Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
AMFED FINANCIAL, INC.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
031144 10 8
(CUSIP Number)
Stanley S. Stroup
Executive Vice President and General Counsel
Norwest Corporation
Norwest Center, Sixth and Marquette
Minneapolis, Minnesota 55479-1026
612-667-8858
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 22, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box *.
Check the following box if a fee is being paid with this statement
*. (A fee is not required only if the reporting person: (1) has
a previous statement on file reporting beneficial ownership of
more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class. See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to
the liabilities of that section of the Act but shall be subject to
all other provisions of the Act (however, see the Notes).
CUSIP NO. 031144 10 8 SCHEDULE 13D
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Norwest Corporation
Tax Identification No. 41-0449260
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions) (a) *
(b) *
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(E) *
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 1,219,298
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 1,219,298
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,219,298
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) *
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.7%
14 TYPE OF REPORTING PERSON (See Instructions)
CO
SCHEDULE 13D
relating to the
Common Stock, Par Value $0.01 Per Share,
of
AMFED Financial, Inc.
Item 1. Security and Issuer
The class of equity securities to which this Statement
relates is the common stock, $0.01 par value, ("AMFED Common
Stock"), of AMFED Financial, Inc. ("AMFED"), a Nevada corporation.
The principal executive offices of AMFED are located at One
California Avenue, Reno, Nevada 89509.
Item 2. Identity and Background
This Statement is being filed by Norwest Corporation
("Norwest"), a Delaware corporation. The principal executive
offices of Norwest, from which its principal business is carried
out, are located at Norwest Center, Sixth and Marquette,
Minneapolis, Minnesota 55479-1000.
Norwest is a bank holding company registered under the
Bank Holding Company Act of 1956, as amended. Through its
commercial bank subsidiaries, Norwest conducts a general banking
and trust business in the states of Arizona, Colorado, Illinois,
Indiana, Iowa, Minnesota, Montana, Nebraska, New Mexico, North
Dakota, Ohio, South Dakota, Texas, Wisconsin, and Wyoming.
Norwest also owns subsidiaries engaged in various businesses
related to banking, principally mortgage banking, equipment
leasing, agricultural finance, commercial finance, consumer
finance, securities brokerage and underwriting, insurance agency
services, computer and data processing services, corporate trust
services, investment advisory services, and venture capital
investments.
The name, business address, present principal occupation
and citizenship of each director of Norwest are set forth on
Schedule I hereto and those of each executive officer of Norwest
are set forth on Schedule II hereto.
During the past five years, neither Norwest nor, to the
best of knowledge of Norwest, any of its executive officers or
directors has been convicted in any criminal proceeding (excluding
traffic violations or similar misdemeanors) or has been a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction and, as a result of such proceeding, is or
was subject to a judgment, decree or final order enjoining
violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
As more fully described in Item 6 of this Statement, AMFED
has granted to Norwest an option pursuant to which Norwest has the
right, upon the occurrence of certain events, to purchase from
AMFED up to 1,171,798 shares of AMFED Common Stock for $26.00 per
share, subject to adjustment under certain circumstances (the
"Option"). If Norwest were to exercise the Option in full, the
funds required to purchase the shares of AMFED Common Stock
issuable upon such exercise would be approximately $30,467,000.
It is currently anticipated that such funds would be provided from
Norwest's working capital.
Item 4. Purpose of Transaction
On July 21, 1995, AMFED and Norwest entered into an
Agreement and Plan of Reorganization (the "Reorganization
Agreement") providing for the merger (the "Merger") of a wholly
owned subsidiary of Norwest into AMFED, with AMFED as the
surviving corporation. The purpose of the Reorganization
Agreement is for Norwest to acquire AMFED.
Upon consummation of the Merger and pursuant to the
Reorganization Agreement, each outstanding share (except for
shares as to which dissenter's rights are perfected) of AMFED
Common Stock will be converted into a number of shares of the
common stock, par value $1 2/3 per share, of Norwest ("Norwest
Common Stock"), determined as described more fully below and in
the Reorganization Agreement.
Concurrently with their entering into the Reorganization
Agreement, Norwest and AMFED also entered into a Stock Option
Agreement (the "Option Agreement") dated as of July 22, 1995,
pursuant to which AMFED granted to Norwest the Option. The
purpose of the Option Agreement is to increase the likelihood that
the Merger will be completed as contemplated by the Reorganization
Agreement.
The principal provisions of the Reorganization Agreement
and the Option Agreement are summarized in Item 6 of this
Statement and copies of the Reorganization Agreement and the
Option Agreement are filed herewith as Exhibits 1 and 2,
respectively.
Norwest may acquire additional securities of AMFED.
Except as set forth herein, Norwest has no plans or proposals with
respect to AMFED that relate to or would result in, prior to the
completion of the Merger, any of the actions specified in clauses
(b) through (j) of Item 4 of of Schedule 13D . Upon the
completion of the Merger, AMFED Common Stock will cease to be
publicly traded and Norwest will cause the registration of AMFED
Common Stock under the Act to be terminated.
Item 5. Interest in Securities of the Issuer
(a)-(b) As a result of the Option Agreement, Norwest may,
pursuant to Rule 13d-3(d)(1)(i) under the Exchange Act, be deemed
to own beneficially 1,219,298 shares of AMFED Common Stock,
constituting approximately 20.7% of the shares of AMFED Common
Stock that would have been issued and outstanding if the Option
had been exercised as of July 31 1995. If Norwest were to
exercise the Option, it would have sole power to vote and, subject
to the terms of the Option Agreement, sole power to direct the
disposition of, the shares of AMFED Common Stock covered thereby.
To the best knowledge of Norwest, none of its directors or
executive officers beneficially owns any shares of AMFED Common
Stock.
(c) In addition to the acquisition of the Option, Norwest
has purchased 47,500 shares of AMFED Common Stock during the past
60 days:
Shares Price
Date Purchased Per Share
July 27, 1995 12,500 28.875
15,000 28.9375
July 28, 1995 5,000 28.875
July 31, 1995 5.000 28.875
5,000 28.875
5,000 28.75
TOTAL 47,500
All such purchases were effected on the National Market System of NASDAQ.
Norwest may purchase additional shares in the future. To
AMFED Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer
The Reorganization Agreement provides that, upon
consummation of the Merger, each share of AMFED Common Stock will
be converted into a number of shares of Norwest Common Stock
determined as follows:
(i) If the Norwest Measurement Price is equal to or
greater than $27.50, but less than or equal to $28.375,
each share of AMFED Common Stock shall be converted into
and exchanged for 1.1273 shares of Norwest Common Stock;
(ii) If the Norwest Measurement Price is greater than
$28.375, but less than or equal to $30.00, each share of
AMFED Common Stock shall be converted into and exchanged
for a number of shares of Norwest Common Stock determined
by dividing 32.00 by the Norwest Measurement Price;
(iii) If the Norwest Measurement Price is greater
than $30.00, each share of AMFED Common Stock shall be
converted into and exchanged for a number of shares of
Norwest Common Stock determined by dividing (A) the sum of
32 + .5* by (B) the Norwest Measurement Price, where *
equals the amount of increase of the Norwest Measurement
Price in excess of $30.00;
(iv) If the Norwest Measurement Price is less than
$27.50, each share of AMFED Common Stock shall be
converted into and exchanged for 1.1273 fully paid and non
assessable shares of Norwest Common Stock; and
(v) In the event that the Termination Measurement
Price multiplied by the applicable exchange ratio
described in subparagraphs (i) - (iv) is less than $31.00
and Norwest, in its sole discretion, elects to adjust the
exchange ratio, each share of AMFED Common Stock shall be
converted into and exchanged for a number of shares of
Norwest Common Stock determined by dividing 31.00 by the
Termination Measurement Price;
In addition, shares of AMFED subject to unexercised
options will be converted into a number of shares of Norwest
Common Stock determined in accordance with a formula set forth in
the Reorganization Agreement.
The "Norwest Measurement Price" is defined as the average
of the closing prices of a share of Norwest Common Stock as
reported on the consolidated tape of the New York Stock Exchange
during the period of 20 trading days ending on the day immediately
preceding the date on which the Board of Governors of the Federal
Reserve System approves the Merger.
The Reorganization Agreement provides, among other things,
that AMFED may refuse to consummate the Merger if the Termination
Measurement Price multiplied by the applicable exchange ratio is
less than $31.00, unless Norwest, in its sole discretion, elects
to adjust the exchange ratio to 31.00 divided by the Termination
Measurement Price. The Termination Measurement Price is defined
in the Reorganization Agreement as the average of the closing
prices of a share of Norwest Common Stock as reported on the New
York Stock Exchange during the period of 10 trading days ending on
the day occurring five business days immediately preceding the
closing date of the Merger.
Consummation of the Merger is subject to certain other
conditions, including, but not limited to, (i) approval of the
Reorganization Agreement by the affirmative vote of the holders of
at least a majority of the outstanding shares of AMFED Common
Stock entitled to vote thereon, (ii) the receipt of all requisite
regulatory approvals without the imposition of any condition or
requirement relating to AMFED or any of its subsidiaries that, in
the good faith judgment of Norwest, is unreasonably burdensome to
Norwest, (iii) the receipt of a letter from AMFED's independent
accountants to the effect that the activities of AMFED would not
preclude the Merger from qualifying for pooling-of-interests
accounting treatment, (iv) the receipt by AMFED of a legal opinion
to the effect that the Merger will be treated for federal income
tax purposes as a reorganization within the meaning of Section 368
of the Internal Revenue Code of 1986, as amended, and (v) the
receipt by AMFED, as of the mailing of its proxy for approval of
the Merger, of an opinion of its financial advisor to the effect
that the consideration to be received by the stockholders of AMFED
pursuant to the Merger is fair from a financial point of view.
In the Reorganization Agreement, AMFED agrees that it
will, through its Board of Directors, except to the extent, based
on the advice of its counsel, legally advisable for the discharge
of the fiduciary duties of such board, recommend that its
stockholders vote in favor of approval of the Reorganization
Agreement. AMFED also agrees that neither it nor any of its
subsidiaries, nor any director, officer, representative or agent
thereof will, directly or indirectly, solicit, authorize the
solicitation of or, except to the extent, based on the advice of
its counsel, legally advisable for the discharge by AMFED's Board
of Directors of its fiduciary duties, enter into any discussions
with any third party (other than Norwest) concerning any proposal
or offer to acquire in any manner an equity interest in or
substantial portion of the assets of AMFED or any of its
subsidiaries, or to merge or otherwise combine with AMFED or any
of its subsidiaries.
The Option gives Norwest the right to purchase up to
1,171,798 shares of AMFED Common Stock (the "Option Shares") at a
price of $26.00 per share, subject to adjustment under certain
circumstances. Norwest may exercise the Option at any time after
the occurrence of a Purchase Event. For purposes of the Option
Agreement, a "Purchase Event" occurs when either (i) any person
(other than Norwest or any of its subsidiaries) acquires 20% or
more of the outstanding shares of AMFED Common Stock, (ii) AMFED
or any of its subsidiaries, without Norwest's prior written
consent, shall have entered into an agreement with a third party
or engage in a (x) merger or consolidation involving AMFED or any
of its subsidiaries, (y) a purchase, lease or other acquisition of
all or substantially all of the assets of AMFED or any of its
subsidiaries or (z) a purchase or other acquisition, other than in
connection with an internal merger or consolidation, of securities
representing 20% or more of the voting power of AMFED or any of
its subsidiaries, or (iii) the AMFED Board of Directors shall have
recommended that the stockholders of AMFED approve or accept any
of the transactions described in clause (ii) above with a third
party other than Norwest or one of its subsidiaries.
The Option Agreement will terminate at the earliest to
occur of (i) the time immediately prior to the effective time of
the Merger, (ii) 9 months after the first occurrence of a Purchase
Event, (iii) 15 months after the termination of the Reorganization
Agreement following the occurrence of a Preliminary Purchase
Event, (iv) termination of the Reorganization Agreement prior to
the occurrence of a Purchase Event or a Preliminary Purchase Event
(other than termination by Norwest in certain circumstances), or
(v) 15 months after the termination of the Reorganization
Agreement by Norwest in certain circumstances.
"Preliminary Purchase Event" means certain events
involving AMFED, occurring after July 22, 1995, that are
inconsistent with AMFED's intent to consummate the Merger or
actions by third parties evidencing an intent to acquire control
of AMFED: (i) AMFED or any of its subsidiaries, without Norwest's
prior written consent, shall have entered into an agreement to
engage in an Acquisition Transaction with a party other than
Norwest or any of its subsidiaries or the AMFED Board of Directors
shall have recommended that the stockholders of AMFED approve an
Acquisition Transaction with a third party, (ii) any party (other
than Norwest or any of its subsidiaries) shall have acquired
beneficial ownership, or the right thereto, of 10% or more of the
outstanding shares of AMFED Common Stock, (iii) any party other
than Norwest or any of its subsidiaries shall have filed a
registration statement under the Securities Act of 1933 (the
"Securities Act") relating to a tender officer or exchange offer
that could result in such party's owning or controlling 20% or
more of the then outstanding shares of AMFED Common Stock, (iv)
after a proposal is made by a third party to AMFED or its
stockholders to engage in an Acquisition Transaction, (x) AMFED
shall have breached any of its covenants or obligations in the
Reorganization Agreement and such breach would entitle Norwest to
terminate the Reorganization Agreement or (y) the Board of
Directors of AMFED does not recommend the approval of the
Reorganization Agreement, or the stockholders of AMFED shall not
have approved the Reorganization Agreement, the stockholder
meeting for the purpose of voting on such approval shall not have
been held or shall have been canceled prior to termination of the
Reorganization Agreement, or the AMFED Board of Directors shall
have withdrawn or modified in a manner adverse to Norwest its
recommendation to the stockholders of AMFED, (v) the AMFED Board
of Directors does not recommend that the stockholders of AMFED
approve the Reorganization Agreement or shall have withdrawn or
modified its recommendation in any manner detrimental to Norwest,
or (vi) any party other than Norwest or any of its subsidiaries,
without Norwest's prior written approval, shall have filed an
application with any governmental authority or regulatory or
administrative body for approval to engage in an Acquisition
Transaction. "Acquisition Transaction" means (i) merger or
consolidation involving AMFED or any of its subsidiaries, (ii) a
purchase, lease or other acquisition of all or substantially all
of the assets of AMFED or any of its subsidiaries or (iii) a
purchase or other acquisition, other than in connection with an
internal merger or consolidation, of securities representing 10%
or more of the voting power of AMFED or any of its subsidiaries or
the recommendation by the AMFED Board of Directors to its
shareholders to approve any such transaction.
Under the Bank Holding Company Act of 1956, Norwest may
not acquire 5% or more of the outstanding shares of AMFED without
the prior approval of the Board of Governors of the Federal
Reserve System. Certain other regulatory approvals may also be
required, including those required before any acquisition under
the Option Agreement could be completed.
The Option may not be assigned by Norwest or by AMFED
without the express written consent of the other party to the
Option Agreement, except that Norwest may assign its rights under
the Option Agreement in whole or in part to a wholly owned
subsidiary of Norwest and after the occurrence of a Preliminary
Purchase Event and, in certain cases, after Norwest gives AMFED an
offer to purchase the rights on the same terms and price which
Norwest proposes to transfer such rights to a third party. After
a Purchase Event, Norwest (on behalf of itself or any subsequent
holder) may require AMFED to prepare and keep current for up to
180 days a registration statement under the Securities Act in form
and substance appropriate and customary under the circumstances
covering the Option Shares and to use its best efforts to cause
such registration statement to remain current for up to 180 days
in order to facilitate the disposition of the Option Shares. Upon
such demand, AMFED must effect such registration statement
promptly, subject to certain exceptions. Norwest is entitled to
two such registration statements upon the occurrence of a Purchase
Event. Subject to certain exceptions, and prior to termination of
the Option, upon the acquisition by a third party of 20% or more
of AMFED's Common Stock or the consummation of an Acquisition
Transaction at the request of Norwest, AMFED will be obligated to
repurchase the Option and any Option Shares theretofore purchased
pursuant to the Option at prices determined as set forth in the
Option Agreement, which may include the reimbursement by AMFED of
up to $200,000 in fees and expenses incurred by Norwest in
connection with the Merger. In the event that Norwest exercises
the repurchase rights described above, AMFED will thereafter be
required to pay the required amount or the portion thereof that
AMFED is not then prohibited from so paying under applicable law
and regulation or as a consequence of administrative policy.
In the event that prior to termination of the Option,
AMFED enters into an agreement (i) to consolidate with or merge
into any party, other than Norwest or any of its subsidiaries, and
is not the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any party, other than
Norwest or any of its subsidiaries, to merge into AMFED and AMFED
is the surviving corporation, but, in connection with such merger,
the then outstanding of AMFED Common Stock are changed into or
exchanged for stock or other securities of any other party or cash
or any other property, or the then outstanding shares of AMFED
Common Stock will after such merger represent less than 50% of the
outstanding shares and share equivalents of the merged company; or
(iii) to sell or otherwise transfer all or substantially all of
its or any subsidiary's assets to any party, other than Norwest or
any of its subsidiaries, then the agreement governing such
transaction must make proper provision so that the Option, upon
consummation of such transaction, will be converted into, or
exchanged for, an option (a "Substitute Option"), at the election
of Norwest, of either (x) the acquiring corporation or (y) any
party that controls the acquiring corporation. The Substitute
Option will be exercisable for shares of the Substitute Option
issuer's common stock in such number and at such exercise price as
determined by the Option Agreement and will otherwise have the
same terms as the Option to the extent permitted by law.
To the best of AMFED's and Norwest's knowledge, no
Preliminary Purchase Event or Purchase Event has occurred as of
the date hereof.
Either AMFED or Norwest may terminate the Reorganization
Agreement under certain circumstances. If no Preliminary Purchase
Event or Purchase Event occurs prior to such termination, the
Option Agreement will terminate at such time, unless Norwest shall
have terminated the Reorganization Agreement pursuant to paragraph
9(a)(ii) thereof due to AMFED's failure to perform or observe in
all material respects its covenants and obligations or pursuant to
paragraph 9(a)(v) thereof. If a Preliminary Purchase Event or
Purchase Event does occur prior to the termination of the Option
Agreement or if Norwest terminates the Reorganization Agreement
pursuant to paragraph 9(a)(ii) thereof due to AMFED's failure to
perform or observe in all material respects its covenants and
obligations or pursuant to paragraph 9(a)(v) thereof, then Norwest
will be entitled to exercise its rights under the Option Agreement
in accordance with its terms.
The Option Agreement is intended to increase the
likelihood that the Merger will be consummated in accordance with
the terms of the Reorganization Agreement and may discourage
persons from proposing a competing offer to acquire AMFED, even if
such offer involves a higher price per share of AMFED Common Stock
than the consideration contemplated by the Reorganization
Agreement. The existence of the Option could significantly
increase the cost to a potential acquiror of acquiring AMFED
compared to its cost had AMFED not entered into the Option
Agreement. AMFED believes that the exercise of the Option would
likely prohibit any acquiror from accounting for an acquisition
of, or merger with, AMFED using the pooling-of-interests
accounting method for a period of up to two years. This could
discourage or preclude an acquisition of AMFED by other
organizations.
The preceding summary of certain provisions of the
Reorganization Agreement and the Option Agreement is not intended
to be complete and is qualified in its entirety by reference to
the full text of such agreements, copies of which are filed
herewith as Exhibits 1 and 2, respectively, and are incorporated
herein by reference.
Except as set forth herein, neither Norwest nor, to the
best knowledge of Norwest, any of its directors or executive
officers, has any contracts, arrangements, understandings or
relationships (legal or otherwise) with any person with respect to
any securities of AMFED, including, but not limited to, transfer
or voting of any securities of AMFED, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees
of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits
(1) Agreement and Plan of Reorganization dated as of
July 21, 1995, by and between AMFED Financial, Inc. and
Norwest Corporation.
(2) Stock Option Agreement, dated as of July 22,
1995, between Norwest Corporation and AMFED Financial,
Inc.
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
NORWEST CORPORATION
By: /s/ Laurel A. Holschuh
Laurel A. Holschuh
Senior Vice President and Secretary
Dated: July 31, 1995
Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (see 18 U.S.C. 1001).
SCHEDULE I
DIRECTORS OF NORWEST CORPORATION
The names, business addresses and present principal
occupations or employments of the directors of Norwest Corporation
are set forth below. All directors listed below are citizens of
the United States.
David A. Christensen; 205 East Sixth Street, Sioux Falls,
South Dakota 57117; President, Chief Executive Officer, and
Director; Raven Industries, Inc.; diversified manufacturer of
plastics, electronics and special-fabric products.
Gerald J. Ford, 200 Crescent Court, Suite 1350, Dallas,
Texas 75201; Chairman of the Board, Chief Executive Officer and
Director; First Nationwide Bank, a Federal Savings Bank; financial
services.
Pierson M. Grieve; 370 Wabasha Street, St. Paul, Minnesota
55102; Chairman and Director; Ecolab Inc.; developer and marketer
of cleaning, sanitizing and maintenance products and services.
Charles M. Harper; 1301 Avenue of the Americas, New York,
New York 10019; Chairman, Chief Executive Officer and Director;
RJR Nabisco Holdings Corp.; consumer packaged goods.
William A. Hodder; 1400 West 94th Street, Minneapolis,
Minnesota 55431; Chairman, Chief Executive Officer, and Director;
Donaldson Company, Inc.; manufacturer of filtration and emission
control products.
Lloyd P. Johnson; Norwest Center, Sixth and Marquette,
Minneapolis, Minnesota 55479-1000; Retired Chairman of the Board;
Norwest Corporation; financial services.
Reatha Clark King; Number One General Mills Boulevard,
Minneapolis, Minnesota 55426; President and Executive Director;
General Mills Foundation; charitable foundation for General Mills,
Inc.
Richard M. Kovacevich; Norwest Center, Sixth and Marquette,
Minneapolis, Minnesota 55479-1000; Chairman of the Board,
President, Chief Executive Officer, and Director; Norwest
Corporation; financial services.
Richard S. Levitt; 3141 Dean Court, Suite 1201, Minneapolis,
Minnesota 55416; Chairman of the Board and Director; Nellis
Corporation; private capital management.
Richard D. McCormick; 7800 East Orchard Road, Suite 200,
Englewood, Colorado 80111; Chairman, Chief Executive Officer and
Director; U S WEST, Inc.; communications.
Cynthia H. Milligan; 6200 North 56th Street, Lincoln,
Nebraska 68504; President and Chief Executive Officer; Cynthia H.
Milligan & Associates; consultant to financial institutions.
Ian M. Rolland, 1300 South Clinton Street, Fort Wayne,
Indiana 46801; Chairman, Chief Executive Officer and Director,
Lincoln National Corporation and Lincoln National Life Insurance
Company; insurance.
Stephen E. Watson; 700 On The Mall, 9th Floor, Minneapolis,
Minnesota 55402; President and Director; Dayton Hudson
Corporation; general merchandise company.
Michael W. Wright; 11840 Valley View Road, Eden Prairie,
Minnesota 55344; Chairman, President, Chief Executive Officer and
Director; SUPERVALU INC.; food distribution and retailing.
SCHEDULE II
EXECUTIVE OFFICERS OF NORWEST CORPORATION
The names and present principal occupations or employments
of the executive officers of Norwest Corporation are set forth
below. Each executive officer's business address is Norwest
Corporation, Norwest Center, Sixth and Marquette, Minneapolis,
Minnesota 55479-1000. Each occupation set forth opposite an
individual's name refers to Norwest Corporation. All officers
listed below are citizens of the United States.
Name Present Principal Occupation or
Employment
Richard M. Kovacevich Chairman, President and Chief Executive
Officer
Leslie S. Biller Executive Vice President
(South Central Banking)
James R. Campbell Executive Vice President
(Twin Cities Banking)
C. Webb Edwards Executive Vice President and
Chief Technology Officer
Kenneth R. Murray Executive Vice President
(Western Banking)
William H. Queenan Executive Vice President
(Chief Credit Officer)
Daniel A. Saklad Executive Vice President
(North Central Banking)
Stanley S. Stroup Executive Vice President
and General Counsel
John T. Thornton Executive Vice President and
Chief Financial Officer
Thomas E. Emerson Senior Vice President,
Chief Auditor and Chief Examiner
John E. Ganoe Senior Vice President (Strategic
Planning and Acquisitions)
Michael A. Graf Senior Vice President and Controller
Stephen W. Hansen Senior Vice President (Human Resources)
Laurel A. Holschuh Senior Vice President and Secretary
Charles D. White Senior Vice President and Treasurer
EXHIBIT INDEX
Exhibit Form of
Number Description Filing
1 Agreement and Plan of Reorganization Electronic
dated as of July 21, 1995, between Transmission
AMFED Financial, Inc. and Norwest
Corporation.
2 Stock Option Agreement, dated as of ElectroniC
July 22, 1995, between Norwest Transmission
Corporation and AMFED Financial, Inc.
EXHIBIT 1
AGREEMENT
AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement")
entered into as of the 21st day of July, 1995, by and between
AMFED FINANCIAL, INC. ("AMFED"), a Nevada corporation, and NORWEST
CORPORATION ("Norwest"), a Delaware corporation.
WHEREAS, the parties hereto desire to effect a
reorganization whereby a wholly-owned subsidiary of Norwest will
merge with and into AMFED (the "Merger") pursuant to an agreement
and plan of merger (the "Merger 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 AMFED of the par value of $.01 per share ("AMFED Common
Stock") outstanding immediately prior to the time the Merger
becomes effective in accordance with the provisions of the Merger
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) Merger. Subject to the terms and conditions contained
herein, a wholly-owned subsidiary of Norwest (the "Merger Co.")
will be merged by statutory merger with and into AMFED pursuant to
the Merger Agreement, with AMFED as the surviving corporation, in
which merger each share of AMFED Common Stock outstanding
immediately prior to the Effective Time of the Merger (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
determined as follows:
(i) If the Norwest Measurement Price (as defined
below) is equal to or greater than $27.50, but less than or
equal to $28.375, each share of AMFED Common Stock
outstanding immediately prior to the Effective Time of the
Merger (other than shares as to which dissenters' appraisal
rights have been exercised) shall, by virtue of the merger
and without any action on the part of the holder thereof, be
converted into and exchanged for 1.1273 fully paid and
nonassessable shares of Norwest Common Stock ("A Exchange
Ratio");
(ii) If the Norwest Measurement Price is greater than
$28.375, but less than or equal to $30.00, each share of
AMFED Common Stock outstanding immediately prior to the
Effective Time of the Merger (other than shares as to which
dissenters' appraisal rights have been exercised) shall, by
virtue of the Merger and without any action on the part of
the holder thereof, be converted into and exchanged for a
number of fully paid and nonassessable shares of Norwest
Common Stock determined by dividing 32.00 by the Norwest
Measurement Price ("B Exchange Ratio");
(iii) If the Norwest Measurement Price is greater
than $30.00, each share of AMFED Common Stock outstanding
immediately prior to the Effective Time of the Merger (other
than shares as to which dissenters' appraisal rights have
been exercised) shall, by virtue of the merger and without
any action on part of the holder thereof, be converted into
and exchanged for a number of fully paid and non assessable
shares of Norwest Common Stock determined by dividing (A)
the sum of 32 + .5* by (B) the Norwest Measurement Price,
where * equals the amount of increase of the Norwest
Measurement Price in excess of $30.00 ("C Exchange Ratio");
(iv) If the Norwest Measurement Price is less than
$27.50, each share of AMFED Common Stock outstanding
immediately prior to the Effective Time of the Merger (other
than shares as to which dissenters' appraisal rights have
been exercised) shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted
into and exchanged for 1.1273 fully paid and non assessable
shares of Norwest Common Stock ("D Exchange Ratio");
(v) In the event that Norwest, in its sole
discretion, makes the election pursuant to paragraph
9(a)(iv) hereof, each share of AMFED Common Stock
outstanding immediately prior to the Effective Time of the
Merger (other than shares as to which dissenters' appraisal
rights have been exercised) shall, by virtue of the Merger
and without any action on the part of the holder thereof, be
converted into and exchanged for a number of fully paid and
nonassessable shares of Norwest Common Stock determined by
dividing 31.00 by the "Termination Measurement Price" (as
defined in paragraph 9(a)(iv)) (the "E Exchange Ratio");
(vi) The shares of AMFED Common Stock subject to each
unexercised Option (as defined in paragraph 4(p) of the
Agreement ) (the "Option Shares") shall be deemed canceled
and as consideration therefor, shall be converted into and
exchanged for that number of fully paid and nonassessable
shares of Norwest Common Stock determined by dividing (A)
the excess of (1) the number of Option Shares multiplied by
the Termination Measurement Price multiplied by either the A
Exchange Ratio, the B Exchange Ratio, the C Exchange Ratio,
the D Exchange Ratio or in the event that Norwest, in its
sole discretion makes the election pursuant to paragraph
9(a)(iv) hereof, the E Exchange Ratio, as applicable, over
(2) the aggregate exercise price of the Option Shares by (B)
the Termination Measurement Price;
(vii) Each share of Merger Co. common stock shall be
converted into and exchanged by virtue of the Merger into
shares of the surviving corporation and shares of AMFED
Common Stock held in treasury shall be cancelled; and
(viii) The "Norwest Measurement Price" is defined as
the average of the closing prices of a share of Norwest
Common Stock as reported on the consolidated tape of the New
York Stock Exchange during the period of 20 trading days
ending on the day immediately preceding the date on which
the Board of Governors of the Federal Reserve System
("Federal Reserve Board") approves the transactions
contemplated by this Agreement.
(b) Norwest Common Stock Adjustments. If, between the date
hereof and the Effective Time of the Merger, 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 (a "Common Stock
Adjustment"), then (i) the number of shares of Norwest Common
Stock into which a share of AMFED 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 AMFED Common Stock
shall be converted will equal the number of shares of Norwest
Common Stock which holders of shares of AMFED Common Stock would
have received pursuant to such Common Stock Adjustment had the
record date therefor been immediately following the Effective Time
of the Merger; and (ii) if a Norwest Common Stock Adjustment
occurs between the date hereof and any date that the closing price
of a share of Norwest Common Stock is used for purpose of this
Agreement or the Merger Agreement, the closing price of a share of
Norwest Common Stock for such purposes shall be the sum of the
closing prices on the date of each such determination of the
number of shares of Norwest Common Stock and/or securities, if
any, (in each case as reported on the consolidated tape of the New
York Stock Exchange on such date) issued with respect to one share
of Norwest Common Stock as a result of the Norwest Common Stock
Adjustment.
(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 Termination Measurement
Price.
(d) Mechanics of Closing Merger. Subject to the terms and
conditions set forth herein, the Merger Agreement shall be
executed and it or Articles of Merger or a Certificate of Merger
shall be filed with the Secretary of State of the State of Nevada
ten (10) business days following the later to occur of the last
required approval under paragraph 6(e) and expiration of all
required waiting periods, approval of the Merger by AMFED's
shareholders or January 2, 1996 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 Merger to be
completed as soon as practicable after the receipt of final
regulatory approval of the Merger and the expiration of all
required waiting periods. The time that the filing referred to in
the first sentence of this paragraph is made is herein referred to
as the "Time of Filing". The day on which such filing is made and
accepted is herein referred to as the "Effective Date of the
Merger". The "Effective Time of the Merger" shall be 11:59 p.m.
Reno, Nevada time on the Effective Date of the Merger. At the
Effective Time of the Merger on the Effective Date of the Merger,
the separate existence of Merger Co. shall cease and Merger Co.
will be merged with and into AMFED pursuant to the Merger
Agreement.
The closing of the transactions contemplated by this
Agreement and the Merger Agreement (the "Closing") shall take
place on the Closing Date at the offices of Norwest, Norwest
Center, Sixth and Marquette, Minneapolis, Minnesota; provided that
in no event shall the Closing Date be prior to January 2, 1996.
2. Representations and Warranties of AMFED. AMFED
represents and warrants to Norwest as follows:
(a) Organization and Authority. AMFED is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Nevada, 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 AMFED and the "AMFED Subsidiaries" (as
defined below) 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. AMFED is registered as a
savings and loan holding company with the Office of Thrift
Supervision ("OTS") under the Savings and Loan Holding Company
Act, as amended (the "SLHC Act"). AMFED has furnished Norwest
true and correct copies of its articles of incorporation and by-
laws, as amended, which articles of incorporation and by-laws are
in full force and effect.
(b) AMFED's Subsidiaries. Schedule 2(b) sets forth a
complete and correct list of all of AMFED's subsidiaries as of the
date hereof (individually an "AMFED Subsidiary" and collectively
the "AMFED 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 AMFED. No equity security of any
AMFED Subsidiary is or may be required to be issued by reason of
any option, warrant, scrip, 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 AMFED 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. All of such shares so owned by AMFED
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 AMFED Subsidiary is a corporation or
federal stock chartered savings bank 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. American
Federal Savings Bank ("AFS") is a federal stock chartered savings
bank, duly organized, validly existing and in good standing under
the laws of the United States of America and engages only in
activities (and holds properties only of the types) permitted by
the Home Owners Loan Act of 1933, as amended ("HOLA") and the
rules and regulations promulgated by the OTS and by the Federal
Deposit Insurance Corporation ("FDIC") thereunder for insured
depository institutions. AFS's deposit accounts are insured by
the Savings Association Insurance Fund as administered by the FDIC
to the fullest extent permitted under applicable law. AFS is a
qualified thrift lender under section 10(m) of HOLA and is a
member of the Federal Home Loan Bank of San Francisco. Except as
set forth on Schedule 2(b), AMFED 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. AMFED has furnished Norwest true and correct copies of
the articles of incorporation or federal stock charter and bylaws,
as amended, of each AMFED Subsidiary, each of which is in full
force and effect.
(c) Capitalization. The authorized capital stock of AMFED
consists of 60,000,000 shares of Common Stock, $.01 par value and
6,000,000 shares of preferred stock, no par value, of which as of
the close of business on March 31, 1995, 5,888,430 shares of AMFED
Common Stock and no shares of preferred stock were outstanding and
169,700 shares were held in the treasury. The maximum number of
shares of AMFED Common Stock (assuming for this purpose that
phantom shares and other share-equivalents constitute AMFED Common
Stock) that would be outstanding as of the Effective Date of the
Merger if all options, warrants, conversion rights and other
rights with respect thereto, except the option to purchase AMFED
Common Stock granted pursuant to the Stock Option Agreement dated
the date hereof between AMFED and Norwest (the "Stock Option
Agreement"), were exercised is 6,327,054. All of the outstanding
shares of capital stock of AMFED have been duly and validly
authorized and issued and are fully paid and nonassessable.
Except as set forth in Schedule 2(c) and except for the option
granted pursuant to the Stock Option Agreement, there are no
outstanding subscriptions, contracts, conversion privileges,
options, warrants, calls, preemptive rights or other rights
obligating AMFED or any AMFED Subsidiary to issue, sell or
otherwise dispose of, or to purchase, redeem or otherwise acquire,
any shares of capital stock of AMFED or any AMFED Subsidiary.
Except as set forth in Schedule 2(c), since March 31, 1995 no
shares of AMFED capital stock have been purchased, redeemed or
otherwise acquired, directly or indirectly, by AMFED or any AMFED
Subsidiary and no dividends or other distributions have been
declared, set aside, made or paid to the shareholders of AMFED.
(d) Authorization. AMFED has the corporate power and
authority to enter into this Agreement and the Merger 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
Merger Agreement by AMFED and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by a
disinterested majority of the Board of Directors of AMFED.
Subject to such approvals of shareholders and of government
agencies and other governing boards having regulatory authority
over AMFED as may be required by statute or regulation, this
Agreement and the Merger Agreement are valid and binding
obligations of AMFED enforceable against AMFED in accordance with
their respective terms, subject as to enforceability, to
applicable bankruptcy, insolvency, receivership, conservatorship,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and to the application
of equitable principles and judicial discretion.
Except as set forth on Schedule 2(d), neither the execution,
delivery and performance by AMFED of this Agreement or the Merger
Agreement, nor the consummation of the transactions contemplated
hereby and thereby, nor compliance by AMFED 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 AMFED or any AMFED Subsidiary under any of
the terms, conditions or provisions of (x) its articles of
incorporation, Federal Stock Charter or by-laws or (y) any
material note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which AMFED
or any AMFED Subsidiary is a party or by which it may be bound, or
to which AMFED or any AMFED Subsidiary or any of the properties or
assets of AMFED or any AMFED 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 AMFED, violate
any judgment, ruling, order, writ, injunction, decree, statute,
rule or regulation applicable to AMFED or any AMFED 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 SLHC Act, the Bank Holding Company
Act of 1956, as amended ("BHC Act") or the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 ("HSR Act"), and filings
required to effect the Merger under Nevada law, 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 AMFED of the transactions contemplated by this
Agreement and the Merger Agreement.
(e) AMFED Financial Statements. The consolidated balance
sheets of AMFED and AMFED Subsidiaries as of December 31, 1994 and
1993 and related consolidated statements of income, shareholders'
equity and cash flows for the three years ended December 31, 1994,
together with the notes thereto, certified by Deloitte & Touche,
LLP and included in AMFED's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (the "AMFED 10-K") as filed
with the Securities and Exchange Commission (the "SEC"), and the
unaudited consolidated statements of financial condition of AMFED
and AMFED Subsidiaries as of March 31, 1995 and the related
unaudited consolidated statements of income, shareholders' equity
and cash flows for the three months then ended included in AMFED's
Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1995 as filed with the SEC (collectively, the "AMFED 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 AMFED and AMFED Subsidiaries at the dates
and the consolidated results of operations and cash flows of AMFED
and AMFED's Subsidiaries for the periods stated therein.
(f) Reports. Since December 31, 1992, AMFED and each AMFED
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 OTS, (iii)
the FDIC and (iv) 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 "AMFED Reports". As of their respective dates, the AMFED
Reports complied in all material respects with all the rules and
regulations promulgated by the SEC, the OTS, the FDIC and
applicable state securities or banking authorities, as the case
may be, and, in the case of the AMFED Reports filed with the SEC,
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 AMFED Reports have been made available to Norwest by
AMFED.
(g) Properties and Leases. Except as set forth on Schedule
2(g), and except as may be reflected in the AMFED Financial
Statements and except for any lien for current taxes not yet
delinquent, AMFED and each AMFED Subsidiary 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 AMFED's consolidated balance sheet as of
March 31, 1995 included in AMFED'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
as has been disposed of in the ordinary course of business. All
leases of real property and all other leases material to AMFED or
any AMFED Subsidiary pursuant to which AMFED or such AMFED
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 AMFED or such
AMFED Subsidiary or, to the best of AMFED's knowledge, any event
which, with notice or lapse of time or both, would constitute such
a material default. Substantially all AMFED's and each AMFED
Subsidiary's buildings and equipment in regular use are in good
and serviceable condition, reasonable wear and tear excepted.
(h) Taxes. Each of AMFED and the AMFED Subsidiaries has
filed all 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 AMFED and the AMFED
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 AMFED nor any AMFED Subsidiary is a
party to any pending action or proceeding, nor, to the best of
AMFED'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 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 AMFED or any AMFED
Subsidiary which has not been settled, resolved and fully
satisfied or adequately reserved for. Each of AMFED and the AMFED
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 March 31, 1995,
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
AMFED and the AMFED Subsidiaries with respect to all periods
through the date thereof.
(i) Absence of Certain Changes. Since December 31, 1994
there has been no change in the business, financial condition or
results of operations of AMFED or any AMFED 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 AMFED and the AMFED Subsidiaries taken as a whole.
(j) Commitments and Contracts. Except as set forth on
Schedule 2(j), neither AMFED nor any AMFED Subsidiary is a party
or subject to any of the following:
(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
AMFED or such AMFED Subsidiary);
(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
AMFED or any AMFED 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, AMFED
or any AMFED 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;
(vi) any lease with annual rental payments
aggregating $10,000 or more; or
(vii) any agreement or commitment with respect to the
Community Reinvestment Act or similar law with any state or
federal regulatory authority or any other party.
(k) Litigation and Other Proceedings. AMFED has furnished
Norwest copies of (i) all attorney responses to the request of the
independent auditors for AMFED with respect to loss contingencies
as of December 31, 1994 in connection with the AMFED financial
statements included in the AMFED 10-K, and (ii) a written list of
legal and regulatory proceedings filed against AMFED or any AMFED
Subsidiary since said date. Neither AMFED nor any AMFED
Subsidiary is a party to any pending or, to the best knowledge of
AMFED, 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 AMFED
and the AMFED Subsidiaries taken as a whole.
(l) Insurance. AMFED and each AMFED Subsidiary is
presently insured, and during each of the past five calendar years
(or during such lesser period of time as AMFED has owned such
AMFED 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. AMFED and each AMFED 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 AMFED or such
AMFED Subsidiary; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and,
to the best knowledge of AMFED, no suspension or cancellation of
any of them is threatened; and all such filings, applications and
registrations material to the business or properties of AMFED or
any AMFED Subsidiary are current. The conduct by AMFED and each
AMFED 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 AMFED nor any AMFED Subsidiary is in default under any
order, 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 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 AMFED or any AMFED Subsidiary which reasonably could be
expected to have a material adverse effect on the business or
properties of AMFED and the AMFED Subsidiaries taken as a whole.
Neither AMFED nor any of the AMFED Subsidiaries is subject to any
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 extraordinary board resolutions at the request of any
federal or state governmental authorities charged with the
supervision or regulation of thrifts or thrift holding companies
or engaged in the insurance of thrift deposits ("Bank
Regulators"), nor have any of them been advised by any 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, extraordinary
board resolution or similar undertaking.
(n) Labor. No work stoppage involving AMFED or any AMFED
Subsidiary is pending or, to the best knowledge of AMFED,
threatened. Neither AMFED nor any AMFED Subsidiary is involved
in, or threatened with, any labor dispute, arbitration, lawsuit or
administrative proceeding which reasonably could be expected to
have a material adverse effect on the business of AMFED or such
AMFED Subsidiary. Employees of AMFED and the AMFED 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.
(i) Except as set forth on Schedule 2(o), to the best
knowledge of AMFED, no officer or director of AMFED or any
AMFED 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 AMFED
or any AMFED Subsidiary.
(ii) Schedule 2(o) sets forth a correct and complete
list of any loan from AFS to any present officer, director,
employee or any associate or related interest of any such
person which was required under Regulation O promulgated by
the Federal Reserve Board to be approved by or reported to
AFS's Board of Directors.
(iii) Schedule 2(o) lists any loan (except credit
card loans or loans on primary residences) by AMFED or an
AMFED Subsidiary to any officer, director or any greater
than 5% shareholder of AMFED or an AMFED Subsidiary or any
affiliate of AMFED; or to any Person in which such officer,
director or greater than 5% shareholder directly or
indirectly owns beneficially or of record 10% or more of any
class of equity securities of any corporation, partnership
or joint venture; or to any trust or estate in which such
officer, director or greater than 5% shareholder has a 10%
or more beneficial interest, or as to which such officer,
director or greater than 5% shareholder serves as a trustee
or in a similar capacity.
(p) AMFED 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 AMFED
or any AMFED 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 AMFED or any AMFED 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), AMFED or the AMFED 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 Plans to which the qualification requirements of Section
401(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), apply. AMFED 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.
(iii) Except as set forth on Schedule 2(p), 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 AMFED, 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 AMFED, 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 AMFED and the AMFED
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 Merger 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 Merger
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 AMFED or any AMFED 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) Intentionally omitted.
(r) Registration Obligations. Except as set forth on
Schedule 2(r), neither AMFED nor any AMFED Subsidiary is under any
obligation, contingent or otherwise, which will survive the Merger
by reason of any agreement to register any of its securities under
the Securities Act.
(s) Brokers and Finders. Except as described on Schedule
2(s), neither AMFED nor any AMFED 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 AMFED or
any AMFED Subsidiary in connection with this Agreement and the
Merger Agreement or the transactions contemplated hereby and
thereby.
(t) Administration of Trust Accounts. AMFED and each AMFED
Subsidiary has properly administered in all respects material and
which could reasonably be expected to be material to the financial
condition of AMFED and the AMFED Subsidiaries taken as a whole all
accounts for which it acts as a fiduciary, including but not
limited to accounts for which it serves as an agent, custodian, or
otherwise in a fiduciary capacity including specifically IRA and
KEOGH accounts, in accordance with the terms of the governing
documents and applicable state and federal law and regulation and
common law. Neither AMFED, any AMFED Subsidiary, nor any
director, officer or employee of AMFED or any AMFED Subsidiary has
committed any breach of trust with respect to any such fiduciary
account which is material to or could reasonably be expected to be
material to the financial condition of AMFED and the AMFED
Subsidiaries taken as a whole, and the accountings for each such
fiduciary account are true and correct in all material respects
and accurately reflect the assets of such fiduciary account.
(u) No Defaults. Neither AMFED nor any AMFED 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 AMFED and the AMFED Subsidiaries,
taken as a whole. To the best of AMFED's knowledge, all parties
with whom AMFED or any AMFED Subsidiary has material leases,
agreements or contracts or who owe to AMFED or any AMFED
Subsidiary material obligations other than with respect to those
arising in the ordinary course of the banking business of the
AMFED 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 pending that seeks to impose, or that could result in the
imposition of, on AMFED or any AMFED 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 AMFED's knowledge, threatened
against AMFED or any AMFED Subsidiary the result of which has had
or could reasonably be expected to have a material adverse effect
upon AMFED and AMFED's Subsidiaries, taken as a whole; to the best
of AMFED's knowledge there is no reasonable basis for any such
proceeding, claim or action; and to the best of AMFED's knowledge,
neither AMFED nor any AMFED 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. AMFED has provided Norwest with copies
of all environmental assessments, reports, studies and other
related information in its possession with respect to each bank
facility and each non-residential REO property.
(w) Intellectual Property. AMFED and each AMFED Subsidiary
owns or possesses valid and binding licenses and other rights to
use without payment all material patents, copyrights, trade
secrets, trade names, service marks and trademarks used in its
business; and neither AMFED nor any AMFED Subsidiary has received
any notice of conflict with respect thereto that asserts the right
of others. AMFED and each AMFED Subsidiary have in all material
respect performed all the obligations required to be performed by
them and are not in default in any material respect under any
contract, agreement, arrangement or commitment relating to any of
the foregoing.
(x) Corporate Approval
(i) The affirmative vote of the holders of a majority
of the outstanding shares of AMFED Common Stock is required
to adopt this Agreement and approve the Merger and the other
transactions contemplated hereby. No other vote of the
AMFED Shareholders is required by law, the Articles of
Incorporation or bylaws of AMFED or otherwise to adopt this
Agreement and approve the Merger and the other transactions
contemplated hereby;
(ii) At a duly constituted meeting of the Board of
Directors of AMFED's directors constituting a majority of
the disinterested directors of AMFED granted their prior
approval to the Merger and the issuance of the option
granted under the Stock Option Agreement, and, accordingly,
the provisions of Article X of AMFED's Articles of
Incorporation and Nevada Revised Statutes Sections 78.378 to 78.3793
inclusive do not and will not apply to this Agreement or the
option granted under the Stock Option Agreement or the
consummation of any of the transactions contemplated hereby
or thereby.
(y) Deposits. Except as set forth in Schedule 2(y), none
of the AFS bank deposits is a Brokered Deposit. Except as set
forth in Schedule 2(y), no portion of the deposits represents a
deposit by any affiliate of AMFED or AFS. "Brokered Deposits"
shall mean all deposits of AFS for which AFS has paid a commission
or an interest rate substantially above that paid by AFS to the
general depositors of AFS.
3. Representations and Warranties of Norwest. Norwest
represents and warrants to AMFED 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. Norwest has
furnished AMFED true and correct copies of its certificate of
incorporation and by-laws, as amended, which certificate of
incorporation and by-laws are in full force and effect.
(b) Norwest Subsidiaries. Schedule 3(b) sets forth a
complete and correct list, as of December 31, 1994, 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. Section 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
December 31, 1994, 1,127,125 shares of 10.24% Cumulative Preferred
Stock at $100 stated value, 980,000 shares of Cumulative Tracking
Preferred Stock, and 1,143,675 shares of Cumulative Convertible
Preferred Stock, Series B, at $200 stated value and 14,265 shares
of ESOP Cumulative Convertible Preferred Stock, at $1,000 stated
value were outstanding, (ii) 500,000,000 shares of Common Stock,
$1-2/3 par value, of which as of the close of business on December
31, 1994, 309,144,857 shares were outstanding and 13,939,617
shares were held in the treasury, and (iii) 4,000,000 shares of
Preference Stock, no par value, of which as of the close of
business on May 31, 1995, no shares were outstanding.
(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
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 Merger 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,
subject as to enforceability, to applicable bankruptcy,
insolvency, receivership, conservatorship, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and to the application of equitable principles
and judicial discretion.
Neither the execution, delivery and performance by Norwest
of this Agreement or the Merger 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 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 SLHC Act, the BHC Act or the HSR Act, and filings required to
effect the Merger under Nevada law, 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
Merger Agreement.
(e) Norwest Financial Statements. The consolidated balance
sheets of Norwest and Norwest's subsidiaries as of December 31,
1994 and 1993 and related consolidated statements of income,
stockholders' equity and cash flows for the three years ended
December 31, 1994, together with the notes thereto, certified by
KPMG Peat Marwick, LLP and included in Norwest's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 (the
"Norwest 10-K") as filed with the SEC, and the unaudited
consolidated balance sheets of Norwest and its subsidiaries as of
March 31, 1995 and the related unaudited consolidated statements
of income and cash flows for the three months then ended included
in Norwest's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1995, 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.
(f) Reports. Since December 31, 1990, 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 March 31, 1995 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 as 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 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.
(i) Absence of Certain Changes. Since December 31, 1994,
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 December 31, 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
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 July 10, 1995, 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 TEFRA, DEFRA and 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 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 Merger 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 Merger 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 (as
defined in paragraph 4(d)), (ii) the Proxy Statement (as defined
in paragraph 4(d)), 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 Merger 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 Merger 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 Merger 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 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) Merger Co. As of the Closing Date, Merger Co. will be
a corporation duly organized, validly existing, duly qualified to
do business and in good standing under the laws of its
jurisdiction of incorporation, and will have corporate power and
authority to own or lease its properties and assets and to carry
on its business and enter into and perform its obligations under
the Merger Agreement, and the execution and delivery by Merger Co.
of the Merger Agreement shall have been duly authorized by the
Board of Directors and shareholders of Merger Co.
4. Covenants of AMFED. AMFED 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
Merger, AMFED, and each AMFED 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 (which consent shall be deemed to have
been given as to any loan approval request to which Norwest had
made no response by the later of 48 hours or at the end of the
second business day following receipt by Norwest of a request to
consent), 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 (or which would be required to be
aggregated for loans to one borrower limitations), would be in
excess of $3,000,000; provided that AMFED and AFS will promptly,
after the making thereof by AMFED or AFS, supply Norwest with all
reasonably requested information concerning loans in amounts less
than $3,000,000 but greater than $500,000; maintain proper
accounting records in accordance with generally accepted
accounting 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 goodwill and the goodwill 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 Merger; comply
in all material respects with all laws, regulations, ordinances,
codes, orders, licenses and permits applicable to the properties
and operations of AMFED and each AMFED Subsidiary the non-
compliance with which reasonably could be expected to have a
material adverse effect on AMFED and the AMFED Subsidiaries taken
as a whole; and permit Norwest, upon reasonable prior notice by
Norwest and its representatives (including KPMG Peat Marwick, LLP)
to examine its and its subsidiaries books, records and properties
and to interview officers, employees and agents at 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, diminish or terminate any
of the representations, warranties or covenants of AMFED herein
expressed.
(b) Except as otherwise contemplated or required by this
Agreement, from the date hereof until the Effective Time of the
Merger, AMFED and each AMFED subsidiary will not (without the
prior written consent of Norwest): amend or otherwise change its
articles of incorporation or association or by-laws; issue or sell
or authorize for issuance or sale, or grant any options, warrants,
stock appreciation rights or similar rights 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, except that AMFED may
issue shares of AMFED Common Stock upon the exercise of the option
granted under the Stock Option Agreement or upon the exercise of
outstanding stock options described in Schedule 4(b); authorize or
incur any long-term debt (other than deposit liabilities and
Federal Home Loan Bank advances incurred in the ordinary course of
business, consistent with past practices); mortgage, pledge or
subject to lien or other encumbrance any of its properties, except
in the ordinary course of business; enter into or renew any
material agreement, contract or commitment in excess of $100,000
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 any
dividend declared by an AMFED Subsidiary's Board of Directors in
accordance with applicable law and regulation provided, however,
that between the date hereof and the Effective Date of the Merger,
AMFED may declare and pay cash dividends on AMFED Common Stock in
an amount not to exceed $.07 per share for the quarter ending
September 30, 1995, payable in October, 1995, for the quarter
ending December 31, 1995, payable in January, 1996, but prior to
the Effective Date of the Merger, and, in the event the Effective
Date of the Merger has not yet occurred, for the quarter ended
March 31, 1996, payable in April, 1996, provided, further, that if
the Effective Date of the Merger is after the record date for
Norwest's regular first quarter Norwest Common Stock dividend
("Norwest Record Date"), AMFED may declare and pay a cash dividend
on AMFED Common Stock, payable immediately prior to the Closing
Date, in an amount not to exceed the difference between AMFED's
December 31, 1995 dividend and the dividend shareholders of AMFED
would have received on Norwest Common Stock issued in connection
with the Merger if the Effective Date of the Merger had occurred
immediately prior to the Norwest Record Date; redeem, purchase or
otherwise acquire, directly or indirectly, any of the capital
stock of AMFED; increase the compensation or benefits 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 AMFED
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 AMFED will duly call, and
will cause to be held not later than twenty-five (25) business
days following the effective date of the Registration Statement
(defined in paragraph 4(d)) referred to in paragraph 5(c) hereof,
a meeting of its shareholders and will direct that this Agreement
and the Merger Agreement be submitted to a vote at such meeting.
The Board of Directors of AMFED will (i) cause proper notice of
such meeting to be given to its shareholders in compliance with
the Nevada Business Corporation Act and other applicable law and
regulation, and (ii) except to the extent, based on the advice of
counsel, legally advisable for the discharge of the fiduciary
duties of the Board of Directors of AMFED (A) recommend by the
affirmative vote of the Board of Directors a vote in favor of
approval of this Agreement and the Merger Agreement, and (B) use
its best efforts to solicit from its shareholders proxies in favor
thereof.
(d) AMFED will furnish or cause to be furnished to Norwest
all the information concerning AMFED and its subsidiaries required
for inclusion in the Registration Statement (defined below)
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. The annual
and quarterly financial statements of AMFED and the AMFED
Subsidiaries included in, or incorporated by reference in, the
Registration Statement will comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the published rules and regulations thereunder.
Any financial statement for any fiscal year provided under this
paragraph must include the audit opinion and the consent of
Deloitte & Touche, LLP to use such opinion in such Registration
Statement. None of the information regarding AMFED and the AMFED
Subsidiaries supplied or to be supplied by AMFED 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 AMFED Common Stock
pursuant to the provisions of the Merger Agreement (the
"Registration Statement"), (ii) the proxy statement to be mailed
to AMFED's shareholders in connection with the meeting to be
called to consider the Merger (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 Merger 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; provided, however, that the provisions of
this paragraph shall not apply to statements in or omissions from
the Registration Statement or Proxy Statement made in reliance
upon or in conformity with information furnished by Norwest or any
Norwest Subsidiary for use in the Registration Statement or Proxy
Statement.
(e) AMFED will cooperate with Norwest in the obtaining of
all approvals of regulatory authorities, consents and other
approvals required to carry out the transactions contemplated by
this Agreement.
(f) AMFED 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) AMFED will hold in confidence all documents and
information concerning Norwest and its subsidiaries furnished to
AMFED 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 AMFED'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 AMFED, in the public domain, or
later acquired by AMFED 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 AMFED, nor any AMFED Subsidiary, nor any
director, officer, representative or agent thereof, will, directly
or indirectly, solicit, authorize the solicitation of or, except
to the extent, based on the advice of counsel, legally advisable
for the discharge of the fiduciary duties of the Board of
Directors of AMFED, 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 AMFED or any AMFED 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 AMFED or any AMFED Subsidiary except in the ordinary course of
business, or (iv) to merge, consolidate or otherwise combine with
AMFED or any AMFED Subsidiary. If any corporation, partnership,
person or other entity or group makes an offer or inquiry to AMFED
or any AMFED Subsidiary concerning any of the foregoing, AMFED or
such AMFED Subsidiary will promptly disclose such offer or
inquiry, including the terms thereof, to Norwest.
(i) AMFED 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) AMFED and each AMFED Subsidiary will take all action
necessary or required (i) to terminate or amend, if requested by
Norwest, all qualified pension and welfare benefit plans to
facilitate the merger of such plans with Norwest plans without
gaps in coverage for participants in the plans and without
duplication of costs caused by the continuation of such plans
after and to the extent coverage is available under Norwest plans
and to terminate all non-qualified benefit plans and compensation
arrangements as of the Effective Date of the Merger, (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 Merger.
(k) Neither AMFED nor any AMFED Subsidiary shall take any
action which with respect to AMFED would disqualify the Merger as
a "pooling of interests" for accounting purposes.
(l) AMFED shall use its best efforts to obtain and deliver
at least 32 days prior to the Effective Date of the Merger signed
representations substantially in the form attached hereto as
Exhibit B to Norwest by each executive officer, director or
shareholder of AMFED who may reasonably be deemed an "affiliate"
of AMFED within the meaning of such term as used in Rule 145 under
the Securities Act.
(m) At the request of Norwest, effective as of December 31,
1995, or such later date specified by Norwest, AMFED shall
establish such additional accruals and reserves as may be
necessary to conform AMFED's accounting and credit loss reserve
practices and methods to those of Norwest and Norwest's plans with
respect to the conduct of AMFED's business following the Merger
and to provide for the costs and expenses relating to the
consummation by AMFED of the Merger and the other transactions
contemplated by this Agreement; provided that AMFED shall not be
required to take such action if all regulatory approvals as
contemplated by paragraph 7(e) hereof shall not have been obtained
by the specified effective date of such action.
(n) AMFED shall obtain, at its sole expense (except as may
be otherwise agreed to by Norwest and AMFED), Phase I
environmental assessments for each branch facility and each non-
residential OREO property. Oral reports of such environmental
assessments shall be delivered to Norwest as soon as practicable,
provided AMFED uses its best efforts to provide such reports no
later than four (4) weeks and written reports shall be delivered
to Norwest as soon as practicable, provided AMFED uses its best
efforts to provide such reports no later than eight (8) weeks from
the date of this Agreement. AMFED shall also obtain, at its sole
expense (except as may be otherwise agreed to by Norwest and
AMFED), Phase II environmental assessments for properties
identified by Norwest on the basis of the results of such Phase I
environmental assessments. AMFED shall obtain a survey and
assessment of all potential asbestos containing material in owned
or leased properties (other than OREO property) and a written
report of the results shall be delivered to Norwest as soon as
practicable, provided AMFED uses its best efforts to obtain a
report within four (4) weeks of execution of the definitive
agreement.
(o) AMFED shall deliver any existing title insurance
policies and boundary surveys for each branch facility and, upon
request by Norwest, AMFED shall obtain, at its sole expense
(except as may be otherwise agreed to by Norwest and AMFED),
commitments for title insurance and boundary surveys for each such
facility which shall be delivered to Norwest as soon as
practiable, provided AMFED uses its best efforts to provide such
policies and surveys no later than four (4) weeks from the date of
request by Norwest.
(p) AMFED shall take all action necessary to terminate the
AMFED 1992 Stock Option Incentive Plan (the "Option Plan") to
provide for the acceleration of the vesting rights of the options
("Options") issued thereunder to permit such Options to be
immediately exercisable as provided in the Option Plan and to
provide for the cancellation of any unexercised Options prior to
the Effective Time of the Merger and, if necessary, shall obtain
the written consent or acknowledgment of the holders of such
Options to such termination in exchange for (i) the acceleration
of such Options in accordance with the terms of the Option Plan
and (ii) the exchange of such Options for shares of Norwest Common
Stock as set forth in paragraph 1(a)(v).
(q) AMFED shall terminate as of September 30, 1995,
effective as of no later than December 31, 1995, that certain
Lease and Administrative Services Agreement dated January 1, 1995,
between Investors Financial Services, Inc. and Americorp
Financial, Inc. ("IFS Agreement") and that certain Agreement dated
December 1, 1994 between Americorp Financial, Inc. and Laughlin
Group Advisors, Inc. ("Laughlin Agreement").
(r) Intentionally Omitted.
(s) Subject to the terms and conditions herein provided,
AMFED agrees to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Agreement , the Merger Agreement and the
Stock Option Agreement, including using all reasonable efforts to
obtain all necessary waivers, consents and approvals, to effect
all necessary registrations and filings (including, but not
limited to, filings under the BHC Act, the SLHC Act and HSR Act
and with all applicable governmental entities).
(t) AMFED shall use its best efforts to amend the
management employment agreements listed on Schedule 4(t)
("Management Agreements") to provide:
(i) that, subject to paragraph 4(t)(ii) hereof, with
respect to any AMFED employee who is a party to a Management
Agreement (a "Management Employee") and who enters the
Norwest benefit plans described in paragraph 8 hereof, the
benefit continuation obligation in paragraph 9(g) of the
Management Agreements may be satisfied by comparable Norwest
benefit plans (to the extent maintained or offered by
Norwest):
(ii) that for any Management Employee who does not
enter the Norwest benefit plans described in paragraph 8
hereof (or for any Management Employee described in
paragraph 4(t)(i) whose employment with Norwest terminates
prior to the expiration of the benefit continuation period
specified in paragraph 9(g) of the Management Agreement) (a)
the benefit continuation provisions of paragraph 9(g) of the
Management Agreements may be satisfied by a cash payment to
such Management Employee in an amount which, on an after-tax
basis, is sufficient to cover the cost of obtaining, on an
individual basis, comparable medical, dental, disability,
life insurance and other AMFED employee welfare benefits at
then prevailing premiums or costs for such Management
Employee over the benefit continuation period, (b) the
obligation to provide continued coverage under the AMFED
pension plan and AMFED employee stock ownership plan may be
satisfied by a cash payment equal to the contributions the
Management Employee would have received under such plans
(assuming 1995 compensation levels) over the benefit
continuation period and (c) in lieu of unreduced pension
benefits in the event of commencement of benefit payments
prior to normal retirement age as specified in paragraph
9(g)(iv) of the Management Agreements, a cash payment shall
be made to the Management Employee in an amount which is the
actuarial equivalent of such benefit;
(iii) that the obligations of Norwest under paragraph
4(t)(ii) may be satisfied, at Norwest's option, by the
provision of benefits under comparable Norwest benefit plans
(including through the extension of COBRA coverage for the
18 month period specified by COBRA at Norwest's expense) and
that the obligation of Norwest to make cash payments to any
Management Employee shall be reduced pro rata for the value
of any comparable Norwest benefits received by such
Management Employee or contributions made to any comparable
benefit plans for such Management Employee; and
(iv) that, notwithstanding anything to the contrary
in the Management Agreements, the payments and benefits to
be provided to any Management Employee under paragraph 9(g)
of the Management Agreements shall be paid or provided over
the minimum period (or otherwise made available) in such
manner as is necessary to cause such payments and benefits
not to constitute "excess parachute payments" for purposes
of Section 280G of the Code.
5. Covenants of Norwest. Norwest covenants and agrees with
AMFED as follows:
(a) From the date hereof until the Effective Time of the
Merger, 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 AMFED all the information
concerning Norwest required for inclusion in a proxy statement or
statements to be sent to the shareholders of AMFED, or in any
statement or application made by AMFED 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 AMFED
pursuant to the Merger Agreement, and will use its best efforts to
cause the Registration Statement to become effective. Each of
Norwest and AMFED will notify the other promptly as is practicable
of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements
to the S-4 or Prospectus/Proxy Statement or for additional
information and will supply the other with copies of all
correspondence with the SEC or its staff with respect to the S-4
or the Prospectus/Proxy Statement. Whenever any event occurs
which should be set forth in an amendment or supplement to the S-4
or the Prospectus/Proxy Statement, Norwest or AMFED, as the case
may be, shall promptly inform the other of such occurrence and
cooperate in filing with the SEC or its staff, and/or mailing to
stockholders of AMFED, of such amendment or supplement. 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
AMFED shareholders, at the time of the AMFED shareholders' meeting
referred to in paragraph 4(c) hereof and at the Effective Time of
the Merger 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
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
AMFED or any AMFED 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 Merger
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 AMFED pursuant to this Agreement
and the Merger Agreement will, upon such issuance and delivery to
said shareholders pursuant to the Merger Agreement, be duly
authorized, validly issued, fully paid and nonassessable. The
shares of Norwest Common Stock to be delivered to the shareholders
of AMFED pursuant to the Merger 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 Merger, 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 AMFED to obtain all such approvals and consents required by
AMFED.
(h) Norwest will hold in confidence all documents and
information concerning AMFED and AMFED'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 AMFED
(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 AMFED.
(i) Norwest will file any documents or agreements required
to be filed in connection with the Merger under the Nevada
Business Corporation 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 AMFED 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 AMFED prompt notice of receipt of
the regulatory approvals referred to in paragraph 7(e) and shall
provide AMFED with copies of any written comments by any
regulatory authorities regarding the relating to the non-
confidential portions of the regulatory applications filed in
connection with the transactions contemplated hereby.
(m) Neither Norwest nor any Norwest Subsidiary shall take
any action which with respect to Norwest would disqualify the
Merger as a "pooling of interests" for accounting purposes.
(n) For a period not exceeding fifteen days prior to the
mailing of the Proxy Statement referred to in paragraph 4(c) and
prior to the Closing Date, Norwest will permit AMFED 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 AMFED or its representatives shall in any way
affect, diminish or terminate any of the representations,
warranties or covenants of Norwest herein expressed.
(o) Subject to the terms and conditions herein provided,
Norwest agrees to use all reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
contemplated by this Agreement , the Merger Agreement and the
Stock Option Agreement, including using all reasonable efforts to
obtain all necessary waivers, consents and approvals, to effect
all necessary registrations and filings (including, but not
limited to, filings under the BHC Act the SLHC Act and HSR Act
and with all applicable governmental entities).
(p) With respect to the indemnification of officers and
directors and officers' and directors' insurance, Norwest agrees
as follows:
(i) For a period of six (6) years from the Effective
Time of the Merger, Norwest shall ensure that all rights to
indemnification and all limitations of liability existing in
favor of any person who is now, or has been at any time
prior to the date hereof, or who becomes prior to the
Effective Time of the Merger, a director or officer of AMFED
or any AMFED Subsidiary, (the "Indemnified Parties") in
AMFED's Articles of Incorporation or By-laws or similar
governing documents of any AMFED Subsidiary, as applicable
in the particular case and as in effect on the date hereof,
shall, with respect to claims arising from facts or events
that occurred before the Effective Time of the Merger,
survive the Merger and shall continue in full force and
effect. Nothing contained in this paragraph 5(p)(i) shall
be deemed to preclude the liquidation, consolidation or
merger of AMFED or any AMFED Subsidiary, in which case all
of such rights to indemnification and limitations on
liability shall be deemed to so survive and continue as
contractual rights notwithstanding any such liquidation or
consolidation of merger; provided, however, that in the
event of liquidation or sale of substantially all of the
assets of AMFED, Norwest shall guarantee, to the extent of
the net asset value of AMFED or any AMFED Subsidiary as of
the Effective Date of the Merger, the indemnification
obligations of AMFED or any AMFED Subsidiary to the extent
of the above mentioned indemnification obligations of AMFED
and the AMFED Subsidiaries described above. Notwithstanding
anything to the contrary contained in this paragraph
5(p)(i), nothing contained herein shall require Norwest to
indemnify any person who was a director or officer of AMFED
or any AMFED Subsidiary to a greater extent than AMFED or
any AMFED Subsidiary is, as of the date of this Agreement,
required to indemnify any such person; and
(ii) any Indemnified Party wishing to claim
indemnification under paragraph 5(p)(i), upon learning of
any such claim, action, suit, proceeding or investigation,
shall promptly notify Norwest thereof, but the failure to so
notify shall not relieve Norwest of any liability it may
have to such Indemnified Party. In the event of any such
claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time of the Merger),
(A) Norwest shall have the right to assume the defense
thereof and Norwest shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, except that if
Norwest elects not to assume such defense or counsel for the
Indemnified Parties advises that there are issues which
raise conflicts of interest between Norwest and the
Indemnified Parties, the Indemnified Parties may retain
counsel satisfactory to them, and Norwest shall pay the
reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are
received; provided, however, that Norwest shall be obligated
pursuant to this subparagraph (ii) to pay for only one firm
of counsel for all Indemnified Parties in any jurisdiction
unless the use of one counsel for such Indemnified Parties
would present such counsel with a conflict of interest and
(B) the Indemnified Parties shall cooperate in the defense
of any such matter.
(iii) for a period of three years after the Effective
Time of the Merger, Norwest shall use all reasonable efforts
to cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by
AMFED (provided that Norwest may substitute therefor
policies of at least the same coverage and amount containing
terms and conditions which are substantially no less
advantageous) with respect to claims arising from facts or
events which occurred before the Effective Time of the
Merger; provided, however, that in no event shall Norwest be
obligated to expend, in order to maintain or provide
insurance coverage pursuant to this paragraph 5(p)(iii), any
amount in excess of 150% of the amount of the annual
payments paid as of the date hereof by AMFED (the "Maximum
Amount") and provided further that, prior to the Effective
Time, AMFED shall notify the appropriate directors' and
officers' liability insurers of the Merger and of all
pending or threatened claims, actions, suits, proceedings or
investigations asserted or claimed against any Indemnified
Party, or circumstances likely to give rise thereto, in
accordance with terms and conditions of the applicable
policies. If the amount of the premiums necessary to
maintain or procure such insurance coverage exceeds the
Maximum Amount, Norwest shall use reasonable efforts to
maintain the most advantageous policies of directors' and
officers' insurance obtainable for a premium equal to the
Maximum Amount:
(iv) if Norwest or any of its successors or assigns
(A) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or
surviving corporation or entity of such consolidation or
merger or (B) shall transfer all or substantially all of its
properties and assets to any individual, corporation or
other entity, then and in each such case, proper provision
shall be made so that the successors and assigns of Norwest
shall assume the obligations set forth in this paragraph
5(p); and
(v) the provisions of this paragraph 5(p) are
intended to be for the benefit of, and shall be enforceable
by, each Indemnified Party and his or her heirs and
representatives.
6. Conditions Precedent to Obligation of AMFED. The
obligation of AMFED to effect the Merger shall be subject to the
satisfaction at or before the Time of Filing of the following
further conditions, which may be waived in writing by AMFED:
(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 its subsidiaries
taken as a whole as if made at the Time of Filing.
(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 Merger Co. at or before the Time of Filing.
(c) AMFED shall have received a favorable certificate,
dated as of the Effective Date of the Merger, 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 Merger Agreement shall have been
approved by the affirmative vote of the holders of the percentage
of the outstanding shares of AMFED required for approval of a plan
of merger in accordance with the provisions of AMFED's Articles of
Incorporation and the Nevada Business Corporation Act.
(e) Norwest shall have received approval by the Federal
Reserve Board and the OTS and by such other governmental agencies
as may be required by law of the transactions contemplated by this
Agreement and the Merger 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 AMFED pursuant to this Agreement and the
Merger Agreement shall have been authorized for listing on the New
York Stock Exchange and the Chicago Stock Exchange.
(h) AMFED shall have received an opinion, dated the Closing
Date, of counsel to AMFED, substantially to the effect that, for
federal income tax purposes: (i) the Merger 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 AMFED 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 AMFED will be the same as the basis of AMFED
Common Stock exchanged therefor; and (iv) the holding period of
the shares of Norwest Common Stock received by the shareholders of
AMFED will include the holding period of the AMFED Common Stock,
provided such shares of AMFED Common Stock were held as a capital
asset as of the Effective Time of the Merger.
(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.
(j) Prior to the mailing of the Proxy Statement referred to
in paragraph 4(c), AMFED and the Board of Directors of AMFED
shall have received an opinion of its financial advisor addressed
to AMFED and the Board of Directors of AMFED, and for their
exclusive benefit, for inclusion in said Proxy Statement and dated
effective as of the date of mailing of such Proxy Statement, based
on such matters as AMFED deems appropriate or necessary, to the
effect that the consideration to be received by stockholders of
AMFED pursuant to the Merger is fair from a financial point of
view. AMFED shall promptly provide a copy of such opinion to
Norwest upon receipt.
7. Conditions Precedent to Obligation of Norwest. The
obligation of Norwest to effect the Merger shall be subject to the
satisfaction at or before the Time of Filing 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 AMFED and
the AMFED Subsidiaries taken as a whole as if made at the Time of
Filing.
(b) AMFED 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 Time of Filing.
(c) This Agreement and the Merger Agreement shall have been
approved by the affirmative vote of the holders of the percentage
of the outstanding shares of AMFED required for approval of a plan
of merger in accordance with the provisions of AMFED's Articles of
Incorporation and the Nevada Business Corporation Act.
(d) Norwest shall have received a favorable certificate
dated as of the Effective Date of the Merger signed by the
Chairman or President and by the Secretary or Assistant Secretary
of AMFED, 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 Merger
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 AMFED or any
AMFED Subsidiary that, in the good faith judgment of Norwest, is
unreasonably burdensome to Norwest; provided, however, that
standard conditions or requirements that are applicable to
approvals of applications by a bank holding company to acquire a
savings and loan holding company generally shall not be deemed
unreasonably burdensome.
(f) AMFED and each AMFED Subsidiary shall have obtained any
and all material consents or waivers from other parties to loan
agreements, leases or other contracts material to AMFED's or such
subsidiary's business required for the consummation of the Merger,
and AMFED and each AMFED Subsidiary shall have obtained any and
all material permits, authorizations, consents, waivers and
approvals required for the lawful consummation by it of the
Merger.
(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 Merger shall qualify as a "pooling of interests"
for accounting purposes and Norwest shall have received from
Deloitte & Touche, LLP an opinion to the effect that the
activities of AMFED would not preclude the Merger from being
accounted for as a pooling of interests.
(i) At any time since the date hereof the total number of
shares of AMFED Common Stock outstanding and subject to issuance
upon exercise (assuming for this purpose that phantom shares and
other share-equivalents constitute AMFED 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 6,327,054.
(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) Intentionally omitted.
(l) Intentionally omitted.
(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 AMFED or any AMFED 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 AMFED and its
subsidiaries taken as a whole.
(n) AMFED shall have terminated the Option Plan and all
outstanding Options shall have been exercised or canceled as
required in paragraph 4(p).
(o) AMFED shall have terminated the IFS Agreement and the
Laughlin Agreement as provided in paragraph 4(q).
(p) The management employment agreements listed on Schedule
4(t) shall have been amended as required by paragraph 4(t).
(q) AMFED shall have accrued or paid by no later than
December 31, 1995, but in any event shall have, prior to the
Closing Date, paid to employees of AMFED the amount of accrued but
untaken carryover vacation to which AMFED's employees are entitled
under AMFED's vacation policy.
(r) AMFED shall have established the accruals and reserves
described in paragraph 4(m) hereof.
8. Employee Benefit Plans. Each person who is an employee
of AMFED or any AMFED Subsidiary as of the Effective Date of the
Merger ("AMFED 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 AMFED 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 any pre-
existing conditions or exclusions except for the Norwest 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 Merger, provided, however, that until the
effective date of coverage for AMFED Employees under the Norwest
employee welfare benefit plans listed below, the employee welfare
benefit plans of AMFED, as in effect prior to the Effective Date
of the Merger, shall be maintained for the benefit of AMFED
Employees on the terms and conditions previously in effect,
including with respect to employer contributions, to ensure that
no gap in coverage occurs:
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 AMFED Employee's benefit for
the year in which the Merger occurs under the Norwest vacation
program, vacation taken by an AMFED Employee in the year in which
the Merger occurs will be deducted from the total Norwest benefit.
After the Effective Date of the Merger, AMFED Employees will be
subject to Norwest's Vacation Program in accordance with the terms
of that Program, with full credit for years of past service to
AMFED and the AMFED Subsidiaries. For purposes of the Short Term
Disability Plan and Severance Policy, AMFED Employees will receive
full credit for years of past service with AMFED and the AMFED
Subsidiaries. Each AMFED Employee whose employment is terminated
on or after the Effective Date of the Merger shall be eligible to
receive benefits under the Norwest Severance Pay Plan on the terms
and conditions stated therein with full credit for years of past
service with AMFED and the AMFED Subsidiaries.
AMFED Employees shall not be entitled to past service credit with
regard to retiree medical benefits.
(b) Employee Retirement Benefit Plans.
Each AMFED 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 AMFED and the AMFED Subsidiaries to
the extent such service was credited in the AMFED ESOP for the
purpose of satisfying any eligibility and vesting periods
applicable to SIP), 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 Merger.
Each AMFED Employee shall be eligible for participation in the
Norwest Pension Plan under the terms thereof with full credit for
years of past service to AMFED and the AMFED Subsidiaries to the
extent such service was credited in the AMFED Pension Plan for the
purpose of satisfying any eligibility and vesting periods
applicable to the Norwest Pension Plan (but not for benefit
purposes).
9. Termination of Agreement.
(a) This Agreement may be terminated at any time prior to
the Time of Filing:
(i) by mutual written consent of the parties hereto;
or
(ii) by either of the parties hereto upon written
notice to the other party if the Merger shall not have been
consummated by June 30, 1996 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 AMFED 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;
(iv) by AMFED, within five business days after the
end of the "Termination Measurement Period" (defined below),
if both of the following conditions are satisfied:
(A) the Termination Measurement Price
multiplied by the applicable A Exchange Ratio, B
Exchange Ratio, C Exchange Ratio or D Exchange Ratio
is less than $31.00; and
(B) Norwest, in its sole discretion, does not
elect, by written notice delivered to AMFED within
five business days after the end of the Termination
Measurement Period, to adjust the number of shares of
Norwest Common Stock to be received in exchange for
each share of AMFED Common Stock tothe E Exchange
Ratio; or
(v) by Norwest, if the Board of Directors of AMFED
does not publicly recommend in the Proxy Statement that the
holders of the AMFED Common Stock approve and adopt this
Agreement, or if after recommending in the Proxy Statement
that stockholders approve and adopt this Agreement, the
Board of Directors of AMFED shall have withdrawn, modified
or amended such recommendation in any respect materially
adverse to Norwest.
(vi) For purposes of the foregoing, the "Termination
Measurement Price" is defined as the average of the closing
prices of a share of Norwest Common Stock as reported on the
consolidated tape of the New York Stock Exchange during the
Termination Measurement Period, which is defined as the
period of ten trading days ending on the day occurring five
business days immediately preceding the Closing Date.
(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. Except as otherwise provided, all expenses
in connection with this Agreement and the transactions
contemplated hereby, including without limitation legal and
accounting fees, incurred by AMFED and AMFED Subsidiaries shall be
borne by AMFED, 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, except as otherwise provided or contemplated herein, 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:
If to Norwest:
Norwest Corporation
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Secretary
If to AMFED:
Breyer & Aguggia
601 13th Street N.W.
Suite 1120 South
Washington, D.C. 20005
Attention: John F. Breyer, Jr.
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 Merger
Agreement contain the complete agreement between the parties
hereto with respect to the Merger 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 Time of Filing, 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 AMFED
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 Merger 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
Merger Agreement shall survive the Merger or except as set forth
in paragraph 9(b), the termination of this Agreement. Paragraph
10 shall survive the Merger. This paragraph shall not apply to
covenants and agreements which by their terms are intended to be
performed after the Effective Time of the Merger.
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.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
NORWEST CORPORATION AMFED FINANCIAL, INC.
By: /s/ Les Biller By: /s/ E. R. Houston
Its: Executive Vice President Its: Chief Executive Officer
EXHIBIT 2
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of the 22nd day of July,
1995 (this "Agreement"), between Norwest Corporation, a Delaware
corporation ("Grantee"), and AMFED Financial, Inc., a Nevada
corporation ("Issuer").
WITNESSETH:
WHEREAS, Grantee and Issuer are entering into an Agreement
and Plan of Reorganization, dated as of the 21st day of July, 1995
(the "Plan"), which is being executed by the parties hereto
simultaneously with the execution of this Agreement;
WHEREAS, as a condition and inducement to Grantee's entering
into the Plan and in consideration therefor, Issuer has agreed to
grant Grantee the Option (as defined below); and
WHEREAS, capitalized terms used herein shall have the same
meanings given them in the Plan;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein and in the Plan,
the parties hereto agree as follows:
SECTION 1. Issuer hereby grants to Grantee an
unconditional, irrevocable option (the "Option") to purchase,
subject to the terms hereof, up to 1,171,798 fully paid and
nonassessable shares of Issuer's Common Stock, $.01 par value
("Common Stock"), at a price per share equal to $26.00 per share
(the "Initial Price"); provided, however, that in the event Issuer
issues or agrees to issue (other than pursuant to options to issue
Common Stock in effect as of the date hereof) any shares of Common
Stock at a price less than the Initial Price (as adjusted pursuant
to Section 5(b)), such price shall be equal to such lesser price
(such price, as adjusted as hereinafter provided, the "Option
Price"). The number of shares of Common Stock that may be
received upon the exercise of the Option and the Option Price are
subject to adjustment as herein set forth.
SECTION 2. (a) Grantee may exercise the Option, in
whole or part, at any time and from time to time following the
occurrence of a Purchase Event (as defined below); provided that
the Option shall terminate and be of no further force and effect
upon the earliest to occur of (i) the time immediately prior to
the Effective Time, (ii) 9 months after the first occurrence of a
Purchase Event, (iii) 15 months after termination of the Plan
following the occurrence of a Preliminary Purchase Event (as
defined below), (iv) termination of the Plan in accordance with
the terms thereof prior to the occurrence of a Purchase Event or a
Preliminary Purchase Event (other than a termination of the Plan
by Grantee pursuant to paragraph 9 (a) (ii) due to the failure of
Issuer to perform or observe in all material respects the
covenants and agreements to be performed or observed by Issuer or
pursuant to paragraph 9(a)(v) thereof, or (v) 15 months after the
termination of the Plan by Grantee pursuant to paragraph 9(a) (ii)
due to the failure of Issuer to perform or observe in all material
respects the covenants and agreements to be performed or observed
by Issuer or pursuant to paragraph 9(a)(v) thereof. The events
described in clauses (i) - (v) in the preceding sentence are
hereinafter collectively referred to as an "Exercise Termination
Event."
(b) The term "Preliminary Purchase Event" shall mean
any of the following events or transactions occurring after the
date hereof:
(i) Issuer or any of its subsidiaries (each an
"Issuer Subsidiary") without having received Grantee's prior
written consent, shall have entered into an agreement to
engage in an Acquisition Transaction (as defined below) with
any person (the term "person" for purposes of this Agreement
having the meaning assigned thereto in Sections 3 (a) (9)
and 13 (d) (3) of the Securities Exchange Act of 1934 and
the rules and regulations thereunder (the "Securities
Exchange Act")) other than Grantee or any of its
subsidiaries (each a "Grantee Subsidiary") or the Board of
Directors of Issuer shall have recommended that the
shareholders of Issuer approve or accept any Acquisition
Transaction with any person other than Grantee or any
Grantee Subsidiary. For purposes of this Agreement,
"Acquisition Transaction" shall mean (x) a merger or
consolidation, or any similar transaction, involving Issuer
or any of Issuer's subsidiaries, (y) a purchase, lease or
other acquisition of all or substantially all of the assets
of Issuer or any subsidiary or (z) a purchase or other
acquisition (including by way of merger, consolidation,
share exchange or otherwise) of securities representing 10%
or more of the voting power of Issuer or any Issuer
Subsidiary; provided that the term "Acquisition Transaction"
does not include any internal merger or consolidation
involving only Issuer and/or Issuer Subsidiaries; or
(ii) Any person (other than Grantee or any Grantee
Subsidiary) shall have acquired beneficial ownership or the
right to acquire beneficial ownership of 10% or more of the
outstanding shares of Common Stock (the term "beneficial
ownership" for purposes of this Agreement having the meaning
assigned thereto in Section 13(d) of the Securities Exchange
Act, and the rules and regulations thereunder); or
(iii) Any person other than Grantee or any Grantee
Subsidiary shall have commenced (as such term is defined in
Rule 14d-2 under the Exchange Act) or shall have filed a
registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to, a tender
offer or exchange offer to purchase any shares of Issuer
Common Stock such that, upon consummation of such offer,
such person would own or control 20% or more of the then
outstanding shares of Issuer Common Stock (such an offer
being referred to herein as a "Tender Offer" or an "Exchange
Offer", respectively); or
(iv) After a proposal is made by a third party to
Issuer or its shareholders to engage in an Acquisition
Transaction, Issuer shall have breached any covenant or
obligation contained in the Plan and such breach would
entitle Grantee to terminate the Plan or the Board of
Directors of Issuer does not recommend that the stockholders
of Issuer approve the Plan or the holders of Issuer Common
Stock shall not have approved the Plan at the meeting of
such stockholders held for the purpose of voting on the
Plan, such meeting shall not have been held or shall have
been cancelled prior to termination of the Plan or Issuer's
Board of Directors shall have withdrawn or modified in a
manner adverse to Grantee the recommendation of Issuer's
Board of Directors with respect to the Plan; or
(v) If the Board of Directors of Issuer does not
publicly recommend in the Proxy Statement that the holders
of the Issuer Common Stock approve and adopt the Plan, or
shall have withdrawn, modified or amended such
recommendation in any respect materially adverse to Grantee;
or
(vi) Any person other than Grantee or any Grantee
Subsidiary, other than in connection with a transaction to
which Grantee has given its prior written consent, shall
have filed an application or notice with the Board of
Governors of the Federal Reserve System (the "Federal
Reserve Board"), the Office of Thrift Supervision (the
"OTS") or other governmental authority or regulatory or
administrative agency or commission (each, a "Governmental
Authority") for approval to engage in an Acquisition
Transaction; or
(c) The term "Purchase Event" shall mean either of
the following events or transactions occurring after the date
hereof:
(i) The acquisition by any person other than Grantee
or any Grantee Subsidiary of beneficial ownership of 20% or
more of the then outstanding Common Stock; or
(ii) The occurrence of a Preliminary Purchase Event
described in Section 2(b)(i) except that the percentage
referred to in clause (z) shall be 20%.
(d) Issuer shall notify Grantee promptly in writing
of the occurrence of any Purchase Event; provided, however, that
the giving of such notice by Issuer shall not be a condition to
the right of Grantee to exercise the Option.
(e) In the event that Grantee is entitled to and
wishes to exercise the Option, it shall send to Issuer a written
notice (the "Option Notice" and the date of which being
hereinafter referred to as the "Notice Date") specifying (i) the
total number of shares of Common Stock it will purchase pursuant
to such exercise and (ii) a period of time (that shall not be less
than three business days nor more than thirty business days)
running from the Notice Date (the "Closing Date") and a place at
which the closing of such purchase shall take place; provided,
that, if prior notification to or approval of the Federal Reserve
Board, the OTS or any other governmental authority is required in
connection with such purchase (each, a "Notification" or an
"Approval," as the case may be), (a) Grantee shall promptly file
the required notice or application for approval
("Notice/Application"), (b) Grantee shall expeditiously process
the Notice/Application and (c) for the purpose of determining the
Closing Date pursuant to clause (ii) of this sentence, the period
of time that otherwise would run from the Notice Date shall
instead run from the later of (x) in connection with any
Notification, the date on which any required notification periods
have expired or been terminated and (y) in connection with any
Approval, the date on which such approval has been obtained and
any requisite waiting period or periods shall have expired. For
purposes of Section 2(a), any exercise of the Option shall be
deemed to occur on the Notice Date relating thereto. On or prior
to the Closing Date, Grantee shall have the right to revoke its
exercise of the Option in the event that the transaction
constituting a Purchase Event that gives rise to such right to
exercise shall not have been consummated.
(f) At the closing referred to in Section 2(d),
Grantee shall pay to Issuer the aggregate purchase price for the
shares of Common Stock specified in the Option Notice in
immediately available funds by wire transfer to a bank account
designated by Issuer; provided, however, that failure or refusal
of Issuer to designate such a bank account shall not preclude
Grantee from exercising the Option.
(g) At such closing, simultaneously with the
delivery of immediately available funds as provided in Section
2(e), Issuer shall deliver to Grantee a certificate or
certificates representing the number of shares of Common Stock
specified in the Option Notice and, if the Option should be
exercised in part only, a new Option evidencing the rights of
Grantee thereof to purchase the balance of the shares of Common
Stock purchasable hereunder.
(h) Certificates for Common Stock delivered at a
closing hereunder shall be endorsed with a restrictive legend
substantially as follows:
The transfer of the shares represented by
this certificate is subject to resale
restrictions arising under the Securities Act
of 1933, as amended, and to certain
provisions of an agreement between Norwest
Corporation and AMFED Financial, Inc.
("Issuer") dated as of the _____ day of July,
1995. A copy of such agreement is on file at
the principal office of Issuer and will be
provided to the holder hereof without charge
upon receipt by Issuer of a written request
therefor.
It is understood and agreed that: (i) the reference to the resale
restrictions of the Securities Act in the above legend shall be
removed by delivery of substitute certificate(s) without such
reference if Grantee shall have delivered to Issuer a copy of a
letter from the staff of the Securities and Exchange Commission
(the "SEC"), or an opinion of counsel, in form and substance
satisfactory to Issuer, to the effect that such legend is not
required for purposes of the Securities Act; (ii) the reference to
the provisions of this Agreement in the above legend shall be
removed by delivery of substitute certificate(s) without such
reference if the shares have been sold or transferred in
compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference;
and (iii) the legend shall be removed in its entirety if the
conditions in the preceding clauses (i) and (ii) are both
satisfied. In addition, such certificates shall bear any other
legend as may be required by law.
(i) Upon the giving by Grantee to Issuer of an
Option Notice and the tender of the applicable purchase price in
immediately available funds on the Closing Date, Grantee shall be
deemed to be the holder of record of the number of shares of
Common Stock specified in the Option Notice, notwithstanding that
the stock transfer books of Issuer shall then be closed or that
certificates representing such shares of Common Stock shall not
then actually be delivered to Grantee. Issuer shall pay all
expenses and any and all United States federal, state and local
taxes and other charges that may be payable in connection with the
preparation, issue and delivery of stock certificates under this
Section 2 in the name of Grantee.
SECTION 3. Issuer agrees: (i) that it shall at all
times until the termination of this Agreement have reserved for
issuance upon the exercise of the Option that number of authorized
and reserved shares of Common Stock equal to the maximum number of
shares of Common Stock at any time and from time to time issuable
hereunder, all of which shares will, upon issuance pursuant
hereto, be duly authorized, validly issued, fully paid,
nonassessable, and delivered free and clear of all claims, liens,
encumbrances and security interests and not subject to any
preemptive rights; (ii) that it will not, by amendment of its
certificate of incorporation or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to
be observed or performed hereunder by Issuer; (iii) promptly to
take all action as may from time to time be required (including
(x) complying with all premerger notification, reporting and
waiting period requirements specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder and (y) in the event, under the
Bank Holding Company Act of 1956, as amended ("BHC Act"), the
Savings and Loan Holding Company Act, as amended (the "SLHC Act")
or any other federal or state banking law, prior approval of or
notice to the Federal Reserve Board or OTS or to any other
Governmental Authority is necessary before the Option may be
exercised, cooperating with Grantee in preparing such applications
or notices and providing such information to each such
Governmental Authority as it may require) in order to permit
Grantee to exercise the Option and Issuer duly and effectively to
issue shares of Common Stock pursuant hereto; and (iv) to take all
action provided herein to protect the rights of Grantee against
dilution.
SECTION 4. This Agreement (and the Option granted
hereby) are exchangeable, without expense, at the option of
Grantee, upon presentation and surrender of this Agreement at the
principal office of Issuer, for other agreements providing for
Options of different denominations entitling the holder thereof to
purchase, on the same terms and subject to the same conditions as
are set forth herein, in the aggregate the same number of shares
of Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any agreements and related options
for which this Agreement (and the Option granted hereby) may be
exchanged. Upon receipt by Issuer of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation
of this Agreement and (in the case of loss, theft or destruction)
of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement if mutilated, Issuer will execute
and deliver a new Agreement of like tenor and date. Any such new
Agreement executed and delivered shall constitute an additional
contractual obligation on the part of Issuer, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any
time be enforceable by anyone.
SECTION 5. The number of shares of Common Stock
purchasable upon the exercise of the Option shall be subject to
adjustment from time to time as follows:
(a) In the event of any change in the Common Stock
(other than pursuant to the Option) by reason of stock
dividends, split-ups, mergers, recapitalizations,
combinations, subdivisions, conversions, exchanges of
shares, exercise of options or warrants (other than the
Option), or the like, the type and number of shares of
Common Stock purchasable upon exercise hereof shall be
appropriately adjusted and proper provision shall be made so
that, in the event that any additional shares of Common
Stock are to be issued or otherwise to become outstanding as
a result of any such change (other than pursuant to an
exercise of the Option), the number of shares of Common
Stock that remain subject to the Option shall be increased
so that after such change, the Option equals 19.9% of the
number of shares of Common Stock then issued and
outstanding.
(b) Whenever the number of shares of Common Stock
purchasable upon exercise hereof is adjusted as provided in
this Section 5, the Option Price shall be adjusted by
multiplying the Option Price by a fraction, the numerator of
which shall be equal to the number of shares of Common Stock
purchasable prior to the adjustment and the denominator of
which shall be equal to the number of shares of Common Stock
purchasable after the adjustment.
SECTION 6. (a) Upon the occurrence of a Purchase
Event that occurs prior to an Exercise Termination Event, Issuer
shall, at the request of Grantee made within three years of a
Purchase Event (whether on its own behalf or on behalf of any
subsequent holder of the Option (or part thereof) or any of the
shares of Common Stock issued pursuant hereto), promptly prepare,
file and keep current a registration statement under the
Securities Act covering any shares issued and issuable pursuant to
the Option and shall use its best efforts to cause such
registration statement to become effective, and to remain current
and effective for a period not in excess of 180 days from the day
such registration statement first becomes effective, in order to
permit the sale or other disposition of any shares of Common Stock
issued upon total or partial exercise of the Option ("Option
Shares") in accordance with any plan of disposition requested by
Grantee; provided, however, that Issuer may postpone filing a
registration statement relating to a registration request by
Grantee under this Section 6 for a period of time (not in excess
of 60 days) if in its judgment such filing would require the
disclosure of material information that Issuer has a bona fide
business purpose for preserving as confidential. Grantee shall
have the right to demand two such registrations. The foregoing
notwithstanding, if, at the time of any request by Grantee for
registration of Option Shares as provided above, Issuer is in the
process of registration with respect to an underwritten public
offering of shares of Common Stock, and if in the good faith
judgment of the managing underwriter or managing underwriters, or,
if none, the sole underwriter or underwriters, of such offering
the offering or inclusion of the Option Shares would interfere
materially with the successful marketing of the shares of Common
Stock offered by Issuer, the number of Option Shares otherwise to
be covered in the registration statement contemplated hereby may
be reduced; provided, however, that after any such required
reduction the number of Option Shares to be included in such
offering for the account of Grantee shall constitute at least 33
1/3% of the total number of shares of Grantee and Issuer covered
in such registration statement; provided further, however, that if
such reduction occurs, then Issuer shall file a registration
statement for the balance as promptly as practicable thereafter as
to which no reduction pursuant to this Section 6(a) shall be
permitted or occur and the Grantee shall thereafter be entitled to
one additional registration statement. Grantee shall provide all
information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. In connection with
any such registration, Issuer and Grantee shall provide each other
with representations, warranties, indemnities and other agreements
customarily given in connection with such registration. If
requested by Grantee in connection with such registration, Issuer
and Grantee shall become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of
obligating themselves in respect of representations, warranties,
indemnities and other agreements customarily included in such
underwriting agreements. Notwithstanding the foregoing, if
Grantee revokes any exercise notice or fails to exercise any
Option with respect to any exercise notice pursuant to Section
2(e), Issuer shall not be obligated to continue any registration
process with respect to the sale of Option Shares issuable upon
the exercise of such Option and Grantee shall not be deemed to
have demanded registration of Option Shares.
(b) In the event that Grantee requests Issuer to
file a registration statement following the failure to obtain any
approval required to exercise the Option as described in Section
9, the closing of the sale or other disposition of the Common
Stock or other securities pursuant to such registration statement
shall occur substantially simultaneously with the exercise of the
Option.
SECTION 7. (a) Upon the occurrence of a "Repurchase
Event" (as defined in Section 7(e) below) that occurs prior to an
Exercise Termination Event, (i) at the request (the date of such
request being the "Option Repurchase Request Date") of Grantee,
Issuer shall repurchase the Option from Grantee at a price (the
"Option Repurchase Price") equal to the amount by which (A) the
market/offer price (as defined below) exceeds (B) the Option
Price, multiplied by the number of shares for which the Option may
then be exercised, plus (C) the amount of the documented expenses
incurred by Grantee in connection with the Plan and the
transactions contemplated thereby, including reasonable accounting
and legal fees (not to exceed $200,000) and (ii) at the request
(the date of such request being the "Option Share Repurchase
Request Date") of the owner of Option Shares from time to time
(the "Owner"), Issuer shall repurchase such number of the Option
Shares from the Owner as the Owner shall designate at a price (the
"Option Share Repurchase Price") equal to the market/offer price
multiplied by the number of Option Shares so designated. The term
"market/offer price" shall mean the highest of (i) the price per
share of Common Stock at which a tender offer or exchange offer
therefor has been made after the date hereof and on or prior to
the Option Repurchase Request Date or the Option Share Repurchase
Request Date, as the case may be, (ii) the price per share of
Common Stock paid or to be paid by any third party pursuant to an
agreement with Issuer (whether by way of a merger, consolidation
or otherwise), (iii) the highest last sale price for shares of
Common Stock within the 180-day period ending on the Option
Repurchase Request Date or the Option Share Repurchase Request
Date, as the case may be, which is reported by The Wall Street
Journal or, if not reported thereby, another authoritative source,
(iv) in the event of a sale of all or substantially all of
Issuer's assets, the sum of the price paid in such sale for such
assets and the current market value of the remaining assets of
Issuer as determined by a nationally recognized independent
investment banking firm selected by Grantee or the Owner, as the
case may be, divided by the number of shares of Common Stock of
Issuer outstanding at the time of such sale. In determining the
market/offer price, the value of consideration other than cash
shall be the value determined by a nationally recognized
independent investment banking firm selected by Grantee or the
Owner, as the case may be, whose determination shall be conclusive
and binding on all parties.
(b) Grantee or the Owner, as the case may be, may
exercise its right to require Issuer to repurchase the Option
and/or any Option Shares pursuant to this Section 7 by
surrendering for such purpose to Issuer, at its principal office,
a copy of this Agreement or certificates for Option Shares, as
applicable, accompanied by a written notice or notices stating
that Grantee or the Owner, as the case may be, elects to require
Issuer to repurchase the Option and/or the Option Shares in
accordance with the provisions of this Section 7. As promptly as
practicable, and in any event within five business days after the
surrender of the Option and/or certificates representing Option
Shares and the receipt of such notice or notices relating thereto,
Issuer shall deliver or cause to be delivered to Grantee the
Option Repurchase Price to the Owner the Option Share Repurchase
Price or the portion thereof that Issuer is not then prohibited
from so delivering under applicable law and regulation or as a
consequence of administrative policy.
(c) Issuer hereby undertakes to use its best efforts
to obtain all required regulatory and legal approvals and to file
any required notices as promptly as practicable in order to
accomplish any repurchase contemplated by this Section 7.
Nonetheless, to the extent that Issuer is prohibited under
applicable law or regulation, or as a consequence of
administrative policy, from repurchasing any Option and/or any
Option Shares in full, Issuer shall promptly so notify Grantee
and/or the Owner and thereafter deliver or cause to be delivered,
from time to time, to Grantee and/or the Owner, as appropriate,
the portion of the Option Repurchase Price and the Option Share
Repurchase Price, respectively, that it is no longer prohibited
from delivering, within five business days after the date on which
Issuer is no longer so prohibited; provided, however, that if
Issuer at any time after delivery of a notice of repurchase
pursuant to Section 7(b) is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from
delivering to Grantee and/or the Owner, as appropriate, the Option
Repurchase Price or the Option Share Repurchase Price,
respectively, in full, Grantee or the Owner, as appropriate, may
revoke its notice of repurchase of the Option or the Option Shares
either in whole or in part whereupon, in the case of a revocation
in part, Issuer shall promptly (i) deliver to Grantee and/or the
Owner, as appropriate, that portion of the Option Purchase Price
or the Option Share Repurchase Price that Issuer is not prohibited
from delivering after taking into account any such revocation and
(ii) deliver, as appropriate, either (A) to Grantee, a new
Agreement evidencing the right of Grantee to purchase that number
of shares of Common Stock equal to the number of shares of Common
Stock purchasable immediately prior to the delivery of the notice
of repurchase less than the number of shares of Common Stock
covered by the portion of the Option repurchased or (B) to the
Owner, a certificate for the number of Option Shares covered by
the revocation.
(d) Issuer shall not enter into any agreement with
any party (other than Grantee or a Grantee Subsidiary) for an
Acquisition Transaction unless the other party thereto assumes all
the obligations of Issuer pursuant to this Section 7 in the event
that Grantee or the Owner elects, in its sole discretion, to
require such other party to perform such obligations.
(e) The term "Repurchase Event" shall mean (i) any
person (other than Grantee or a Grantee Subsidiary) shall have
acquired "Beneficial Ownership," as that term has the meaning set
forth in Section 13(d) of the Securities Exchange Act, of 20% or
more of the then outstanding shares of Common Stock of Issuer, or
(ii) the consummation of an Acquisition Transaction.
SECTION 8. (a) In the event that prior to an
Exercise Termination Event, Issuer shall enter into an agreement
(i) to consolidate or merge with any person, other than Grantee or
a Grantee Subsidiary, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any
person, other than Grantee or a Grantee Subsidiary, to merge into
Issuer and Issuer shall be the continuing or surviving
corporation, but, in connection with such merger, the then
outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other person or
cash or any other property or the then outstanding shares of
Common Stock shall after such merger represent less than 50% of
the outstanding shares and share equivalents of the merged
company, or (iii) to sell or otherwise transfer all or
substantially all of its or AFS's or any other material Issuer
Subsidiary's assets to any person, other than Grantee or a Grantee
Subsidiary, then, and in each such case, the agreement governing
such transaction shall make proper provision so that the Option
shall, upon the consummation of such transaction and upon the
terms and conditions set forth herein, be converted into, or
exchanged for, an option (the "Substitute Option"), at the
election of Grantee, of either (x) the Acquiring Corporation (as
defined below) or (y) any person that controls the Acquiring
Corporation (the Acquiring Corporation and any such controlling
person being hereinafter referred to as the "Substitute Option
Issuer").
(b) The Substitute Option shall be exercisable for
such number of shares of the Substitute Common Stock (as is
hereinafter defined) as is equal to the market/offer price (as
defined in Section 7) multiplied by the number of shares of the
Issuer Common Stock for which the Option was theretofore
exercisable, divided by the Average Price (as is hereinafter
defined). The exercise price of the Substitute Option per share
of the Substitute Common Stock (the "Substitute Purchase Price")
shall then be equal to the Option Price multiplied by a fraction
in which the numerator is the number of shares of the Issuer
Common Stock for which the Option was theretofore exercisable and
the denominator is the number of shares for which the Substitute
Option is exercisable.
(c) The Substitute Option shall otherwise have the
same terms as the Option, provided that if the terms of the
Substitute Option cannot, for legal reasons, be the same as the
Option, such terms shall be as similar as possible and in no event
less advantageous to Grantee, provided further that the terms of
the Substitute Option shall include (by way of example and not
limitation) provisions for the repurchase of the Substitute Option
and Substitute Common Stock by the Substitute Option Issuer on the
same terms and conditions as provided in Section 7.
(d) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (i) the
continuing or surviving corporation of a consolidation or
merger with Issuer (if other than Issuer), (ii) Issuer in a
merger in which Issuer is the continuing or surviving
person, and (iii) the transferee of all or any substantial
part of the Issuer's assets (or the assets of any Issuer
subsidiary);
(ii) "Substitute Common Stock" shall mean the
common stock issued by the Substitute Option Issuer upon
exercise of the Substitute Option; and
(iii) "Average Price" shall mean the average
closing price of a share of the Substitute Common Stock for
the one year immediately preceding the consolidation, merger
or sale in question, but in no event higher than the closing
price of the shares of the Substitute Common Stock on the
day preceding such consolidation, merger or sale; provided
that if Issuer is the issuer of the Substitute Option, the
Average Price shall be computed with respect to a share of
common stock issued by Issuer, the person merging into
Issuer or by any company which controls or is controlled by
such merging person, as Grantee may elect.
(e) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exerciseable for more
than 19.9% of the aggregate of the shares of the Substitute Common
Stock outstanding immediately prior to the issuance of the
Substitute Option. In the event that the Substitute Option would
be exercisable for more than 19.9% of the aggregate of the shares
of Substitute Common Stock but for this clause (e), the Substitute
Option Issuer shall make a cash payment to Grantee equal to the
excess of (i) the value of the Substitute Option without giving
effect to the limitation in this clause (e) over (ii) the value of
the Substitute Option after giving effect to the limitation in the
clause (e). This difference in value shall be determined by a
nationally recognized investment banking firm selected by Grantee
and the Substitute Option Issuer.
SECTION 9. Notwithstanding Sections 2, 6 and 7, if
Grantee has given the notice referred to in one or more of such
Sections, the exercise of the rights specified in any such Section
shall be extended (a) if the exercise of such rights requires
obtaining regulatory approvals (including any required waiting
periods) to the extent necessary to obtain all regulatory
approvals for the exercise of such rights, and (b) to the extent
necessary to avoid liability under Section 16(b) of the Securities
Exchange Act by reason of such exercise; provided that in no event
shall any closing date occur more than 18 months after the related
Notice Date, and, if the closing date shall not have occurred
within such period due to the failure to obtain any required
approval by the Federal Reserve Board, the OTS or any other
governmental authority despite the best efforts of Issuer or the
Substitute Option Issuer, as the case may be, to obtain such
approvals, the exercise of the Option shall be deemed to have been
rescinded as of the related Notice Date. In the event (a) Grantee
receives official notice that an approval of the Federal Reserve
Board, the OTS or any other governmental authority required for
the purchase and sale of the Option Shares will not be issued or
granted or (b) a closing date has not occurred within 18 months
after the related Notice Date due to the failure to obtain any
such required approval, Grantee shall be entitled to exercise the
Option in connection with the resale of the Option Shares pursuant
to a registration statement as provided in Section 6. Nothing
contained in this Agreement shall restrict Grantee from specifying
alternative means of exercising rights pursuant to Sections 2, 6
or 7 hereof in the event that the exercising of any such rights
shall not have occurred due to the failure to obtain any required
approval referred to in this Section 9.
SECTION 10. Issuer hereby represents and warrants
to Grantee as follows:
(a) Issuer has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly approved by the Board of
Directors of Issuer and no other corporate proceedings on the part
of Issuer are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has
been duly executed and delivered by, and constitutes a valid and
binding obligation of, Issuer, enforceable against Issuer in
accordance with its terms, except as enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of
creditors' rights generally and except that the availability of
the equitable remedy of specific performance or injunctive relief
is subject to the discretion of the court before which any
proceeding may be brought; and
(b) Issuer has taken all necessary corporate action
to authorize and reserve and to permit it to issue, and at all
times from the date hereof through the termination of this
Agreement in accordance with its terms will have reserved for
issuance upon the exercise or the Option, that number of shares of
Common Stock equal to the maximum number of shares of Common Stock
at any time and from time to time issuable hereunder, and all such
shares, upon issuance pursuant hereto, will be duly authorized,
validly issued, fully paid, non-assessable, and will be delivered
free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights.
SECTION 11. (a) Neither of the parties hereto may
assign any of its rights or delegate any of its obligations under
this Agreement or the Option created hereunder to any other person
without the express written consent of the other party, except
that Grantee may assign this Agreement to a wholly owned
subsidiary of Grantee and Grantee may assign its rights hereunder
in whole or in part after the occurrence of a Preliminary Purchase
Event.
(b) Any assignment of rights of Grantee to any
permitted assignee of Grantee hereunder shall bear the restrictive
legend at the beginning thereof substantially as follows:
The transfer of the option represented by this
assignment and the related option agreement is
subject to resale restrictions arising under the
Securities Act of 1933, as amended, and to
certain provisions of an agreement between
Norwest Corporation and AMFED Financial, Inc.
("Issuer"), dated as of the _____ day of July,
1995. A copy of such agreement is on file at
the principal office of Issuer and will be
provided to any permitted assignee of the Option
without change upon receipt by Issuer of a
written request therefor.
It is understood and agreed that (i) the reference to the resale
restrictions of the Securities Act in the above legend shall be
removed by delivery of substitute assignments without such
reference if Grantee shall have delivered to Issuer a copy of a
letter from the staff of the SEC, or an opinion of counsel, in
form and substance satisfactory to Issuer, to the effect that such
legend is not required for purposes of the Securities Act; (ii)
the reference to the provisions of this Agreement in the above
legend shall be removed by delivery of substitute assignments
without such reference if the Option has been sold or transferred
in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference;
and (iii) the legend shall be removed in its entirety if the
conditions in the preceding clauses (i) and (ii) are both
satisfied. In addition, such assignments shall bear any other
legend as may be required by law.
SECTION 12. Each of Grantee and Issuer will use its
reasonable efforts to make all filings with, and to obtain
consents of, all third parties and Governmental Authorities
necessary to the consummation of the transactions contemplated by
this Agreement, including, without limitation, if necessary,
applying to the Federal Reserve Board under the BHC Act or the OTS
under the SLHC Act for approval to acquire the shares issuable
hereunder.
SECTION 13. The parties hereto acknowledge that
damages would be an inadequate remedy for a breach of this
Agreement by either party hereto and that the obligations of the
parties shall hereto be enforceable by either party hereto through
injunctive or other equitable relief. Both parties further agree
to waive any requirement for the securing or posting of any bond
in connection with the obtaining of any such equitable relief and
that this provision is without prejudice to any other rights that
the parties hereto may have for any failure to perform this
Agreement.
SECTION 14. If any term, provision, covenant or
restriction contained in this Agreement is held by a court or a
federal or state regulatory agency of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms,
provisions and covenants and restrictions contained in this
Agreement shall remain in full force and effect, and shall in no
way be affected, impaired or invalidated. If for any reason such
court or regulatory agency determines that Grantee is not
permitted to acquire, or Issuer is not permitted to repurchase
pursuant to Section 7, the full number of shares of Common Stock
provided in Section 1(a) (as adjusted pursuant hereto), it is the
express intention of Issuer to allow Grantee to acquire or to
require Issuer to repurchase such lesser number of shares as may
be permissible, without any amendment or modification hereof.
SECTION 15. All notices, requests, claims, demands
and other communications hereunder shall be deemed to have been
duly given when delivered in person, by cable, telegram, telecopy
or telex, or by registered or certified mail (postage prepaid,
return receipt requested) at the respective addresses of the
parties set forth in the Plan.
SECTION 16. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
SECTION 17. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same
agreement and shall be effective at the time of execution.
SECTION 18. Except as otherwise expressly provided
herein, each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with
the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers,
accountants and counsel.
SECTION 19. Except as otherwise expressly provided
herein or in the Plan, this Agreement contains the entire
agreement between the parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereof, written or oral. The terms
and conditions of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors
and permitted assigns. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party, other than the
parties hereto, and their respective successors except as assigns,
any rights, remedies, obligations or liabilities under or by
reason of this Agreement, except as expressly provided herein.
SECTION 20. Capitalized terms used in this
Agreement and not defined herein but defined in the Plan shall
have the meanings assigned thereto in the Plan.
SECTION 21. Nothing contained in this Agreement
shall be deemed to authorize Issuer or Grantee to breach any
provision of the Plan.
SECTION 22. In the event that any selection or
determination is to be made by Grantee or the Owner hereunder and
at the time of such selection or determination there is more than
one Grantee or Owner, such selection shall be made by a majority
in interest of such Grantee or Owners.
SECTION 23. In the event of any exercise of the
option by Grantee, Issuer and such Grantee shall execute and
deliver all other documents and instruments and take all other
action that may be reasonably necessary in order to consummate the
transactions provided for by such exercise.
SECTION 24. Except to the extent Grantee exercises
the Option, Grantee shall have no rights to vote or receive
dividends or have any other rights as a shareholder with respect
to shares of Common Stock covered hereby.
IN WITNESS WHEREOF, each of the parties has caused
this Stock Option Agreement to be executed on its behalf by their
officers thereunto duly authorized, all as of the date first above
written.
NORWEST CORPORATION
By: /s/ Les Biller
Name: Les Biller
Title: Executive Vice President
AMFED FINANCIAL, INC.
By: /s/ E.R. Houston
Name: E.R. Houston
Title: Chief Executive Officer
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