizations required under any
Environmental Law. To the knowledge of the Company or the Bank,
there is no past or present event, condition or circumstance that
is likely to interfere with the conduct of the business of the
Company or the Bank in the manner now conducted relating to such
entity's compliance with Environmental Laws or constitute a
violation thereof or which would have a Material Adverse Effect
upon the Company or the Bank;
(b) Neither the Company nor any Subsidiary does now or
has leased, operated, owned, or exercised managerial functions at
any facilities or real property with respect to which such entity,
facility or real property is subject to any actual, potential, or,
to the knowledge of the Company or the Bank, threatened Proceeding
under any Environmental Law;
(c) There are no actions or Proceedings pending or, to
the knowledge of the Company or the Bank, threatened against the
Company or the Bank under any Environmental Law, and neither the
Company nor the Bank has received any notice (whether from any
regulatory body or private person) of violation, or potential or
threatened violation, of any Environmental Law;
(d) There are no actions or Proceedings pending or, to
the knowledge of the Company or the Bank, threatened under any
Environmental Law involving the release or threat of release of any
Polluting Substances (as defined in Section 10.14(d)) at or on
(i) any Property currently or in the past owned, operated, or
leased by the Company or Bank or over which the Company or the Bank
exercised managerial functions, or (ii) at any property where
Polluting Substances generated by the Company or the Bank have been
disposed;
(e) There is no Property for which the Company or the
Bank is or was required to obtain any Permit under an Environmental
Law to construct, demolish, renovate, occupy, operate, or use such
Property or any portion of it;
(f) Except as disclosed in writing to Compass, to the
knowledge of the Company or the Bank neither the Bank nor the
Company has generated any Polluting Substances and for any such
Polluting Substances properly executed manifests are on record with
them and any appropriate regulatory agency;
(g) To the knowledge of the Company or the Bank, there
has been no release of Polluting Substances in violation of any
Environmental Laws, which would require any report or notification
to any governmental or regulatory authority, in or on any Property;
(h) Neither any Property nor the Bank nor the Company is
subject to investigation or pending or, to the knowledge of the
Company or the Bank, threatened litigation by federal, state or
local officials or private litigant as a result of any previous
on-site management, treatment, storage, release or disposal of
Polluting Substances or exposure to any Polluting Substances;
(i) There are no underground or above-ground storage
tanks under or on any Property other than Property now held as
security for a loan or other indebtedness owed to the Company or
the Bank and, to the knowledge of the Company or the Bank, there
are no underground or above-ground storage tanks on any Property
now held as security for a loan or other indebtedness owed to the
Company or the Bank, which are not in conformity with Environmental
Laws and any Property previously containing such tanks has been
remediated in compliance with all Environmental Laws;
(j) There is no asbestos-containing material on any
Property other than Property now held as security for a loan or
other indebtedness owed to the Company or the Bank and, to the
knowledge of the Company or the Bank, there is no
asbestos-containing material on any Property now held as security
for a loan or other indebtedness owed to the Company or the Bank;
(k) The Company and the Bank have fully complied with the
guidelines issued by the Federal Deposit Insurance Corporation on
February 25, 1993 that require banks to investigate and regularly
review the hazardous waste conditions of property held by such bank
as security with respect to any Property securing any loan.
(l) For purposes of this Section 3.23 and Section 6.10,
"Property" includes any property (whether real or personal) which
the Company or the Bank currently or in the past has leased,
operated or owned or managed in any manner including without
limitation any property acquired by foreclosure or deed in lieu
thereof and property now held as security for a loan or other
indebtedness by the Company or the Bank.
SECTION 3.24 Regulatory Actions. Except as set forth on
Schedule 3.24, there are no actions or proceedings pending or, to
the knowledge of the Company and the Bank, threatened against the
Company or the Bank by or before the FRB, the FDIC, the U.S.
Environmental Protection Agency, the Texas Natural Resource
Conservation Commission, or any other nation or government, any
state or political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government. Except as set forth on
Schedule 3.24, neither the Bank nor the Company is subject to a
formal or informal agreement, memorandum of understanding,
enforcement action with or any type of financial assistance by any
regulatory authority having jurisdiction over such entity. Neither
the Company nor the Bank has taken or agreed to take any action or
has knowledge of any fact or circumstance that would materially
impede or delay receipt of any required regulatory approval.
Except as set forth in Schedule 3.24, the Company and the Bank have
not received or been made aware of any complaints or inquiries
under the Community Reinvestment Act, the Fair Housing Act, the
Equal Credit Opportunity Act or any other state or federal
anti-discrimination fair lending law and, to the knowledge of the
Company and the Bank, there is no fact or circumstance that would
form the basis of any such complaint or inquiry.
SECTION 3.25 Title to Properties; Encumbrances. Except
as set forth on Schedule 3.25, each of the Company and the Bank has
unencumbered, good, legal, and marketable title to all its
properties and assets, real and personal, including, without
limitation, all the properties and assets reflected in the
Financial Statements except for those properties and assets
disposed of in the ordinary course of business and consistent with
prudent banking practice since the date of the Financial
Statements. Except as set forth on Schedule 3.25, the Company has
a title policy in full force and effect from a title insurance
company which, to the best of Company's knowledge, is solvent,
insuring good and indefeasible title to all real property owned by
the Company and the Bank in favor of the Company or the Bank,
whichever is applicable. The Company has made available to Compass
all of the files and information in the possession of the Company
or the Bank concerning such properties, including any title
exceptions which might affect marketable title or value of such
property. The Company and the Bank each hold good and legal title
or good and valid leasehold rights to all assets that are necessary
for them to conduct their respective businesses as they are
currently being conducted. Except as set forth on Schedule 3.25,
the Company owns all furniture, equipment, art and other property
used to transact business presently located on its premises.
Except as set forth on Schedule 3.25, no Property has been deed
recorded or otherwise been identified in public records or should
have been recorded or so identified as containing Polluting
Substances.
SECTION 3.26 Shareholder List. The Company has provided
to Compass prior to the date of this Agreement a list of the
holders of Shares and the holders of any outstanding warrant,
option, convertible debenture or other security entitling the
holder thereof to acquire Shares as of June 30, 1995 containing the
names, addresses and number of Shares or such other securities
held of record, which is accurate in all respects as of such date,
and the Company will promptly advise Compass in writing of any
significant changes thereto.
SECTION 3.27 Section 368 Representations. To the
knowledge of the Company and the Bank, there is no present plan or
intention by any of the Shareholders to sell or otherwise dispose
of shares of Compass Common Stock received pursuant to the Merger
that would reduce all such Shareholders' holdings to a number of
shares having a total fair market value at the Effective Time of
less than forty percent (40%) of the total fair market value of all
of the Company's capital stock outstanding immediately prior to the
Effective Time.
SECTION 3.28 Employee Stock Options. Except as set forth
on Schedule 3.28, there are no Company employee stock option plans
or provisions in any other plan, program, or arrangement providing
for the issuance or grant of any other interest in respect of the
capital stock of the Company or the Bank.
SECTION 3.29 Accounting Matters. Neither the Company
nor any of its affiliates has taken or agreed to take any action
that would prevent Compass from accounting for the business
combination to be effected by the Merger as a pooling of interests,
including, without limitation, any action inconsistent with the
provisions of Exhibit B hereto. The Company has entered into and
caused each Shareholder who is an "affiliate" (as defined in SEC
Rule 405) of the Company to enter into with Compass a written
agreement in substantially the form of Exhibit C attached hereto.
SECTION 3.30 Investment Representations. The Shareholders
have executed and delivered to Compass investment representations
in substantially the form of Exhibit D attached hereto.
SECTION 3.31 Representations Not Misleading. No
representation or warranty by the Company in this Agreement, nor
any statement, summary, exhibit or schedule furnished to Compass or
Compass Texas by the Company or the Bank under and pursuant to, or
in anticipation of this Agreement, contains or will contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained herein or therein
not misleading.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
OF COMPASS
Compass hereby makes the representations and warranties set
forth in this Article IV to the Company.
SECTION 4.1 Organization and Authority.
(a) Compass is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to
conduct its business as now conducted, to own, lease and operate
its properties and assets as now owned, leased or operated and to
enter into and carry out its obligations under this Agreement.
(b) Compass is a bank holding company under the Bank
Holding Company Act of 1956, as amended, and in good standing under
all laws, rules and regulations applicable to bank holding
companies. Compass is duly qualified or licensed and in good
standing in each jurisdiction which requires such qualification
where it owns or leases properties or conducts business.
SECTION 4.2 Authority Relative to Agreement. Compass has
full corporate power and authority and no further corporate
proceedings on the part of Compass are necessary to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby, all of which have been duly and validly
authorized by Compass' Board of Directors. This Agreement has been
duly executed and delivered by Compass and is a duly authorized,
valid, legally binding and enforceable obligation of Compass,
subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws relating to creditors' rights
generally and general equitable principles, and subject to such
shareholder approvals and such approval of regulatory agencies and
other governmental authorities having authority over Compass as may
be required by statute or regulation. Compass is not in violation
of or default under its Certificate of Incorporation or By-Laws or
any agreement, document or instrument under which Compass is
obligated or bound, or any law, order, judgment, injunction, award,
decree, statute, rule, ordinance or regulation applicable to
Compass or any of its Subsidiaries, the violation or breach of
which could have a Material Adverse Effect on Compass and its
Subsidiaries taken as a whole. Except as set forth on
Schedule 4.2, neither the execution, delivery nor performance of
this Agreement in its entirety, nor the consummation of all the
transactions contemplated hereby, following the receipt of such
approvals as may be required from the SEC, the FRB, the FDIC, and
the Department will (i) violate (with or without the giving of
notice or passage of time), any law, order, writ, judgment,
injunction, award, decree, rule, statute, ordinance or regulation
applicable to Compass, or (ii) be in conflict with, result in a
breach or termination of any provision of, cause the acceleration
of the maturity of any debt or obligation pursuant to, constitute
a default (or give rise to any right of termination, cancellation
or acceleration) under, or result in the creation of any security
interest, lien, charge or other encumbrance upon any property or
assets of Compass pursuant to, any terms, conditions or provisions
of any note, license, instrument, indenture, mortgage, deed of
trust or other agreement or understanding or any other restriction
of any kind or character, to which Compass is a party or by which
any of its assets or properties are bound. Except as set forth on
Schedule 4.2, there are no proceedings pending or, to the knowledge
of Compass, threatened, against Compass, at law or in equity or
before any foreign, federal, state, municipal or other governmental
court, department, commission, board, bureau, agency,
instrumentality or other person which may result in liability to
the Company or the Bank on the consummation of the transactions
contemplated hereby or which would prevent or delay such
consummation. Except as set forth in Schedule 4.2, or as
contemplated hereby, the corporate existence, business,
organization, assets, licenses, permits, authorizations and
contracts of Compass will not be terminated or impaired by reason
of the execution, delivery or performance by Compass of this
Agreement or consummation by Compass of the transactions
contemplated hereby, assuming receipt of the required regulatory
approvals.
SECTION 4.3 Financial Reports. Compass has previously
furnished the Company and the Shareholders a true and complete copy
of (i) the 1994 Annual Report to Shareholders, which report (the
"Compass 1994 Annual Report") includes, among other things,
consolidated statements of financial position of Compass and its
Subsidiaries as of December 31, 1994 and 1993, the related
consolidated statements of income, shareholders' equity and cash
flows for the two years then ended and (ii) Compass's quarterly
report on Form 10-Q for the quarter ended June 30, 1995 (the
"Quarterly Report") which report includes among other things
consolidated statements of financial position of Compass and its
Subsidiaries as of June 30, 1995 and 1994, respectively, and the
related consolidated statements of income and cash flows for the
six month periods ending June 30, 1995 and 1994. The financial
statements contained in the Compass 1994 Annual Report and such
Quarterly Report have been prepared in conformity with GAAP applied
on a basis consistent with prior periods. The consolidated
statements of financial position of Compass and its subsidiaries as
of December 31, 1994 and 1993 contained in the Compass 1994 Annual
Report fairly present the consolidated financial condition of
Compass and its Subsidiaries as at the dates thereof, and the
related consolidated statements of income, shareholders' equity and
cash flows of Compass and its Subsidiaries contained therein fairly
present the results of operations and cash flows thereof for the
fiscal years then ended. The consolidated financial statements of
Compass and its Subsidiaries as of June 30, 1995 and 1994,
contained in the Quarterly Report, fairly present the financial
condition, the results of the operations and cash flows thereof as
of such dates and for the periods indicated. For the purposes of
this Agreement, all financial statements referred to in this
Section 4.3 shall be deemed to include any notes to such financial
statements. Compass has made all filings required to be made in
compliance with the Exchange Act. None of the information
contained in the Compass 1994 Annual Report or the Quarterly Report
is false or misleading with respect to any material fact, or omits
to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. Until the Closing, Compass will provide
the Shareholders with copies of all of the periodic filings filed
by Compass after the date hereof with the Securities and Exchange
Commission pursuant to Section 13(a) of the Securities Exchange Act
of 1934, as amended, including, but not limited to, all Forms 8-K,
Forms 10-Q and Forms 10-K.
SECTION 4.4 Capitalization. The shares of Compass Common
Stock to be issued pursuant to this Agreement, when so issued, will
be duly and validly authorized and issued, fully paid and
nonassessable, and not issued in violation of any preemptive
rights. As of June 30, 1995, Compass had 38,110,995 shares of
common stock, $2.00 per share par value, issued and outstanding,
none of which are held as treasury stock. None of the shares of
Compass Common Stock to be issued pursuant to this Agreement will
be subject to any lien, charge, encumbrance, claim, rights of
others, mortgage, pledge or security interest, and none will be
subject to any agreements or understandings among any persons with
respect to the voting or transfer of such shares of Compass Common
Stock except as contemplated hereby.
SECTION 4.5 Consents and Approvals. No prior consent,
approval or authorization of, or declaration, filing or
registration with any person, domestic or foreign, is required of
or by Compass in connection with the execution, delivery and
performance by Compass of this Agreement and the transactions
contemplated hereby or the resulting change in control of the
Company and the Bank, except the filing of Articles of Merger under
the TBCA, the filing of the Certificate of Merger under the GCL,
and such approvals as may be required from the FRB, the Department
and the FDIC.
SECTION 4.6 Availability of Compass Common Stock.
Compass has available a sufficient number of authorized and
unissued shares of Compass Common Stock to pay the Merger
Consideration, and Compass will not take any action during the term
of this Agreement that will cause it not to have a sufficient
number of authorized and unissued shares of Compass Common Stock to
pay the Merger Consideration.
SECTION 4.7 Representations Not Misleading. No
representation or warranty by Compass in this Agreement, nor any
statement or exhibit furnished to the Company or the Bank under and
pursuant to, or in anticipation of this Agreement, contains or will
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE V.
COVENANTS OF THE COMPANY
SECTION 5.1 Affirmative Covenants of the Company. For so
long as this Agreement is in effect, the Company shall, and shall
use its best efforts to cause its Subsidiaries, including the Bank
(collectively, the "Acquired Companies") to, from the date of
this Agreement to the Closing, except as specifically contemplated
by this Agreement:
(a) operate and conduct the businesses of the Acquired
Companies in the ordinary course of business and consistent with
prudent banking practices;
(b) preserve intact the Acquired Companies' corporate
existence, business organization, assets, licenses, permits,
authorizations, and business opportunities;
(c) comply with all material contractual obligations
applicable to the Acquired Companies' operations;
(d) maintain all the Acquired Companies' properties in
good repair, order and condition, reasonable wear and tear
excepted, and maintain the insurance coverages described in
Schedule 5.1(d) (which shall list all Property insured by such
coverages) or obtain comparable insurance coverages from reputable
insurers which are consistent with the existing insurance
coverages;
(e) in good faith and in a timely manner (i) cooperate
with Compass and Compass Texas in satisfying the conditions in this
Agreement, (ii) assist Compass and Compass Texas in obtaining as
promptly as possible all consents, approvals, authorizations and
rulings, whether regulatory, corporate or otherwise, as are
necessary for Compass and Compass Texas and the Company (or any of
them) to carry out and consummate the transactions contemplated by
this Agreement, including all consents, approvals and
authorizations required by any agreement or understanding existing
at the Closing between the Company and any governmental agency or
other third party, (iii) furnish information concerning the
Acquired Companies not previously provided to Compass required for
inclusion in any filings or applications that may be necessary in
that regard and (iv) perform all acts and execute and deliver all
documents necessary to cause the transactions contemplated by this
Agreement to be consummated at the earliest possible date;
(f) timely file with the FRB, the Department, and the
FDIC, all financial statements and other reports required to be so
filed by any of the Acquired Companies and to the extent permitted
by applicable law, promptly thereafter deliver to Compass copies of
all financial statements and other reports required to be so filed;
(g) comply in all material respects with all applicable
laws and regulations, domestic and foreign;
(h) promptly notify Compass upon obtaining knowledge of
any default, event of default or condition with which the passage
of time or giving of notice would constitute a default or an event
of default under the Company Loan Documents and promptly notify and
provide copies to Compass of any material written communications
concerning the Company Loan Documents;
(i) between the date of this Agreement and Closing,
promptly give written notice to Compass upon obtaining knowledge of
any event or fact that would cause any of the representations or
warranties of the Company contained in or referred to in this
Agreement to be untrue or misleading in any material respect;
(j) deliver to Compass a list (Schedule 5.1(j)), dated as
of the Effective Time, showing (i) the name of each bank or
institution where the Company and the Bank have accounts or safe
deposit boxes, (ii) the name(s) in which such accounts or boxes are
held and (iii) the name of each person authorized to draw thereon
or have access thereto;
(k) deliver to Compass a list (Schedule 5.1(k)), dated as
of the Effective Time, showing all liabilities of Company and the
Bank, except those arising in the ordinary course of their
respective businesses, incurred since the Balance Sheet Date,
certified by an officer of Company;
(l) promptly notify Compass of any material change or
inaccuracies in any data previously given or made available to
Compass or Compass Texas pursuant to this Agreement; and
(m) provide access, to the extent that the Company or the
Bank have the right to provide access, to any or all Property (as
defined in Section 3.23) so as to enable Compass to physically
inspect any structure or components of any structure on such
Property, including without limitation surface and subsurface
testing and analyses.
SECTION 5.2 Negative Covenants of the Company. Except
with the prior written consent of Compass or as otherwise
specifically permitted by this Agreement, the Company will not and
will use its best efforts not to permit the Bank, or any other
Subsidiary of the Company, to, from the date of this Agreement to
the Closing:
(a) make any amendment to its Articles of Incorporation
or Association or Bylaws;
(b) make any change in the methods used in allocating and
charging costs, except as may be required by applicable law,
regulation or GAAP and after notice to Compass;
(c) make any change in the number of shares of the
capital stock issued and outstanding, or issue, reserve for
issuance, grant, sell or authorize the issuance of any shares of
its capital stock or subscriptions, options, warrants, calls,
rights or commitments of any kind relating to the issuance or sale
of or conversion into shares of its capital stock;
(d) contract to create any obligation or liability
(absolute, accrued, contingent or otherwise) except in the ordinary
course of business and consistent with prudent banking practices;
(e) contract to create any mortgage, pledge, lien,
security interest or encumbrances, restrictions, or charge of any
kind (other than statutory liens for which the obligations secured
thereby shall not become delinquent), except in the ordinary course
of business and consistent with prudent banking practices;
(f) cancel any debts, waive any claims or rights of value
or sell, transfer, or otherwise dispose of any of its material
properties or assets, except in the ordinary course of business and
consistent with prudent banking practices;
(g) sell any real estate owned as of the date of this
Agreement or acquired thereafter, which real estate qualifies as
"other real estate owned" under accounting principles applicable
to it, except in the ordinary course of business and consistent
with prudent banking practices and applicable banking laws and
regulations;
(h) dispose of or permit to lapse any rights to the use
of any material trademark, service mark, trade name or copyright,
or dispose of or disclose to any person other than its employees
any material trade secret not theretofore a matter of public
knowledge;
(i) except for regular salary increases granted in the
ordinary course of business within the Company's or the Bank's 1995
budget and consistent with prior practices, grant any increase in
compensation or directors' fees, or pay or agree to pay or accrue
any bonus or like benefit to or for the credit of any director,
officer, employee or other person or enter into any employment,
consulting or severance agreement or other agreement with any
director, officer or employee, or adopt, amend or terminate any
Employee Benefit Plan or change or modify the period of vesting or
retirement age for any participant of such a plan;
(j) declare, pay or set aside for payment any dividend or
other distribution or payment in respect of shares of its capital
stock; provided, however, that the Bank may pay dividends to the
Company in the amounts necessary to enable the Company to pay the
principal and interest due to the Shareholders in connection with
their loan to the Company;
(k) except through settlement of indebtedness,
foreclosure, the exercise of creditors' remedies or in a fiduciary
capacity, acquire the capital stock or other equity securities or
interest of any person;
(l) make any capital expenditure or a series of
expenditures of a similar nature in excess of $25,000 in the
aggregate, other than as set forth in Schedule 5.2(l);
(m) make any income tax or franchise tax election or
settle or compromise any federal, state, local or foreign income
tax or franchise tax liability, or, except in the ordinary course
of business consistent with prudent banking practices, make any
other tax election or settle or compromise any other federal,
state, local or foreign tax liability;
(n) except for negotiations and discussions between the
parties hereto relating to the transactions contemplated by this
Agreement or as otherwise permitted hereunder, enter into any
transaction, or enter into, modify or amend any contract or
commitment other than in the ordinary course of business and
consistent with prudent banking practices;
(o) except as contemplated by this Agreement, adopt a
plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization, or other
reorganization or business combination of the Company or the Bank;
(p) issue any certificates of deposit except in the
ordinary course of business and in accordance with prudent banking
practices;
(q) make any investments except in the ordinary course of
business and in accordance with prudent banking practices;
(r) modify, amend, waive or extend either the Company
Loan Documents or any rights under such agreements;
(s) modify any outstanding loan, make any new loan, or
acquire any loan participation, unless such modification, new loan,
or participation is made in the ordinary course of business and in
accordance with prudent banking practices;
(t) sell or contract to sell any part of the Bank
premises;
(u) change any fiscal year or the length thereof;
(v) take or agree to take any action that would prevent
Compass from accounting for the business combination to be effected
by the Merger as a pooling of interests, including, without
limitation, any action inconsistent with the provisions of Exhibit
B hereto; or
(w) enter into any agreement, understanding or
commitment, written or oral, with any other person which is in any
manner inconsistent with the obligations of the Company and its
directors and the Bank under this Agreement or any related written
agreement.
Nothing contained in this Section 5.2 or in Section 5.1 is
intended to influence the general management or overall operations
of the Company or the Bank in a manner not permitted by applicable
law and the provisions thereof shall automatically be reduced in
compliance therewith.
ARTICLE VI.
ADDITIONAL AGREEMENTS
SECTION 6.1 Access To, and Information Concerning,
Properties and Records. During the pendency of the transactions
contemplated hereby, the Company shall, to the extent permitted by
law, give Compass, its legal counsel, accountants and other
representatives reasonable access, during normal business hours,
throughout the period prior to the Closing, to all of the Company's
and the Bank's properties, books, contracts, commitments and
records, permit Compass to make such reasonable inspections
(including without limitation with regard to such properties
physical inspection of the surface and subsurface thereof and any
structure thereon) as they may require and furnish to Compass
during such period all such information concerning the Company and
the Bank and their affairs. All information disclosed or provided
by the Company to, or otherwise obtained regarding the Company by,
Compass shall be held confidential by Compass and its
representatives, except to the extent counsel to Compass has
advised it such information either (i) is required to or should be
disclosed in filings with regulatory agencies or governmental
authorities or (ii) was already public information when provided to
Compass. In the event this Agreement is terminated pursuant to the
provisions of Article VIII, upon the written request of the
Company, Compass agrees to destroy or return to the Company all
copies of such confidential information.
SECTION 6.2 Filing of Regulatory Approvals. As soon as
reasonably practicable, Compass shall file all notices and
applications to the FRB, the Department and the FDIC which Compass
deems necessary or appropriate to complete the transactions
contemplated herein, including the merger of the Bank and Compass
Bank-Dallas, a Texas state bank and indirect wholly-owned
subsidiary of Compass ("Compass Bank"). Compass will deliver to
the Company, and the Company will deliver to Compass, copies of all
non-confidential portions of any such applications and all
non-confidential correspondence to and from regulatory authorities
concerning such applications.
SECTION 6.3 Miscellaneous Agreements and Consents.
Subject to the terms and conditions of this Agreement, Compass and
the Company agree to use all reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable under applicable laws and
regulations to consummate and make effective, as soon as
practicable after the date hereof, the transactions contemplated by
this Agreement. Compass and the Company shall use their respective
best efforts to obtain or cause to be obtained consents of all
third parties and governmental and regulatory authorities necessary
or desirable for the consummation of the transactions contemplated
herein.
SECTION 6.4 Company Indebtedness. Prior to the Effective
Time, the Company shall pay all regularly scheduled payments on all
Company Indebtedness and shall cooperate with Compass in taking
such actions as are reasonably appropriate or necessary in
connection with the redemption, prepayment, modification,
satisfaction or elimination of any outstanding indebtedness of the
Company or the Bank with respect to which a consent is required to
be obtained to effectuate the Merger and the transactions
contemplated by this Agreement and has not been so obtained.
SECTION 6.5 Best Good Faith Efforts. All parties hereto
agree that the parties will use their best good faith efforts to
secure all regulatory approvals necessary to consummate the Merger
and other transactions provided herein and to satisfy the other
conditions to Closing contained herein.
SECTION 6.6 Exclusivity. The Company shall not solicit,
entertain or negotiate with respect to any offer to acquire the
Company or the Bank from any other person. During the term of this
Agreement, neither the Company nor the Bank shall provide
information to any other person in connection with a possible
acquisition of the Company or the Bank. Immediately upon receipt
of any such unsolicited offer, the Company will communicate to
Compass the terms of any proposal or request for information and
the identity of parties involved.
SECTION 6.7 Public Announcement. Subject to written
advice of counsel with respect to legal requirements relating to
public disclosure of matters related to the subject matter of this
Agreement, the timing and content of any announcements, press
releases or other public statements concerning the proposal
contained herein will occur upon, and be determined by, the mutual
consent of the Company and Compass.
SECTION 6.8 Employee Benefit Plans. Compass presently
intends that, after the Merger, Compass Texas and the Bank will not
make additional contributions to the Employee Benefit Plans.
However, Compass agrees that the employees of the Company and the
Bank will be entitled to participate as new employees in the
employee welfare and pension benefit plans maintained for employees
of Compass Bank and its Affiliates, in accordance with their
respective terms. Compass further agrees that employees of the
Company and the Bank will be entitled to credit for prior service
with the Company and the Bank for purposes of calculating vacation
benefits and sick time. Employees of the Company and the Bank will
not receive any credit for prior service with the Company or the
Bank with respect to the employee stock ownership plan, 401(k)
plan, retirement plan or any other defined ownership plan or
defined benefit plan now or hereafter maintained by Compass for the
benefit of any of the employees of Compass and its Affiliates.
SECTION 6.9 Merger of Bank. Compass presently intends to
cause the Bank to merge into Compass Bank immediately after the
Merger, and the Company agrees to use its best efforts to cause the
Bank to execute documents and take actions (conditioned on the
Merger being effective) and otherwise cooperate with Compass during
the time the Merger transaction is pending in order to facilitate
such merger of the Bank into Compass Bank immediately after the
Closing.
SECTION 6.10 Environmental Investigation; Right to
Terminate Agreement. (a) Compass and its consultants, agents and
representatives, shall have the right to the same extent that the
Company or the Bank has such right, but not the obligation or
responsibility, to inspect the Property to the extent that the
Company and the Bank have the right to permit Compass and its
consultants, agents and representatives to inspect the Property,
including, without limitation, conducting asbestos surveys and
sampling, environmental assessments and investigations, and other
environmental surveys and analyses including soil and ground
sampling ("Environmental Inspections") at any time and shall
complete such inspections on or prior to the 45th day after the
date hereof. Compass shall notify the Company prior to any
physical inspections of Property, and the Company may place
reasonable restrictions on the time of such inspections. If, as a
result of any such Environmental Inspection, further investigation
("secondary investigation") including, without limitation, test
borings, soil, water and other sampling is deemed desirable by
Compass, Compass shall notify the Company of the Properties on
which it intends to conduct a secondary investigation on or prior
to the 52nd day after the date hereof. Compass shall notify the
Company of any Properties that are not acceptable and require
remediation on or prior to the 102nd day after the date hereof.
With respect to any Property which is owned, operated or
leased by the Company or the Bank or over which the Company or the
Bank has managerial control, including without limitation the
Company's and the Bank's premises and other real estate owned
("Controlled Property"), that Compass has notified the Company is
not acceptable and requires remediation, the Company shall promptly
prepare a remediation plan acceptable to Compass and obtain
approval of such remediation plan by the Texas Natural Resource
Conservation Commission or any other appropriate governmental
authority ("Environmental Regulatory Authority") on or prior to
the 240th day after the date hereof. Promptly following the
preparation of any such remediation plan and its approval by the
appropriate Environmental Regulatory Authority, the Company shall
perform the remediation contemplated by any such plan. In the
event that the Company is unable to obtain the approval of any such
remediation plan within the time period described above, any such
approved remediation plan is not acceptable to Compass, the Company
refuses or fails to conduct remediation in accordance with any such
approved plan on or prior to the 240th day after the date hereof,
or the applicable Environmental Regulatory Authority disapproves of
the results of any such remediation conducted by the Company,
Compass shall have the right to terminate this Agreement pursuant
to written notice to the Company on or prior to the 10th business
day after the date the Company advises Compass in writing that, as
applicable, the Company has been unable to obtain timely approval
of any remediation plan, that any such approved remediation plan
has been obtained, that any such Controlled Property has been
remediated by the Company but the applicable Environmental
Regulatory Authority does not approve the results of the
remediation, or that the Company does not intend to remediate or
has not timely remediated any such Controlled Property.
With respect to any Property other than a Controlled Property
("Collateral Property") that Compass has notified the Company is
not acceptable and requires remediation, the Company agrees
promptly to request the person ("Third Party Owner") who owns,
operates, leases or otherwise exercises managerial control over any
such Collateral Property to remediate such Collateral Property
pursuant to a remediation plan approved by the appropriate
Environmental Regulatory Authority on or prior to the 240th day
after the date hereof. If the Third Party Owner's approved
remediation plan is not acceptable to Compass, Compass shall have
the right to terminate this Agreement within five business days
after receiving notice and a copy of the approved remediation plan.
In the event that the Third Party Owner remediates the Collateral
Property but the applicable Environmental Regulatory Authority does
not approve the results of the remediation or obtains the approval
by the appropriate Environmental Regulatory Authority of a
remediation plan but is unable to complete the remediation within
the time period described above, the Company shall so advise
Compass in writing of such Third Party Owner's attempted
remediation or approved but unperformed remediation plan, and
Compass shall have the right to terminate this Agreement within ten
business days after the date of receiving such written notice from
the Company. If a Third Party Owner refuses or fails to conduct
any remediation or obtain any approved remediation plan with
respect to any Collateral Property, the Company agrees to obtain a
written estimate ("Remediation Estimate") from an environmental
professional acceptable to Compass of all costs of remediating any
such Collateral Property (including the costs of preparing a
remediation plan acceptable to Compass and approved by the
appropriate Environmental Regulatory Authority). A remediation
plan prepared by the Third Party Owner and acceptable to Compass
may be the basis of the Remediation Estimate. Compass shall have
the right to terminate this Agreement by written notice to the
Company within ten business days after receipt from the Company of
any Remediation Estimate for a particular Collateral Property.
Notwithstanding the foregoing, and without limiting any rights of
Compass to terminate this Agreement, the Company shall not be
obligated to incur aggregate expenditures in excess of $150,000 in
connection with preparing and obtaining approval by the appropriate
Environmental Regulatory Authority of remediation plans with
respect to Controlled Properties and in connection with obtaining
Remediation Estimates in connection with Collateral Properties.
(b) Each party hereto hereby agrees to indemnify and hold
harmless the other party hereto and its affiliates for any claims
for damage to the Property or injury or death to persons arising in
connection with any Environmental Inspection or secondary
investigation to the extent such damage, injury or death is
directly or indirectly attributable to the negligent actions or
negligent omissions of such indemnifying party. Neither Compass
nor Compass Texas shall have any liability or responsibility of any
nature whatsoever for the results, conclusions or other findings
related to any Environmental Inspection, secondary investigation or
other environmental survey. If this Agreement is terminated, then
except as otherwise required by law, neither Compass nor Compass
Texas shall have any obligation to make any reports to any
governmental authority of the results of any Environmental
Inspection, secondary investigation or other environmental survey,
but such reporting shall remain the responsibility of and within
the discretion of the Company or the Bank, as the case may be.
Neither Compass nor Compass Texas shall have any liability to the
Company or its Subsidiaries for making any report of such results
to any governmental authority.
(c) Compass shall have the right to terminate this
Agreement in the following circumstances: (i) the Company's breach
of any representation or warranty set forth in Section 3.23; (ii)
the factual substance of any warranty or representation set forth
in Section 3.23 is not true and accurate in all material respects
irrespective of the knowledge or lack of knowledge of the Company
or the Bank; (iii) the results of such Environmental Inspection,
secondary investigation or other environmental survey are
disapproved by Compass because the Environmental Inspection,
secondary investigation or other environmental survey identifies
material violations or potential material violations of
Environmental Laws; (iv) the Environmental Inspection, secondary
investigation or other environmental survey identifies any past or
present event, condition or circumstance that would or potentially
would require remedial or cleanup action which, when aggregated
with any other expenditures which may be incurred in connection
with this subsection (iv) or subsection (vi) below, may require
expenditures in excess of $150,000 in connection with (1)
remediation of any Property, (2) preparing and obtaining approval
by the appropriate Environmental Regulatory Authority of
remediation plans with respect to Controlled Properties, or (3)
obtaining Remediation Estimates in connection with Collateral
Properties; (v) the presence of any underground or above-ground
storage tank in, on or under any Property which is not registered
properly with appropriate governmental authorities and otherwise
entitled to applicable governmental remediation funds or which has
resulted in a release of any Polluting Substances or which
otherwise is in violation of an Environmental Law; (vi) the
presence of any asbestos-containing material in, on or under any
Property, the removal of which, when aggregated with any other
expenditures which may be incurred in connection with this
subsection (vi) or subsection (iv) above, may require expenditures
in excess of $150,000 in connection with (1) remediation of any
Property, (2) preparing and obtaining approval by the appropriate
Environmental Regulatory Authority of remediation plans with
respect to Controlled Properties, or (iii) obtaining Remediation
Estimates in connection with Collateral Properties.; or (vii)
Compass is not permitted to conduct an Environmental Inspection or
secondary investigation of any Property to the extent it deems
appropriate.
(d) The Company agrees to make available to Compass and
its consultants, agents and representatives all documents and other
material relating to environmental conditions of the Property
including, without limitation, the results of other environmental
inspections and surveys. The Company also agrees that all
engineers and consultants who prepared or furnished such reports
may discuss such reports and information with Compass and shall be
entitled to certify the same in favor of Compass and its
consultants, agents and representatives and make all other data
available to Compass and its consultants, agents and
representatives. Compass agrees to provide the Company with a copy
of all environmental reports prepared by its consultants as a
result of the Environmental Inspections.
SECTION 6.11 Cooperation on Texas Receipts. The Company
and Compass agree to cooperate in good faith and to use their best
efforts, and the Company agrees to take action reasonably requested
by Compass, so as to cause the Company not to have any Texas gross
receipts, including dividends from the Bank, for purposes of Texas
franchise taxes after the date of incorporation of Compass Texas.
SECTION 6.12 Employment Agreement. Compass Bank, on the
one hand, and W.H. Ellis, on the other hand, have executed and
delivered an employment agreement in substantially the form of
Exhibit E attached hereto pursuant to which, subject to
consummation of the transactions contemplated by this Agreement,
Compass Bank has agreed to employ such person and such person has
agreed not to solicit the employees or customers of Compass or
Compass Bank, and to keep confidential certain information about
Compass, Compass Bank, the Company and the Bank.
SECTION 6.13 Rights Agreement. Immediately prior to or at
the Effective Time, Compass and the Shareholders agree to enter
into a rights agreement substantially in the form attached hereto
as Exhibit F ("Rights Agreement").
SECTION 6.14 Debt Owed to Shareholders. At or immediately
prior to the Effective Time, Compass shall pay or cause or permit
to be paid to the Shareholders all of the outstanding principal
balance of the loan from the Shareholders to the Company in the
original principal amount of $200,000.
SECTION 6.15 Employee Bonuses. Unless paid by the Bank
prior to the Effective Time, Compass agrees to cause to be paid to
the employees of the Bank the 1996 bonuses set forth on Schedule
6.15 prorated through the Effective Time.
ARTICLE VII.
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1 Conditions to Each Party's Obligation to
Effect the Merger. The respective obligations of each party to
effect the Merger are subject to the satisfaction or waiver of the
following conditions prior to the Effective Time:
(a) the receipt of regulatory approvals and the
expiration of any applicable waiting period with respect thereto.
Such approvals shall not have imposed any condition or requirement
which in the judgment of Compass would adversely impact the
economic or business benefits of the transactions contemplated by
this Agreement or otherwise would in the judgment of Compass be so
burdensome as to render inadvisable the consummation of the Merger;
and
(b) the Closing will not violate any injunction, order or
decree of any court or governmental body having competent
jurisdiction.
SECTION 7.2 Conditions to the Obligations of Compass and
Compass Texas to Effect the Merger.
The obligations of Compass and Compass Texas to effect the
Merger are subject to the satisfaction or waiver of the following
conditions prior to the Effective Time:
(a) all representations and warranties of the Company
shall be true and correct in all material respects as of the date
hereof and at and as of the Closing, with the same force and effect
as though made on and as of the Closing;
(b) the Company shall have performed in all material
respects all obligations and agreements and in all material
respects complied with all covenants and conditions, contained in
this Agreement to be performed or complied with by it prior to the
Effective Time;
(c) there shall not have occurred a Material Adverse
Effect with respect to the Company and the Bank taken as a whole;
(d) the directors of the Company and the Bank shall have
delivered to Compass an instrument dated the Effective Time
releasing the Company and the Bank from any and all claims of such
directors (except as to their deposits and accounts, and as to
rights of indemnification pursuant to the Articles of Incorporation
of the Company or the Bank) and shall have delivered to Compass
their resignations as directors of the Company and the Bank;
(e) the officers of the Company and the Bank set forth on
Schedule 10.13 shall have delivered to Compass an instrument dated
the Effective Time releasing the Company and the Bank from any and
all claims of such officers (except as to deposits and accounts and
accrued compensation permitted by their respective agreements and
rights of indemnification pursuant to the Articles of Incorporation
of the Company or the Bank);
(f) Compass shall have received the opinions of counsel to
the Company acceptable to it as to the matters set forth on
ExhibitEG attached hereto;
(g) Compass shall have received a letter from KPMG Peat
Marwick, L.L.P., within 30 days after the date of this Agreement
and another letter from KPMG Peat Marwick, L.L.P., dated as of the
Effective Time, each to the effect that the Merger will qualify for
pooling-of-interests accounting treatment if closed and consummated
in accordance with this Agreement;
(h) the aggregate principal amount of all Company
Indebtedness shall not exceed $200,000;
(i) The Company shall have delivered to Compass a
schedule of all transactions in the capital stock (or instruments
exercisable for or convertible into capital stock) of the Company
of which the Company has knowledge from and including the date of
this Agreement through the Effective Time;
(j) Compass shall have determined, in its sole judgment,
that the liabilities set forth on Schedule 5.1(k) do not have a
Material Adverse Effect; and
(k) Compass shall have received as investment
representation certificate in substantially the form of Exhibit D
from each of the Shareholders dated as of the Effective Time.
(l) Compass shall have received certificates dated as of
the Closing executed by the Chairman of the Board of the Company
and by the Chairman of the Board of the Bank, and the Secretary or
Cashier of the Company and the Bank, respectively, certifying in
such reasonable detail as Compass may reasonably request, to the
effect described in Sections 7.2(a), (b), (c) and (h).
SECTION 7.3 Conditions to the Obligations of the Company
to Effect the Merger. The obligations of the Company to effect the
Merger are subject to the satisfaction or waiver of the following
conditions prior to the Effective Time:
(a) all representations and warranties of Compass
contained herein shall be true and correct in all material respects
as of the date hereof and at and as of the Closing, with the same
force and effect as though made on and as of the Closing;
(b) Compass and Compass Texas shall have performed in all
material respects all obligations and agreements and in all
material respects complied with all covenants and conditions
contained in this Agreement to be performed or complied with by
either of them prior to the Effective Time; and
(c) the Company shall have received the opinion of
counsel to Compass and Compass Texas acceptable to it, as to the
matters set forth on Exhibit H attached hereto;
(d) The Bank and the Company shall have delivered to the
directors and officers of the Company and the Bank, covered by
Sections 7.2(d) and (e), an instrument dated the Effective Time
releasing such directors from any and all claims of the Company and
the Bank (except as to indebtedness or other contractual
liabilities); provided, however, that such releases shall not
release an action against such directors or officers by Compass
Texas or Compass in connection with the transactions contemplated
by this Agreement;
(e) the Shareholders shall have received the Merger
Consideration payable pursuant to Section 1.6(b);
(f) the Company shall have received certificates dated the
Closing, executed by an appropriate officer of Compass and by the
Chairman of the Board or President and by the Chief Financial
Officer or Secretary of Compass Texas, respectively, certifying, in
such detail as the Company may reasonably request, to the effect
described in Sections 7.3(a) and (b); and
(g) the Rights Agreement shall have been executed by
Compass.
ARTICLE VIII.
TERMINATION; AMENDMENT; WAIVER
SECTION 8.1 Termination. This Agreement may be
terminated and the Merger contemplated hereby may be abandoned at
any time prior to the Effective Time:
(a) by mutual written consent duly authorized by the
Boards of Directors of Compass and the Company;
(b) by Compass (i) if Compass learns or becomes aware of
a state of facts or breach or inaccuracy of any representation or
warranty of the Company contained in Article III which constitutes
a Material Adverse Effect, (ii) pursuant to Section 6.10, or (iii)
if any of the conditions to Closing contained in Section 7.1 or 7.2
are not satisfied or waived in writing by Compass;
(c) by the Company (i) if the Company learns or becomes
aware of a state of facts or breach or inaccuracy of any
representation or warranty of Compass contained in Article IV which
constitutes a Material Adverse Effect as to Compass, (ii) pursuant
to Section 6.10, or (iii) if the conditions to Closing contained in
Section 7.1 or 7.3 are not satisfied or waived in writing by the
Company;
(d) by Compass or the Company if the Effective Time shall
not have occurred on or before the expiration of nine months from
the date of this Agreement or such later date agreed to in writing
by Compass and the Company; or
(e) by Compass or the Company if any court of competent
jurisdiction in the United States or other United States (federal
or state) governmental body shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or
other action shall have been final and nonappealable.
SECTION 8.2 Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to
Section 8.1 hereof, this Agreement shall forthwith become void and
have no effect, without any liability on the part of any party or
its directors, officers or shareholders, other than the provisions
of this Section 8.2 and Sections 6.1 and 9.1. Nothing contained in
this Section 8.2 shall relieve any party from liability for any
breach of this Agreement.
SECTION 8.3 Amendment. (a) To the extent permitted by
applicable law, this Agreement may be amended by action taken by or
on behalf of the Board of Directors of the Company, Compass and, if
required, Compass Texas at any time but, no amendment shall be made
which reduces the Merger Consideration or which materially and
adversely affects the rights of the Shareholders hereunder without
any required approval of such Shareholders. This Agreement may not
be amended except by an instrument in writing signed on behalf of
all the parties.
(b) The parties hereto hereby agree to enter into an
amendment of this Agreement for the purpose of adding Compass Texas
as a party hereto.
SECTION 8.4 Extension; Waiver. At any time prior to the
Effective Time, the parties may mutually agree to (i) extend the
time for the performance of any of the obligations or other acts of
the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document,
certificate or writing delivered pursuant hereto, or (iii) waive
compliance with any of the agreements or conditions contained
herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE IX.
SURVIVAL
SECTION 9.1 Survival of Representations and Warranties.
The parties hereto agree that all of their respective
representations and warranties contained in this Agreement shall
not survive after the Effective Time.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 Expenses. All costs and expenses incurred
in connection with the transactions contemplated by this Agreement,
including without limitation attorneys' fees, accountants' fees,
other professional fees and costs related to expenses of officers
and directors of the Company and the Bank, shall be paid by the
party incurring such costs and expenses.
SECTION 10.2 Brokers and Finders. All negotiations on
behalf of Compass and the Company relating to this Agreement and
the transactions contemplated by this Agreement have been carried
on by the parties hereto and their respective agents directly
without the intervention of any other person in such manner as to
give rise to any claim against Compass, Compass Texas, the Company
or the Bank for financial advisory fees, brokerage or commission
fees, finder's fees or other like payment in connection with the
consummation of the transactions contemplated hereby, and each
party hereto hereby agrees to and shall indemnify the other parties
hereto against any liability arising from any such fee or payment
incurred by such party.
SECTION 10.3 Entire Agreement; Assignment. This
Agreement (a) constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, among
the parties or any of them with respect to the subject matter
hereof, and (b) shall not be assigned by operation of law or
otherwise, provided that Compass may assign its rights and
obligations or those of Compass Texas to any direct or indirect,
wholly-owned, subsidiary of Compass, but no such assignment shall
relieve Compass of its obligations hereunder if such assignee does
not perform such obligations.
SECTION 10.4 Further Assurances. From time to time as
and when requested by Compass or its successors or assigns, the
Company, the officers and directors of the Company, or the Bank,
shall execute and deliver such further agreements, documents,
deeds, certificates and other instruments and shall take or cause
to be taken such other actions, including those as shall be
reasonably necessary to vest or perfect in or to confirm of record
or otherwise the Company's title to and possession of, all of its
property, interests, assets, rights, privileges, powers, franchises
and authority, as shall be reasonably necessary or advisable to
carry out the purposes of and effect the transactions contemplated
by this Agreement. In the event that Compass requires any of the
officers or directors of either the Company or the Bank to execute
and deliver any such instrument or to take any such action pursuant
to this Section 10.4 at any time following the Effective Time, then
Compass shall pay all reasonable fees, including legal fees,
incurred by such person in connection with any request by Compass
pursuant to this Section 10.4.
SECTION 10.5 Enforcement of the Agreement. The parties
hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions hereof, this being
in addition to any other remedy to which they are entitled at law
or in equity.
SECTION 10.6 Severability. The invalidity or
unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provisions of
this Agreement, which shall remain in full force and effect.
SECTION 10.7 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and
shall be deemed to have been duly given when delivered, if
delivered in person, by cable, telegram or telex, or by telecopy,
or five business days after mailing, if delivered by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:
if to Compass or Compass Texas:
D. Paul Jones, Jr.
Chairman and Chief Executive Officer
Compass Bancshares, Inc.
15 South 20th Street
Birmingham, Alabama 35233
Telecopy No: (205) 933-3043
Charles E. McMahen
Chairman and Chief Executive Officer
Compass Banks of Texas, Inc.
24 Greenway Plaza
Houston, Texas 72046
Telecopy No: (713) 993-8500
with copies to:
Daniel B. Graves
Associate General Counsel
Compass Bancshares, Inc.
15 South 20th Street
Birmingham, Alabama 35233
Telecopy No: (205) 933-3043
and
Gene G. Lewis
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
3300 Texas Commerce Tower
Houston, Texas 77002
Telecopy No.: (713) 223-3717
if to the Company:
W. H. Ellis
President and Chief Executive Officer
Flower Mound Bancshares, Inc.
2631 Cross Timbers Road
Flower Mound, Texas 75028
Telecopy No.: (214) 539-8932
with a copy to:
Peter Weinstock
Jenkens & Gilchrist
1445 Ross Avenue, Ste. 3200
Dallas, Texas 75202-2799
Telecopy No.: (214) 855-4300
or to such other address as the person to whom notice is given may
have previously furnished to the others in writing in the manner
set forth above (provided that notice of any change of address
shall be effective only upon receipt thereof).
SECTION 10.8 Governing Law and Venue. This Agreement
shall be governed by and construed in accordance with the laws of
the State of Texas, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof,
except to the extent that the GCL governs aspects of the Merger.
Venue for any cause of action arising from this Agreement shall lie
in Dallas County, Texas.
SECTION 10.9 Descriptive Headings. The descriptive
headings are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation
of this Agreement.
SECTION 10.10 Parties in Interest. This Agreement shall
be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
SECTION 10.11 Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed
to be an original, but all of which shall constitute one and the
same agreement.
SECTION 10.12 Incorporation by References. Any and all
schedules, exhibits, annexes, statements, reports, certificates or
other documents or instruments referred to herein or attached
hereto are incorporated herein by reference hereto as though fully
set forth at the point referred to in the Agreement.
SECTION 10.13 Certain Definitions.
(a) "Subsidiary" shall mean, when used with reference
to an entity, any corporation, a majority of the outstanding voting
securities of which are owned directly or indirectly by such entity
or any partnership, joint venture or other enterprise in which any
entity has, directly or indirectly, any equity interest.
(b) "Material Adverse Effect" shall mean any material
adverse change in the financial condition, assets, liabilities
(absolute, accrued, contingent or otherwise), reserves, business or
results of operations of the Company and the Bank taken as a whole
(or when the reference is to Compass, to Compass and its
Subsidiaries, taken as a whole).
(c) "Environmental Laws" shall mean laws, including,
without limitation, federal, state or local laws, ordinances,
rules, regulations, interpretations and orders of courts or
administrative agencies or authorities relating to pollution or
protection of the environment (including, without limitation,
ambient air, surface water, ground water, land surface, and
subsurface strata), including, without limitation, the
Comprehensive Environmental Response Compensation and Liability Act
of 1980, as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1987, as amended ("SARA), the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA),
Hazardous and Solid Waste Amendments of 1984, as amended
("HSWA"), the Hazardous Materials Transportation Act, as amended
("HMTA"), the Toxic Substance Control Act ("TSCA"), National
Emissions Standard for Hazardous Pollutants ("NESHAP"),
Occupational Safety and Health Act ("OSHA"), Federal Water
Pollution Control Act, Clean Air Act, and other laws relating to
pollution or protection of the environment, or to the manufacture,
processing, distribution, use, treatment, handling, storage,
disposal or transportation of Polluting Substances.
(d) "Polluting Substances" shall mean (a) asbestos, (b)
urea formaldehyde foam insulation, (c) oil and gasoline products or
wastes, and (d) all pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes and shall
include, without limitation, any flammable explosives, radioactive
materials, oil, hazardous materials, hazardous or solid wastes,
hazardous or toxic substances or regulated materials defined in
CERCLA, SARA, RCRA, HSWA, HMTA, TSCA, OSHA, NESHAP and/or any other
Environmental Laws, as amended, and in the regulations adopted and
publications promulgated thereto; provided to the extent that the
laws of the State of Texas establish a meaning for "hazardous
substance," "hazardous waste," "hazardous materials," "solid
waste," or "toxic substance," which is broader than that
specified in any of CERCLA, SARA, RCRA, HSWA, HMTA, TSCA, OSHA or
other Environmental Laws such broader meaning shall apply.
(e) "Knowledge" or "known" _ An individual shall be
deemed to have "knowledge" of or to have "known" a particular
fact or other matter if such individual is actually aware of such
fact or other matter. The Company and the Bank shall be deemed to
have "knowledge" of or to have "known" a particular fact or
matter if any individual who is now serving as a director or
officer (or in any similar capacity) of the Company or the Bank is
actually aware of such fact or other matter, all of which officers
and directors are listed on Schedule 10.13.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto
duly authorized, all as of the day and year first above written.
ATTEST: COMPASS BANCSHARES, INC.
By: /s/ Daniel B. Graves By: /s/ D. Paul Jones
Its: Assistant Secretary Its: Chairman & Chief
Executive Officer
ATTEST: FLOWER MOUND BANCSHARES, INC.
By: /s/ Frank R. Scheer By: /s/ W. H. Ellis
Its: Secretary Its: President
EXHIBIT A
LETTER OF TRANSMITTAL
For Shares of Common Stock of
FLOWER MOUND BANCSHARES, INC.
Delivered Pursuant to the Agreement and Plan of Merger
dated as of __________, 1995
By Mail: By Hand
____________________ __________________________
____________________ __________________________
____________________ __________________________
Attention: _____________ Attention: __________________
DESCRIPTION OF SHARES SURRENDERED
Based on its stock transfer records, Flower Mound Bancshares,
Inc. (the "Company") has listed below your name, address and the
certificate numbers representing your shares of Common Stock
("Shares") of the Company. If any of the listed information
appears to be incorrect, please notify ______________________ at
(___) ________ at once.
Name, Address and Social Security
Number of Registered Holders Certificate(s) Surrendered
Total Number of
Certificate Shares Represented
Number(s) by Certificate(s)
_______________________________ _______________ ______________
Name _______________ ______________
_______________ ______________
_______________________________
_______________________________
Address
_______________________________
Social Security Number Total Shares _____________________
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Gentlemen:
I, as the registered holder of the above described Shares of
the Company, hereby tender to Compass Bancshares, Inc.
("Compass"), such Shares pursuant to the Agreement and Plan of
Merger dated as of __________, 1995, as amended ("the Merger
Agreement"), between Compass and the Company.
I represent and warrant to Compass that I am the true and
lawful owner of the Shares, and have full capacity, power and
authority to exchange the Shares, free and clear of all liens,
restrictions and encumbrances of any kind whatsoever, and the
Shares will not be subject to any adverse claim. I understand that
Compass may require additional documentation, and I agree, upon
request, to execute and deliver any additional documents or
instruments deemed by Compass necessary to complete the exchange of
the Shares.
The authority conferred in this Letter of Transmittal shall
not be affected by, and shall survive, my death or incapacity, and
any obligation I may have hereunder shall be binding upon my
successors, assigns, heirs, executors, administrators, trustees in
bankruptcy and personal and legal representatives. I acknowledge
that the tender of my Shares is irrevocable.
INSTRUCTIONS REGARDING ISSUANCE OF SHARES
If you wish to have the shares of Compass Common Stock to be
issued pursuant to the Merger Agreement in the name and at the
address set forth above, please sign and date this letter on page
3. If you wish to have the shares of Compass Common Stock to be
issued pursuant to the Merger Agreement in a name or to an address
other than the name and address specified above, please complete
the following section. You will be required to pay any transfer or
other taxes required by reason of the payment and delivery of
Compass Common Stock to such other person.
NEW CERTIFICATES TO BE ISSUED
IN A DIFFERENT NAME OR TO A DIFFERENT ADDRESS
If you are entitled to receive shares of Compass Common Stock
and wish to have certificates representing Compass Common Stock
issued in a name or to an address other than the name or address
shown on your Company stock certificates, please indicate the name
and address below:
Name and Address
Name:__________________________________ Taxpayer I.D. No. or
(Type or print full name) Social Security No.:______________
Address:______________________________________________________________________
City, State, Zip Code:________________________________________________________
PLEASE SIGN AND DATE BELOW AS INDICATED
THEN PLEASE COMPLETE SUBSTITUTE FORM W-9
Signatures _________________________________
_________________________________
Dated _________________________, 1995
Name(s) _____________________________________________
(Please Print)
Capacity _____________________________________________
(Full Title)
Address _________________________________
_________________________________
(Include Zip Code)
Area Code and Telephone Number _____________________________
Tax Identification or Social Security Number _____________________________
GUARANTEE OF SIGNATURES
Authorized Signature __________________________________
Name __________________________________
(Please Print)
Title __________________________________
Name of Firm __________________________________
Address __________________________________
__________________________________
(Include Zip Code)
Area Code and Telephone Number __________________
Dated ____________________________, 1992
(Must be signed by registered holder(s) as name(s) appear above or
by person(s) authorized to become registered holder(s) by
certificate(s) and documents transmitted. If signing is by an
officer or a corporation, or by an attorney, executor,
administrator, trustee, guardian, agent or other person acting in
a fiduciary or representative capacity, please set forth full
title. See Instruction 1).
_________________________________________________________________
DO NOT WRITE IN SPACE BELOW
Date Received:__________________ By:_________________ Date:_________________
Share Company Compass
Accepted Stock Certificate No. of
Shares for Certificate No. Fractional Cash Check
Surrendered Exchange Nos. issued Shares Paid No.
Accepted by:______________ Checked By:_______________ Date:_____________, 199__
LETTER OF TRANSMITTAL
INSTRUCTIONS
1. Delivery of Letter of Transmittal and Certificates;
Signature Guarantees. Please send all certificates for Shares to
Compass, with the Letter of Transmittal, or a facsimile thereof,
fully completed and signed by you, the registered holder(s).
Compass retains the right to require that a signature on the Letter
of Transmittal and the Share certificates be guaranteed by an
Eligible Institution. An Eligible Institution is a member of a
registered national securities exchange or of the National
Association of Securities Dealers, Inc. (the "NASD") or a
commercial bank or trust company having an office, branch or agency
located in the United States. If Compass wishes to have your
signature guaranteed by an Eligible Institution, you will be
notified by separate letter.
If certificates are registered in the name of a person
other than you, the certificate(s) must be duly endorsed or
accompanied by stock powers signed by the registered holder and the
Letter of Transmittal. If the Letter of Transmittal is executed by
an officer on behalf of a corporation or by an executor,
administrator, trustee, guardian, attorney, agent or other person
acting in a fiduciary or representative capacity, Compass reserves
the right to require that proper documentary evidence of the
authority of the person executing the Letter of Transmittal. If
the tendered certificates are owned of record by two or more joint
owners, each of you must sign the Letter of Transmittal. Questions
regarding such evidence of authority may be referred to
_________________________________, at (___) ________.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER
OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS IS AT
YOUR OPTION AND RISK. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
STRONGLY RECOMMENDED.
2. Issuance of Compass Common Stock. You will receive the
Compass Common Stock for your Shares only after receipt and
acceptance by Compass of all of the certificates representing your
Shares, a properly completed and executed Letter of Transmittal,
and any other required documents and upon processing of the
documents by Compass.
3. Payment for Fractional Shares. As provided in Section
1.6(c) of the Merger Agreement, Compass will not issue any
certificates of Compass Common Stock for fractional shares. In
lieu of issuing fractional shares, Compass will pay to any Company
shareholder entitled to receive a fractional share of Compass
Common Stock, a cash payment based on the average closing price for
Compass Common Stock as reported by the NASDAQ National Market
System for the thirty days of trading of Compass Common Stock
immediately preceding the Effective Time of the Merger.
4. No Conditional Tenders; Waiver of Notice. No
alternative, conditional, irregular or contingent deliveries of
Shares will be accepted. By execution of the Letter of Transmittal
or any manually signed facsimile thereof, you waive any rights to
receive any notice of the acceptance of your Shares for exchange.
5. Signatures on Letter of Transmittal. In order for the
Letter of Transmittal to be properly signed by you, the signature
must correspond exactly with the name(s) as written on the face of
the certificate(s).
If the Shares tendered hereby are owned of record by two
or more joint owners, all of you must sign the Letter of
Transmittal.
If your Shares are registered in different names on
several certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are
different registrations of certificates.
If the certificate(s) representing the Shares transmitted
hereby are registered in your name and the Letter of Transmittal is
properly signed by you, no endorsements of certificates or separate
stock powers are required. In all other cases, the certificate(s)
representing the Shares transmitted hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the
certificate(s), and if required, signature(s) on such
certificate(s) or stock power(s) must be guaranteed by an Eligible
Institution.
If the Letter of Transmittal or any certificate or stock
power is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of corporation or other acting in a
fiduciary or representative capacity, such person should so
indicate when signing, and Compass reserves the right to require
proper evidence of their authority to so act.
6. Irregularities. All questions as to the validity,
form, eligibility, acceptance of and delivery of Shares and the
issuance of Compass Common Stock and the payment of cash in lieu of
fractional shares will be determined by Compass, which
determination shall be final and binding. Compass reserves the
absolute right to reject any or all tenders determined by Compass
not to be in appropriate form or which would, in the opinion of
Compass' counsel, be unlawful. Compass also reserves the absolute
right in its sole discretion, to waive any of the conditions
hereof, or any defect in any tender with respect to any particular
Shares of any particular shareholder, and Compass' interpretations
of the terms and conditions of the Merger Agreement and these
instructions shall be final and binding. Compass shall not be
obligated to give notice of defects or irregularities in tenders,
nor shall they incur any liability for failure to give any such
notice. Tenders will be deemed not to have been made until all
defects and irregularities have been cured or waived.
7. 31% Backup Withholding. Under the Federal income tax
law, you must provide Compass with a correct taxpayer
identification number ("TIN") unless an exemption applies. If
the correct TIN is not provided, a $50 penalty may be imposed upon
you by the Internal Revenue Service and you will be subject to
backup withholding of 31% of the payments to be received by you.
8. Request for Assistance of Additional Copies. Questions
and requests for assistance or additional copies of the Letter of
Transmittal may be directed to Compass at the addresses set forth
at the top of page 1.
IMPORTANT TAX INFORMATION
Under the Federal income tax law, you are to provide Compass
(as payer) with a correct taxpayer identification number on
Substitute Form W-9 below. If Compass is not provided with the
correct taxpayer identification number, you may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, all
payments that are made to you with respect to Shares (including any
cash payable to you under the Merger Agreement in lieu of
fractional shares) may be subject to backup withholding.
Exempt shareholders (including among others, all corporations
and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. Nonetheless, exempt
shareholders should complete the Substitute Form W-9 below and so
indicate their exempt status by writing "exempt" across the face
of the Substitute Form W-9. In order for a foreign individual to
qualify as an exempt recipient, that shareholder must submit a
statement, signed under penalties of perjury, attesting to that
individual's exempt status. Such statements can be obtained from
the Exchange Agent. See the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9 for
additional information.
If backup withholding applies, Compass is required to withhold
31% of any payments made to the shareholder. Backup withholding is
not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a
refund may be obtained.
Purpose of Substitute Form W-9
To prevent backup withholding on payments that are made to you
with respect to shares of Compass Common Stock acquired as a result
of the Merger or with respect to cash payments, if any, receivable
in lieu of fractional shares pursuant to the Merger Agreement, you
are required to notify Compass of your correct taxpayer
identification number by completing the form below certifying that
the taxpayer identification number provided on Substitute Form W-9
is correct (or that you are awaiting a taxpayer identification
number).
What Number to Give
As the record owner of the Shares, you are required to give
Compass your Social Security Number or Employer Identification
Number. If the Shares are in more than one name or are not in the
name of the actual owners, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form
W-9 for additional guidelines on which number to report.
SUBSTITUTE FORM W-9
Department of the Treasury
Internal Revenue Service
Taxpayer Identification Number
Part 1 - PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION __________________
IDENTIFICATION NUMBER IN THE BOX AT RIGHT Social Security
AND CERTIFY BY SIGNING AND Number or Employer
DATING BELOW Identification Number
Part 2 - Check the following box if you are NOT subject to backup
withholding under the provisions of Section 3406(a)(1)(C)
of the Internal Revenue Code because (1) you have not
been notified that you are subject to backup withholding
as a result of failure to report all interest or
dividends or (2) the Internal Revenue Service has
notified you that you are no longer subject to backup
withholding.
Part 3 - Check the following box if you are awaiting a Taxpayer
Identification Number.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
By checking the box in Part 3, I certify under penalties of perjury
that a taxpayer identification number has not been issued to me,
and either (a) I have mailed or delivered an application to receive
a taxpayer identification number to the appropriate Internal
Revenue Service Center or Social Security Administration Office, or
(b) I intend to mail or deliver an application in the near future.
I understand that if I do not provide a taxpayer identification
number within sixty (60) days, 31% of all reportable payments made
to me thereafter will be withheld until I provide a number.
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE
INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
Signature: ______________________________ Date:_____________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
FOR ADDITIONAL DETAILS.
____________________________________________________________________
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give
the Payer._Social Security numbers have nine digits separated by
two hyphens: i.e. 000-00-0000. Employer identification numbers have
nine digits separated by only one hyphen: i.e. 00-0000000. The
table below will help determine the number to give the payer.
______________________________________________________________________________
Give the SOCIAL
For this type of account: SECURITY number of _
______________________________________________________________________________
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the
account) account or, if combined
funds, any one of the
individuals(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint The adult or, if the minor
account) is the only contributor,
the minor(1)
6. Account in the name of The ward, minor or
guardian or committee for a incompetent person(3)
designated ward, minor, or
incompetent person
7. a The usual revocable savings The grantor-trustee(1)
trust account (grantor is
also trustee)
b So-called trust account that The actual owner(1)
is not a legal or valid trust
under State law
8. Sole proprietorship account The owner(4)
______________________________________________________________________________
Give the EMPLOYER
For this type of account: IDENTIFICATION
number of _
______________________________________________________________________________
9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
education organization
account
12. Partnership account held in The partnership
the name of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered The broker or nominee
nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
______________________________________________________________________________
(1) List first and circle the name of the person whose number you
furnish.
(2) Circle the minor's name and furnish the minor's social
security number.
(3) Circle the ward's, minor's or incompetent person's name and
furnish such person's social
security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or
pension trust.
Note: If no name is circled when there is more than one name, the
number will be considered to be that of the first name
listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't
know your number, obtain Form SS-5, Application for a Social
Security Number Card, or Form SS-4, Application for Employer
Identification Number, at the local office of the Social Security
Administration or the Internal Revenue Service and apply for a
number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL
payments include the following:
- -- A corporation.
- -- A financial institution.
- -- An organization exempt from tax under section 501(a), or an
individual retirement plan.
- -- The United States or any agency or instrumentality thereof.
- -- A State, the District of Columbia, a possession of the United
States, or any subdivision or instrumentality thereof.
- -- A foreign government, a political subdivision of a foreign
government, or any agency or instrumentality thereof.
- -- An international organization or any agency, or
instrumentality thereof.
- -- A registered dealer in securities or commodities registered in
the U.S. or a possession of the U.S.
- -- A real estate investment trust.
- -- A common trust fund operated by a bank under section 584(a).
- -- An exempt charitable remainder trust, or a non-exempt trust
described in section 4947(a)(1).
- -- An entity registered at all times under the Investment Company
Act of 1940.
- -- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject
to backup withholding include the following:
- -- Payments to nonresident aliens subject to withholding under
section 1441.
- -- Payments to partnerships not engaged in a trade or business in
the U.S. and which have at least one nonresident partner.
- -- Payments of patronage dividends where the amount received is
not paid in money.
- -- Payments made by certain foreign organizations.
- -- Payments made to a nominee.
Payments of interest not generally subject to backup withholding
include the following:
- -- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this
interest is $600 or more and is paid in the course of the
payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
- -- Payments of tax-exempt interest (including exempt-interest
dividends under section 852).
- -- Payments described in section 6049(b)(5) to nonresident
aliens.
- -- Payments on tax-free covenant bonds under section 1451.
- -- Payments made by certain foreign organizations.
- -- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE
PAYER. FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER. WRITE
"EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF
THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage
dividends, that are not subject to information reporting are also
not subject to backup withholding. For details, see the
regulations under sections 6041, 6041A(a), 6045 and 6050A.
Privacy Act Notice.--Section 6109 requires most recipients of
dividend, interest or other payments to give taxpayer
identification numbers to payers who must report the payments to
the IRS. The IRS uses the numbers for identification purposes.
Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers
must generally withhold 31% of taxable interest, dividend, and
certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also
apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification
Number.--If you fail to furnish your taxpayer identification number
to a payer, you are subject to a penalty of $50 for each such
failure unless your failure is due to reasonable cause and not to
willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments.--If
you fail to include any portion of an includible payment for
interest, dividends, or patronage dividends in gross income, such
failure will be treated as being due to negligence and will be
subject to a penalty of 5% on any portion of an under-payment
attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) Civil Penalty for False Information With Respect to
Withholdings.--If you make a false statement with no reasonable
basis which results in no imposition of backup withholding, you are
subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information.--Falsifying
certifications or affirmations may subject you to criminal
penalties including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE
INTERNAL REVENUE SERVICE
EXHIBIT B
POOLING OF INTEREST CRITERIA
ATTRIBUTES OF COMBINING ENTERPRISES
(a) Autonomy Condition. Each of the combining enterprises is
autonomous and has not been a subsidiary or division of another
enterprise within two years before the plan of combination is
initiated.
(b) Independence Condition. Each of the combining enterprises
is independent of the other combining enterprises.
MANNER OF COMBINING INTERESTS
(c) One-Year Rule. The combination is effected in a single
transaction or is completed in accordance with a specific plan
within one year after the plan is initiated.
(d) Common-Stock-for-Common-Stock-Condition. An enterprise
offers and issues only common stock with rights identical to those
of the majority of its outstanding voting common stock in exchange
for substantially all of the voting common stock interest of
another enterprise at the date the plan of combination is
consummated.
(e) Change-in-Equity-Interests Condition. None of the
combining enterprises changes the equity interest of the voting
common stock in contemplation of effecting the combination either
within two years before the plan of combination is initiated or
between the dates the combination is initiated and consummated;
changes in contemplation of effecting the combination may include
distributions to stockholders and additional issuances, exchanges,
and retirements of securities.
(f) Treasury-Stock Condition. Each of the combining
enterprises reacquires shares of voting common stock only for
purposes other than business combinations, and no enterprise
reacquires more than a normal number of shares between the dates
the plan of combination is initiated and consummated.
(g) Proportionate-Interest Condition. The ratio of the
interest of an individual common stockholder to those of other
common stockholders in a combining enterprise remains the same as
a result of the exchange of stock to effect the combination.
(h) Voting-Rights Condition. The voting rights to which the
common stock ownership interests in the resulting combined
enterprise are entitled are exercisable by the stockholders; the
stockholders are neither deprived of nor restricted in exercising
those rights for a period.
(i) Contingency Condition. The combination is resolved at the
date the plan is consummated and no provisions of the plan relating
to the issue of securities or other consideration are pending.
ABSENCE OF PLANNED TRANSACTIONS
(j) The combined enterprise does not agree directly or
indirectly to retire or reacquire all or part of the common stock
issued to effect the combination.
(k) The combined enterprise does not enter into other financial
arrangements for the benefit of the former stockholders of a
combining enterprise, such as a guaranty of loans secured by stock
issued in the combination, that in effect negates the exchange of
equity securities.
(l) The combined enterprise does not intend or plan to dispose
of a significant part of the assets of the combining enterprises
within two years after the combination other than disposals in the
ordinary course of business of the formerly separate enterprise and
to eliminate duplicate facilities or excess capacity.
EXHIBIT C
POOLING TRANSFER RESTRICTIONS AGREEMENT
This Pooling Transfer Restrictions Agreement (this
"Agreement") is executed and delivered this 29th day of August,
1994 by and between Compass Bancshares, Inc. ("Compass"), Flower
Mound Bancshares, Inc. (the "Company"), and the undersigned
shareholder of the Company (the "Shareholder").
WHEREAS, Compass and the Company entered into an Agreement and
Plan of Merger ("Merger Agreement") pursuant to which the Company
will be merged with and into a subsidiary of Compass to be formed
(the "Merger"), and
WHEREAS, Compass has required as a condition to entering into
the Merger Agreement that the Company and the Shareholder and each
other affiliate of the Company deliver to Compass an agreement in
substantially the form hereof,
NOW, THEREFORE, in consideration of Compass' agreement to
enter into the Merger Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned, intending to be legally bound,
hereby agree as follows:
1. The Shareholder agrees that he will not sell, pledge,
transfer or otherwise dispose of any shares of the Company's common
stock, par value $.10 per share ("Company Common Stock"), within
30 days prior to the Effective Time (as defined in the Merger
Agreement). The Shareholder further agrees that until the
publication of financial results covering at least 30 days of
post-Merger combined operations of the Company and Compass, he will
not sell, pledge, transfer or otherwise dispose of any shares of
the Compass Common Stock to be acquired by him in the Merger,
except for pledges by the Shareholder of all or part of such
Shareholder's Compass Common Stock acquired in the Merger to secure
loans, provided the lender accepts any pledge of such Compass
Common Stock subject to the terms of this Agreement. The
Shareholder further agrees that he will not sell, pledge, transfer
or otherwise dispose of any shares of the Compass Common Stock to
be acquired by him in the Merger except in a manner which is
consistent with any additional requirements for Compass' accounting
for the Merger as a pooling of interests, including without
limitation any new requirements imposed by the applicable
provisions of the Securities Act of 1933, the Securities Exchange
Act of 1934, and the respective rules and regulations thereunder.
2. The Shareholder agrees that the shares of Compass
Common Stock to be issued to him in the merger will bear a
restrictive transfer legend in substantially the following form:
The shares represented by this certificate are subject to a Pooling
Transfer Restrictions Agreement dated August 29, 1995 which
restricts any sale or other transfer of such shares prior to
[insert due date of filing of next Quarterly Report on Form 10-Q or
Annual Report on Form 10-K that will contain required combined
financial results]. The issuer will furnish to the record holder
of this certificate, without charge, upon written request to the
issuer at its principal place of business, a copy of the Pooling
Transfer Restrictions Agreement.
Compass agrees to instruct its transfer agent to remove the
restrictive legend from any certificates evidencing shares subject
hereto promptly following the expiration of the transfer
restrictions described in Section 1.
3. The Company agrees that it will not permit the transfer
of any shares of Company Common Stock by the Shareholder within 30
days prior to the Effective Time.
4. Compass agrees to issue a press release containing
earnings information not later than 30 days following the last day
of the Company's fiscal quarter ending after at least 30 days of
post-Merger combined operations of the Company and Compass.
5. To the extent the terms and provisions of this
Agreement conflict with the Merger Agreement, the terms and
provisions of the Merger Agreement shall control.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the undersigned set his hand effective as
of the day first written above.
COMPASS BANCSHARES, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
FLOWER MOUND BANCSHARES, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
_____________________________________
Signature of Shareholder
_____________________________________
Printed Name of Shareholder
EXHIBIT D
INVESTMENT REPRESENTATIONS CERTIFICATE
(ACCREDITED INVESTOR)
The undersigned, being a shareholder of Flower Mound
Bancshares, Inc. (the "Company") and pursuant to that certain
Agreement and Plan of Merger dated August 29, 1995 by and between
Compass Bancshares, Inc. and the Company (the "Agreement"), does
hereby represent and warrant to Compass Bancshares, Inc. as
follows. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Agreement.
1. The undersigned is acquiring the shares of Compass
Common Stock to be issued in connection with the Merger in a
private placement. In connection with the acquisition of the
Compass Common Stock, the undersigned represents that the Compass
Common Stock is being acquired for the undersigned's own account
and not as a nominee or agent for any other person, and for
investment, and not with a view to or for resale in connection with
any distribution thereof.
2. The undersigned acknowledges that Compass is relying
upon the representations contained herein in issuing the Compass
Common Stock to the undersigned and that the Compass Common Stock
must be held indefinitely unless it is subsequently registered
under the Securities Act of 1933, as amended (the "Securities
Act") or an exemption from such registration is available.
3. The undersigned understands that upon original issuance
of the Compass Common Stock, and until the same is no longer
required under the applicable requirements of the Securities Act,
the Compass Common Stock (and all securities issued in exchange
therefor or substitution thereof) shall bear a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAW.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO (i)
A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES
WHICH IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER
SUCH ACT, OR (iii) AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND, IF REQUESTED BY THE ISSUER, UNLESS
ACCOMPANIED BY AN OPINION OF COUNSEL ACCEPTABLE IN FORM
AND SUBSTANCE TO THE ISSUER AS TO THE FOREGOING.
4. The undersigned is (i) an "accredited investor"
within the meaning of Rule 501 promulgated under the Securities Act
and (ii) by reason of its business and financial experience and the
business and financial experience of the persons it has retained to
advise it with respect to its investment in the Compass Common
Stock, the undersigned, together with such advisors, has such
knowledge, sophistication and experience in business and financial
matters that it is capable of evaluating the merits and risks of
the prospective investment, it is able to bear the economic risk of
such investment and, at the present time, the undersigned could
afford a complete loss of such investment.
5. The undersigned has been provided with a copy of the
1994 Annual Report to Shareholders of Compass and Compass'
Quarterly Reports on Form 10-Q for the Quarters ended March 31,
1995 and June 30, 1995.
6. All information necessary for the undersigned to make
an informed decision regarding the transaction contemplated by the
Agreement has been made available to the undersigned. The
undersigned has had the opportunity to ask questions of, and
receive answers from, Compass and its representatives, as the
undersigned deemed appropriate concerning the Agreement, the Merger
and the Compass Common Stock and all such questions have been
answered to the undersigned's full satisfaction.
IN WITNESS WHEREOF, this certificate has been executed by the
undersigned as of August 29, 1995.
____________________________________
____________________________________
[Typed Name of Shareholder]
EXHIBIT D
INVESTMENT REPRESENTATIONS CERTIFICATE
(NON-ACCREDITED INVESTOR)
The undersigned, being a shareholder of Flower Mound
Bancshares, Inc. (the "Company") and pursuant to that certain
Agreement and Plan of Merger dated August 29, 1995 by and between
Compass Bancshares, Inc. and the Company (the "Agreement"), does
hereby represent and warrant to Compass Bancshares, Inc. as
follows. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Agreement.
1. The undersigned is acquiring the shares of Compass
Common Stock to be issued in connection with the Merger in a
private placement. In connection with the acquisition of the
Compass Common Stock, the undersigned represents that the Compass
Common Stock is being acquired for the undersigned's own account
and not as a nominee or agent for any other person, and for
investment, and not with a view to or for resale in connection with
any distribution thereof.
2. The undersigned acknowledges that Compass is relying
upon the representations contained herein in issuing the Compass
Common Stock to the undersigned and that the Compass Common Stock
must be held indefinitely unless it is subsequently registered
under the Securities Act of 1933, as amended (the "Securities
Act") or an exemption from such registration is available.
3. The undersigned understands that upon original issuance
of the Compass Common Stock, and until the same is no longer
required under the applicable requirements of the Securities Act,
the Compass Common Stock (and all securities issued in exchange
therefor or substitution thereof) shall bear a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAW.
SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO (i)
A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES
WHICH IS EFFECTIVE UNDER SUCH ACT, (ii) RULE 144 UNDER
SUCH ACT, OR (iii) AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND, IF REQUESTED BY THE ISSUER, UNLESS
ACCOMPANIED BY AN OPINION OF COUNSEL ACCEPTABLE IN FORM
AND SUBSTANCE TO THE ISSUER AS TO THE FOREGOING.
4. The undersigned by reason of its business and financial
experience and the business and financial experience of the persons
it has retained to advise it with respect to its investment in the
Compass Common Stock, the undersigned, together with such advisors,
has such knowledge, sophistication and experience in business and
financial matters that it is capable of evaluating the merits and
risks of the prospective investment, it is able to bear the
economic risk of such investment and, at the present time, the
undersigned could afford a complete loss of such investment.
5. The undersigned has been provided with a copy of the
1994 Annual Report to Shareholders of Compass and Compass'
Quarterly Reports on Form 10-Q for the Quarters ended March 31,
1995 and June 30, 1995.
6. All information necessary for the undersigned to make
an informed decision regarding the transaction contemplated by the
Agreement has been made available to the undersigned. The
undersigned has had the opportunity to ask questions of, and
receive answers from, Compass and its representatives, as the
undersigned deemed appropriate concerning the Agreement, the Merger
and the Compass Common Stock and all such questions have been
answered to the undersigned's full satisfaction.
IN WITNESS WHEREOF, this certificate has been executed by the
undersigned as of August 29, 1995.
____________________________________
____________________________________
[Typed Name of Shareholder]
EXHIBIT E
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of August 29, 1995,
effective as of the date set forth hereinafter, by and between
Compass Texas Management, Inc., a Texas corporation ("Compass"),
and W. H. Ellis (" Ellis").
WHEREAS, Compass desires to enter into an employment agreement
with Ellis to provide for the continued management and success of
its operations and those of its affiliates, and Ellis desires to
engage in such services, under the terms and conditions set forth
in this Agreement; and
WHEREAS, Ellis has been an employee of Flower Mound
Bancshares, Inc. and Security Bank (herein jointly called "Flower
Mound") which are being acquired by Compass Bancshares, Inc. and
its affiliates pursuant to an Agreement and Plan of Merger dated as
of August 29, 1995 ("Merger"), and Ellis acknowledges that (i)
Flower Mound has been engaged for a number of years in the business
of banking, lending, deposit taking, and related banking and trust
services (the "Business") in the Flower Mound, Texas area; (ii)
Ellis is one of a limited number of persons instrumental in the
development of the Business of Flower Mound; (iii) Ellis' work for
Flower Mound has given him and will continue to give him access to
trade secrets and confidential information concerning the Business
and the relationships between Flower Mound and its customers; (iv)
Ellis' employment with Compass will give him access to trade
secrets and confidential information concerning the business and
customer relationships of Compass and its affiliates; (v) the
agreements and covenants contained in this Agreement are essential
to protect the Business and goodwill of Flower Mound being acquired
by Compass Bancshares, Inc. and the business and goodwill of
Compass and its affiliates; and (vi) Compass Bancshares, Inc. would
not acquire Flower Mound or employ Ellis but for such agreements
and covenants.
NOW, THEREFORE, in consideration of the premises and the
agreements herein contained, the receipt and sufficiency of which
are hereby acknowledged, Compass and Ellis hereby agree, effective
as of the date of the consummation of the Merger, as follows:
1. Employment
During the Term (as defined herein), Compass agrees to
employ Ellis and Ellis agrees to act as a senior officer of Compass
Bank-Dallas, Dallas, Texas, ("Compass Bank") an affiliate of
Compass. Ellis hereby accepts such employment on the terms and
conditions set forth in this Agreement.
2. Position and Responsibilities
Ellis will be engaged by Compass Bank in said capacity
as provided in the Bylaws of Compass Bank and to provide such
services as may be determined by the Chief Executive Officer of
Compass Bank.
3. Term of Employment
Ellis' employment under this Agreement shall commence
as of the effective date of the Merger and shall continue (unless
sooner terminated as provided in Section 8) for a period of one
year ("Term").
4. Extent of Services
During the Term, Ellis shall devote his full business
time and efforts to the performance of his duties hereunder. It
is, however, understood and agreed that the preceding sentence
shall not prohibit Ellis from spending a reasonable amount of time
managing his personal investments and discharging his civic
responsibilities as long as such activities do not interfere with
the discharge of his duties hereunder. Ellis hereby agrees and
represents that his employment, and the performance of his duties
as required by this Agreement, do not violate any agreements or
relationships existing between Ellis and any other person. During
the Term, Ellis will not serve as an officer or director of any
business enterprise (other than Compass Bank) without the prior
approval of the Chief Executive Officer of Compass.
5. Compensation and Benefits
(a) Compass shall pay Ellis (or cause to be paid by
Compass Bank) for all services and agreements of Ellis pursuant to
this Agreement, and any other duties assigned to him by Compass, an
annual base salary of $94,600 per year ($88,600 per year base
salary plus $500 per month automobile allowance), plus incentive
pay earned by Ellis under a plan to be established by Compass for
Ellis annually which is comparable to incentive compensation plans
of other employees of Compass Bank serving in a like capacity,
which shall be payable in accordance with Compass' customary
payroll practices with respect to time and manner of payment. No
compensation shall be payable until and unless the Merger becomes
effective.
(b) If Ellis' employment under this Agreement is
terminated by Compass for other than death or "good cause", as
defined in Section 8 hereof, Compass will pay (or cause to be paid)
the compensation provided by this Agreement for the remainder of
the Term. In the event of the termination of Ellis' employment
under this Agreement because of Ellis' disability, as defined in
Section 8 hereof, any payments of disability benefits to Ellis
under any disability insurance policy or disability benefit plan
covering Ellis maintained by Compass or its affiliates, as it may
exist from time to time, shall be treated as payments by Compass
toward satisfaction of its obligations under this Agreement. Such
payments shall be paid in accordance with Compass' customary
payroll practices with respect to the time and manner of payment.
Payments received under medical insurance policies are not counted
toward this obligation. If Ellis, dies, resigns or is terminated
for "good cause", Compass shall have no further obligation to
Ellis under this Agreement or otherwise.
6. Benefits
During the Term, Compass shall provide Ellis such
benefits as are made generally available to employees of equal
title and base salary on the same basis as Compass makes such
benefits available to Compass' other employees, including
participation in the Compass Bancshares, Inc. retirement plan.
During the Term, Ellis shall be entitled to twenty business days
annually as paid vacation.
7. Confidentiality; Nonsolicitation
(a) Ellis recognizes and acknowledges that he has
and will have access to confidential information of a special and
unique value concerning Compass and its affiliates which may
include, without limitation, books and records relating to
operations, customer names and addresses, customer service
requirements, customer financial statements and other financial,
business and personal information relating to Compass and its
affiliates, their customers, markets, officers and employees, cost
of providing service and equipment, operating and maintenance
costs, and pricing criteria. Ellis also recognizes that a portion
of the business of Compass and its affiliates is dependent upon
trade secrets, including techniques, methods, systems, processes,
data and other confidential information. The protection of these
trade secrets and confidential information against unauthorized
disclosure or use is of critical importance to Compass. Ellis
therefore agrees that, without prior written authorization from the
Chief Executive Officer of Compass, he will not at any time, either
while employed by Compass or Compass Bank or afterwards, make any
independent use of, or disclose to any other person, any trade
secrets or confidential information of Compass or its affiliates or
Flower Mound. The agreements contained in this Section 7(a) shall
survive the termination of this Agreement for a period of 2 years.
(b) All records, files, memoranda, reports, price
lists, customer lists, documents, and other information (together
with all copies thereof) which relate to Compass, its affiliates,
or Flower Mound, and which Ellis, either prior to or during the
Term, has obtained or obtains, uses, prepares, or comes in contact
with shall remain the sole property of Compass and its affiliates.
Upon the termination of Ellis' employment by Compass, or upon the
prior demand of Compass, all such materials and all copies thereof
shall be returned to Flower Mound (or its successors by merger
immediately) immediately.
(c) To support the agreements contained in Section
7(a) hereof, from the effective date of the Merger and for a period
of one year thereafter and notwithstanding any termination of
Ellis' employment pursuant to Section 8 hereof, Ellis, on behalf of
himself and his present and future affiliates and employers (other
than Flower Mound or its successors by merger), agrees not to and
shall not directly or indirectly (i) hire, employ or engage any
past, present or future employee of Compass, its affiliates or
Flower Mound, without the prior written permission of the Chief
Executive Officer of Compass, (ii) compete for or solicit banking,
lending, deposit taking or any other banking or trust services
business for or on behalf of any bank or other financial
institution with a place of business within 10 miles from each of
2631 Cross Timbers, Flower Mound, Texas, or own, operate,
participate in, undertake any employment with or have any interest
in any bank or other financial institution within 10 miles from
each of 2631 Cross Timbers, Flower Mound, Texas, except owning
publicly traded stock for investment purposes only in which Ellis
owns less than 5% (iii) compete for or solicit banking, lending,
deposit taking or any other banking or trust services business from
any customer of Flower Mound (or its successors by merger), or (iv)
use in any competition, solicitation or marketing effort any
proprietary list of or other information concerning customers of
Flower Mound, Compass or its affiliates developed by Flower Mound,
Compass or its affiliates. It is expressly acknowledged that
Ellis, during the one year period provided by this Section 7(c), is
permitted to acquire a passive investment in a bank whose home
office and branches are located in a rural area more than 50 miles
from Flower Mound, Texas and that has less than $25 million dollars
in total assets, so long as Ellis is not a director or officer of
such bank and is not active in the management of such bank and so
long as Ellis does not own directly or indirectly more than 25% of
the outstanding shares of voting stock or other ownership interests
of such bank. Compass acknowledges that the first clause of the
first sentence of this Section 7(c) does not extend the term of the
obligations of this Section 7(c) beyond the one year term stated in
this Section 7(c).
(d) In the event of a breach or threatened breach by
Ellis of the provisions of this Section 7, Compass shall be
entitled to temporary or permanent injunctions and other
appropriate relief restraining Ellis from using or disclosing, in
whole or in part, trade secrets and confidential information or
violating the other provisions hereof. Ellis hereby waives any
requirement that Compass post any bond in connection with obtaining
any such relief. Nothing herein shall be construed as prohibiting
Compass from pursuing any other remedies available to it.
(e) Ellis has read and considered the provisions of
this Section 7 and, having done so, agrees, states, and covenants
that the restrictions on competition set forth herein are fair and
reasonable as to time, geographical area, and scope of activities
to be restrained, and are reasonably required for the protection of
the Business, goodwill and other business interests of Compass and
its affiliates and Flower Mound. In the event a court of competent
jurisdiction determines as a matter of law that any of the terms of
Section 7 are unreasonable or overbroad, the parties expressly
allow such court to reform this agreement to the extent necessary
to make it reasonable as a matter of law and to enforce it as so
reformed.
8. Termination of Employment
Ellis' employment with Compass shall be terminated upon
the occurrence of any one or more of the following events:
(a) Compass gives written notice of termination for
good cause to Ellis. For the purposes of this Agreement, "good
cause" shall include, without limitation, a willful and material
violation of applicable banking laws and regulations; theft; fraud;
embezzlement; the charging or conviction of Ellis with a felony or
a crime involving moral turpitude; substantial dependence or
addiction to alcohol or any drug; or any other breach of this or
any other Agreement between Ellis and Compass. Should "good
cause" as defined herein occur, Compass will provide Ellis with
written notice of such good cause and provide him a period of
thirty days to cure such good cause prior to giving the notice of
termination provided for herein.
(b) Death.
(c) The disability of Ellis. For purposes of this
Agreement, "disability" shall mean a mental or physical condition
resulting from an injury or illness which shall render Ellis
incapable of performing the essential functions of his position
with reasonable accommodations from Compass.
(d) Resignation of Ellis who agrees to provide not
less than 30 days prior written notice of his resignation to
Compass. In turn, Compass agrees to provide Ellis 30 days prior
written notice of the termination of this Agreement unless this
Agreement is terminated by Compass for good cause.
9. Compliance with Rules
Ellis agrees to observe and comply with the rules and
regulations of Compass and Compass Bank as adopted either orally or
in writing by the Board of Directors of Compass or Compass Bank
with respect to the performance of Ellis' duties, and to carry out
and to perform orders, directions, and policies announced to Ellis
by Compass or Compass Bank, unless such orders, directions or
policies violate applicable laws or regulations.
10. Notices
Any notice required or desired to be given under this
Agreement shall be deemed given if in writing mailed or delivered
as follows:
If to Ellis:
W. H. Ellis
4704 Oak Spring Drive
Flower Mound, Texas 75028
If to Compass:
Charles E. McMahen
24 Greenway Plaza
Suite 1401
Houston, Texas 77210
11. Entire Agreement
This Agreement contains the entire agreement of the
parties regarding the employment of Ellis by Compass and supersedes
any prior agreement, arrangement or understanding, whether oral or
written, between Compass and Ellis concerning Ellis' employment
hereunder.
12. Choice of Law
This Agreement shall be governed by, and enforced
according to, the laws of the State of Texas. The invalidity of
any provision shall be automatically reformed to the extent
permitted by applicable law and shall not affect the enforceability
of the remaining provisions hereof.
13. Assignment
This Agreement is for the personal service of Ellis and
may not be assigned by Ellis but may be assigned by Compass to any
affiliate or successor in interest to Compass' business. In the
event Compass makes such an assignment, Ellis shall continue to
perform, on behalf of such affiliate or successor, the services
required of Ellis by this Agreement and the provisions of this
Agreement shall be binding upon, and inure to the benefit of, such
successor or affiliate. This Agreement shall be binding upon and
inure to the benefit of Ellis, his heirs, representatives and
estate.
14. Modification; Termination
This Agreement may be modified only by written
agreement signed by Ellis and by a duly authorized officer of
Compass. The failure to insist upon compliance with any provision
hereof shall not be deemed a waiver of such provision or any other
provision hereof. This Agreement shall terminate if the Merger
Agreement between Flower Mound Bancshares, Inc. and Compass
Bancshares, Inc. shall be terminated, provided however, Ellis
agrees that if this Agreement is terminated he will keep
confidential any confidential information received from Compass or
its affiliates prior to such termination.
IN WITNESS WHEREOF, this Agreement is executed by the parties
as of the day and year first above written, but shall not become
effective until the consummation of the Merger.
COMPASS TEXAS MANAGEMENT, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
__________________________________
W. H. Ellis
EXHIBIT F
RIGHTS AGREEMENT
This Rights Agreement (this "Agreement") is made and entered
into as of the ___ day of _____________________, 1995, by and among
Compass Bancshares, Inc. ("Compass") and ___________,
_______________, ____________________, ___________________, and
____________ (collectively, the "Shareholders").
WHEREAS, Compass and the Shareholders are parties to that
certain Agreement and Plan of Merger dated as of ________, 1995
(the "Merger Agreement"), pursuant to which Flower Mound
Bancshares, Inc. will be merged with and into a subsidiary of
Compass; and
WHEREAS, as consideration for the Merger, the Shareholders
have received an aggregate of _______ shares (the "Shares") of
Compass' Common Stock, par value $2.00 per share (collectively
"Compass Common Stock");
NOW, THEREFORE, in consideration of the mutual covenants and
promises herein, the parties hereto agree as follows:
ARTICLE I
REGISTRATION RIGHTS
1.1 Demand Registration. (a) Any Shareholder may
request Compass to register under the Securities Act of 1933, as
amended (the "Securities Act"), all or a portion of the Shares
held by such Shareholder for sale in a non-underwritten public
offering ("Demand Registration"). Simultaneously with the
delivery of a request to Compass for registration, the Shareholder
requesting registration shall provide written notice of the request
to the other Shareholders. Within five days after the receipt of
such notice, the other Shareholders shall give written notice to
Compass as to the number of Shares held by them to be registered.
All Shareholders shall be entitled to participate in any such
registration and offering, but the failure of any Shareholder to
participate in a registration and offering and the failure of a
Shareholder to register all of the Shares held by such Shareholder
in such an offering shall not increase the number of occasions on
which Compass is obligated to register Shares hereunder, which is
only one occasion.
(b) Promptly following receipt of any notice under this
Section 1.1, Compass shall use its best efforts to register under
the Securities Act, for public sale in a continuous or "shelf"
registration made pursuant to Rule 415 promulgated under the
Securities Act, or any similar or successor rule and under the
securities laws of any state or other jurisdiction as may be
reasonably required by the Shareholders, the Shares specified in
such notice from the Shareholders. The registration statement
shall permit sales of the Shares by the Shareholders to be effected
continuously in one or more transactions on the NASDAQ National
Market System or any stock exchange on which Compass Common Stock
may hereafter be admitted for trading (collectively, "Exchanges")
pursuant to and in accordance with the applicable rules of the
Exchanges, in block transactions on the Exchanges pursuant to and
in accordance with the applicable rules of the Exchanges, otherwise
than on the Exchanges, in negotiated transactions (which may
include the pledge or hypothecation of some or all of the Shares),
or in a combination of any such methods of sale, at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Compass shall
not be required to maintain the effectiveness of any registration
statement pursuant to this Agreement beyond the earlier to occur of
(i) two years from the date hereof, and (ii) such lesser period of
time if the Shareholders could sell their shares pursuant to any
amendment to Rule 144 promulgated under the Securities Act (the
"Termination Date"). Without in any way limiting the obligation
of Compass to keep effective a registration statement or state
registration or qualification in a Demand Registration once it is
effective or once such qualification has been obtained, Compass
shall be obligated to register Shares pursuant to this Section 1.1
on one occasion only; provided that no request may be made (a) for
a period of 90 days after the completion of a distribution of
Compass Common Stock pursuant to a firm commitment underwritten
public offering, or (b) after the Termination Date.
Notwithstanding anything to the contrary contained herein, Compass
shall not be obligated to prepare and file any registration
statement pursuant to this Section 1.1, or prepare or file any
amendment or supplement thereto, and may suspend the Shareholders'
rights to make sales of Shares pursuant to an effective
registration statement only if either the registration statement or
the prospectus is required to be amended or supplemented as the
result of a material event. The filing of a registration
statement, or any amendment or supplement thereto, by Compass
cannot be deferred, and the Shareholders' rights to make sales
pursuant to an effective registration statement cannot be
suspended, pursuant to the provisions of the immediately preceding
sentence for more than 60 days after the abandonment or
consummation of any of the foregoing proposals or transactions or,
in any event, for more than 120 days after the date of Compass'
determination pursuant to the immediately preceding sentence of
this Section 1.1(b).
(c) Compass shall be entitled to include in any
registration statement filed pursuant to this Section 1.1 shares of
Compass Common Stock (or any securities convertible into or
exchangeable for or exercisable for the purchase of Compass Common
Stock to be sold by or for the account of other shareholders of
Compass.
1.2 Registration Procedures. If and whenever Compass is
required by the provisions of Section 1.1 to use its best efforts
to effect the registration of any of the Shares under the
Securities Act, Compass will as expeditiously as possible:
(a) prepare and file with the Securities Exchange
Commission ("SEC") a registration statement with respect to the
Shares and use its best efforts to cause such registration
statement to become and remain effective until the Termination
Date;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective until the Termination Date and as
may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Shares covered by such
registration statement in accordance with the method of disposition
set forth in such registration statement for such period;
(c) furnish to the Shareholders such number of copies of
the registration statement and the prospectus included therein
(including each preliminary prospectus and each document
incorporated by reference therein to the extent then required by
the rules and regulations of the SEC) as such persons may
reasonably request in order to facilitate the public sale or other
disposition of the Shares covered by such registration statement;
(d) use its best efforts to register or qualify the Shares
covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the Shareholders shall reasonably
request and to take all necessary action to keep such registration
or qualification effective as required by this Section 1.2 as to a
registration statement filed with the SEC; provided, that Compass
shall not be required to qualify to transact business as a foreign
corporation in any jurisdiction in which it would not otherwise be
required to be so qualified, subject itself to taxation in any such
jurisdiction, or take any action which would subject it to general
service of process in any such jurisdictions in which it is not
then so subject;
(e) immediately notify in writing the Shareholders, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result
of which the prospectus contained in such registration statement,
as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the
light of the circumstances then existing (in which case, Compass
shall promptly provide the Shareholders with revised or
supplemental prospectuses and if so requested by Compass in
writing, the Shareholders shall promptly take action to cease
making any offers of the Shares until receipt and distribution of
such revised supplemental prospectuses); and
(f) use its best efforts to keep effective and maintain
any registration, qualification, approval or listing obtained to
cover the Shares as may be necessary for the Shareholders to
dispose of such Shares from the effective date of the registration
statement through the Termination Date and shall from time to time
amend or supplement any prospectus used in connection therewith to
the extent necessary in order to comply with applicable law;
provided that, notwithstanding the foregoing, Compass shall not be
required to file or to keep effective and maintain any such
registration, qualification, approval or listing for such period
that would require it to cause an audit of Compass to be performed
other than as is required by the rules and regulations of the SEC
with respect to reports required to be filed under the Securities
Exchange Act of 1934, as amended.
In connection with any registration hereunder each
Shareholder will furnish promptly to Compass in writing such
information (together with such supplements as may be necessary
from time to time) with respect to itself and the proposed
distribution by it as shall be reasonably necessary in order to
ensure compliance with federal and applicable state securities
laws.
1.3 Expenses. Compass shall bear in accordance with this
Agreement the expenses of registration of the Shares; provided,
that the Shareholders shall be responsible for any fees and
disbursements of counsel and other representatives of the
Shareholders and any discounts, selling commissions or other
selling expenses allocable to sales of the Shares by the
Shareholders.
ARTICLE II
INDEMNIFICATION
2.1 Indemnification by Compass. In the event of a
registration of any of the Shares under the Securities Act pursuant
to Article I, Compass will indemnify and hold harmless the
Shareholders and each person who controls any such Shareholder
within the meaning of the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act") against any
losses, claims, damages or liabilities (including reasonable
attorneys' fees), joint or several, to which such Shareholder or
controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which
such Shares were registered under the Securities Act pursuant to
Section 1.1, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse
each such Shareholder, and controlling person for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that Compass will not be liable in
any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by such
Shareholder or controlling person for use in such registration
statement or prospectus; provided, further, that Compass will not
be liable hereunder to the Shareholder or controlling person for
any loss, claim, damage or liability that arises out of, or is
based upon, any untrue statement or alleged untrue statement or any
omission or alleged omission contained in any preliminary
prospectus that was corrected by any subsequent prospectus, and the
Shareholder or controlling person was required to deliver but
failed to deliver such prospectus as required by the Securities
Act.
2.2 Indemnification by the Shareholders. In the event of
a registration of any of the Shares under the Securities Act
pursuant to Article I, the Shareholders will indemnify and hold
harmless Compass and each person who controls Compass within the
meaning of the Securities Act and the Exchange Act, each officer of
Compass who signs the registration statement, and each director of
Compass, against all losses, claims, damages or liabilities, joint
or several, to which Compass or such officer or director or
controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which
such Shares were registered under the Securities Act pursuant to
Section 1.1, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse
Compass and each such officer, director, and controlling person for
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that such
Shareholders will be liable hereunder in any such case if and only
to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission relating to the
Shareholders made in reliance upon and in conformity with
information pertaining to the Shareholders, as such, furnished in
writing to Compass by the Shareholders for use in such registration
statement or prospectus ("Shareholder Information"); and provided
further, that the liability of the Shareholders hereunder shall not
exceed the amount of the proceeds received by the Shareholders from
the sale of the Shares covered by such registration statement.
2.3 Indemnification Procedures. Promptly after receipt by
an indemnified party hereunder of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof
is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to
notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party other than
under this Section 2.3. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party and, after notice from the
indemnifying party to such indemnified party of its election so to
assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this
Section 2.3 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof; provided,
however, that (i) if the indemnifying party has failed to assume
the defense and employ counsel or (ii) if the defendants in any
such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it that are
different from or additional to those available to the indemnifying
party, then the indemnified party shall have the right to select a
separate counsel and to assume such legal defense and otherwise to
participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as
incurred.
2.4 Contribution. If the indemnification provided for in
this Section 2.4 is unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or
liabilities or actions in respect thereof, then each indemnifying
party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or actions
in such proportion as is appropriate to reflect the relative fault
of Compass, on the one hand, and the Shareholders, on the other, in
connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or actions as well as any
other relevant equitable considerations, including the failure to
give any required notice. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by Compass, on the one hand, or the Shareholders, on the other, and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Compass and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 2.4 were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this Section 2.4. The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or actions in respect thereof referred
to above in this Section 2.4 shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 2.4, the
amount that the Shareholders shall be required to contribute shall
not exceed the total price at which the securities sold by the
Shareholders were offered to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
ARTICLE III
MISCELLANEOUS PROVISIONS
3.1 Nontransferability of Registration Rights. The
Shareholders' registration rights under Article I shall not inure
to the benefit of any person who acquires such Shares from the
Shareholders.
3.2 Binding Effect. Except as otherwise provided herein,
this Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior
written consent of the other parties. Nothing in this Agreement,
express or implied, is intended to confer upon any person or entity
other than the parties hereto and their respective permitted
successors and assigns, any right, benefit or obligations
hereunder.
3.3 Amendments. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by each of the parties
hereto. However, any party may waive any condition to the
obligations of any other party hereunder.
3.4 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in
person, by cable, telegram or telex, or by telecopy, or five
business days after mailing, if delivered by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:
If to Compass, to:
D. Paul Jones, Jr.
Chairman and Chief Executive Officer
Compass Bancshares, Inc.
15 South 2Oth Street
Birmingham, Alabama 35233
Telecopy No.: (205) 933-3043
and
Charles E. McMahen
Chairman and Chief Executive Officer
Compass Banks of Texas, Inc.
24 Greenway Plaza
Houston, Texas 72046
Telecopy No.: (713) 993-8500
With copies to:
Daniel B. Graves
Associate General Counsel
Compass Bancshares , Inc.
15 South 2Oth Street
Birmingham, Alabama 35233
Telecopy No.: (205) 933-3043
and
Gene G. Lewis
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
3400 Texas Commerce Tower
600 Travis
Houston, Texas 77002
Telecopy No.: (713) 223-3717
If to the Shareholders, to:
W. H. Ellis
4704 Oak Spring Drive
Flower Mound, Texas 75028
With a copy to:
Peter Weinstock
Jenkens & Gilchrist
1445 Ross Avenue, Ste. 3200
Dallas, Texas 75202-2799
Telecopy No.: (214) 855-4300
or to such other address as any party may have furnished to the
others in writing in accordance herewith.
3.5 Applicable Law. This Agreement and the legal
relations among the parties hereto arising from this Agreement
shall be governed by and construed in accordance with the laws of
the State of Texas, without reference to or application of any
conflicts of law principles.
3.6 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the
same instrument.
3.7 Entire Agreement. This Agreement, together with the
Merger Agreement, embody the entire agreement and understanding of
the parties hereto in respect of the subject matter contained
herein, and there are no promises, warranties, covenants or
undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject
matter.
3.8 Definition. The term "person" as used herein shall
have the meaning ascribed thereto in the Securities Act.
3.9 Conflict. In the event the terms and provisions of
this Agreement conflict with the Merger Agreement, the terms and
provisions of the Merger Agreement shall control.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and made and entered into as of the
date first set forth above.
COMPASS BANCSHARES, INC.
By: _________________________
Name: _______________________
Title: ______________________
______________________________
______________________________
______________________________
______________________________
______________________________
EXHIBIT G
OPINIONS REQUIRED FROM COUNSEL
TO THE COMPANY AND THE BANK
(i) the Company is a Texas corporation and a bank holding
company under the Bank Holding Company Act of 1956, as amended, and
is duly organized, validly existing and in good standing under the
laws of the State of Texas. The Bank is a Texas state bank, duly
organized, validly existing and in good standing under the laws of
the State of Texas. Each of the Company and the Bank has all
requisite corporate power and authority to carry on its business as
we know it to be conducted and to own, lease and operate its
properties and assets as now owned, leased or operated. Each of the
Company and the Bank is duly qualified and in good standing in
Texas.
(ii) the Company has all requisite power and authority to
execute and deliver the Agreement and any other agreements
contemplated by the Agreement (collectively, the "Other
Agreements") and to consummate the transactions contemplated
thereby; all acts (corporate or otherwise) and other proceedings
required to be taken by or on the part of the Company to execute
and deliver the Agreement and the Other Agreements and to
consummate the transactions contemplated therein have been duly and
validly taken; and the Agreement and the Other Agreements have been
duly executed and delivered by, and constitute the valid and
binding obligations of the Company enforceable against the Company
in accordance with their terms, subject to the effect of (a) any
applicable bankruptcy, insolvency, reorganization or other law
relating to or affecting creditors' rights generally and
(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(iii) the authorized capital stock of the Company consists
solely of 10,000 shares of Company Common Stock (as defined in the
Agreement) of which 1,040 shares are issued and outstanding (none
of which are held in the treasury); the Company is the record
holder of all of the issued and outstanding capital stock of the
Bank; all of the outstanding shares of the Company Common Stock are
validly issued, fully paid and nonassessable and all of the capital
stock of the Bank is validly issued, fully paid and nonassessable;
and to the best of our knowledge, none of such stock was issued in
violation of the preemptive rights of any person;
(iv) to the best of our knowledge and except as set forth
on Schedule 3.2 to the Agreement, there are no outstanding
subscriptions, options, rights, warrants, calls, convertible
securities, irrevocable proxies, or other agreements or commitments
obligating the Company or the Bank to issue any shares of,
restricting the transfer of, or otherwise relating to shares of
their respective capital stock of any class;
(v) the execution and delivery by the Company of the
Agreement does not and the consummation of the transactions
contemplated thereby will not contravene or violate any provision
of or constitute a default under (a) the articles of incorporation
or association or bylaws of the Company or the Bank, (b) to the
best of our knowledge and except as disclosed in the Agreement, any
note, license, instrument, mortgage, deed of trust, or other
agreement or understanding, permit, authorization or contract,
order, arbitration award, judgment or decree, or any other
restriction of any kind or character known to us to which the
Company or the Bank is a party or by which the Company or the Bank
or any of their respective assets or properties is bound, and
(c) to the best of our knowledge and except as disclosed in the
Agreement, any law, regulation, rule, administrative regulation or
decree of any court or any governmental agency or body whether
domestic or foreign applicable to the Company or the Bank, or their
respective assets or properties;
(vi) except as disclosed in the Agreement and except for
such consents, approvals, authorizations, actions or filings as
have already been obtained by Compass or Compass Texas, no consent,
approval, authorization, action or filing with any court,
governmental agency or public body is required in connection with
the execution, delivery and performance by the Company of the
Agreement;
(vii) except as set forth in Schedule 3.12 to the
Agreement, to the best of our knowledge, neither the Company nor
the Bank is a party to any Proceeding (as defined in the
Agreement), nor to the best of our knowledge, is any Proceeding
threatened against or affecting the Company or the Bank, which by
the terms of the Agreement would required to be set forth in
Section 3.12;
(viii) to the best of our knowledge and except as set
forth on Schedule 3.18 to the Agreement, neither the Company nor
the Bank is in material default under any law or regulation, or
under any order of any court, commission, board, bureau, agency or
instrumentality wherever located; and
(ix) upon consummation of the transactions contemplated by
the Agreement in accordance with its terms and upon filing of the
Articles of Merger relating to the Merger by the Secretary of State
of Texas, and upon filing by the Secretary of State of Delaware of
a Certificate of Merger the Merger will have been legally
consummated in accordance with the laws of the States of Texas and
Delaware with the consequences specified in Article 5.06 of the
Texas Business Corporation Act and Section 259 of the GCL.
EXHIBIT H
OPINIONS REQUIRED FROM COUNSEL
TO COMPASS
(i) Compass is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware, and is a bank holding company under the Bank Holding
Company Act of 1956, as amended. Compass has all requisite
corporate power and authority to carry on its business as now being
conducted and to own, lease and operate its properties as now
owned, leased or operated. Compass is duly qualified and in good
standing in the respective states where such qualification is
required.
(ii) Compass has all requisite power and authority to
execute and deliver the Agreement and to consummate the
transactions contemplated thereby; all acts (corporate or
otherwise) and other proceedings required to be taken by or on the
part of Compass to execute and deliver the Agreement and to
consummate the transactions contemplated therein have been duly and
validly taken; and the Agreement has been duly executed and
delivered by, and constitutes the valid and binding obligation of
Compass enforceable against Compass in accordance with its terms,
subject to the effect of (a) any applicable bankruptcy, insolvency,
reorganization or other law relating to or affecting creditors'
rights generally and (b) general principles or equity (regardless
of whether such enforceability is considered in a proceeding in
equity or at law);
(iii) the shares of Compass Common Stock to be issued
pursuant to the Agreement are validly issued, fully paid and
nonassessable; and, to the best of our knowledge and except as
contemplated by the Agreement, the shares of Compass Common Stock
issued pursuant to the Agreement are not subject to any agreements
or understandings to which Compass is a party with respect to the
voting or transfer of such shares, are not subject to any
agreements or understandings among any other parties with respect
to the voting or transfer of such shares, and have not been issued
in violation of the preemptive rights of any person;
(iv) the execution and delivery by Compass of the
Agreement does not and the consummation of the transactions
contemplated thereby will not contravene or violate any provision
of or constitute a default under (a) the Certificate of
Incorporation or Bylaws of Compass, (b) to the best of our
knowledge and except as disclosed in the Agreement, any note,
license, instrument, mortgage, deed of trust, or other agreement or
understanding, permit, authorization or contract, order,
arbitration award, judgment of decree, or any other restriction of
any kind known to us to which Compass is a party or by which
Compass or any of its assets or properties is bound, the breach or
violation of which could have a material adverse effect on Compass
and its Subsidiaries taken as a whole, and (c) to the best of our
knowledge and except as disclosed in the Agreement, any law,
regulation, rule, administrative regulation or decree of any court
or any governmental agency or body applicable to Compass or its
assets or properties;
(v) except as disclosed in the Agreement and except for
such consents, approvals, authorizations, actions or filings as
have already been obtained, no consent, approval, authorization,
action or filing with any court, governmental agency or public body
is required in connection with the execution, delivery and
performance by Compass of the Agreement;
(vi) to the best of our knowledge, Compass is not in
violation of or default under its Certificates of Incorporation or
Bylaws or any agreement, document or instrument under which Compass
is obligated or bound, or any law, order, judgment, or regulation
applicable to Compass or any of its Subsidiaries, the violation of
which could have a material adverse effect on Compass and its
Subsidiaries taken as a whole; and
(vii) the Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Act of
1933, as amended, permit the offering and sale by the Shareholders
of the shares of Compass Common Stock to be issued pursuant to the
Agreement to be registered on Form S-3 and permit the offering of
such shares to be made on a continuous or delayed basis in the
future.
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This First Amendment to Agreement and Plan of Merger (this
"Amendment") dated as of January 26, 1996 is entered into by and
among Compass Bancshares, Inc. ("Compass"), Compass Flower Mound,
Inc. ("Compass Flower") and Flower Mound Bancshares, Inc. (the
"Company").
WHEREAS, Compass and the Company entered into an Agreement and
Plan of Merger dated as of August 29, 1995 (the "Merger
Agreement");
WHEREAS, the Merger Agreement requires Compass to form a new
subsidiary which shall be merged with and into the Company, with
the Company surviving;
WHEREAS, Compass Flower is such new subsidiary; and
WHEREAS, Section 8.3 of the Merger Agreement requires Compass
and the Company to amend the Merger Agreement for the purpose of
making Compass Flower a party thereto;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and in the Merger Agreement and for
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as
follows:
1. Capitalized terms used herein and not defined
herein shall have the meanings set forth in the Merger Agreement.
2. Upon execution of this Amendment, Compass Flower
shall become a party to the Merger Agreement, shall be deemed to be
Compass Texas as defined in the Merger Agreement, and shall succeed
to the rights and become subject to the obligations of Compass
Texas as provided in the Merger Agreement.
3. The execution of this Amendment shall not relieve
Compass of its obligations under the Merger Agreement.
4. Except as herein provided, the terms of the Merger
Agreement shall remain in full force and effect.
5. This Amendment may be executed in several
counterparts, and by the parties on separate counterparts, and all
such counterparts, when so executed and delivered, shall constitute
but one and the same agreement.
IN WITNESS WHEREOF the parties have executed this Amendment as
of the date first written above.
ATTEST: COMPASS BANCSHARES, INC.
By: /s/ Daniel B. Graves By: /s/ Garrett R. Hagel
Its: Assistant Secretary Its: Chief Financial Officer
ATTEST: COMPASS FLOWER MOUND, INC.
By: /s/ Daniel B. Graves By: /s/ Garrett R. Hagel
Its: Assistant Secretary Its: Vice President and Treasurer
ATTEST: FLOWER MOUND BANCSHARES, INC.
By: /s/ Frank R. Scheer By: /s/ W. H. Ellis
Its: Secretary Its: President
EXHIBIT 4.1
Rights Agreement dated February 1, 1996
by and among Compass Bancshares, Inc.
and the former stockholders
of Flower Mound Bancshares, Inc.
RIGHTS AGREEMENT
This Rights Agreement (this "Agreement") is made and entered
into as of the 1stEday of February, 1996, by and among Compass
Bancshares, Inc. ("Compass") and Jack R. Brandenburger, W. H.
Ellis, Janet M. Fellers, Ralph Fellers, David D. Hickerson, and
Frank R. Scheer (collectively, the "Shareholders").
WHEREAS, Compass and the Shareholders are parties to that
certain Agreement and Plan of Merger dated as of August 29, 1995 ,
as amended (the "Merger Agreement"), pursuant to which Flower
Mound Bancshares, Inc. will be merged with and into a subsidiary of
Compass; and
WHEREAS, as consideration for the Merger, the Shareholders
have received an aggregate of 342,931 shares (the "Shares") of
Compass' Common Stock, par value $2.00 per share (collectively
"Compass Common Stock");
NOW, THEREFORE, in consideration of the mutual covenants and
promises herein, the parties hereto agree as follows:
ARTICLE I
REGISTRATION RIGHTS
1.1 Demand Registration. (a) Any Shareholder may
request Compass to register under the Securities Act of 1933, as
amended (the "Securities Act"), all or a portion of the Shares
held by such Shareholder for sale in a non-underwritten public
offering ("Demand Registration"). Simultaneously with the
delivery of a request to Compass for registration, the Shareholder
requesting registration shall provide written notice of the request
to the other Shareholders. Within five days after the receipt of
such notice, the other Shareholders shall give written notice to
Compass as to the number of Shares held by them to be registered.
All Shareholders shall be entitled to participate in any such
registration and offering, but the failure of any Shareholder to
participate in a registration and offering and the failure of a
Shareholder to register all of the Shares held by such Shareholder
in such an offering shall not increase the number of occasions on
which Compass is obligated to register Shares hereunder, which is
only one occasion.
(b) Promptly following receipt of any notice under this
Section 1.1, Compass shall use its best efforts to register under
the Securities Act, for public sale in a continuous or "shelf"
registration made pursuant to Rule 415 promulgated under the
Securities Act, or any similar or successor rule and under the
securities laws of any state or other jurisdiction as may be
reasonably required by the Shareholders, the Shares specified in
such notice from the Shareholders. The registration statement
shall permit sales of the Shares by the Shareholders to be effected
continuously in one or more transactions on the NASDAQ National
Market System or any stock exchange on which Compass Common Stock
may hereafter be admitted for trading (collectively, "Exchanges")
pursuant to and in accordance with the applicable rules of the
Exchanges, in block transactions on the Exchanges pursuant to and
in accordance with the applicable rules of the Exchanges, otherwise
than on the Exchanges, in negotiated transactions (which may
include the pledge or hypothecation of some or all of the Shares),
or in a combination of any such methods of sale, at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Compass shall
not be required to maintain the effectiveness of any registration
statement pursuant to this Agreement beyond the earlier to occur of
(i) two years from the date hereof, and (ii) such lesser period of
time if the Shareholders could sell their shares pursuant to any
amendment to Rule 144 promulgated under the Securities Act (the
"Termination Date"). Without in any way limiting the obligation
of Compass to keep effective a registration statement or state
registration or qualification in a Demand Registration once it is
effective or once such qualification has been obtained, Compass
shall be obligated to register Shares pursuant to this Section 1.1
on one occasion only; provided that no request may be made (a) for
a period of 90Edays after the completion of a distribution of
Compass Common Stock pursuant to a firm commitment underwritten
public offering, or (b) after the Termination Date.
Notwithstanding anything to the contrary contained herein, Compass
shall not be obligated to prepare and file any registration
statement pursuant to this Section 1.1, or prepare or file any
amendment or supplement thereto, and may suspend the Shareholders'
rights to make sales of Shares pursuant to an effective
registration statement only if either the registration statement or
the prospectus is required to be amended or supplemented as the
result of a material event. The filing of a registration
statement, or any amendment or supplement thereto, by Compass
cannot be deferred, and the Shareholders' rights to make sales
pursuant to an effective registration statement cannot be
suspended, pursuant to the provisions of the immediately preceding
sentence for more than 60 days after the abandonment or
consummation of any of the foregoing proposals or transactions or,
in any event, for more than 120 days after the date of Compass'
determination pursuant to the immediately preceding sentence of
this Section 1.1(b).
(c) Compass shall be entitled to include in any
registration statement filed pursuant to this Section 1.1 shares of
Compass Common Stock (or any securities convertible into or
exchangeable for or exercisable for the purchase of Compass Common
Stock to be sold by or for the account of other shareholders of
Compass.
1.2 Registration Procedures. If and whenever Compass is
required by the provisions of Section 1.1 to use its best efforts
to effect the registration of any of the Shares under the
Securities Act, Compass will as expeditiously as possible:
(a) prepare and file with the Securities Exchange
Commission ("SEC") a registration statement with respect to the
Shares and use its best efforts to cause such registration
statement to become and remain effective until the Termination
Date;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective until the Termination Date and as
may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Shares covered by such
registration statement in accordance with the method of disposition
set forth in such registration statement for such period;
(c) furnish to the Shareholders such number of copies of
the registration statement and the prospectus included therein
(including each preliminary prospectus and each document
incorporated by reference therein to the extent then required by
the rules and regulations of the SEC) as such persons may
reasonably request in order to facilitate the public sale or other
disposition of the Shares covered by such registration statement;
(d) use its best efforts to register or qualify the Shares
covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the Shareholders shall reasonably
request and to take all necessary action to keep such registration
or qualification effective as required by this Section 1.2 as to a
registration statement filed with the SEC; provided, that Compass
shall not be required to qualify to transact business as a foreign
corporation in any jurisdiction in which it would not otherwise be
required to be so qualified, subject itself to taxation in any such
jurisdiction, or take any action which would subject it to general
service of process in any such jurisdictions in which it is not
then so subject;
(e) immediately notify in writing the Shareholders, at any
time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result
of which the prospectus contained in such registration statement,
as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the
light of the circumstances then existing (in which case, Compass
shall promptly provide the Shareholders with revised or
supplemental prospectuses and if so requested by Compass in
writing, the Shareholders shall promptly take action to cease
making any offers of the Shares until receipt and distribution of
such revised supplemental prospectuses); and
(f) use its best efforts to keep effective and maintain
any registration, qualification, approval or listing obtained to
cover the Shares as may be necessary for the Shareholders to
dispose of such Shares from the effective date of the registration
statement through the Termination Date and shall from time to time
amend or supplement any prospectus used in connection therewith to
the extent necessary in order to comply with applicable law;
provided that, notwithstanding the foregoing, Compass shall not be
required to file or to keep effective and maintain any such
registration, qualification, approval or listing for such period
that would require it to cause an audit of Compass to be performed
other than as is required by the rules and regulations of the SEC
with respect to reports required to be filed under the Securities
Exchange Act of 1934, as amended.
In connection with any registration hereunder each
Shareholder will furnish promptly to Compass in writing such
information (together with such supplements as may be necessary
from time to time) with respect to itself and the proposed
distribution by it as shall be reasonably necessary in order to
ensure compliance with federal and applicable state securities
laws.
1.3 Expenses. Compass shall bear in accordance with this
Agreement the expenses of registration of the Shares; provided,
that the Shareholders shall be responsible for any fees and
disbursements of counsel and other representatives of the
Shareholders and any discounts, selling commissions or other
selling expenses allocable to sales of the Shares by the
Shareholders.
ARTICLE II
INDEMNIFICATION
2.1 Indemnification by Compass. In the event of a
registration of any of the Shares under the Securities Act pursuant
to Article I, Compass will indemnify and hold harmless the
Shareholders and each person who controls any such Shareholder
within the meaning of the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act") against any
losses, claims, damages or liabilities (including reasonable
attorneys' fees), joint or several, to which such Shareholder or
controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which
such Shares were registered under the Securities Act pursuant to
Section 1.1, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse
each such Shareholder, and controlling person for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided, however, that Compass will not be liable in
any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by such
Shareholder or controlling person for use in such registration
statement or prospectus; provided, further, that Compass will not
be liable hereunder to the Shareholder or controlling person for
any loss, claim, damage or liability that arises out of, or is
based upon, any untrue statement or alleged untrue statement or any
omission or alleged omission contained in any preliminary
prospectus that was corrected by any subsequent prospectus, and the
Shareholder or controlling person was required to deliver but
failed to deliver such prospectus as required by the Securities
Act.
2.2 Indemnification by the Shareholders. In the event of
a registration of any of the Shares under the Securities Act
pursuant to Article I, the Shareholders will indemnify and hold
harmless Compass and each person who controls Compass within the
meaning of the Securities Act and the Exchange Act, each officer of
Compass who signs the registration statement, and each director of
Compass, against all losses, claims, damages or liabilities, joint
or several, to which Compass or such officer or director or
controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which
such Shares were registered under the Securities Act pursuant to
Section 1.1, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, and will reimburse
Compass and each such officer, director, and controlling person for
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that such
Shareholders will be liable hereunder in any such case if and only
to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission relating to the
Shareholders made in reliance upon and in conformity with
information pertaining to the Shareholders, as such, furnished in
writing to Compass by the Shareholders for use in such registration
statement or prospectus ("Shareholder Information"); and provided
further, that the liability of the Shareholders hereunder shall not
exceed the amount of the proceeds received by the Shareholders from
the sale of the Shares covered by such registration statement.
2.3 Indemnification Procedures. Promptly after receipt by
an indemnified party hereunder of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof
is to be made against the indemnifying party hereunder, notify the
indemnifying party in writing thereof, but the omission so to
notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party other than
under this Section 2.3. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to
assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party and, after notice from the
indemnifying party to such indemnified party of its election so to
assume and undertake the defense thereof, the indemnifying party
shall not be liable to such indemnified party under this
Section 2.3 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof; provided,
however, that (i) if the indemnifying party has failed to assume
the defense and employ counsel or (ii) if the defendants in any
such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it that are
different from or additional to those available to the indemnifying
party, then the indemnified party shall have the right to select a
separate counsel and to assume such legal defense and otherwise to
participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as
incurred.
2.4 Contribution. If the indemnification provided for in
this Section 2.4 is unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or
liabilities or actions in respect thereof, then each indemnifying
party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or actions
in such proportion as is appropriate to reflect the relative fault
of Compass, on the one hand, and the Shareholders, on the other, in
connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or actions as well as any
other relevant equitable considerations, including the failure to
give any required notice. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied
by Compass, on the one hand, or the Shareholders, on the other, and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
Compass and the Shareholders agree that it would not be just and
equitable if contribution pursuant to this Section 2.4 were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this Section 2.4. The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or actions in respect thereof referred
to above in this Section 2.4 shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this Section 2.4, the
amount that the Shareholders shall be required to contribute shall
not exceed the total price at which the securities sold by the
Shareholders were offered to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
ARTICLE III
MISCELLANEOUS PROVISIONS
3.1 Nontransferability of Registration Rights. The
Shareholders' registration rights under Article I shall not inure
to the benefit of any person who acquires such Shares from the
Shareholders.
3.2 Binding Effect. Except as otherwise provided herein,
this Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior
written consent of the other parties. Nothing in this Agreement,
express or implied, is intended to confer upon any person or entity
other than the parties hereto and their respective permitted
successors and assigns, any right, benefit or obligations
hereunder.
3.3 Amendments. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by each of the parties
hereto. However, any party may waive any condition to the
obligations of any other party hereunder.
3.4 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be
deemed to have been duly given when delivered, if delivered in
person, by cable, telegram or telex, or by telecopy, or five
business days after mailing, if delivered by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:
If to Compass, to:
D. Paul Jones, Jr.
Chairman and Chief Executive Officer
Compass Bancshares, Inc.
15 South 2Oth Street
Birmingham, Alabama 35233
Telecopy No.: (205) 933-3043
and
Charles E. McMahen
Chairman and Chief Executive Officer
Compass Banks of Texas, Inc.
24 Greenway Plaza
Houston, Texas 72046
Telecopy No.: (713) 993-8500
With copies to:
Daniel B. Graves
Associate General Counsel
Compass Bancshares , Inc.
15 South 2Oth Street
Birmingham, Alabama 35233
Telecopy No.: (205) 933-3043
and
Gene G. Lewis
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
3400 Texas Commerce Tower
600 Travis
Houston, Texas 77002
Telecopy No.: (713) 223-3717
If to the Shareholders, to:
W. H. Ellis
4704 Oak Spring Drive
Flower Mound, Texas 75028
With a copy to:
Peter Weinstock
Jenkens & Gilchrist
1445 Ross Avenue, Ste. 3200
Dallas, Texas 75202-2799
Telecopy No.: (214) 855-4300
or to such other address as any party may have furnished to the
others in writing in accordance herewith.
3.5 Applicable Law. This Agreement and the legal
relations among the parties hereto arising from this Agreement
shall be governed by and construed in accordance with the laws of
the State of Texas, without reference to or application of any
conflicts of law principles.
3.6 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the
same instrument.
3.7 Entire Agreement. This Agreement, together with the
Merger Agreement, embody the entire agreement and understanding of
the parties hereto in respect of the subject matter contained
herein, and there are no promises, warranties, covenants or
undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject
matter.
3.8 Definition. The term "person" as used herein shall
have the meaning ascribed thereto in the Securities Act.
3.9 Conflict. In the event the terms and provisions of
this Agreement conflict with the Merger Agreement, the terms and
provisions of the Merger Agreement shall control.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and made and entered into as of the
date first set forth above.
COMPASS BANCSHARES, INC.
By: /s/ Garrett R. Hegel
Name: Garrett R. Hegel
Title: Chief Financial Officer
/s/ Jack R. Brandenburger
Jack R. Brandenburger
/s/ W. H. Ellis
W. H. Ellis
/s/ Janet M. Fellers
Janet M. Fellers
/s/ Ralph Fellers
Ralph Fellers
/s/ David D. Hickerson
David D. Hickerson
/s/ Frank R. Scheer
Frank R. Scheer
EXHIBIT 5.1
Opinion and consent of Jerry W. Powell, Esquire,
as to the legality of the securities being registered
May 20, 1996
Board of Directors
Compass Bancshares, Inc.
15 South 20th Street
Birmingham, Alabama 35233
Re: Compass Bancshares, Inc. _ Registration of 342,930
Shares of Common Stock $2.00 Per Share Par Value on
Securities and Exchange Commission Form S-3
Dear Sirs:
In connection with the registration under the Securities Act
of 1933, as amended, of 342,930 shares of common stock, $2.00 per
share par value (the "Company Stock") of Compass Bancshares,
Inc., a Delaware corporation (the "Company"), for issuance and
sale in the manner described in the Company's registration
statement on Form S-3 filed with the Securities and Exchange
Commission, to which this opinion is an exhibit (the "Registration
Statement"), I, as General Counsel to the Company, have examined
such corporate records, certificates and other documents as I have
considered necessary or appropriate for the purposes of this
opinion.
On the basis of the foregoing, I am of the opinion that the
shares of the Company Stock offered pursuant to the Registration
Statement have been duly and validly authorized and are duly and
validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement.
Yours very truly,
/s/ Jerry W. Powell
Jerry W. Powell
General Counsel
EXHIBIT 23.1
Consent of KPMG Peat Marwick, LLP
Accountant's Consent
The Board of Directors
Compass Bancshares, Inc.
We consent to the use of our report incorporated herein by
reference and to the reference to our firm under the heading
"Experts" in the Prospectus.
Our report refers to changes in the method of accounting for
income taxes and the method of accounting for certain investments
in debt and equity securities.
Birmingham, Alabama /s/ KPMG Peat Marwick, LLP
May 20, 1996
EXHIBIT 24.1
Power of Attorney
POWER OF ATTORNEY
WHEREAS, Compass Bancshares, Inc. (the "Company") has agreed
to file registration statements and amendments thereto under the
Securities Act of 1933, as amended, with respect to the issuance
and sale of shares of common stock of the Company in connection
with the acquisition by the Company of Flower Mound Bancshares,
Inc.;
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that the
Company and the undersigned directors and officers of said Company,
individually as a director and/or as an officer of the Company,
hereby make, constitute and appoint each of D. Paul Jones, Jr.,
Garrett R. Hegel, Jerry W. Powell, and Daniel B. Graves their true
and lawful attorney-in-fact for each of them and in each of their
names, places and steads to sign and cause to be filed with the
Securities and Exchange Commission said registration statement and
any appropriate amendments thereto, to be accompanied by
prospectuses and any appropriately amended prospectuses and any
necessary exhibits.
The Company hereby authorizes said persons or any one of them
to execute said registration statement and amendments thereto on
its behalf as attorney-in-fact for it and its authorized officers,
and to file the same as aforesaid.
The undersigned directors and officers of the Company hereby
authorize said persons or any one of them to sign said registration
statements on their behalf as attorney-in-fact and to amend, or
remedy any deficiencies with respect to, said registration
statements by appropriate amendment or amendments and to file the
same as aforesaid.
DONE as of this the 20th day of November, 1995.
COMPASS BANCSHARES, INC.
By: /s/ D. Paul Jones, Jr.
-----------------------------------------
D. Paul Jones, Jr.
Its Chairman and Chief Financial Officer
/s/ D. Paul Jones, Jr.
---------------------------------------------
D. Paul Jones, Jr.
/s/ Garrett R. Hegel
---------------------------------------------
Garrett R. Hegel
/s/ Michael A. Bean
---------------------------------------------
Michael A. Bean
---------------------------------------------
Stanley M. Brock
---------------------------------------------
Charles W. Daniel
/s/ W. Eugene Davenport
---------------------------------------------
W. Eugene Davenport
/s/ Marshall Durbin, Jr.
---------------------------------------------
Marshall Durbin, Jr.
/s/ Tranum Fitzpatrick
---------------------------------------------
Tranum Fitzpatrick
/s/ George W. Hansberry, M.D.
---------------------------------------------
George W. Hansberry, M.D.
/s/ John S. Stein
---------------------------------------------
John S. Stein
---------------------------------------------
Robert J. Wright
EXHIBIT 24.2
Compass Board of Director Resolutions
CERTIFICATE OF THE ASSISTANT SECRETARY REGARDING
RESOLUTIONS OF THE BOARD OF DIRECTORS
OF COMPASS BANCSHARES, INC., RELATING TO
PROPOSED ACQUISITION OF FLOWER MOUND BANCSHARES, INC., AND ITS
SUBSIDIARY, SECURITY BANK, FLOWER MOUND, TEXAS
I, the undersigned Assistant Secretary of Compass Bancshares,
Inc., a Delaware corporation, and a custodian of the minutes book
and other records of the Board of Directors of said Corporation, do
hereby certify that the following resolutions were adopted by the
Board of Directors of said Corporation in a meeting, duly called
and held on November 20, 1995:
RESOLVED, that the Board of Directors of Compass Bancshares,
Inc., a Delaware corporation (the "Corporation"), has determined
that it is desirable and in the best interests of the Corporation
and its stockholders to acquire (the "Flower Mound Acquisition")
Flower Mound Bancshares, Inc. (the "Company") and its wholly-owned
subsidiary, Security Bank (the "Bank"), the principal offices of
which are located in Flower Mound, Texas, in accordance with the
basic terms of such transaction as described to this Board by the
Chairman and Chief Executive Officer, the Chief Financial Officer,
and/or the General Counsel and Secretary of the Corporation at the
meeting at which these resolutions were adopted; and further
RESOLVED, that the Agreement and Plan of Merger by and between
the Corporation and the Company, dated as of August 29, 1995, is
hereby approved and ratified; and further
RESOLVED, that the execution, attestation, and delivery of the
Agreement and Plan of Merger, as well as any amendments or
supplements thereto in such form as the proper officers of the
Corporation in their sole discretion shall approve, such approval
to be conclusively evidenced by their execution, attestation, and
delivery thereof (referred to collectively herein as the
"Agreement"), by the officers of the Corporation, in consultation
with counsel, are authorized, approved, and ratified; and further
RESOLVED, that all negotiations and any other actions taken
and things done heretofore by the officers of the Corporation with
respect to the execution, attestation, and delivery of written
agreements in principle or definitive agreements relating to the
acquisition of the Company and the Bank are hereby ratified and
approved; and further
RESOLVED, that the organization of one or more corporations as
a subsidiary or subsidiaries of the Corporation or as a subsidiary
or subsidiaries of an existing affiliate of the Corporation for the
purpose of effectuating the Flower Mound Acquisition is hereby
authorized, approved, and ratified in the event that it shall be
determined or has been determined by the officers of the
Corporation, after consultation with counsel, that such
organization of a subsidiary is necessary or appropriate for the
effectuation of the acquisition of the Company and the Bank; and
further
RESOLVED, that to the extent that the approval of the
Corporation as the sole stockholder of any of its subsidiaries is
required in connection with the Flower Mound Acquisition, the
Corporation hereby waives any and all notice of a meeting or
meetings of stockholders of any such subsidiary or subsidiaries for
the purposes of approving the Flower Mound Acquisition or the
Agreement, and the Board of Directors of the Corporation hereby
approves, authorizes, and ratifies the Flower Mound Acquisition and
the Agreement as the stockholder of its subsidiaries now existing
or to be organized, it being the intent of the Board of Directors
of the Corporation that the approval by the Corporation set forth
in this resolution shall constitute any and all approval required
by law for the approval of the Flower Mound Acquisition or the
Agreement by the Corporation as a stockholder; and further
RESOLVED, that the Corporation's and the Corporation+s
subsidiaries' officers are authorized, empowered, and directed to
prepare, or cause to be prepared, and to execute, attest, and file
all applications, or requests for waiver of application
requirements, which they shall deem necessary or appropriate with
the Board of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of Thrift Supervision,
the Office of the Comptroller of the Currency, the Texas Department
of Banking, and any other appropriate bank and bank holding company
regulatory authorities with respect to the Flower Mound
Acquisition; and further
RESOLVED, that the proper officers of the Corporation, in
consultation with counsel, are authorized and directed to prepare,
execute, attest, and file a Registration Statement on Form S-3 or
other appropriate form for the registration of securities (the
"Registration Statement") with the United States Securities and
Exchange Commission (the "Commission") relating to the Flower Mound
Acquisition and the proposed issuance of securities of the
Corporation as consideration in such transaction; and further
RESOLVED, that the proper officers of the Corporation are
authorized, empowered, and directed for and on behalf of the
Corporation to do any and all acts and things necessary or
appropriate in connection with such filing of the Registration
Statement, including the execution, attestation, and filing of any
amendments or supplements thereto, to effectuate the registration
of securities of the Corporation to be issued in the Flower Mound
Acquisition and the continuation of the effectiveness of the
Registration Statement; and further
RESOLVED, that each officer or director who may be required to
execute the Registration Statement or any amendment or supplement
to the Registration Statement (whether on behalf of the Corporation
or as an officer or director thereof) is hereby authorized to
constitute and appoint D. Paul Jones, Jr., Garrett R. Hegel, Jerry
W. Powell, and Daniel B. Graves, and each of them acting
singularly, his true and lawful attorney-in-fact and agent, with
full power of substitution for him and in his name, place, and
stead, in any and all capacities, to sign the Registration
Statement and any and all amendments and supplements thereto; and
further
RESOLVED, that the proper officers of the Corporation are
authorized in the name and on behalf of the Corporation to take any
and all action that they deem necessary or appropriate in order to
effect the registration, qualification, or exemption from
registration or qualification of securities of the Corporation
included in the Registration Statement for issue, offer, sale, or
trade under the "blue sky" or securities laws of any of the states
of the United States of America or the securities laws of any
jurisdiction or foreign country where such action may be advisable
or necessary, to effect the registration of securities of the
Corporation to issued in connection with the Flower Mound
Acquisition, to execute, acknowledge, verify, deliver, file or
cause to be published any application, surety bonds, reports,
irrevocable consents to service of process, appointment of
attorneys for service of process, and any other documents or
instruments that may be required under such laws, and to take any
and all further action that they may deem necessary or advisable in
order to maintain any such registration, qualification, or
exemption for so long as they deem necessary as required by law;
and further
RESOLVED, that the Corporation hereby consents to service of
process in any state or jurisdiction in which such consent is
required under the blue sky laws as a precondition to the offer and
sale of securities of the Corporation to be issued in the Flower
Mound Acquisition, and that Jerry W. Powell, General Counsel and
Secretary of the Corporation, is hereby designated as agent for
service of process in connection with the Registration Statement
and any consent to service of process that may be required by the
blue sky laws of any jurisdiction as a precondition to the offer
and sale of such securities; and further
RESOLVED, that the appropriate officers of the Corporation are
hereby authorized, empowered, and directed to do any and all other
or further acts, and to prepare, or cause to be prepared, and to
execute, attest, and deliver all other or further instruments,
certificates, applications, reports, and documents, including
without limitation obtaining any necessary or appropriate
regulatory approvals, all on behalf of the Corporation as they, in
their discretion, may deem necessary or appropriate to effectuate
the purposes of these resolutions, and that all acts and things
undertaken and completed heretofore by the proper officers of the
Corporation in connection with the Flower Mound Acquisition as
contemplated by these resolutions are hereby approved, ratified,
and confirmed.
I further certify that the foregoing resolutions have not been
modified, amended, or rescinded and that said resolutions are in
full force and effect as of the date of this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of the Corporation this the 15th day of March, 1996.
/s/ Daniel B. Graves
------------------------------------
Daniel B. Graves
Assistant Secretary
Compass Bancshares, Inc.
[Corporate Seal]
