SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-
1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
FIRST COLORADO BANCORP, INC.
(Name of Issuer)
COMMON STOCK, $0.10 PAR VALUE
(Title of Class of Securities)
319764106
(CUSIP Number)
MR. JAMES A. LAPHEN
PRESIDENT
COMMERCIAL FEDERAL CORPORATION
2120 SOUTH 72ND STREET
OMAHA, NEBRASKA 68124
(402) 390-5361
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
MARCH 9, 1998
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
(Continued on following pages)
(Page 1 of 9 Pages)
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CUSIP NO. 319764106
SCHEDULE 13D
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Commercial Federal Corporation
47-0658852
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Nebraska
NUMBER OF 7. SOLE VOTING POWER
SHARES 0
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 0
PERSON 10. SHARED DISPOSITIVE POWER
WITH 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,348,533
shares of Common Stock.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.6%. Based upon
16,826,798 shares of Common Stock outstanding as of March 9, 1998, as
represented by Issuer, calculated pursuant to Rule 13d-3(d)(1).
14. TYPE OF REPORTING PERSON
HC, CO
(Page 2 of 9 Pages)
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CUSIP NO. 319764106
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the common stock, par value $0.10 per
share ("Bancorp Common Stock"), of First Colorado Bancorp, Inc. ("Bancorp"), a
Colorado corporation. The principal executive offices of Bancorp are located at
215 S. Wadsworth Boulevard, Lakewood, Colorado 80226.
ITEM 2. IDENTITY AND BACKGROUND.
This Schedule 13D is filed by Commercial Federal Corporation
("Commercial"), a Nebraska corporation. Commercial is a unitary non-diversified
savings and loan holding company holding all of the capital stock of Commercial
Federal Bank, a Federal Savings Bank (the "Bank"), a federally chartered savings
bank. Commercial's principal executive offices are located at 2120 South 72nd
Street, Omaha, Nebraska 68124.
Each executive officer and each director of Commercial is a citizen
of the United States. The name, business address and present principal
occupation of each executive officer and director are set forth in Annex I to
this Schedule 13D which is incorporated herein by this reference.
During the last five years, to the best of Commercial's knowledge,
neither Commercial nor any of its executive officers or directors has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which Commercial or
such person was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws, or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the Stock Option Agreement, dated March 9, 1998, between
Commercial and Bancorp (the "Stock Option Agreement"), Bancorp granted
Commercial an irrevocable option (the "Option") to purchase from Bancorp, under
certain circumstances and subject to certain adjustments, up to 3,348,533
authorized and unissued shares of Bancorp Common Stock, at a price of $24.125
per share (the "Purchase Price"), payable in cash. As of the date hereof, the
Option is not exercisable. The shares of Bancorp Common Stock subject to the
Option would equal 19.9% of the outstanding Bancorp Common Stock before giving
effect to the exercise of the Option and 16.6% of the outstanding Bancorp Common
Stock after giving effect to the exercise of the Option. Under certain
circumstances, Commercial may require Bancorp to, or Bancorp may be permitted
to, repurchase for cash the Option and any shares of Bancorp Common Stock
acquired pursuant to the exercise of the Option.
The Option was granted by Bancorp as a condition of and in
consideration for Commercial entering into a Reorganization and Merger
Agreement, dated as of March 9, 1998 (the "Merger Agreement"), by and among
Commercial, the Bank, Bancorp and First Bank of Colorado (the "Company"), a
federally chartered savings bank and wholly-owned subsidiary of Bancorp.
The exercise of the Option for the full number of shares currently
covered thereby would require aggregate funds of $80,783,359, based on a
Purchase Price of $24.125. It is anticipated that, should the Option become
exercisable and should Commercial determine to exercise the Option, Commercial
would obtain the funds for purchase from working capital or by borrowing from
parties whose identity is not yet known.
(Page 3 of 9 Pages)
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CUSIP NO. 319764106
A copy of the Stock Option Agreement is included as Exhibit 2.2 to
this Schedule 13D and is incorporated herein by this reference. The foregoing
description of the Stock Option Agreement is qualified in its entirety by
reference to such exhibit.
ITEM 4. PURPOSE OF TRANSACTION.
In connection with the execution of the Stock Option Agreement,
Commercial, the Bank, Bancorp and the Company entered into the Merger Agreement,
pursuant to which, among other matters and subject to the terms and conditions
set forth in the Merger Agreement, Bancorp will merge with and into Commercial
(the "Merger"). The Option was granted by Bancorp as a condition of and in
consideration for Commercial entering into the Merger Agreement. Consummation of
the Merger is subject to certain conditions, including: (i) receipt of the
approval of the Merger, the Merger Agreement and the transactions contemplated
thereby by the holders of a majority of the outstanding shares of Bancorp Common
Stock and by the holders of a majority of the outstanding shares of common
stock, par value $.01 per share ("Commercial Common Stock"), of Commercial; (ii)
all consents, waivers, authorizations and approvals required from all
governmental authorities (including the Office of Thrift Supervision) to
consummate Merger having been obtained and remaining in full force and effect
and all waiting periods under applicable law in respect thereof having expired
or terminated; (iii) no statute, rule, regulation, order, injunction, decree or
other applicable law having been enacted, entered, issued, promulgated or
enforced by any governmental authority which prohibits, restricts or makes
illegal consummation of the Merger (an "Injunction") and which remains in effect
and no proceeding initiated by any governmental authority seeking an Injunction
be pending; (iv) registration of the shares of Commercial Common Stock to be
issued in the Merger under the Securities Act of 1933, as amended; (v) receipt
of an opinion of counsel as to the tax-free nature of certain aspects of the
Merger; (vi) receipt of an accountant's letter confirming that the Merger will
qualify as a pooling of interests transaction for accounting and financial
reporting purposes; (vii) the number of shares of Bancorp Common Stock with
respect to which appraisal rights have been perfected not being greater than 5%
of the number of shares of Bancorp Common Stock issued and outstanding as of the
date of the Merger Agreement; and (viii) satisfaction of certain other
conditions. Pursuant to the Merger Agreement, upon consummation of the Merger,
(a) the officers of Commercial will be the officers of the surviving corporation
in the Merger, (b) the directors of Commercial will be the directors of the
surviving corporation in the Merger, (c) each share of Bancorp Common Stock will
be converted into the right to receive a number of shares of Commercial Common
Stock equal to the Exchange Ratio (as defined in the Merger Agreement), subject
to adjustment under the circumstances described in the Merger Agreement, plus
cash in lieu of fractional shares, and (d) the Articles of Incorporation and
Bylaws of Commercial will be the Articles of Incorporation and Bylaws of the
surviving corporation in the Merger. Upon consummation of the Merger, the
Bancorp Common Stock will be delisted from the Nasdaq National Market.
The Merger Agreement provides that promptly following the effective
time of the Merger, (i) Malcolm E. Collier, Jr., President, CEO and Chairman of
Bancorp, will be invited to serve as an additional member of the Commercial
Board of Directors (or, at Mr. Collier's election, a director emeritus for a
period of not less than 36 months) and, upon acceptance thereof and appointment
thereon, will be entitled to receive director fees (of no less than $500 per
meeting) on the same basis as other non-employee directors of Commercial, and
(ii) each other director serving on the Bancorp Board of Directors as of the
date of the Merger Agreement and as of the effective time of the Merger will be
invited to serve on an advisory board to Commercial for a period of not less
than 12 months following the effective time and, upon acceptance thereof and
appointment thereon, each such director serving on such advisory board who is
not an employee of Commercial or a Commercial subsidiary following the effective
time will be entitled to receive a meeting fee of $500 per meeting for such
service, such advisory board to meet not less frequently than 4 times a
(Page 4 of 9 Pages)
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CUSIP NO. 319764106
year.
A copy of the Merger Agreement is included as Exhibit 2.1 to this
Schedule 13D and is incorporated herein by this reference. The foregoing
description of the Merger Agreement is qualified in its entirety by reference to
such exhibit.
Except as set forth in this Schedule 13D, Commercial does not have
any current plans or proposals that relate to or would result in (i) the
acquisition by any person of additional shares of Bancorp Common Stock or the
disposition of shares of Bancorp Common Stock; (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving Bancorp
or any of its subsidiaries; (iii) a sale or transfer of any material amount of
assets of Bancorp or any of its subsidiaries; (iv) any change in the present
board of directors or management of Bancorp, including any plans or proposals to
change the number or term of directors or to fill any vacancies on the board;
(v) any material change in the present capitalization or dividend policy of
Bancorp; (vi) any other material change in Bancorp's business or corporate
structure; (vii) any change in Bancorp's charter or bylaws, or instruments
corresponding thereto, or other actions that may impede the acquisition of
control of Bancorp by any person; (viii) causing a class of securities of
Bancorp to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (ix) a class of equity securities of Bancorp
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended; or (x) any action similar to
any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
Although the Option does not allow Commercial to purchase any shares
of Bancorp Common Stock pursuant thereto unless and until the conditions to
exercise specified in the Stock Option Agreement occur, assuming for purposes of
this Item 5 that such conditions are satisfied and Commercial is entitled to
purchase shares of Bancorp Common Stock pursuant to the Option, Commercial
currently would be entitled to purchase 3,348,533 shares of Bancorp Common
Stock, or approximately 19.9% of the outstanding Bancorp Common Stock before
giving effect to the exercise of the Option and 16.6% of the outstanding Bancorp
Common Stock after giving effect to the exercise of the Option (based upon
16,826,798 shares of Bancorp Common Stock outstanding as of March 9, 1998, as
represented by Bancorp in the Merger Agreement).
Commercial does not currently have the right to acquire any shares
of Bancorp Common Stock under the Option unless certain events specified in the
Stock Option Agreement occur. Accordingly, Commercial does not have sole or
shared voting or dispositive power with respect to any shares of Bancorp Common
Stock subject to the Option, and Commercial disclaims beneficial ownership of
Bancorp Common Stock subject to the Option until such events occur. Assuming for
purposes of this Item 5 that events occurred that would enable Commercial to
exercise the Option and Commercial exercised the Option, Commercial would have
sole voting power and sole dispositive power with respect to the shares of
Bancorp Common Stock acquired pursuant to the Option, subject to Bancorp's right
to repurchase such shares as set forth in the Stock Option Agreement.
The foregoing description of certain terms of the Stock Option
Agreement is qualified in its entirety by reference to the Stock Option
Agreement which is filed as Exhibit 2.2 hereto and which is incorporated herein
by this reference.
To the best of Commercial's knowledge, no executive officer or
director of Commercial beneficially owns any shares of Bancorp Common Stock, nor
(except for the issuance of the Option) have any transactions in Bancorp Common
Stock been effected during the past 60
(Page 5 of 9 Pages)
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CUSIP NO. 319764106
days by Commercial or, to the best knowledge of Commercial, by any executive
officer or director of Commercial. In addition, no other person is known by
Commercial to have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the securities covered by this
Schedule 13D.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
A copy of the Merger Agreement is included as Exhibit 2.1 to this
Schedule 13D and is incorporated herein by this reference. See Item 4.
A copy of the Stock Option Agreement is included as Exhibit 2.2 to
this Schedule 13D and is incorporated herein by this reference. See Items 3 and
5.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following exhibits are filed as part of this Schedule 13D:
Exhibit 2.1 -- Reorganization and Merger Agreement, dated as of March 9,
1998, by and among Commercial Federal Corporation, Commercial
Federal Bank, A Federal Savings Bank, First Colorado Bancorp, Inc.
and First Federal Bank of Colorado, filed as Exhibit 2 to the
Current Report on Form 8-K of Commercial Federal Corporation
(Commission File No. 1-11515), dated March 9, 1998 and filed March
18, 1998, is incorporated herein by reference.
Exhibit 2.2 -- Stock Option Agreement, dated March 9, 1998, by and between
Commercial Federal Corporation and First Colorado Bancorp, Inc.
(Page 6 of 9 Pages)
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CUSIP NO. 319764106
ANNEX I
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the name and present principal occupation of
each director and executive officer of Commercial Federal Corporation as of
March 9, 1998. The business address of each such director and executive officer
is c/o Commercial Federal Corporation, 2120 South 72nd Street, Omaha, Nebraska
68124.
NAME PRINCIPAL OCCUPATION
Directors
of Commercial
Federal Corporation:
Michael P. Glinsky Executive Vice President and Chief
Financial Officer of U S West, Inc., an
international telecommunications, entertainment
and directory and information services company.
Talton K. Anderson Owner and President of three automobile
dealerships in Omaha, Nebraska, as well as one
in Lincoln, Nebraska. Mr. Anderson is also the
President of a Nebraska-based automobile leasing
company and a reinsurance company.
Carl G. Mammel Chairman of the Board of Mammel & Associates, a
consulting firm providing services in executive
benefits, employee benefits planning and wealth
transfer planning. Mr. Mammel is also Chairman
of the Board of M Financial Corporation, a
network of financial service firms throughout
the United States.
James P. O'Donnell Executive Vice President, Chief
Financial Officer and Corporate Secretary of
ConAgra, Inc., an Omaha, Nebraska-based
international diversified food company with annual
sales of approximately $24 billion.
William A. Fitzgerald Chairman of the Board and Chief Executive
Officer of Commercial Federal Corporation and
Commercial Federal Bank, a Federal Savings Bank.
Robert D. Taylor Owner and President of Taylor Financial,
based in Wichita, Kansas, a consulting and
investment firm.
Aldo J. Tesi President of First Data Card Enterprise
Group since 1996. First Data is a leading
third-party provider of credit, debit, private
label and commercial card processing services.
Robert F. Krohn Vice Chairman and Chief Executive Officer
of PSI Group, Inc., a national mail presort
company.
Robert S. Milligan Chairman of the Board and Chief Executive
Officer of MI Industries, a protein processing
company headquartered in
(Page 7 of 9 Pages)
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CUSIP NO. 319764106
ANNEX I
Lincoln, Nebraska, which produces products
for pharmaceutical, biological and research
markets throughout the world.
William Krause President of Krause Gentle Corporation, a
diversified corporation.
Executive Officers
of Commercial Federal
Corporation (who
are not directors):
James A. Laphen President, Chief Operating Officer and Chief
Financial Officer of Commercial Federal
Corporation and Commercial Federal Bank, a Federal
Savings Bank ("CFB").
Gary L. Matter Senior Vice President, Controller and Secretary
of Commercial Federal Corporation and CFB.
Joy J. Narzisi Senior Vice President, Treasurer and Assistant
Secretary of Commmercial Federal Corporation and
CFB.
Margaret E. Ash Senior Vice President and Assistant Secretary of
CFB.
Roger L. Lewis Senior Vice President and Assistant Secretary of
CFB.
Gary L. Baugh Senior Vice President of CFB.
Russell G. Olson Senior Vice President of CFB.
Jon W. Stephenson Senior Vice President of CFB.
Terry A. Taggart Senior Vice President of CFB.
Gary D. White Senior Vice President of CFB.
Ronald A. Aalseth First Vice President of CFB.
Pamela J. Acuff First Vice President of CFB.
R. Hal Bailey First Vice President of CFB.
Melissa M. Beumler First Vice President of CFB.
Richard A. Campbell First Vice President of CFB.
Ronald P. Cheffer First Vice President of CFB.
Monte M. Deere First Vice President of CFB.
Larry R. Goddard First Vice President of CFB.
John J. Griffith First Vice President of CFB.
Robert E. Gruwell First Vice President of CFB.
David E. Gunter, Jr. First Vice President of CFB.
Michael J. Hoffman First Vice President of CFB.
Thomas J. Hromatka First Vice President of CFB.
Lauren W. Kingry First Vice President of CFB.
Kevin C. Parks First Vice President of CFB.
Thomas N. Perkins First Vice President of CFB.
Douglas D. Pullin First Vice President of CFB.
Harold G. Siemens First Vice President of CFB.
Michael J. Walts First Vice President of CFB.
Dennis R. Zimmerman First Vice President of CFB.
(Page 8 of 9 Pages)
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
COMMERCIAL FEDERAL CORPORATION
By: /s/ James A. Laphen
Name: James A. Laphen
Title: President
Dated: March 19, 1998
(Page 9 of 9 Pages)
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
2.1 Reorganization and Merger Agreement, dated as of March 9, 1998, by
and among Commercial Federal Corporation, Commercial Federal Bank, A
Federal Savings Bank, First Colorado Bancorp, Inc. and First Federal
Bank of Colorado, filed as Exhibit 2 to the Current Report on Form
8-K of Commercial Federal Corporation (Commission File No. 1-11515),
dated March 9, 1998 and filed March 18, 1998, is incorporated herein
by reference.
2.2 Stock Option Agreement, dated March 9, 1998, by and between
Commercial Federal Corporation and First Colorado Bancorp,
Inc.
EXHIBIT 2.2
THE TRANSFER OF THIS AGREEMENT IS SUBJECT TO CERTAIN PROVISIONS
CONTAINED HEREIN AND TO RESALE RESTRICTIONS
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT ("Option Agreement") dated March 9, 1998, by
and between COMMERCIAL FEDERAL CORPORATION ("Commercial"), a Nebraska
corporation registered as a savings and loan holding company under the Home
Owners' Loan Act of 1933, as amended ("HOLA"), and FIRST COLORADO BANCORP, INC.
("Bancorp"), a Colorado corporation registered as a savings and loan holding
company under the HOLA.
W I T N E S S E T H:
WHEREAS, the Board of Directors of Commercial and the Board of
Directors of Bancorp have approved a Reorganization and Merger Agreement dated
as of even date herewith (the "Merger Agreement") providing, among other things,
for the merger of Bancorp with and into Commercial;
WHEREAS, as a condition and inducement to Commercial's entering into
the Merger Agreement, Commercial has required that Bancorp agree, and Bancorp
has agreed, to grant to Commercial the Option (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises contained herein
and in the Merger Agreement, the parties agree as follows:
1. Definitions.
Capitalized terms used but not defined herein shall have the same
meanings as in the Merger Agreement.
2. Grant of Option.
Subject to the terms and conditions set forth herein, Bancorp hereby
grants to Commercial an option (the "Option") to purchase up to 3,348,533 fully
paid and nonassessable, authorized and unissued shares of Bancorp Common Stock
at a price of $24.125 per share (the "Purchase Price") payable in cash as
provided in Section 4 hereof; provided, however, that in no event shall the
number of shares of Bancorp Common Stock for which this Option is exercisable
exceed 19.9% of Bancorp's issued and outstanding shares of Bancorp Common Stock
(without giving effect to any shares subject to or issued pursuant to the
Option). The number of shares of Bancorp Common Stock that may be received upon
the exercise of the Option and the Purchase Price are subject to adjustment as
herein set forth.
3. Exercise of Option.
(a) Commercial may exercise the Option, in whole or in part, at any
time or from time to time only if a Purchase Event (as defined below) shall have
occurred; provided, however, that (i) to the extent the Option shall not have
been exercised, it shall terminate and be of no further force and effect upon
the earliest to occur of (A) the Effective Time of the Merger, (B) the
termination of the Merger Agreement in accordance with any of Sections
8.1(a)(i), 8.1(a)(ii), 8.1(a)(iii) (but only upon termination by (I) Bancorp
under such Section 8.1(a)(iii) or
<PAGE>
(II) by Commercial under such Section 8.1(a)(iii) other than with
respect to a willful breach by Bancorp), 8.1(a)(iv), 8.1(a)(vi) or 8.1(a)(vii)
thereof, and (C) 12 months following the termination of the Merger Agreement in
accordance with any of Sections 8.1(a)(iii) (but only upon termination by
Commercial under such Section 8.1(a)(iii) with respect to a willful breach by
Bancorp) or 8.1(a)(v) thereof, provided that, with respect to any of the
foregoing, if such termination follows an Extension Event (as defined below),
the Option shall not terminate until the date that is 18 months following such
termination; (ii) if the Option cannot be exercised on such day because of any
injunction, order or similar restraint issued by a Governmental Authority of
competent jurisdiction, the Option shall expire on the 30th Business Day after
such injunction, order or restraint shall have been dissolved or when such
injunction, order or restraint shall have become permanent and no longer subject
to appeal, as the case may be; and (iii) that any such exercise shall be subject
to compliance with Applicable Law, including the HOLA. This Option may not be
exercised at any time when Commercial shall be in willful and material breach of
any of its covenants or agreements contained in the Merger Agreement such that
Bancorp shall be entitled to terminate the Merger Agreement pursuant to Section
8.1(a)(iii) thereof.
(b) As used herein, a "Purchase Event" shall mean any of the
following events:
(i) Bancorp or any Bancorp Subsidiary, without having received
prior written consent from Commercial, shall have entered into,
authorized, recommended, proposed or publicly announced its intention to
enter into, authorize, recommend, or propose, an agreement, arrangement or
understanding with any Person (other than Commercial or any Commercial
Subsidiary) to (A) effect a merger or consolidation or similar transaction
involving Bancorp or any Bancorp Subsidiary (other than internal mergers,
reorganizing actions, consolidations or dissolutions involving only
existing Bancorp Subsidiaries), (B) purchase, lease or otherwise acquire
20% or more of the assets of Bancorp or any Bancorp Subsidiary or (C)
purchase or otherwise acquire (including by way of merger, consolidation,
share exchange or similar transaction) Beneficial Ownership of securities
representing 20% or more of the voting power of Bancorp or any Bancorp
Subsidiary;
(ii) any Person (other than Commercial or any Commercial Subsidiary
or any Person acting in concert with Commercial; or Bancorp or any Bancorp
Subsidiary in a fiduciary capacity) shall have acquired Beneficial
Ownership of 20% or more of the voting power of Bancorp or any Bancorp
Subsidiary; or
(iii) Bancorp's Board of Directors shall have withdrawn, modified
or changed in a manner adverse to Commercial the recommendation of
Bancorp's Board of Directors with respect to the Merger, the Merger
Agreement or the transactions contemplated thereby, unless the Board of
Directors of Bancorp reasonably determines in good faith not to so
recommend based upon the advice of counsel, which counsel either is
Malizia, Spidi, Sloane & Fisch, P.C. or is otherwise reasonably acceptable
to Commercial, to the effect that to so recommend would constitute a
violation of the Board's fiduciary duties under Applicable Law, in each
case after an Extension Event.
(c) As used herein, the term "Extension Event" shall mean any of
the following events:
(i) a Purchase Event of the type specified in clauses (b)(i)
and (b)(ii) above;
2
<PAGE>
(ii) any Person (other than Commercial or any Commercial
Subsidiary) shall have "commenced" (as such term is defined in Rule 14d-2
under the Exchange Act), or shall have filed a registration statement
under the Securities Act with respect to, a tender offer or exchange offer
to purchase shares of Bancorp Common Stock such that, upon consummation of
such offer, such Person would have Beneficial Ownership (as defined below)
or the right to acquire Beneficial Ownership of 10% or more of the voting
power of Bancorp or any Bancorp Subsidiary; or
(iii) any Person (other than Commercial or any Commercial
Subsidiary; or Bancorp or any Bancorp Subsidiary in a fiduciary capacity)
shall have publicly announced its willingness, or shall have publicly
announced a bona fide proposal, or publicly disclosed an intention to make
a bona fide proposal, (x) to make an offer described in clause (ii) above
or (y) to engage in a transaction described in clause (i) above.
(d) As used herein, the terms "Beneficial Ownership" and
"Beneficially Own" shall have the meanings ascribed to them in Rule 13d-3 under
the Exchange Act.
(e) In the event Commercial wishes to exercise the Option, it shall
deliver to Bancorp a written notice (the date of which being herein referred to
as the "Notice Date") specifying (i) the total number of shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three Business Days nor later than 60 calendar days from the Notice Date for the
closing of such purchase (the "Closing Date").
4. Payment and Delivery of Certificates.
(a) At the closing referred to in Section 3 hereof, Commercial
shall pay to Bancorp the aggregate Purchase Price for the shares of Bancorp
Common Stock purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by Bancorp.
(b) At such closing, simultaneously with the delivery of cash as
provided in Section 4(a), Bancorp shall deliver to Commercial a certificate or
certificates representing the number of shares of Bancorp Common Stock purchased
by Commercial, registered in the name of Commercial or a nominee designated in
writing by Commercial, and Commercial shall deliver to Bancorp a letter agreeing
that Commercial shall not offer to sell, pledge or otherwise dispose of such
shares in violation of Applicable Law or the provisions of this Option
Agreement.
(c) If at the time of issuance of any Bancorp Common Stock pursuant
to any exercise of the Option, Bancorp shall have issued any share purchase
rights or similar securities to holders of Bancorp Common Stock, then each such
share of Bancorp Common Stock shall also represent rights with terms
substantially the same as and at least as favorable to Commercial as those
issued to other holders of Bancorp Common Stock.
(d) Certificates for Bancorp Common Stock delivered at any closing
hereunder shall be endorsed with a restrictive legend which shall read
substantially as follows:
The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the registered
holder hereof and ____________________, a copy of which is on file
at the principal office of ____________________, and to resale
restrictions arising under the Securities Act of 1933 and any
applicable state securities laws. A copy of such agreement will be
provided to the holder hereof without charge upon receipt by
__________________ of a written request therefor.
3
<PAGE>
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Commercial shall have
delivered to Bancorp an opinion of counsel, in form and substance reasonably
satisfactory to Bancorp and its counsel, to the effect that such legend is not
required for purposes of the Securities Act and any applicable state securities
laws.
5. Authorization, etc.
(a) Bancorp hereby represents and warrants to Commercial that:
(i) Bancorp has full corporate authority to execute and deliver
this Option Agreement and, subject to Section 11(i), to consummate the
transactions contemplated hereby;
(ii) such execution, delivery and consummation have been authorized
by the Board of Directors of Bancorp, and no other corporate proceedings
are necessary therefor;
(iii) this Option Agreement has been duly and validly executed and
delivered and represents a valid and legally binding obligation of
Bancorp, enforceable against Bancorp in accordance with its terms; and
(iv) Bancorp has taken all necessary corporate action to authorize
and reserve and, subject to Section 11(i), permit it to issue and, at all
times from the date hereof through the date of the exercise in full or the
expiration or termination of the Option, shall have reserved for issuance
upon exercise of the Option, 3,348,533 shares of Bancorp Common Stock, all
of which, upon issuance pursuant hereto, shall be duly authorized, validly
issued, fully paid and nonassessable, and shall be delivered free and
clear of all claims, liens, encumbrances, restrictions (other than federal
and state securities restrictions) and security interests and not subject
to any preemptive rights.
(b) Commercial hereby represents and warrants to Bancorp that:
(i) Commercial has full corporate authority to execute and deliver
this Option Agreement and, subject to Section 11(i), to consummate the
transactions contemplated hereby;
(ii) such execution, delivery and consummation have been authorized
by all requisite corporate action by Commercial, and no other corporate
proceedings are necessary therefor;
(iii) this Option Agreement has been duly and validly executed and
delivered and represents a valid and legally binding obligation of
Commercial, enforceable against Commercial in accordance with its terms;
and
(iv) any Bancorp Common Stock or other securities acquired by
Commercial upon exercise of the Option will not be taken with a view to
the public distribution thereof and will not be transferred or otherwise
disposed of except in compliance with the Securities Act.
6. Adjustment upon Changes in Capitalization.
In the event of any change in Bancorp Common Stock by reason of
stock dividends, split-ups, recapitalizations or the like, the type and number
of shares subject to the
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Option, and the Purchase Price per share, as the case may be, shall be adjusted
appropriately. In the event that any additional shares of Bancorp Common Stock
are issued after the date of this Option Agreement (other than pursuant to an
event described in the preceding sentence or pursuant to this Option Agreement),
the number of shares of Bancorp Common Stock subject to the Option shall be
adjusted so that, after such issuance, it equals at least 19.9% of the number of
shares of Bancorp Common Stock then issued and outstanding (without considering
any shares subject to or issued pursuant to the Option).
7. Repurchase.
(a) Subject to Section 11(i), at the request of Commercial at any
time commencing upon the occurrence of a Purchase Event and ending 13 months
immediately thereafter (the "Repurchase Period"), Bancorp (or any successor
entity thereof) shall repurchase the Option from Commercial together with all
(but not less than all, subject to Section 10) shares of Bancorp Common Stock
purchased by Commercial pursuant thereto with respect to which Commercial then
has Beneficial Ownership, at a price (on a per share basis, the "Per Share
Repurchase Price") equal to the sum of:
(i) The aggregate Purchase Price paid by Commercial for any shares
of Bancorp Common Stock acquired pursuant to the Option;
(ii) The difference between (A) the "Market/Tender Offer Price" for
shares of Bancorp Common Stock (defined as the higher of (x) the highest
price per share at which a tender or exchange offer has been made for
shares of Bancorp Common Stock or (y) the highest closing mean of the
"bid" and the "ask" price per share of Bancorp Common Stock reported by
NASDAQ, the automated quotation system of the National Association of
Securities Dealers, Inc., for any day within that portion of the
Repurchase Period which precedes the date Commercial gives notice of the
required repurchase under this Section 7) and (B) the Purchase Price as
determined pursuant to Section 2 hereof (subject to adjustment as provided
in Section 6), multiplied by the number of shares of Bancorp Common Stock
with respect to which the Option has not been exercised, but only if the
Market/Tender Offer Price is greater than such Purchase Price;
(iii) The difference between the Market/Tender Offer Price and the
Purchase Price paid by Commercial for any shares of Bancorp Common Stock
purchased pursuant to the exercise of the Option, multiplied by the number
of shares so purchased, but only if the Market/Tender Offer Price is
greater than such Purchase Price; and
(iv) Commercial's reasonable out-of-pocket expenses incurred in
connection with the transactions contemplated by the Merger Agreement,
including, without limitation, legal, accounting and investment banking
fees;
provided, however, that if such price is greater than an amount (the "Maximum
Repurchase Price") equal to the sum of (x) $20,000,000 and (y) the amount set
forth in (i) above, then such price shall be deemed to be the Maximum Repurchase
Price for all purposes hereunder.
(b) In the event Commercial exercises its rights under this Section
7, Bancorp shall, within 10 Business Days thereafter, pay the required amount to
Commercial by wire transfer of immediately available funds to an account
designated by Commercial and Commercial shall surrender to Bancorp the Option
and the certificates evidencing the shares of Bancorp Common Stock purchased
thereunder with respect to which Commercial then has Ben-
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eficial Ownership, and Commercial shall warrant that it has sole record and
Beneficial Ownership of such shares and that the same are free and clear of all
liens, claims, charges, restrictions and encumbrances of any kind whatsoever.
(c) In determining the Market/Tender Offer Price, the value of any
consideration other than cash shall be determined by an independent nationally
recognized investment banking firm selected by Commercial and reasonably
acceptable to Bancorp.
8. Repurchase at Option of Bancorp and Right of First Refusal.
(a) Except to the extent that Commercial shall have previously
exercised its rights under Section 7, at the request of Bancorp during the
six-month period commencing 13 months following the first occurrence of a
Purchase Event, Bancorp may repurchase from Commercial, and Commercial shall
sell to Bancorp, all (but not less than all, subject to Section 10) of the
Bancorp Common Stock acquired by Commercial pursuant hereto and with respect to
which Commercial has Beneficial Ownership at the time of such repurchase at a
price per share equal to the greater of (i) 110% of the Market/Tender Offer
Price, (ii) the Per Share Repurchase Price or (iii) the quotient obtained by
dividing (x) the sum of (A) the aggregate Purchase Price paid for the shares so
repurchased plus (B) interest on the aggregate Purchase Price paid for the
shares so repurchased from the date of purchase to the date of repurchase at the
highest rate of interest announced by Commercial as its prime or base lending or
reference rate during such period, less any dividends received on the shares so
repurchased, plus (C) Commercial's reasonable out-of-pocket expenses incurred in
connection with the transactions contemplated by the Merger Agreement,
including, without limitation, legal, accounting and investment banking fees by
(y) the number of shares so repurchased. Any repurchase under this Section 8(a)
shall be consummated in accordance with Section 7(b).
(b) If, at any time after the occurrence of a Purchase Event and
prior to the earlier of (i) the expiration of 18 months immediately following
such Purchase Event or (ii) the expiration or termination of the Option,
Commercial shall desire to sell, assign, transfer or otherwise dispose of the
Option or all or any of the shares of Bancorp Common Stock acquired by it
pursuant to the Option, it shall give Bancorp written notice of the proposed
transaction (an "Offeror's Notice"), identifying the proposed transferee, and
setting forth the terms of the proposed transaction. An Offeror's Notice shall
be deemed an offer by Commercial to Bancorp, which may be accepted within 10
Business Days of the receipt of such Offeror's Notice, on the same terms and
conditions and at the same price at which Commercial is proposing to transfer
the Option or such shares to a third party. The purchase of the Option or any
such shares by Bancorp shall be closed within 10 Business Days of the date of
the acceptance of the offer and the purchase price shall be paid to Commercial
by wire transfer of immediately available funds to an account designated by
Commercial. In the event of the failure or refusal of Bancorp to purchase the
Option or all the shares covered by the Offeror's Notice or if any Governmental
Authority disapproves Bancorp's proposed purchase of the Option or such shares,
Commercial may, within 60 days from the date of the Offeror's Notice, sell all,
but not less than all, of the Option or such shares to such third party at no
less than the price specified and on terms no more favorable to the purchaser
than those set forth in the Offeror's Notice. The requirements of this Section
8(b) shall not apply to (A) any disposition as a result of which the proposed
transferee would Beneficially Own not more than 2% of the voting power of
Bancorp or (B) any disposition of Bancorp Common Stock by a Person to whom
Commercial has sold shares of Bancorp Common Stock issued upon exercise of the
Option.
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9. Registration Rights.
At any time after a Purchase Event, Bancorp shall, if requested by
any holder or Beneficial Owner of shares of Bancorp Common Stock issued upon
exercise of the Option (except any Beneficial Owner or holder who acquired all
of such Beneficial Owner's or holder's shares in a transaction exempt from the
requirements of Section 8(b) by reason of clause (A) thereof) (each a "Holder"),
as expeditiously as possible file a registration statement on a form for general
use under the Securities Act if necessary in order to permit the sale or other
disposition of the shares of Bancorp Common Stock that have been acquired upon
exercise of the Option in accordance with the intended method of sale or other
disposition requested by any such Holder (it being understood and agreed that
any such sale or other disposition shall be effected on a widely distributed
basis so that, upon consummation thereof, no purchaser or transferee shall
Beneficially Own more than 2% of the shares of Bancorp Common Stock then
outstanding). Each such Holder shall provide all information reasonably
requested by Bancorp for inclusion in any registration statement to be filed
hereunder. Bancorp shall use its best efforts to cause such registration
statement first to become effective and then to remain effective for such period
not in excess of 180 days from the day such registration statement first becomes
effective as may be reasonably necessary to effect such sales or other
dispositions. The registration effected under this Section 9 shall be at
Bancorp's expense except for underwriting commissions and the fees and
disbursements of such Holders' counsel attributable to the registration of such
Bancorp Common Stock. In no event shall Bancorp be required to effect more than
two registrations hereunder. The filing of the registration statement hereunder
may be delayed for such period of time as may reasonably be required to
facilitate any public distribution by Bancorp of Bancorp Common Stock or if a
special audit of Bancorp would otherwise be required in connection therewith. If
requested by any such Holder in connection with such registration, Bancorp shall
become a party to any underwriting agreement relating to the sale of such
shares, but only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements customarily
included in such underwriting agreements for parties similarly situated. Upon
receiving any request for registration under this Section 9 from any Holder,
Bancorp agrees to send a copy thereof to any other Person known to Bancorp to be
entitled to registration rights under this Section 9, in each case by promptly
mailing the same, postage prepaid, to the address of record of the Persons
entitled to receive such copies, and each such other Person, whether or not
known by Bancorp to be entitled thereto, shall be permitted to include shares of
Bancorp Common Stock with respect to which such Person is entitled to such
registration rights in such registration requested by such Holder, to the extent
reasonably practicable.
10. Severability.
Any term, provision, covenant or restriction contained in this
Option Agreement held by a Governmental Authority of competent jurisdiction to
be invalid, void or unenforceable, shall be ineffective to the extent of such
invalidity, voidness or unenforceability, but neither the remaining terms,
provisions, covenants or restrictions contained in this Option Agreement nor the
validity or enforceability thereof in any other jurisdiction shall be affected
or impaired thereby. Any term, provision, covenant or restriction contained in
this Option Agreement that is so found to be so broad as to be unenforceable
shall be interpreted to be as broad as is enforceable. If for any reason such
Governmental Authority determines that Applicable Law will not permit Commercial
or any other Person to acquire, or Bancorp to repurchase or purchase, the full
number of shares of Bancorp Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6 hereof), it is the express intention of the
parties hereto to allow Commercial or such other Person to acquire, or Bancorp
to repurchase or purchase, such lesser number of shares as may be permissible,
without any amendment or modification hereof.
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11. Miscellaneous.
(a) Expenses. Each of the parties hereto shall pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel, except as otherwise
provided herein.
(b) Entire Agreement. Except as otherwise expressly provided
herein, this Option Agreement and the Merger Agreement contain the entire
agreement between the parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral.
(c) Successors; No Third Party Beneficiaries. The terms and
conditions of this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns.
Nothing in this Option Agreement, expressed or implied, is intended to confer
upon any party, other than the parties hereto, and their respective successors
and assigns, any rights, remedies, obligations, or liabilities under or by
reason of this Option Agreement, except as expressly provided herein.
(d) Assignment. Other than as provided in Sections 8 and 9 hereof,
neither of the parties hereto may sell, transfer, assign or otherwise dispose of
any of its rights or obligations under this Option Agreement or the Option
created hereunder to any other Person (whether by operation of law or
otherwise), without the express written consent of the other party.
(e) Notices. All notices or other communications which are required
or permitted hereunder shall be in writing and sufficient if delivered in
accordance with Section 9.6 of the Merger Agreement (which is incorporated
herein by reference).
(f) Counterparts. This Option Agreement may be executed in
counterparts, and each such counterpart shall be deemed to be an original
instrument, but both such counterparts together shall constitute but one
agreement.
(g) Specific Performance. The parties hereto agree that if for any
reason Commercial or Bancorp shall have failed to perform its obligations under
this Option Agreement, then either party hereto seeking to enforce this Option
Agreement against such non-performing party shall be entitled to specific
performance and injunctive and other equitable relief, and the parties hereto
further agree to waive any requirement for the securing or posting of any bond
in connection with the obtaining of any such injunctive or other equitable
relief. This provision is without prejudice to any other rights that either
party hereto may have against the other party hereto for any failure to perform
its obligations under this Option Agreement.
(h) Governing Law. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of Nebraska applicable to
agreements made and entirely to be performed within such state. Nothing in this
Option Agreement shall be construed to require any party (or any subsidiary or
affiliate of any party) to take any action or fail to take any action in
violation of Applicable Law, rule or regulation.
(i) Regulatory Approvals; Section 16(b). If, in connection with (A)
the exercise of the Option under Section 3 or a sale by Commercial to a third
party under Section 8, (B) a repurchase by Bancorp under Section 7 or a
repurchase or purchase by Bancorp under Section 8, prior notification to or
approval of any Governmental Authority is required, then the required notice or
application for approval shall be promptly filed and expeditiously processed and
periods of time that otherwise would run pursuant to such Sections shall run
instead from the
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date on which any such required notification period has expired or been
terminated or such approval has been obtained, and in either event, any
requisite waiting period shall have passed. In the case of clause (A) of this
subsection (i), such filing shall be made by Commercial, and in the case of
clause (B) of this subsection (i), such filing shall be made by Bancorp,
provided that each of Commercial and Bancorp shall use its best efforts to make
all filings with, and to obtain consents of, all third parties and Governmental
Authorities necessary to the consummation of the transactions contemplated
hereby, including without limitation applying to the OTS under the HOLA for
approval to acquire the shares issuable hereunder. Periods of time that
otherwise would run pursuant to Sections 3, 7 or 8 shall also be extended to the
extent necessary to avoid liability under Section 16(b) of the Exchange Act.
(j) No Breach of Merger Agreement. Nothing contained in this Option
Agreement shall, and performance by any party hereto of any of its obligations
under this Option Agreement in accordance with their terms shall not, constitute
a breach of any of the provisions of the Merger Agreement.
(k) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision, but only by delivery of a written instrument executed by such party.
This Option Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Option Agreement as of the date first written above.
COMMERCIAL FEDERAL CORPORATION
By: /s/ James A. Laphen
Name: James A. Laphen
Title: President
FIRST COLORADO BANCORP, INC.
By: /s/ Brian L. Johnson
Name: Brian L. Johnson
Title: Executive Vice President/Treasurer
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