Common use of Conditions to Exercise of Option Clause in Contracts

Conditions to Exercise of Option. Except for any assignment or transfer of the Option in whole or in part to a Subsidiary as provided in Section 2 hereof, Zions Bancorp may sell, assign, transfer or exercise the Option, in whole or in part, only if any one or more of the following events (the "Trigger Events") shall have occurred: (a) The Board of Directors of the Company shall have (i) authorized the execution of an agreement with any person or group of persons other than Zions Bancorp or a Subsidiary ("Third Party") pursuant to which such Third Party will acquire, merge or consolidate with, or acquire all or substantially all of the assets of the Company (or engage in a substantially similar transaction), (ii) supported an offer or proposal by any Third Party to acquire, merge or consolidate with the Company, or acquire all or substantially all of the assets of the Company (or to engage in a substantially similar transaction), or (iii) recommended to the shareholders of the Company that they not approve the Agreement and Plan of Reorganization; or (b) the termination of the Agreement and Plan of Reorganization by Zions Bancorp pursuant to Section 10.2(b) of the Agreement and Plan of Reorganization due to a willful breach by the Company; or (c) the receipt by a Third Party of all required approvals of all governmental authorities to acquire beneficial ownership of more than 25 percent of the Common Stock of the Company; or (d) upon the public announcement by any Third Party with financial ability of a bona fide proposal or intention to in any manner acquire control of the Company and, thereafter, if such proposal has not been withdrawn at least twenty days prior to the meeting of shareholders of the Company called to vote on the Agreement and Plan of Reorganization, the Company's shareholders fail to approve the Agreement and Plan of Reorganization by the vote required by applicable law at the meeting of shareholders called for such purpose. Notwithstanding the foregoing, the Option may only be exercised (a) with respect to that number of Option Shares the acquisition of which would be permissible without the consent or approval of the Board of Governors or the OTS or consent or approval of or filings with any other governmental authority, unless all applicable and required governmental approvals have been obtained with respect to such exercise or if such exercise would not violate any applicable regulatory restrictions, and (b) if, at the time of exercise Zions Bancorp is not in material violation or breach of or in default under any material provisions of the Agreement and Plan of Reorganization. The Company shall promptly give notice to Zions Bancorp of the occurrence of a Trigger Event, it being understood that the giving of such notice by the Company shall not be a condition to the right of Zions Bancorp to exercise the Option. As used in this Section 3, "person," "group of persons," and "beneficial ownership" shall have the meanings conferred thereon by Section 13(d) of the Securities Exchange Act and the regulations promulgated thereunder.