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Transaction Agreement

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Title:

Transaction Agreement

Entities:

Banco Bilbao Vizcaya Argentaria SA

Date:

2007

Size:

259KB total

Price:

$67

ID:

#2868689

► M&A ► Transaction Agreements
► Financial ► Regional Banks

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TRANSACTION AGREEMENT

by and between

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

and

COMPASS BANCSHARES, INC.

DATED AS OF FEBRUARY 16, 2007

ARTICLE I

THE REINCORPORATION MERGER


1.1	The Reincorporation Merger	2

1.2	Reincorporation Effective Time	2

1.3	Effects of the Reincorporation Merger	2

1.4	Conversion of Shares	2

1.5	Options	3

1.6	Other Stock-Based Awards	3

1.7	Articles of Incorporation	4

1.8	Bylaws	4

1.9	Tax Consequences	4

1.10	Board of Directors; Management	4

ARTICLE II THE SHARE EXCHANGE

2.1	The Share Exchange	5

2.2	Exchange Effective Time	5

2.3	Effects of the Share Exchange	5

2.4	Exchange of Company Virginia Sub Common Stock	6

2.5	Proration	7

2.6	Parent Capital Stock	9

2.7	Options	9

2.8	Restricted Stock Awards	9

2.9	Other Stock-Based Awards	10

ARTICLE III DELIVERY OF CONSIDERATION

3.1	Election Procedures	10

3.2	Deposit of Consideration	12

3.3	Delivery of Consideration	12

ARTICLE IV THE THIRD STEP MERGER

4.1	The Third Step Merger	15

4.2	Third Step Merger Effective Time	15

4.3	Effects of the Third Step Merger	15

4.4	Conversion of Shares	15


4.5	Certificate of Formation	16

4.6	Bylaws	16

4.7	Tax Consequences	16

4.8	Board of Directors; Management	16

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY

5.1	Corporate Organization	17

5.2	Capitalization	18

5.3	Authority; No Violation	19

5.4	Consents and Approvals	20

5.5	Reports; Regulatory Matters	20

5.6	Financial Statements	22

5.7	Brokers Fees	24

5.8	Absence of Certain Changes or Events	24

5.9	Legal Proceedings	25

5.10	Taxes and Tax Returns	25

5.11	Employee Matters	26

5.12	Compliance with Applicable Law	28

5.13	Certain Contracts	29

5.14	Risk Management Instruments	29

5.15	Investment Securities and Commodities	30

5.16	Loan Portfolio	30

5.17	Property	32

5.18	Intellectual Property	33

5.19	Environmental Liability	33

5.20	Investment Adviser Subsidiaries; Funds; Clients	34

5.21	Broker-Dealer Subsidiaries	35

5.22	State Takeover Laws	36

5.23	Reorganization; Approvals	36

5.24	Opinion	36

5.25	Related Party Transactions	36

5.26	Company Virginia Sub	36

5.27	Information Supplied	38

iii


ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT

6.1	Corporate Organization	38

6.2	Capitalization	39

6.3	Authority; No Violation	39

6.4	Consents and Approvals	40

6.5	Reports; Regulatory Matters	41

6.6	Financial Statements	42

6.7	Brokers Fees	44

6.8	Absence of Certain Changes or Events	44

6.9	Legal Proceedings	44

6.10	Taxes and Tax Returns	44

6.11	Compliance with Applicable Law	44

6.12	Intellectual Property	45

6.13	Reorganization; Approvals	45

6.14	Opinion	45

6.15	Parent Texas Sub	45

6.16	Information Supplied	47

ARTICLE VII COVENANTS RELATING TO CONDUCT OF BUSINESS

7.1	Conduct of Businesses Prior to the Exchange Effective Time	47

7.2	Company Forbearances	47

7.3	Parent Forbearances	50

ARTICLE VIII ADDITIONAL AGREEMENTS

8.1	Regulatory Matters	51

8.2	Access to Information	52

8.3	Stockholder Meetings	53

8.4	Affiliates	53

8.5	Listing	54

8.6	Employee Matters	54

8.7	Indemnification; Directors and Officers Insurance	55

8.8	Additional Agreements	56

8.9	Advice of Changes	56


8.10	Exemption from Liability Under Section 16(b)	57

8.11	No Solicitation	57

8.12	Structure of the Transaction	59

8.13	Joinder Agreement	59

ARTICLE IX CONDITIONS PRECEDENT

9.1	Conditions to Each Partys Obligation To Effect the Transaction	59

9.2	Conditions to Obligations of Parent	60

9.3	Conditions to Obligations of the Company	60

ARTICLE X TERMINATION AND AMENDMENT

10.1	Termination	61

10.2	Effect of Termination	63

10.3	Fees and Expenses	63

10.4	Termination Fee	63

10.5	Amendment	64

10.6	Extension; Waiver	65

ARTICLE XI GENERAL PROVISIONS

11.1	Closing	65

11.2	Standard	65

11.3	Nonsurvival of Representations, Warranties and Agreements	66

11.4	Notices	66

11.5	Interpretation	67

11.6	Counterparts	67

11.7	Entire Agreement	68

11.8	Governing Law; Jurisdiction	68

11.9	Publicity	68

11.10	Assignment; Third Party Beneficiaries	68

INDEX OF DEFINED TERMS


2006 10-K		22
2006 20-F		43
409A Authorities		28
Agencies		32
Agency		32
Aggregate Consideration		9
Agreement		1
Alternative Proposal		58
Alternative Transaction		58
Articles of Merger		15
BHC Act		17
Board Reports		52
Broker-Dealer Subsidiary		36
Capital Increase		39
Cash Amount		7
Cash Consideration		6
Cash Election		6
Cash Election Shares		6
Claim		56
Closing		66
Closing Date		66
Code		1
Commercial Registry		6
Company Advisory Client		34
Company Advisory Contract		34
Company Advisory Entity		34
Company Benefit Plans		27
Company Board		1
Company Bylaws		4
Company Capitalization Date		18
Company Certificate		4
Company Common Certificate		3
Company Common Stock		2
Company Contract		30
Company Criticized Assets		31
Company Disclosure Schedule		17
Company Fund Client		34
Company Leased Properties		33
Company Owned Properties		33
Company Preferred Stock		18
Company Real Property		33
Company Regulatory Agreement		22
Company Requisite Regulatory Approvals		62
Company Restricted Stock		3
Company SEC Reports		22
Company Stock Options		3


Company Stock Plans		3
Company Stock-Based Awards		4
Company Stockholder Approval		20
Company Subsidiary		18
Company Virginia Exchange Certificate		5
Company Virginia Sub		1
Company Virginia Sub Articles		4
Company Virginia Sub Board		1
Company Virginia Sub Bylaws		4
Company Virginia Sub Certificates		3
Company Virginia Sub Common Stock		3
Confidentiality Agreement		54
Consideration		7
Covered Employees		54
Deed of Capital Increase		6
Depositary		12
Depositary Agreement		7
Derivative Transactions		30
DGCL		2
Election		10
Election Deadline		11
ERISA		26
EU-IFRS		18
Exchange Act		22
Exchange Agent		11
Exchange Agent Agreement		11
Exchange Fund		12
Exchange Effective Time		5
Exchange Ratio		7
F-4		20
FDIC		18
Federal Reserve Board		20
Final Surviving Corporation		15
Form ADV		35
Form BD		36
Form of Election		10
GAAP		18
Governmental Entity		21
Holder		10
HSR Act		21
Indemnified Parties		56
Injunction		60
Insurance Amount		57
Intellectual Property		34
Investment Advisers Act		34
Investment Company Act		34
IRS		26

vii


Letter of Transmittal		12
Liens		19
Loans		31
Material Adverse Effect		24
Materially Burdensome Regulatory Condition		53
Non-Election Shares		7
Nonqualified Deferred Compensation Plan		28
NSEC		41
NYSE		21
Option		9
Other Regulatory Approvals		20
Parent ADSs		7
Parent Board		1
Parent Bylaws		39
Parent Charter		39
Parent Closing Price		9
Parent Disclosure Schedule		39
Parent Ordinary Shares		6
Parent Regulatory Agreement		42
Parent Requisite Regulatory Approvals		61
Parent SEC Reports		43
Parent Shareholder Approval		40
Parent Subsidiary		18
Parent Texas Sub Board		1
Parent Texas Sub Common Stock		16
Permitted Encumbrances		33
Per Share Amount		9
Policies, Practices and Procedures		31
Pool		32
Prospectus		41
Proxy Statement		20
Regulatory Agencies		21
Reincorporation Effective Time		2
Reincorporation Merger		1
Related Party Transaction		37
Sarbanes-Oxley Act		22
SBA		20
SCL		5
SEC		20
Securities Act		19
Share Component		7
Share Consideration		6
Share Conversion Number		7
Share Election		6
Share Election Number		8
Share Election Shares		6
Share Exchange		1

viii


Shortfall Number		8
Sponsored		34
SRO		21
Stock Based Award		4
Subsidiary		17
Subsidiary Banks		18
Surviving Corporation		2
Takeover Statutes		36
Tax		26
Tax Return		26
Taxes		26
TBCA		1
TBOC		15
Third Step Merger		1
Third Step Merger Effective Time		16
Transaction		1
Transfer Agent		5
Voting Debt		18
VSCA		1

TRANSACTION AGREEMENT

TRANSACTION AGREEMENT (this Agreement), dated as of February 16, 2007, by and among BANCO BILBAO VIZCAYA ARGENTARIA, S.A., a bank organized and existing under the Laws of Spain (Parent), and COMPASS BANCSHARES, INC., a Delaware corporation (the Company).

W I T N E S S E T H:

WHEREAS, promptly following the execution of this Agreement, Parent shall form a new wholly owned subsidiary (Parent Texas Sub) as a Texas corporation under and in accordance with the Texas Business Corporation Act (the TBCA), and Parent shall cause Parent Texas Sub to, and Parent Texas Sub shall, sign a joinder agreement to this Agreement and be bound hereunder;

WHEREAS, promptly following the execution of this Agreement, the Company shall form a new wholly owned subsidiary (Company Virginia Sub) as a Virginia corporation under and in accordance with the Virginia Stock Corporation Act (the VSCA), and the Company shall cause Company Virginia Sub to, and Company Virginia Sub shall, sign a joinder agreement to this Agreement and be bound hereunder;

WHEREAS, the Boards of Directors of each of Parent (the Parent Board) and the Company (the Company Board) have approved, and the Boards of Directors of each of Parent Texas Sub (the Parent Texas Sub Board) and Company Virginia Sub (the Company Virginia Sub Board) shall approve, the strategic business combination transactions provided for herein (the Transaction) whereby (1) the Company will merge with and into Company Virginia Sub, with Company Virginia Sub surviving such merger (the Reincorporation Merger), (2) immediately following the Reincorporation Merger, Company Virginia Sub, as the surviving corporation in the Reincorporation Merger, will become a wholly owned subsidiary of Parent pursuant to a statutory share exchange (the Share Exchange) in accordance with VSCA and (3) immediately following the Share Exchange, Company Virginia Sub will merge with and into Parent Texas Sub (the Third Step Merger), with Parent Texas Sub as the surviving corporation in such Third Step Merger;

WHEREAS, concurrently with the execution of this Agreement, certain of the senior executives of the Company are entering into employment agreements with Parent and the Company, which employment agreements shall become effective as of the Exchange Effective Time (as defined below);

WHEREAS, it is the intent of the parties hereto that, for U.S. federal income tax purposes, the Reincorporation Merger shall constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the Code), and that this Agreement shall constitute a plan of reorganization in respect of the Reincorporation Merger for the purposes of Sections 354 and 361 of the Code;

WHEREAS, it is the intent of the parties hereto that, for U.S. federal income tax purposes, the Share Exchange and the Third Step Merger shall be treated as a single, integrated

transaction that constitutes a reorganization within the meaning of Section 368(a) of the Code, and that this Agreement shall constitute a plan of reorganization in respect of such transaction for the purposes of Sections 354 and 361 of the Code;

WHEREAS, for U.S. federal income tax purposes, it is intended that the Share Exchange and the Third Step Merger result in no gain recognition to the shareholders of Company Virginia Sub pursuant to Section 367(a) of the Code;

WHEREAS, the parties desire to make certain representations, warranties and agreements in connection with the Transaction and also to prescribe certain conditions to the Transaction.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

THE REINCORPORATION MERGER

1.1 The Reincorporation Merger. Subject to the terms and conditions of this Agreement, in accordance with the General Corporation Law of Delaware (the DGCL) and the VSCA, at the Reincorporation Effective Time, the Company shall merge with and into Company Virginia Sub. Company Virginia Sub shall be the surviving corporation (the Surviving Corporation) in the Reincorporation Merger and shall continue its corporate existence under the laws of the Commonwealth of Virginia. Upon consummation of the Reincorporation Merger, the separate corporate existence of the Company shall terminate.

1.2 Reincorporation Effective Time. The Reincorporation Merger shall become effective in accordance with a Plan of Merger (which Plan of Merger shall be prepared by Company promptly following the date of this Agreement and shall be consistent with this Agreement and the VSCA and reasonably satisfactory to Parent) on the Closing Date (as defined in Section 11.1) at the time that is specified in the certificate of merger relating to the Reincorporation Merger issued by the Virginia State Corporation Commission and upon the issuance of the certificate of merger by the Secretary of State of the State of Delaware (the Reincorporation Effective Time).

1.3 Effects of the Reincorporation Merger. At and after the Reincorporation Effective Time, the Reincorporation Merger shall have the effects set forth in the DGCL and the VSCA.

1.4 Conversion of Shares.