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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/X/ Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
FIRST BANK SYSTEM, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
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Contact: John R. Danielson Wendy Raway
Investor Relations Media Relations
First Bank System, Inc. First Bank System, Inc.
(612) 973-2261 (612) 973-2429
FIRST BANK SYSTEM (FBS) SUES WELLS FARGO FOR VIOLATIONS OF
FEDERAL SECURITIES LAW
-CITES MANIPULATION OF STOCK PRICE, VIOLATION OF PROXY RULES,
AND DISSEMINATION OF FALSE AND MISLEADING INFORMATION-
-ACCUSES WELLS OF CAMPAIGN OF DECEPTION TO SABOTAGE ALLIANCE
BETWEEN FBS AND FIRST INTERSTATE-
MINNEAPOLIS (December 14, 1995) -- First Bank System, Inc. (NYSE: FBS) today
filed a lawsuit in U.S. District Court for the District of Delaware alleging
that Wells Fargo, Inc.'s (NYSE: WFC) has embarked upon a campaign of deception
and manipulation to sabotage the FBS-First Interstate merger agreement. The
suit alleges that Wells has engaged in scheme to artificially manipulate and
inflate its stock price to create a false sense of momentum and to make its
hostile offer appear more attractive to First Interstate shareholders. FBS
cites fourteen (14) specific instances of false statements and deceptions made
by Wells Fargo and designed to advance its campaign of manipulation and
sabotage.
With this lawsuit, First Bank is seeking injunctive relief that will
require Wells to significantly delay its offer and disclose publicly its clear
and continuing violations of the federal securities laws; enjoin Wells from
further violations; and require Wells to correct its numerous misstatements
concerning the FBS - First Interstate merger and its own hostile offer.
The alleged repeated violations by Wells of federal securities laws
include a highly unusual analyst meeting held on December 7, in connection with
the proposed Wells exchange offer, at which Wells purposefully manipulated the
price of its stock by issuing new earnings projections. This constitutes a
blatant violation of SEC Rule 10b-6, which prohibits companies from artificially
conditioning the market for their securities to facilitate the purchase of those
securities, even if the projections were well-founded. The complaint also
alleges that these projections were not well-founded and were misleading.
In addition, Wells has disseminated false and deceptive analyses of
the relative economic benefits of the FBS - First Interstate merger and its own
hostile offer. Wells has also misled investors by claiming that its hostile
offer can be consummated on the same timetable as the FBS - First Interstate
merger, concealing time consuming obstacles to regulatory approval that are
unique to its hostile offer. Wells has also falsely
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FBS Sues Wells Fargo
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represented to the public that it could purchase shares of First Interstate
after it announced its hostile offer, despite the prohibition against such
purchases by SEC Rule 10b-13.
John Grundhofer, Chairman, Chief Executive Officer and President of
FBS, said, "In its single-minded pursuit of its hostile takeover, Wells Fargo
has exhibited a remarkable disregard for the law. Wells has poisoned the
marketplace with misleading information in an attempt to inflate the price of
its stock. By holding its first major meetings in the past five years in early
December - a highly unusual time unrelated to any earnings report or periodic
filing - Wells' actions lead to an inescapable conclusion: the purpose of the
meetings was to attempt to induce purchases of, and price increases in, Wells'
stock. This clear and blatant violation of securities law has contributed to an
artificial divergence in the price of Wells Fargo's and First Bank System's
stocks, thus deceiving investors as to the real value of Wells' offer for First
Interstate. In fairness to First Bank and First Interstate shareholders, we
could no longer stand by idly, while Wells continued to perpetrate its campaign
of deception and sabotage."
The lawsuit points out that securities analysts themselves were aware
of Wells Fargo's strategy to pump-up its stock price. FBS cited a report dated
December 8, 1995, in which James Roseberg of Lehman Brothers observed: "Wells is
smart. Before the First Interstate battle, it was in their interest to
conservatively report earnings to permit share buybacks at lower prices. Now
reverse goals are in force, and earnings may be aggressively reported to raise
the stock price."
The FBS lawsuit points out that Rule 10b-6, under the Securities and
Exchange Act of 1934, makes it unlawful for an issuer of securities to attempt
to induce any person to purchase any security which is the subject of such
distribution. Wells Fargo's stock offer for First Interstate is considered to
be a distribution of securities. The purpose of the rule, as stated by the
Securities and Exchange Commission, is "to prevent participants in a
distribution from artificially conditioning the market for the securities in
order to facilitate the distribution. The rule is designed to protect the
integrity of the securities trading market as an independent pricing mechanism
and thereby enhance investor confidence in the marketplace."
Richard Zona, FBS Vice Chairman and Chief Executive Officer, said,
"Wells' fraudulent statements permeate its Registration Statement, preliminary
proxy material, press releases, and widely-reported presentations to securities
analysts. The suit details more than fourteen (14) specific instances in which
Wells Fargo engages in deception and makes false and misleading statements. For
example, Wells knows that its claims to achieve an additional $500 million in
cost savings because of its California overlap with First Interstate are untrue.
While First Interstate's California branch and business line expenses total
approximately $500 million, only $130 million of such costs relate to occupancy
and equipment. Even with Wells closing 85% of the First Interstate California
branches, the maximum amount of expenses which could be eliminated relating to
branch closures would be $230 million."
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FBS Sues Wells Fargo
Page 3
"Furthermore, the FBS suit alleges that Wells has concealed the
regulatory delays that will prevent its offer from being presented to First
Interstate shareholders at the same time as First Bank System's. Since Wells'
entire franchise is in California, and First Interstate is one of its principal
competitors there, consummation of the Wells' hostile offer raises serious
anti-trust concerns under federal anti-trust law and banking laws. In contrast,
there is no such problem with the FBS - First Interstate merger. Wells has also
significantly understated the amount of deposits it will need to divest to win
regulatory approval for an acquisition of First Interstate. These large
divestitures will lead inevitably to a lengthening of the approval process,"
said Mr. Zona.
The lawsuit filed today asks the court to enjoin Wells from pursuing
its hostile offer until such time in 1996 as the 1996 earnings and other
estimates disseminated by Wells at the December 6-7, 1995 meetings can be
verified or disproved through the reporting of actual earnings; to require Wells
to disclose publicly its clear and continuing violation of the federal
securities laws as a material consideration of its hostile offer; to enjoin
Wells from engaging in similar actions in the future, and to require Wells to
rescind and correct the numerous false and misleading statements it has made in
connection with the FBS - First Interstate merger and its own hostile offer.
Mr. Grundhofer concluded, "Aware that its hostile offer is unlikely to
succeed on a fair assessment of its merits, Wells has inflated its stock price,
focused attention on the diverging prices of Wells Fargo and FBS stock, and
engaged in a calculated campaign of deception aimed at sabotaging the alliance
between FBS and First Interstate. Nonetheless, the fact remains that the FBS
offer creates a more valuable company for First Interstate shareholders than the
Wells proposal. As our filing yesterday comparing the two offers demonstrates,
the FBS merger proposal is superior in value to Wells' hostile offer in
projected earnings per share, key performance ration, earnings per share growth,
and implied price."
* * *
The participants in this solicitation may include First Bank
System, Inc. ("FBS"), the directors of FBS (John F. Grundhofer, Roger L. Hale,
Delbert W. Johnson, Norman M. Jones, John H. Kareken, Richard L. Knowlton,
Jerry W. Levin, Kenneth A. Macke, Marilyn C. Nelson, Edward J. Phillips,
James J. Renier, S. Walter Richey, Richard L. Robinson, Richard L. Schall, and
Lyle E. Schroeder), Lester Pollack (Board Observer) and the following executive
officers and employees of FBS: Richard A. Zona (Vice Chairman and Chief
Financial Officer), Philip G. Heasley (Vice Chairman and President, Retail
Product Group), Lee R. Micau (Executive Vice President, Secretary and General
Counsel), Susan E. Lester (Executive Vice President), Elizabeth A. Malkerson
(Senior Vice President, Corporate Relations), David R. Edstam (Executive Vice
President and Treasurer), David J. Parrin (Senior Vice President and
Controller), Arnold C. Hahn (Senior Vice President, Corporate Development),
Andrew Cecere (Senior Vice President, Management Accounting and Forecasting),
John R. Danielson (Senior Vice President, Investor Relations), Wendy Raway (Vice
President and Manager of Media Relations) and Karin Glasgow (Assistant Vice
President, Investor Relations).
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FBS Sues Wells Fargo
Page 4
FBS and First Interstate Bancorp ("First Interstate" or "FI") are
parties to an Agreement and Plan of Merger, dated as of November 5, 1995,
pursuant to which a wholly owned subsidiary of FBS is to merge with and into
First Interstate. In addition, First Interstate has granted to FBS an option to
purchase up to 19.9% of the outstanding shares of common stock of First
Interstate in certain circumstances. As of October 31, 1995, certain FBS
subsidiaries held 54,437 shares of First Interstate common stock in a fiduciary
capacity. FBS disclaims beneficial ownership of shares of First Interstate
commons stock held in a fiduciary capacity and any other shares held by any
pension plan of FBS or any affiliates of FBS.
As of November 30, 1995, Marilyn C. Nelson and Richard L.
Robinson, directors of FBS, held 2,000 shares and 150 shares, respectively, of
First Interstate common stock. Lester Pollack is an executive officer of
Corporate Advisors, L.P., the general partner of two shareholders of FBS and the
investment manager for another shareholder of FBS. Corporate Advisors, L.P. may
be deemed to be indirectly controlled by Lazard Freres & Co. LLC, of which
Mr. Pollack is a managing director. Lazard Freres & Co. LLC engages in a full
range of investment banking, securities trading, market-making and brokerage
services for institutional and individual clients. In the normal course of its
business, Lazard Freres & Co. LLC may trade securities of First Interstate for
its own account and the account of its customers and, accordingly, may at any
time hold a long or short position in such securities.
Although J.P. Morgan Securities Inc. does not admit that it or
any of its directors, officers, employees or affiliates is a "participant," as
defined in Schedule 14A promulgated under the Securities Exchange Act of 1934 by
the Securities and Exchange Commission (the "Commission"), or that such Schedule
14A requires the disclosure of certain information concerning J.P. Morgan
Securities Inc., it may assistant FBS in this solicitation. J.P. Morgan
Securities Inc. engages in a full range of investment banking, securities
trading, market-making and brokerage services for institutional and individual
clients. In the normal course of its business, J.P. Morgan Securities Inc. may
trade securities of First Interstate for its own account and the account of its
customers and, accordingly, may at any time hold a long or short position in
such securities.
Except as disclosed above, to the knowledge of FBS, none of FBS,
the directors or executive officers of FBS or the employees or other
representatives of FBS named above has any interest direct or indirect, by
security holdings or otherwise, in First Interstate.
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