<PAGE>
As filed with the Securities and Exchange Commission on April 25, 1995
Registration No. 033-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-------------------------------
NORWEST CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 6711 41-0449260
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1000
612-667-1234
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------------------
Stanley S. Stroup
Executive Vice President and General Counsel Copy to :
Norwest Corporation H. Bernt von Ohlen
Norwest Center Norwest Corporation
Sixth and Marquette Norwest Center
Minneapolis, Minnesota 55479-1026 Sixth and Marquette
612-667-8858 Minneapolis, Minnesota 55479-1026
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
__________________
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of the Registration
Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================
Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to Be to Be Offering Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 193,000 N/A $2,762,574.00(3) $952.61
(par value $1 2/3 per share) (1) Shares (2)
====================================================================================================
</TABLE>
(1) Each share of the registrant's common stock includes one preferred stock
purchase right.
(2) Based upon the maximum number of shares that may be issued in the
transaction described herein.
(3) Estimated solely for purpose of computing the registration fee, in
accordance with Rule 457(f), based upon the book value, as of December 31,
1994, of all shares of common stock to be acquired by the registrant in the
transaction described herein.
__________________________
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.
===============================================================================
<PAGE>
NORWEST CORPORATION
-------------------
Cross Reference Sheet
Pursuant to Regulation S-K, Item 501(b)
<TABLE>
<CAPTION>
Form S-4 Item Prospectus Heading
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<S> <C> <C>
1. Forepart of Registration Statement Outside Front Cover Page
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Available Information;
Pages of Prospectus Incorporation of Certain
Documents by Reference;
Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Summary Information
Charges, and Other Information
4. Terms of the Transaction The Consolidation
5. Pro Forma Financial Information *
6. Material Contracts with the Company The Consolidation
Being Acquired
7. Additional Information Required for *
Reoffering by Persons and Parties
Deemed to be Underwriters
8. Interests of Named Experts and Counsel Legal Opinion
9. Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities
10. Information with Respect to S-3 Summary; Certain Regulatory
Registrants Considerations
11. Incorporation of Certain Information Incorporation of Certain
by Reference Documents by Reference;
Management of Norwest
and Additional Information
12. Information with Respect to S-2 or *
S-3 Registrants
</TABLE>
<PAGE>
NORWEST CORPORATION
Cross Reference Sheet
Pursuant to Regulation S-K, Item 501(b)
<TABLE>
<CAPTION>
Form S-4 Item Prospectus Heading
------------- ------------------
<S> <C> <C>
13. Incorporation of Certain Information *
by Reference
14. Information with Respect to *
Registrants Other Than S-2 or S-3
Registrants
15. Information with Respect to S-3 *
Companies
16. Information with Respect to *
S-2 or S-3 Companies
17. Information with Respect to Companies Summary Information--Selected
Other Than S-2 or S-3 Companies Financial Data; Summary
Information--Comparative Unaudited
Per Share Data; Information
About the Bank
18. Information If Proxies, Consents, Meeting Information; The
or Authorizations Are to Be Solicited Consolidation--Rights of
Dissenting Bank Shareholders
19. Information If Proxies, Consents, or *
Authorizations Are Not to Be Solicited
in an Exchange Offer
</TABLE>
- ---------------------------
*Item is omitted because answer is negative or item is inapplicable.
<PAGE>
First American National Bank
2990 North Dobson Road
Chandler, Arizona 85224
April __, 1995
Dear Shareholder:
You are cordially invited to attend the Special Meeting of Shareholders of
First American National Bank (the "Bank") to be held at the Bank, 1098 North
Arizona Avenue, Chandler, Arizona, on __________, May ___, 1995, at 10:00
a.m., local time. At the Special Meeting you will be asked to consider and
vote on the approval of a proposed reorganization whereby a national banking
association which is a wholly owned subsidiary of Norwest Corporation
("Norwest") will be consolidated with the Bank (the "Consolidation") pursuant
to the Agreement and Plan of Reorganization, dated as of November 21, 1994,
between the Bank and Norwest (together with the Agreement and Plan of
Consolidation attached thereto, the "Consolidation Agreement").
Under the terms of the Consolidation Agreement, the Consolidation will
result in the conversion of each share of the Bank's Common Stock outstanding
immediately prior to the time the Consolidation becomes effective into a
number of shares of Norwest Common Stock determined in accordance with the
provisions of the Consolidation Agreement, as described in the accompanying
Proxy Statement-Prospectus for the Special Meeting.
The enclosed Proxy Statement-Prospectus contains a more complete description
of the terms of the Consolidation. You are urged to read the Proxy Statement-
Prospectus carefully.
The Board of Directors has approved the Consolidation Agreement as being in
the best interest of the Bank's shareholders and recommends that you vote in
favor of the Consolidation. In making this recommendation, the Board of
Directors has considered numerous factors including the consideration offered
by Norwest and the structure of the proposed Consolidation, which is designed
to enhance the value of the investment of the Bank's shareholders and to be
tax-free for federal income tax purposes to the Bank's shareholders receiving
Norwest Common Stock. Frazer, Ryan, Goldberg & Hunter, L.L.P., special tax
counsel for the Bank, is providing its opinion to the Board of Directors that
the Consolidation will be treated as a tax-free reorganization for federal
income tax purposes. HOWEVER, YOU SHOULD CONSULT YOUR OWN TAX ADVISOR
CONCERNING THE FEDERAL, AND ANY APPLICABLE FOREIGN, STATE, AND LOCAL, INCOME
TAX CONSEQUENCES TO YOU OF THE CONSOLIDATION.
In order to ensure that your vote is represented at the Special Meeting,
PLEASE DATE, SIGN, AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
If you attend the meeting, you may vote in person if you wish, even though you
have previously returned your proxy.
Eugene Hickey
Chairman of the Board
<PAGE>
FIRST AMERICAN NATIONAL BANK
2990 NORTH DOBSON ROAD
CHANDLER, ARIZONA 85224
----------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
ON MAY ___, 1995
---------------------------------------------
A Special Meeting of Shareholders of First American National Bank (the
"Bank"), a national banking association, will be held at the Bank, 1098 North
Arizona Avenue, Chandler, Arizona, on __________, May ___, 1995, at 10:00
a.m., local time, for the following purposes:
1. To consider and vote upon the Agreement and Plan of Reorganization,
dated as of November 21, 1994, (together with the Agreement and Plan of
Consolidation attached thereto, the "Consolidation Agreement") between the
Bank and Norwest Corporation ("Norwest"), a Delaware corporation, a copy
of which is included in the accompanying Proxy Statement-Prospectus as
Appendix A, under the terms of which a wholly owned banking subsidiary of
Norwest would be consolidated with the Bank (the "Consolidation"), under
the charter of the Bank, and each outstanding share of common stock, par
value $2.50 per share, of the Bank ("Bank Common Stock") would be
converted into a number of shares of common stock, par value $1 2/3 per
share, of Norwest determined in accordance with the provisions of the
Consolidation Agreement; and to authorize such further action by the Board
of Directors and proper officers of the Bank as may be necessary or
appropriate to carry out the intent and purposes of the Consolidation.
2. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record on the books of the Bank at the close of
business on April __, 1995, will be entitled to notice of and to vote at the
Special Meeting or any adjournment thereof.
Your attention is directed to the Proxy Statement-Prospectus accompanying
this notice for a more complete statement regarding the matters to be acted
upon at the Special Meeting.
By Order of the Board of Directors
Gene W. Chandler
Vice President and Cashier
April __, 1995
HOLDERS OF BANK COMMON STOCK ARE URGED TO COMPLETE, SIGN, DATE, AND MAIL THE
ENCLOSED PROXY PROMPTLY IN THE ACCOMPANYING ENVELOPE. NO POSTAGE IS REQUIRED
IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY,
IF YOU WISH, REVOKE YOUR PROXY AND VOTE IN PERSON. THE PROXY MAY BE REVOKED
AT ANY TIME PRIOR TO ITS EXERCISE IN THE MANNER DESCRIBED IN THE PROXY
STATEMENT-PROSPECTUS.
<PAGE>
PROXY STATEMENT
OF
FIRST AMERICAN NATIONAL BANK
FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY ___, 1995
---------------------
PROSPECTUS
OF
NORWEST CORPORATION
COMMON STOCK
This Prospectus of Norwest Corporation ("Norwest") relates to up to
193,000 shares of the common stock, par value $1 2/3 per share, of Norwest
("Norwest Common Stock") issuable to the shareholders of First American
National Bank (the "Bank") upon consummation of the consolidation (the
"Consolidation") of a wholly owned banking subsidiary of Norwest with the
Bank, pursuant to the terms of the Agreement and Plan of Reorganization
between the Bank and Norwest, dated as of November 21, 1994 (together with the
Agreement and Plan of Consolidation attached thereto, the "Consolidation
Agreement"). The Consolidation Agreement is set forth in Appendix A to this
Proxy Statement-Prospectus and is incorporated by reference herein.
This Prospectus also serves as the Proxy Statement of the Bank for a
special meeting of shareholders to be held on May ___, 1995 (the "Special
Meeting").
Upon consummation of the Consolidation, except as described herein, each
outstanding share of common stock, par value $2.50 per share, of the Bank
("Bank Common Stock"), except shares with respect to which statutory
dissenters' rights have been exercised and not forfeited, will be converted
into a number of shares of Norwest Common Stock determined in accordance with
the terms of the Consolidation Agreement. For a more complete description of
the Consolidation Agreement and the terms of the Consolidation, see "THE
CONSOLIDATION."
This Proxy Statement-Prospectus and the form of proxy are first being
mailed to shareholders of the Bank on or about April __, 1995.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROXY STATEMENT-PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The date of this Proxy Statement-Prospectus is April __, 1995.
<PAGE>
AVAILABLE INFORMATION
Norwest is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
therewith, Norwest files reports, proxy statements, and other information with
the Securities and Exchange Commission (the "Commission").
Reports, proxy statements, and other information concerning Norwest can be
inspected and copied at the public reference facilities of the Commission,
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at Seven World Trade Center, Suite 1300, New
York, New York 10048, and at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such materials can be obtained at prescribed
rates by writing to the Commission, Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549. Reports, proxy statements, and other
information filed by Norwest with the New York Stock Exchange and the Chicago
Stock Exchange may be inspected at the offices of the New York Stock Exchange
at 20 Broad Street, New York, New York 10005 and at the offices of the Chicago
Stock Exchange at One Financial Place, 440 South LaSalle Street, Chicago,
Illinois 60605.
This Proxy Statement-Prospectus does not contain all of the information
set forth in the Registration Statement on Form S-4 and exhibits thereto (the
"Registration Statement") covering the securities offered hereby that Norwest
has filed with the Commission. Certain portions of the Registration Statement
have been omitted pursuant to the rules and regulations of the Commission.
Reference is hereby made to such omitted portions for further information with
respect to Norwest and the securities offered hereby.
---------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROXY STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE NORWEST COMMON STOCK
OFFERED BY THIS PROXY STATEMENT-PROSPECTUS, OR THE SOLICITATION OF A PROXY, IN
ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROXY
STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF NORWEST OR THE BANK SINCE THE DATE OF THIS PROXY STATEMENT-
PROSPECTUS.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. DOCUMENTS RELATING TO
NORWEST, EXCLUDING EXHIBITS, UNLESS SPECIFICALLY INCORPORATED THEREIN, ARE
AVAILABLE WITHOUT CHARGE UPON REQUEST TO LAUREL A. HOLSCHUH, SECRETARY,
NORWEST CORPORATION, NORWEST CENTER, SIXTH AND MARQUETTE, MINNEAPOLIS,
MINNESOTA 55479-1026, TELEPHONE (612) 667-8655. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY MAY __, 1995.
The following documents filed with the Commission by Norwest (File No. 1-
2979) pursuant to the Exchange Act are incorporated by reference in this Proxy
Statement-Prospectus:
1. Norwest's Annual Report on Form 10-K for the year ended December 31,
1994; and
2. Norwest's Current Reports on Form 8-K dated January 9, 1995, January
27, 1995, February 17, 1995, and April 21, 1995.
All documents filed by Norwest with the Commission pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the date hereof
and prior to the Special Meeting shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of such filing. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein or in any other
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part hereof.
3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
AVAILABLE INFORMATION........................................................ 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................. 3
SUMMARY...................................................................... 6
The Companies............................................................ 6
Terms of the Consolidation............................................... 7
The Special Meeting and Vote Required.................................... 7
Reasons for the Consolidation; Recommendation of the Board of Directors
of the Bank............................................................ 8
Effective Date and Time of the Consolidation............................. 8
Conditions and Termination............................................... 8
Accounting Treatment..................................................... 9
Regulatory Approvals..................................................... 9
Management and Operations After the Consolidation........................ 9
Interests of Certain Persons in the Consolidation........................ 9
Rights of Dissenting Bank Shareholders................................... 9
Certain Federal Income Tax Consequences.................................. 9
Markets and Market Prices................................................ 10
Certain Differences in Rights of Shareholders............................ 10
Comparative Unaudited Per Share Data..................................... 11
Selected Financial Data.................................................. 13
MEETING INFORMATION.......................................................... 17
General.................................................................. 17
Date, Place, and Time.................................................... 17
Record Date; Vote Required............................................... 17
Principal Shareholders and Security Ownership of Management.............. 18
Voting and Revocation of Proxies......................................... 19
Solicitation of Proxies.................................................. 20
THE CONSOLIDATION............................................................ 21
Background of and Reasons for the Consolidation.......................... 21
Terms of the Consolidation............................................... 21
Effective Date and Time of the Consolidation............................. 22
Surrender of Certificates................................................ 22
Conditions to the Consolidation.......................................... 23
Regulatory Approvals..................................................... 24
Business Pending the Consolidation....................................... 25
Certain Covenants........................................................ 25
Waiver, Amendment, and Termination....................................... 26
Management and Operations After the Consolidation........................ 26
Interests of Certain Persons in the Consolidation........................ 26
Certain Differences in Rights of Shareholders............................ 27
Rights of Dissenting Bank Shareholders................................... 31
Certain Federal Income Tax Consequences.................................. 32
Resale of Norwest Common Stock........................................... 33
Stock Exchange Listing................................................... 33
Dividend Reinvestment and Optional Cash Payment Plan..................... 34
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Accounting Treatment..................................................... 34
Expenses................................................................. 34
INFORMATION ABOUT THE BANK................................................... 35
Business and Property of the Bank........................................ 35
Environmental Protection Considerations.................................. 36
Market Prices and Dividends.............................................. 36
Management's Discussion and Analysis of Financial Condition and Results
of Operations.......................................................... 37
CERTAIN REGULATORY CONSIDERATIONS............................................ 52
General.................................................................. 52
Dividend Restrictions.................................................... 52
Holding Company Structure................................................ 52
Capital Requirements..................................................... 53
Federal Deposit Insurance Corporation Improvement Act of 1991............ 54
FDIC Insurance........................................................... 55
EXPERTS...................................................................... 57
LEGAL OPINION................................................................ 57
MANAGEMENT OF NORWEST AND ADDITIONAL INFORMATION............................. 57
FINANCIAL STATEMENTS OF THE BANK............................................. F-1
</TABLE>
APPENDIX A RESTATED AGREEMENT AND PLAN OF REORGANIZATION, AND FORM OF
AGREEMENT AND PLAN OF CONSOLIDATION
APPENDIX B UNITED STATES CODE, TITLE 12, SECTION 215
APPENDIX C BANKING CIRCULAR 259
5
<PAGE>
SUMMARY
The following summary is not intended to be complete and is qualified in all
respects by the more detailed information included in this Proxy Statement-
Prospectus, the Appendices hereto, and the documents incorporated by reference
herein. As used in this Proxy Statement-Prospectus, the terms "Norwest" and
the "Bank" refer to such entities, respectively, and where the context
requires, such entities and their respective subsidiaries. All information
concerning Norwest included in this Proxy Statement-Prospectus has been
furnished by Norwest, and all information concerning the Bank included in this
Proxy Statement-Prospectus has been furnished by the Bank to Norwest for
incorporation herein.
THE COMPANIES
NORWEST CORPORATION
Norwest Corporation is a diversified financial services company which was
organized under the laws of Delaware in 1929 and is registered under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"). As a diversified
financial services organization, Norwest operates through subsidiaries engaged
in banking and in related businesses. Norwest provides retail, commercial,
and corporate banking services to its customers through banks located in
Arizona, Colorado, Illinois, Indiana, Iowa, Minnesota, Montana, Nebraska, New
Mexico, North Dakota, Ohio, South Dakota, Texas, Wisconsin, and Wyoming.
Norwest provides additional financial services to its customers through
subsidiaries engaged in various businesses related to banking, principally
mortgage banking, consumer finance, equipment leasing, agricultural finance,
commercial finance, securities brokerage and investment banking, insurance,
computer and data processing services, trust services, and venture capital
investments.
At December 31, 1994, Norwest had consolidated total assets of $59.3
billion, total deposits of $36.4 billion, and total stockholders' equity of
$3.8 billion. Based on total assets at December 31, 1994, Norwest was the
13th largest commercial banking organization in the United States.
Norwest regularly explores opportunities for acquisitions of financial
institutions and related businesses. Generally, management of Norwest does
not make a public announcement about an acquisition until a definitive
agreement has been signed. Norwest has entered into definitive agreements for
the acquisition of various financial institutions, including the Bank, having
aggregate total assets at December 31, 1994, of $4.4 billion. Certain of
these acquisitions were consummated subsequent to December 31, 1994, and the
others remain subject to regulatory approval and are expected to be completed
by the end of the third quarter of 1995. None of these acquisitions are
significant for the financial statements of Norwest, either individually or in
the aggregate.
Norwest's principal executive offices are located at Norwest Center,
Sixth and Marquette, in Minneapolis, Minnesota, and its telephone number is
612-667-1234.
Additional information concerning Norwest is included in the Norwest
documents incorporated by reference herein. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
6
<PAGE>
FIRST AMERICAN NATIONAL BANK
The Bank is a national bank headquartered in Chandler, Arizona, that
provides retail and commercial banking services to its customers through three
banking facilities located at 2990 North Dobson Road, Chandler, Arizona, 1098
North Arizona Avenue, Chandler, Arizona, and 2030 East Baseline Road, Mesa,
Arizona. The Bank's deposits are insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation. At December 31, 1994, the Bank had
total assets of $40.9 million, deposits of $37.9 million, and stockholders'
equity of $2.8 million. The Bank was initially chartered as a state bank in
Arizona in 1965 and was chartered as a national bank in 1971.
The Bank provides a wide range of banking services for its retail and
commercial customers, including real estate loans, revolving credit
arrangements, inventory and accounts receivable financing, equipment
financing, home improvement and other personal loans, NOW checking, and
savings and time accounts. The Bank provides 24-hour access to routine
banking services through Plus System network automated teller machines located
throughout Arizona and the United States.
The Bank's headquarters are located at 2990 North Dobson Road in
Chandler, Arizona, and the Bank's phone number is (602) 899-5828. See
"INFORMATION ABOUT THE BANK."
TERMS OF THE CONSOLIDATION
The Consolidation Agreement provides for the consolidation of a wholly
owned banking subsidiary of Norwest with the Bank, under the charter of the
Bank. Upon consummation of the Consolidation, the outstanding shares of Bank
Common Stock (other than shares as to which statutory dissenters' rights have
been exercised and not forfeited) will be converted into a number of shares of
Norwest Common Stock determined in accordance with the provisions of the
Consolidation Agreement. As provided in the Consolidation Agreement, the
exact number of shares of Norwest Common Stock into which each share of Bank
Common Stock will be converted will be determined using a conversion factor
calculated by dividing 193,000 by the number of shares of Bank Common Stock
outstanding immediately prior to the Consolidation. See "THE CONSOLIDATION--
Terms of the Consolidation."
THE SPECIAL MEETING AND VOTE REQUIRED
THE SPECIAL MEETING
The Special Meeting of Shareholders of the Bank to consider and vote on
the Consolidation will be held on _______, May ___, 1995, at 10:00 a.m., local
time, at 1098 North Arizona Avenue, Chandler, Arizona. Only holders of record
of Bank Common Stock at the close of business on April __, 1995, will be
entitled to notice of and to vote at the Special Meeting. At such date, there
were 113,596 shares of Bank Common Stock outstanding. Each share of Bank
Common Stock is entitled to one vote. For additional information relating to
the Special Meeting, see "MEETING INFORMATION."
7
<PAGE>
VOTE REQUIRED
Approval of the Consolidation Agreement requires the affirmative vote of
the holders of two-thirds of the outstanding shares of Bank Common Stock. See
"MEETING INFORMATION--Record Date; Vote Required."
As of the record date for the Special Meeting, directors and officers of
the Bank owned beneficially or controlled the voting of 32,879, or 28.94%, of
the shares of Bank Common Stock outstanding on that date. The Bank's
directors and officers have informed the Bank that they intend to vote all of
their shares in favor of the Consolidation. At the record date, directors and
executive officers of Norwest did not own beneficially any shares of Bank
Common Stock. See "MEETING INFORMATION--Record Date; Vote Required" and
"MEETING INFORMATION--Principal Shareholders and Security Ownership of
Management."
REASONS FOR THE CONSOLIDATION; RECOMMENDATION OF THE BOARD OF DIRECTORS OF THE
BANK
The Board of Directors of the Bank has concluded that the Consolidation
is in the best interest of the holders of Bank Common Stock, who will receive,
in a tax-free exchange, stock of a much larger and more diversified enterprise
that is actively traded on national stock exchanges. In addition to the
greater liquidity provided to the Bank's shareholders, the Consolidation will
provide customers of the Bank with access to a broader range of services and
will provide the Bank with increased financial strength. See "THE
CONSOLIDATION--Background of and Reasons for the Consolidation." THE BOARD OF
DIRECTORS OF THE BANK UNANIMOUSLY RECOMMENDS THAT THE BANK SHAREHOLDERS VOTE
FOR THE CONSOLIDATION.
EFFECTIVE DATE AND TIME OF THE CONSOLIDATION
Subject to the terms and conditions of the Consolidation Agreement, the
Consolidation will be effective at 11:59 p.m., Chandler, Arizona time, (the
"Effective Time") on the date specified in the certificate of approval to be
issued by the Office of the Comptroller of the Currency (the "Effective
Date"). See "THE CONSOLIDATION--Effective Date and Time of the Consolidation"
and "THE CONSOLIDATION--Conditions to the Consolidation."
CONDITIONS AND TERMINATION
The respective obligations of Norwest and the Bank to consummate the
Consolidation are subject to certain conditions, including the receipt of
regulatory approvals without unreasonably burdensome conditions, approval of
the Consolidation Agreement by the shareholders of the Bank, receipt by the
Bank of certain tax opinions, and certain other conditions customary in
transactions of this nature. See "THE CONSOLIDATION--Conditions to the
Consolidation" and "THE CONSOLIDATION--Regulatory Approvals."
The Consolidation Agreement may be terminated at any time prior to the
Effective Date, whether prior to or after approval by the Bank's shareholders,
by either party under specified conditions, including if the Consolidation
shall not have been consummated by September 1, 1995, unless such failure of
consummation shall be due to the failure of the party seeking termination to
perform its respective covenants and agreements under the
8
<PAGE>
Consolidation Agreement. See "THE CONSOLIDATION--Waiver, Amendment, and
Termination."
ACCOUNTING TREATMENT
Management of Norwest anticipates that the Consolidation will be
accounted for as a "pooling of interests" under generally accepted accounting
principles. The Consolidation Agreement provides that a condition to
consummation of the Consolidation is the receipt of letters from both KPMG
Peat Marwick LLP, Norwest's independent auditors, and McGladrey and Pullen,
LLP, Bank's independent auditors, to the effect that the Consolidation
qualifies for pooling of interests accounting treatment. See "THE
CONSOLIDATION--Accounting Treatment."
REGULATORY APPROVALS
The Consolidation is subject to the prior approval of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") and the
Office of the Comptroller of the Currency (the "OCC"), and also of the Arizona
Superintendent of Banks. All three approvals have been received.
MANAGEMENT AND OPERATIONS AFTER THE CONSOLIDATION
Following the Consolidation, Norwest intends to operate at the Bank's
present locations and to offer products and services offered by Norwest
affiliates. See "THE CONSOLIDATION--Management and Operations After the
Consolidation."
INTERESTS OF CERTAIN PERSONS IN THE CONSOLIDATION
Certain officers, one of whom is also a director of the Bank, have direct
and indirect interests in the consummation of the Consolidation separate from
their interests as holders of Bank Common Stock. See "THE CONSOLIDATION--
Interests of Certain Persons in the Consolidation."
RIGHTS OF DISSENTING BANK SHAREHOLDERS
Under federal law dissenting shareholders who comply with the requisite
statutory procedures will be entitled to receive an appraised value of their
shares. The value so determined could be more than, the same as, or less than
the value of the consideration to be received by Bank shareholders, pursuant
to the Consolidation Agreement, who do not dissent. See "THE CONSOLIDATION--
Rights of Dissenting Bank Shareholders."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Consolidation is designed so that no gain or loss (other than with
respect to cash received in lieu of fractional shares or in satisfaction of
dissenters' rights) will be recognized to Bank shareholders upon the exchange
of their Bank Common Stock for Norwest Common Stock. The opinion of Frazer,
Ryan, Goldberg & Hunter, L.L.P., special tax counsel for the Bank, with
respect to the Consolidation qualifying as a "tax-free" reorganization for
federal income tax purposes will be provided to the Bank. HOWEVER, THE
FEDERAL INCOME
9
<PAGE>
TAX CONSIDERATIONS RELATED TO THE CONSOLIDATION MAY BE DIFFERENT TO PARTICULAR
TYPES OF BANK SHAREHOLDERS, OR IN LIGHT OF THE BANK SHAREHOLDERS' PERSONAL
INVESTMENT CIRCUMSTANCES. ACCORDINGLY, SHAREHOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS IN DETERMINING THE TAX CONSIDERATIONS THAT MAY BE
RELEVANT TO THEM IN CONNECTION WITH THE CONSOLIDATION UNDER FEDERAL, STATE,
LOCAL, AND ANY OTHER APPLICABLE TAX LAWS. See "THE CONSOLIDATION--Certain
Federal Income Tax Considerations."
MARKETS AND MARKET PRICES
Norwest Common Stock is listed on the New York Stock Exchange and the
Chicago Stock Exchange. On November 18, 1994, the last trading day preceding
public announcement of the proposed Consolidation, the closing price per share
of Norwest Common Stock was $22.50 and on April __, 1995, the price was $____.
There is no public market for Bank Common Stock. Shareholders of the Bank are
advised to obtain current market quotations for Norwest Common Stock. The
market price for Norwest Common Stock will fluctuate between the date of this
Proxy Statement-Prospectus and the Effective Date, which may be a period of
several weeks. As a result, the market value of the Norwest Common Stock that
shareholders of the Bank ultimately receive in the Consolidation could be more
or less than its market value on the date of this Proxy Statement-Prospectus.
No assurance can be given concerning the market price of Norwest Common Stock
before or after the Effective Date.
CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS
Upon consummation of the Consolidation, shareholders of the Bank will
become stockholders of Norwest. As a result, such shareholders' rights will
change significantly. See "THE CONSOLIDATION--Certain Differences in Rights
of Shareholders."
10
<PAGE>
COMPARATIVE UNAUDITED PER SHARE DATA
The following table presents selected comparative unaudited per share
data for Norwest Common Stock on a historical and pro forma combined basis and
for Bank Common Stock on a historical and a pro forma equivalent basis giving
effect to the Consolidation using the pooling-of-interests method of
accounting. For a description of the pooling-of-interests method of
accounting with respect to the Consolidation and the related effects on the
historical financial statements of Norwest, see "THE CONSOLIDATION--Accounting
Treatment." This information is derived from the consolidated historical
financial statements of Norwest, including the related notes thereto,
incorporated by reference into this Proxy Statement-Prospectus and the
historical financial statements of the Bank, including the notes thereto,
appearing elsewhere in this Proxy Statement-Prospectus. This information
should be read in conjunction with such historical financial statements and
the related notes thereto. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" and "FINANCIAL STATEMENTS OF THE BANK."
This data is not necessarily indicative of the results of the future
operations of the combined entity or the actual results that would have
occurred had the Consolidation been consummated prior to the periods
indicated.
11
<PAGE>
COMPARATIVE UNAUDITED PER SHARE DATA
<TABLE>
<CAPTION>
Norwest Common Stock Bank Common Stock
--------------------- -----------------
Pro Forma Pro Forma
Historical Combined Historical Equivalent
---------- --------- ---------- -----------------
<S> <C> <C> <C> <C>
BOOK VALUE (1):
December 31, 1994 $10.79 10.79 24.32 18.33
DIVIDENDS DECLARED (2):
Year Ended
December 31, 1994 0.765 0.765 - 1.300
December 31, 1993 0.640 0.640 - 1.087
December 31, 1992 0.540 0.540 - 0.917
NET INCOME (3) (4):
Year Ended
December 31, 1994 2.41 2.41 4.34 4.09
December 31, 1993 1.86 1.86 3.93 3.15
December 31, 1992 1.19 1.19 5.57 2.02
</TABLE>
(1) The pro forma combined book value per share of Norwest Common Stock is
based upon the historical total combined common stockholders' equity for Norwest
and the Bank divided by total pro forma common shares of the combined entities
assuming exchange of the outstanding Bank Common Stock at a ratio of 1.699
shares of Norwest Common Stock for each share of Bank Common Stock (the
"Exchange Ratio"). The pro forma equivalent book value per share of the Bank
represents the pro forma combined amount multiplied by the Exchange Ratio. The
Exchange Ratio assumes that the aggregate number of shares of Norwest Common
Stock issued in the Consolidation will be 193,000. See "THE CONSOLIDATION--
Terms of the Consolidation."
(2) Assumes no changes in cash dividends per share. The pro forma equivalent
dividends per share of Bank Common Stock represent cash dividends declared per
share of Norwest Common Stock multiplied by the Exchange Ratio.
(3) The pro forma combined net income per share of Norwest Common Stock (based
on fully diluted net income and weighted average shares outstanding) is based
upon the combined historical net income for Norwest and the Bank divided by the
average pro forma common shares of the combined entities. The pro forma
equivalent net income per share of Bank Common Stock represents the pro forma
combined net income per share multiplied by the Exchange Ratio.
(4) The following table presents a reconciliation of the Bank's historical net
income per share data on a calendar year basis, as presented above, to its
reported fiscal year-end per share data. See "FINANCIAL STATEMENTS OF THE
BANK."
<TABLE>
<CAPTION>
Net Income
Per Share
----------
<S> <C>
Calendar year ended December 31, 1994 $ 4.34
Less net income for three months ended March 31, 1994 (1.53)
------
Reported net income for nine months ended December 31, 1994 $ 2.81
======
Calendar year ended December 31, 1993 $ 3.93
Add net income for three months ended March 31, 1994 1.53
Less net income for six months ended June 30, 1993 (2.52)
------
Reported net income for nine months ended March 31, 1994 $ 2.94
======
Calendar year ended December 31, 1992 $ 5.57
Add net income for six months ended June 30, 1993 2.52
Less net income for six months ended June 30, 1992 (2.38)
------
Reported net income for twelve months ended June 30, 1993 $ 5.71
======
</TABLE>
12
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth certain selected historical consolidated
financial information for Norwest and certain selected historical financial
information for the Bank. The income statement and balance sheet data
included in the selected financial data for the five years ended December 31,
1994, are derived from audited consolidated financial statements of Norwest
and from audited financial statements of the Bank for the periods shown. In
1994 the Bank changed its fiscal year-end to December 31 from March 31. Prior
to 1994 the Bank's fiscal year-end was June 30. All financial information
derived from unaudited financial statements reflects, in the respective
opinions of management of Norwest and the Bank, all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation of
such data. This information should be read in conjunction with the
consolidated financial statements of Norwest and the related notes thereto,
included in documents incorporated herein by reference, and in conjunction
with the financial statements of the Bank, including the notes thereto,
appearing elsewhere in this Proxy Statement-Prospectus. See "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE" and "FINANCIAL STATEMENTS OF THE BANK."
13
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
NORWEST CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------------
1994 1993(1) 1992(2) 1991 1990(3)
--------- -------- -------- -------- --------
(In millions except per share amounts)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
- ---------------------
Interest income $ 4,393.7 3,946.3 3,806.4 4,025.9 3,885.8
Interest expense 1,590.1 1,442.9 1,610.6 2,150.3 2,320.1
--------- -------- -------- -------- --------
Net interest income 2,803.6 2,503.4 2,195.8 1,875.6 1,565.7
Provision for credit losses 164.9 158.2 270.8 406.4 433.0
Non-interest income 1,638.3 1,585.0 1,273.7 1,064.0 896.3
Non-interest expense 3,096.4 3,050.4 2,553.1 2,041.5 1,744.5
--------- -------- -------- -------- --------
Income before income taxes 1,180.6 879.8 645.6 491.7 284.5
Income tax expense 380.2 266.7 175.6 73.4 115.1
--------- -------- -------- -------- --------
Income before cumulative effect
of a change in accounting method 800.4 613.1 470.0 418.3 169.4
Cumulative effect on years prior
to 1992 of change in accounting method -- -- (76.0) -- --
--------- -------- -------- -------- --------
Net income $ 800.4 613.1 394.0 418.3 169.4
========= ======== ======== ======== ========
PER SHARE DATA
- --------------
Net income per share:
Primary:
Before cumulative effect of a
change in accounting method $2.45 1.89 1.44 1.33 0.59
Cumulative effect on years prior
to 1992 of change in accounting method -- -- (0.25) -- --
----- ---- ----- ---- ----
Net income $2.45 1.89 1.19 1.33 0.59
===== ==== ===== ==== ====
Fully diluted:
Before cumulative effect of a
change in accounting method $2.41 1.86 1.42 1.32 0.59
Cumulative effect on years prior
to 1992 of change in accounting method -- -- (0.23) -- --
----- ---- ----- ---- ----
Net income $2.41 1.86 1.19 1.32 0.59
===== ==== ===== ==== ====
Dividends declared per common share $0.765 0.640 0.540 0.470 0.423
BALANCE SHEET DATA
- ------------------
At period end:
Total assets $59,315.9 54,665.0 50,037.0 45,974.5 43,523.0
Long-term debt 9,186.3 6,850.9 4,553.2 3,686.6 3,066.0
Total stockholders' equity 3,846.4 3,760.9 3,371.8 3,192.3 2,434.0
</TABLE>
14
<PAGE>
(1) On January 14, 1994, First United Bank Group, Inc. ("First United"), a
$3.9 billion bank holding company headquartered in Albuquerque, New Mexico,
was acquired in a pooling transaction. Norwest's historical results have been
restated to include the historical results of First United. Appropriate
Norwest items reflect an increase in First United's provision for credit
losses of $16.5 million to conform with Norwest's credit loss reserve
practices and methods and $83.2 million in accruals and reserves for merger-
related expenses, including termination costs, systems and operations costs,
and investment banking, legal, and accounting expenses.
(2) On February 9, 1993, Lincoln Financial Corporation ("Lincoln"), a $2.0
billion bank holding company headquartered in Fort Wayne, Indiana, was
acquired in a pooling transaction. Norwest's historical results have been
restated to include the historical results of Lincoln. Appropriate Norwest
items reflect an increase in Lincoln's provision for credit losses of $60.0
million and $33.5 million in Lincoln's provisions and expenditures for costs
related to restructuring activities.
(3) On April 19, 1991, United Banks of Colorado, Inc. ("United"), a $5.5
billion financial institution headquartered in Denver, Colorado, merged with
Norwest in a pooling transaction. Norwest's historical results have been
restated to include the historical results of United. Appropriate Norwest
items reflect United's special provisions for credit losses and writedowns for
other real estate owned, which together totaled $165 million, and $31 million
of accruals for expected reorganization and restructuring costs for the year
ended December 31, 1990. The special provisions were due to deterioration of
several large commercial loan relationships, the anticipated results of the
then recent examination by the Office of the Comptroller of the Currency, and
the anticipated impact of the Resolution Trust Corporation's accelerated
efforts to liquidate foreclosed properties at deep discounts.
15
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
FIRST AMERICAN NATIONAL BANK
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED JUNE 30
------------------------ -----------------------------------------------
December 31, March 31,
1994 1994 1993 1992 1991 1990 1989
------------ --------- ------- ------- ------- ------- -------
(In thousands except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
- ---------------------
Interest income $ 2,005 1,932 2,637 3,173 3,893 4,267 4,515
Interest expense 623 644 957 1,582 2,203 2,422 2,348
-------- ------- ------- ------- ------- ------- -------
Net interest income 1,382 1,288 1,680 1,591 1,690 1,845 2,167
Provision for credit losses - (100) (400) 498 1,332 370 365
Non-interest income 257 242 290 324 348 311 305
Non-interest expense 1,211 1,221 1,619 1,660 1,983 1,759 1,693
-------- ------- ------- ------- ------- ------- -------
Income (loss) before income taxes 428 409 751 (243) (1,277) 27 414
Income tax expense (benefit) 109 75 112 (173) (265) (12) 137
-------- ------- ------- ------- ------- ------- -------
Net income (loss) $ 319 334 639 (70) (1,012) 39 277
======== ======= ======= ======= ======= ======= =======
PER SHARE DATA
- --------------
Net income (loss) $2.81 2.94 5.71 (0.63) (9.19) 0.35 2.52
Dividends $ - - - - - - -
Shares outstanding 113,596 113,596 113,596 113,596 110,096 110,096 110,096
BALANCE SHEET DATA
- ------------------
At period end:
Total assets $ 40,916 38,854 35,560 34,906 40,705 43,258 41,232
Long-term debt - - - - - 400 400
Total stockholders' equity 2,763 2,444 2,110 1,417 1,486 2,526 2,541
</TABLE>
16
<PAGE>
MEETING INFORMATION
GENERAL
This Proxy Statement-Prospectus is being furnished to holders of Bank
Common Stock in connection with the solicitation of proxies by the Board of
Directors of the Bank for use at the Special Meeting to be held on ________,
May ___, 1995, and any adjournments thereof, to consider and take action upon
the approval of the Consolidation Agreement and such other business as may
properly come before the Special Meeting or any adjournments thereof. Each
copy of this Proxy Statement-Prospectus mailed to holders of Bank Common Stock
is accompanied by a form of proxy for use at the Special Meeting.
This Proxy Statement-Prospectus is also furnished by Norwest to
shareholders of the Bank as a prospectus in connection with the issuance by
Norwest of shares of Norwest Common Stock upon consummation of the
Consolidation. This Proxy Statement-Prospectus, the attached Notice of
Special Meeting, and the form of proxy enclosed herewith are first being
mailed to shareholders of the Bank on or about April __, 1995.
DATE, PLACE, AND TIME
The Special Meeting will be held at Bank, 1098 North Arizona Avenue,
Chandler, Arizona, on ___________, May ___, 1995, at 10:00 a.m., local time.
RECORD DATE; VOTE REQUIRED
The Board of Directors of the Bank has fixed the close of business on
April __, 1995, as the record date for the determination of shareholders of
the Bank entitled to receive notice of, and to vote at, the Special Meeting.
On the record date there were 113,596 shares of Bank Common Stock outstanding.
Each share of Bank Common Stock outstanding on the record date is entitled to
one vote. Approval of the Consolidation Agreement requires the affirmative
vote of the holders of two-thirds of the outstanding shares of Bank Common
Stock. The Consolidation cannot be consummated without shareholder approval
of the Consolidation Agreement.
As of the record date for the Special Meeting, directors and executive
officers of the Bank owned beneficially or controlled the voting of an
aggregate of 32,879 shares, or 28.94%, of the shares of Bank Common Stock
outstanding on that date. The Bank's directors and executive officers have
informed the Bank that they intend to vote all of their shares in favor of the
Consolidation Agreement. Information regarding the shares of Bank Common
Stock beneficially owned by each director and executive officer of the Bank,
and by all directors and executive officers as a group is set forth in the
tables under the heading "Principal Shareholders and Security Ownership of
Management" below.
At the record date, directors and executive officers of Norwest did not
own beneficially any shares of Bank Common Stock.
17
<PAGE>
PRINCIPAL SHAREHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT
Set forth below are the names, and, in the case of holders of 5% or more,
the addresses, and the number of shares held as of the record date for the
Special Meeting by those persons who may be deemed to own beneficially,
whether directly or indirectly, 5% or more of the outstanding shares of Bank
Common Stock, by each director and executive officer of the Bank, and by all
directors and executive officers as a group. Each shareholder named below has
sole voting and investment power over the shares shown in the tables unless
otherwise indicated. The shares shown in the table include all shares the
named parties may be deemed to own beneficially, including shares held by
spouses.
<TABLE>
<CAPTION>
Number of Shares
Beneficially
Name and Address Owned Percent of Class
---------------------- -------------------- ----------------
<S> <C> <C>
Eugene Hickey (1) 1,226 (2) 1.08%
Michael E. Hickey (3) 3,688 (2)(4) 3.25%
Glenn A. McCollum (5) 3,939 (6) 3.47%
Irvin W. Peden (7) 3,816 (8) 3.36%
John W. Parker, Jr. (9) 500 .44%
Paul A. Rose (10) 1,110 .98%
Gale & Co. 7,770 6.84%
c/o Harris Trust
P.O. Box 755
Chicago, IL 60690
John W. and Elizabeth Parker Family Trust 16,873 14.85%
210 San Francisco
San Gabriel, CA 91775
Peden Investment Company (11) 5,880 5.18%
1060 Arizona Avenue
Chandler, AZ 85224
Posada Group Limited Partnership (12) 13,446 11.84%
760 North McQueen
Chandler, AZ 85225
Directors and executive officers as 32,879 (13) 28.94%
a group (6 persons)
</TABLE>
_______________________
(1) Mr. Hickey is Chairman of the Board and a director of the Bank.
18
<PAGE>
(2) Includes 726 shares owned by JEM Land Company, a general partnership
having three general partners, including both Mr. Eugene Hickey and Mr.
Michael E. Hickey. Excludes 13,446 shares owned by Posada Group Limited
Partnership ("Posada"). Mr. Eugene Hickey may be deemed to own
beneficially the shares owned by Posada by virtue of his direct and
indirect ownership interests in Posada. See note (12) below.
(3) Mr. Hickey is a director of the Bank.
(4) Includes 1,786 shares held by the Michael E. Hickey Family Trust, 388
shares held by the Michael E. Hickey Child Trust for Michael A. Hickey
and 388 shares held by the Michael E. Hickey Child Trust for Brent E.
Hickey. The Child Trusts are subject to the voting control of Mr.
Michael E. Hickey, but are not beneficially owned by him.
(5) Mr. McCollum is a director of the Bank.
(6) Includes 3,451 shares held by the McCollum Revocable Trust.
(7) Mr. Peden is a director of the Bank.
(8) Includes 2,640 shares held by the Irvin W. Peden Family Trust and 776
shares owned by a partnership over which Mr. Peden and his wife have
joint voting control. Excludes 5,880 shares owned by Peden Investment
Company ("PIC"). Mr. Peden may be deemed to own beneficially the shares
owned by PIC by virtue of his ownership interest in PIC. See note (11)
below.
(9) Mr. Parker is a director of the Bank.
(10) Mr. Rose is President, Chief Executive Officer, and a director of the
Bank.
(11) Mr. Peden is the principal shareholder of PIC.
(12) Mr. Eugene Hickey and his wife are limited partners of Posada, possess an
ownership interest in Posada's corporate general partner, and the
beneficial interest in a trust which is a general partner of Posada.
(13) Includes trusts for which a director is trustee or co-trustee and
interests in other entities, as identified in notes (2), (4), (6), (8),
(11), and (12) above. Shares owned by trusts are subject to the voting
control of the trustee or joint voting control of the co-trustees.
VOTING AND REVOCATION OF PROXIES
Shares of Bank Common Stock represented by a proxy properly signed and
received at, or prior to, the Special Meeting, unless subsequently revoked,
will be voted at the Special Meeting in accordance with the instructions
thereon. If a proxy is signed and returned without indicating any voting
instructions, shares of Bank Common Stock represented by such proxy will be
voted FOR approval of the Consolidation Agreement. Any proxy given pursuant
to this solicitation may be revoked by the person giving it at any time before
the proxy is voted by filing either an instrument revoking it or a duly
executed proxy bearing a later date with the Secretary of the Bank prior to or
at the Special Meeting or by voting the shares subject to the proxy in person
at the Special Meeting. Attendance at the Special Meeting will not in and of
itself constitute a revocation of a proxy.
19
<PAGE>
A proxy may indicate that all or a portion of the shares represented
thereby are not being voted with respect to a specific proposal. This could
occur, for example, when a broker is not permitted to vote shares held in
street name on certain proposals in the absence of instructions from the
beneficial owner. Shares that are not voted with respect to a specific
proposal will be considered as not present for such proposal, even though such
shares will be considered present for purposes of determining a quorum and
voting on other proposals. Abstentions on a specific proposal will be
considered as present, but not as voting in favor of such proposal. The
proposal to adopt the Consolidation Agreement must be approved by the holders
of two-thirds of the outstanding Bank Common Stock. Because this proposal
requires the affirmative vote of a specified percentage of outstanding shares,
the nonvoting of shares or abstentions with regard to this proposal will have
the same effect as votes against the proposal.
The Board of Directors of the Bank is not aware of any business to be
acted upon at the Special Meeting other than the business described herein.
If, however, other matters are properly brought before the Special Meeting, or
any adjournments thereof, the persons appointed as proxies will have
discretion to vote or act on such matters according to their best judgment.
SOLICITATION OF PROXIES
In addition to solicitation by mail, directors, officers, and employees
of the Bank may solicit proxies from the shareholders of the Bank, either
personally or by telephone, telegram, or other form of communication. None of
the foregoing persons who solicit proxies will be specifically compensated for
such services. Nominees, fiduciaries, and other custodians will be requested
to forward soliciting materials to beneficial owners and will be reimbursed
for their reasonable expenses incurred in sending proxy material to beneficial
owners. The Bank will bear its own expenses in connection with the
solicitation of proxies for the Special Meeting. See "THE CONSOLIDATION--
Expenses."
HOLDERS OF BANK COMMON STOCK ARE REQUESTED TO COMPLETE, DATE, AND SIGN
THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY TO THE BANK IN THE ENCLOSED
POSTAGE-PREPAID ENVELOPE.
20
<PAGE>
THE CONSOLIDATION
This section of the Proxy Statement-Prospectus describes certain aspects
of the Consolidation. The following description does not purport to be
complete and is qualified in its entirety by reference to the Consolidation
Agreement, which is attached as Appendix A to this Proxy Statement-Prospectus
and is incorporated by reference herein. ALL SHAREHOLDERS OF THE BANK ARE
URGED TO READ THE CONSOLIDATION AGREEMENT IN ITS ENTIRETY.
BACKGROUND OF AND REASONS FOR THE CONSOLIDATION
During the latter part of 1992, the directors of the Bank, some of whom,
directly or indirectly, were principal shareholders of the Bank, determined
that an acquisition of the Bank by a proper third party would be in the best
interests of the shareholders by increasing the liquidity of their investment,
as well as in the best interests of the Bank's customers, by expanding the
range of services the Bank could offer. Although the Bank did not initiate
inquiries, numerous inquiries were received from third parties, including
Norwest, who expressed interest in acquiring a controlling ownership position
in the Bank. Because of a potential transaction with another party, the Bank
was unable to respond to Norwest's inquiry until the fall of 1994. An
exchange of information and discussions with Norwest followed. In September
1994, Norwest submitted a preliminary acquisition proposal covering all of the
Bank's outstanding stock for consideration by the Bank's Board of Directors.
Further negotiations between the Bank and Norwest followed, which resulted in
Norwest's submitting a letter of intent to the Bank on September 15, 1994,
which was unanimously approved by the Board of Directors and signed on behalf
of the Bank on September 19, 1994. During the next few weeks, Norwest
completed its due diligence of the Bank, and the parties negotiated a
definitive agreement which was approved by the Board of Directors of the Bank
and executed by Norwest and the Bank as of November 21, 1994.
As noted above, a number of the directors were interested in increasing
the liquidity of their investment, as well as that of all the shareholders of
the Bank, and also in enhancing the Bank's ability to offer a broader range of
services to its customers. Management of the Bank believes that by becoming a
part of Norwest, which is a larger and more diverse banking organization, the
Bank's customers will benefit from the added financial strength and services
that Norwest can bring to the Bank. In addition, the shareholders of the Bank
will be able to exchange their shares of the Bank for the stock of Norwest,
which is actively traded on the New York and Chicago Stock Exchanges.
THE BOARD OF DIRECTORS OF THE BANK UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE BANK VOTE FOR APPROVAL OF THE CONSOLIDATION AGREEMENT.
TERMS OF THE CONSOLIDATION
At the Effective Time, a wholly owned banking subsidiary of Norwest
("Norwest Interim Bank") will consolidate with the Bank, under the charter of
the Bank. The resulting bank will be a wholly owned subsidiary of Norwest.
At the Effective Time, each outstanding share of Bank Common Stock (other than
shares as to which statutory dissenters' appraisal rights have been exercised
and not forfeited) will be converted into a number of shares of
21
<PAGE>
Norwest Common Stock determined by dividing 193,000 by the number of shares of
Bank Common Stock then outstanding. Assuming no change in the number of shares
of Bank Common Stock outstanding from the date of this Proxy Statement-
Prospectus through the date on which the closing of the Consolidation occurs,
each outstanding share of Bank Common Stock would be converted into 1.699
shares of Norwest Common Stock.
The market price for Norwest Common Stock will fluctuate between the date
of this Proxy Statement-Prospectus and the Effective Date, which may be a
period of several weeks. As a result, the market value of the Norwest Common
Stock that shareholders of the Bank ultimately receive in the Consolidation
could be more or less than its market value on the date of this Proxy
Statement-Prospectus.
The Consolidation Agreement provides that if, between the date of the
Consolidation Agreement and the Effective Time, shares of Norwest Common Stock
are changed into a different number or class of shares by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares,
or readjustment, or if a stock dividend thereon is declared with a record date
within the same period, the conversion ratios provided for in the
Consolidation Agreement will be adjusted accordingly.
No fractional shares of Norwest Common Stock will be issued in the
Consolidation. Instead, Norwest will pay to each holder of Bank Common Stock
who would otherwise be entitled to a fractional share an amount of cash equal
to the fraction of a share of Norwest Common Stock to which the Bank
shareholder would otherwise be entitled multiplied by the average of the
closing prices of a share of Norwest Common Stock on the New York Stock
Exchange for each of the five trading days immediately preceding the day on
which the Special Meeting will be held.
Shares of Norwest Common Stock issued and outstanding immediately prior
to the Effective Date will remain issued and outstanding.
EFFECTIVE DATE AND TIME OF THE CONSOLIDATION
The Effective Time will be 11:59 p.m., Chandler, Arizona time, on the
Effective Date, the date specified in the certificate of approval to be issued
by the OCC approving the Consolidation. Subject to the terms and conditions
set forth in the Consolidation Agreement, the closing of the Consolidation
will occur on a date (the "Closing Date") agreed to by the parties to the
Consolidation, but no later than ten business days following the satisfaction
or waiver of all conditions set forth in the Consolidation Agreement, or on
such other date upon which the parties agree. Norwest and the Bank anticipate
that the Consolidation will close in the third quarter of 1995, although there
can be no assurance as to whether or when the Consolidation will occur. See
"Terms of the Consolidation," "Conditions to the Consolidation," and
"Regulatory Approvals."
SURRENDER OF CERTIFICATES
As soon as practicable after the Effective Time, Norwest Bank Minnesota,
National Association, acting in the capacity of exchange agent for Norwest
(the "Exchange Agent"), will mail to each former holder of record of shares of
Bank Common Stock a form of letter of
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transmittal, together with instructions for the exchange of such holder's Bank
Common Stock certificates for a certificate representing Norwest Common Stock.
SHAREHOLDERS OF THE BANK SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY
RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS.
Upon surrender to the Exchange Agent of one or more certificates for Bank
Common Stock, together with a properly completed letter of transmittal, there
will be issued and mailed to the holder a certificate representing the number
of whole shares of Norwest Common Stock to which such holder is entitled and,
where applicable, a check for the amount representing any fractional share. A
certificate for Norwest Common Stock may be issued in a name other than the
name in which the surrendered certificate is registered only if (i) the
certificate surrendered is properly endorsed and otherwise in proper form for
transfer and (ii) the person requesting the issuance of such certificate
either pays to the Exchange Agent any transfer or other taxes required by
reason of the issuance of a certificate for such shares in a name other than
the registered holder of the certificate surrendered or establishes to the
satisfaction of the Exchange Agent that such tax has been paid or is not
applicable.
All Norwest Common Stock issued pursuant to the Consolidation will be
deemed issued as of the Effective Time. No dividends on Norwest Common Stock
with a record date after the Effective Date will be paid to Bank shareholders
entitled to receive certificates for shares of Norwest Common Stock until such
shareholders surrender their certificates representing shares of Bank Common
Stock. Upon such surrender, there shall be paid to the shareholder in whose
name the certificates representing such shares of Norwest Common Stock are
issued any dividends the record and payment dates of which shall have been
after the Effective Date and before the date of such surrender. After such
surrender, there shall be paid to the person in whose name the certificate
representing such shares of Norwest Common Stock is issued, on the appropriate
dividend payment date, any dividend on such shares of Norwest Common Stock
which shall have a record date after the Effective Date and prior to the date
of surrender, but a payment date subsequent to the surrender. In no event
shall the persons entitled to receive such dividends be entitled to receive
interest on amounts payable as dividends.
CONDITIONS TO THE CONSOLIDATION
The Consolidation will occur only if the Consolidation Agreement is
approved by the requisite vote of shareholders of the Bank. Consummation of
the Consolidation is subject to the satisfaction of certain conditions, most
of which are customary in transactions such as the Consolidation. Such
conditions may be waived by the parties to the extent that waiver is permitted
by applicable law. Conditions to the obligations of both parties to
consummate the Consolidation include, but are not limited to (i) approval of
the Consolidation Agreement by the requisite vote of shareholders of the Bank,
(ii) the receipt of all necessary regulatory approvals, including the approval
of the Consolidation by the Federal Reserve Board and the OCC, and by the
State of Arizona, and the expiration of all applicable waiting and appeal
periods, (iii) the absence of any order of a court or agency of competent
jurisdiction restraining, enjoining, or otherwise prohibiting consummation of
the transactions contemplated by the Consolidation Agreement, and (iv) the
receipt by the Bank of an opinion of counsel to
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the effect that for federal income tax purposes the Consolidation will be a
tax-free reorganization.
Norwest's obligation to consummate the Consolidation is also subject,
among other things, to (i) the total number of shares of Bank Common Stock
(including phantom shares and other share equivalents) outstanding and subject
to issuance upon exercise of all warrants, options, conversion rights, phantom
shares, or other share equivalents not having exceeded 113,596; (ii) the
receipt of a certificate from the Bank's Chief Executive Officer and the
Bank's Chief Financial Officer concerning the accuracy and completeness of the
Bank's financial information presented in this Proxy Statement-Prospectus and
the absence of any material changes in such information since the date of the
Bank's most recent interim financial statements; (iii) the absence of any
reasonable basis for any proceeding, claim, or action seeking to impose, or
that could reasonably be expected to result in the imposition, on the Bank of
any liability arising from the release of hazardous substances under any
local, state, or federal environmental statute, regulation, or ordinance which
has had or could reasonably be expected to have a material adverse effect upon
the Bank; (iv) the requirement that the Bank shall not have sustained since
December 31, 1993, any material loss or interference with its business from
any civil disturbance or any fire, explosion, flood, or other calamity,
whether or not covered by insurance; (v) the absence, since June 30, 1994, of
any change, other than changes in banking laws or regulations that affect the
banking industry generally or changes in the general level of interest rates,
or any circumstance which has had or might reasonably be expected to have a
material adverse effect on the financial condition, results of operations,
business, or prospects of the Bank; (vi) the qualification of the
Consolidation as a pooling-of-interests for accounting purposes and the
receipt from KPMG Peat Marwick LLP and McGladrey and Pullen, LLP, Norwest's
and the Bank's respective independent auditors, of letters to that effect; and
(vii) the Bank's having corrected to Norwest's satisfaction all of the
regulatory compliance and violation of law problems and technical violations
identified by Norwest in its due diligence examination of the Bank.
REGULATORY APPROVALS
Transactions such as the Consolidation are subject to prior approval by
the Federal Reserve Board under the Bank Holding Company Act of 1956, as
amended (the "BHC Act"), which requires that the Federal Reserve Board take
into consideration the financial and managerial resources and future prospects
of the existing and proposed institutions and the convenience and needs of the
communities to be served. Transactions such as the Consolidation are also
subject to prior approval by the OCC under the National Bank Act. On February
14, 1995, the Federal Reserve Board informed Norwest that it had approved the
Consolidation, and by letter dated February 23, 1995, the OCC informed Norwest
that it had approved the Consolidation. The Arizona Superintendent of Banks
approved the transaction by letter dated January 17, 1995.
The approval of any application merely implies satisfaction of regulatory
criteria for approval, which do not include review of the transaction from the
standpoint of the adequacy of the consideration to be received by, or fairness
to, shareholders. Regulatory approvals do not constitute an endorsement or
recommendation of the proposed transactions.
Norwest and the Bank are not aware of any additional governmental
approvals or compliance with banking laws and regulations that would be
required for consummation of the
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Consolidation other than those described above. Should any other approval or
action be required, it is currently contemplated that such approval or action
would be sought. There can be no assurance that any such approval or action,
if needed, could be obtained and, if such approvals or actions are obtained,
there can be no assurance regarding the timing thereof.
BUSINESS PENDING THE CONSOLIDATION
By entering into the Consolidation Agreement, the Bank has agreed to
maintain its corporate existence in good standing and to conduct its business
in the ordinary and usual manner, including the extension of credit in
accordance with existing lending policies, except that the Bank has agreed not
to make, without the prior written consent of Norwest, any new loan or modify,
restructure, or renew any existing loan (except pursuant to commitments made
prior to November 21, 1994) if the amount of the resulting loan, when
aggregated with all other loans or extensions of credit to such person, would
exceed $100,000. In the Consolidation Agreement the Bank has also agreed,
among other things, that it will not, without the prior written consent of
Norwest: (i) enter into any material agreement, contract, or commitment in
excess of $20,000 except banking transactions in the ordinary course of
business and in accordance with policies and procedures in effect on November
21, 1994, or make any investments except individual investments made in the
ordinary course of business for terms of up to one year and in amounts of
$100,000 or less; (ii) declare, set aside, make, or pay any dividend or other
distribution with respect to its capital stock, except for a dividend declared
on October 24, 1994, and paid on February 1, 1995; or (iii) sell or otherwise
dispose of any of its assets or properties other than in the ordinary course
of business.
CERTAIN COVENANTS
The Consolidation Agreement includes a number of covenants of the Bank
which are customary in transactions such as the Consolidation. The
Consolidation Agreement provides, among other things, that, prior to the
Closing Date, the Bank will (i) establish such additional accruals and
reserves as may be necessary to conform the Bank's accounting and credit loss
practices to those of Norwest and Norwest's plans with respect to the conduct
of the Bank's business following the Consolidation and to provide for costs
and expenses related to the consummation of the transactions contemplated by
the Consolidation Agreement; (ii) obtain, at its own expense, and deliver
environmental assessment reports on certain properties; and (iii) obtain, at
its own expense, and deliver title commitments and boundary surveys for each
bank facility owned by the Bank; and (iv) not take any action with respect to
Bank which would disqualify the Consolidation as a pooling of interests for
accounting purposes.
The Consolidation Agreement also includes a number of covenants of
Norwest which are customary in transactions such as the Merger. The
Consolidation Agreement provides, among other things, that, prior to the
Closing Date, Norwest will (i) give the Bank written notice of the receipt of
all regulatory approvals and (ii) permit the Bank and its representatives to
examine Norwest's books, records, and properties, and to interview Norwest's
officers, employees, and agents, for a period of up to 15 days prior to the
Closing Date.
Neither the Bank nor any director, officer, representative, or agent of
the Bank, will solicit, authorize the solicitation of, or enter into any
discussions with any party other than Norwest concerning any offer or possible
offer (i) to purchase any shares of common stock, any option or warrant to
purchase any shares of common stock, any securities convertible into
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any shares of common stock, or any other equity security of the Bank; (ii) to
make a tender or exchange offer for any shares of such common stock or other
equity security; (iii) to purchase, lease, or otherwise acquire the assets of
the Bank except in the ordinary course of business; or (iv) to merge,
consolidate, or otherwise combine with the Bank.
WAIVER, AMENDMENT, AND TERMINATION
Either Norwest or the Bank may, in writing, give any consent, terminate
the Consolidation Agreement in accordance with its terms, or waive any
inaccuracies in the representations and warranties of the other party or
compliance by the other party with any of the covenants and conditions in the
Consolidation Agreement.
At any time before the Closing Date the parties may amend the
Consolidation Agreement by action of their respective Boards of Directors or
pursuant to authority delegated by their respective Boards of Directors;
provided, however, that no such amendment occurring after approval of the
Consolidation by the shareholders of the Bank may adversely affect the
consideration to be received by the shareholders of the Bank.
The Consolidation Agreement may be terminated at any time prior to the
Closing Date (i) by mutual written consent of the parties; (ii) by either
party by written notice to the other if the Consolidation shall not have been
consummated by September 1, 1995, unless such failure of consummation is due
to the failure of the party seeking termination to perform or observe in all
material respects the covenants and agreements to be performed or observed by
it under the Consolidation Agreement; or (iii) by either party by written
notice to the other if any court or governmental authority of competent
jurisdiction shall have issued a final order restraining, enjoining, or
otherwise prohibiting the consummation of the transactions contemplated by the
Consolidation Agreement.
MANAGEMENT AND OPERATIONS AFTER THE CONSOLIDATION
After the Consolidation, the Bank will become a wholly owned subsidiary
of Norwest and will continue to operate at its present locations. Products
and services offered by Norwest affiliates will be offered through the Bank.
INTERESTS OF CERTAIN PERSONS IN THE CONSOLIDATION
In considering the recommendation of the Bank's Board of Directors with
respect to the Consolidation, shareholders of the Bank should be aware that
certain officers and one director of the Bank have certain direct or indirect
interests separate from their interests as holders of the Bank Common Stock,
as set forth below.
After the Effective Time, two of the officers will continue to be
officers of the Bank. One of the officers is also a director and will
continue to be a director of the Bank. These parties will hold such positions
until their successors are elected and will be entitled to participate in
Norwest's benefit plans.
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CERTAIN DIFFERENCES IN RIGHTS OF SHAREHOLDERS
The Bank is organized as a national banking association under the laws of
the United States, and Norwest is incorporated as a corporation in the State
of Delaware. Shareholders of the Bank, whose rights are governed by the
Bank's Articles of Association and By-Laws and by federal banking law, will,
upon consummation of the Consolidation, become stockholders of Norwest. Their
rights as Norwest stockholders will then be governed by Norwest's Certificate
of Incorporation and By-Laws and by the Delaware General Corporation Law. The
following is a summary of certain significant differences between the rights
of shareholders of the Bank and the rights of stockholders of Norwest.
CAPITAL STOCK
THE BANK. The Bank's Articles of Association authorize the issuance of
1,000,000 shares of common stock, par value $2.50 per share, in such series
and with such rights and preferences as the Board of Directors shall
determine. All shares of Bank Common Stock currently outstanding have equal
rights and preferences with respect to voting, dividends, and distributions
upon liquidation.
NORWEST. Norwest's Certificate of Incorporation authorizes the issuance
of 500,000,000 shares of Common Stock, par value $1 2/3 per share, and
5,000,000 shares of preferred stock, without par value ("Preferred Stock").
At December 31, 1994, 323,084,474 shares of Common Stock were issued, of which
309,144,857 were outstanding, and 13,939,617 were held as treasury shares, and
3,265,065 shares of Preferred Stock were outstanding, consisting of 1,127,125
shares of 10.24% Cumulative Preferred Stock, 980,000 shares of Cumulative
Tracking Preferred Stock (of which 125,000 shares are held by a subsidiary of
Norwest), 1,143,675 shares of Cumulative Convertible Preferred Stock, Series
B, and 14,265 shares of ESOP Cumulative Convertible Preferred Stock. In
addition, 1,250,000 shares of Preferred Stock are reserved for issuance under
the Rights Agreement dated as of November 22, 1988, between Citibank, N.A. as
Rights Agent, and Norwest (the "Rights Agreement"). Norwest has also
authorized for issuance from time to time and registered with the Commission
an additional 1,700,000 shares of Preferred Stock. Norwest has also
authorized for issuance from time to time and registered or filed for
registration with the SEC, pursuant to two universal shelf registration
statements, an indeterminate number of securities (the "Shelf Securities")
with an aggregate initial offering price, as of December 31, 1994, not to
exceed $1,825,000,000. The Shelf Securities may be issued as Preferred Stock
or as securities convertible into shares of Preferred Stock or Common Stock.
Based on the current number of shares of Preferred Stock authorized for
issuance under Norwest's Certificate of Incorporation, the maximum number of
shares of Preferred Stock and Common Stock, respectively, that could be issued
pursuant to the effective shelf registration statements, when added to shares
of Preferred Stock and Common Stock already reserved for issuance, issued, or
outstanding, could not exceed respectively, 5,000,000 shares of Preferred
Stock and 500,000,000 shares of Common Stock. All or any portion of the
authorized but unissued Preferred Stock or Shelf Securities issuable as
Preferred Stock or convertible into Preferred Stock or Common Stock, may be
issued by the Board of Directors of Norwest without further action by
stockholders. Holders of Preferred Stock have certain rights and preferences
with respect to dividends and upon liquidation that are superior to those of
holders of Common Stock. The relative rights and preferences of any Preferred
Stock issued in the future may be established by Norwest's Board of Directors
without stockholder action. Although Norwest
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has no current plans for the issuance of any shares of Preferred Stock, except
as disclosed in this Prospectus, such shares, when and if issued, could have
dividend, liquidation, voting, and other rights superior to those of the
Common Stock.
Subject to any prior rights of any Preferred Stock then outstanding,
holders of Common Stock are entitled to receive such dividends as are declared
by Norwest's Board of Directors out of funds legally available for that
purpose. For information concerning legal limitations on the ability of
Norwest's banking subsidiaries to supply funds to Norwest, see "CERTAIN
REGULATORY CONSIDERATIONS." Subject to the rights, if any, of any Preferred
Stock then outstanding, all voting rights are vested in the holders of Common
Stock, each share being entitled to one vote. Subject to any prior rights of
any Preferred Stock, in the event of liquidation, dissolution, or winding up
of Norwest, holders of shares of Common Stock are entitled to receive pro rata
any assets distributable to stockholders in respect of shares held by them.
Holders of shares of Common Stock do not have any preemptive right to
subscribe for any additional securities which may be issued by Norwest. The
outstanding shares of Common Stock are, and the shares offered hereby will be,
fully paid and nonassessable. The transfer agent and registrar for the Common
Stock is Norwest Bank Minnesota, N.A. Each share of Common Stock also
includes, and each share offered hereby will include, a right to purchase
certain Preferred Stock, as described below.
The foregoing description of the material terms of the Norwest Common
Stock does not purport to be complete and is qualified in its entirety by
reference to Article Fourth of Norwest's Certificate of Incorporation.
On November 22, 1988, the Board of Directors of Norwest declared a
dividend of one preferred share purchase right (collectively, the "Rights")
for each outstanding share of Norwest Common Stock. The dividend was paid on
December 9, 1988, to stockholders of record on that date. Holders of shares
of Norwest Common Stock issued subsequent to that date, including those to be
issued in connection with the Consolidation, will receive the Rights with
their shares.
The Rights trade automatically with shares of Norwest Common Stock and
become exercisable only under certain circumstances. The Rights are designed
to protect the interests of Norwest and its stockholders against coercive
takeover tactics. The purpose of the Rights is to encourage potential
acquirors to negotiate with Norwest's Board of Directors prior to attempting a
takeover and to give the Board leverage in negotiating on behalf of all
stockholders the terms of any proposed takeover. The Rights may, but are not
intended to, deter takeover proposals.
Upon becoming exercisable, each Right will entitle the registered holder
to purchase from Norwest one four-hundredth of a share of Norwest Series A
Junior Participating Preferred Stock (collectively, the "Junior Preferred
Shares"). Until a Right is exercised, the holder of a Right, as such, will
have no rights with respect to the Junior Preferred Shares including, without
limitation, the right to vote or receive dividends. The stated purchase price
for each one one-hundredth of a Junior Preferred Share is $175.00. The
purchase price is subject to adjustment upon the occurrence of certain events,
including stock dividends on the Junior Preferred Shares or issuance of
warrants for, or securities convertible on certain terms into, Junior
Preferred Shares. The number of Rights outstanding and the number of Junior
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Preferred Shares issuable upon exercise of the Rights are subject to
adjustment in the event of a stock split of, or a stock dividend on, Norwest
Common Stock.
The Rights will become exercisable only if a person or group acquires or
announces an offer to acquire 25% or more of the outstanding shares of Norwest
Common Stock. This triggering percentage may be reduced to no less than 15%
by the Board of Directors prior to the time the Rights become exercisable.
The Rights have certain additional features that will be triggered upon the
occurrence of specified events:
(1) If a person or group acquires at least the triggering percentage of
Norwest Common Stock, the Rights permit holders of the Rights, other than
such person or group, to acquire Norwest Common Stock at 50% of market
value. However, this feature will not apply if a person or group which
owns less than the triggering percentage acquires at least 85% of the
outstanding shares of Norwest Common Stock pursuant to a cash tender
offer for 100% of the outstanding Norwest Common Stock.
(2) After a person or group acquires at least the triggering percentage
and before the acquiror owns 50% of the outstanding shares of Norwest
Common Stock, the Board of Directors may exchange each Right, other than
Rights owned by such acquiror, for one share of Norwest Common Stock or
one four-hundredth of a Junior Preferred Share.
(3) In the event of certain business combinations involving Norwest or
the sale of 50% or more of the assets or earning power of Norwest, the
Rights permit holders of the Rights to purchase the stock of the acquiror
at 50% of market value.
The Junior Preferred Shares will not be redeemable. Each Junior
Preferred Share will be entitled to a minimum preferential quarterly dividend
payment of $1.00 per share but will be entitled to an aggregate dividend of
400 times the dividend declared per share of Norwest Common Stock. In the
event of liquidation, the holders of the Junior Preferred Shares will be
entitled to a minimum preferential liquidation payment of $400.00 per share
but will be entitled to an aggregate payment of 400 times the payment made per
share of Norwest Common Stock. Each Junior Preferred Share will have 400
votes, voting together with the Norwest Common Stock. Finally, in the event
of any merger, consolidation, or other transaction in which Norwest Common
Stock is exchanged, each Junior Preferred Share will be entitled to receive
400 times the amount received per share of Norwest Common Stock. These rights
are protected by customary antidilution provisions.
At any time prior to the acquisition by a person or group of the
triggering percentage or more of the outstanding shares of Norwest Common
Stock, the Board of Directors may redeem the Rights in whole, but not in part,
at a price of $.0025 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis, and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only remaining right of the holders of Rights
will be to receive the Redemption Price.
The Rights will expire on November 23, 1998, unless extended or earlier
redeemed by Norwest. Generally, the terms of the Rights may be amended by the
Board of Directors without the consent of the holders of the Rights.
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REQUIRED VOTE FOR AUTHORIZATION OF CERTAIN ACTIONS
THE BANK. Under federal law the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Bank Common Stock is required to
approve a merger or consolidation.
NORWEST. Under Delaware law the vote of a simple majority of the
outstanding shares of Norwest Common Stock entitled to vote thereon is
required to approve a merger or consolidation, or the sale, lease, or exchange
of substantially all of Norwest's corporate assets. With respect to a merger,
no vote of the stockholders of Norwest is required if Norwest is the surviving
corporation and (1) the related agreement of merger does not amend Norwest's
Certificate of Incorporation, (2) each share of stock of Norwest outstanding
immediately before the merger is an identical outstanding or treasury share of
Norwest after the merger, and (3) the number of shares of Norwest stock to be
issued in the merger (or to be issuable upon conversion of any convertible
instruments to be issued in the merger) does not exceed 20% of the shares of
Norwest Common Stock outstanding immediately before the merger.
In addition to being subject to the laws of Delaware, Norwest, as a bank
holding company, is subject to various provisions of federal law with respect
to mergers, consolidations and certain other corporate transactions.
DISSENTERS' RIGHTS
THE BANK. Under federal law any shareholder of the Bank is entitled to
receive payment of the value of such shareholder's shares of the Bank capital
stock if such shareholder dissents from any merger or consolidation for which
a vote of the Bank's shareholders is required. See the more detailed
discussion below under "Rights of Dissenting Bank Shareholders."
NORWEST. Under Delaware law a stockholder is generally entitled to
receive payment of the appraised value of such stockholder's shares if the
stockholder dissents from a merger or consolidation. However, appraisal
rights are not available to holders of (a) shares listed on a national
securities exchange or held of record by more than 2,000 persons or (b) shares
of the corporation surviving a merger, if the merger did not require the
approval of the stockholders of such corporation, unless in either case, the
holders of such stock are required by the terms of the consolidation to accept
anything other than (i) shares of stock of the surviving corporation, (ii)
shares of stock of another corporation which are also listed on a national
securities exchange or held by more than 2,000 holders, or (iii) cash in lieu
of fractional shares of such stock. Appraisal rights are not available for a
sale of assets or an amendment to the Certificate of Incorporation. Because
shares of Norwest Common Stock are listed on both the New York Stock Exchange
and the Chicago Stock Exchange, and Norwest has more than 2,000 stockholders
of record, its stockholders are not, subject to the aforementioned exceptions,
entitled to any rights of appraisal in connection with mergers or
consolidations involving Norwest.
SPECIAL MEETINGS
THE BANK. Under federal law and the Bank's Articles of Association, a
special meeting of the Bank's shareholders may be called by the Bank's Board
of Directors, or by
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three or more shareholders owning, in the aggregate, not less than twenty-five
percent of the outstanding shares of the Bank.
NORWEST. Under Delaware law and the By-Laws of Norwest, a special
meeting of stockholders may be called only by the Chairman of the Board, a
Vice Chairman, the President, or a majority of the Board of Directors.
ANTITAKEOVER STATUTES
THE BANK. National banking associations are not covered by any specific
antitakeover statute. However, the acquisition of more than 5% of the capital
stock of a national bank requires the approval of federal regulatory agencies.
NORWEST. The Delaware antitakeover statute governs "business
combinations" between a publicly held Delaware corporation having certain
numbers of stockholders or listed on certain exchanges and an "interested
stockholder." This statute is designed primarily to regulate the second step
of a two-tiered takeover attempt. Delaware law broadly defines a "business
combination" as including a merger, sale of assets, issuance of voting stock,
and various other types of transactions with an interested stockholder and
other related parties. An "interested stockholder" is defined as any person
who beneficially owns, directly or indirectly, 15% or more of the outstanding
voting stock of a corporation. Delaware law prohibits a corporation from
engaging in a business combination with an interested stockholder for a period
of three years following the date on which the stockholder became an
interested stockholder unless (a) the board of directors approved the business
combination before the stockholder became an interested stockholder, (b) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, such stockholder owned at least 85% of the voting
stock outstanding when the transaction began, excluding in computing such
percentage shares held by certain types of stockholders, or (c) the board of
directors approved the business combination after the stockholder became an
interested stockholder and the business combination was approved by at least
two-thirds of the outstanding voting stock not owned by such stockholder.
RIGHTS OF DISSENTING BANK SHAREHOLDERS
Title 12, Section 215, of the United States Code provides that any
shareholder of either of the parties to a consolidation involving a national
bank who objects to the proposed consolidation has the right to receive
payment in cash of the value of such shareholder's shares as of the Effective
Date, if and when the consolidation is consummated, subject to certain
conditions. These conditions, in the case of a shareholder of the Bank, are
that: (i) the shareholder must have voted against approval of the
Consolidation at the Special Meeting or given notice in writing at, or prior
to, the Special Meeting to the presiding officer that such shareholder
dissents from the proposed Consolidation; (ii) the shareholder must, within 30
days after the Effective Date, make a written request for payment to the
surviving bank; and (iii) the written request must be accompanied by surrender
of the shareholder's stock certificate(s). Any shareholder of the Bank who
votes against the Consolidation at the Special Meeting, or who gives notice in
writing at, or prior to, the Special Meeting to the presiding officer that
such shareholder dissents, will be notified in writing of the Effective Date.
Failure to comply with each of the foregoing conditions will result in the
loss of the appraisal rights described herein.
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The value of the shares of any dissenting shareholder shall be determined
by an appraisal made by a committee of three persons, one to be selected by
the majority vote of the dissenting shareholders, one by the Board of
Directors of the surviving bank, and the third by the two so chosen. The
valuation agreed upon by any two of the three appraisers shall govern. If the
value so fixed is not satisfactory to any dissenting shareholder, that
shareholder may, within five days after being notified of the appraised value
of such shareholder's shares, appeal to the Comptroller of the Currency, who
shall cause a reappraisal to be made which shall be final and binding as to
the value of such shares. If a shareholder dissents and, within 90 days from
the date of consummation of the Consolidation, one or more of the appraisers
is not selected as above provided for any reason, or the appraisers fail to
determine the value of such shares, the Comptroller shall, upon written
request of any interested party, cause an appraisal to be made which shall be
final and binding on all parties. The expenses of the Comptroller in making
the reappraisal or the appraisal, as the case may be, shall be paid by the
surviving bank. The value of the shares ascertained shall be promptly paid to
the dissenting shareholder by the surviving bank.
The foregoing summary does not purport to be a complete statement of the
provisions of Section 215 and is qualified in its entirety by reference to the
relevant provisions of Section 215, the text of which is attached hereto as
Exhibit B. Any shareholder of the Bank who desires to exercise dissenters'
appraisal rights should carefully review and comply with the relevant
provisions of Section 215. DISSENTERS' RIGHTS WILL BE LOST IF THE PROCEDURAL
REQUIREMENTS OF SECTION 215 ARE NOT FULLY AND PRECISELY SATISFIED.
Attached hereto as Appendix C is a copy of Banking Circular 259 regarding
the valuation methods used by the Comptroller to estimate the value of a
bank's shares when the Comptroller is involved in the appraisal of shares held
by dissenting shareholders. The results of appraisals performed by the
Comptroller between January 1, 1985, and September 30, 1991, are also
summarized in Appendix C. EACH SHAREHOLDER OF THE BANK SHOULD FULLY CONSIDER
APPENDIX C BEFORE DECIDING WHETHER TO EXERCISE DISSENTERS' RIGHTS.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion summarizes certain U.S. Federal income tax
consequences of the Consolidation under the Internal Revenue Code of 1986, as
amended (the "Code"). THIS SUMMARY SHOULD NOT BE REGARDED AS A SUBSTITUTE FOR
AN INDIVIDUAL ANALYSIS OF THE TAX CONSEQUENCES OF THE CONSOLIDATION TO A BANK
SHAREHOLDER. EACH BANK SHAREHOLDER SHOULD CONSULT A TAX ADVISOR REGARDING THE
PARTICULAR TAX CONSEQUENCES OF THE CONSOLIDATION TO SUCH SHAREHOLDER'S OWN
SITUATION.
Neither Norwest, Norwest Interim Bank, nor the Bank has requested a
ruling from the Internal Revenue Service (the "Service") in connection with
the Consolidation. The Bank has requested from special tax counsel, Frazer,
Ryan, Goldberg & Hunter, L.L.P., an opinion to the effect that the
Consolidation done in accordance with 12 U.S.C. Section 215 will be treated
for U.S. Federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code and that Norwest, Norwest Interim Bank, and the
Bank will each be a party to the reorganization within the meaning of Section
368(b) of the Code. Such opinion will be subject to certain assumptions and
based on certain representations of Norwest, Norwest Interim Bank,
32
<PAGE>
and the Bank. The Bank shareholders should be aware that such opinion will
neither be binding upon the Service nor will the Service be precluded from
adopting a contrary position.
Assuming the Consolidation qualifies as a reorganization under Section
368(a) of the Code, the following U.S. Federal income tax consequences will
occur:
(a) No gain or loss will be recognized by Norwest, Norwest Interim Bank,
or the Bank in connection with the Consolidation;
(b) No gain or loss will be recognized by a holder of Bank Common Stock
who exchanges all of such holder's shares of Bank Common Stock solely
for shares of Norwest Common Stock in the Consolidation;
(c) The aggregate basis of the shares of Norwest Common Stock to be
received by a Bank shareholder in the Consolidation (including any
fractional share not actually received) will be the aggregate basis
of the shares of Bank Common Stock surrendered in exchange therefor
(assuming that the amount received for fractional shares constitutes
a redemption of such shares and is not separately bargained for
consideration); and
(d) The holding period of the shares of Norwest Common Stock to be
received by a Bank shareholder in the Consolidation will include the
holding period of the shares of Bank Common Stock surrendered in
exchange therefor, provided that such shares of Bank Common Stock
were held as capital assets at the Effective Time.
RESALE OF NORWEST COMMON STOCK
The shares of Norwest Common Stock issuable to shareholders of the Bank
upon consummation of the Consolidation have been registered under the
Securities Act of 1933 (the "Securities Act"). Such shares may be traded
freely and without restriction by those shareholders not deemed to be
"affiliates" of the Bank or Norwest as that term is defined in the rules under
the Securities Act. Norwest Common Stock received by those shareholders of
the Bank who are deemed to be affiliates of the Bank may be resold without
registration as provided for by Rule 145, or as otherwise permitted under the
Securities Act. In the Consolidation Agreement, the Bank has agreed to use
its best efforts to cause each executive officer, director, or shareholder of
the Bank who may reasonably be deemed to be an affiliate of the Bank to enter
into an agreement with Norwest providing that such affiliate will not sell,
transfer, or otherwise dispose of the shares of Norwest Common Stock to be
received by such person in the Consolidation except in compliance with the
applicable provisions of the Securities Act and the rules and regulations
promulgated thereunder. This Proxy Statement-Prospectus does not cover any
resales of Norwest Common Stock received by affiliates of the Bank.
STOCK EXCHANGE LISTING
The Consolidation Agreement provides for the filing by Norwest of listing
applications with the New York Stock Exchange (the "NYSE") and the Chicago
Stock Exchange (the "CHX") covering the shares of Norwest Common Stock
issuable upon consummation of the
33
<PAGE>
Consolidation. It is a condition to the consummation of the Consolidation that
such shares of Norwest Common Stock shall have been authorized for listing on
the NYSE and the CHX.
DIVIDEND REINVESTMENT AND OPTIONAL CASH PAYMENT PLAN
For those stockholders who elect to participate in Norwest's Dividend
Reinvestment and Optional Cash Payment Plan, dividends on Norwest Common Stock
will be reinvested in shares of Norwest Common Stock at market price (as
defined in the Plan). The plan also permits participants to invest through
voluntary cash payments, within certain dollar limitations, in additional
shares of Norwest Common Stock at the market price (as defined in the Plan) of
such stock at the time of purchase. It is anticipated that after the
Effective Time, Norwest will continue to offer its Dividend Reinvestment and
Optional Cash Payment Plan and that shareholders of the Bank who receive
Norwest Common Stock in the Consolidation will have the right to participate
therein.
ACCOUNTING TREATMENT
It is anticipated that the Consolidation will be accounted for as a
"pooling of interests" transaction in accordance with generally accepted
accounting principles.
Under the pooling-of-interests method of accounting, the historical basis
of the assets and liabilities of Norwest and Bank will be combined at the
Effective Time and carried forward at their previously recorded amounts, and
the stockholders' equity accounts of Bank will be combined with Norwest's on
Norwest's consolidated balance sheet. Income and other financial statements
of Norwest will not be restated retroactively because the Merger is not
material to the financial statements of Norwest.
In order for the Consolidation to qualify for pooling-of-interests
accounting treatment, among other things, substantially all (90% or more) of
the outstanding Bank Common Stock must be exchanged for Norwest Common Stock.
Bank has agreed not to take any action (other than actions required under the
Consolidation Agreement or requested by Norwest) that would disqualify the
Consolidation from pooling-of-interests treatment by Norwest.
The unaudited per share data contained in this Proxy Statement-Prospectus
has been prepared using the pooling-of-interests method of accounting to
account for the Merger. See "SUMMARY--Comparative Unaudited Per Share Data."
EXPENSES
Norwest and the Bank will each pay their own expenses in connection with
the Consolidation and the transactions contemplated thereby, including fees
and expenses of their respective accountants and counsel.
34
<PAGE>
INFORMATION ABOUT THE BANK
BUSINESS AND PROPERTY OF THE BANK
GENERAL
The Bank is a national bank headquartered in Chandler, Arizona, that
provides retail and commercial banking services to its customers through
banking facilities located at 2990 North Dobson Road and 1098 North Arizona
Avenue, Chandler, Arizona, and 2030 East Baseline Road, Mesa, Arizona. The
Bank's deposits are insured by the Bank Insurance Fund of the Federal Deposit
Insurance Corporation (the "FDIC"). At December 31, 1994, the Bank had total
assets of $40,916,426, deposits of $37,904,305, and stockholders' equity of
$2,762,574. The Bank was initially chartered as a state bank in Arizona in
1965 and was chartered as a national bank in 1971.
The Bank provides a wide range of banking services for its retail and
commercial customers, including real estate loans, revolving credit
arrangements, inventory and accounts receivable financing, equipment
financing, home improvement and other personal loans, NOW checking, and
savings and time accounts. The Bank provides 24-hour access to routine
banking services through Plus System network automated teller machines located
throughout Arizona and the United States.
The Bank's business strategy has been to develop long-term customer
relationships, maintain high quality service, and respond quickly to the needs
of its customers. The Bank supports active participation of its personnel in
local charitable, civic, school, and church activities. The Bank has installed
data processing and telecommunication systems and facilities to adequately
service its customers and its growth in the area. The Bank's customers are
located primarily in the cities of Chandler, Mesa, Gilbert, and Tempe,
Arizona.
COMPETITION
The Bank is subject to competition in all aspects of its business from
other banks and financial institutions in the immediate market area, as well
as those in surrounding areas. The Bank has been able to compete effectively
by emphasizing customer service, establishing long-term customer
relationships, and building customer loyalty through providing the products
and personal services designed to meet the specific needs of its customers.
EMPLOYEES
At December 31, 1994, the Bank had 27 full-time employees, including 7
officers, and 2 part-time employees.
BANKING LOCATIONS
The main facility of the Bank is located at 2990 North Dobson Road in
Chandler, Arizona. The main facility is a single-story building and consists
of a walk-in lobby, four teller stations, administrative offices, and two
drive-in lanes.
35
<PAGE>
ENVIRONMENTAL PROTECTION CONSIDERATIONS
It is a condition to Norwest's obligation to consummate the Consolidation
that there be no reasonable basis for an environmental proceeding, claim, or
action that could reasonably be expected to result in liability which has had
or could reasonably be expected to have a material adverse effect on the Bank.
The Bank is aware of no such potential proceeding, claim, or action.
MARKET PRICES AND DIVIDENDS
There is no established trading market for Bank Common Stock. As of the
record date for the Special Meeting, there were 222 holders of record of
shares of Bank Common Stock and 113,596 shares outstanding.
The Bank paid no dividends on its Common Stock in its two most recent
fiscal years, the nine-month periods ended March 31, 1994, and December 31,
1994, respectively. On February 1, 1995, the Bank paid a dividend of $0.43
per share.
36
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
The following analysis of the Bank's financial condition and results of
operations, as of and for the nine month period ending December 31, 1994, should
be read in conjunction with the accompanying Financial Statements of the Bank
and statistical data presented herein.
RESULTS OF OPERATIONS
NET INCOME - The Bank's net income, after tax expense of $109,225, was $319,047
for the nine months ended December 31, 1994 compared to $333,857 for the nine
month period ended March 31, 1994. The nine month period ended March 31, 1994
included $100,000 credit to the provision for loan loss expense. Exclusive of
this recovery, net income increased 36.4% or $85,190. The increase in net
income was primarily due to additional service fee income, control of non-
interest expenses and growth in the investment portfolio.
NET INTEREST INCOME - Total interest income increased from $1,931,468 for the
nine months ended March 31, 1994, to $2,005,070 for the nine months ended
December 31, 1994. This represents a 3.8% increase. The primary cause for this
increase was a higher level of earning assets, particularly in the loan and
investment portfolios. By comparison interest expense decreased by $20,920, or
3.2% from $643,699 to $622,779 between the same two periods which is
attributable to a shift from certificates of deposit to lower cost funds.
Average interest-earning assets of the Bank were $35,563,000 for the nine months
ending December 31, 1994 compared to $34,218,000 for the nine months ended March
31, 1994. Average interest-bearing liabilities totaled $26,829,000 for the nine
months ended December 31, 1994 compared to $26,997,000 for the nine months ended
March 31, 1994. The Bank's yield on average interest-earning assets was 7.52%
and the rate on average interest-bearing liabilities was 3.10% resulting in a
net interest spread of 4.42% for the nine months ended December 31, 1994. Net
interest spread for the nine months ending March 31, 1994 was 3.94%. "Net
interest spread" is the difference between the rate of interest earned on
interest-earning assets and the rate of interest paid on interest-bearing
liabilities. The Bank's net interest margin was 5.18% for the nine months ended
December 31, 1994 compared to 5.01% for the nine months ended March 31, 1994.
"Net interest margin" is the difference between interest income and interest
expense expressed as a percentage of average interest earning assets.
37
<PAGE>
NON-INTEREST INCOME - Non-interest income increased by $14,395, or 5.9% to
$256,663 for the nine months ended December 31, 1994 compared to $242,268 for
the same nine month period ended March 31, 1994. This increase is due primarily
to increased volume on service fee income on deposit accounts.
NON-INTEREST EXPENSE - Non-interest expense for the nine months ended December
31, 1994 decreased $10,898, or 0.9%, from $1,221,580 to $1,210,682 for the
comparable period ended March 31, 1994. The Bank was able to control costs as
reflected by the 0.9% decrease.
Income tax expense increased to $109,225 for the nine months ended December 31,
1994 from $74,600 for the comparable period ended March 31, 1994. This increase
takes into account that the $100,000 credit to loan provision expense taken in
the period ended March 31, 1994 was not taxable income.
FINANCIAL CONDITION
ASSETS - At December 31, 1994, the Bank's total assets were $40,916,426 compared
to $38,854,154 at March 31, 1994. This represents a growth of $2,062,272, or
5.3%, which is traditionally typical for calendar year ends at the Bank.
INVESTMENTS - Total investments increased by $1,216,480, or 10.9%, to
$12,331,667 for the period ended December 31, 1994 from $11,115,187 at March 31,
1994. The increase in investments was predominately in liquid U. S. Treasury
securities with maturities of less than one year to reduce exposure to
potentially unfavorable interest rate changes. The Bank does not maintain a
"trading" account and its investments are all classified "held to maturity".
LOANS - Total loans, net of reserves, increased by $995,746, or 5.7%, to
$18,359,157 at December 31, 1994 from $17,363,411 at March 31, 1994. Loans to
commercial borrowers accounted for the net increase in loans. Composition of the
loan portfolio has not changed materially over the past several years. At year
end 1994, commercial loans comprised 42% of the Bank's loan portfolio and real
estate loans and installment loans comprised 37% and 21% of the Bank's loan
portfolio respectively.
As of December 31, 1994 the Bank had no loans which were 90 days or more past
due. Non-accrual loans constituted only $6,823, or .04% of the total loan
portfolio.
The Bank's allowance for loan losses at December 31, 1994 was $654,136 compared
to $622,573 at March 31, 1994. This represents a ratio to total loans
outstanding for both of these respective periods of 3.4%. The allowance for loan
losses is maintained at an amount deemed necessary by the Bank's management,
based on its
38
<PAGE>
frequent and extensive review of the loan portfolio combined with
trends and other statistical analysis methods. The following are some of the
more significant items taken into consideration by management when evaluating
the adequacy of the allowance for loan losses:
1. Loan delinquency trends and loans on non-accrual;
2. Analysis of "graded" loans;
3. The mix of the loan portfolio including concentrations by borrower type;
4. Analysis of allowance for loan loss reserve ratios for prior
periods; and
5. Review of changes in lending policy for possible effect on
the allowance.
Management considers the Bank's loan loss reserve to be adequate based upon its
method of evaluating loan portfolio risk, economic conditions, and prior loan
loss experience.
DEPOSITS - Total deposits increased by $1,726,781, or 4.8% to $37,904,305 at
December 31, 1994 from $36,177,524 at March 31, 1994. The majority of this
increase occurred in demand deposits which again is traditionally typical for
calendar year ends at the Bank. Core deposits have remained very stable and
consistently exceeds those of its peer group. The Bank has no brokered deposits.
CAPITAL - The Federal Deposit Insurance Corporation assigns to all banks a
matrix of five capital risk classifications: Well Capitalized, Adequately
Capitalized, Undercapitalized, Significantly Undercapitalized, and Critically
Undercapitalized. A Well Capitalized classification is the highest assignment
given to a bank's capitalization. To be Well Capitalized a bank must be equal or
exceed the following ratios: Total Risk Based Capital Ratio of 10%; Tier I Risk
Based Capital Ratio of 6%; and Tier I Leverage Capital Ratio of 5%. The Bank
exceeded these ratios at December 31, 1994 and March 31, 1994 and is classified
a Well Capitalized bank.
LIQUIDITY - The Bank has maintained and continues to maintain adequate
liquidity. Liquidity is the degree of readiness with which the Bank's assets can
be converted into cash without substantial loss in value. It is net cash, short
term and marketable assets as a percentage of net deposits and short term
liabilities. The Bank's liquidity has not been a problem as it has consistently
been around 50%. At year end 1994 the Bank had nearly 85% of its investment
portfolio due in less than five years with 45% of the portfolio due in one year
or less. These readily marketable securities enhance the Bank's liquidity. The
Bank's loan-to-deposit ratio has consistently been near the 50% level. In
addition the Bank has a substantial amount of unused collateralized borrowing
lines available through a correspondent bank. The Bank has no brokered funds and
maintains a strong base of core deposits.
39
<PAGE>
AVERAGE BALANCES, INTEREST RATES AND YIELDS - The following tables present for
the periods indicated the total dollar amount of interest income from average
interest-earning assets and the resultant yields, as well as the interest
expense on average interest-bearing liabilities, expressed both in dollar
amounts and rates, and the net interest margin. The tables do not reflect any
effect of income taxes. All average balances are monthly average balances and
include the balances of non-accruing loans. The yields and costs for the periods
indicated include fees which are considered adjustments to yield.
40
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosures
Average Balance Sheets/Yields and Rates
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
12/31/94 03/31/94
Interest Interest
Yields & Yields &
Balance Interest Rates Balance Interest Rates
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Federal Funds Sold $ 4,500 $ 151 4.47% $ 5,394 $ 122 3.02%
Purchased C.D.s 1,189 40 4.48% 1,014 33 4.34%
Investments:
Taxable Investment Securities 11,257 403 4.77% 8.674 335 5.15%
Nontaxable Investment Securities 813 30 4.92% 1,007 38 5.03%
-------- -------- -------- -------- -------- --------
Total Securities 12,070 433 3.59% 9,681 373 3.85%
Loans:
Commercial 7,149 555 10.35% 7,115 527 9.88%
Consumer 4,048 322 10.61% 4,434 356 10.70%
Real Estate 7,252 504 9.27% 7,268 520 9.54%
-------- -------- -------- -------- -------- --------
Total Loans 18,449 1,381 9.98% 18,817 1,403 9.94%
Allowance for Loan Losses (645) (688)
Net Loans 17,804 18,129
Total Earning Assets 35,563 2,005 7.52% 34,218 1,931 7.52%
Cash & Due from Banks 2,406 2,409
Other Assets 1,113 1,274
Total Assets $39,082 $37,901
</TABLE>
<TABLE>
<CAPTION>
06/30/93 06/30/92
Interest Interest
Yields & Yields &
Balance Interest Rates Balance Interest Rates
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Federal Funds Sold $ 4,361 $ 129 2.96% $ 5,087 $ 222 4.36%
Purchased C.D.s 259 10 3.86% 23 1 4.35%
Investments:
Taxable Investment Securities 7,009 409 5.83% 4,143 307 7.41%
Nontaxable Investment Securities 974 60 4.82% 781 60 7.68%
-------- -------- -------- -------- -------- --------
Total Securities 7,983 469 5.87% 4,924 367 7.45%
Loans:
Commercial 7,569 778 10.28% 10,797 1,087 10.07%
Consumer 4,364 509 11.66% 5,069 604 11.91%
Real Estate 7,599 742 9.76% 9,003 893 9.92%
-------- -------- -------- -------- -------- --------
Total Loans 19,532 2,029 10.39% 24,869 2,584 10.39%
Allowance for Loan Losses (942) (1,152)
Net Loans 18,590 23,717
Total Earning Assets 31,193 2,637 8.45% 33,751 3,174 9.40%
Cash & Due from Banks 2,225 1,926
Other Assets 1,398 1,688
Total Assets $34,816 $37,365
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
12/31/94 03/31/94
Interest Interest
Yields & Yields &
Balance Interest Rates Balance Interest Rates
________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES &
STOCKHOLDERS EQUITY
Deposits
Non-Interest Bearing $ 9,325 $ 8,238
Interest Bearing:
Savings & Now Accounts 15,191 $ 271 2.38% 14,608 $ 254 2.41%
Time Accounts under $100,000 10,156 314 4.12% 10,756 349 4.33%
Time Account over $100,000 1,482 38 3.42% 1,633 41 3.35%
-------- -------- -------- -------- -------- --------
Total Interest Bearing Deposits 26,829 623 3.10% 26,997 644 3.58%
Fed Funds Purchased/Other Borrowings -0- -0- 0.00% -0- -0- 0.00%
Repurchase Agreements -0- -0- 0.00% -0- -0- 0.00%
Total Interest Bearing Liabilities 26,829 623 3.10% 26,997 644 3.58%
Other Liabilities 276 390
Stockholders Equity 2,652 2,276
Total Liabilities &
Stockholder's Equity $39,082 $37,901
Net Interest Income $ 1,382 $ 1,287
Net Interest Spread 4.42% 3.94%
Net Interest Income to
Earning Assets 5.18% 5.01%
</TABLE>
<TABLE>
<CAPTION>
06/30/93 06/30/92
Interest Interest
Yields & Yields &
Balance Interest Rates Balance Interest Rates
________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES &
STOCKHOLDERS EQUITY
Deposits
Non-Interest Bearing $ 7,126 $ 6,807
Interest Bearing:
Savings & Now Accounts 12,620 $ 325 2.57% 11,563 $ 453 3.92%
Time Accounts under $100,000 11,202 567 5.06% 14,626 965 6.60%
Time Account over $100,000 1,664 66 3.97% 2,628 164 6.24%
-------- -------- -------- -------- -------- --------
Total Interest Bearing Deposits 25,486 958 3.76% 28,817 1,582 5.49%
Fed Funds Purchased/Other Borrowings -0- -0- 0.00% -0- -0- 0.00%
Repurchase Agreements -0- -0- 0.00% -0- -0- 0.00%
Total Interest Bearing Liabilities 25,486 958 3.76% 28,817 1,582 5.49%
Other Liabilities 299 404
Stockholders Equity 1,905 1,337
Total Liabilities &
Stockholder's Equity $34,816 $37,365
Net Interest Income $ 1,679 $ 1,592
Net Interest Spread 4.69% 3.91%
Net Interest Income to
Earning Assets 5.38% 4.72%
</TABLE>
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosures
Changes in Net Interest Income
(amounts in thousands)
Nine Months ended December 31, 1994
Compared with Nine Months ended March 31, 1994
- ----------------------------------------------
<TABLE>
<CAPTION>
Increase (decrease) due to:
----------------------------
Volume Yield/Rate Total
------ ---------- -----
<S> <C> <C> <C>
Loans ($27.4) 5.4 (22.0)
Investment securities 92.0 (32.0) 60.0
Federal funds sold and
purchased CD's (17.4) 53.4 36.0
------ ----- -----
Total 47.2 26.8 74.0
Deposits (4.0) (17.0) (21.0)
------ ----- -----
Net interest income $ 51.2 43.8 95.0
====== ===== =====
</TABLE>
Twelve Months ended June 30, 1993
Compared with Twelve Months ended June 30, 1992
- -----------------------------------------------
<TABLE>
<CAPTION>
Increase (decrease) due to:
----------------------------
Volume Yield/Rate Total
------ ---------- -----
<S> <C> <C> <C>
Loans ($554.5) (0.5) (555.0)
Investment securities 228.0 (126.0) 102.0
Federal funds sold and
purchased CD's (21.4) (62.6) (84.0)
------- ------ ------
Total (347.9) (189.1) (537.0)
Deposits (182.9) (441.1) (624.0)
------- ------ ------
Net interest income ($165.0) 252.0 87.0
======= ======= ======
</TABLE>
43
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosure
Loans
(AMOUNTS IN THOUSANDS)
This table below sets forth the composition of the Bank's loan portfolio at the
dates indicated.
<TABLE>
<CAPTION>
December 31 March 31 June 30 June 30
1994 1994 1993 1992
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Commercial $ 7,966 43.39% $ 6,708 38.63% $ 7,222 39.92% $ 8,316 41.27%
Consumer 3,986 21.71% 4,161 23.96% 4,426 24.46% 4,510 22.38%
Real Estate 7,135 38.86% 7,188 41.40% 7,208 39.84% 8,453 41.95%
Other -0- -0- -0- -0-
------- ------- ------- ------- ------- ------- ------- -------
Total Gross Loans $19,087 103.96% $18,057 103.99% $18,856 104.22% $21,279 105.60%
Less: Allowance (654) -3.56% (622) -3.58% (691) -3.82% (1099) -5.45%
Less: Unearned Discount
and Loan Fees (74) - .40% (72) - .41% (72) - .40% (30) - .15%
------- ------- ------- ------- ------- ------- ------- -------
Loans: Net $18,359 100.00% $17,363 100.00% $18,093 100.00% $20,150 100.00%
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
44
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosure
Nonperforming Assets
(Amounts in Thousands)
The following table sets forth information concerning the Bank's nonperforming
assets as of the dates indicated.
<TABLE>
<CAPTION>
December 31 March 31 June 30 June 30
1994 1994 1993 1992
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Nonperforming loans:
Non-accrual Loans $ 7 $ 8 $ 43 $ 171
Restructured Loans -0- -0- -0- -0-
----------- ----------- ----------- -----------
Total Nonperforming Loans $ 7 $ 8 $ 43 $ 171
Other Real Estate Owned Net $ 42 $ 42 $153 $ 652
----------- ----------- ----------- -----------
Total Nonperforming Assets $ 49 $ 50 $196 $ 823
=========== =========== =========== ===========
Loans Past Due 90 days or more $ -0- -0- -0- -0-
Allowance for Loan Losses $654 622 691 1,099
Ratio of Total Nonperforming Assets to Assets 0.12% 0.13% 0.55% 2.36%
Ratio of Total Nonperforming Loans to Loans 0.04% 0.04% 0.22% 0.80%
Ratio of Allowance to Nonperforming Loans 9342.86% 7775.00% 1606.98% 642.69%
45
</TABLE>
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosure
Allowance for Loan Losses
(Amounts in Thousands)
The following table sets forth information regarding changes in the Bank's
allowance for loan losses (ALL) for the periods indicated.
<TABLE>
<CAPTION>
12/31/94 3/31/94 6/30/93 6/30/92
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Balance of allowance for
loan losses at beginning
of period $ 622 $ 691 $ 1,099 $ 1,164
Charge-offs:
Commercial 0 18 8 534
Consumer 23 48 23 85
Real Estate 0 0 75 4
Other 0 0 0 0
------- ------- ------- -------
Total Charge-offs 23 66 106 623
Recoveries:
Commercial 49 90 72 32
Consumer 5 7 23 17
Real Estate 1 0 3 11
Other 0 0 0 0
------- ------- ------- -------
Total Recoveries 55 97 98 60
Net Recoveries(Charge-offs) 32 31 (8) (563)
Provisions for loan losses
charged to operations 0 (100) (400) 498
------- ------- ------- -------
Balance of allowance for
loan losses at end of
period $ 654 $ 622 $ 691 $ 1,099
======= ======= ======= =======
Average gross loans
outstanding during period $18,449 $18,817 $19,532 $24,869
</TABLE>
46
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosure
Allowance for Loan Losses
(Amounts in Thousands)
The following table sets forth the allowance for loan losses by loan category,
based upon management's assessment of the risk associated with such categories,
at the dates indicated.
<TABLE>
<CAPTION>
December 31, 1994 March 31, 1994 June 30, 1993 June 30, 1992
----------------- ----------------- ----------------- -----------------
Amount Gross Amount Gross Amount Gross Amount Gross
of Loans out- of Loans out- of Loans out- of Loans out-
Allow- standing Allow- standing Allow- standing Allow- standing
ance ance ance ance
----------------- ----------------- ----------------- -----------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial $ 515 $ 7,966 $ 478 $ 6,708 $ 506 $ 7,222 $ 754 $ 8,316
Consumer 96 3,986 100 4,161 132 4,426 245 4,510
Real Estate 43 7,135 44 7,188 53 7,208 100 8,453
----------------- ----------------- ----------------- -----------------
TOTAL $ 654 $19,087 $ 622 $18,057 $ 691 $18,856 $1,099 $21,279
================= ================= ================= =================
</TABLE>
47
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosure
Loan Maturities and Sensitivity to Changes in Interest Rates
(Amounts in Thousands)
<TABLE>
<CAPTION>
December 31, 1994
-------------------------------------------
Maturing
Maturing After One
in One Year Maturing
Year or Through After Five
Less Five Years Years Total
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Commercial $3,805 $3,021 $1,140 $ 7,966
Consumer 940 2,465 581 3,986
Real Estate 801 2,449 3,885 7,135
------ ------ ------ -------
$5,546 $7,935 $5,606 $19,087
</TABLE>
<TABLE>
<CAPTION>
Due in Due After
One Year One Year Total
-------- --------- -------
<S> <C> <C> <C>
Loans at Fixed Int. Rate $1,445 $13,541 $14,986
Loans at Variable Int. Rate 4,101 0 4,101
------- ------- -------
$5,546 $13,541 $19,087
</TABLE>
<TABLE>
<CAPTION>
March 31, 1994
-------------------------------------------
Maturing
Maturing After One
in One Year Maturing
Year or Through After Five
Less Five Years Years Total
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
Commercial $3,274 $2,407 $ 1,027 $ 6,708
Consumer 954 2,636 571 4,161
Real Estate 909 2,574 3,705 7,188
------- ------- ------- -------
$5,137 $7,617 $ 5,303 $18,057
</TABLE>
<TABLE>
<CAPTION>
Due in Due After
One Year One Year Total
-------- --------- -------
<S> <C> <C> <C>
Loans at Fixed Int. Rates $ 1,086 $12,920 $14,006
Loans at Variable Int. Rates 4,051 0 4,051
------- ------- -------
$ 5,137 $12,920 $18,057
</TABLE>
48
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosure
Investments
(Amounts in Thousands)
The following table sets forth the book value of the securities in the Bank's
portfolio by type at the date indicated.
<TABLE>
<CAPTION>
12/31/94 3/31/94 6/30/93 6/30/92
-------- -------- -------- --------
<S> <C> <C> <C> <C>
U.S. Treasury $ 5,779 $ 4,769 $ 4,801 $5,321
U.S. Gov't. Agencies 4,730 4,142 3,597 572
State & Political Subdiv. 719 1,003 1,187 769
Other 1,103 1,201 619 124
Held for Sale Securities 0 0 0 0
Total Securities ------- ------- ------- ------
$12,331 $11,115 $10,204 $6,786
======= ======= ======= ======
</TABLE>
49
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosure
Investments
(Amounts in Thousands)
<TABLE>
<CAPTION>
December 31, 1994 March 31, 1994
------------------- ----------------
Type & Maturity Yield(1) Amount Yield(1) Amount
--------------- ------------------- ----------------
<S> <C> <C> <C> <C>
U.S.Treasury:
One year or less 4.80% $ 4,228 4.20% $ 1,990
Over one through 5 years 6.32% 1,551 4.65% 2,779
Over 5 through 10 years 0.00% 0 0.00% 0
Over 10 years 0.00% 0 0.00% 0
----- ------- ----- -------
Total 5.22% $ 5,779 4.46% $ 4,769
U.S. Government Agencies:
One year or less 5.45% $ 695 0.00% 0
Over one through 5 years 4.20% 2,251 4.28% 2,252
Over 5 through 10 years 4.67% 519 4.40% 522
Over 10 years 7.32% 1,265 6.04% 1,368
----- ------- ----- -------
Total 5.27% $ 4,730 4.93% $ 4,142
States & Political Subdiv:
One year or less 6.00% $ 75 6.10% $ 200
Over one through 5 years 4.39% 644 4.80% 803
Over 5 through 10 years 0.00% 0 0.00% 0
Over 10 years 0.00% 0 0.00% 0
----- ------- ----- -------
Total 4.53% $ 719 5.06% $ 1,003
Certificates of Deposit:
One year or less 4.52% $ 593 4.69% $ 197
Over one through 5 years 4.68% 483 4.49% 978
Over 5 through 10 years 0.00% 0 0.00% 0
Over 10 years 0.00% 0 0.00% 0
----- ------- ----- -------
Total 4.60% $ 1,076 4.52% $ 1,175
Total Investment Sec:
One year or less 4.87% $ 5,591 4.40% $ 2,387
Over one through 5 years 4.95% 4,930 4.53% 6,812
Over 5 through 10 years 4.67% 519 4.40% 522
Over 10 years 6.96% 1,265 6.82% 1,368
----- ------- ----- -------
Total 5.12% $12,305 4.78% $11,089
No Contractual Maturity 6.00% $ 27 6.00% $ 26
----- ------- ----- -------
Total Investment Sec. 5.12% $12,331 4.78% $11,115
</TABLE>
(1) Yields were determined by dividing aggregate annual interest income by
aggregate book value.
50
<PAGE>
FIRST AMERICAN NATIONAL BANK
Selected Statistical Disclosure
Time Certificates of Deposit and Other Time Deposits in Denominations
of $100,000 or More at Indicated Dates
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Over
Three Six Twelve Twelve
Months Months Months Months Total
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
December 31, 1994 $512 500 516 100 $1,628
March 31, 1994 $603 600 317 200 $1,720
June 30, 1993 $602 211 601 224 $1,638
June 30, 1992 $1,101 407 600 115 $2,222
</TABLE>
51
<PAGE>
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, Norwest is subject to supervision and
examination by the Federal Reserve Board. Norwest's banking subsidiaries are
subject to supervision and examination by applicable federal and state banking
agencies. The deposits of Norwest's banking subsidiaries are insured by the
Bank Insurance Fund of the Federal Deposit Insurance Corporation ("FDIC"), and
therefore such banking subsidiaries are subject to regulation by the FDIC. In
addition to the impact of regulation, commercial banks are affected
significantly by the actions of the Federal Reserve Board as it attempts to
control the money supply and credit availability in order to influence the
economy.
DIVIDEND RESTRICTIONS
Various federal and state statutes and regulations limit the amount of
dividends the subsidiary banks can pay to Norwest without regulatory approval.
The approval of the OCC is required for any dividend by a national bank if the
total of all dividends declared by the bank in any calendar year would exceed
the total of its net profits, as defined by regulation, for that year combined
with its retained net profits for the preceding two years less any required
transfers to surplus or a fund for the retirement of any preferred stock. In
addition, a national bank may not pay a dividend in an amount greater than its
net profits then on hand after deducting its losses and bad debts. For this
purpose, bad debts are defined to include, generally, loans which have matured
and are in arrears with respect to interest by six months or more, other than
such loans which are well secured and in the process of collection. Under
these provisions Norwest's national bank subsidiaries could have declared, as
of December 31, 1994, aggregate dividends of at least $361.4 million without
obtaining prior regulatory approval and without reducing the capital of the
banks below their respective minimum regulatory levels. Norwest also has
several state bank subsidiaries that are subject to state regulations limiting
dividends; however, the amount of dividends payable by Norwest's state bank
subsidiaries, with or without state regulatory approval, would represent an
immaterial contribution to Norwest's revenues.
If, in the opinion of the applicable regulatory authority, a bank under
its jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the bank, could
include the payment of dividends), such authority may require, after notice
and hearing, that such bank cease and desist from such practice. The Federal
Reserve Board, the OCC, and the FDIC have issued policy statements which
provide that FDIC-insured banks and bank holding companies should generally
pay dividends only out of current operating earnings.
HOLDING COMPANY STRUCTURE
Norwest is a legal entity separate and distinct from its banking and
nonbanking subsidiaries. Accordingly, the right of Norwest, and thus the
rights of Norwest's creditors, to participate in any distribution of the
assets or earnings of any subsidiary is necessarily subject to the prior
claims of creditors of such subsidiary, except to the extent that claims of
Norwest in its capacity as a creditor may be recognized. The principal
sources of Norwest's revenues are dividends and fees from its subsidiaries.
52
<PAGE>
Norwest's banking subsidiaries are subject to restrictions under federal
law which limit the transfer of funds by the subsidiary banks to Norwest and
its nonbanking subsidiaries, whether in the form of loans, extensions of
credit, investments, or asset purchases. Such transfers by any subsidiary
bank to Norwest or any nonbanking subsidiary are limited in amount to 10% of
the bank's capital and surplus and, with respect to Norwest and all such
nonbanking subsidiaries, to an aggregate of 20% of such bank's capital and
surplus. Furthermore, such loans and extensions of credit are required to be
secured in specified amounts.
The Federal Reserve Board has a policy to the effect that a bank holding
company is expected to act as a source of financial and managerial strength to
each of its subsidiary banks and to commit resources to support each such
subsidiary bank. This support may be required at times when Norwest may not
have the resources to provide it. Any capital loans by Norwest to any of the
subsidiary banks are subordinate in right of payment to deposits and to
certain other indebtedness of such subsidiary bank. In addition, the Crime
Control Act of 1990 provides that in the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.
A depository institution insured by the FDIC can be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC after
August 9, 1989, in connection with (i) the default of a commonly controlled
FDIC-insured depository institution or (ii) any assistance provided by the
FDIC to a commonly controlled FDIC-insured depository institution in danger of
default. "Default" is defined generally as the appointment of a conservator
or receiver and "in danger of default" is defined generally as the existence
of certain conditions indicating that a "default" is likely to occur in the
absence of regulatory assistance.
Federal law (12 U.S.C. (S)55) permits the OCC to order the pro rata
assessment of shareholders of a national bank whose capital stock has become
impaired, by losses or otherwise, to relieve a deficiency in such national
bank's capital stock. This statute also provides for the enforcement of any
such pro rata assessment of shareholders of such national bank to cover such
impairment of capital stock by sale, to the extent necessary, of the capital
stock of any assessed shareholder failing to pay the assessment. Similarly,
the laws of certain states provide for such assessment and sale with respect
to banks chartered by such states. Norwest, as the sole shareholder of
certain of its subsidiary banks, is subject to such provisions.
CAPITAL REQUIREMENTS
Under the Federal Reserve Board's risk-based capital guidelines for bank
holding companies, the minimum ratio of total capital to risk-adjusted assets
(including certain off-balance sheet items, such as stand-by letters of
credit) is 8%. At least half of the total capital is to be comprised of
common stock, minority interests, and noncumulative perpetual preferred stock
("Tier 1 capital"). The remainder ("Tier 2 capital") may consist of hybrid
capital instruments, perpetual debt, mandatory convertible debt securities, a
limited amount of subordinated debt, other preferred stock, and a limited
amount of loan and lease loss reserves. In addition, the Federal Reserve
Board's final minimum "leverage ratio" (the ratio of Tier 1 capital to
quarterly average total assets) guidelines for bank holding companies provide
for a
53
<PAGE>
minimum leverage ratio of 3% for bank holding companies that meet certain
specified criteria, including that they have the highest regulatory rating.
All other bank holding companies are required to maintain a leverage ratio of
3% plus an additional cushion of 100 to 200 basis points. The guidelines also
provide that banking organizations experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions
substantially above the minimum supervisory levels, without significant
reliance on intangible assets. Furthermore, the guidelines indicate that the
Federal Reserve Board will continue to consider a "tangible Tier 1 leverage
ratio" in evaluating proposals for expansion or new activities. The tangible
Tier 1 leverage ratio is the ratio of a banking organization's Tier 1 capital,
less all intangibles, to total assets, less all intangibles. Each of Norwest's
banking subsidiaries is also subject to capital requirements adopted by
applicable regulatory agencies which are substantially similar to the
foregoing. At December 31, 1994, Norwest's Tier 1 and total capital (the sum
of Tier 1 and Tier 2 capital) to risk-adjusted assets ratios were 9.89% and
12.23%, respectively, and Norwest's leverage ratio was 6.94%. Neither Norwest
nor any subsidiary bank has been advised by the appropriate federal regulatory
agency of any specific leverage ratio applicable to it.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December 1991, Congress enacted the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), which substantially revised
the bank regulatory and funding provisions of the Federal Deposit Insurance
Act and makes revisions to several other federal banking statutes. Among
other things, FDICIA requires the federal banking regulators to take "prompt
corrective action" in respect of FDIC-insured depository institutions that do
not meet minimum capital requirements. FDICIA establishes five capital tiers:
"well capitalized," "adequately capitalized," "undercapitalized,"
significantly undercapitalized," and "critically undercapitalized." Under
applicable regulations, an FDIC-insured depository institution is defined to
be well capitalized if it maintains a leverage ratio of at least 5%, a risk-
adjusted Tier 1 capital ratio of at least 6%, and a risk-adjusted total
capital ratio of at least 10%, and is not subject to a directive, order, or
written agreement to meet and maintain specific capital levels. An insured
depository institution is defined to be adequately capitalized if its meets
all of its minimum capital requirements as described above. An insured
depository institution will be considered undercapitalized if it fails to meet
any minimum required measure, significantly undercapitalized if it has a risk-
adjusted total capital ratio of less than 6%, risk-adjusted Tier 1 capital
ratio of less than 3%, or a leverage ratio of less than 3%, and critically
undercapitalized if it fails to maintain a level of tangible equity equal to
at least 2% of total assets. An insured depository institution may be deemed
to be in a capitalization category that is lower than is indicated by its
actual capital position if it receives an unsatisfactory examination rating.
FDICIA generally prohibits a depository institution from making any
capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be undercapitalized. Undercapitalized depository institutions are
subject to a wide range of limitations on operations and activities, including
growth limitations, and are required to submit a capital restoration plan.
The federal banking agencies may not accept a capital plan without
determining, among other things, that the plan is based on realistic
assumptions and is likely to succeed in restoring the depository institution's
capital. In addition, for a capital restoration plan to be acceptable, the
depository institution's parent holding company must guarantee that the
institution will comply with such
54
<PAGE>
capital restoration plan. The aggregate liability of the parent holding
company is limited to the lesser of (i) an amount equal to 5% of the
depository institution's total assets at the time it became undercapitalized
and (ii) the amount which is necessary (or would have been necessary) to bring
the institution into compliance with all capital standards applicable with
respect to such institution as of the time it fails to comply with the plan.
If a depository institution fails to submit an acceptable plan, it is treated
as if it were significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to
a number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets, and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver or conservator.
FDICIA directs that each federal banking agency prescribe standards for
depository institutions and depository institution holding companies relating
to internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, a maximum ratio of classified assets to capital, minimum
earnings sufficient to absorb losses, a minimum ratio of market value to book
value for publicly traded shares, and such other standards as the agency deems
appropriate. The FDIC, in consultation with the other federal banking
agencies, has adopted a final rule and guidelines with respect to external and
internal audit procedures and internal controls in order to implement those
provisions of FDICIA intended to facilitate the early identification of
problems in financial management of depository institutions. The FDIC has
also issued proposed rules prescribing standards relating to certain other of
the management and operational standards listed above. The full impact of
such rule and guidelines and proposed standards on Norwest cannot yet be
ascertained.
FDICIA also contains a variety of other provisions that may affect the
operations of Norwest, including new reporting requirements, revised
regulatory standards for real estate lending, "truth in savings" provisions,
and the requirement that a depository institution give 90 days' notice to
customers and regulatory authorities before closing any branch.
Under other regulations promulgated under FDICIA a bank cannot accept
brokered deposits (that is, deposits obtained through a person engaged in the
business of placing deposits with insured depository institutions or with
interest rates significantly higher than prevailing market rates) unless (i)
it is "well capitalized" or (ii) it is "adequately capitalized" and receives a
waiver from the FDIC. A bank is defined to be "adequately capitalized" if it
meets all of its minimum capital requirements. A bank that cannot receive
brokered deposits also cannot offer "pass-through" insurance on certain
employee benefit accounts, unless it provides certain notices to affected
depositors. In addition, a bank that is "adequately capitalized" and that has
not received a waiver from the FDIC may not pay an interest rate on any
deposits in excess of 75 basis points over certain prevailing market rates.
There are no such restrictions on a bank that is "well capitalized." At
December 31, 1994, all of Norwest's banking subsidiaries were well capitalized
and therefore were not subject to these restrictions.
FDIC INSURANCE
Effective January 1, 1993, the deposit insurance assessment rate for the
Bank Insurance Fund ("BIF") increased as part of the adoption by the FDIC of a
transitional risk-based
55
<PAGE>
assessment system. In June 1993, the FDIC published final regulations making
the transitional system permanent effective January 1, 1994, but left open the
possibility that it may consider expanding the range between the highest and
lowest assessment rates at a later date. An institution's risk category is
based upon whether the institution is well capitalized, adequately
capitalized, or less than adequately capitalized. Each insured depository
institution is also to be assigned to one of the following "supervisory
subgroups": Subgroup A, B, or C. Subgroup A institutions are financially sound
institutions with few minor weaknesses; Subgroup B institutions are
institutions that demonstrate weaknesses which, if not corrected, could result
in significant deterioration; and Subgroup C institutions are institutions for
which there is a substantial probability that the FDIC will suffer a loss in
connection with the institution unless effective action is taken to correct
the areas of weakness. Based on its capital and supervisory subgroups, each
BIF member institution will be assigned an annual FDIC assessment rate ranging
from 23 cents per $100 of domestic deposits (for well capitalized Subgroup A
institutions) to 31 cents (for undercapitalized Subgroup C institutions).
Adequately capitalized institutions will be assigned assessment rates ranging
from 26 cents to 30 cents. The FDIC has proposed regulations that would assign
an annual FDIC assessment rate for BIF member institutions ranging from 4
cents per $100 of domestic deposits (for well capitalized Subgroup A
institutions) to 31 cents (for undercapitalized Subgroup C institutions).
Norwest incurred $79.2 million of FDIC insurance expense in 1994.
56
<PAGE>
EXPERTS
The consolidated financial statements of Norwest and subsidiaries as of
December 31, 1994 and 1993, and for each of the years in the three-year period
ended December 31, 1994, incorporated by reference herein, have been
incorporated herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The financial statements of the Bank as of December 31, 1994 and March
31, 1994, and for the nine months then ended, included in this Proxy
Statement-Prospectus have been audited by McGladrey and Pullen, LLP,
independent auditors, as stated in their report appearing herein, and have
been so included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
LEGAL OPINION
A legal opinion to the effect that the shares of Norwest Common Stock
offered hereby, when issued in accordance with the Consolidation Agreement,
will be validly issued and fully paid and nonassessable, has been rendered by
Stanley S. Stroup, Executive Vice President and General Counsel of Norwest.
At December 31, 1994, Mr. Stroup was the beneficial owner of approximately
108,607 shares and held options to acquire 207,410 additional shares of
Norwest Common Stock.
MANAGEMENT OF NORWEST AND ADDITIONAL INFORMATION
Certain information relating to the executive compensation, voting
securities and the principal holders thereof, certain relationships and
related transactions, and other related matters concerning Norwest is included
or incorporated by reference in its Annual Report on Form 10-K for the year
ended December 31, 1994, which are incorporated in this Proxy Statement-
Prospectus by reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE." Shareholders of the Bank desiring copies of such documents may
contact Norwest at its address or phone number indicated under "AVAILABLE
INFORMATION" above.
57
<PAGE>
FINANCIAL STATEMENTS
OF
FIRST AMERICAN NATIONAL BANK
INDEX
-----
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditor's Report F-2
Balance Sheets for Nine Months Ended December 31, 1994 and F-3
March 31, 1994
Statements of Income for Nine Months Ended December 31, 1994 F-4
and March 31, 1994
Statements of Changes in Stockholders' Equity for the Nine Months F-5
Ended December 31, 1994 and March 31, 1994
Statements of Cash Flows for the Nine Months Ended December 31, F-6
1994 and March 31, 1994
Notes to Financial Statements F-8
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
First American National Bank
Chandler, Arizona
We have audited the accompanying balance sheets of First American National Bank
as of December 31 and March 31, 1994, and the related statements of income,
stockholders' equity, and cash flows for the nine month periods then ended.
These financial statements are the responsibility of the Bank's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First American National Bank as
of December 31 and March 31, 1994, and the results of its operations and its
cash flows for the nine month periods then ended in conformity with generally
accepted accounting principles.
/s/ McGladrey & Pullen, LLP
Phoenix, Arizona
February 10, 1995
F-2
<PAGE>
<TABLE>
<CAPTION>
FIRST AMERICAN NATIONAL BANK
- ------------------------------------------------------------------------------------
BALANCE SHEETS
December 31 and March 31, 1994
December 31 March 31
- ------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks (Note 2) $2,394,060 $2,573,305
Federal funds sold 6,675,000 6,650,000
------------------------
Cash and cash equivalents 9,069,060 9,223,305
Securities held to maturity (fair value December 31, 1994
$11,866,693; March 31, 1994 $11,005,183) (Note 3) 12,331,667 11,115,187
Loans, net (Notes 4, 10, and 11) 18,359,157 17,363,411
Bank premises and equipment, net (Note 5) 773,686 815,452
Accrued income receivable 196,645 190,527
Other real estate owned 42,301 42,301
Other assets 143,910 103,971
------------------------
$40,916,426 $38,854,154
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits (Note 6):
Interest bearing $25,645,681 $26,991,509
Noninterest bearing 12,258,624 9,186,015
------------------------
37,904,305 36,177,524
Accrued interest and other liabilities 249,547 233,103
------------------------
38,153,852 36,410,627
------------------------
COMMITMENTS AND CONTINGENCIES (Notes 9, 10, and 12)
STOCKHOLDERS' EQUITY (Notes 8 and 13)
Common stock, $2.50 par value;
authorized 1,000,000 shares 283,990 283,990
Surplus 595,980 595,980
Retained earnings 1,882,604 1,563,557
------------------------
2,762,574 2,443,527
------------------------
$40,916,426 $38,854,154
========================
</TABLE>
===============================================================================
See Notes to Financial Statements
===============================================================================
F-3
<PAGE>
FIRST AMERICAN NATIONAL BANK
- ------------------------------------------------------------------------------
STATEMENTS OF INCOME
Nine Months Ended December 31 and March 31, 1994
<TABLE>
<CAPTION>
December 31 March 31
- ------------------------------------------------------------------------------
<S> <C> <C>
Interest income on:
Loans $1,381,414 $1,402,962
Securities held to maturity 472,695 406,350
Federal funds sold 150,961 122,156
--------------------------
2,005,070 1,931,468
Interest expense on deposits 622,779 643,699
--------------------------
Net interest income 1,382,291 1,287,769
Provision for possible loan losses (recoveries)
(Note 4) - (100,000)
--------------------------
Net interest income after provision for
possible loan losses (recoveries) 1,382,291 1,387,769
--------------------------
Other income:
Service fees 224,568 208,798
Other 32,095 33,470
--------------------------
256,663 242,268
--------------------------
Other expenses:
Salaries and employee benefits 601,655 604,223
Occupancy (Note 10) 228,004 235,029
Professional fees 47,471 76,474
Regulatory fees 74,371 80,283
Data processing 95,430 86,123
Supplies, printing and advertising 57,488 68,620
Directors' fees and bonuses 30,939 28,604
Other operating expenses 75,324 42,224
--------------------------
1,210,682 1,221,580
==========================
Income before income tax expenses 428,272 408,457
Federal and state income taxes (Note 7) 109,225 74,600
--------------------------
Net income $ 319,047 $ 333,857
==========================
</TABLE>
===============================================================================
See Notes to Financial Statements
===============================================================================
F-4
<PAGE>
FIRST AMERICAN NATIONAL BANK
- -------------------------------------------------------------------------------
STATEMENTS OF STOCKHOLDERS' EQUITY
Nine Months Ended December 31 and March 31, 1994
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common stock
--------------------
Retained
Shares Amount Surplus earnings Total
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, June 30, 1993 113,596 $283,990 $595,980 $1,229,700 $2,109,670
Net income - - - 333,857 333,857
----------------------------------------------------------------
Balance, March 31, 1994 113,596 $283,990 $595,980 $1,563,557 $2,443,527
Net income - - - 319,047 319,047
----------------------------------------------------------------
Balance, December 31, 1994 113,596 $283,990 $595,980 $1,882,604 $2,762,574
================================================================
</TABLE>
===============================================================================
See Notes to Financial Statements
===============================================================================
F-5
<PAGE>
FIRST AMERICAN NATIONAL BANK
- ------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
Nine Months Ended December 31 and March 31, 1994
<TABLE>
<CAPTION>
December 31 March 31
- ----------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 319,047 $ 333,857
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 45,481 56,883
Provision for loan losses (recoveries) - (100,000)
Amortization (accretion) of premium (discount), net (104,674) 29,846
Gain on sale of other real estate owned - (9,515)
Changes in assets and liabilities:
Accrued income receivable (6,118) 27,426
Other assets (39,939) 18,036
Accrued interest and other liabilities 16,444 33,083
-------------------------
Net cash provided by operating activities 230,241 389,616
-------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of securities held to maturity 6,176,372 3,276,669
Purchase of securities held to maturity (7,288,178) (4,218,097)
Loans made to customers, net (995,746) 828,674
Proceed from sales of other real estate owned - 119,905
Purchase of premises and equipment (3,715) (1,436)
-------------------------
Net cash provided by (used in) investing activities (2,111,267) 5,715
-------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in interest bearing deposits (1,345,828) 1,515,310
Net increase in noninterest bearing deposits 3,072,609 1,341,228
-------------------------
Net cash provided by financing activities 1,726,781 2,856,538
-------------------------
Increase (decrease) in cash and cash equivalents (154,245) 3,251,869
Cash and cash equivalents:
Beginning 9,223,305 5,971,436
-------------------------
Ending $ 9,069,060 $ 9,223,305
=========================
</TABLE>
(Continued)
F-6
<PAGE>
FIRST AMERICAN NATIONAL BANK
- ------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS (Continued)
Nine Months Ended December 31 and March 31, 1994
<TABLE>
<CAPTION>
December 31 March 31
- ----------------------------------------------------------------------------------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash payments for:
Interest paid to depositors $ 626,603 $ 647,198
=========================
Income taxes (net of refunds 1994 $0; 1993 $290,159) $ 83,506 $ 41,550
=========================
</TABLE>
===============================================================================
See Notes to Financial Statements
===============================================================================
F-7
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 1.
SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
For purposes of reporting cash flows, cash and due from banks includes cash on
hand, amounts due from banks (including cash items in process of clearing) and
federal funds sold. Cash flows from loans originated by the Bank and deposits
are reported net.
The Bank maintains amounts due from banks which, at times, may exceed
federally insured limits. The Bank has not experienced any losses in such
accounts.
SECURITIES:
Securities classified as held to maturity are those debt securities the Bank
has both the intent and ability to hold to maturity regardless of changes in
market conditions, liquidity needs or changes in general economic conditions.
These securities are carried at cost adjusted for amortization of premium and
accretion of discount, computed by the interest method over their contractual
lives.
The Bank has classified all of its securities as held to maturity.
LOANS:
Loans are stated at the amount of unpaid principal, reduced by unearned
discount and fees and an allowance for possible loan losses.
The allowance for loan losses is established through a provision for loan
losses charged to expense. Loans are charged against the allowance for loan
losses when management believes that collectibility of the principal is
unlikely. The allowance is an amount that management believes will be adequate
to absorb estimated losses on existing loans that may become uncollectible,
based on evaluation of the collectibility of loans and prior loss experience.
This evaluation also takes into consideration such factors as changes in the
nature and volume of the loan portfolio, overall portfolio quality, review of
specific problem loans, and current economic conditions that may affect the
borrower's ability to pay. While management uses the best information
available to make its evaluation, future adjustments to the allowance may be
necessary if there are significant changes in economic conditions. In
addition, regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowance for loan losses, and may
require the Bank to make additions to the allowance based on their judgment
about information available to them at the time of their examinations.
Unearned interest on discounted loans is amortized to income over the life of
the loans, using the interest method. For all other loans, interest is accrued
daily on the outstanding balances. Accrual of interest is discontinued on a
loan when management believes, after considering collection efforts and other
factors, that the borrower's financial condition is such that collection of
interest is doubtful.
(Continued)
F-8
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 1. (Continued)
SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
Loan origination and commitment fees and certain direct loan origination costs
are deferred and the net amount amortized as an adjustment of the related
loan's yield. The Bank is amortizing these amounts over the contractual life.
Commitment fees based upon a percentage of a customer's unused line of credit
and fees related to standby letters of credit are recognized over the
commitment period.
BANK PREMISES AND EQUIPMENT:
Bank premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed principally by the straight-line method over
estimated lives of 3 to 20 years. The estimated life of leasehold improvements
is determined to be the lesser of the respective life of the lease or the
estimated useful life of the improvement.
OTHER REAL ESTATE OWNED:
Other real estate owned (OREO) represents properties acquired through
foreclosure or other proceedings. OREO is held for sale and is recorded at the
lower of the recorded amount of the loan or fair value of the properties less
estimated costs of disposal. Any write-down to fair value at the time of
transfer to OREO is charged to the allowance for loan losses. Property is
evaluated regularly to ensure the recorded amount is supported by its current
fair value and valuation allowances to reduce the carrying amount to fair
value less estimated costs to dispose are recorded as necessary.
INCOME TAXES:
Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.
The Bank files its tax returns on a calendar year basis.
(Continued)
F-9
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 1. (Continued)
SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
CURRENT ACCOUNTING DEVELOPMENTS:
In December 1991, the Financial Accounting Standards Board issued Statement
No. 107, Disclosures About Fair Value of Financial Instruments. The Statement
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate that value. The disclosures include the methods and assumptions used
to estimate the fair value if quoted market prices are not available.
Statement 107 will first be required for the Bank's year that ends December
31, 1995.
Effective January 1, 1995, the Bank adopted Financial Accounting Standards
Board Statement No. 114, Accounting by Creditors for Impairment of a Loan and
Statement No. 118, Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures, with no material effect on its financial
statements. The Statements generally require impaired loans to be measured on
the present value of expected future cash flows discounted at the loan's
effective interest rate, or as an alternative, at the loan's observable market
price or the fair value of the collateral if the loan is collateral-dependent.
A loan is impaired when it is probable the creditor will be unable to collect
all contractual principal and interest payments due in accordance with the
terms of the loan agreement.
RECLASSIFICATION:
Certain amounts in the March 31, 1994 financial statements have been
reclassified to confirm to the December 31, 1994 presentation, with no effect
in net income or stockholders' equity.
NOTE 2.
RESTRICTIONS ON CASH AND DUE FROM BANKS
- ------------------------------------------------------------------------------
The Bank is required to maintain reserve balances in cash or on deposit with
Federal Reserve Banks. The total of those reserve balances was approximately
$206,000 and $188,000 at December 31 and March 31, 1994, respectively.
F-10
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 3.
SECURITIES
- --------------------------------------------------------------------------------
Effective January 1, 1994, the Bank adopted Financial Accounting Standards Board
Statement No. 115, Accounting for Certain Investments in Debt and Equity
Securities which requires the Bank to classify investment securities as trading,
held for sale or held to maturity. Investments classified as trading and
available for sale are to be valued at their fair market value while investment
securities classified as held to maturity are valued at cost. The Bank
classified all of its investment portfolio as held to maturity. No amounts were
classified as available for sale or trading. The adoption of this statement did
not have a material effect on the financial statements of the Bank.
Carrying amounts and fair values of securities being held to maturity are
summarized as follows:
<TABLE>
<CAPTION>
December 31, 1994
-----------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 5,779,893 $ - $129,788 $ 5,650,105
U.S. Government agencies 4,730,002 490 302,699 4,427,793
Municipal securities 719,254 - 32,977 686,277
Certificates of deposits 1,076,118 - - 1,076,118
Federal Reserve Bank stock 26,400 - - 26,400
------------------------------------------------
$12,331,667 $ 490 $465,464 $11,866,693
================================================
</TABLE>
<TABLE>
<CAPTION>
March 31, 1994
------------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 4,768,676 $ 6,362 $ 53,378 $ 4,721,660
U.S. Government agencies 4,141,897 4,637 88,559 4,057,975
Municipal securities 1,003,096 20,934 - 1,024,030
Certificates of deposits 1,175,118 - - 1,175,118
Federal Reserve Bank stock 26,400 - - 26,400
------------------------------------------------
$11,115,187 $31,933 $141,937 $11,005,183
------------------------------------------------
</TABLE>
(Continued)
F-11
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 3. (Continued)
SECURITIES
- -------------------------------------------------------------------------------
The amortized cost and fair value of securities being held to maturity as of
December 31, 1994 by contractual maturity are shown below. The Federal Reserve
Bank stock is not included in the following maturity summary as there is no
maturity date.
<TABLE>
<CAPTION>
Amortized Fair
cost value
------------------------
<S> <C> <C>
Due in one year or less $ 5,516,139 $ 5,483,608
Due after one year through 5 years 4,930,629 4,656,103
Due after 5 years through ten years 518,879 461,089
Due after 10 years 1,339,620 1,239,493
------------------------
$12,305,267 $11,840,293
========================
</TABLE>
Securities being held to maturity with a carrying amount of approximately
$1,980,000 and $1,900,000 at December 31 and March 31, 1994, respectively, were
pledged as collateral on public deposits, a federal funds line of credit and for
other purposes as required or permitted by law.
There were no sales of securities for the nine month periods ended December 31
and March 31, 1994.
NOTE 4.
LOANS
- ------------------------------------------------------------------------------
The composition of net loans is as follows:
<TABLE>
<CAPTION>
December 31 March 31
------------------------
<S> <C> <C>
Commercial $ 7,965,684 $ 6,707,683
Residential real estate 7,135,136 7,188,037
Consumer installment 3,985,959 4,161,454
------------------------
19,086,779 18,057,174
------------------------
Deduct:
Unearned discount 27,405 35,129
Unearned net loan fees 46,081 36,061
Allowance for loan losses 654,136 622,573
------------------------
727,622 693,763
------------------------
Loans, net $18,359,157 $17,363,411
========================
</TABLE>
(Continued)
F-12
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 4. (Continued)
LOANS
- -------------------------------------------------------------------------------
Changes in the allowances for loan losses are as follows for the nine months
ended December 31 and March 31, 1994:
<TABLE>
<CAPTION>
December 31 March 31
------------------------
<S> <C> <C>
Balance, beginning $ 622,573 $ 691,369
Provision credited to expense - (100,000)
Recoveries of amounts charged off 54,559 97,659
------------------------
677,132 689,028
Amounts charged off 22,996 66,455
------------------------
Balance, ending $ 654,136 $ 622,573
=======================
</TABLE>
The Bank makes commercial, residential and consumer installment loans to
customers primarily in the East Valley Communities of the Phoenix, Arizona
metropolitan area. Although the Bank's loan portfolios are diversified, loans
totalling approximately $13,300,000 have real estate as the primary source of
collateral. The Bank's lending policies for real estate customers require loans
to be well-collateralized and supported by cash flows. Credit losses from loans
related to the real estate economy are consistent with credit losses experienced
in the portfolio as a whole. The concentration of credit in the regional real
estate economy is taken into consideration by management in determining the
allowance for loan losses.
F-13
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 5.
BANK PREMISES AND EQUIPMENT
- -------------------------------------------------------------------------------
The major classes of bank premises and equipment and the total accumulated
depreciation are as follows:
<TABLE>
<CAPTION>
December 31 March 31
----------------------
<S> <C> <C>
Land $ 415,397 $ 415,397
Building 380,349 380,349
Furniture and fixtures 601,227 605,979
Leasehold improvements 147,704 147,704
Automobile 22,582 22,582
-----------------------
1,567,259 1,572,011
Less accumulated depreciation 793,573 756,559
-----------------------
$ 773,686 $ 815,452
=======================
</TABLE>
NOTE 6.
DEPOSITS
- -------------------------------------------------------------------------------
The composition of deposits is as follows:
<TABLE>
<CAPTION>
December 31 March 31
------------------------
<S> <C> <C>
Demand $12,258,624 $ 9,186,015
NOW and money market accounts 11,975,653 11,963,083
Savings 2,806,549 2,828,312
Time certificates, $100,000 or more 1,627,867 1,719,974
Other time certificates 9,235,612 10,480,140
------------------------
$37,904,305 $36,177,524
========================
</TABLE>
F-14
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 7.
INCOME TAX MATTERS
- -------------------------------------------------------------------------------
The net deferred tax asset consists of the following components as of December
31 and March 31, 1994:
<TABLE>
<CAPTION>
December 31 March 31
----------------------
<S> <C> <C>
Deferred tax assets $ 330,000 $ 352,000
Less valuation allowance (285,000) (310,000)
----------------------
45,000 42,000
Deferred tax liability (45,000) (42,000)
----------------------
$ - $ -
======================
</TABLE>
Taxable temporary differences giving rise to the deferred tax liability is
related to the conversion from accrual to cash basis for income tax reporting
purposes. Deductible differences giving rise to the deferred tax assets are
related to the allowance for possible loan losses, bank premises and equipment,
and an approximate $700,000 Arizona net operating loss carryforward.
The Bank has recorded a valuation allowance on the deferred tax assets to reduce
the total to an amount that management believes will be realized during the next
year. Realization of deferred tax assets is dependent upon sufficient future
taxable income during the period that deductible differences and carryforwards
are expected to be available to reduce taxable income.
The provision for income taxes charged to income before taxes for the nine
months ended December 31 and March 31, 1994 is all current tax expense.
The income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate to pretax income for the nine month
periods ended December 31 and March 31, 1994 due to the following:
<TABLE>
<CAPTION>
December 31 March 31
----------------------
<S> <C> <C>
Computed "expected" tax expense $150,000 $143,000
Increase (decrease) in income taxes resulting
from the following:
State income taxes 26,000 35,000
Nontaxable interest income (15,000) -
Realization of deferred tax asset for which a
valuation allowance had been provided (26,000) (78,500)
Other (25,775) (24,900)
----------------------
$109,225 $ 74,600
======================
</TABLE>
F-15
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 8.
REGULATORY MATTERS
- -------------------------------------------------------------------------------
Banking laws and regulations limit the amount of dividends that may be paid
without prior approval of the Bank's regulatory agency. Regulations also
require the Bank to maintain certain minimum capital levels in relation to
assets. Capital is measured using a leverage ratio as well as based on risk-
weighing assets according to regulatory guidelines. A comparison of the Bank's
actual regulatory capital as of December 31, 1994 with minimum requirements for
well capitalized and adequately capitalized banks, as defined by regulation, is
shown below:
<TABLE>
<CAPTION>
Minimum requirements
--------------------------
December
31, 1994 Well Adequately
actual capitalized capitalized
--------------------------------------
<S> <C> <C> <C>
Tier 1 risk-based capital 13.9% 6.0% 4.0%
Total risk-based capital 15.5% 10.0% 8.0%
Leverage ratio 6.8% 5.0% 4.0%
</TABLE>
NOTE 9.
401(k) PLAN
- -------------------------------------------------------------------------------
During the year ended June 30, 1993, the Bank adopted a contributory profit-
sharing plan. The plan allows contributions by employees, subject to
limitations, under Section 401(k) of the Internal Revenue Code. The Bank
matches the lesser of 50% of the employee's contribution or 6% of the employee's
gross compensation. To be eligible, an employee must have attained the age of
21 and completed one year of service. The Bank's matching contribution totaled
$11,338 and $10,937 for the nine month periods ended December 31 and March 31,
1994, respectively. The employer and employee contributions vest immediately.
F-16
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 10.
COMMITMENTS AND CONTINGENCIES
- -------------------------------------------------------------------------------
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK:
The Bank is party to financial instruments with off-balance-sheet risk in the
normal course of business to meet the financing needs of its customers. These
financial instruments include commitments to extend credit and standby letters
of credit. These instruments involve, to varying degrees, elements of credit
risk in excess of the amount recognized in the balance sheet.
The Bank's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual amount of those instruments.
The Bank uses the same credit policies in making commitments and conditional
obligations as they do for on-balance-sheet instruments. A summary of the
Bank's approximate commitments is as follows:
<TABLE>
<CAPTION>
December 31 March 31
------------------------
<S> <C> <C>
Commitments to extend credit $2,800,000 $2,560,000
Standby letters of credit 203,000 225,000
-----------------------
$3,003,000 $2,785,000
=======================
</TABLE>
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Since many
of the commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements. The
Bank evaluates each customer's creditworthiness on a case-by-case basis. The
amount of collateral obtained, if deemed necessary by the Bank upon extension of
credit, is based on management's credit evaluation of the party. Collateral
held varies, but may include accounts receivable, inventory, property and
equipment, residential real estate and income-producing commercial properties.
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. Those guarantees are
primarily issued to support public and private borrowing arrangements. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers. Collateral held varies
as specified above and is required in instances which the Bank deems necessary.
(Continued)
F-17
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 10. (Continued)
COMMITMENTS AND CONTINGENCIES
- -------------------------------------------------------------------------------
CONCENTRATIONS OF CREDIT RISK:
All of the Bank's loans, commitments to extend credit, and standby letters of
credit have been granted to customers in the Bank's market area. Municipal
investments in securities (see Note 3) also involve governmental entities within
the Bank's market area. The concentrations of credit by type of loan are set
forth in Note 4. The distribution of commitments to extend credit approximates
the distribution of loans outstanding. The standby letter of credit was granted
to a commercial borrower. The Bank, as a matter of policy, does not extend
credit to any single borrower or group of related borrowers in excess of
$512,000. In addition, the Bank has $6,675,000 of federal funds sold to three
banks.
LEASE COMMITMENTS:
The Bank leases two of its office buildings under operating leases from a
partnership consisting of three members of its board of directors. One lease
requires monthly payments of $4,506 through December 1997, and is renewable for
one three-year period. The second lease requires monthly payments of $2,659
through August 1995, and is renewable for one five year period.
At December 31, 1994, approximate future lease commitments under these
agreements are as follows:
<TABLE>
<CAPTION>
Years ending
December 31,
- ------------
<S> <C>
1995 $ 75,000
1996 54,000
1997 54,000
--------
$183,000
========
</TABLE>
Rent expense for the above leases totaled approximately $64,000 for the nine
month periods ended December 31 and March 31, 1994 and is included in occupancy
expense.
FEDERAL FUNDS PURCHASE LINE OF CREDIT:
The Bank has been extended a $1,000,000 Federal Funds purchase line of credit.
Federal Funds purchased were $0 at December 31 and March 31, 1994.
F-18
<PAGE>
===============================================================================
FIRST AMERICAN NATIONAL BANK
Notes to Financial Statements
===============================================================================
NOTE 11.
TRANSACTIONS WITH RELATED PARTIES
- -------------------------------------------------------------------------------
The Bank has had, and may be expected to have in the future, banking
transactions in the ordinary course of business with directors, principal
officers, their immediate families and affiliated companies in which they are
principal stockholders (commonly referred to as related parties), all of which
have been, in the opinion of management, on the same terms, including interest
rates and collateral, as those prevailing at the time for comparable
transactions with others.
Aggregate loan transactions with related parties were as follows for the nine
months ended December 31 and March 31, 1994:
<TABLE>
<CAPTION>
December 31 March 31
----------------------
<S> <C> <C>
Balance, beginning $574,802 $415,843
New loans 4,225 208,328
Repayments (74,251) (49,369)
---------------------
Balance, ending $504,776 $574,802
=====================
Maximum balance during the year $574,802 $585,757
=====================
</TABLE>
Loan activity for loans categorized as revolving-lines or plus-lines have been
presented as a net amount above.
NOTE 12.
MERGER WITH NORWEST CORPORATION
- -------------------------------------------------------------------------------
On November 21, 1994, First American National Bank entered into an Agreement and
Plan of Reorganization with Norwest Corporation. Under the terms of this
agreement, the transaction will be treated as a pooling of interest with the
First American National Bank stockholders exchanging their stock for stock in
Norwest Corporation. This merger is contingent upon governmental regulatory and
stockholder approval.
NOTE 13.
SUBSEQUENT EVENT
- -------------------------------------------------------------------------------
The Bank paid dividends totaling $48,846 on February 1, 1995.
F-19
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION,
AND
FORM OF AGREEMENT AND PLAN OF CONSOLIDATION
<PAGE>
AGREEMENT
AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") entered into as
of the 21st day of November, 1994, by and between FIRST AMERICAN NATIONAL BANK
("FANB"), a national banking association, and NORWEST CORPORATION ("Norwest"), a
Delaware corporation.
WHEREAS, the parties hereto desire to effect a reorganization whereby
a wholly-owned subsidiary of Norwest will consolidate with and into FANB (the
"Consolidation") pursuant to an agreement and plan of consolidation (the
"Consolidation Agreement") in substantially the form attached hereto as Exhibit
A, which provides, among other things, for the conversion and exchange of the
shares of Common Stock of FANB of the par value of $2.50 per share ("FANB Common
Stock") outstanding immediately prior to the time the Consolidation becomes
effective in accordance with the provisions of the Consolidation Agreement into
shares of voting Common Stock of Norwest of the par value of $1-2/3 per share
("Norwest Common Stock"),
NOW, THEREFORE, to effect such reorganization and in consideration of
the premises and the mutual covenants and agreements contained herein, the
parties hereto do hereby represent, warrant, covenant and agree as follows:
1. BASIC PLAN OF REORGANIZATION
(a) Consolidation.
-------------
(i) Subject to the terms and conditions contained herein, a
wholly-owned subsidiary of Norwest (the "Consolidation Co.") will be
consolidated by statutory consolidation with and into FANB, under the
charter of FANB, pursuant to the provisions of (S)215 of the National
Bank Act ("National Bank Act") and pursuant to the Consolidation
Agreement, in which consolidation each share of FANB Common Stock
outstanding immediately prior to the "Effective Time of the
Consolidation" (as defined below) (other than shares as to which
statutory dissenters' appraisal rights have been exercised) will be
converted into and exchanged for the number of shares of Norwest
Common Stock equal to 193,000 divided by 113,596 or such greater or
lesser number of shares of FANB Common Stock then outstanding.
(ii) The Consolidation shall become effective at 12:01 a.m.
Arizona time on the date (the "Effective Date of the Consolidation")
specified in the Certificate of Approval of Consolidation to be issued
by the Office of the Comptroller of the Currency ("Comptroller"),
which date shall be the "Closing Date" established in paragraph 1(d)
below (the "Effective Time of the Consolidation").
(b) Norwest Common Stock Adjustments. If, between the date hereof and
the Effective Time of the Consolidation, shares of Norwest Common Stock shall be
changed into a different number of shares or a different class of shares by
reason of any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment, or if a stock dividend thereon shall be
A-1
<PAGE>
declared with a record date within such period (a "Common Stock Adjustment"),
then the number of shares of Norwest Common Stock into which a share of FANB
Common Stock shall be converted pursuant to subparagraph (a), above, will be
appropriately and proportionately adjusted so that the number of such shares of
Norwest Common Stock into which a share of FANB Common Stock shall be converted
will equal the number of shares of Norwest Common Stock which holders of shares
of FANB Common Stock would have received pursuant to such Common Stock
Adjustment had the record date therefor been immediately following the Effective
Time of the Consolidation.
(c) Fractional Shares. No fractional shares of Norwest Common Stock and
no certificates or scrip certificates therefor shall be issued to represent any
such fractional interest, and any holder thereof shall be paid an amount of cash
equal to the product obtained by multiplying the fractional share interest to
which such holder is entitled by the average of the closing prices of a share of
Norwest Common Stock as reported by the consolidated tape of the New York Stock
Exchange for each of the five (5) trading days ending on the day immediately
preceding the meeting of shareholders required by paragraph 4(c) of this
Agreement.
(d) Mechanics of Closing Consolidation. Subject to the terms and
conditions set forth herein, the Consolidation Agreement shall be executed and
it shall be filed with the Comptroller and the Closing of the Consolidation will
occur on a mutually agreeable date, which date shall be no later than ten (10)
business days following the satisfaction or waiver of all conditions precedent
set forth in Sections 6 and 7 of this Agreement or on such other date as may be
agreed to by the parties (the "Closing Date"). Each of the parties agrees to
use its best efforts to cause the Consolidation to be completed as soon as
practicable after the receipt of final regulatory approval of the Consolidation
and the expiration of all required waiting periods. At the Effective Time of
the Consolidation on the Effective Date of the Consolidation, the separate
existence of Consolidation Co. shall cease and Consolidation Co. will be
consolidated with and into FANB under the charter of FANB pursuant to the
Consolidation Agreement.
The closing of the transactions contemplated by this Agreement and the
Consolidation Agreement (the "Closing") shall take place on the Closing Date at
the offices of Norwest, Norwest Center, Sixth and Marquette, Minneapolis,
Minnesota.
2. REPRESENTATIONS AND WARRANTIES OF FANB. FANB represents and warrants
to Norwest as follows:
(a) Organization and Authority. FANB is a national banking association
duly organized, validly existing and in good standing under the laws of the
United States, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and failure to be so qualified would
have a material adverse effect on FANB and has corporate power and authority to
own its properties and assets and to carry on its business as it is now being
conducted. FANB has furnished Norwest true and correct copies of its Articles
of Association and by-laws, as amended.
(b) FANB's Subsidiaries. Schedule 2(b) sets forth a complete and correct
list of all of FANB's subsidiaries as of the date hereof (individually a "FANB
Subsidiary" and collectively the "FANB Subsidiaries"), all shares of the
outstanding capital stock of each of which, except as set forth on Schedule
2(b), are owned directly or indirectly by FANB. No equity security of any FANB
Subsidiary is or may be required to be issued by reason of any option, warrant,
scrip,
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preemptive right, right to subscribe to, call or commitment of any character
whatsoever relating to, or security or right convertible into, shares of any
capital stock of such subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any FANB Subsidiary is bound to issue
additional shares of its capital stock, or any option, warrant or right to
purchase or acquire any additional shares of its capital stock. Subject to 12
U.S.C. (S) 55 (1982), all of such shares so owned by FANB are fully paid and
nonassessable and are owned by it free and clear of any lien, claim, charge,
option, encumbrance or agreement with respect thereto. Each FANB Subsidiary is a
corporation or national banking association duly organized, validly existing,
duly qualified to do business and in good standing under the laws of its
jurisdiction of incorporation, and has corporate power and authority to own or
lease its properties and assets and to carry on its business as it is now being
conducted. Except as set forth on Schedule 2(b), FANB does not own beneficially,
directly or indirectly, more than 5% of any class of equity securities or
similar interests of any corporation, bank, business trust, association or
similar organization, and is not, directly or indirectly, a partner in any
partnership or party to any joint venture.
(c) Capitalization. The authorized capital stock of FANB consists of
1,000,000 shares of common stock, $2.50 par value, of which as of the close of
business on June 30, 1994, 113,596 shares were outstanding and no shares were
held in the treasury. The maximum number of shares of FANB Common Stock
(assuming for this purpose that phantom shares and other share-equivalents
constitute FANB Common Stock) that would be outstanding as of the Effective Date
of the Consolidation if all options, warrants, conversion rights and other
rights with respect thereto were exercised is 113,596. All of the outstanding
shares of capital stock of FANB have been duly and validly authorized and issued
and are fully paid and nonassessable. Except as set forth in Schedule 2(c),
there are no outstanding subscriptions, contracts, conversion privileges,
options, warrants, calls, preemptive rights or other rights obligating FANB or
any FANB Subsidiary to issue, sell or otherwise dispose of, or to purchase,
redeem or otherwise acquire, any shares of capital stock of FANB or any FANB
Subsidiary. Except as set forth on Schedule 2(c), since June 30, 1994 no shares
of FANB capital stock have been purchased, redeemed or otherwise acquired,
directly or indirectly, by FANB or any FANB Subsidiary and no dividends or other
distributions have been declared, set aside, made or paid to the shareholders of
FANB.
(d) Authorization. FANB has the corporate power and authority to enter
into this Agreement and the Consolidation Agreement and, subject to any required
approvals of its shareholders, to carry out its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Consolidation Agreement by FANB and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of FANB. Subject to such approvals of shareholders and of government
agencies and other governing boards having regulatory authority over FANB as may
be required by statute or regulation, this Agreement and the Consolidation
Agreement are valid and binding obligations of FANB enforceable against FANB in
accordance with their respective terms.
Except as set forth on Schedule 2(d), neither the execution, delivery and
performance by FANB of this Agreement or the Consolidation Agreement, nor the
consummation of the transactions contemplated hereby and thereby, nor compliance
by FANB with any of the provisions hereof or thereof, will (i) violate, conflict
with, or result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance required
by, or result in a right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of FANB or any FANB Subsidiary
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under any of the terms, conditions or provisions of (x) its articles of
incorporation or by-laws or (y) any material note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation to
which FANB or any FANB Subsidiary is a party or by which it may be bound, or to
which FANB or any FANB Subsidiary or any of the properties or assets of FANB or
any FANB Subsidiary may be subject, or (ii) subject to compliance with the
statutes and regulations referred to in the next paragraph, to the best
knowledge of FANB, violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to FANB or any FANB Subsidiary or
any of their respective properties or assets.
Other than in connection or in compliance with the provisions of the
Securities Act of 1933 and the rules and regulations thereunder (the "Securities
Act"), the Securities Exchange Act of 1934 and the rules and regulations
thereunder (the "Exchange Act"), the securities or blue sky laws of the various
states or filings, consents, reviews, authorizations, approvals or exemptions
required under the Bank Holding Company Act of 1956, as amended (the "BHC Act")
or the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act"), and
filings required to effect the Consolidation under the National Bank Act, no
notice to, filing with, exemption or review by, or authorization, consent or
approval of, any public body or authority is necessary for the consummation by
FANB of the transactions contemplated by this Agreement and the Consolidation
Agreement.
(e) FANB Financial Statements. The consolidated balance sheets of FANB
and FANB's Subsidiaries as of June 30, 1993 and 1992 and March 31, 1994 and
related consolidated statements of income, shareholders' equity and cash flows
for the two years and nine months ended March 31, 1994, together with the notes
thereto, certified by McGladrey and Pullen, and the unaudited consolidated
statements of financial condition of FANB and FANB's Subsidiaries as of August
31, 1994 and the related unaudited consolidated statements of income,
shareholders' equity and cash flows for the three months then ended
(collectively, the "FANB Financial Statements"), have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and present fairly (subject, in the case of financial statements for
interim periods, to normal recurring adjustments) the consolidated financial
position of FANB and FANB's Subsidiaries at the dates and the consolidated
results of operations and cash flows of FANB and FANB's Subsidiaries for the
periods stated therein.
(f) Reports. Since December 31, 1988, FANB and each FANB Subsidiary has
filed all reports, registrations and statements, together with any required
amendments thereto, that it was required to file (if applicable) with (i) the
Securities Exchange Commission ("SEC"), (ii) the Federal Reserve Board, (iii)
the Federal Deposit Insurance Corporation (the "FDIC"), (iv) the Comptroller and
(v) any applicable state securities or banking authorities. All such reports
and statements filed with any such regulatory body or authority are collectively
referred to herein as the "FANB Reports". As of their respective dates, the
FANB Reports complied in all material respects with all the rules and
regulations promulgated by the SEC, the Federal Reserve Board, the FDIC, the
Comptroller and applicable state securities or banking authorities, as the case
may be, and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Copies of all the FANB Reports have been made available
to Norwest by FANB.
(g) Properties and Leases. Except as may be reflected in the FANB
Financial Statements and except for any lien for current taxes not yet
delinquent, FANB and each FANB Subsidiary
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have good title free and clear of any material liens, claims, charges, options,
encumbrances or similar restrictions to all the real and personal property
reflected in FANB's consolidated balance sheet as of June 30, 1994 for the
period then ended, and all real and personal property acquired since such date,
except such real and personal property as has been disposed of in the ordinary
course of business. All leases of real property and all other leases material to
FANB or any FANB Subsidiary pursuant to which FANB or such FANB Subsidiary, as
lessee, leases real or personal property, which leases are described on Schedule
2(g), are valid and effective in accordance with their respective terms, and
there is not, under any such lease, any material existing default by FANB or
such FANB Subsidiary or any event which, with notice or lapse of time or both,
would constitute such a material default. Substantially all FANB's and each FANB
Subsidiary's buildings and equipment in regular use have been well maintained
and are in good and serviceable condition, reasonable wear and tear excepted.
(h) Taxes. Each of FANB and the FANB Subsidiaries has filed all federal,
state, county, local and foreign tax returns, including information returns,
required to be filed by it, and paid all taxes owed by it, including those with
respect to income, withholding, social security, unemployment, workers
compensation, franchise, ad valorem, premium, excise and sales taxes, and no
taxes shown on such returns to be owed by it or assessments received by it are
delinquent. The federal income tax returns of FANB and the FANB Subsidiaries
for the fiscal year ended December 31, 1990, and for all fiscal years prior
thereto, are for the purposes of routine audit by the Internal Revenue Service
closed because of the statute of limitations, and no claims for additional taxes
for such fiscal years are pending. Except only as set forth on Schedule 2(h),
(i) neither FANB nor any FANB Subsidiary is a party to any pending action or
proceeding, nor is any such action or proceeding threatened by any governmental
authority, for the assessment or collection of taxes, interest, penalties,
assessments or deficiencies and (ii) no issue has been raised by any federal,
state, local or foreign taxing authority in connection with an audit or
examination of the tax returns, business or properties of FANB or any FANB
Subsidiary which has not been settled, resolved and fully satisfied. Each of
FANB and the FANB Subsidiaries has paid all taxes owed or which it is required
to withhold from amounts owing to employees, creditors or other third parties.
The consolidated balance sheet as of June 30, 1994, referred to in paragraph
2(e) hereof, includes adequate provision for all accrued but unpaid federal,
state, county, local and foreign taxes, interest, penalties, assessments or
deficiencies of FANB and the FANB Subsidiaries with respect to all periods
through the date thereof.
(i) Absence of Certain Changes. Since December 31, 1993 there has been no
change in the business, financial condition or results of operations of FANB or
any FANB Subsidiary, which has had, or may reasonably be expected to have, a
material adverse effect on the business, financial condition or results of
operations of FANB and the FANB Subsidiaries taken as a whole.
(j) Commitments and Contracts. Except as set forth on Schedule 2(j),
neither FANB nor any FANB Subsidiary is a party or subject to any of the
following (whether written or oral, express or implied):
(i) any employment contract or understanding (including any
understandings or obligations with respect to severance or termination pay
liabilities or fringe benefits) with any present or former officer,
director, employee or consultant (other than those which are terminable at
will by FANB or such FANB Subsidiary);
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(ii) any plan, contract or understanding providing for any bonus,
pension, option, deferred compensation, retirement payment, profit sharing
or similar arrangement with respect to any present or former officer,
director, employee or consultant;
(iii) any labor contract or agreement with any labor union;
(iv) any contract not made in the ordinary course of business
containing covenants which limit the ability of FANB or any FANB Subsidiary
to compete in any line of business or with any person or which involve any
restriction of the geographical area in which, or method by which, FANB or
any FANB Subsidiary may carry on its business (other than as may be
required by law or applicable regulatory authorities);
(v) any other contract or agreement which is a "material contract"
within the meaning of Item 601(b)(10) of Regulation S-K; or
(vi) any lease or contract with annual rental or other payments
aggregating $20,000 or more.
(k) Litigation and Other Proceedings. FANB has furnished Norwest copies
of (i) all attorney responses to the request of the independent auditors for
FANB with respect to loss contingencies as of December 31, 1993, and (ii) a
written list of legal and regulatory proceedings filed against FANB or any FANB
Subsidiary since said date. Neither FANB nor any FANB Subsidiary is a party to
any pending or, to the best knowledge of FANB, threatened, claim, action, suit,
investigation or proceeding, or is subject to any order, judgment or decree,
except for matters which, in the aggregate, will not have, or cannot reasonably
be expected to have, a material adverse effect on the business, financial
condition or results of operations of FANB and the FANB Subsidiaries taken as a
whole.
(l) Insurance. FANB and each FANB Subsidiary is presently insured, and,
except as set forth on Schedule 2(l), during each of the past five calendar
years (or during such lesser period of time as FANB has owned such FANB
Subsidiary) has been insured, for reasonable amounts with financially sound and
reputable insurance companies against such risks as companies engaged in a
similar business would, in accordance with good business practice, customarily
be insured and has maintained all insurance required by applicable law and
regulation.
(m) Compliance with Laws. FANB and each FANB Subsidiary has all permits,
licenses, authorizations, orders and approvals of, and has made all filings,
applications and registrations with, federal, state, local or foreign
governmental or regulatory bodies that are required in order to permit it to own
or lease its properties and assets and to carry on its business as presently
conducted and that are material to the business of FANB or such FANB Subsidiary;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect and, to the best knowledge of FANB, no suspension or
cancellation of any of them is threatened; and all such filings, applications
and registrations are current. The conduct by FANB and each FANB Subsidiary of
its business and the condition and use of its properties does not violate or
infringe, in any respect material to any such business, any applicable domestic
(federal, state or local) or foreign law, statute, ordinance, license or
regulation. Neither FANB nor any FANB Subsidiary is in default under any order,
license, regulation or demand of any federal, state, municipal or other
governmental agency or with respect to any order, writ, injunction or decree of
any court. Except as set forth on Schedule 2(m), neither FANB nor any of the
FANB Subsidiaries is subject to any
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cease and desist order, written agreement or memorandum of understanding with,
or a party to any commitment letter or similar undertaking to, or is subject to
any order or directive by, or is a recipient of any extraordinary supervisory
letter from, or has adopted any board resolutions at the request of, federal or
state governmental authorities charged with the supervision or regulation of
banks or bank holding companies or engaged in the insurance of bank deposits
("Bank Regulators"), nor have any of them been advised by Bank Regulator that it
is contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, directive, written agreement, memorandum
or understanding, extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking. Except for statutory or regulatory
restrictions of general application and except as set forth on Schedule 2(m), no
federal, state, municipal or other governmental authority has placed any
restriction on the business or properties of FANB or any FANB Subsidiary which
reasonably could be expected to have a material adverse effect on the business
or properties of FANB and the FANB Subsidiaries taken as a whole.
(n) Labor. No work stoppage involving FANB or any FANB Subsidiary is pending
or, to the best knowledge of FANB, threatened. Neither FANB nor any FANB
Subsidiary is involved in, or threatened with or affected by, any labor dispute,
arbitration, lawsuit or administrative proceeding which could materially and
adversely affect the business of FANB or such FANB Subsidiary. Employees of
FANB and the FANB Subsidiaries are not represented by any labor union nor are
any collective bargaining agreements otherwise in effect with respect to such
employees.
(o) Material Interests of Certain Persons. Except as set forth on Schedule
2(o), to the best knowledge of FANB no officer or director of FANB or any FANB
Subsidiary, or any "associate" (as such term is defined in Rule l4a-1 under the
Exchange Act) of any such officer or director, has any interest in any material
contract or property (real or personal), tangible or intangible, used in or
pertaining to the business of FANB or any FANB Subsidiary.
Schedule 2(o) sets forth a correct and complete list of any loan from FANB or
any FANB Subsidiary to any present officer, director, or related interest of any
such person which was required under Regulation O of the Federal Reserve Board
("Reg. O") to be approved by or reported to FANB's or such FANB Subsidiary's
Board of Directors and a correct list of all transactions subject to the
restrictions of Sections 23A and 23B of the Federal Reserve Act ("23A and 23B").
Except as set forth on Schedule 2(o), all such loans or transactions were made
in compliance with the requirements of Reg. O and 23A and 23B as the case may
be.
(p) FANB Benefit Plans.
(i) The only "employee benefit plans" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), for which FANB or any FANB Subsidiary acts as the plan sponsor
as defined in ERISA Section 3(16)(B), and with respect to which any
liability under ERISA or otherwise exists or may be incurred by FANB or any
FANB Subsidiary are those set forth on Schedule 2(p) (the "Plans"). No
Plan is a "multi-employer plan" within the meaning of Section 3(37) of
ERISA.
(ii) Each Plan is and has been in all material respects operated and
administered in accordance with its provisions and applicable law. Except
as set forth on Schedule 2(p), FANB or the FANB subsidiaries have received
favorable determination letters from
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the Internal Revenue Service under the provisions of the Tax Equity and
Fiscal Responsibility Act ("TEFRA"), the Deficit Reduction Act ("DEFRA")
and the Retirement Equity Act ("REA") for each of the Plans to which the
qualification requirements of Section 401(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), apply. FANB knows of no reason that any
Plan which is subject to the qualification provisions of Section 401(a) of
the Code is not "qualified" within the meaning of Section 401(a) of the
Code and that each related trust is not exempt from taxation under Section
501(a) of the Code, except that any such Plan may not have been amended to
comply with the Tax Reform Act of 1986 (the "TRA") and other recent
legislation and regulations, although each such Plan is within the remedial
amendment period during which retroactive amendment may be made.
(iii) The present value of all benefits vested and all benefits
accrued under each Plan which is subject to Title IV of ERISA did not, in
each case, as determined for purposes of reporting on Schedule B to the
Annual Report on Form 5500 of each such Plan as of the end of the most
recent Plan year exceed the value of the assets of the Plan allocable to
such vested or accrued benefits.
(iv) Except as disclosed in Schedule 2(p), and to the best knowledge
of FANB, no Plan or any trust created thereunder, nor any trustee,
fiduciary or administrator thereof, has engaged in a "prohibited
transaction", as such term is defined in Section 4975 of the Code or
Section 406 of ERISA or violated any of the fiduciary standards under Part
4 of Title I of ERISA which could subject, to the best knowledge of FANB,
such Plan or trust, or any trustee, fiduciary or administrator thereof, or
any party dealing with any such Plan or trust, to the tax or penalty on
prohibited transactions imposed by said Section 4975 or would result in
material liability to FANB and the FANB Subsidiaries taken as a whole.
(v) No Plan which is subject to Title IV of ERISA or any trust
created thereunder has been terminated, nor have there been any "reportable
events" as that term is defined in Section 4043 of ERISA, with respect to
any Plan, other than those events which may result from the transactions
contemplated by this Agreement and the Consolidation Agreement.
(vi) No Plan or any trust created thereunder has incurred any
"accumulated funding deficiency", as such term is defined in Section 412 of
the Code (whether or not waived), since the effective date of ERISA.
(vii) Except as disclosed in Schedule 2(p), neither the execution and
delivery of this Agreement and the Consolidation Agreement nor the
consummation of the transactions contemplated hereby and thereby will (i)
result in any material payment (including, without limitation, severance,
unemployment compensation, golden parachute or otherwise) becoming due to
any director or employee or former employee of FANB or any FANB Subsidiary
under any Plan or otherwise, (ii) materially increase any benefits
otherwise payable under any Plan or (iii) result in the acceleration of the
time of payment or vesting of any such benefits to any material extent.
(q) Proxy Statement, etc. None of the information regarding FANB and the
FANB Subsidiaries supplied or to be supplied by FANB for inclusion in (i) a
Registration Statement on Form S-4 to be filed with the SEC by Norwest for the
purpose of registering the shares of Norwest Common Stock to be exchanged for
shares of FANB Common Stock pursuant to the provisions of
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the Consolidation Agreement (the "Registration Statement"), (ii) the proxy
statement to be mailed to FANB's shareholders in connection with the meeting to
be called to consider the Consolidation (the "Proxy Statement") and (iii) any
other documents to be filed with the SEC or any regulatory authority in
connection with the transactions contemplated hereby or by the Consolidation
Agreement will, at the respective times such documents are filed with the SEC or
any regulatory authority and, in the case of the Registration Statement, when it
becomes effective and, with respect to the Proxy Statement, when mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading
or, in the case of the Proxy Statement or any amendment thereof or supplement
thereto, at the time of the meeting of shareholders referred to in paragraph
4(c), be false or misleading with respect to any material fact, or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for such meeting.
All documents which FANB and the FANB Subsidiaries are responsible for filing
with the SEC and any other regulatory authority in connection with the
Consolidation will comply as to form in all material respects with the
provisions of applicable law.
(r) Registration Obligations. Except as set forth on Schedule 2(r), neither
FANB nor any FANB Subsidiary is under any obligation, contingent or otherwise,
which will survive the Consolidation by reason of any agreement to register any
of its securities under the Securities Act.
(s) Brokers and Finders. Neither FANB nor any FANB Subsidiary nor any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder's fees, and no broker or finder has acted directly
or indirectly for FANB or any FANB Subsidiary in connection with this Agreement
and the Consolidation Agreement or the transactions contemplated hereby and
thereby.
(t) Fiduciary Activities. Except as set forth on Schedule 2(t), neither FANB
nor any FANB subsidiary has ever had any accounts for which it has acted as a
fiduciary including but not limited to accounts for which it has served as
trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor.
(u) No Defaults. Neither FANB nor any FANB Subsidiary is in default, nor has
any event occurred which, with the passage of time or the giving of notice, or
both, would constitute a default, under any material agreement, indenture, loan
agreement or other instrument to which it is a party or by which it or any of
its assets is bound or to which any of its assets is subject, the result of
which has had or could reasonably be expected to have a material adverse effect
upon FANB and the FANB Subsidiaries, taken as a whole. To the best of FANB's
knowledge, all parties with whom FANB or any FANB Subsidiary has material
leases, agreements or contracts or who owe to FANB or any FANB Subsidiary
material obligations other than with respect to those arising in the ordinary
course of the banking business of the FANB Subsidiaries are in compliance
therewith in all material respects.
(v) Environmental Liability. There is no legal, administrative, or other
proceeding, claim, or action of any nature seeking to impose, or that could
result in the imposition of, on FANB or any FANB Subsidiary, any liability
relating to the release of hazardous substances as defined under any local,
state or federal environmental statute, regulation or ordinance including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, pending or to the best of FANB's knowledge,
threatened against FANB or any FANB
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Subsidiary the result of which has had or could reasonably be expected to have a
material adverse effect upon FANB and FANB's Subsidiaries taken as a whole; to
the best of FANB's knowledge there is no reasonable basis for any such
proceeding, claim or action; and to the best of FANB's knowledge neither FANB
nor any FANB Subsidiary is subject to any agreement, order, judgment, or decree
by or with any court, governmental authority or third party imposing any such
environmental liability. There are no environmental assessments, reports,
studies or other related information with respect to the bank facilities or the
non-residential OREO properties.
3. REPRESENTATIONS AND WARRANTIES OF NORWEST. Norwest represents and
warrants to FANB as follows:
(a) Organization and Authority. Norwest is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
is duly qualified to do business and is in good standing in all jurisdictions
where its ownership or leasing of property or the conduct of its business
requires it to be so qualified and failure to be so qualified would have a
material adverse effect on Norwest and its subsidiaries taken as a whole and has
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted. Norwest is registered as a bank
holding company with the Federal Reserve Board under the BHC Act.
(b) Norwest Subsidiaries. Schedule 3(b) sets forth a complete and correct
list as of December 31, 1993, of Norwest's Significant Subsidiaries (as defined
in Regulation S-X promulgated by the SEC) (individually a "Norwest Subsidiary"
and collectively the "Norwest Subsidiaries"), all shares of the outstanding
capital stock of each of which, except as set forth in Schedule 3(b), are owned
directly or indirectly by Norwest. No equity security of any Norwest Subsidiary
is or may be required to be issued to any person or entity other than Norwest by
reason of any option, warrant, scrip, right to subscribe to, call or commitment
of any character whatsoever relating to, or security or right convertible into,
shares of any capital stock of such subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any Norwest Subsidiary is
bound to issue additional shares of its capital stock, or options, warrants or
rights to purchase or acquire any additional shares of its capital stock.
Subject to 12 U.S.C. (S) 55 (1982), all of such shares so owned by Norwest are
fully paid and nonassessable and are owned by it free and clear of any lien,
claim, charge, option, encumbrance or agreement with respect thereto. Each
Norwest Subsidiary is a corporation or national banking association duly
organized, validly existing, duly qualified to do business and in good standing
under the laws of its jurisdiction of incorporation, and has corporate power and
authority to own or lease its properties and assets and to carry on its business
as it is now being conducted.
(c) Norwest Capitalization. The authorized capital stock of Norwest consists
of (i) 5,000,000 shares of Preferred Stock, without par value, of which as of
the close of business on June 30, 1994, 1,127,125 shares of 10.24% Cumulative
Preferred Stock at $100 stated value and 1,143,750 shares of Cumulative
Convertible Preferred Stock, Series B, at $200 stated value and 35,125 shares of
ESOP Cumulative Convertible Preferred Stock, at $1,000 stated value were
outstanding, and (ii) 500,000,000 shares of Common Stock, $1-2/3 par value, of
which as of the close of business on June 30, 1994, 315,537,227 shares were
outstanding and 7,627,247 shares were held in the treasury.
(d) Authorization. Norwest has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of
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this Agreement by Norwest and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Norwest. No
approval or consent by the stockholders of Norwest is necessary for the
execution and delivery of this Agreement and the Consolidation Agreement and the
consummation of the transactions contemplated hereby and thereby. Subject to
such approvals of government agencies and other governing boards having
regulatory authority over Norwest as may be required by statute or regulation,
this Agreement is a valid and binding obligation of Norwest enforceable against
Norwest in accordance with its terms.
Neither the execution, delivery and performance by Norwest of this Agreement
or the Consolidation Agreement, nor the consummation of the transactions
contemplated hereby and thereby, nor compliance by Norwest with any of the
provisions hereof or thereof, will (i) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the creation of, any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Norwest or any Norwest Subsidiary under any of the terms, conditions or
provisions of (x) its certificate of incorporation or by-laws or (y) any
material note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which Norwest or any Norwest
Subsidiary is a party or by which it may be bound, or to which Norwest or any
Norwest Subsidiary or any of the properties or assets of Norwest or any Norwest
Subsidiary may be subject, or (ii) subject to compliance with the statutes and
regulations referred to in the next paragraph, to the best knowledge of Norwest,
violate any judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to Norwest or any Norwest Subsidiary or any of their
respective properties or assets.
Other than in connection with or in compliance with the provisions of the
Securities Act, the Exchange Act, the securities or blue sky laws of the various
states or filings, consents, reviews, authorizations, approvals or exemptions
required under the BHC Act or the HSR Act, and filings required to effect the
Consolidation under the National Bank Act, no notice to, filing with, exemption
or review by, or authorization, consent or approval of, any public body or
authority is necessary for the consummation by Norwest of the transactions
contemplated by this Agreement and the Consolidation Agreement.
(e) Norwest Financial Statements. The consolidated balance sheets of Norwest
and Norwest's subsidiaries as of December 31, 1993 and 1992 and related
consolidated statements of income, stockholders' equity and cash flows for the
three years ended December 31, 1993, together with the notes thereto, certified
by KPMG Peat Marwick, L.L.P. and included in Norwest's Annual Report on Form 10-
K for the fiscal year ended December 31, 1993 as amended by Form 10-K/A dated
May 13, 1994 (the "Norwest 10-K") as filed with the SEC, and the unaudited
consolidated balance sheets of Norwest and its subsidiaries as of June 30, 1994
and the related unaudited consolidated statements of income and cash flows for
the six months then ended included in Norwest's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1994, as filed with the SEC (collectively,
the "Norwest Financial Statements"), have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis and
present fairly (subject, in the case of financial statements for interim
periods, to normal recurring adjustments) the consolidated financial position of
Norwest and its subsidiaries at the dates and the consolidated results of
operations, changes in financial position and cash flows of Norwest and its
subsidiaries for the periods stated therein.
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(f) Reports. Since December 31, 1988, Norwest and each Norwest Subsidiary
has filed all reports, registrations and statements, together with any required
amendments thereto, that it was required to file with (i) the SEC, including,
but not limited to, Forms 10-K, Forms 10-Q and proxy statements, (ii) the
Federal Reserve Board, (iii) the FDIC, (iv) the Comptroller and (v) any
applicable state securities or banking authorities. All such reports and
statements filed with any such regulatory body or authority are collectively
referred to herein as the "Norwest Reports". As of their respective dates, the
Norwest Reports complied in all material respects with all the rules and
regulations promulgated by the SEC, the Federal Reserve Board, the FDIC, the
Comptroller and any applicable state securities or banking authorities, as the
case may be, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(g) Properties and Leases. Except as may be reflected in the Norwest
Financial Statements and except for any lien for current taxes not yet
delinquent, Norwest and each Norwest Subsidiary has good title free and clear of
any material liens, claims, charges, options, encumbrances or similar
restrictions to all the real and personal property reflected in Norwest's
consolidated balance sheet as of June 30, 1994 included in Norwest's Quarterly
Report on Form 10-Q for the period then ended, and all real and personal
property acquired since such date, except such real and personal property has
been disposed of in the ordinary course of business. All leases of real
property and all other leases material to Norwest or any Norwest Subsidiary
pursuant to which Norwest or such Norwest Subsidiary, as lessee, leases real or
personal property, are valid and effective in accordance with their respective
terms, and there is not, under any such lease, any material existing default by
Norwest or such Norwest Subsidiary or any event which, with notice or lapse of
time or both, would constitute such a material default. Substantially all
Norwest's and each Norwest Subsidiary's buildings and equipment in regular use
have been well maintained and are in good and serviceable condition, reasonable
wear and tear excepted.
(h) Taxes. Each of Norwest and the Norwest Subsidiaries has filed all
material federal, state, county, local and foreign tax returns, including
information returns, required to be filed by it, and paid or made adequate
provision for the payment of all taxes owed by it, including those with respect
to income, withholding, social security, unemployment, workers compensation,
franchise, ad valorem, premium, excise and sales taxes, and no taxes shown on
such returns to be owed by it or assessments received by it are delinquent. The
federal income tax returns of Norwest and the Norwest Subsidiaries for the
fiscal year ended December 31, 1979, and for all fiscal years prior thereto, are
for the purposes of routine audit by the Internal Revenue Service closed because
of the statute of limitations, and no claims for additional taxes for such
fiscal years are pending. Except only as set forth on Schedule 3(h), (i)
neither Norwest nor any Norwest Subsidiary is a party to any pending action or
proceeding, nor to Norwest's knowledge is any such action or proceeding
threatened by any governmental authority, for the assessment or collection of
taxes, interest, penalties, assessments or deficiencies which could reasonably
be expected to have any material adverse effect on Norwest and its subsidiaries
taken as a whole, and (ii) no issue has been raised by any federal, state, local
or foreign taxing authority in connection with an audit or examination of the
tax returns, business or properties of Norwest or any Norwest Subsidiary which
has not been settled, resolved and fully satisfied, or adequately reserved for.
Each of Norwest and the Norwest Subsidiaries has paid all taxes owed or which it
is required to withhold from amounts owing to employees, creditors or other
third parties.
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(i) Absence of Certain Changes. Since December 31, 1993, there has been no
change in the business, financial condition or results of operations of Norwest
or any Norwest Subsidiary which has had, or may reasonably be expected to have,
a material adverse effect on the business, financial condition or results of
operations of Norwest and its subsidiaries taken as a whole.
(j) Commitments and Contracts. Except as set forth on Schedule 3(j), as of
June 30, 1994 neither Norwest nor any Norwest Subsidiary is a party or subject
to any of the following (whether written or oral, express or implied):
(i) any labor contract or agreement with any labor union;
(ii) any contract not made in the ordinary course of business
containing covenants which materially limit the ability of Norwest or any
Norwest Subsidiary to compete in any line of business or with any person or
which involve any material restriction of the geographical area in which,
or method by which, Norwest or any Norwest Subsidiary may carry on its
business (other than as may be required by law or applicable regulatory
authorities);
(iii) any other contract or agreement which is a "material contract"
within the meaning of Item 601(b)(10) of Regulation S-K.
(k) Litigation and Other Proceedings. Neither Norwest nor any Norwest
Subsidiary is a party to any pending or, to the best knowledge of Norwest,
threatened, claim, action, suit, investigation or proceeding, or is subject to
any order, judgment or decree, except for matters which, in the aggregate, will
not have, or cannot reasonably be expected to have, a material adverse effect on
the business, financial condition or results of operations of Norwest and its
subsidiaries taken as a whole.
(l) Insurance. Norwest and each Norwest Subsidiary is presently insured or
self insured, and during each of the past five calendar years (or during such
lesser period of time as Norwest has owned such Norwest Subsidiary) has been
insured or self-insured, for reasonable amounts with financially sound and
reputable insurance companies against such risks as companies engaged in a
similar business would, in accordance with good business practice, customarily
be insured and has maintained all insurance required by applicable law and
regulation.
(m) Compliance with Laws. Norwest and each Norwest Subsidiary has all
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, federal, state, local or foreign
governmental or regulatory bodies that are required in order to permit it to own
or lease its properties or assets and to carry on its business as presently
conducted and that are material to the business of Norwest or such Subsidiary;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect, and to the best knowledge of Norwest, no suspension or
cancellation of any of them is threatened; and all such filings, applications
and registrations are current. The conduct by Norwest and each Norwest
Subsidiary of its business and the condition and use of its properties does not
violate or infringe, in any respect material to any such business, any
applicable domestic (federal, state or local) or foreign law, statute,
ordinance, license or regulation. Neither Norwest nor any Norwest Subsidiary is
in default under any order, license, regulation or demand of any federal, state,
municipal or other governmental agency or with respect to any order, writ,
injunction or decree of any court. Except for statutory or regulatory
restrictions of general application, no federal, state, municipal or other
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governmental authority has placed any restrictions on the business or properties
of Norwest or any Norwest Subsidiary which reasonably could be expected to have
a material adverse effect on the business or properties of Norwest and its
subsidiaries taken as a whole.
(n) Labor. No work stoppage involving Norwest or any Norwest Subsidiary is
pending or, to the best knowledge of Norwest, threatened. Neither Norwest nor
any Norwest Subsidiary is involved in, or threatened with or affected by, any
labor dispute, arbitration, lawsuit or administrative proceeding which could
materially and adversely affect the business of Norwest or such Norwest
Subsidiary. Except as set forth on Schedule 3(j), employees of Norwest and the
Norwest Subsidiaries are not represented by any labor union nor are any
collective bargaining agreements otherwise in effect with respect to such
employees.
(o) Norwest Benefit Plans.
(i) As of September 1, 1994, the only "employee benefit plans" within
the meaning of Section 3(3) of ERISA for which Norwest or any Norwest
Subsidiary acts as plan sponsor as defined in ERISA Section 3(16)(B) with
respect to which any liability under ERISA or otherwise exists or may be
incurred by Norwest or any Norwest Subsidiary are those set forth on
Schedule 3(o) (the "Norwest Plans"). No Norwest Plan is a "multi-employer
plan" within the meaning of Section 3(37) of ERISA.
(ii) Each Norwest Plan is and has been in all material respects
operated and administered in accordance with its provisions and applicable
law. Except as set forth on Schedule 3(o), Norwest or the Norwest
Subsidiaries have received favorable determination letters from the
Internal Revenue Service under the provisions of the Tax Equity and Fiscal
Responsibility Act ("TEFRA"), the Deficit Reduction Act ("DEFRA") and the
Retirement Equity Act ("REA") for each of the Norwest Plans to which the
qualification requirements of Section 401(a) of the Code apply. Norwest
knows of no reason that any Norwest Plan which is subject to the
qualification provisions of Section 401(a) of the Code is not "qualified"
within the meaning of Section 401(a) of the Code and that each related
trust is not exempt from taxation under Section 501(a) of the Code, except
that any such Norwest Plan may not have been amended to comply with TRA and
other recent legislation and regulations, although each such Norwest Plan
is within the remedial amendment period during which retroactive amendment
may be made.
(iii) The present value of all benefits vested and all benefits
accrued under each Norwest Plan which is subject to Title IV of ERISA did
not, in each case, as determined for purposes of reporting on Schedule B to
the Annual Report on Form 5500 of each such Norwest Plan as of the end of
the most recent Plan year, exceed the value of the assets of the Norwest
Plans allocable to such vested or accrued benefits.
(iv) Except as set forth on Schedule 3(o), and to the best knowledge
of Norwest, no Norwest Plan or any trust created thereunder, nor any
trustee, fiduciary or administrator thereof, has engaged in a "prohibited
transaction", as such term is defined in Section 4975 of the Code or
Section 406 of ERISA or violated fiduciary standards under Part 4 of Title
I of ERISA, which could subject, to the best knowledge of Norwest, such
Norwest Plan or trust, or any trustee, fiduciary or administrator thereof,
or any party dealing with any such Norwest Plan or trust, to the tax or
penalty on prohibited
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transactions imposed by said Section 4975 or would result in material
liability to Norwest and its subsidiaries taken as a whole.
(v) Except as set forth on Schedule 3(o), no Norwest Plan which is
subject to Title IV of ERISA or any trust created thereunder has been
terminated, nor have there been any "reportable events" as that term is
defined in Section 4043 of ERISA with respect to any Norwest Plan, other
than those events which may result from the transactions contemplated by
this Agreement and the Consolidation Agreement.
(vi) No Norwest Plan or any trust created thereunder has incurred any
"accumulated funding deficiency", as such term is defined in Section 412 of
the Code (whether or not waived), during the last five Norwest Plan years
which would result in a material liability.
(vii) Neither the execution and delivery of this Agreement and the
Consolidation Agreement nor the consummation of the transactions
contemplated hereby and thereby will (i) result in any material payment
(including, without limitation, severance, unemployment compensation,
golden parachute or otherwise) becoming due to any director or employee or
former employee of Norwest under any Norwest Plan or otherwise, (ii)
materially increase any benefits otherwise payable under any Norwest Plan
or (iii) result in the acceleration of the time of payment or vesting of
any such benefits to any material extent.
(p) Registration Statement, etc. None of the information regarding
Norwest and its subsidiaries supplied or to be supplied by Norwest for inclusion
in (i) the Registration Statement, (ii) the Proxy Statement, or (iii) any other
documents to be filed with the SEC or any regulatory authority in connection
with the transactions contemplated hereby or by the Consolidation Agreement
will, at the respective times such documents are filed with the SEC or any
regulatory authority and, in the case of the Registration Statement, when it
becomes effective and, with respect to the Proxy Statement, when mailed, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein not misleading
or, in the case of the Proxy Statement or any amendment thereof or supplement
thereto, at the time of the meeting of shareholders referred to in paragraph
4(c), be false or misleading with respect to any material fact, or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for such meeting.
All documents which Norwest and the Norwest Subsidiaries are responsible for
filing with the SEC and any other regulatory authority in connection with the
Consolidation will comply as to form in all material respects with the
provisions of applicable law.
(q) Brokers and Finders. Neither Norwest nor any Norwest Subsidiary nor
any of their respective officers, directors or employees has employed any broker
or finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder's fees, and no broker or finder has acted directly
or indirectly for Norwest or any Norwest Subsidiary in connection with this
Agreement and the Consolidation Agreement or the transactions contemplated
hereby and thereby.
(r) No Defaults. Neither Norwest nor any Norwest Subsidiary is in
default, nor has any event occurred which, with the passage of time or the
giving of notice, or both, would constitute a default under any material
agreement, indenture, loan agreement or other instrument to which it is a party
or by which it or any of its assets is bound or to which any of its assets is
subject, the result
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of which has had or could reasonably be expected to have a material adverse
effect upon Norwest and its subsidiaries taken as a whole. To the best of
Norwest's knowledge, all parties with whom Norwest or any Norwest Subsidiary has
material leases, agreements or contracts or who owe to Norwest or any Norwest
Subsidiary material obligations other than with respect to those arising in the
ordinary course of the banking business of the Norwest Subsidiaries are in
compliance therewith in all material respects.
(s) Environmental Liability. There is no legal, administrative, or other
proceeding, claim, or action of any nature seeking to impose, or that could
result in the imposition, on Norwest or any Norwest Subsidiary of any liability
relating to the release of hazardous substances as defined under any local,
state or federal environmental statute, regulation or ordinance including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, pending or to the best of Norwest's
knowledge, threatened against Norwest or any Norwest Subsidiary, the result of
which has had or could reasonably be expected to have a material adverse effect
upon Norwest and its subsidiaries taken as a whole; to the best of Norwest's
knowledge there is no reasonable basis for any such proceeding, claim or action;
and to the best of Norwest's knowledge neither Norwest nor any Norwest
Subsidiary is subject to any agreement, order, judgment, or decree by or with
any court, governmental authority or third party imposing any such environmental
liability.
(t) Consolidation Co. As of the Closing Date, Consolidation Co. will be an
interim national banking association duly organized, validly existing, duly
qualified to do business and in good standing under the laws of the United
States.
4. COVENANTS OF FANB. FANB covenants and agrees with Norwest as follows:
(a) Except as otherwise permitted or required by this Agreement, from the
date hereof until the Effective Time of the Consolidation, FANB, and each FANB
Subsidiary will: maintain its corporate existence in good standing; maintain
the general character of its business and conduct its business in its ordinary
and usual manner; extend credit in accordance with existing lending policies,
except that it shall not, without the prior written consent of Norwest, make any
new loan or modify, restructure or renew any existing loan (except pursuant to
commitments made prior to the date of this Agreement) to any borrower if the
amount of the resulting loan, when aggregated with all other loans or extensions
of credit to such person, would be in excess of $100,000; maintain proper
business and accounting records in accordance with generally accepted
principles; maintain its properties in good repair and condition, ordinary wear
and tear excepted; maintain in all material respects presently existing
insurance coverage; use its best efforts to preserve its business organization
intact, to keep the services of its present principal employees and to preserve
its good will and the good will of its suppliers, customers and others having
business relationships with it; use its best efforts to obtain any approvals or
consents required to maintain existing leases and other contracts in effect
following the Consolidation; comply in all material respects with all laws,
regulations, ordinances, codes, orders, licenses and permits applicable to the
properties and operations of FANB and each FANB Subsidiary the non-compliance
with which reasonably could be expected to have a material adverse effect on
FANB and the FANB Subsidiaries taken as a whole; and permit Norwest and its
representatives (including KPMG Peat Marwick, L.L.P.) to examine its and its
subsidiaries books, records and properties and to interview officers, employees
and agents at all reasonable times when it is open for business. No such
examination by Norwest or its representatives either before or after the date of
this Agreement shall in any way affect,
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diminish or terminate any of the representations, warranties or covenants of
FANB herein expressed.
(b) Except as otherwise contemplated or required by this Agreement, from the
date hereof until the Effective Time of the Consolidation, FANB and each FANB
subsidiary will not (without the prior written consent of Norwest): amend or
otherwise change its Articles of Association or by-laws; issue or sell or
authorize for issuance or sale, or grant any options or make other agreements
with respect to the issuance or sale or conversion of, any shares of its capital
stock, phantom shares or other share-equivalents, or any other of its
securities; authorize or incur any long-term debt (other than deposit
liabilities); mortgage, pledge or subject to lien or other encumbrance any of
its properties, except in the ordinary course of business; enter into any
material agreement, contract or commitment in excess of $20,000 except banking
transactions in the ordinary course of business and in accordance with policies
and procedures in effect on the date hereof; make any investments except
investments made by bank subsidiaries in the ordinary course of business for
terms of up to one year and in amounts of $100,000 or less; amend or terminate
any Plan except as required by law; make any contributions to any Plan except as
required by the terms of such Plan in effect as of the date hereof; declare, set
aside, make or pay any dividend or other distribution with respect to its
capital stock except payment of the dividend declared by FANB on October 24,
1994 and except any dividend declared by a subsidiary's Board of Directors in
accordance with applicable law and regulation; redeem, purchase or otherwise
acquire, directly or indirectly, any of the capital stock of FANB; increase the
compensation of any officers, directors or executive employees, except pursuant
to existing compensation plans and practices; sell or otherwise dispose of any
shares of the capital stock of any FANB Subsidiary; or sell or otherwise dispose
of any of its assets or properties other than in the ordinary course of
business.
(c) The Board of Directors of FANB will duly call, and will cause to be held
not later than fourty-five (45) days following the effective date of the
Registration Statement referred to in paragraph 5(c) hereof, but in no event
later than 22 "business days" (defined as any day on which the SEC accepts
documents for filing) after the date Norwest proposes to mail its Prospectus to
shareholders of FANB, a meeting of its shareholders and will direct that this
Agreement and the Consolidation Agreement be submitted to a vote at such
meeting. The Board of Directors of FANB will (i) cause proper notice of such
meeting to be given to its shareholders in compliance with the National Bank Act
and other applicable law and regulation, (ii) recommend by the affirmative vote
of the Board of Directors a vote in favor of approval of this Agreement and the
Consolidation Agreement, and (iii) use its best efforts to solicit from its
shareholders proxies in favor thereof.
(d) FANB will furnish or cause to be furnished to Norwest all the information
concerning FANB and its subsidiaries required for inclusion in the Registration
Statement referred to in paragraph 5(c) hereof, or any statement or application
made by Norwest to any governmental body in connection with the transactions
contemplated by this Agreement. Any financial statement for any fiscal year
provided under this paragraph must include the audit opinion and the consent of
McGladrey and Pullen to use such opinion in such Registration Statement.
(e) FANB will take all necessary corporate and other action and use its best
efforts to obtain all approvals of regulatory authorities, consents and other
approvals required of FANB to carry out the transactions contemplated by this
Agreement and will cooperate with Norwest to obtain all such approvals and
consents required of Norwest.
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(f) FANB will use its best efforts to deliver to the Closing all opinions,
certificates and other documents required to be delivered by it at the Closing.
(g) FANB will hold in confidence all documents and information concerning
Norwest and its subsidiaries furnished to FANB and its representatives in
connection with the transactions contemplated by this Agreement and will not
release or disclose such information to any other person, except as required by
law and except to FANB's outside professional advisers in connection with this
Agreement, with the same undertaking from such professional advisers. If the
transactions contemplated by this Agreement shall not be consummated, such
confidence shall be maintained and such information shall not be used in
competition with Norwest (except to the extent that such information can be
shown to be previously known to FANB, in the public domain, or later acquired by
FANB from other legitimate sources) and, upon request, all such documents, any
copies thereof and extracts therefrom shall immediately thereafter be returned
to Norwest.
(h) Neither FANB, nor any FANB Subsidiary, nor any director, officer,
representative or agent thereof, will, directly or indirectly, solicit,
authorize the solicitation of or enter into any discussions with any
corporation, partnership, person or other entity or group (other than Norwest)
concerning any offer or possible offer (i) to purchase any shares of common
stock, any option or warrant to purchase any shares of common stock, any
securities convertible into any shares of such common stock, or any other equity
security of FANB or any FANB Subsidiary, (ii) to make a tender or exchange offer
for any shares of such common stock or other equity security, (iii) to purchase,
lease or otherwise acquire the assets of FANB or any FANB Subsidiary except in
the ordinary course of business, or (iv) to consolidate, consolidate or
otherwise combine with FANB or any FANB Subsidiary. If any corporation,
partnership, person or other entity or group makes an offer or inquiry to FANB
or any FANB Subsidiary concerning any of the foregoing, FANB or such FANB
Subsidiary will promptly disclose such offer or inquiry, including the terms
thereof, to Norwest.
(i) FANB shall consult with Norwest as to the form and substance of any
proposed press release or other proposed public disclosure of matters related to
this Agreement or any of the transactions contemplated hereby.
(j) FANB and each FANB Subsidiary will take all action necessary or required
(i) to terminate or amend, if requested by Norwest, all qualified pension and
welfare benefit plans and all non-qualified benefit plans and compensation
arrangements as of the Effective Date of the Consolidation, (ii) to amend the
Plans to comply with the provisions of the TRA and regulations thereunder and
other applicable law, and (iii) to submit application to the Internal Revenue
Service for a favorable determination letter for each of the Plans which is
subject to the qualification requirements of Section 401(a) of the Code prior to
the Effective Date of the Consolidation.
(k) Neither FANB nor any FANB Subsidiary shall take any action which with
respect to FANB would disqualify the Consolidation as a "pooling of interests"
for accounting purposes.
(l) FANB shall use its best efforts to obtain and deliver at least 32 days
prior to the Effective Date of the Consolidation signed representations
substantially in the form attached hereto as Exhibit B to Norwest by each
executive officer, director or shareholder of FANB who may reasonably be deemed
an "affiliate" of FANB within the meaning of such term as used in Rule 145 under
the Securities Act.
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(m) FANB shall establish such additional accruals and reserves as may be
necessary to conform FANB's accounting and credit loss reserve practices and
methods to those of Norwest and Norwest's plans with respect to the conduct of
FANB's business following the Consolidation and to provide for the costs and
expenses relating to the consummation by FANB of the Consolidation and the other
transactions contemplated by this Agreement.
(n) FANB shall obtain, at its sole expense, Phase I environmental assessments
for each bank facility owned by FANB and each non-residential OREO property.
Oral reports of such environmental assessments shall be delivered to Norwest no
later than four (4) weeks and written reports shall be delivered to Norwest no
later than eight (8) weeks from the date of this Agreement. FANB shall obtain,
at its sole expense, Phase II environmental assessments for properties
identified by Norwest on the basis of the results of such Phase I environmental
assessments.
(o) FANB shall obtain, at its sole expense, commitments for title insurance
and boundary surveys for each bank facility owned by FANB which shall be
delivered to Norwest no later than four (4) weeks from the date of this
Agreement.
5. COVENANTS OF NORWEST. Norwest covenants and agrees with FANB as follows:
(a) From the date hereof until the Effective Time of the Consolidation,
Norwest will maintain its corporate existence in good standing; conduct, and
cause the Norwest Subsidiaries to conduct, their respective businesses in
compliance with all material obligations and duties imposed on them by all laws,
governmental regulations, rules and ordinances, and judicial orders, judgments
and decrees applicable to Norwest or the Norwest Subsidiaries, their businesses
or their properties; maintain all books and records of it and the Norwest
Subsidiaries, including all financial statements, in accordance with the
accounting principles and practices consistent with those used for the Norwest
Financial Statements, except for changes in such principles and practices
required under generally accepted accounting principles.
(b) Norwest will furnish to FANB all the information concerning Norwest
required for inclusion in a proxy statement or statements to be sent to the
shareholders of FANB, or in any statement or application made by FANB to any
governmental body in connection with the transactions contemplated by this
Agreement.
(c) As promptly as practicable after the execution of this Agreement, Norwest
will file with the SEC a registration statement on Form S-4 (the "Registration
Statement") under the Securities Act and any other applicable documents,
relating to the shares of Norwest Common Stock to be delivered to the
shareholders of FANB pursuant to the Consolidation Agreement, and will use its
best efforts to cause the Registration Statement to become effective. At the
time the Registration Statement becomes effective, the Registration Statement
will comply in all material respects with the provisions of the Securities Act
and the published rules and regulations thereunder, and will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not false or
misleading, and at the time of mailing thereof to the FANB shareholders, at the
time of the FANB shareholders' meeting referred to in paragraph 4(c) hereof and
at the Effective Time of the Consolidation the prospectus included as part of
the Registration Statement, as amended or supplemented by any amendment or
supplement filed by Norwest (hereinafter the "Prospectus"), will not contain any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not false or misleading; provided, however, that
none of the
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provisions of this subparagraph shall apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished by FANB or any FANB subsidiary for use in
the Registration Statement or the Prospectus.
(d) Norwest will file all documents required to be filed to list the Norwest
Common Stock to be issued pursuant to the Consolidation Agreement on the New
York Stock Exchange and the Chicago Stock Exchange and use its best efforts to
effect said listings.
(e) The shares of Norwest Common Stock to be issued by Norwest to the
shareholders of FANB pursuant to this Agreement and the Consolidation Agreement
will, upon such issuance and delivery to said shareholders pursuant to the
Consolidation Agreement, be duly authorized, validly issued, fully paid and
nonassessable. The shares of Norwest Common Stock to be delivered to the
shareholders of FANB pursuant to the Consolidation Agreement are and will be
free of any preemptive rights of the stockholders of Norwest.
(f) Norwest will file all documents required to obtain, prior to the
Effective Time of the Consolidation, all necessary Blue Sky permits and
approvals, if any, required to carry out the transactions contemplated by this
Agreement, will pay all expenses incident thereto and will use its best efforts
to obtain such permits and approvals.
(g) Norwest will take all necessary corporate and other action and file all
documents required to obtain and will use its best efforts to obtain all
approvals of regulatory authorities, consents and approvals required of it to
carry out the transactions contemplated by this Agreement and will cooperate
with FANB to obtain all such approvals and consents required by FANB.
(h) Norwest will hold in confidence all documents and information concerning
FANB and FANB's Subsidiaries furnished to it and its representatives in
connection with the transactions contemplated by this Agreement and will not
release or disclose such information to any other person, except as required by
law and except to its outside professional advisers in connection with this
Agreement, with the same undertaking from such professional advisers. If the
transactions contemplated by this Agreement shall not be consummated, such
confidence shall be maintained and such information shall not be used in
competition with FANB (except to the extent that such information can be shown
to be previously known to Norwest, in the public domain, or later acquired by
Norwest from other legitimate sources) and, upon request, all such documents,
copies thereof or extracts therefrom shall immediately thereafter be returned to
FANB.
(i) Norwest will file any documents or agreements required to be filed in
connection with the Consolidation under the National Bank Act.
(j) Norwest will use its best efforts to deliver to the Closing all opinions,
certificates and other documents required to be delivered by it at the Closing.
(k) Norwest shall consult with FANB as to the form and substance of any
proposed press release or other proposed public disclosure of matters related to
this Agreement or any of the transactions contemplated hereby.
(l) Norwest shall give FANB written notice of receipt of the regulatory
approvals referred to in paragraph 7(e).
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(m) For a period not exceeding fifteen days prior to the Closing Date,
Norwest will permit FANB and its representatives to examine its books, records
and properties and interview officers, employees and agents of Norwest at all
reasonable times when it is open for business. No such examination by FANB or
its representatives shall in any way affect, diminish or terminate any of the
representations, warranties or covenants of Norwest herein expressed.
6. CONDITIONS PRECEDENT TO OBLIGATION OF FANB. The obligation of FANB to
effect the Consolidation shall be subject to the satisfaction at or before the
Closing Date of the following further conditions, which may be waived in writing
by FANB:
(a) Except as they may be affected by transactions contemplated hereby and
except to the extent such representations and warranties are by their express
provisions made as of a specified date and except for activities or transactions
after the date of this Agreement made in the ordinary course of business and not
expressly prohibited by this Agreement, the representations and warranties
contained in paragraph 3 hereof shall be true and correct in all respects
material to Norwest and the Norwest Subsidiaries taken as a whole as if made at
the Closing Date.
(b) Norwest shall have, or shall have caused to be, performed and observed in
all material respects all covenants, agreements and conditions hereof to be
performed or observed by it and Consolidation Co. at or before the Closing Date.
(c) FANB shall have received a favorable certificate, dated as of the
Effective Date of the Consolidation, signed by the Chairman, the President or
any Executive Vice President or Senior Vice President and by the Secretary or
Assistant Secretary of Norwest, as to the matters set forth in subparagraphs (a)
and (b) of this paragraph 6.
(d) This Agreement and the Consolidation Agreement shall have been approved
by the affirmative vote of the holders of the percentage of the outstanding
shares of FANB required for approval of a plan of consolidation in accordance
with the provisions of FANB's Articles of Association and the National Bank Act.
(e) Norwest shall have received approval by the Federal Reserve Board and by
such other governmental agencies as may be required by law of the transactions
contemplated by this Agreement and the Consolidation Agreement and all waiting
and appeal periods prescribed by applicable law or regulation shall have
expired.
(f) No court or governmental authority of competent jurisdiction shall have
issued an order restraining, enjoining or otherwise prohibiting the consummation
of the transactions contemplated by this Agreement.
(g) The shares of Norwest Common Stock to be delivered to the stockholders of
FANB pursuant to this Agreement and the Consolidation Agreement shall have been
authorized for listing on the New York Stock Exchange and the Chicago Stock
Exchange.
(h) FANB shall have received an opinion, dated the Closing Date, of counsel
to FANB, substantially to the effect that, for federal income tax purposes: (i)
the Consolidation will constitute a reorganization within the meaning of
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code; (ii) no gain or loss will be
recognized by the holders of FANB Common Stock upon receipt of Norwest Common
Stock except for cash received in lieu of fractional shares; (iii) the basis of
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the Norwest Common Stock received by the shareholders of FANB will be the same
as the basis of FANB Common Stock exchanged therefor; and (iv) the holding
period of the shares of Norwest Common Stock received by the shareholders of
FANB will include the holding period of the FANB Common Stock, provided such
shares of FANB Common Stock were held as a capital asset as of the Effective
Time of the Consolidation.
(i) The Registration Statement (as amended or supplemented) shall have become
effective under the Securities Act and shall not be subject to any stop order,
and no action, suit, proceeding or investigation by the SEC to suspend the
effectiveness of the Registration Statement shall have been initiated and be
continuing, or have been threatened and be unresolved. Norwest shall have
received all state securities law or blue sky authorizations necessary to carry
out the transactions contemplated by this Agreement.
7. CONDITIONS PRECEDENT TO OBLIGATION OF NORWEST. The obligation of Norwest
to effect the Consolidation shall be subject to the satisfaction at or before
the Closing Date of the following conditions, which may be waived in writing by
Norwest:
(a) Except as they may be affected by transactions contemplated hereby and
except to the extent such representations and warranties are by their express
provisions made as of a specified date and except for activities or transactions
or events occurring after the date of this Agreement made in the ordinary course
of business and not expressly prohibited by this Agreement, the representations
and warranties contained in paragraph 2 hereof shall be true and correct in all
respects material to FANB and the FANB Subsidiaries taken as a whole as if made
at the Closing Date; notwithstanding the foregoing, FANB's representations
contained in paragraphs 2(m) and 2(o) shall be true and correct in all material
respects and shall not have omitted to state any material fact.
(b) FANB shall have, or shall have caused to be, performed and observed in
all material respects all covenants, agreements and conditions hereof to be
performed or observed by it at or before the Closing Date.
(c) This Agreement and the Consolidation Agreement shall have been approved
by the affirmative vote of the holders of the percentage of the outstanding
shares of FANB required for approval of a plan of consolidation in accordance
with the provisions of FANB's Articles of Incorporation and the National Bank
Act.
(d) Norwest shall have received a favorable certificate dated as of the
Effective Date of the Consolidation signed by the Chairman or President and by
the Secretary or Assistant Secretary of FANB, as to the matters set forth in
subparagraphs (a) through (c) of this paragraph 7.
(e) Norwest shall have received approval by all governmental agencies as may
be required by law of the transactions contemplated by this Agreement and the
Consolidation Agreement and all waiting and appeal periods prescribed by
applicable law or regulation shall have expired. No approvals, licenses or
consents granted by any regulatory authority shall contain any condition or
requirement relating to FANB or any FANB Subsidiary that, in the good faith
judgment of Norwest, is unreasonably burdensome to Norwest.
(f) FANB and each FANB Subsidiary shall have obtained any and all material
consents or waivers from other parties to loan agreements, leases or other
contracts material to FANB's or
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such subsidiary's business required for the consummation of the Consolidation,
and FANB and each FANB Subsidiary shall have obtained any and all material
permits, authorizations, consents, waivers and approvals required for the lawful
consummation by it of the Consolidation.
(g) No court or governmental authority of competent jurisdiction shall have
issued an order restraining, enjoining or otherwise prohibiting the consummation
of the transactions contemplated by this Agreement.
(h) The Consolidation shall qualify as a "pooling of interests" for
accounting purposes and Norwest shall have received from KPMG Peat Marwick,
L.L.P. and McGladrey and Pullen opinions to that effect.
(i) At any time since the date hereof the total number of shares of FANB
Common Stock outstanding and subject to issuance upon exercise (assuming for
this purpose that phantom shares and other share-equivalents constitute FANB
Common Stock) of all warrants, options, conversion rights, phantom shares or
other share-equivalents, other than any option held by Norwest, shall not have
exceeded 113,596.
(j) The Registration Statement (as amended or supplemented) shall have become
effective under the Securities Act and shall not be subject to any stop order,
and no action, suit, proceeding or investigation by the SEC to suspend the
effectiveness of the Registration Statement shall have been initiated and be
continuing, or have been threatened or be unresolved. Norwest shall have
received all state securities law or blue sky authorizations necessary to carry
out the transactions contemplated by this Agreement.
(k) Norwest shall have received from the Chief Executive Officer and Chief
Financial Officer of FANB a letter, dated as of the effective date of the
Registration Statement and updated through the date of Closing, in form and
substance satisfactory to Norwest, to the effect that:
(i) the interim quarterly financial statements of FANB included or
incorporated by reference in the Registration Statement are prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with the audited financial statements of FANB;
(ii) the amounts reported in the interim quarterly financial
statements of FANB agree with the general ledger of FANB;
(iii) the annual and quarterly financial statements of FANB and the
FANB Subsidiaries included in, or incorporated by reference in, the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the published
rules and regulations thereunder;
(iv) from June 30, 1994 (or, if later, since the date of the most
recent unaudited consolidated financial statements of FANB and the FANB
Subsidiaries as may be included in the Registration Statement) to a date 5
days prior to the effective date of the Registration Statement or 5 days
prior to the Closing, there are no increases in long-term debt, changes in
the capital stock or decreases in stockholders' equity of FANB and the FANB
Subsidiaries, except in each case for changes, increases or decreases which
the Registration Statement discloses have occurred or may occur or which
are described in
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such letters. For the same period, there have been no decreases in
consolidated net interest income, consolidated net interest income after
provision for credit losses, consolidated income before income taxes,
consolidated net income and net income per share amounts of FANB and the
FANB Subsidiaries, or in income before equity in undistributed income of
subsidiaries, in each case as compared with the comparable period of the
preceding year, except in each case for changes, increases or decreases
which the Registration Statement discloses have occurred or may occur or
which are described in such letters;
(v) they have reviewed certain amounts, percentages, numbers of
shares and financial information which are derived from the general
accounting records of FANB and the FANB Subsidiaries, which appear in the
Registration Statement under the certain captions to be specified by
Norwest, and have compared certain of such amounts, percentages, numbers
and financial information with the accounting records of FANB and the FANB
Subsidiaries and have found them to be in agreement with financial records
and analyses prepared by FANB included in the annual and quarterly
financial statements, except as disclosed in such letters.
(l) FANB and the FANB Subsidiaries considered as a whole shall not have
sustained since December 31, 1993 any material loss or interference with their
business from any civil disturbance or any fire, explosion, flood or other
calamity, whether or not covered by insurance.
(m) There shall be no reasonable basis for any proceeding, claim or action
of any nature seeking to impose, or that could result in the imposition on FANB
or any FANB Subsidiary of, any liability relating to the release of hazardous
substances as defined under any local, state or federal environmental statute,
regulation or ordinance including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended, which
has had or could reasonably be expected to have a material adverse effect upon
FANB and its subsidiaries taken as a whole.
(n) Since June 30, 1994, no change shall have occurred and no
circumstances shall exist which has had or might reasonably be expected to have
a material adverse effect on the financial condition, results of operations,
business or prospects of FANB and the FANB Subsidiaries taken as a whole (other
than changes in banking laws or regulations, or interpretations thereof, that
affect the banking industry generally or changes in the general level of
interest rates).
(o) FANB shall have received an opinion, dated the Closing Date, of
counsel to FANB, substantially to the effect that, for federal income tax
purposes: (i) the Consolidation will constitute a reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code; (ii) no gain or
loss will be recognized by the holders of FANB Common Stock upon receipt of
Norwest Common Stock except for cash received in lieu of fractional shares;
(iii) the basis of the Norwest Common Stock received by the shareholders of FANB
will be the same as the basis of FANB Common Stock exchanged therefor; and (iv)
the holding period of the shares of Norwest Common Stock received by the
shareholders of FANB will include the holding period of the FANB Common Stock,
provided such shares of FANB Common Stock were held as a capital asset as of the
Effective Time of the Consolidation.
(p) FANB shall have corrected to Norwest's satisfaction all of the
regulatory compliance and violation of law problems and technical violations
identified by Norwest in its due diligence examination of FANB, including but
not limited to (i) errors or deficiencies in compliance with
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currency transaction reporting and exemption requirements of the Bank Secrecy
Act, (ii) errors in calculating and disclosing adjustments for adjustable rate
mortgages and other variable rate loans, (iii) omissions of or deficiencies in
required appraisal, flood insurance documentation, title insurance documentation
and corporate resolutions, (iv) deficiencies in disclosures relating to Truth in
Lending, RESPA, Fair Housing and escrows and (v) deficiencies in truth in Saving
disclosures, (vi) violations of Reg. O.
8. EMPLOYEE BENEFIT PLANS. Each person who is an employee of FANB or any
FANB Subsidiary as of the Effective Date of the Consolidation ("FANB Employees")
shall be eligible for participation in the employee welfare and retirement plans
of Norwest, as in effect from time to time, as follows:
(a) Employee Welfare Benefit Plans. Each FANB employee shall be eligible
for participation in the employee welfare benefit plans of Norwest listed below
subject to any eligibility requirements applicable to such plans (but not
subject to the new hire/rehire waiting period, unless prohibited by federal or
state law, and not subject to any pre-existing condition exclusions, except for
the Long Term Care Plan) and shall enter each plan not later than the first day
of the calendar quarter which begins at least 32 days after the Effective Date
of the Consolidation:
Medical Plan
Dental Plan
Vision Plan
Short Term Disability Plan
Long Term Disability Plan
Long Term Care Plan
Flexible Benefits Plan
Basic Group Life Insurance Plan
Group Universal Life Insurance Plan
Dependent Group Life Insurance Plan
Business Travel Accident Insurance Plan
Accidental Death and Dismemberment Plan
Severance Pay Plan
Vacation Program
For the purpose of determining each FANB Employee's benefit for the year in
which the Consolidation occurs under the Norwest vacation program, vacation
taken by an FANB Employee in the year in which the Consolidation occurs will be
deducted from the total Norwest benefit.
(b) Employee Retirement Benefit Plans.
Each FANB Employee shall be eligible for participation in the Norwest Savings-
Investment Plan (the "SIP"), subject to any eligibility requirements applicable
to the SIP (with full credit for years of past service to FANB and the FANB
Subsidiaries for the purpose of satisfying any eligibility and vesting periods
applicable to the SIP to the extent that such FANB Employee was given credit for
past service under the FANB 401(k) Plan, but not subject to the new hire/rehire
waiting period unless prohibited by federal or state law ), and shall enter the
SIP not later than the first day of the calendar quarter which begins at least
32 days after the Effective Date of the Consolidation.
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Each FANB Employee shall be eligible for participation, as a new employee, in
the Norwest Pension Plan under the terms thereof.
9. TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated at any time prior to the Closing Date:
(i) by mutual written consent of the parties hereto;
(ii) by either of the parties hereto upon written notice to the other
party if the Consolidation shall not have been consummated by September 1,
1995 unless such failure of consummation shall be due to the failure of the
party seeking to terminate to perform or observe in all material respects
the covenants and agreements hereof to be performed or observed by such
party; or
(iii) by FANB or Norwest upon written notice to the other party if
any court or governmental authority of competent jurisdiction shall have
issued a final order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
(b) Termination of this Agreement under this paragraph 9 shall not release,
or be construed as so releasing, either party hereto from any liability or
damage to the other party hereto arising out of the breaching party's wilful and
material breach of the warranties and representations made by it, or wilful and
material failure in performance of any of its covenants, agreements, duties or
obligations arising hereunder, and the obligations under paragraphs 4(g), 5(h)
and 10 shall survive such termination.
10. EXPENSES. All expenses in connection with this Agreement and the
transactions contemplated hereby, including without limitation legal and
accounting fees, incurred by FANB and FANB Subsidiaries shall be borne by FANB
and FANB Subsidiaries, and all such expenses incurred by Norwest shall be borne
by Norwest.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, but shall not be assignable by either party hereto without the prior
written consent of the other party hereto.
12. THIRD PARTY BENEFICIARIES. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto.
13. NOTICES. Any notice or other communication provided for herein or given
hereunder to a party hereto shall be in writing and shall be delivered in person
or shall be mailed by first class registered or certified mail, postage prepaid,
addressed as follows:
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If to Norwest:
Norwest Corporation
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Secretary
If to FANB:
Mr. Eugene Hickey
Chairman of the Board
2990 North Dobson Road
Chandler, AZ 85224
or to such other address with respect to a party as such party shall notify the
other in writing as above provided.
14. COMPLETE AGREEMENT. This Agreement and the Consolidation Agreement
contain the complete agreement between the parties hereto with respect to the
Consolidation and other transactions contemplated hereby and supersede all prior
agreements and understandings between the parties hereto with respect thereto.
15. CAPTIONS. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement.
16. WAIVER AND OTHER ACTION. Either party hereto may, by a signed
writing, give any consent, take any action pursuant to paragraph 9 hereof or
otherwise, or waive any inaccuracies in the representations and warranties by
the other party and compliance by the other party with any of the covenants and
conditions herein.
17. AMENDMENT. At any time before the Closing Date, the parties hereto,
by action taken by their respective Boards of Directors or pursuant to authority
delegated by their respective Boards of Directors, may amend this Agreement;
provided, however, that no amendment after approval by the shareholders of FANB
shall be made which changes in a manner adverse to such shareholders the
consideration to be provided to said shareholders pursuant to this Agreement and
the Consolidation Agreement.
18. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Minnesota.
19. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. No representation or
warranty contained in the Agreement or the Consolidation Agreement shall survive
the Consolidation or except as set forth in paragraph 9(b), the termination of
this Agreement. Paragraph 10 shall survive the Consolidation.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
NORWEST CORPORATION FIRST AMERICAN NATIONAL BANK
By: /s/ Kenneth R. Murray By: /s/ Paul A. Rose
----------------------------- ----------------------------
Its: Executive Vice President Its: President
----------------------------- ----------------------------
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EXHIBIT A
AGREEMENT AND PLAN OF CONSOLIDATION
THIS AGREEMENT AND PLAN OF CONSOLIDATION (the "Consolidation Agreement")
is dated as of _______________,1995, between FIRST AMERICAN NATIONAL BANK
("FANB") and NORWEST INTERIM BANK CHANDLER, NATIONAL ASSOCIATION
("Norwest Bank").
PREAMBLE
FANB and Norwest Bank acknowledge and confirm the following:
(a) FANB is a national banking association having its principal office and
place of business at 2990 Dobson Road, Chandler, AZ 85224.
(b) As of ________________, FANB had a capital of $283,990, divided into
113,596 shares of common stock, par value $2.50 per share ("FANB Common Stock"),
and surplus of $___________ and retained earnings of $___________.
(c) Norwest Bank is a national banking association having its principal
office and place of business at 2990 Dobson Road, Chandler, AZ 85224.
(d) As of ________________, Norwest Bank had a capital of $100,000,
divided into 1,000 shares of common stock, par value $100 per share ("Norwest
Bank Common Stock"), and surplus of $20,000.
(e) FANB and Norwest Corporation ("Norwest") have entered into an
Agreement dated as of November 21, 1994 (the "Reorganization Agreement"), a copy
of which has been presented to and approved by the Board of Directors of FANB
and Norwest Bank, which Reorganization Agreement contemplates the transactions
to be effected by this Consolidation Agreement.
(f) A majority of the Board of Directors of FANB and a majority of the
Board of Directors of Norwest Bank have duly approved this Consolidation
Agreement and authorized its execution.
(g) It is the intent of the parties hereto to effect a corporate
reorganization which qualifies as a tax-free reorganization pursuant to Section
368(a)(2)(E) of the Internal Revenue Code.
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AGREEMENTS
IN CONSIDERATION OF THE PREMISES, FANB and Norwest Bank make this
Consolidation Agreement and fix the terms and conditions of the consolidation of
FANB and Norwest Bank as follows:
SECTION 1
1.1 Pursuant to the authority of and in accordance with the provisions of
12 U.S.C. 215, FANB and Norwest Bank (hereinafter collectively called
"Consolidated or Consolidating Banks") shall be consolidated under the charter
of FANB.
1.2 The name of the consolidated bank (the "New Bank") shall continue to
be First American National Bank.
1.3 The consolidation shall be effective as of 12:01 a.m., Arizona time,
on the date specified in the certificate of approval to be issued by the
Comptroller of the Currency of the United States, under the seal of his office,
approving the consolidation (the "Effective Date").
1.4 The business of the New Bank shall be that of a national banking
association and shall be conducted at the main office of the New Bank, which
shall be located at 2990 North Dobson Road, Chandler, AZ 85224, and at its
legally established branches.
1.5 As of the Effective Date, the Articles of Association of the New Bank
shall read in their entirety as set forth in Appendix A attached hereto, and the
New Bank shall be authorized under such Articles of Association to issue 113,596
shares of common stock, par value $2.50 per share.
SECTION 2
As of the Effective Date:
2.1 The corporate existence of Norwest Bank and FANB shall be
consolidated, and the New Bank shall be deemed to be the same corporation as
each of the Consolidating Banks.
2.2 All rights, franchises, and interests of the Consolidating Banks in
and to every type of property (real, personal and mixed) and choses in action
shall be transferred to and vested in the New Bank by virtue of the
consolidation without any deed or other transfer. The New Bank, upon the
consolidation and without any order or other action on the part of any court or
otherwise, shall hold and enjoy all rights of property, franchises, and
interests, including appointments, designations, and nominations, and all other
rights
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and interests as trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver, and in every other fiduciary
capacity, in the same manner and to the same extent as such rights, franchises,
and interests were held or enjoyed by either of the Consolidating Banks at the
time of consolidation.
2.3 The New Bank shall be liable for all liabilities of every kind and
description, including liabilities arising out of the operation of a trust
department, of each of the Consolidating Banks existing as of the Effective
Date.
2.4 The amount of capital stock of the New Bank shall be $283,990, divided
into 113,596 shares of common stock, each of $2.50 par value, and at the time
the consolidation shall become effective, the New Bank shall have a surplus of
$_________ and retained earnings which, when combined with the capital and
surplus, will be equal to the combined capital structures of the Consolidating
Banks as stated in the preamble of this Consolidation Agreement, adjusted,
however, for the results of operations, and the payment of dividends, if any,
between December 31, 1994 and the Effective Date.
SECTION 3
3.1 Subject to the provisions of 12 USC (S) 215 regarding rights of
dissenting shareholders, the shares of common stock of the Consolidating Banks
issued and outstanding immediately prior to the Effective Date shall, as of the
Effective Date, by virtue of the consolidation and without any action on the
part of the holder or holders thereof, be converted as follows:
(a) Each share of FANB Common Stock outstanding immediately prior to the
time of consolidation and owned by a shareholder other than Company shall at
the time of consolidation, by virtue of the consolidation and without any
action on the part of the holder or holders thereof, be converted into a
number of shares of common stock of Norwest of the par value of $1 2/3 per
share ("Norwest Common Stock") determined by dividing 193,000 by the number
of shares of FANB Common Stock immediately prior to the Effective Time of
the Consolidation.
(b) As soon as practicable after the consolidation becomes effective, each
holder of a certificate for shares of FANB Common Stock outstanding
immediately prior to the time of consolidation shall be entitled, upon
surrender of such certificate for cancellation to Norwest Bank Minnesota,
National Association, as the designated agent of the New Bank (the "Agent"),
to receive a new certificate for the number of whole shares of Norwest
Common Stock to which such holder shall be entitled on the basis above set
forth. Until so surrendered each certificate which, immediately prior to the
time of consolidation, represented shares of FANB Common Stock shall not be
transferable on the books of the New Bank but shall be deemed (except for
the payment of dividends as provided below)
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to evidence ownership of the number of whole shares of Norwest Common Stock
into which such shares of FANB Common Stock have been converted on the
basis above set forth; provided, however, that, until the holder of such
certificate shall have surrendered the same for exchange as above set
forth, no dividend payable to holders of record of Norwest Common Stock as
of any date subsequent to the effective date of consolidation shall be paid
to such holder with respect to the Norwest Common Stock represented by such
certificate, but, upon surrender and exchange thereof as herein provided,
there shall be paid by the New Bank or the Agent to the record holder of
such certificate for Norwest Common Stock issued in exchange therefor an
amount with respect to such shares of Norwest Common Stock equal to all
dividends that shall have been paid or become payable to holders of record
of Norwest Common Stock between the effective date of consolidation and the
date of such exchange.
(c) If between the date of the Reorganization Agreement and the Effective
Time of the Merger (as defined in the Reorganization Agreement), shares of
Norwest Common Stock shall be changed into a different number of shares or
a different class of shares by reason of any reclassification,
recapitalization , split-up, combination, exchange of shares or
readjustment, or if a stock dividend thereon shall be declared with a
record date within such period, then the number of shares of Norwest Common
Stock into which a share of FANB Common Stock shall be converted on the
basis above set forth, will be appropriately and proportionately adjusted
so that the number of such shares of Norwest Common Stock into which a
share of FANB Common Stock shall be converted will equal the number of
shares of Norwest Common Stock which the holders of shares of FANB Common
Stock would have received pursuant to such reclassification,
recapitalization, split-up, combination, exchange of shares or
readjustment, or stock dividend had the record date therefor been
immediately following the time of Effective Time of the Merger.
(d) No fractional shares of Norwest Common Stock and no certificates or
scrip certificates therefor shall be issued to represent any such
fractional interest, and any holder of a fractional interest shall be paid
an amount of cash equal to the product obtained by multiplying the
fractional share interest to which such holder is entitled by the Norwest
Measurement Price.
(e) The presently outstanding 1,000 shares of Norwest Bank Common Stock
shall be deemed canceled and exchanged for cash in the amount of $120,000.
Shares of Norwest Bank Common Stock thereafter surrendered to the New Bank
shall be canceled and no further transfer or registering of Norwest Bank
Common Stock shall occur after the Effective Date.
3.2 From and after the Effective Date, there shall be no transfers on the
stock transfer books of Consolidated Banks of the shares of FANB Common Stock or
Norwest
A-32
<PAGE>
Bank Common Stock which were issued and outstanding immediately prior to the
Effective Date.
SECTION 4
4.1 The by-laws of FANB as they exist at the Effective Date shall continue
in full force as the by-laws of the New Bank until altered, amended, or repealed
as provided therein or as provided by law.
4.2 As of the Effective Date, the following named persons shall serve as
the Board of Directors of the New Bank until the next annual meeting of the
shareholders or until such time as their successors have been elected and have
qualified:
_____________________ __________________________
_____________________ __________________________
_____________________ __________________________
_____________________ __________________________
4.3 The officers of FANB holding office at the Effective Date shall
continue as the officers of the New Bank for the term prescribed in the by-laws
or until the Board of Directors otherwise shall determine.
4.4 From and after the Effective Date, the Articles of Association of the
Association shall read in their entirety as set forth in Appendix A attached
hereto and made a part hereof.
SECTION 5
5.1 This Consolidation Agreement shall be submitted to the shareholders of
FANB and Norwest Bank, respectively, for approval at meetings to be called and
held in accordance with the articles of incorporation of FANB and the articles
of association of Norwest Bank and in accordance with applicable provisions of
law. Such approval by the shareholders shall require the affirmative vote of
the shareholders of each of the Consolidating Banks owning at least two-thirds
of its capital stock outstanding.
SECTION 6
6.1 The consolidation shall be subject to and conditioned upon the
following:
(a) approval of this Consolidation Agreement by the shareholders of FANB
and Norwest Bank as required by law;
A-33
<PAGE>
(b) approval of the consolidation by all appropriate banking and
regulatory authorities and the satisfaction of all other requirements
prescribed by law necessary for consummation of the consolidation; and
(c) consummation of the merger of a wholly owned subsidiary of Norwest
into Company as defined in and contemplated by the Reorganization
Agreement.
6.2 At any time before the Effective Date, if any of the following
circumstances obtain, this Consolidation Agreement may be terminated, at the
election of FANB or Norwest Bank, by written notice from the party so electing
to the other, or the consummation of the consolidation may be postponed for such
period, and subject to such further rights of FANB and Norwest Bank, or either
of them, to terminate this Consolidation Agreement as FANB and Norwest Bank may
agree in writing:
(a) by mutual consent of the Boards of Directors of the Consolidating
Banks if consummation of the consolidation would be inadvisable in the
opinion of said Boards; or
(b) by action of the Board of Directors of any party hereto if the
Reorganization Agreement is terminated.
SECTION 7
7.1 FANB and Norwest Bank, by mutual consent of their respective Boards of
Directors, may amend this Consolidation Agreement before the Effective Date;
provided, however, that after this Consolidation Agreement has been approved by
the shareholders of FANB, no such amendment shall affect the rights of such
shareholders of FANB in a manner which is materially adverse to such
shareholders.
7.2 This Consolidation Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
A-34
<PAGE>
IN WITNESS WHEREOF, FANB and Norwest Bank have caused this Consolidation
Agreement to be executed by their respective duly authorized officers and their
corporate seals to be hereunto affixed as of the date first above written,
pursuant to a resolution of each Consolidating Bank's Board of Directors, acting
by a majority thereof.
(SEAL) FIRST AMERICAN NATIONAL BANK
ATTEST:
By:
-----------------------------
Its:
- -------------------------------- -----------------------------
Secretary
NORWEST INTERIM BANK
(NO SEAL) CHANDLER, NATIONAL
ASSOCIATION
ATTEST:
By:
-----------------------------
Its:
- -------------------------------- -----------------------------
Secretary
A-35
<PAGE>
STATE OF ARIZONA )
) ss
COUNTY OF ________________ )
On this _____ day of __________, 1994, before me, a Notary Public for the
State and County aforesaid, personally came ____________________ , as President,
and ____________________, as Secretary, of FIRST AMERICAN NATIONAL BANK, and
each in his or her said capacity acknowledged the foregoing instrument to be the
act and deed of said bank and the seal affixed thereto to be its seal.
WITNESS my official seal and signature this day and year aforesaid.
----------------------------------------
(Seal of Notary) Notary Public, __________________ County
My Commission Expires __________________
A-36
<PAGE>
STATE OF ARIZONA )
) ss
COUNTY OF ________________ )
On this _____ day of __________, 1994, before me, a Notary Public for the
State and County aforesaid, personally came ____________________ , as President
and ____________________, as Secretary, of NORWEST INTERIM BANK CHANDLER,
NATIONAL ASSOCIATION, and each in his or her said capacity acknowledged the
foregoing instrument to be the act and deed of said bank and the seal affixed
thereto to be its seal.
WITNESS my official seal and signature this day and year aforesaid.
----------------------------------------
(Seal of Notary) Notary Public, __________________ County
My Commission Expires __________________
A-37
<PAGE>
EXHIBIT B
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
Attn: Secretary
Gentlemen:
I have been advised that I might be considered to be an "affiliate," as
that term is defined for purposes of paragraphs (c) and (d) of Rule 145 ("Rule
145") promulgated by the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act") of First
American National Bank, a national banking association ("FANB").
Pursuant to an Agreement and Plan of Reorganization, dated as of November
18, 1994, (the "Reorganization Agreement"), between FANB and Norwest
Corporation, a Delaware corporation ("Norwest") it is contemplated that a
wholly-owned subsidiary of Norwest will consolidate with and into FANB (the
"Consolidation") and as a result, I will receive in exchange for each share of
Common Stock, par value $2.50 per share, of FANB ("FANB Common Stock") owned by
me immediately prior to the Effective Time of the Consolidation (as defined in
the Reorganization Agreement), a number of shares of Common Stock, par value $1
2/3 per share, of Norwest ("Norwest Common Stock"), as more specifically set
forth in the Reorganization Agreement.
I hereby agree as follows:
I will not offer to sell, transfer or otherwise dispose of any of the
shares of FANB Common Stock or Norwest Common Stock held by me during the 30
days prior to the Effective Time of the Consolidation.
I will not offer to sell, transfer or otherwise dispose of any of the
shares of Norwest Common Stock issued to me pursuant to the Consolidation (the
"Stock") except (a) in compliance with the applicable provisions of Rule 145,
(b) in a transaction that is otherwise exempt from the registration requirements
of the Securities Act, or (c) in an offering registered under the Securities
Act.
I will not sell, transfer or otherwise dispose of the Stock or in any way
reduce my risk relative to any shares of the Stock issued to me pursuant to the
Consolidation until such time as financial results covering at least 30 days of
post-Consolidation combined operations of FANB and Norwest have been published.
I consent to the endorsement of the Stock issued to me pursuant to the
Consolidation with a restrictive legend which will read substantially as
follows:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of 1933,
as amended (the "Act"), applies, and may be sold or otherwise transferred
only in compliance with the limitations of such
A-38
<PAGE>
Rule 145, or upon receipt by Norwest Corporation of an opinion of counsel
reasonably satisfactory to it that some other exemption from registration
under the Act is available, or pursuant to a registration statement under
the Act."
Norwest's transfer agent shall be given an appropriate stop transfer order
and shall not be required to register any attempted transfer of the shares of
the Stock, unless the transfer has been effected in compliance with the terms of
this letter agreement.
It is understood and agreed that this letter agreement shall terminate and
be of no further force and effect and the restrictive legend set forth above
shall be removed by delivery of substitute certificates without such legend, and
the related stop transfer restrictions shall be lifted forthwith, if (a) (i) any
such shares of Stock shall have been registered under the Securities Act for
sale, transfer or other disposition by me or on my behalf and are sold,
transferred or otherwise disposed of, or (ii) any such shares of Stock are sold
in accordance with the provisions of paragraphs (c), (e), (f) and (g) of Rule
144 promulgated under the Securities Act, or (iii) I am not at the time an
affiliate of Norwest and have been the beneficial owner of the Stock for at
least two years (or such other period as may be prescribed thereunder) and
Norwest has filed with the Commission all of the reports it is required to file
under the Securities Exchange Act of 1934, as amended, during the preceding
twelve months, or (iv) I am not and have not been for at least three months an
affiliate of Norwest and have been the beneficial owner of the Stock for at
least three years (or such other period as may be prescribed by the Securities
Act, and the rules and regulations promulgated thereunder), or (v) Norwest shall
have received an opinion of counsel acceptable to Norwest to the effect that the
stock transfer restrictions and the legend are not required, and (b) financial
results covering at least 30 days of post-Consolidation combined operations have
been published.
I have carefully read this letter agreement and the Reorganization
Agreement and have discussed their requirements and other applicable limitations
upon my ability to offer to sell, transfer or otherwise dispose of shares of the
Stock, to the extent I felt necessary, with my counsel or counsel for FANB.
Sincerely,
_________________________
A-39
<PAGE>
APPENDIX B
UNITED STATES CODE
TITLE 12, SECTION 215
<PAGE>
* * * * *
(B) LIABILITY OF CONSOLIDATED ASSOCIATION; CAPITAL STOCK; DISSENTING
SHAREHOLDERS
The consolidated association shall be liable for all liabilities of the
respective consolidating banks or associations. The capital stock of such
consolidated association shall not be less than that required under existing law
for the organization of a national bank in the place in which it is located:
Provided, That if such consolidation shall be voted for at such meetings by the
necessary majorities of the shareholders of each association and State bank
proposing to consolidate, and thereafter the consolidation shall be approved by
the Comptroller, any shareholder of any of the associations or State banks so
consolidated who has voted against such consolidation at the meeting of the
association or bank of which he is a stockholder or who has given notice in
writing at or prior to such meeting to the presiding officer that he dissents
from the plan of consolidation, shall be entitled to receive the value of the
shares so held by him when such consolidation is approved by the Comptroller
upon written request made to the consolidated association at any time before
thirty days after the date of consummation of the consolidation, accompanied by
the surrender of his stock certificates.
(C) VALUATION OF SHARES
The value of the shares of any dissenting shareholder shall be ascertained,
as of the effective date of the consolidation, by an appraisal made by a
committee of three persons, composed of (1) one selected by the vote of the
holders of the majority of the stock, the owners of which are entitled to
payment in cash; (2) one selected by the directors of the consolidated banking
association; and (3) one selected by the two so selected. The valuation agreed
upon by any two of the three appraisers shall govern. If the value so fixed
shall not be satisfactory to any dissenting shareholder who has requested
payment, that shareholder may, within five days after being notified of the
appraised value of his shares, appeal to the Comptroller, who shall cause a
reappraisal to be made which shall be final and binding as to the value of the
shares of the appellant.
(D) APPRAISAL BY COMPTROLLER; EXPENSES OF CONSOLIDATED ASSOCIATION; SALE AND
RESALE OF SHARES; STATE APPRAISAL AND CONSOLIDATION LAW
If, within ninety days from the date of consummation of the consolidation,
for any reason one or more of the appraisers is not selected as herein provided,
or the appraisers fail to determine the value of such shares, the Comptroller
shall upon written request of any interested party cause an appraisal to be made
which shall be final and binding on all parties. The expenses of the
Comptroller in making the reappraisal or the appraisal, as the case may be,
shall be paid by the consolidated banking association. The value of the shares
ascertained shall be promptly paid to the dissenting shareholders by the
consolidated banking association. Within thirty days after payment has been
made to all dissenting shareholders as provided for in this section the shares
of stock of the consolidated banking association which would have been delivered
to such dissenting shareholders had they not requested payment shall be sold by
the consolidated banking association at an advertised public auction, unless
some other method of sale is approved by the Comptroller, and the consolidated
banking association shall have the rights to purchase any of such shares at such
public auction, if it is the highest bidder therefor, for the purpose of
reselling such shares within thirty days thereafter to such person or persons
and at such price not less than par as its
B-1
<PAGE>
board of directors by resolution may determine. If the shares are sold at public
auction at a price greater than the amount paid to the dissenting shareholder
the excess in such sale price shall be determined in the manner prescribed by
the law of the State in such cases, rather than as provided in this section, if
such provision is made in the State law; and no such consolidation shall be in
contravention of the law of the State under which such bank is incorporated.
B-2
<PAGE>
APPENDIX C
BANKING CIRCULAR 259
<PAGE>
BC-259
BANKING ISSUANCE
- --------------------------------------------------------------------------------
COMPTROLLER OF THE CURRENCY
ADMINISTRATOR OF NATIONAL BANKS
- --------------------------------------------------------------------------------
Type: Banking Circular Subject: Stock Appraisals
- --------------------------------------------------------------------------------
TO: Chief Executive Officers of National Banks, Deputy
Comptrollers (District), Department and Division Heads, and
Examining Personnel
PURPOSE
- -------
This banking circular informs all national banks of the valuation methods used
by the Office of the Comptroller of the Currency (OCC) to estimate the value of
a bank's shares when requested to do so by a shareholder dissenting to the
conversion, merger, or consolidation of its bank. The results of appraisals
performed by the OCC between January 1, 1985 and September 30, 1991 are also
summarized.
References: 12 U.S.C. 214a, 215 and 215a; 12 CFR 11.590 (Item 2)
BACKGROUND
- ----------
Under 12 U.S.C. Sections 214a, a shareholder dissenting from a conversion,
consolidation, or merger involving a national bank is entitled to receive the
value of his or her shares from the resulting bank. A valuation of the shares
shall be made by a committee of three appraisers (a representative of the
dissenting shareholder, a representative of the resulting bank, and a third
appraiser selected by the other two). If the committee is formed and renders an
appraisal that is acceptable to the dissenting shareholder, the process is
complete and the appraised value of the shares is paid to the dissenting
shareholder by the resulting bank. If, for any reason, the committee is not
formed or if it renders an appraisal that is not acceptable to the dissenting
shareholder, an interested party may request an appraisal by the Office of the
Comptroller of the Currency (OCC). 12 U.S.C. Section 215 provides these
appraisal rights to any shareholder dissenting to a consolidation. Any
dissenting shareholder of a target bank in a merger is also entitled to these
appraisal rights pursuant to 12 U.S.C. Section 215a.
- --------------------------------------------------------------------------------
Date: March 5, 1992
The above provides only a general overview of the appraisal process. The
specific requirements of the process are set forth in the statutes themselves.
C-1
<PAGE>
METHODS OF VALUATION USED
- -------------------------
Through its appraisal process, the OCC attempts to arrive at a fair estimate of
the value of a bank's shares. After reviewing the particular facts in each case
and the available information on a bank's shares, the OCC selects an appropriate
valuation method, or combination of methods, to determine a reasonable estimate
of the shares' value.
MARKET VALUE
- ------------
The OCC uses various methods to establish the market value of shares being
appraised. If sufficient trading in the shares exists and the prices are
available from direct quotes from the Wall Street Journal or a market-maker,
those quotes are considered in determining the market value. If no market value
is readily available, or if the market value is not well established, other
methods of estimating market value can be used, such as the investment value and
adjusted book value methods.
INVESTMENT VALUE
- ----------------
Investment value requires an assessment of the value to investors of a share in
the future earnings of the target bank. Investment value is estimated by
applying an average price/earnings ratio of banks with similar earnings
potential to the earnings capacity of the target bank.
The peer group selection is based on location, size, and earnings patterns. If
the state in which the subject bank is located provides a sufficient number of
comparable banks using location, size and earnings patterns as the criteria for
selection, the price/earnings ratios assigned to the banks are applied to the
earnings per share estimated for the subject bank. In order to select a
reasonable peer group when there are too few comparable independent banks in a
location that is comparable to that of the subject bank, the pool of banks from
which a peer group is selected is broadened by including one-bank holding
company banks in a comparable location, and/or by selecting banks in less
comparable locations, including adjacent states, that have earnings patterns
similar to the subject bank.
ADJUSTED BOOK VALUE
- -------------------
The OCC also uses an "adjusted book value" method for estimating value.
Historically, the OCC has not placed any weight on the bank's "unadjusted book
value", since the value is based on historical acquisition costs of the bank's
assets, and does not reflect investors' perceptions of the value of the bank as
an ongoing concern. Adjusted book value is calculated by multiplying the book
value of the target bank's assets per share times the average market price to
book value ratio of comparable banking organizations. The average market price
to book value ratio measures the premium or discount to book value which
investors attribute to shares of similarly situated banking organizations.
Both the investment value method and the adjusted book value method present
appraised values which are based on the target bank's value as a going concern.
These techniques provide estimates of the market value of the shares of the
subject bank.
C-2
<PAGE>
OVERALL VALUATION
- -----------------
The OCC may use more than one of the above-described methods in deriving the
value of shares of stock. If more than one method is used, varying weights may
be applied in reaching an overall valuation. The weight given to the value by a
particular valuation method is based on how accurately the given method is
believed to represent market value. For example, the OCC may give more weight
to a market value representing infrequent trading by shareholders than to the
value derived from the investment value method when the subject bank's earnings
trend is so irregular that it is considered to be a poor predictor of future
earnings.
PURCHASE PREMIUMS
- -----------------
For mergers and consolidations, the OCC recognizes that purchase premiums do
exist and may, in some instances, be paid in the purchase of small blocks of
shares. However, the payment of purchase premiums depends entirely on the
acquisition or control plans of the purchasers, and such payment are not regular
or predictable elements of market value. Consequently, the OCC's valuation
methods do not include consideration of purchase premiums in arriving at the
value of shares.
STATISTICAL DATA
- ----------------
The chart below lists the results of appraisals the OCC performed between
January 1, 1985 and September 30, 1991. The OCC provides statistical data on
book value and price/earnings ratios for comparative purposes, but does not
necessarily rely on such data in determining the value of the banks' shares.
Dissenting shareholders should not view these statistics as determinative for
future appraisals.
In connection with disclosures given to shareholders under 12 CFR 11.590 (Item
2), banks may provide shareholders a copy of this banking circular or disclose
the information contained herein, including the past results of OCC appraisals.
If the bank discloses the past results of the OCC appraisals, it should advise
shareholders that: (1) the OCC did not rely on all the information set forth in
the chart in performing each appraisal; and (2) the OCC's past appraisals are
not necessarily determinative of its future appraisals of a particular bank's
shares.
C-3
<PAGE>
APPRAISAL RESULTS
- -----------------
<TABLE>
<CAPTION>
OCC AVERAGE PRICE/
APPRAISAL APPRAISAL PRICE BOOK EARNINGS RATIO
DATE* VALUE OFFERED VALUE OF PEER GROUP
<S> <C> <C> <C> <C>
1/1/85 107.25 110.00 178.29 5.3
1/2/85 73.16 NA 66.35 6.8
1/15/85 53.41 60.00 83.95 4.8
1/31/85 22.72 20.00 38.49 5.4
2/1/85 30.63 24.00 34.08 5.7
2/25/85 27.74 27.55 41.62 5.9
4/30/85 25.98 35.00 42.21 4.5
7/30/85 3,153.10 2,640.00 6,063.66 NC
9/1/85 17.23 21.00 21.84 4.7
11/22/85 316.74 338.75 519.89 5.0
11/22/85 30.28 NA 34.42 5.9
12/16/85 66.29 77.00 89.64 5.6
12/27/85 60.85 57.00 119.36 5.3
12/31/85 61.77 NA 73.56 5.9
12/31/85 75.79 40.00 58.74 12.1
1/12/86 19.93 NA 26.37 7.0
3/14/86 59.02 200.00 132.20 3.1
4/21/86 40.44 35.00 43.54 6.4
5/2/86 15.50 16.50 23.69 5.0
7/3/86 405.74 NA 612.82 3.9
7/31/86 297.34 600.00 650.63 4.4
8/22/86 103.53 106.67 136.23 NC
12/26/86 16.66 NA 43.57 4.0
12/31/86 53.39 95.58 69.66 7.1
5/1/87 186.42 NA 360.05 5.1
6/11/87 50.46 70.00 92.35 4.5
6/11/87 38.53 55.00 77.75 4.5
7/31/87 13.10 NA 20.04 6.7
8/26/87 55.92 57.52 70.88 NC
8/31/87 19.55 23.75 30.64 5.0
8/31/87 10.98 NA 17.01 4.2
10/6/87 56.48 60.00 73.11 5.6
3/15/88 297.63 NA 414.95 6.1
6/2/88 27.26 NA 28.45 5.4
6/30/88 137.78 NA 215.36 6.0
8/30/88 768.62 677.00 1,090.55 10.7
3/31/89 773.62 NA 557.30 7.9
5/26/89 136.47 180.00 250.42 4.5
5/29/90 9.87 NA 11.04 9.9
</TABLE>
- ----------------------------------------------------------------------
* The "Appraisal Date" is the consummation date for the conversion,
consolidation, or merger.
NA - Not Available
NC - Not Computed
C-4
<PAGE>
- ------------------------------------------------------------------------------
For more information regarding the OCC's stock appraisal process, contact the
Office of the Comptroller of the Currency, 490 L'Enfant Plaza East, S.W.,
Washington, D.C. 20219, Director for Corporate Activity, Bank Organization and
Structure.
/s/ Frank McGuire
- -------------------------------------------
Frank McGuire
Acting Corporate Policy and Economic Analysis
C-5
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
-----------------------------------------
Section 145 of the Delaware General Corporation Law authorizes indemnification
of directors and officers of a Delaware corporation under certain circumstances
against expenses, judgments, and the like in connection with an action, suit, or
proceeding. Article Fourteenth of Norwest's Certificate of Incorporation
provides for broad indemnification of directors and officers.
Item 21. Exhibits and Financial Statement Schedules
------------------------------------------
Exhibits: Parenthetical references to exhibits in the description of Exhibits
- --------- 3.1, 3.1.1, 3.1.2, and 3.2 below are incorporated by reference from
such exhibits to the indicated reports of Norwest filed with the
Securities and Exchange Commission under File No. 1-2979.
2.1 -- Agreement and Plan of Reorganization, dated as of November 21, 1994,
between First American National Bank and Norwest Corporation
(included in Proxy Statement-Prospectus as Appendix A).
2.2 -- Form of Agreement and Plan of Consolidation between Norwest Interim
Bank Chandler, N.A. and First American National Bank (included in
Proxy Statement-Prospectus as part of Appendix A).
3.1 -- Restated Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3(b) to Norwest's Current Report on Form 8-K
dated June 28, 1993).
3.1.1 -- Certificate of Designations of Powers, Preferences, and Rights of
Norwest ESOP Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4 to Norwest's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1994).
3.1.2 -- Certificate of Designations of Powers, Preferences, and Rights of
Norwest Cumulative Tracking Preferred Stock (incorporated by
reference to Exhibit 3 to Norwest's Current Report on Form 8-K dated
January 9, 1995).
3.2 -- By-Laws, as amended (incorporated by reference to Exhibit 4(c) to
Norwest's Quarterly Report on Form 10-Q for the quarter ended March
31, 1991).
4 -- Rights Agreement, dated as of November 22, 1988, between Norwest
Corporation and Citibank, N.A. (incorporated by reference to Exhibit
1 to Norwest's Form 8-A dated December 6, 1988).
4.1 -- Certificate of Adjustment, dated July 21, 1989, to Rights Agreement
(incorporated by reference to Exhibit 3 to Norwest's Form 8 dated
July 21, 1989).
4.2 -- Certificate of Adjustment, dated June 28, 1993, to Rights Agreement
(incorporated by reference to Exhibit 4 to Norwest's Form 8-A/A
dated June 29, 1993).
5 -- Opinion of Stanley S. Stroup, counsel to Norwest.
II-1
<PAGE>
8 -- Form of Opinion of Frazer, Ryan, Goldberg & Hunter, L.L.P.
23.1 -- Consent of Stanley S. Stroup (included as part of Exhibit 5 filed
herewith).
23.2 -- Consent of Frazer, Ryan, Goldberg & Hunter, L.L.P.
23.3 -- Consent of KPMG Peat Marwick LLP.
23.4 -- Consent of McGladrey & Pullen, LLP.
24 -- Powers of Attorney.
99 -- Form of proxy for Special Meeting of Shareholders of First American
National Bank
Item 22. Undertakings
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period, in which offers or sales are being made, a
posteffective amendment to this registration statement (i) to include
any prospectus required by section 10(a)(3) of the Securities Act of
1933, (ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent posteffective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement, and (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.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective 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 posteffective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) 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
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities 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.
(c) The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
II-2
<PAGE>
(d) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, 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.
(e) 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 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.
(f) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(g) The undersigned registrant hereby undertakes to supply by means of a
posteffective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis, State of
Minnesota, on the 25th day of April, 1995.
NORWEST CORPORATION
By: /s/ Richard M. Kovacevich
----------------------------------
Richard M. Kovacevich
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed on the 25th day of April, 1995, by the following
persons in the capacities indicated:
/s/ Richard M. Kovacevich President and Chief Executive Officer
- ------------------------------- (Principal Executive Officer)
Richard M. Kovacevich
/s/ John T. Thornton Executive Vice President and Chief
- ------------------------------- Financial Officer
John T. Thornton (Principal Financial Officer)
/s/ Michael A. Graf Senior Vice President and Controller
- ------------------------------- (Principal Accounting Officer)
Michael A. Graf
DAVID A. CHRISTENSEN )
GERALD J. FORD )
PIERSON M. GRIEVE )
CHARLES M. HARPER )
N. BERNE HART )
WILLIAM A. HODDER )
LLOYD P. JOHNSON ) A majority of the
REATHA CLARK KING ) Board of Directors*
RICHARD M. KOVACEVICH )
RICHARD S. LEVITT )
RICHARD D. McCORMICK )
CYNTHIA H. MILLIGAN )
JOHN E. PEARSON )
IAN M. ROLLAND )
STEPHEN E. WATSON )
MICHAEL W. WRIGHT )
- ---------
*Richard M. Kovacevich, by signing his name hereto, does hereby sign this
document on behalf of each of the directors named above pursuant to powers of
attorney duly executed by such persons.
/s/ Richard M. Kovacevich
----------------------------------
Richard M. Kovacevich
Attorney-in-Fact
II-4
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Exhibit Form of
Number Description* Filing
- ------ ------------ ------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization, dated as of
November 21, 1994, between First American National
Bank and Norwest Corporation (included in Proxy
Statement-Prospectus as Appendix A).
2.2 Form of Agreement and Plan of Consolidation between
Norwest Interim Bank Chandler, N.A. and First American
National Bank (included in Proxy Statement-Prospectus
as part of Appendix A).
3.1 Restated Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3(b) to Norwest's
Current Report on Form 8-K dated June 28, 1993).
3.1.1 Certificate of Designations of Powers, Preferences, and
Rights of Norwest ESOP Cumulative Convertible Preferred
Stock (incorporated by reference to Exhibit 4 to
Norwest's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1994).
3.1.2 Certificate of Designations of Powers, Preferences, and
Rights of Norwest Cumulative Tracking Preferred Stock
(incorporated by reference to Exhibit 3 to Norwest's
Current Report on Form 8-K dated January 9, 1995).
3.2 By-Laws, as amended (incorporated by reference to
Exhibit 4(c) to Norwest's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1991).
4 Rights Agreement, dated as of November 22, 1988, between
Norwest Corporation and Citibank, N.A. (incorporated by
reference to Exhibit 1 to Norwest's Form 8-A dated
December 6, 1988).
4.1 Certificate of Adjustment, dated July 21, 1989, to
Rights Agreement (incorporated by reference to Exhibit 3
to Norwest's Form 8 dated July 21, 1989).
4.2 Certificate of Adjustment, dated June 28, 1993, to
Rights Agreement (incorporated by reference to Exhibit 4
to Norwest's Form 8-A/A dated June 29, 1993).
5 Opinion of Stanley S. Stroup, counsel to Norwest. Electronic
Transmission
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Form of
Number Description* Filing
- ------ ------------ ------
<S> <C> <C>
8 Form of Opinion of Frazer, Ryan, Goldberg & Hunter, L.L.P. Electronic
Transmission
23.1 Consent of Stanley S. Stroup (included as part of Exhibit 5
filed herewith).
23.2 Consent of Frazer, Ryan, Goldberg & Hunter, L.L.P. Electronic
Transmission
23.3 Consent of KPMG Peat Marwick LLP. Electronic
Transmission
23.4 Consent of McGladrey & Pullen, LLP. Electronic
Transmission
24 Powers of Attorney. Electronic
Transmission
99 Form of proxy for Special Meeting of Shareholders of Electronic
First American National Bank. Transmission
</TABLE>
________________________
* Parenthetical references to exhibits in the description of Exhibits 3.1,
3.1.1, 3.1.2, and 3.2 are incorporated by reference from such exhibits to the
indicated reports of Norwest filed with the SEC under File No. 1-2979.
<PAGE>
EXHIBIT 5
[LETTERHEAD OF STANLEY S. STROUP]
April 25, 1995
Board of Directors
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1000
Ladies and Gentlemen:
In connection with the proposed registration under the Securities Act of
1933, as amended, of up to 210,000 shares of the common stock (the "Shares"),
par value $1 2/3 per share, of Norwest Corporation (the "Corporation"), a
Delaware corporation, which are proposed to be issued by the Corporation in
connection with the consolidation (the "Consolidation") of a wholly owned
subsidiary of the Corporation with First American National Bank, a national
banking association, I have examined such corporate records and other documents,
including the Registration Statement on Form S-4 relating to the Shares and have
reviewed such matters of law as I have deemed necessary for this opinion, and I
advise you that in my opinion:
1. The Corporation is a corporation duly organized and existing under the
laws of the State of Delaware.
2. All necessary corporate action on the part of the Corporation has been
taken to authorize the issuance of the Shares in connection with the
Consolidation, and, when issued as described in the Registration Statement, the
Shares will be legally and validly issued, fully paid, and nonassessable.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Stanley S. Stroup
<PAGE>
EXHIBIT 8
[LETTERHEAD OF FRAZER, RYAN, GOLDBERG & HUNTER, L.L.P.]
_____________, 1995
File #5793-001
Board of Directors
First American National Bank
1098 North Arizona Avenue
Chandler, Arizona 85224
Re: Reorganization Transaction
--------------------------
Ladies and Gentlemen:
We have acted as special tax counsel to First American National Bank
("First American"), a national banking association, in connection with a
proposed reorganization of First American pursuant to that Agreement and Plan of
Reorganization dated as of November 21, 1994, between First American and Norwest
Corporation, a Delaware corporation ("Norwest"), and that proposed Agreement and
Plan of Consolidation between First American and Norwest Interim Bank Chandler,
a national banking association ("Norwest Interim Bank"). The reorganization
shall be conducted as a "consolidation" as that term is used in the National
Banking Act, 12 U.S.C. (S) 215. Norwest shall form Norwest Interim Bank as its
wholly owned subsidiary which shall be consolidated with First American under
the charter of First American (the "Consolidation"). In our capacity as special
tax counsel to First American, our opinion has been requested with respect to
certain of the federal income tax consequences of the proposed transaction.
This opinion is governed by, and shall be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991). Consequently, it is subject to a number of qualifications, exceptions,
definitions, limitations on coverage and other limitations, all as more
particularly described in the Accord, and this opinion should be read in
conjunction therewith. Capitalized terms not defined herein shall be defined as
in the Accord. Capitalized terms used in this opinion which are not defined in
the Accord or in this opinion shall have the same meaning ascribed to such terms
in the Agreement.
The opinion is based upon the existing provisions of the Internal Revenue
Code ("Code") and regulations thereunder (both final and proposed) and upon
current Internal Revenue Service ("Service") published rulings, including but
not limited to Rev. Rul. 84-104, 1984-C.B. 94, that ruled on the tax treatment
of a reorganization under the National Banking Act, and existing court
decisions, any of which could be changed at any time. Any such changes may be
retroactive and could significantly modify the opinions expressed herein.
Similarly, any change in the facts and assumptions stated below, upon which this
opinion is based, could modify the conclusion.
<PAGE>
Board of Directors
First American National Bank
________, 1995
Page 2
In rendering the opinions expressed herein, we have examined such documents
as we have deemed appropriate, including (i) the Agreement and Plan of
Reorganization; (ii) the Agreement and Plan of Consolidation; (iii) the
Registration Statement that has been filed with the Securities and Exchange
Commission regarding the Consolidation ("Registration Statement"), which
includes the preliminary Proxy Statement-Prospectus; and (iv) such additional
documents as we have considered relevant.
We understand that First American will be consolidated under 12 U.S.C. 215
with the wholly owned subsidiary of Norwest and that First American will be the
survivor of the Consolidation. We assume that the reorganization will be
accomplished in accordance with the Agreement.
The following further assumptions have been made in connection with the
Consolidation:
1. First American has only one class of voting stock outstanding and it
has no classes of nonvoting stock. In the transaction, shareholders of First
American will have exchanged for voting common stock of Norwest an amount of
First American voting stock representing control of First American as defined in
Section 368(c) of the Code. For purposes of this representation, shares of
First American stock exchanged for cash or other property originating with
Norwest will be treated as outstanding First American stock as of the Effective
Time.
2. The fair market value of the Norwest stock and other consideration
received by each First American shareholder will be approximately equal to the
fair market value of the First American stock surrendered in the exchange.
3. There is no plan or intention by the shareholders of First American,
who own five percent or more of the First American stock, and to the best of the
knowledge of the management of First American, there is no plan or intention on
the part of the remaining shareholders of First American to sell, exchange, or
otherwise dispose of a number of shares of Norwest stock received in the
transaction that would reduce the First American shareholders' ownership of
Norwest stock to a number of shares having a value as of the Effective Time, of
less than 50 percent of the value of all of the formerly outstanding stock of
First American as of the same date. For purposes of this representation, shares
of First American stock exchanged for cash or other property, surrendered by
dissenters, or exchanged for cash in lieu of fractional shares of Norwest stock
will be treated as outstanding First American stock as of the Effective Time.
Moreover, shares of First American stock and shares of Norwest stock held by
First American shareholders and otherwise sold, redeemed, or disposed of prior
or subsequent to the Effective Time will be considered in making this
representation.
<PAGE>
Board of Directors
First American National Bank
________, 1995
Page 3
4. Following the Effective Time, First American, as the surviving
association in the Consolidation, will acquire at least 90 percent of the fair
market value of the net assets and at least 70 percent of the fair market value
of the gross assets held by First American and Norwest Interim Bank (other than
stock of Norwest) immediately prior to the Effective Time. For purposes of this
representation, amounts paid by First American or Norwest Interim Bank to
shareholders who receive cash or other property, amounts used by First American
or Norwest Interim Bank to pay reorganization expenses, and all redemptions, and
distributions (except for regular, normal dividends) made by First American will
be included as assets of First American or Norwest Interim Bank, respectively,
immediately prior to the Effective Time.
5. Prior to the Effective Time, Norwest will be in control of Norwest
Interim Bank within the meaning of Section 368(c) of the Code.
6. First American has no plan or intention to issue additional shares of
its stock that would result in Norwest losing control of First American within
the meaning of Section 368(c) of the Code.
7. Norwest has no plan or intention to reacquire any of its stock issued
in the transaction. Norwest has, however, authorized and is engaged from time
to time in the repurchase through brokers of shares of its common stock on the
open market.
8. Norwest has no plan or intention to liquidate First American; to merge
or consolidate First American with or into another corporation; to sell or
otherwise dispose of the stock of First American except for transfers of stock
to corporations controlled by Norwest; or to cause First American to sell or
otherwise dispose of any of its assets or of any of the assets acquired from
Norwest Interim Bank, except for dispositions made in the ordinary course of
business or transfer of assets to a corporation controlled by Norwest.
9. Norwest Interim Bank had no liabilities assumed by First American and
did not transfer to First American any assets subject to liabilities in the
transaction.
10. Following the Effective Time, First American will continue its
historic business or use a significant portion of its historic business assets
in a business.
11. Norwest, Norwest Interim Bank, First American and the shareholders of
First American will each pay their respective expenses, if any, incurred in
connection with the transaction.
12. There is no intercorporate indebtedness existing between Norwest and
First American or between Norwest Interim Bank and First American that was
issued, acquired, or will be settled at a discount.
<PAGE>
Board of Directors
First American National Bank
________, 1995
Page 4
13. At the Effective Time, First American will not have outstanding any
warrants, options, convertible securities, or any other type of right pursuant
to which any person could acquire stock in First American that, if exercised or
converted, would affect Norwest's acquisition or retention of control of First
American, as defined in Section 368(c) of the Code.
14. Norwest does not own, nor has it owned during the past five years, any
shares of the stock of First American.
15. No two parties to the transaction are investment companies as defined
in Section 368(a)(2)(F)(iii) and (iv) of the Code.
16. As of the Effective Time, the fair market value of the assets of First
American will exceed the sum of its liabilities, plus the amount of liabilities,
if any, to which the net assets are subject.
17. First American is not under the jurisdiction of a court in a Title 11,
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
18. No stock of Norwest Interim Bank will be issued in the transaction.
No securities will be exchange by Norwest, Norwest Interim Bank or First
American in the transaction.
19. Shareholders of First American (immediately before the Effective Time)
receiving shares of Norwest stock will not own (immediately after the Effective
Time) more than 50 percent of the fair market value of the stock of Norwest.
20. The payment of cash in lieu of fractional shares of Norwest stock is
solely for the purposes of avoiding the expense and inconvenience to Norwest of
issuing fractional shares and does not represent separately bargained-for
consideration. The total cash consideration that will be paid in the
transaction to the First American shareholders instead of issuing fractional
shares of Norwest stock will not exceed one percent of the total consideration
that will be issued in the transaction to the First American shareholders in
exchange for their shares of First American stock. The fractional share
interests of each First American shareholder will be aggregated, and no First
American shareholder will receive cash in an amount equal to or greater than the
value of one full share of Norwest stock.
21. None of the compensation received by any shareholder-employee of First
American will be separate consideration for, or allocable to, any of their
shares of First American stock; none of the shares of Norwest stock received by
any shareholder-employees will be separate consideration for, or allocable to,
any employment agreement; and the compensation paid to any shareholder-employees
will be for services actually rendered and will
<PAGE>
Board of Directors
First American National Bank
________, 1995
Page 5
be commensurate with amounts paid to third parties bargaining at arms' length
for similar services.
Based solely on the information submitted and the representations and
assumptions set forth above, we are of the opinion that:
i) Provided the proposed Consolidation of Norwest Interim Bank with
First American qualifies as a statutory consolidation under the laws of the
United States, that First American will hold substantially all of its assets and
the assets of Norwest Interim Bank, and that in the transactions the
shareholders of First American will exchange an amount of stock constituting
control of First American (within the meaning of Section 368(c) of the Code)
solely for Norwest voting common stock, then the Consolidation will constitute a
reorganization within the meaning of Section 368(a)(1)(A) of the Code. The
reorganization will not be disqualified by reason of the fact that voting stock
of Norwest is used in the Consolidation. Section 368(a)(2)(E) of the Code. For
purposes of this opinion, "substantially all" means at least 90 percent of the
fair market value of the net assets and at least 70 percent of the fair market
value of the gross assets of Norwest Interim Bank and First American. Norwest
and Norwest Interim Bank will each be "a party to a reorganization" within the
meaning of Section 368(b).
ii) No gain or loss will be recognized to the shareholders of First
American upon the exchange of First American stock solely for Norwest common
stock. Section 354(a)(1) of the Code.
iii) The basis of the Norwest common stock received by the shareholders of
First American (including any fractional share not actually received) will be
the same as the basis of First American stock surrendered in exchange therefor.
Section 358(a)(1) of the Code.
iv) The holding period of the Norwest common stock received by the
shareholders of First American will include the period during which the First
American stock surrendered in exchange therefor was held, provided the stock of
First American is a capital asset in the hands of the shareholders of First
American on the date of the exchange. Section 1223(1) of the Code.
We, of course, opine only as to the matters we expressly set forth and no
opinions should be inferred as to any other matter or as to the tax treatment of
issues or transactions that we do not specifically address.
This opinion represents our best judgment as to the probable outcome of the
tax issues discussed and is not binding on the Internal Revenue Service. We can
give no assurance that the Service will not challenge our conclusions and
prevail in the courts in such a manner as to cause adverse tax consequences to
Norwest.
<PAGE>
Board of Directors
First American National Bank
________, 1995
Page 6
The opinions and views we express are based upon our best interpretations
of existing law; we can give no assurance that our interpretations would be
followed if the issues became the subject of judicial or administrative
proceedings. Realization of certain of the tax benefits described is subject to
the significant risk that the Internal Revenue Service may challenge the tax
treatment and that a court may sustain that challenge. Because taxpayers bear
the burden of proof required to support claimed deductions and credits, the
opinions expressed as to the likelihood of realization of various tax benefits
assume that the affected parties will undertake the effort and expense to
present fully the case in support of any matter the Service challenges.
This opinion is addressed to and is for the benefit solely of addressees.
Except as hereinafter provided, no other person or persons shall be furnished a
copy of this opinion or shall be entitled to rely on the contents herein without
our express written consent. We hereby provide our written consent to the
filing of a copy of this opinion as an exhibit to the Registration Statement and
consent to any reference to our firm in the Proxy Statement-Prospectus.
The opinions expressed in this letter are based on the facts as stated and
the documents, representations, assumptions, and statements to which reference
is made herein as well as other investigations of facts as we have deemed
necessary and appropriate. Any inaccuracy in any such fact, representation,
assumption or statement, any amendment to such documents, or any material
adverse change in the affairs of First American, Norwest Interim Bank, Norwest,
or affiliates of either corporation, may have the effect of changing all or a
part of this opinion.
Sincerely,
YFG/tc
<PAGE>
EXHIBIT 23.2
[CONSENT OF FRAZER, RYAN, GOLDBERG & HUNTER, L.L.P]
We consent to the filing as an exhibit to this Registration Statement of the
proposed form of our opinion to First American National Bank concerning the
federal income tax consequences of a reorganization involving First American
National Bank, Norwest Corporation, a Delaware corporation, and a wholly-owned
subsidiary of Norwest Corporation. We also consent to the reference to us under
the heading "THE CONSOLIDATION"--Certain Federal Income Tax Considerations" in
the Proxy Statement-Prospectus which is part of this Registration Statement.
/s/ Yale F. Goldberg
Phoenix, Arizona
April 20, 1995
<PAGE>
EXHIBIT 23.3
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
Independent Auditors' Consent
-----------------------------
The Board of Directors
Norwest Corporation:
We consent to the use of our report dated January 18, 1995 incorporated herein
by reference and to the reference to our firm under the heading "EXPERTS" in the
prospectus. Our report refers to the Corporation's adoption of Financial
Accounting Standards Board's Statements of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits," and No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," in 1994, and
No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions"
in 1992.
/s/ KPMG Peat Marwick LLP
April 24, 1995
Minneapolis, Minnesota
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement of our report,
dated February 10, 1995, relating to the financial statements of First
American National Bank, and to the reference to our Firm under the caption
"Experts" in the Prospectus.
/s/ McGladrey & Pullen, LLP
Phoenix, Arizona
April 24, 1995
<PAGE>
EXHIBIT 24
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ David A. Christensen
------------------------
David A. Christensen
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Gerald J. Ford
------------------
Gerald J. Ford
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Pierson M. Grieve
---------------------
Pierson M. Grieve
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Charles M. Harper
---------------------
Charles M. Harper
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ N. Berne Hart
-----------------
N. Berne Hart
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ William A. Hodder
---------------------
William A. Hodder
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Lloyd P. Johnson
--------------------
Lloyd P. Johnson
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Reatha Clark King
---------------------
Reatha Clark King
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Richard M. Kovacevich
-------------------------
Richard M. Kovacevich
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Richard S. Levitt
---------------------
Richard S. Levitt
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Richard D. McCormick
------------------------
Richard D. McCormick
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Cynthia H. Milligan
-----------------------
Cynthia H. Milligan
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ John E. Pearson
-------------------
John E. Pearson
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Ian M. Rolland
------------------
Ian M. Rolland
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Stephen E. Watson
---------------------
Stephen E. Watson
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
210,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of First American National
Bank, and to file the same, with all exhibits thereto and other supporting
documents, with said Commission, granting unto said attorneys-in-fact, and each
of them, full power and authority to do and perform any and all acts necessary
or incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
26th day of September, 1994.
/s/ Michael W. Wright
---------------------
Michael W. Wright
<PAGE>
EXHIBIT 99
FIRST AMERICAN NATIONAL BANK
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints _______________, _______________, and
_______________, and each of them, proxies, with full power of substitution, to
vote all shares of Common Stock the undersigned is entitled to vote at the
Special Meeting of Shareholders of First American National Bank (the "Bank") to
be held at the office of the Bank located at 1098 North Arizona Avenue,
Chandler, Arizona, at 10:00 a.m. on _____________, May __, 1995, or at any
adjournment thereof, as follows, hereby revoking any proxy previously given:
(1) The adoption of the Agreement and Plan of Reorganization between the
Bank and Norwest Corporation ("Norwest"), dated as of November 21, 1994,
pursuant to which a wholly owned banking subsidiary of Norwest will be
consolidated with the Bank, under the charter of the Bank, and each outstanding
share of the common stock of the Bank will be exchanged for shares of the common
stock, par value $1 2/3 per share, of Norwest, as more fully described in the
Proxy Statement-Prospectus accompanying this Proxy.
FOR [_] AGAINST [_] ABSTAIN [_]
(2) In their discretion on such matters as may properly come before the
meeting or any adjournment thereof; all as set out in the Notice and Proxy
Statement-Prospectus relating to the meeting, receipt of which are hereby
acknowledged.
Shares represented by this proxy will be voted as directed by the
shareholder. The Board of Directors recommends a vote "FOR" proposal 1. If no
direction is supplied, the proxy will be voted "FOR" proposal 1.
Dated: _______________________________, 1995.
----------------------------------------------
(Please sign exactly as name appears at left.)
----------------------------------------------
(If stock is owned by more than one person,
all owners should sign. Persons signing as
executors, administrators, trustees, or in
similar capacities should so indicate.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
