<PAGE>
As filed with the Securities and Exchange Commission on November __, 1995
Registration No. 033-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________________________
NORWEST CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 6711 41-0449260
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1000
612-667-1234
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
__________________________
Stanley S. Stroup
Executive Vice President and General Counsel Copy to:
Norwest Corporation Robert J. Kaukol
Norwest Center Norwest Corporation
Sixth and Marquette Norwest Center
Minneapolis, Minnesota 55479-1026 Sixth and Marquette
612-667-8858 Minneapolis, Minnesota 55479-1026
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
__________________
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of the Registration
Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
CALCULATION OF REGISTRATION FEE
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==================================================================================================
Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to Be to Be Offering Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 7,800,000 N/A $201,279,405 (3) $69,407
(par value $1-2/3 per share) (1) Shares (2)
==================================================================================================
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(1) Each share of the registrant's common stock includes one preferred stock
purchase right.
(2) Based upon the maximum number of shares that may be issued in the
transaction described herein.
(3) Estimated solely for purpose of computing the registration fee, in
accordance with Rule 457(f), based upon (i) a maximum number of 6,327,054
outstanding shares of common stock of AMFED Financial, Inc. to be acquired
by the registrant in the transaction described herein (assuming the
exercise in full of all options, warrants, conversion rights, and other
rights with respect thereto, other than certain option rights held by the
registrant), and (ii) the average of the high and low sales of AMFED
Financial, Inc. as reported on the Nasdaq National Market on November 16,
1995.
__________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
NORWEST CORPORATION
-------------------
Cross Reference Sheet
Pursuant to Regulation S-K, Item 501(b)
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<CAPTION>
Form S-4 Item Prospectus Heading
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1. Forepart of Registration Statement Outside Front Cover Page
and Outside Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Available Information;
Pages of Prospectus Incorporation of Certain
Documents by Reference;
Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Summary
Charges, and Other Information
4. Terms of the Transaction The Merger
5. Pro Forma Financial Information *
6. Material Contracts with the Company The Merger
Being Acquired
7. Additional Information Required for *
Reoffering by Persons and Parties
Deemed to be Underwriters
8. Interests of Named Experts and Counsel Legal Opinions
9. Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities
10. Information with Respect to S-3 Summary; The Merger; Certain
Registrants Regulatory Considerations
11. Incorporation of Certain Information Incorporation of Certain
by Reference Documents by Reference;
Management of Norwest and
Additional Information
12. Information with Respect to S-2 or *
S-3 Registrants
13. Incorporation of Certain Documents *
by Reference
</TABLE>
<PAGE>
NORWEST CORPORATION
-------------------
Cross Reference Sheet
Pursuant to Regulation S-K, Item 501(b)
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Form S-4 Item Prospectus Heading
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14. Information with Respect to *
Registrants Other Than S-2 or S-3
Registrants
15. Information with Respect to S-3 Incorporation of Certain
Companies Documents By Reference
16. Information with Respect to *
S-2 or S-3 Companies
17. Information with Respect to Companies *
Other Than S-2 or S-3 Companies
18. Information If Proxies, Consents, Meeting Information; The
or Authorizations Are to Be Solicited Merger--No Dissenters' Rights;
Management of Norwest and
Additional Information
19. Information If Proxies, Consents, or *
Authorizations Are Not to Be Solicited
in an Exchange Offer
</TABLE>
- ---------------------------
*Item is omitted because answer is negative or item is inapplicable.
<PAGE>
December , 1995
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
AMFED Financial, Inc. ("AMFED") to be held in the Southern Pacific Rooms D and
E at John Ascuaga's Nugget Hotel, 1100 Nugget Avenue, Sparks, Nevada, on
Wednesday, January 3, 1996, at 10:00 a.m., local time. At the Special Meeting
you will be asked to consider and vote upon a proposal to approve the
Agreement and Plan of Reorganization, dated as of July 21, 1995, between AMFED
and Norwest Corporation ("Norwest"), and the related Agreement and Plan of
Merger (together, the "Merger Agreement"), providing for the merger of a
wholly-owned subsidiary of Norwest into AMFED (the "Merger"). Upon
consummation of the Merger, AMFED will be a wholly-owned subsidiary of
Norwest.
As a result of the Merger, each outstanding share of AMFED common stock will
be converted into 1.0251 shares of Norwest common stock in a transaction that
is generally tax-free for federal income tax purposes, all as more fully
discussed in the accompanying Proxy Statement-Prospectus. The common stock of
Norwest is actively traded and is listed on the New York Stock Exchange
("NYSE"). The last reported sale price of Norwest common stock on the NYSE on
November , 1995 was $ per share.
The enclosed Proxy Statement-Prospectus contains a more complete description
of the terms of the Merger. I urge you to review carefully the Proxy
Statement-Prospectus and the information in Norwest's 1994 Annual Report on
Form 10-K, 1995 First, Second and Third Quarter Reports on Form 10-Q, 1995
Annual Meeting Proxy Statement and 1995 Current Reports on Form 8-K, copies of
which are available as indicated in the accompanying Proxy Statement-
Prospectus under "Incorporation of Certain Documents by Reference."
The Board of Directors has approved the Merger Agreement as being in the
best interests of AMFED and its stockholders and recommends that you vote in
favor of the Merger. AMFED has received an opinion from Merrill Lynch & Co.,
an investment banking firm experienced in the valuation of financial
institutions, that as of the date hereof the exchange ratio is fair to the
stockholders of AMFED (other than Norwest) from a financial point of view.
Consummation of the Merger is subject to a number of conditions, including
approval of the Merger Agreement by AMFED's stockholders.
It is very important that your shares be represented at the Special Meeting,
regardless of whether you plan to attend in person. A failure to vote, either
by not returning the enclosed proxy or by checking the "Abstain" box thereon,
will have the same effect as a vote against approval of the Merger Agreement.
Therefore, in order to ensure that your vote is represented at the Special
Meeting, PLEASE DATE, SIGN, AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED
ENVELOPE. If you attend the meeting, you may vote in person if you wish, even
though you have previously returned your proxy.
On behalf of the Board of Directors, I recommend that you vote FOR approval
of the Merger Agreement.
E.R. Houston
Chairman of the Board
<PAGE>
AMFED FINANCIAL, INC.
ONE CALIFORNIA AVENUE
RENO, NEVADA 89509
(702) 785-8500
----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 3, 1996
----------------
NOTICE IS HEREBY GIVEN that a special meeting of the stockholders (the
"Special Meeting") of AMFED Financial, Inc. ("AMFED"), a Nevada corporation,
will be held in the Southern Pacific Rooms D and E at John Ascuaga's Nugget
Hotel, 1100 Nugget Avenue, Sparks, Nevada, on Wednesday, January 3, 1996, at
10:00 a.m., local time, for the following purposes:
1. To consider and vote upon a proposal to approve the Agreement and Plan
of Reorganization, dated as of July 21, 1995 (including the Agreement and
Plan of Merger attached thereto), between AMFED and Norwest Corporation
("Norwest"), a Delaware corporation, a copy of which is included in the
accompanying Proxy Statement-Prospectus as Appendix A, under the terms of
which (i) a wholly-owned subsidiary of Norwest would be merged with AMFED
(the "Merger"), with AMFED as the surviving corporation, and (ii) each
outstanding share of common stock, par value $.01 per share, of AMFED would
be converted into 1.0251 shares of common stock, par value $1 2/3 per
share, of Norwest in accordance with the provisions of the Agreement and
Plan of Reorganization; and to authorize such further action by the Board
of Directors and officers of AMFED as may be necessary or appropriate to
carry out the intent and purposes of the Merger.
2. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record on the books of AMFED at the close of business
on November 24, 1995 will be entitled to vote at the Special Meeting or any
adjournments thereof.
Your attention is directed to the Proxy Statement-Prospectus accompanying
this notice for a more complete statement regarding the matters to be acted
upon at the Special Meeting.
By Order of the Board of Directors
JoAnn Coy
Secretary
December , 1995
THE BOARD OF DIRECTORS OF AMFED RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSAL.
HOLDERS OF AMFED COMMON STOCK ARE URGED TO COMPLETE, SIGN, DATE, AND MAIL
THE ENCLOSED PROXY PROMPTLY IN THE ACCOMPANYING ENVELOPE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE SPECIAL MEETING,
YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AND VOTE IN PERSON. THE PROXY MAY BE
REVOKED AT ANY TIME PRIOR TO ITS EXERCISE IN THE MANNER DESCRIBED IN THE PROXY
STATEMENT-PROSPECTUS.
<PAGE>
PROXY STATEMENT OF
AMFED FINANCIAL, INC.
FOR A SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 3, 1996
----------------
PROSPECTUS
OF
NORWEST CORPORATION
COMMON STOCK
----------------
This Proxy Statement-Prospectus of Norwest Corporation ("Norwest") relates
to up to 7,800,000 shares of the common stock, par value $1 2/3 per share, of
Norwest ("Norwest Common Stock") issuable to the stockholders of AMFED
Financial, Inc. ("AMFED") upon consummation of the merger (the "Merger") of a
wholly-owned subsidiary of Norwest with AMFED, with AMFED as the surviving
corporation, pursuant to the terms of an Agreement and Plan of Reorganization
dated as of July 21, 1995 between AMFED and Norwest (together with the
Agreement and Plan of Merger attached thereto, the "Merger Agreement"). A copy
of the Merger Agreement is attached as Appendix A to this Proxy Statement-
Prospectus and incorporated by reference herein.
This Proxy Statement-Prospectus is being furnished to the stockholders of
AMFED in connection with the solicitation of proxies by the Board of Directors
of AMFED (the "AMFED Board") for use at the special meeting of stockholders of
AMFED to be held on January 3, 1996 and at any adjournments or postponements
thereof (the "Special Meeting").
At the Special Meeting, the holders of record of the common stock, par value
$.01 per share, of AMFED ("AMFED Common Stock") on November 24, 1995 will
consider and vote upon a proposal to approve the Merger Agreement. Except as
described herein, upon consummation of the Merger, each outstanding share
AMFED Common Stock will be converted into 1.0251 shares of Norwest Common
Stock in accordance with the provisions of the Merger Agreement. For a more
complete description of the Merger Agreement and the terms of the Merger, see
"THE MERGER."
Norwest Common Stock is traded on the New York Stock Exchange ("NYSE") under
the symbol "NOB" and on the Chicago Stock Exchange ("CHX"). The closing price
of Norwest Common Stock as reported on the NYSE Composite Tape on November
, 1995 was $ per share. AMFED Common Stock is traded on the
Nasdaq National Market. The last reported sale price of AMFED Common Stock on
November , 1995 was $ per share.
This Proxy Statement-Prospectus and the form of proxy are first being mailed
to stockholders of AMFED on or about December , 1995.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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AVAILABLE INFORMATION...................................................... 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 5
SUMMARY.................................................................... 6
Parties to the Merger.................................................... 6
Special Meeting and Vote Required........................................ 7
Terms of the Merger...................................................... 7
Recommendation of the Board of Directors of AMFED........................ 8
Opinion of AMFED's Financial Advisor..................................... 8
Effective Date and Time of the Merger.................................... 8
Conditions and Termination............................................... 9
Regulatory Approvals..................................................... 9
No Solicitation.......................................................... 9
Accounting Treatment..................................................... 9
Interests of Certain Persons in the Merger............................... 9
No Dissenters' Rights.................................................... 10
Stock Option Agreement Between Norwest and AMFED......................... 11
Certain U.S. Federal Income Tax Consequences............................. 11
Market Information....................................................... 11
Certain Differences in Rights of Stockholders............................ 12
Comparative Per Common Share Data........................................ 12
Selected Financial Data.................................................. 13
MEETING INFORMATION........................................................ 17
General.................................................................. 17
Date, Place and Time..................................................... 17
Record Date; Vote Required............................................... 17
Voting and Revocation of Proxies......................................... 17
Solicitation of Proxies.................................................. 18
THE MERGER................................................................. 18
Terms of the Merger...................................................... 18
Background and Reasons for the Merger.................................... 19
Opinion of AMFED's Financial Advisor..................................... 22
Certain Considerations................................................... 29
Effective Date and Time of the Merger.................................... 30
No Dissenters' Rights.................................................... 30
Surrender of Certificates................................................ 30
Conditions to the Merger................................................. 31
Regulatory Approvals..................................................... 31
Conduct of Business Pending the Merger................................... 32
Certain Covenants........................................................ 32
No Solicitation.......................................................... 33
Waiver, Amendment, and Termination....................................... 33
Effect on Employee Benefit Plans......................................... 33
Interests of Certain Persons in the Merger............................... 34
Stock Option Agreement Between Norwest and AMFED......................... 35
Certain U.S. Federal Income Tax Consequences............................. 37
Resale of Norwest Common Stock........................................... 37
Stock Exchange Listing................................................... 38
Accounting Treatment..................................................... 38
Expenses................................................................. 38
</TABLE>
2
<PAGE>
<TABLE>
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PAGE
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CERTAIN DIFFERENCES IN RIGHTS OF STOCKHOLDERS............................ 38
Authorized Stock....................................................... 38
Election and Removal of Directors...................................... 40
Rights Plans........................................................... 40
Amendment of Corporate Charter and By-Laws............................. 42
Required Vote for Authorization of Certain Actions..................... 42
Dissenters' Rights..................................................... 43
Special Meetings....................................................... 43
Limitation of Director Liability and Indemnication..................... 44
Action Without a Meeting............................................... 45
Dividends.............................................................. 45
Proposal of Business; Nomination of Director........................... 45
COMPARATIVE PER SHARE PRICES AND DIVIDENDS............................... 45
CERTAIN REGULATORY CONSIDERATIONS........................................ 46
General................................................................ 46
Dividend Restrictions.................................................. 46
Holding Company Structure.............................................. 47
Capital Requirements................................................... 47
Federal Deposit Insurance Corporation Improvement Act of 1991.......... 48
FDIC Insurance......................................................... 50
DIVIDEND REINVESTMENT AND OPTIONAL CASH PAYMENT PLAN..................... 50
EXPERTS.................................................................. 50
LEGAL OPINIONS........................................................... 51
MANAGEMENT OF NORWEST AND ADDITIONAL INFORMATION......................... 51
APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION AND AGREEMENT AND PLAN
OF MERGER
APPENDIX B STOCK OPTION AGREEMENT
APPENDIX C OPINION OF MERRILL LYNCH & CO.
</TABLE>
3
<PAGE>
AVAILABLE INFORMATION
Norwest and AMFED are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, file reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission").
The reports, proxy statements, and other information filed by Norwest and
AMFED with the Commission can be inspected and copied at the public reference
facilities of the Commission, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, at the regional offices of the Commission located at Seven World
Trade Center, Suite 1300, New York, New York 10048, and at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials can
be obtained at prescribed rates by writing to the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549. Reports, proxy
statements, and other information filed by Norwest also may be inspected at
the offices of the New York Stock Exchange at 20 Broad Street, New York, New
York 10005 and at the offices of the Chicago Stock Exchange at One Financial
Place, 440 South LaSalle Street, Chicago, Illinois 60605. In addition,
materials filed by AMFED are available for inspection at the offices of The
Nasdaq Stock Market, 1735 K Street, Washington, D.C. 20006.
This Proxy Statement-Prospectus does not contain all of the information set
forth in the Registration Statement on Form S-4 (File No. 33- ) and the
exhibits thereto (the "Registration Statement") covering the securities
offered hereby that Norwest has filed with the Commission. Certain portions of
the Registration Statement have been omitted pursuant to the rules and
regulations of the Commission. Reference is hereby made to such omitted
portions for further information with respect to Norwest, AMFED, and the
securities offered hereby. Statements contained herein concerning the
provisions of certain documents are necessarily summaries of such documents,
and each statement is qualified in its entirety by reference to the copy of
the applicable document filed with the Commission or attached hereto as an
appendix.
----------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, THE NORWEST COMMON
STOCK OFFERED BY THIS PROXY STATEMENT-PROSPECTUS, OR THE SOLICITATION OF A
PROXY, IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROXY STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF NORWEST OR AMFED SINCE THE DATE OF THIS PROXY
STATEMENT-PROSPECTUS.
4
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS THAT ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS, EXCLUDING
EXHIBITS, UNLESS SPECIFICALLY INCORPORATED THEREIN, ARE AVAILABLE WITHOUT
CHARGE, UPON WRITTEN OR ORAL REQUEST, IN THE CASE OF DOCUMENTS RELATING TO
NORWEST, TO LAUREL A. HOLSCHUH, SECRETARY, NORWEST CORPORATION, NORWEST
CENTER, SIXTH AND MARQUETTE, MINNEAPOLIS, MINNESOTA 55479-1026, TELEPHONE
(612) 667-8655; OR, IN THE CASE OF AMFED, TO JOANN COY, SECRETARY, ONE
CALIFORNIA AVENUE, P.O. BOX 1118, RENO, NEVADA 58601, TELEPHONE (702) 785-
8500. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD
BE MADE BY DECEMBER , 1995.
The following documents filed with the Commission by Norwest (File No. 1-
2979) pursuant to the Exchange Act are incorporated by reference in this Proxy
Statement-Prospectus:
1. Norwest's Annual Report on Form 10-K for the year ended December 31,
1994;
2. Norwest's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995 and September 30, 1995; and
3. Norwest's Current Reports on Form 8-K dated January 9, 1995, January
27, 1995, February 17, 1995, April 21, 1995, July 3, 1995, September 13,
1995, October 4, 1995 and November 1, 1995.
The following documents filed with the Commission by AMFED (File No. 0-
20748) pursuant to the Exchange Act are incorporated by reference in this
Proxy Statement-Prospectus.
1. AMFED's Annual Report on Form 10-K for the year ended December 31,
1994;
2. AMFED's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995 and September 30, 1995; and
3. AMFED's Current Report on Form 8-K dated July 21, 1995.
All documents filed by Norwest and AMFED with the Commission pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the Special Meeting shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of such filing. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein or in any other
subsequently filed document that also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part hereof.
5
<PAGE>
SUMMARY
The following summary of certain information relating to the Merger is not
intended to be complete and is qualified in all respects by the more detailed
information included in this Proxy Statement-Prospectus, the Appendices hereto,
and the documents incorporated by reference herein. As used in this Proxy
Statement-Prospectus, the terms "Norwest" and "AMFED" refer to such entities,
respectively, and where the context requires, such entities and their
respective subsidiaries. All information concerning Norwest included in this
Proxy Statement-Prospectus has been furnished by Norwest for inclusion or
incorporation herein, and all information concerning AMFED included in this
Proxy Statement-Prospectus has been furnished by AMFED to Norwest for inclusion
herein.
PARTIES TO THE MERGER
Norwest Corporation
Norwest Corporation is a diversified financial services company which was
organized under the laws of Delaware in 1929 and is registered under the Bank
Holding Company Act of 1956, as amended (the "BHC Act"). Norwest owns
subsidiaries engaged in banking and in a variety of related businesses. Norwest
provides retail, commercial, and corporate banking services to its customers
through banks located in Arizona, Colorado, Illinois, Indiana, Iowa, Minnesota,
Montana, Nebraska, New Mexico, Ohio, South Dakota, Texas, Wisconsin, and
Wyoming. Norwest provides additional financial services to its customers
through subsidiaries engaged in various businesses, principally mortgage
banking, consumer finance, equipment leasing, agricultural finance, commercial
finance, securities brokerage and investment banking, insurance agency
services, computer and data processing services, trust services, and venture
capital investment.
At September 30, 1995, Norwest had consolidated total assets of $71.4
billion, total deposits of $39.7 billion, and total stockholders' equity of
$4.9 billion. Based on total assets at September 30, 1995, Norwest was the 11th
largest commercial banking organization in the United States.
Norwest regularly explores opportunities for acquisitions of financial
institutions and related businesses. Generally, management of Norwest does not
make a public announcement about an acquisition until a definitive agreement
has been signed. Norwest has entered into definitive agreements for the
acquisition of various financial institutions, including AMFED, having
aggregate total assets at September 30, 1995 of $4.1 billion. Certain of these
acquisitions were consummated subsequent to September 30, 1995, and the others
remain subject to regulatory approval and are expected to be completed by the
end of the first quarter of 1996. None of these acquisitions is individually
significant or material to the financial statements of Norwest.
Norwest's principal executive offices are located at Norwest Center, Sixth
and Marquette, Minneapolis, Minnesota 55479-1000, and its telephone number is
612-667-1234.
Additional information concerning Norwest is included in the Norwest
documents incorporated by reference herein. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
AMFED Financial, Inc.
AMFED Financial, Inc. is a savings and loan holding company which was
organized under the laws of Nevada in 1992. Its principal executive offices are
located at One California Avenue, Reno, Nevada 89509, and its telephone number
is (702) 785-8500. It holds 100% of the issued and outstanding capital stock of
American Federal Savings Bank (the "Bank"). AMFED became the holding company
for the Bank upon the Bank's conversion from a federal mutual savings bank to a
federal stock savings bank (the "Conversion"). The Conversion was completed on
November 20, 1992. At September 30, 1995, AMFED had total assets of $1.6
6
<PAGE>
billion, total deposits of $1.4 billion and stockholders' equity of $141.9
million. AMFED has not engaged in any significant activity other than holding
the stock of the Bank. The Bank was organized in 1889 as a Nevada chartered
building and loan association under the name Union Building and Loan Society
and received a federal mutual charter in 1939, at which time it became a member
of the Federal Home Loan Bank ("FHLB") System. The Bank is regulated by the
Office of Thrift Supervision ("OTS") and its deposits are insured up to
applicable limits under the Savings Association Insurance Fund ("SAIF") of the
Federal Deposit Insurance Corporation ("FDIC"). The Bank's principal business
consists of originating and purchasing loans secured by single-family
residential real estate and, to a lesser extent, originating multi-family,
commercial real estate, consumer, construction and other loans. At September
30, 1995, the Bank operated 43 banking offices in Nevada.
SPECIAL MEETING AND VOTE REQUIRED
Special Meeting
The Special Meeting will be held on Wednesday, January 3, 1996, at 10:00
a.m., local time, in the Southern Pacific Rooms D and E at John Ascuaga's
Nugget Hotel, 1100 Nugget Avenue, Sparks, Nevada for the purpose of voting on a
proposal to approve the Merger Agreement. Only holders of record of AMFED
Common Stock at the close of business on November 24, 1995 will be entitled to
receive notice of and to vote at the Special Meeting. At such date, there were
5,891,930 shares of AMFED Common Stock outstanding. Each share of AMFED Common
Stock is entitled to one vote. For additional information relating to the
Special Meeting, see "MEETING INFORMATION."
Vote Required
Approval of the Merger Agreement requires the affirmative vote of the holders
of a majority of the outstanding shares of AMFED Common Stock. As of the record
date for the Special Meeting, directors and executive officers of AMFED and
their affiliates owned beneficially an aggregate of 227,100 shares (not
including shares that may be acquired upon the exercise of stock options), or
approximately 3.85%, of the AMFED Common Stock outstanding on that date. At the
record date, directors and executive officers of Norwest did not own
beneficially any shares of AMFED Common Stock. Norwest beneficially owned
290,000 shares of AMFED Common Stock at the record date. If a majority of the
votes eligible to be cast do not vote in favor of approval of the Merger
Agreement, AMFED will continue to act as a separate entity and a going concern.
A failure to vote, either by not returning the enclosed proxy or by checking
the "Abstain" box thereon, will have the same effect as a vote against approval
of the Merger Agreement. See "MEETING INFORMATION--Record Date; Vote Required."
TERMS OF THE MERGER
Upon consummation of the Merger, a newly formed wholly-owned subsidiary of
Norwest ("Merger Co.") will be merged with and into AMFED and AMFED, as the
surviving corporation in the Merger, will become a wholly-owned subsidiary of
Norwest. In the Merger, each outstanding share of AMFED Common Stock will be
automatically converted (subject to certain provisions described herein with
respect to fractional shares) into the right to receive 1.0251 shares of
Norwest Common Stock (the "Exchange Ratio"). The Merger Agreement also
provides, among other things, that AMFED may refuse to consummate the Merger if
the "Termination Measurement Price" multiplied by the Exchange Ratio is less
than $31.00, unless Norwest, in its sole discretion, elects to adjust the
Exchange Ratio to equal the quotient of 31.00 divided by the Termination
Measurement Price, which would give AMFED stockholders the equivalent of $31.00
in Norwest Common Stock. The Termination Measurement Price is defined in the
Merger Agreement as the average of the closing prices of a share of Norwest
Common Stock as reported on the NYSE during the period of ten trading days
ending on the day occurring five business days immediately preceding the
closing date of the Merger. Based on the Exchange Ratio of 1.0251,
7
<PAGE>
AMFED may terminate the Merger Agreement if the Termination Measurement Price
is less than $30.25, unless Norwest elects to adjust the Exchange Ratio. No
fractional shares will be issued. Norwest will pay cash in lieu of fractional
shares of Norwest Common Stock to be received in the Merger. See "THE MERGER--
Terms of the Merger."
Outstanding options issued pursuant to AMFED's 1992 Stock Option Incentive
Plan ("1992 Option Plan") that are not exercised in full prior to the Effective
Date shall terminate and will be converted into and exchanged for that number
of 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 the Exchange Ratio (as may be adjusted as described above), over
(2) the aggregate exercise price of the option shares by (B) the Termination
Measurement Price. It is a condition precedent to Norwest's obligation to
effect the Merger that AMFED shall have terminated all unexercised options
under the 1992 Option Plan in exchange for shares of Norwest Common Stock as
described above and, if necessary, obtained the written consent of the holders
of such options to such termination. See "THE MERGER--Conditions to the
Merger."
RECOMMENDATION OF THE BOARD OF DIRECTORS OF AMFED
At a Board of Directors meeting held on July 21, 1995, after considering the
terms and conditions of the Merger Agreement and obtaining the advice of its
financial advisor, the AMFED Board approved the Merger Agreement. The AMFED
Board believes that the Merger is in the best interests of AMFED and its
stockholders and, accordingly, recommends that stockholders of AMFED vote "FOR"
approval of the Merger Agreement. For a discussion of the circumstances
surrounding the Merger and the factors considered by the AMFED Board in making
its recommendation, see "THE MERGER--Background and Reasons for the Merger."
Certain members of AMFED's management and the AMFED Board have certain
interests in the Merger that are in addition to their interests as stockholders
of AMFED generally. See "THE MERGER--Interests of Certain Persons in the
Merger."
OPINION OF AMFED'S FINANCIAL ADVISOR
The AMFED Board retained Merrill Lynch & Co. ("Merrill Lynch"), to assist in
the negotiation of the Merger and to act as financial advisor in connection
therewith. Merrill Lynch has delivered its written opinion to the AMFED Board
dated as of July 21, 1995 and updated as of the date of this Proxy Statement-
Prospectus that the Exchange Ratio is fair to the holders of AMFED Common Stock
(other than Norwest) from a financial point of view. The opinion of Merrill
Lynch is attached as Appendix C to this Proxy Statement-Prospectus.
Stockholders are urged to read such opinion in its entirety for a description
of the procedures followed, matters considered, and limitations on the reviews
undertaken in connection therewith. For additional information, see "THE
MERGER--Opinion of AMFED's Financial Advisor."
EFFECTIVE DATE AND TIME OF THE MERGER
Subject to the terms and conditions of the Merger Agreement, the Merger will
be effective at 11:59 p.m., Reno, Nevada time (the "Effective Time") on the
date on which articles of merger relating to the Merger (the "Articles of
Merger") are filed with the Nevada Secretary of State (the "Effective Date").
Unless the parties agree on a different date of filing, the Articles of Merger
will be filed ten business days following the approval of the Merger Agreement
by AMFED's stockholders. All required regulatory approvals have been received
as of the date of this Proxy Statement-Prospectus. The closing of the Merger
(the "Closing") will occur on the Effective Date (the "Closing Date"). See "THE
MERGER--Effective Date and Time of the Merger," "--Conditions to the Merger"
and "--Regulatory Approvals."
8
<PAGE>
CONDITIONS AND TERMINATION
The obligations of Norwest and AMFED to consummate the Merger are subject to
various conditions, including, but not limited to: (i) obtaining requisite
stockholder and governmental approvals; (ii) the absence of any preliminary or
permanent injunction or other order by any federal or state court which
prevents the consummation of the Merger; (iii) approval for listing on the NYSE
and the CHX of the Norwest Common Stock to be issued in connection with the
Merger; (iv) receipt of an opinion of counsel to AMFED at the closing of the
Merger in respect of certain federal income tax consequences of the Merger; and
(v) receipt of accountants' letters to the effect that the Merger qualifies for
pooling of interests accounting treatment. See "THE MERGER--Conditions to the
Merger."
The Merger Agreement may be terminated at any time prior to the Effective
Date, whether before or after approval of the Merger Agreement by the
stockholders of AMFED, (i) by mutual consent of the parties; (ii) by either
Norwest or AMFED if the Merger shall not have been consummated on or before
June 30, 1996; (iii) by Norwest or AMFED if any court or governmental authority
of competent jurisdiction shall have issued a final order restraining,
enjoining, or otherwise prohibiting the consummation of the Merger; (iv) by
AMFED if the Termination Measurement Price is less than $30.25 and Norwest in
its sole discretion does not elect to adjust the Exchange Ratio to give AMFED
stockholders the equivalent of $31.00 in Norwest Common Stock; or (v) by
Norwest, if the AMFED Board withdraws, modifies, or amends its recommendation
of the Merger in any way materially adverse to Norwest. See "THE MERGER--
Waiver, Amendment, and Termination."
REGULATORY APPROVALS
The Merger is subject to the approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), the OTS and the State of
Nevada. The approval of the Federal Reserve Board was received by letter dated
October 26, 1995. The approval of the OTS and the State of Nevada were both
received by letters dated November 13, 1995. See "THE MERGER--Regulatory
Approvals."
NO SOLICITATION
AMFED, subject to certain exceptions, has agreed not to solicit or enter into
discussions with any persons concerning certain transactions with AMFED
involving the acquisition of its common stock or assets. In the event AMFED
receives a proposal concerning such a transaction, the AMFED Board may, to the
extent legally advisable for the discharge of its fiduciary duties based on the
advice of counsel, approve such proposal or recommend such transaction to AMFED
stockholders and, in such case, the AMFED Board may amend, withhold, or
withdraw its recommendation of the Merger, which action may result in the
exercisability of the stock option granted to Norwest under the Stock Option
Agreement described below. See "THE MERGER--No Solicitation" and "--Stock
Option Agreement Between Norwest and AMFED."
ACCOUNTING TREATMENT
It is anticipated that the Merger will be accounted for as a pooling of
interests by Norwest under generally accepted accounting principles. The Merger
Agreement provides that a condition to consummation of the Merger is the
receipt of a letter from Deloitte & Touche LLP, AMFED's independent auditors,
to the effect that activities of AMFED do not preclude the Merger from
qualifying for pooling of interests accounting treatment. See "THE MERGER--
Conditions to the Merger" and "--Accounting Treatment."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
The directors and executive officers of AMFED beneficially owned a total of
227,100 shares of AMFED Common Stock (representing 3.85% of all outstanding
shares of AMFED Common Stock) on November 24,
9
<PAGE>
1995. In the Merger, the directors and executive officers will receive the same
consideration for their shares as the other stockholders of AMFED. Certain
members of AMFED's management and the AMFED Board have certain interests in the
Merger that are in addition to their interest as stockholders of AMFED
generally.
E.R. Houston, the Chief Executive Officer of AMFED and the Bank, David P.
Downs, the President of AMFED and the Bank, John H. Kerr, Jr. the Chief
Financial Officer and Treasurer of AMFED and the Bank, and JoAnn Coy, Executive
Vice President and Chief Operating Officer of AMFED and the Bank, have
employment agreements with AMFED and the Bank. In addition, Keith V. Thomas,
Senior Vice President of the Bank, and John Warden, Senior Vice President of
the Bank, have employment agreements with the Bank. The Merger Agreement
provides that Norwest will honor the terms of such agreements. The employment
agreements provide for severance payments and other benefits in the event of
involuntary termination of employment of such officers or a change in the
capacity or circumstances in which they are employed in connection with any
change in control of AMFED or the Bank. The severance payments will equal 2.99
times the officer's average annual compensation during the preceding five
years, which will result in a severance payment to Mr. Houston of approximately
$902,000, to Mr. Downs of approximately $553,000, to Mr. Kerr of approximately
$368,000, to Ms. Coy of approximately $450,000, to Mr. Thomas of approximately
$330,000, and to Mr. Warden of approximately $325,000. In addition, for a
period of three years following the Effective Time, the officers will also
continue to receive other employee benefits, including life, disability and
health insurance.
Pursuant to the Merger Agreement, outstanding options to acquire AMFED Common
Stock will be terminated and exchanged for shares of Norwest Common Stock, as
described above. Non-employee directors of AMFED currently hold options to
purchase an aggregate of 61,660 shares of AMFED Common Stock. Under this
arrangement, based on the Exchange Ratio, such directors will receive an
aggregate of 63,207 shares of Norwest Common Stock with a total value of
approximately $ , using the November , 1995 closing price of Norwest
Common Stock. The executive officers of AMFED hold options to acquire the
following number of shares of AMFED Common Stock: Mr. Houston, 129,782; Mr.
Downs, 78,866; Mr. Kerr, 25,910; Ms. Coy, 38,663; and Mr. Thomas, 19,069; Mr.
Warden, 17,774; and Linda Moore, Senior Vice President of the Bank, 9,512.
Pursuant to the Merger Agreement, such options will be terminated and the
officers will receive shares of Norwest Common Stock having the value
indicated, using the November , 1995 closing price of Norwest Common Stock of
$ per share: Mr. Houston, $ ; Mr. Downs, $ ; Mr. Kerr,
$ ; Ms. Coy, $ ; Mr. Thomas $ ; Mr. Warden, $ ;
and Ms. Moore, $ .
For the first six years after the Effective Time, Norwest will ensure that
all rights to indemnification and all limitations of liability existing in
favor of directors and officers of AMFED in AMFED's Articles of Incorporation
and Bylaws or similar governing documents of AMFED's subsidiaries shall
continue in full force and effect. In addition, for a period of three years
after the Effective Time, Norwest will use all reasonable efforts to cause all
directors and officers of AMFED to continue to be covered by AMFED's directors
and officers liability insurance policy at an annual cost not to exceed 150% of
AMFED's premium payment for AMFED's current policy.
Following the Effective Date of the Merger, the AMFED Board will consist of
at least five, but not more than seven, members to be designated from among the
members of the Board of Directors of the Bank. The initial retainer for each
board member will be not less than $1,000 per month.
See "THE MERGER--Interests of Certain Persons in the Merger."
NO DISSENTERS' RIGHTS
The holders of AMFED Common Stock will not have dissenters' rights under
applicable provisions of the Nevada General Corporation Law. See "THE MERGER--
No Dissenters' Rights."
10
<PAGE>
STOCK OPTION AGREEMENT BETWEEN NORWEST AND AMFED
As a condition to Norwest's execution of the Merger Agreement, AMFED entered
into a stock option agreement with Norwest (the "Option Agreement"), pursuant
to which AMFED granted Norwest an option (the "Option") to purchase up to
1,171,798 authorized and unissued shares of AMFED Common Stock at a price of
$26.00 per share. The Option Agreement is set forth in Appendix B to this Proxy
Statement-Prospectus. The Option is exercisable only upon the occurrence of
certain limited and specifically defined events, none of which has occurred as
of the date hereof. The Option Agreement is intended to increase the likelihood
that the Merger will be consummated in accordance with the terms set forth in
the Merger Agreement. Consequently, certain aspects of the Option Agreement may
have the effect of discouraging persons who might now or prior to the Effective
Time be interested in acquiring all of or a significant interest in AMFED from
considering or proposing such an acquisition, even if such persons were
prepared to pay a higher price per share for AMFED Common Stock than the price
per share contemplated by the Merger Agreement. See "THE MERGER--Stock Option
Agreement Between Norwest and AMFED."
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The Merger is intended to be a tax-free reorganization so that no gain or
loss would be recognized by AMFED stockholders, except with respect to cash
received for any fractional shares. Consummation of the Merger is conditioned
upon the receipt by AMFED of an opinion of Breyer & Aguggia, Washington, D.C.,
special counsel to AMFED, to the effect that: (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"); (ii) no gain or loss will be recognized
by AMFED stockholders who exchange all of their AMFED Common Stock solely for
shares of Norwest Common Stock (except cash received in lieu of fractional
shares); (iii) the basis of shares of Norwest Common Stock received by the
stockholders of AMFED will be the same as the basis of shares of AMFED Common
Stock exchanged therefor; and (iv) the holding period of the shares of Norwest
Common Stock received by such stockholders will include the holding period of
the shares of AMFED Common Stock exchanged therefore, provided such shares were
held as capital assets as of the Effective Time.
The U.S. federal income tax considerations of the Merger may be different for
particular types of AMFED stockholders or in light of each AMFED stockholder's
personal investment circumstances. Consequently, AMFED stockholders are urged
to consult their own tax advisors concerning the federal income tax
considerations that may be relevant to them in connection with the Merger, as
well as the application to them of any state, local, foreign, or other tax
laws. See "THE MERGER--Certain U.S. Federal Income Tax Consequences."
MARKET INFORMATION
The following table sets forth the closing price per share of Norwest Common
Stock, as reported on the NYSE Composite Tape, and of AMFED Common Stock, as
quoted on the Nasdaq National Market, and the equivalent per share price for
AMFED Common Stock giving effect to the Exchange Ratio on (i) July 20, 1995,
the last business day preceding public announcement of the Merger Agreement and
(ii) November , 1995, the last practicable date prior to the mailing of this
Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
NORWEST AMFED EQUIVALENT PRICE
COMMON STOCK COMMON STOCK PER AMFED SHARES(1)
------------ ------------ ------------------
<S> <C> <C> <C>
July 20, 1995............... $28.00 $25.50 $28.70
, 1995........
</TABLE>
- --------
(1) The equivalent price per share of AMFED Common Stock at each specified date
was determined by multiplying the last reported sale price of a share of
Norwest Common Stock on such date by the Exchange Ratio.
11
<PAGE>
The market price for Norwest Common Stock will fluctuate between the date of
this Proxy Statement-Prospectus and the Effective Date, which will be a period
of several weeks. As a result, the market value per share of the Norwest Common
Stock that AMFED stockholders ultimately receive in the Merger could be more or
less than its market value on the date of this Proxy Statement-Prospectus. No
assurance can be given concerning the market price of Norwest Common Stock
before or after the Effective Date. AMFED stockholders are advised to obtain
current market quotations for Norwest Common Stock. See "COMPARATIVE PER SHARE
PRICES AND DIVIDENDS."
CERTAIN DIFFERENCES IN RIGHTS OF STOCKHOLDERS
The rights of stockholders of AMFED are currently determined by reference to
the Nevada General Corporation Law and AMFED's Articles of Incorporation and
Bylaws. On the Effective Date, stockholders of AMFED will become stockholders
of Norwest and, accordingly, their rights as stockholders of Norwest will be
determined by reference to the Delaware General Corporation Law and by
Norwest's Restated Certificate of Incorporation and By-Laws. For a discussion
of material differences in the rights of stockholders of AMFED and Norwest, see
"CERTAIN DIFFERENCES IN RIGHTS OF STOCKHOLDERS."
COMPARATIVE PER COMMON SHARE DATA
The following table presents selected comparative per common share data for
Norwest Common Stock on a historical and pro forma combined basis and for AMFED
Common Stock on a historical and a pro forma equivalent basis giving effect to
the Merger using the pooling of interests method of accounting. For a
description of the pooling of interests method of accounting with respect to
the Merger and the related effects on the historical financial statements of
Norwest, see "THE MERGER--Accounting Treatment." This information is derived
from the consolidated historical financial statements of Norwest and AMFED,
including the related notes thereto, incorporated by reference into this Proxy
Statement-Prospectus, and should be read in conjunction with such historical
financial statements and related notes. See "INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE." This data is not necessarily indicative of the results of the
future operations of the combined entity or the actual results that would have
occurred had the Merger been consummated prior to the periods indicated.
COMPARATIVE PER COMMON SHARE DATA
<TABLE>
<CAPTION>
NORWEST COMMON STOCK AMFED COMMON STOCK
-------------------- ---------------------
PRO FORMA PRO FORMA
HISTORICAL COMBINED HISTORICAL EQUIVALENT
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
BOOK VALUE(1):
September 30, 1995................. $13.73 13.89 24.09 14.24
December 31, 1994.................. 10.79 10.99 22.15 11.26
DIVIDENDS DECLARED(2):
Nine Months Ended
September 30, 1995............... 0.660 0.660 0.200 0.677
Year Ended
December 31, 1994................ 0.765 0.765 0.230 0.784
December 31, 1993................ 0.640 0.640 0.150 0.656
December 31, 1992................ 0.540 0.540 -- 0.554
NET INCOME(3):
Nine Months Ended
September 30, 1995............... 2.01 1.99 1.68 2.04
Year Ended
December 31, 1994................ 2.41 2.39 1.95 2.45
December 31, 1993................ 1.86 1.85 1.73 1.89
December 31, 1992................ 1.19 1.16 0.03 1.19
</TABLE>
12
<PAGE>
- --------
(1) The pro forma combined book value per share of Norwest Common Stock is
based upon the historical total combined common stockholders' equity for
Norwest and AMFED divided by total pro forma common shares of the combined
entities assuming exchange of the outstanding AMFED Common Stock at a ratio
of 1.0251 shares of Norwest Common Stock for each share of AMFED Common
Stock. The data presented assume the exercise of all stock options and
exclude any shares of AMFED Common Stock held by Norwest and exclude any
shares of AMFED Common Stock issuable to Norwest upon exercise of options
held by Norwest. The aggregate number of shares of Norwest Common Stock
assumed to be issued in the Merger is 6,188,584. See "THE MERGER--Terms of
the Merger." The pro forma equivalent book value per share of AMFED
represents the pro forma combined amount multiplied by the Exchange Ratio.
(2) Assumes no changes in cash dividends per share. The pro forma equivalent
dividends per share of AMFED Common Stock represent cash dividends declared
per share of Norwest Common Stock multiplied by the Exchange Ratio.
(3) The pro forma combined net income per share of Norwest Common Stock (based
on fully diluted net income and weighted average shares outstanding) is
based upon the combined historical net income for Norwest and AMFED divided
by the average pro forma common shares of the combined entities. The
historical net income per share of AMFED Common Stock is based on fully
diluted income from continuing operations, after the cumulative effect of a
change in accounting principle. The 1992 historical net income per share of
AMFED Common Stock represents net income for the period November 20, 1992
(the effective date of the Conversion) to December 31, 1992 divided by the
weighted average number of shares of AMFED Common Stock and common stock
equivalents outstanding since the Conversion. The pro forma equivalent net
income per share of AMFED Common Stock represents the pro forma combined
net income per share multiplied by the Exchange Ratio.
SELECTED FINANCIAL DATA
The following table sets forth certain selected historical consolidated
financial information for Norwest and AMFED. The income statement and balance
sheet data for Norwest included in the selected financial data for each of the
five years in the period ended December 31, 1994 are derived from audited
consolidated financial statements of Norwest for such five-year period. The
income statement and balance sheet data for AMFED included in the selected
financial data for each of the five years in the period ended December 31, 1994
are derived from audited consolidated financial statements for AMFED for the
years ended December 31, 1994, 1993 and 1992 and from audited consolidated
financial statements for the Bank for the years ended December 31, 1991 and
1990. The selected financial data for the nine-month periods ended September
30, 1995 and 1994 are derived from the unaudited historical financial
statements of Norwest and AMFED. All financial information derived from
unaudited financial statements reflects, in the respective opinions of
management of Norwest and AMFED, all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of such data. Results
for the nine months ended September 30, 1995 are not necessarily indicative of
the results that may be expected for any other interim period or for the year
as a whole. This information should be read in conjunction with the
consolidated financial statements of Norwest and AMFED and the related notes
thereto, included in documents incorporated herein by reference. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
13
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
NORWEST CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 YEAR ENDED DECEMBER 31
------------------ ---------------------------------------------
1995 1994 1994 1993(1) 1992(2) 1991 1990(3)
--------- -------- -------- -------- -------- -------- --------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Interest income........ $ 4,153.3 3,197.3 4,393.7 3,946.3 3,806.4 4,025.9 3,885.8
Interest expense....... 1,771.6 1,128.3 1,590.1 1,442.9 1,610.6 2,150.3 2,320.1
--------- -------- -------- -------- -------- -------- --------
Net interest income.... 2,381.7 2,069.0 2,803.6 2,503.4 2,195.8 1,875.6 1,565.7
Provision for credit
losses................ 216.5 101.6 164.9 158.2 270.8 406.4 433.0
Non-interest income.... 1,337.3 1,200.4 1,638.3 1,585.0 1,273.7 1,064.0 896.3
Non-interest expenses.. 2,458.8 2,288.6 3,096.4 3,050.4 2,553.1 2,041.5 1,744.5
--------- -------- -------- -------- -------- -------- --------
Income before income
taxes................. 1,043.7 879.2 1,180.6 879.8 645.6 491.7 284.5
Income tax expense..... 347.4 283.7 380.2 266.7 175.6 73.4 115.1
--------- -------- -------- -------- -------- -------- --------
Income before
cumulative effect of a
change in accounting
method................ 696.3 595.5 800.4 613.1 470.0 418.3 169.4
Cumulative effect on
years prior to 1992 of
change in accounting
method................ -- -- -- -- (76.0) -- --
--------- -------- -------- -------- -------- -------- --------
Net income............. $ 696.3 595.5 800.4 613.1 394.0 418.3 169.4
========= ======== ======== ======== ======== ======== ========
PER COMMON SHARE DATA
Net income per share:
Primary:
Before cumulative
effect of a change
in accounting
method............... $ 2.04 1.82 2.45 1.89 1.44 1.33 0.59
Cumulative effect on
years prior to 1992
of change in
accounting method.... -- -- -- -- (0.25) -- --
--------- -------- -------- -------- -------- -------- --------
Net income........... $ 2.04 1.82 2.45 1.89 1.19 1.33 0.59
========= ======== ======== ======== ======== ======== ========
Fully diluted:
Before cumulative
effect of a change
in accounting
method............... $ 2.01 1.79 2.41 1.86 1.42 1.32 0.59
Cumulative effect on
years prior to 1992
of change in
accounting method.... -- -- -- -- (0.23) -- --
--------- -------- -------- -------- -------- -------- --------
Net income........... $ 2.01 1.79 2.41 1.86 1.19 1.32 0.59
========= ======== ======== ======== ======== ======== ========
Dividends declared per
common share.......... $ 0.660 0.555 0.765 0.640 0.540 0.470 0.423
BALANCE SHEET DATA
At period end:
Total assets........... $71,411.9 56,565.4 59,315.9 54,665.0 50,037.0 45,974.5 43,523.0
Long-term debt......... 12,686.3 8,310.1 9,186.3 6,850.9 4,553.2 3,686.6 3,066.0
Total stockholders'
equity................ 4,940.1 3,824.3 3,846.4 3,760.9 3,371.8 3,192.3 2,434.0
</TABLE>
- --------
(1) On January 14, 1994, First United Bank Group, Inc. ("First United"), a $3.9
billion bank holding company headquartered in Albuquerque, New Mexico, was
acquired in a pooling transaction. Norwest's historical results have been
restated to include the historical results of First United. Appropriate
Norwest items reflect an increase in First United's provision for credit
losses of $16.5 million to conform with Norwest's credit loss reserve
practices and methods and $83.2 million in accruals and reserves for
merger-related expenses, including termination costs, systems and
operations costs, and investment banking, legal, and accounting expenses.
(2) On February 9, 1993, Lincoln Financial Corporation ("Lincoln"), a $2.0
billion bank holding company headquartered in Fort Wayne, Indiana, was
acquired in a pooling of interests transaction. Norwest's historical
results have been restated to include the historical results of Lincoln.
Appropriate Norwest items
14
<PAGE>
reflect an increase in Lincoln's provision for credit losses of $60.0
million and $33.5 million in Lincoln's provisions and expenditures for
costs related to restructuring activities.
(3) On April 19, 1991, United Banks of Colorado, Inc. ("United"), a $5.5
billion financial holding company headquartered in Denver, Colorado,
merged with Norwest in a pooling of interests transaction. Norwest's
historical results have been restated to include the historical results of
United. Appropriate Norwest items reflect United's special provisions for
credit losses and writedowns for other real estate owned, which together
totaled $165 million, and $31 million of accruals for expected
reorganization and restructuring costs for the year ended December 31,
1990. The special provisions were due to deterioration of several large
commercial loan relationships, the anticipated results of the then recent
examination by the Office of the Comptroller of the Currency, and the
anticipated impact of the Resolution Trust Corporation's accelerated
efforts to liquidate foreclosed properties at deep discounts.
15
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
AMFED FINANCIAL, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 YEAR ENDED DECEMBER 31
--------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- --------------- ----- ----- ----- -----
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Interest income........... $ 86.5 37.6 60.8 50.2 51.2 54.7 56.7
Interest expense.......... 43.5 16.3 27.4 23.2 25.2 34.3 39.2
---------- ------- ------- ----- ----- ----- -----
Net interest income....... 43.0 21.3 33.4 27.0 25.0 20.4 17.5
Provision for credit
losses................... .4 .2 .3 .5 1.1 1.6 5.0
Non-interest income....... 6.4 6.5 8.3 5.4 4.5 2.8 3.4
Non-interest expenses..... 33.0 16.6 26.4 20.4 18.6 16.9 16.1
---------- ------- ------- ----- ----- ----- -----
Income (loss) before
income taxes............. 16.0 11.0 15.0 11.5 9.8 4.7 (.2)
Income tax expense........ 5.7 3.9 5.3 3.9 3.5 1.8 --
---------- ------- ------- ----- ----- ----- -----
Income before cumulative
effect of a change in
accounting method........ 10.3 7.1 9.7 7.6 6.3 2.9 (.2)
Cumulative effect on years
prior to 1993 of change
in accounting method..... -- -- -- .7 -- -- --
---------- ------- ------- ----- ----- ----- -----
Net income (loss)......... $ 10.3 7.1 9.7 8.3 6.3 2.9 (.2)
========== ======= ======= ===== ===== ===== =====
PER COMMON SHARE DATA(1)
Net income per share:
Primary:
Before cumulative effect
of a change in
accounting method....... $ 1.69 1.50 1.95 1.58 .03
Cumulative effect on
years prior to 1993 of
change in accounting
method.................. -- -- -- .16 --
---------- ------- ------- ----- -----
Net income.............. $ 1.69 1.50 1.95 1.74 .03
========== ======= ======= ===== =====
Fully diluted:
Before cumulative effect
of a change in
accounting method....... $ 1.68 1.50 1.95 1.57 .03
Cumulative effect on
years prior to 1993 of
change in accounting
method.................. -- -- -- .16 --
---------- ------- ------- ----- -----
Net income.............. $ 1.68 1.50 1.95 1.73 .03
========== ======= ======= ===== ===== ===== =====
Dividends declared per
common share............. $ .20 .17 .23 .15 0 -- --
BALANCE SHEET DATA
At period end:
Total assets.............. $ 1,572.4 834.0 1,557.3 755.8 708.2 600.1 583.1
Long-term debt............ -- -- -- -- -- -- --
Total stockholders'
equity................... 141.9 98.3 130.5 95.2 85.8 38.3 35.4
</TABLE>
- --------
(1) The Bank was converted from a federal mutual savings bank to a federal
stock savings bank on November 20, 1992. For that reason, no per common
share data are presented for the years ended December 31, 1991 and 1990.
The per common share data for the year ended December 31, 1992 are for the
period beginning November 20, 1992 (the effective date of the Conversion)
and ending December 31, 1992.
16
<PAGE>
MEETING INFORMATION
GENERAL
This Proxy Statement-Prospectus is being furnished to holders of AMFED
Common Stock in connection with the solicitation of proxies by the AMFED Board
for use at the Special Meeting to be held on Wednesday, January 3, 1996 and
any adjournments or postponements thereof, to consider and take action upon a
proposal to approve the Merger Agreement and such other business as may
properly come before the Special Meeting or any adjournments or postponements
thereof. Each copy of this Proxy Statement-Prospectus mailed to holders of
AMFED Common Stock is accompanied by a form of proxy for use at the Special
Meeting.
This Proxy Statement-Prospectus is also being furnished by Norwest to the
stockholders of AMFED as a prospectus in connection with the issuance by
Norwest of shares of Norwest Common Stock upon consummation of the Merger.
DATE, PLACE AND TIME
The Special Meeting will be held in the Southern Pacific Rooms D and E at
John Ascuaga's Nugget Hotel, 1100 Nugget Avenue, Sparks, Nevada, on Wednesday,
January 3, 1996, at 10:00 a.m., local time.
RECORD DATE; VOTE REQUIRED
The AMFED Board has fixed the close of business on November 24, 1995 as the
record date for the determination of stockholders of AMFED entitled to receive
notice of, and to vote at, the Special Meeting. On the record date there were
5,891,930 shares of AMFED Common Stock outstanding and entitled to vote at the
Special Meeting. Approval of the Merger Agreement requires the affirmative
vote of the holders of a majority of the outstanding shares of AMFED Common
Stock. The Merger cannot be consummated without the requisite approval of the
Merger Agreement by the holders of AMFED Common Stock.
As of the record date for the Special Meeting, directors and executive
officers of AMFED and their affiliates owned beneficially an aggregate of
227,100 shares (not including shares that may be acquired upon the exercise of
outstanding stock options), or approximately 3.85%, of the AMFED Common Stock
outstanding on that date.
At the record date, directors and executive officers of Norwest did not own
beneficially any shares of AMFED Common Stock.
VOTING AND REVOCATION OF PROXIES
Shares of AMFED Common Stock represented by a proxy properly signed and
received at, or prior to, the Special Meeting, unless subsequently revoked,
will be voted at the Special Meeting in accordance with the instructions
thereon. If a proxy is signed and returned without indicating any voting
instructions, shares of AMFED Common Stock represented by such proxy will be
voted FOR approval of the Merger Agreement. Any proxy given pursuant to this
solicitation may be revoked by the person giving it at any time before the
proxy is voted by filing either an instrument revoking it or a duly executed
proxy bearing a later date with the Secretary of AMFED prior to or at the
Special Meeting or by voting the shares subject to the proxy in person at the
Special Meeting. Attendance at the Special Meeting will not in and of itself
constitute a revocation of a proxy.
A proxy may indicate that all or a portion of the shares represented thereby
are not being voted with respect to a specific proposal. This could occur, for
example, when a broker is not permitted to vote shares held in street name on
certain proposals in the absence of instructions from the beneficial owner.
Shares that are not voted with respect to a specific proposal will be
considered as not present for such proposal, even though such shares will be
considered present for purposes of determining a quorum and voting on other
proposals. Abstentions on a specific proposal will be considered as present,
but not as voting in favor of such proposal. The proposal to approve the
Merger Agreement must be approved by the holders of a majority of the
outstanding shares of
17
<PAGE>
AMFED Common Stock. Because this proposal requires the affirmative vote of a
specified percentage of outstanding shares, the nonvoting of shares or
abstentions with regard to this proposal will have the same effect as votes
against the proposal.
The AMFED Board is not aware of any business to be acted upon at the Special
Meeting other than the business described herein. If, however, other matters
are properly brought before the Special Meeting, or any adjournments or
postponements thereof, the persons appointed as proxies will have discretion
to vote or act on such matters according to their best judgment.
SOLICITATION OF PROXIES
In addition to solicitation by mail, directors, officers, and employees of
AMFED may solicit proxies from the stockholders of AMFED, either personally or
by telephone or other form of communication. None of the foregoing persons who
solicit proxies will be specifically compensated for such services. Nominees,
fiduciaries, and other custodians will be requested to forward soliciting
materials to beneficial owners and will be reimbursed for their reasonable
expenses incurred in sending proxy material to beneficial owners. AMFED will
bear its own expenses in connection with any solicitation of proxies for the
Special Meeting. See "THE MERGER--Expenses."
In addition, AMFED has engaged Chemical Mellon Shareholder Services
("Chemical") to assist in distributing proxy materials and contacting record
and beneficial owners of AMFED Common Stock. AMFED has agreed to pay Chemical
approximately $4,500, plus out-of-pocket expenses, for services Chemical will
render on behalf of AMFED.
THE MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING ARE OF GREAT IMPORTANCE
TO THE STOCKHOLDERS OF AMFED. ACCORDINGLY, STOCKHOLDERS ARE URGED TO READ AND
CAREFULLY CONSIDER THE INFORMATION PRESENTED IN THIS PROXY STATEMENT-
PROSPECTUS, AND TO COMPLETE, DATE, AND SIGN THE ACCOMPANYING PROXY AND RETURN
IT PROMPTLY TO AMFED IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
THE MERGER
This section of the Proxy Statement-Prospectus describes certain aspects of
the Merger. The following description does not purport to be complete and is
qualified in its entirety by reference to the Merger Agreement, which is
attached as Appendix A to this Proxy Statement-Prospectus. Stockholders are
urged to read the Merger Agreement in its entirety.
TERMS OF THE MERGER
At the Effective Time, Merger Co. will merge with and into AMFED, and AMFED,
as the surviving corporation, will become a wholly-owned subsidiary of
Norwest. In the Merger, each outstanding share of AMFED Common Stock will be
automatically converted (subject to certain provisions described herein with
respect to fractional shares) into the right to receive 1.0251 shares of
Norwest Common Stock. The Merger Agreement provides that AMFED may refuse to
consummate the Merger if the "Termination Measurement Price" multiplied by the
Exchange Ratio is less than $31.00, unless Norwest, in its sole discretion,
elects to adjust the Exchange Ratio to equal the quotient of 31.00 divided by
the Termination Measurement Price, which would give AMFED stockholders the
equivalent of $31.00 in Norwest Common Stock. The Termination Measurement
Price is defined in the Merger Agreement as the average of the closing prices
of a share of Norwest Common Stock as reported on the NYSE during the period
of 10 trading days ending on the day occurring five business days immediately
preceding the Closing Date of the Merger. Based on the Exchange Ratio of
1.0251, AMFED may terminate the Merger Agreement if the Termination
Measurement Price is less than $30.25, unless
18
<PAGE>
Norwest elects to adjust the Exchange Ratio. No fractional shares will be
issued. Norwest will pay cash in lieu of fractional shares of Norwest Common
Stock to be received in the Merger.
The Exchange Ratio of 1.0251 is based on a "Norwest Measurement Price" of
$32.375. Pursuant to the Merger Agreement, because the Norwest Measurement
Price was greater than $30.00, each share of AMFED Common Stock outstanding
immediately prior to the Effective Time of the Merger will be converted into
and exchanged for a number of shares of Norwest Common Stock determined by
dividing (A) the sum of 32 + .54 by (B) the Norwest Measurement Price, where 4
equals the amount the Norwest Measurement Price exceeds $30.00. The "Norwest
Measurement Price" is defined in the Merger Agreement as the average of the
closing prices of a share of Norwest Common Stock as reported on the
consolidated tape of the NYSE during the period of 20 trading days ending on
the day immediately preceding the date on which the Federal Reserve Board
approves the Merger. The Federal Reserve Board approved the Merger by letter
dated October 26, 1995. Accordingly, the Norwest Measurement Price was
determined during the 20 trading days ending on October 25, 1995.
Outstanding options issued pursuant to AMFED's 1992 Option Plan that are not
exercised in full prior to the Effective Date shall terminate and will be
converted into and exchanged for that number of shares of Norwest Common Stock
determined by (A) the excess of (1) the number of option shares multiplied by
the Termination Measurement Price multiplied by the Exchange Ratio (as may be
adjusted as described above), over (2) the aggregate exercise price of the
Option Shares by (B) the Termination Measurement Price. It is a condition
precedent to Norwest's obligation to effect the Merger that AMFED shall have
terminated all unexercised options under the 1992 Option Plan in exchange for
shares of Norwest Common Stock as described above. See "--Conditions to the
Merger."
Shares of Norwest Common Stock issued and outstanding immediately prior to
the Effective Time will remain issued and outstanding.
The market price for Norwest Common Stock will fluctuate between the date of
this Proxy Statement-Prospectus and the Effective Date, which will be a period
of several weeks. As a result, the market value of the Norwest Common Stock
that stockholders of AMFED ultimately receive in the Merger could be more or
less than its market value on the date of this Proxy Statement-Prospectus.
No fractional shares of Norwest Common Stock will be issued in the Merger.
Instead, Norwest will pay to each holder of AMFED Common Stock who would
otherwise be entitled to a fractional share an amount of cash equal to the
product determined by multiplying the fraction of a share of Norwest Common
Stock to which the AMFED stockholder would otherwise be entitled by the
Termination Measurement Price.
BACKGROUND AND REASONS FOR THE MERGER
Following the Conversion, AMFED focused on leveraging its strong capital
position and expanding its franchise through, in particular, the acquisitions
of First Western Financial Corporation ("First Western") and its wholly-owned
subsidiary, First Western Bank, F.S.B., and Home Federal Bank, Savings Bank.
Towards the end of 1994, following the completion of AMFED's acquisition of
First Western, AMFED asked Merrill Lynch to present an analysis of the
prospects of AMFED. Because of the rapid pace of consolidation in the bank and
thrift industry, the uncertainty surrounding the thrift industry due to the
deposit insurance premium differential between institutions insured by the
SAIF and those insured by the Bank Insurance Fund ("BIF") and potential
federal regulatory agency consolidation, and the attractiveness of thrift
acquisition premiums, AMFED asked Merrill Lynch to include an overview of the
merger and acquisition environment. On November 22, 1994, Merrill Lynch
delivered a presentation to AMFED's Board of Directors in which it discussed
recent merger and acquisition activity among depository institutions,
identified potential targets for and potential acquirors of AMFED, and
presented an overview and a preliminary valuation of AMFED. Subsequent to this
meeting, Merrill Lynch was contacted by Norwest, which expressed an interest
in discussing a possible business combination with AMFED. Merrill Lynch
communicated this interest to AMFED, and an introductory meeting was arranged
for a
19
<PAGE>
later date. Prior to the meeting with Norwest, the AMFED Board met with legal
counsel on December 8, 1994 and discussed the roles and responsibilities of
directors, management and outside professionals in implementing board policies
in connection with a possible business combination.
On December 20, 1994, E.R. Houston, Chief Executive Officer of AMFED, and
David P. Downs, President of AMFED, met with Les Biller, Executive Vice
President of Norwest and had general conversations about a possible business
combination. At a meeting on December 22, 1994, the AMFED Board received a
report on the meeting with Norwest and was advised that another financial
institution had expressed an interest in a transaction with AMFED. As a result
of these inquiries, in late December 1994, at the request of AMFED, Merrill
Lynch made a second presentation to the AMFED Board at which it reviewed
recent merger activity, presented an updated preliminary valuation analysis,
discussed potential acquirors of AMFED, and discussed strategies for
determining potential interest in a business combination with possible
acquirors.
Considering Merrill Lynch's report and other factors, and after discussing
the proposed services and fee structure, AMFED engaged Merrill Lynch on
February 1, 1995 to render financial advisory and investment banking services
to AMFED in connection with evaluating and discussing AMFED's financial
condition and situation, including advising AMFED with regard to AMFED's
financial performance and market conditions and evaluating a possible merger
of AMFED with another institution or a possible sale of AMFED. At this time,
AMFED wanted to ascertain its potential value, but was not actively seeking a
merger or sale of the company.
During February 1995, Merrill Lynch contacted eight financial institutions
approved by AMFED to determine whether they might be interested in a business
combination with AMFED. Three of these institutions indicated that they had no
interest in a transaction with AMFED. During late February and early March
1995, AMFED provided Norwest and four other potentially interested financial
institutions with financial and business information after execution of
confidentiality agreements.
By letter dated April 18, 1995, Norwest informed AMFED that it was
interested in acquiring AMFED in a merger in which each outstanding share of
AMFED Common Stock would be exchanged for $30.00 in cash or a combination of
cash and Norwest Common Stock valued at $30.00. AMFED also received
indications of interest from three other potential acquirors. At a meeting
held on April 25, 1995, Merrill Lynch presented to the AMFED Board a summary
of the four indications of interest and provided an updated valuation summary
of AMFED. Merrill Lynch also discussed with the AMFED Board general strategic
alternatives, including continuing discussions with the interested parties and
terminating discussions and exploring other strategic opportunities.
On May 5, 1995, the AMFED Board met with Merrill Lynch and legal counsel to
discuss the strategic alternatives for AMFED and whether or not to proceed
with further discussions. The AMFED Board decided that it would proceed if the
consideration were increased to at least $32.00 per share. Merrill Lynch
informed the Board that two of the interested parties would not increase their
offers to that level, that one was not prepared to re-evaluate its offer at
that time, and that Norwest would be willing to increase its offer to $32.00
subject to conducting a due diligence investigation of AMFED. The AMFED Board
authorized continued discussions with Norwest and permitted Norwest to conduct
preliminary due diligence.
General discussions between AMFED and Norwest continued through May 1995. As
a result of its due diligence, in early June 1995, Norwest informed AMFED that
it could not pay $32.00 per share in cash for shares of AMFED Common Stock
because of the amount of goodwill that would be generated under the purchase
method of accounting for a cash transaction and because it did not believe it
could increase AMFED's earnings beyond what AMFED was projecting under its own
strategic plan. Accordingly, Norwest proposed that the transaction be
structured so that AMFED stockholders receive Norwest Common Stock in exchange
for their shares, and thereby permit pooling of interests accounting. After a
considerable amount of negotiations between Norwest and AMFED, Norwest
submitted a revised proposal essentially incorporating the terms detailed in
this Proxy Statement-Prospectus.
20
<PAGE>
At a meeting held on June 15, 1995, the AMFED Board discussed Norwest's
proposal with Merrill Lynch and AMFED's legal counsel. Merrill Lynch presented
a summary of the revised proposal and provided a review of Norwest Common
Stock, historical trading data, and an estimation of earnings by selected Wall
Street firms and pro forma financial analysis. The AMFED Board agreed to go
forward on the terms proposed by Norwest and permitted Norwest to conduct a
more detailed examination of the assets, business and financial condition of
AMFED. The AMFED Board decided to enter into negotiations with Norwest to
produce an agreement for the acquisition of AMFED. In connection therewith,
AMFED and Merrill Lynch entered into a letter agreement dated June 16, 1995
pursuant to which Merrill Lynch would provide advisory services in connection
with the Merger. During early to mid July, the executive officers of AMFED,
its counsel and financial advisors engaged in numerous discussions to
negotiate terms of a definitive merger agreement and related documents. During
this time, officers and representatives of AMFED conducted a due diligence
examination of Norwest since Norwest Common Stock would be issued as
consideration to AMFED stockholders under the terms of the proposed
transaction.
On July 20, 1995, the AMFED Board, along with Merrill Lynch and AMFED's
special legal counsel, Breyer & Aguggia, reviewed the contents of the Merger
Agreement together with its exhibits. The AMFED Board also considered the
potential benefits of the transaction, the financial and valuation analyses of
the transaction, the terms of the Merger Agreement, and related questions and
answers. The AMFED Board also reviewed a draft of Merrill Lynch's written
opinion, to be dated on the date the Board approved the Merger Agreement, that
the Exchange Ratio was fair to holders of AMFED Common Stock (other than
Norwest) from a financial point of view. On July 21, 1995, Merrill Lynch
rendered its written opinion that the Exchange Ratio was fair to holders of
AMFED Common Stock (other than Norwest) from a financial point of view, and
the AMFED Board met and approved the Merger Agreement by a vote of 9 to 1,
with one outside director dissenting on the grounds that the consideration was
inadequate because of his perception as to AMFED's franchise value, the
economic conditions in Nevada and the United States and the strength of the
Bank.
In reaching its conclusion to approve the Merger, the AMFED Board considered
a number of factors. The AMFED Board did not assign any relative or specific
weights to the factors considered. Among other things, the AMFED Board
considered: the merger consideration in relation to the book value, assets and
earnings of AMFED; information concerning the financial condition, results of
operations and prospects of AMFED, including the return on assets and return
on equity of AMFED; the financial terms of other recent business combinations
in the thrift industry; and the opinion of Merrill Lynch as to the fairness of
the Exchange Ratio to AMFED stockholders (other than Norwest) from a financial
point of view.
As part of its duties, Merrill Lynch, before the execution of the Merger
Agreement, made a detailed financial presentation to the AMFED Board. At the
July 21, 1995 meeting of the AMFED Board, Merrill Lynch delivered to the Board
a written opinion that the Exchange Ratio was fair to AMFED stockholders
(other than Norwest) from a financial point of view.
The AMFED Board believes that the terms of the Merger Agreement, which are
the product of arms length negotiations between Norwest and AMFED, are fair
and in the best interests of AMFED and its stockholders. In the course of
reaching its determination, the AMFED Board consulted with legal counsel with
respect to its legal duties, the terms of the Merger Agreement and the issues
related thereto; with its financial advisor with respect to the financial
aspects and fairness of the transaction; and with senior management regarding,
among other things, operational matters.
In reaching its determination to approve the Merger Agreement, the AMFED
Board considered all factors it deemed material, which are the following:
(a) The AMFED Board analyzed information with respect to the financial
condition, results of operations, businesses and prospects of AMFED. In
this regard, the AMFED Board analyzed the options of selling AMFED or
continuing on a stand-alone basis. The range of values on a sale basis were
determined to generally exceed the present value of AMFED shares on a
stand-alone basis under business strategies which could be reasonably
implemented by AMFED.
21
<PAGE>
(b) The AMFED Board considered the written opinion of Merrill Lynch that,
as of July 21, 1995, the Exchange Ratio was fair to AMFED stockholders
(other than Norwest) from a financial point of view. See "--Opinion of
AMFED's Financial Advisor."
(c) The AMFED Board considered the current operating environment,
including, but not limited to, the continued consolidation and increasing
competition in the banking and financial services industries, the prospect
for further changes in these industries, the limited number of attractive
acquisition targets for AMFED within the State of Nevada, the controversy
pertaining to the BIF/SAIF deposit insurance premium differential and
federal regulatory agency consolidation and the importance of being able to
capitalize on developing opportunities in these industries. This
information had been periodically reviewed by the AMFED Board at its
regular Board meetings following AMFED's Conversion and was also discussed
between the AMFED Board and AMFED's various advisors.
(d) The AMFED Board considered the other terms of the Merger Agreement
and exhibits, including the tax-free nature of the transaction.
(e) The AMFED Board considered the detailed financial analyses and other
information with respect to AMFED and Norwest discussed by Merrill Lynch,
as well as the AMFED Board's own knowledge of AMFED, Norwest and their
respective businesses. In this regard, the latest publicly-available
financial and other information for AMFED and Norwest were analyzed,
including a comparison to publicly-available financial and other
information for other similar institutions.
(f) The AMFED Board considered the value of AMFED Common Stock continuing
as a stand-alone entity compared to the effect of AMFED combining with
Norwest in light of the factors summarized above and the current economic
and financial environment, including, but not limited to, other possible
strategic alternatives, the results of the contacts and discussions between
AMFED and its financial advisor and various third parties and the belief of
the AMFED Board and management that the Merger offered the best transaction
available to AMFED and its stockholders.
(g) The AMFED Board considered the likelihood of the Merger being
approved by the appropriate regulatory authorities, including factors such
as market share analyses, Norwest's Community Reinvestment Act rating at
that time and the estimated pro forma financial impact of the Merger on
Norwest. See "Regulatory Approvals" below.
(h) The AMFED Board considered the fact that the Merger Agreement
prohibits AMFED from soliciting discussions with third parties relating to
alternative transactions and that Norwest required the Option Agreement as
a condition to entering into the Merger Agreement. The AMFED Board also
considered that the Merger consideration represented the highest price per
share offered by the parties who expressed interest in the acquisition of
AMFED.
The foregoing discussion of the information and factors considered by the
AMFED Board is not intended to be exhaustive, but constitutes the material
factors considered by the AMFED Board. In reaching its determination to
approve and recommend the Merger Agreement, the AMFED Board did not assign any
relative or specific weights to the foregoing factors, and individual
directors may have weighed factors differently. After deliberating with
respect to the Merger and the other transactions contemplated by the Merger
Agreement, considering, among other things, the matters discussed above and
the opinion of Merrill Lynch referred to above, the AMFED Board approved and
adopted the Merger Agreement and the transactions contemplated thereby as
being in the best interests of AMFED and its stockholders.
FOR THE REASONS SET FORTH ABOVE, THE AMFED BOARD HAS APPROVED THE MERGER
AGREEMENT AS ADVISABLE AND IN THE BEST INTERESTS OF AMFED AND AMFED
STOCKHOLDERS AND RECOMMENDS THAT THE STOCKHOLDERS OF AMFED VOTE "FOR" THE
APPROVAL OF THE MERGER AGREEMENT.
OPINION OF AMFED'S FINANCIAL ADVISOR
On February 1, 1995, AMFED engaged Merrill Lynch to act as its financial
advisor. AMFED selected Merrill Lynch as its financial advisor on the basis of
Merrill Lynch's experience and qualifications in similar advisory capacities
and its general familiarity with AMFED and its business.
22
<PAGE>
As part of its engagement, representatives of Merrill Lynch attended the
meetings of the AMFED Board held on July 20, 1995 and July 21, 1995 at which
the AMFED Board considered the Merger. On July 21, 1995, Merrill Lynch
rendered its written opinion to the AMFED Board to the effect that, as of such
date, the Exchange Ratio was fair to the holders of AMFED Common Stock (other
than Norwest) from a financial point of view. This opinion was reconfirmed in
writing as of the date of this Proxy Statement-Prospectus. No limitations were
imposed by AMFED on the scope of Merrill Lynch's investigation or on the
procedures followed by Merrill Lynch in rendering its fairness opinion.
The full text of Merrill Lynch's written opinion dated as of the date of
this Proxy Statement-Prospectus is attached hereto as Appendix C to this Proxy
Statement-Prospectus and is incorporated herein by reference. The description
of the opinion set forth herein is qualified in its entirety by reference to
Appendix C. AMFED stockholders are urged to read Merrill Lynch's opinion in
its entirety for a description of the procedures followed, assumptions made,
matters considered, and qualifications and limitations on the review
undertaken by Merrill Lynch in connection therewith.
MERRILL LYNCH'S OPINION IS DIRECTED TO THE AMFED BOARD AND ADDRESSES ONLY
THE EXCHANGE RATIO. IT DOES NOT ADDRESS AMFED'S UNDERLYING BUSINESS DECISION
TO PROCEED WITH THE MERGER AND DOES NOT CONSTITUTE, NOR SHOULD IT BE CONSTRUED
AS, A RECOMMENDATION TO ANY AMFED STOCKHOLDER AS TO HOW SUCH STOCKHOLDER
SHOULD VOTE AT THE SPECIAL MEETING ON THE MERGER OR ANY OTHER MATTER
CONSIDERED IN CONNECTION THEREWITH.
Merrill Lynch has informed AMFED that in arriving at its opinion, Merrill
Lynch has, among other things: (i) reviewed AMFED's Annual Reports, Forms 10-K
and related financial information for the three fiscal years ended December
31, 1994 and AMFED's Quarterly Report on Forms 10-Q and the related unaudited
financial information for the quarterly periods ending March 31, 1995, June
30, 1995 and September 30, 1995; (ii) reviewed Norwest's Annual Reports, Forms
10-K and related financial information for the three fiscal years ended
December 31, 1994 and Norwest's Quarterly Report on Forms 10-Q and the related
unaudited financial information for the quarterly periods ending March 31,
1995, June 30, 1995 and September 30, 1995; (iii) reviewed certain
information, including financial forecasts and assumptions regarding
incremental revenue resulting from the Merger, relating to the business,
earnings, assets and prospects of AMFED and Norwest furnished to it by the
senior managements of AMFED and Norwest; (iv) conducted discussions with
members of senior management of AMFED and Norwest concerning their respective
financial condition, businesses, earnings, assets and prospects and such
managements' views as to the future financial performance of AMFED and
Norwest, as the case may be; (v) reviewed the historical market prices and
trading activity for AMFED Common Stock and Norwest Common Stock and compared
them, respectively, with those of certain companies which it deemed to be
relevant; (vi) compared the respective results of operations of AMFED and
Norwest with those of certain publicly traded companies which it deemed to be
relevant; (vii) compared the proposed financial terms of the Merger
contemplated by the Merger Agreement with financial terms of certain other
mergers and acquisitions which it deemed to be relevant; (viii) analyzed,
based upon the information provided by AMFED's and Norwest's senior
management, the pro forma impact of the Merger on the earnings and book value
per share, consolidated capitalization and certain balance sheet and
profitability ratios of Norwest; (ix) participated in discussions and
negotiations among representatives of AMFED and Norwest; (x) reviewed the
Merger Agreement dated July 21, 1995; (xi) reviewed the Option Agreement dated
July 22, 1995; and (xii) reviewed such other financial studies and analyses
and performed such other investigations and took into account such other
matters as it deemed necessary.
In preparing its opinion, Merrill Lynch assumed and relied on the accuracy
and completeness of all financial and other information supplied or otherwise
made available to it for the purposes of its opinion, and has not
independently verified such information or undertaken an independent
evaluation or appraisal of the assets or liabilities of AMFED or Norwest or
any of their subsidiaries nor has it been furnished any such evaluation or
appraisal. Merrill Lynch is not an expert in the evaluation of allowances for
loan losses and has not made an independent evaluation of the adequacy of the
allowances for loan losses of AMFED and Norwest nor has Merrill
23
<PAGE>
Lynch reviewed any individual credit files, and it has assumed that the
aggregate allowances for loan losses are adequate to cover such losses and
will be adequate on a pro forma basis for the combined entity. Merrill Lynch
has also assumed and relied upon the senior managements of AMFED and Norwest
as to the reasonableness and achievability of the financial forecasts
furnished by AMFED and Norwest (and the assumptions and bases therefore). In
that regard, Merrill Lynch has assumed with AMFED's consent that such
information, including, without limitation, financial forecasts, projected
incremental income resulting from the Merger and adequacy of reserves, reflect
the best currently available estimates and judgment of the senior management
of AMFED and Norwest as to the expected future financial performance of AMFED,
Norwest or the combined entity, as the case may be. Merrill Lynch's opinion is
necessarily based on economic, market and other conditions as in effect on,
and the information made available to it as of, the date of such opinion.
Merrill Lynch's opinion has been rendered without regard to the necessity
for, or the level of, any restrictions, obligations, undertakings or
divestitures which may be imposed or required in the course of obtaining
regulatory approvals for the Merger.
In connection with rendering its written opinion on July 21, 1995, Merrill
Lynch performed a variety of financial analyses, including those summarized
below. The summary set forth below, which has been provided by Merrill Lynch,
does not purport to be a complete description of the analyses performed by
Merrill Lynch in this regard. The preparation of a fairness opinion involves
various determinations as to the most appropriate and relevant methods of
financial analysis and the application of these methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to a
partial analysis or summary description. Accordingly, notwithstanding the
separate factors summarized below, Merrill Lynch believes that its analyses
must be considered as a whole and that selecting portions of its analyses and
factors considered by it, without considering all analyses and factors, or
attempting to ascribe relative weights to some or all such analyses and
factors, could create an incomplete view of the evaluation process underlying
Merrill Lynch's opinion. In addition, while Merrill Lynch gave the various
analyses approximately similar weight, it may have used them for different
purposes and may have deemed various assumptions more or less probable than
other assumptions, so that the ranges of valuations resulting from any
particular analysis described below should not be taken to be Merrill Lynch's
view of the actual value of AMFED. The fact that any specific analysis has
been referred to in the summary below is not meant to indicate that such
analysis was given more weight than any other analysis.
In performing its analyses, Merrill Lynch made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond AMFED's and Norwest's control. The
analyses performed by Merrill Lynch are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely
as part of Merrill Lynch's analysis of the fairness of the Exchange Ratio to
the holders of AMFED Common Stock (other than Norwest) and were provided to
the AMFED Board in connection with the delivery of Merrill Lynch's written
opinion on July 21, 1995. With respect to the comparison of selected companies
analysis and the analysis of selected bank merger transactions summarized
below, no public company utilized as a comparison is identical to AMFED or
Norwest and such analyses necessarily involve complex considerations and
judgments concerning the differences in financial and operating
characteristics of the companies and other factors that could affect the
public trading values of, or merger transactions involving, the companies
concerned. In addition, the analyses do not purport to be appraisals or to
reflect the prices at which any securities of AMFED or Norwest may trade at
the present time or at any time in the future. Furthermore, Merrill Lynch's
opinion is just one of many factors taken into consideration by the AMFED
Board.
The projections furnished to Merrill Lynch and used by it in certain of its
analyses were prepared by the managements of AMFED and Norwest. AMFED and
Norwest do not publicly disclose internal management projections of the type
provided to Merrill Lynch in connection with its review of the Merger. Such
projections were not prepared with a view towards public disclosure. The
projections were based on numerous variables and assumptions which are
inherently uncertain, including, without limitation, factors related to
general economic and competitive conditions. Accordingly, actual results could
vary significantly from those set forth in such projections.
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The following is a summary of the selected analyses presented by Merrill
Lynch to the AMFED Board on July 20, 1995 in connection with the delivery of
its written opinion on July 21, 1995.
Summary of Proposal. Merrill Lynch reviewed the terms of the proposed
transaction, including the exchange ratio and aggregate transaction value
determined in accordance with the formula set forth in the proposed Merger
Agreement. Merrill Lynch considered the ability of AMFED to terminate the
Merger in the event that the exchange ratio resulted in a per share value to
AMFED stockholders of less than $31.00 per share. At the time it presented its
analyses to the AMFED Board, Merrill Lynch could not know what the price of
Norwest Common Stock would be and, therefore, what the exchange ratio would
be, at the time of the Merger. Using the formula contained in the proposed
Merger Agreement, however, Merrill Lynch calculated a range of exchange ratios
and transaction values based upon a range of Norwest Measurement Prices (as
defined in the Merger Agreement).
Merrill Lynch determined that, based upon a Norwest Measurement Price
ranging from $27.50 to $34.00 per share, the exchange ratio would range from
1.1273 to 1.0000 shares of Norwest Common Stock for each share of AMFED Common
Stock and the implied value of the Norwest proposal would range from
approximately $31.00 to $34.00 per share of AMFED Common Stock or $190.3
million to $209.2 million in the aggregate. Based on a Norwest Measurement
Price between $28.38 and $30.00 per share, the exchange ratio would range from
1.1273 to 1.0667 shares of Norwest Common Stock for each share of AMFED Common
Stock and the implied value of the Norwest proposal would equal approximately
$32.00 per share of AMFED Common Stock or $196.6 million in the aggregate,
equating to a price to book multiple of 1.46x, a price to tangible book value
multiple of 1.76x, a price to market price (at July 18, 1995) multiple of
1.27x, a price to latest quarter annualized earnings multiple of 15.12x, a
price to 1995 estimated earnings multiple of 15.74x and a price to 1996
estimated earnings multiple of 14.33x. All data for AMFED, except for
estimated earnings, was at or for the quarter ended March 31, 1995.
Overview of Norwest. Merrill Lynch reviewed with the AMFED Board a financial
overview of Norwest. Merrill Lynch discussed, among other things, the key
businesses, financial attributes, loan and deposit composition, market share
and shareholder profile of Norwest. Merrill Lynch also reviewed various Wall
Street firms' research analysts' opinions, stock recommendations and stock
price targets for Norwest. Merrill Lynch also reviewed the trading ranges for
Norwest Common Stock over the prior 52-week period. In addition, Merrill Lynch
reviewed the 1-year, 3-year, 5-year, 7-year and 10-year compounded returns to
holders of Norwest Common Stock (assuming the reinvestment of dividends),
which were 16.11%, 17.74%, 28.22%, 24.29% and 24.80%, respectively.
Pro Forma Merger Analysis. Merrill Lynch analyzed, based upon discussions
with senior management of Norwest and AMFED, certain pro forma effects
resulting from the Merger as if consummated on December 31, 1995. This
analysis indicated that the transaction (excluding the effect of any
restructuring charges) would be modestly dilutive to Norwest's 1996 earnings
per share and modestly accretive to Norwest's 1997 earnings per share,
increasing thereafter, based upon Norwest's stock price and the implied
exchange ratio of 1.1179 on July 18, 1995. The analysis also showed that the
Merger was modestly accretive to the book value and tangible book value per
share of Norwest. In this analysis, Merrill Lynch assumed that Norwest
performed in accordance with the earnings forecast provided to Merrill Lynch
by Norwest's senior management.
Historical Trading Valuation. Merrill Lynch analyzed the closing prices of
the Norwest Common Stock on July 18, 1995 and over various periods ranging
from the five-day average trading price to the 60-day average trading price
through July 18, 1995. The analysis showed that the implied values for AMFED
Common Stock ranged from a low of $31.35 per share to a high of $32.00 per
share, with the low determined with reference to the 60-day trading period
prior to July 18, 1995. The implied exchange ratio during these periods ranged
from a low of 1.1060 shares of Norwest Common Stock for each share of AMFED
Common Stock to a high of 1.1273 shares of Norwest Common Stock for each share
of AMFED Common Stock, with the high determined with reference to the 60-day
trading period prior to July 18, 1995.
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Discounted Dividend Stream Analysis. Using a discounted dividend stream
analysis, Merrill Lynch estimated the present value of the future streams of
after-tax cash flows that AMFED could produce on a stand-alone basis from 1996
through 2000 and distribute to shareholders ("dividendable net income"). In
this analysis, Merrill Lynch assumed that AMFED performed in accordance with
the earnings forecasts provided by AMFED's senior management and projected the
maximum dividends that would permit AMFED's tangible common equity to asset
ratio to be maintained at a minimum 7.30% level (AMFED's then-current level at
March 31, 1995). Merrill Lynch estimated the terminal values for the AMFED
Common Stock at 8.0 to 10.0 times AMFED's year 2000 estimated operating income
(defined as net income before intangible amortization). The dividendable net
income streams and terminal values were then discounted to present values
using different discount rates ranging from 13% to 15% based upon the Capital
Asset Pricing Model and chosen to reflect different assumptions of required
returns of holders or prospective buyers of AMFED's Common Stock. This
discounted dividend stream analysis indicated a reference range of between
$21.34 and $26.41 per share of AMFED Common Stock. The analysis was based upon
AMFED's senior management's projections, which were based upon many factors
and assumptions, many of which are beyond the control of AMFED. As indicated
above, this analysis did not purport to be indicative of actual future results
and did not purport to reflect the prices at which shares of AMFED Common
Stock may trade before or after the Merger. Merrill Lynch noted that the
discounted dividend analysis was included because it is a widely used
valuation methodology, but noted that the results of such methodology are
highly dependent upon the numerous assumptions that must be made, including
earnings growth rates, dividend payout rates, terminal values, and discount
rates.
Using a discounted dividend stream analysis, Merrill Lynch also estimated
the present value of the dividendable net income that Norwest could produce on
a stand-alone basis from 1996 through 2000. In this analysis, Merrill Lynch
assumed that Norwest performed in accordance with the earnings forecasts
provided by Norwest's senior management and projected the maximum dividends
that would permit Norwest's tangible common equity to asset ratio to be
maintained at a minimum 6.00% level. Merrill Lynch estimated the terminal
values for Norwest Common Stock at 9.0 to 11.0 times Norwest's year 2000
estimated operating income. The dividendable net income streams and terminal
values were then discounted to present values using different discount rates
ranging from 14% to 16% based upon the Capital Asset Pricing Model and chosen
to reflect different assumptions of required returns of holders or prospective
buyers of Norwest Common Stock. This discounted dividend stream analysis
indicated a reference range of between $30.54 and $38.05 per share of Norwest
Common Stock. The analysis was based upon Norwest's senior management's
projections, which were based upon many factors and assumptions, many of which
are beyond the control of Norwest. As indicated above, this analysis did not
purport to be indicative of actual future results and did not purport to
reflect the prices at which shares of Norwest Common Stock may trade before or
after the Merger.
In addition, using a discounted dividend stream analysis, Merrill Lynch
estimated the present value of the dividendable net income that the combined
institution could produce from 1996 through 2000 and distribute to
shareholders. In this analysis, Merrill Lynch assumed that the combined
institution performed in accordance with the combined earnings forecasts
provided by the senior management of AMFED and Norwest, including the
incremental revenue projected to result from the Merger, and that the combined
institution's tangible common equity to asset ratio would be maintained at a
minimum 6.00% level. Merrill Lynch estimated the terminal values for the
combined institution's Common Stock at 9.0 to 11.0 times the combined
institution's 2000 estimated operating income. The dividendable net income
streams and terminal values were then discounted to present values using
different discount rates ranging from 14% to 16% based upon the Capital Asset
Pricing Model and chosen to reflect different assumptions of required returns
of holders or prospective buyers of the combined institution's Common Stock.
This discounted dividend stream analysis indicated a reference range of
between $32.83 and $41.10 per share of AMFED Common Stock based upon an
exchange ratio of 1.1179 and assuming an average Norwest stock price of
$28.63, the stock price of Norwest on July 18, 1995. The analysis was based
upon AMFED's and Norwest's senior management's projections, which were based
upon many factors and assumptions, many of which are beyond the control of
AMFED and Norwest. As indicated above, this analysis did not purport to be
indicative of actual future results and did not purport to reflect the prices
at which any securities may trade before or after the Merger.
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Analysis of Selected Thrift Merger Transactions. Merrill Lynch reviewed
publicly available information regarding thrift merger transactions with a
value between $50 million and $500 million which had occurred in the Western
region of the United States since January 1, 1994. Merrill Lynch calculated
the price to market, price to year-to-date annualized earnings, price to fully
diluted book value and price to fully diluted tangible book multiples and the
implied deposit premium (defined as the aggregate transaction value minus
tangible book value divided by total deposits) paid in the contemplated
transaction (assuming an exchange ratio calculated in accordance with
Norwest's closing price per share on July 18, 1995) and such selected thrift
merger transactions. This analysis yielded a range of price to market
multiples of 1.11x to 1.13x with a mean of 1.12x and a median of 1.12x,
compared to a transaction multiple of 1.27x (using the July 18, 1995 stock
prices for AMFED and Norwest), a range of price to earnings multiples of 7.81x
to 19.70x with a mean of 12.42x and a median of 11.09x compared to a
transaction multiple of 15.12x for AMFED (using the July 18, 1995 stock price
for Norwest and AMFED's annualized earnings for the three months ended March
31, 1995), a range of price to fully diluted book value multiples of
approximately 1.43x to 1.83x with a mean of 1.62x and a median of 1.64x
compared to a transaction multiple of 1.46x for AMFED (using the July 18, 1995
stock price for Norwest and the fully diluted book value of AMFED as of March
31, 1995), a range of price to fully diluted tangible book multiples of
approximately 1.43x to 1.85x with a mean of 1.66x and a median of 1.64x
compared to a transaction multiple of 1.76x for AMFED (using the July 18, 1995
stock price for Norwest and the fully diluted tangible book value of AMFED as
of March 31, 1995) and a range of implied deposit premiums paid of
approximately 9.55% to 3.09% with a mean of 6.59% and a median of 6.72%
compared to a transaction premium of 6.14% for AMFED (using the July 18, 1995
stock price for Norwest). This analysis yielded an overall imputed reference
range per share of AMFED Common Stock of $16.49 to $43.39, and a reference
range per share of AMFED Common Stock of $23.41 to $37.01 based on both the
mean and median imputed ranges compared to a transaction value of $32.00 per
share of AMFED Common Stock (based upon the July 18, 1995 stock price for
Norwest).
Merrill Lynch also reviewed publicly available information regarding thrift
merger transactions with a value between $50 million and $500 million which
had occurred in the United States since January 1, 1994. Merrill Lynch
calculated the price to market, price to year-to-date annualized earnings,
price to fully diluted book value and price to fully diluted tangible book
multiples and the implied deposit premium (defined as the aggregate
transaction value minus tangible book value divided by total deposits) paid in
the contemplated transaction (assuming an exchange ratio calculated in
accordance with Norwest's closing price per share on July 18, 1995) and such
selected thrift merger transactions. This analysis yielded a range of price to
market multiples of 0.95x to 1.55x with a mean of 1.27x and a median of 1.28x
compared to a transaction multiple of 1.27x (using the July 18, 1995 stock
prices for AMFED and Norwest), a range of price to earnings multiples of 7.81x
to 20.02x with a mean of 13.72x and a median of 14.07x compared to a
transaction multiple of 15.12x for AMFED (using the July 18, 1995 stock price
for Norwest and AMFED's annualized earnings for the three months ended March
31, 1995), a range of price to fully diluted book value multiples of
approximately 0.65x to 2.62x with a mean of 1.65x and a median of 1.63x
compared to a transaction multiple of 1.46x for AMFED (using the July 18, 1995
stock price for Norwest and the fully diluted book value of AMFED as of March
31, 1995), a range of price to fully diluted tangible book multiples of
approximately 1.16x to 2.66x with a mean of 1.74x and a median of 1.70x
compared to a transaction multiple of 1.76x for AMFED (using the July 18, 1995
stock price for Norwest and the fully diluted tangible book value of AMFED as
of March 31, 1995) and a range of implied deposit premiums paid of
approximately -0.73% to 16.34% with a mean of 7.74% and a median of 7.25%
compared to a transaction premium of 6.14% for AMFED (using the July 18, 1995
stock price for Norwest). This analysis yielded an overall imputed reference
range per share of AMFED Common Stock of $14.22 to $54.97 and a reference
range per share of AMFED Common Stock of $28.96 to $36.09 based on the mean
and median imputed ranges compared to a transaction value of $32.00 per share
of AMFED Common Stock (based upon the July 18, 1995 stock price for Norwest).
No company or transaction used in the above analysis as a comparison is
identical to AMFED, Norwest, or the contemplated transaction. Accordingly, an
analysis of the results of the foregoing necessarily involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the
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companies and other factors that could affect the public trading value of the
companies to which they are being compared. Mathematical analysis (such as
determining the mean or median) is not, in itself, a meaningful method of
using comparable company data.
Comparison of Selected Companies. Merrill Lynch compared selected balance
sheet data, asset quality, capitalization and profitability ratios and market
statistics using financial data at or for the three months ended March 31,
1995 and, as appropriate, market data as of July 18, 1995 for AMFED to a group
of selected bank holding companies which Merrill Lynch deemed to be relevant,
including CENFED Financial Corp., California Financial Holding, First Republic
Bancorp, Home Federal Financial Corp, InterWest Saving Bank, Metropolitan
Bancorp and Sterling Financial Corp. (collectively, the "AMFED Composite").
This comparison showed, among other things, that (i) for the 3-month period
ended March 31, 1995 for AMFED and for the 12-month period ended March 31,
1995 for the AMFED Composite, AMFED's net interest margin was 3.90% compared
to a low of 2.25%, a mean of 2.63% and a high of 3.29% for the AMFED
Composite; (ii) for the 3-month period ended March 31, 1995 for AMFED and for
the 12-month period ended March 31, 1995 for the AMFED Composite, AMFED's
efficiency ratio (defined as non-interest expense divided by the sum of non-
interest income and net interest income before provision for loan losses) was
64.79% compared to a low of 47.77%, a mean of 63.65% and a high of 76.06% for
the AMFED Composite; (iii) for the 3-month period ended March 31, 1995 for
AMFED and for the 12-month period ended March 31, 1995 for the AMFED
Composite, AMFED's return on average assets was 0.84% compared to a low of
0.24%, a mean of 0.55% and a high of 1.10% for the AMFED Composite; (iv) for
the 3-month period ended March 31, 1995 for AMFED and for the 12-month period
ended March 31, 1995 for the AMFED Composite, AMFED's return on average equity
was 9.76% compared to a low of 3.32%, a mean of 8.60% and a high of 14.43% for
the AMFED Composite; (v) at March 31, 1995, AMFED's tangible equity to
tangible assets was 7.30% compared to a low of 4.52%, a mean of 6.01% and a
high of 7.85% for the AMFED Composite; (vi) at March 31, 1995, AMFED's non-
performing loans to total loans was 0.36% compared to a low of 0.16%, a mean
of 1.33% and a high of 2.97% for the AMFED Composite; (vii) at March 31, 1995,
AMFED's non-performing assets to total assets was 0.38% compared to a low of
0.65%, a mean of 1.60% and a high of 3.21% for the AMFED Composite; (viii) at
March 31, 1995, AMFED's loan loss reserves to non-performing assets was
152.04% compared to a low of 23.22%, a mean of 47.32% and a high of 67.93% for
the AMFED Composite; (ix) at July 18, 1995, AMFED's price per share to 1995
estimated earnings per share was 12.32x compared to a low of 7.88x, a mean of
11.34x and a high of 15.66x for the AMFED Composite; (x) at July 18, 1995,
AMFED's price per share to book value per share at March 31, 1995 was 1.08x
compared to a low of 0.89x, a mean of 0.99x and a high of 1.07x for the AMFED
Composite; (xi) at July 18, 1995, AMFED's price per share to tangible book
value per share at March 31, 1995 was 1.31x compared to a low of 0.89x, a mean
of 1.07x and a high of 1.44x for the AMFED Composite; and (xii) at July 18,
1995, AMFED's dividend yield was 1.13% compared to a low of 0.07%, a mean of
1.30% and a high of 2.73% for the AMFED Composite.
Merrill Lynch also compared selected operating and stock market results of
Norwest to the publicly available corresponding data of other companies which
Merrill Lynch deemed to be relevant, including Bank of New York Company, Bank
of Boston Corporation, Fleet Financial Group, NBD Bancorp, Inc., Barnett
Banks, Inc., First Chicago Corporation, First Union Corporation, First
Interstate Bancorp, KeyCorp, PNC Bank Corp., Banc One Corporation, Republic
New York Corporation, SunTrust Banks, Inc., and Wells Fargo & Company
(collectively, the "Norwest Composite"). This comparison showed, among other
things, that (i) for the 12-month period ended March 31, 1995, the net
interest margin for Norwest was 5.68% compared to a low of 2.54%, a mean of
4.34% and a high of 5.57% for the Norwest Composite; (ii) for the 12-month
period ended March 31, 1995, the efficiency ratio (defined as non-interest
expense divided by the sum of non-interest income and net interest income
before provision for loan losses) of Norwest was 64.81% compared to a low of
52.90%, a mean of 58.52% and a high of 63.65% for the Norwest Composite; (iii)
for the 12-month period ended March 31, 1995, the return on average assets for
Norwest was 1.45% compared to a low of 0.84%, a mean of 1.23% and a high of
1.67% for the Norwest Composite; (iv) for the 12-month period ended March 31,
1995, the return on average equity for Norwest was 21.33% compared to a low of
12.20%, a mean of 16.57% and a high of 21.92% for the Norwest Composite; (v)
at March 31, 1995, the tangible equity to tangible assets ratio of Norwest was
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5.99% compared to a low of 5.21%, a mean of 6.60% and a high of 8.42% for the
Norwest Composite; (vi) at March 31, 1995, non-performing loans to total loans
of Norwest was 0.38% compared to a low of 0.38%, a mean of 0.83% and a high of
1.77% for the Norwest Composite; (vii) at March 31, 1995, non-performing
assets to total assets of Norwest was 0.26% compared to a low of 0.18%, a mean
of 0.69% and a high of 1.66% for the Norwest Composite; (viii) at March 31,
1995, loan loss reserves to non-performing assets of Norwest was 499.08%
compared to a low of 149.15%, a mean of 254.28% and a high of 580.00% for the
Norwest Composite; (ix) at July 18, 1995, the Norwest price per share to 1995
estimated earnings per share was 10.37x compared to a low of 2.41x, a mean of
9.43x and a high of 11.99x for the Norwest Composite; (x) at July 18, 1995,
the Norwest price per share to book value per share at March 31, 1995 was
2.39x compared to a low of 1.28x, a mean of 1.66x and a high of 2.66x for the
Norwest Composite; (xi) at July 18, 1995, the Norwest price per share to
tangible book value per share at March 31, 1995 was 2.92x compared to a low of
1.39x, a mean of 1.91x and a high of 3.36x for the Norwest Composite; (xii) at
July 18, 1995, Norwest's dividend yield was 2.86%, compared to a low of 2.46%,
a mean of 3.66% and a high of 5.31% for the Norwest Composite. Merrill Lynch
did not establish any valuation or reference ranges for AMFED or Norwest from
the above comparisons.
Mark-to-Market Analysis. Merrill Lynch evaluated the estimated market value
of key components of AMFED's balance sheet, including, among other things,
AMFED's investment securities and mortgage-backed securities portfolios and
loan portfolio. This analysis indicated a valuation of approximately $20.23
per share of AMFED Common Stock (on a fully diluted basis) before any
adjustments for a premium related to deposits or intangible assets not
included on AMFED's balance sheet or any credit quality related writedowns
related to the portfolios analyzed.
In connection with its opinion dated as of the date of this Proxy Statement-
Prospectus, Merrill Lynch performed procedures to update, as necessary,
certain of the analyses described above and reviewed the assumptions on which
such analyses described above were based and the factors considered in
connection therewith. Merrill Lynch did not perform any analyses in addition
to those described above.
AMFED and Merrill Lynch have entered into letter agreements dated February
1, 1995 and June 16, 1995 relating to the services to be provided by Merrill
Lynch in connection with the Merger. AMFED has agreed to pay Merrill Lynch
fees as follows: (1) a cash retainer fee of $100,000 paid in February, 1995,
(2) a cash fee of $400,000, which was paid upon execution of the Merger
Agreement, (3) an additional cash fee of $500,000, to be paid upon the
delivery of this Proxy Statement-Prospectus and (4) an additional cash fee
equal to 0.95% of the aggregate purchase price paid in the Merger up to $202
million plus 2.5% of the aggregate purchase price paid in Merger above $202
million, less the fees paid pursuant to clauses (1), (2) and (3), payable at
the Effective Date of the Merger. In such letter, AMFED also agreed to
reimburse Merrill Lynch for its reasonable and necessary out-of-pocket
expenses incurred in connection with its advisory work, including the
reasonable fees and disbursements of its legal counsel, and to indemnify
Merrill Lynch against certain liabilities relating to or arising out of the
Merger, including liabilities arising under the federal securities laws.
Merrill Lynch has been retained by the AMFED Board as an independent
contractor to act as financial advisor to AMFED with respect to the Merger.
Merrill Lynch is a nationally recognized investment banking firm which, among
other things, regularly engages in the valuation of businesses and securities,
including banking institutions, in connection with mergers and acquisitions.
Merrill Lynch has in the past three years provided financial advisory,
investment banking and other services to AMFED and Norwest and has received
customary fees for the rendering of such services. In addition, in the
ordinary course of its securities business, Merrill Lynch may actively trade
debt and/or equity securities of AMFED and Norwest and their respective
affiliates for its own account and the accounts of its customers, and Merrill
Lynch, therefore, may from time to time hold a long or short position in such
securities.
CERTAIN CONSIDERATIONS
In considering whether to approve the Merger Agreement and the transactions
contemplated thereby, stockholders should consider the following factors: (i)
the relative stock prices of Norwest Common Stock and
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AMFED Common Stock at the Effective Date may vary significantly from the
prices as of the date hereof or the date on which stockholders vote on the
Merger due to general market and economic conditions, changes in prospects of
Norwest or AMFED, market assessments of the likelihood that the Merger will be
consummated and the timing thereof, the effect of any conditions or
restrictions imposed on or proposed with respect to the combined companies by
regulatory agencies in connection with or following consummation of the
Merger, and other factors; and (ii) the Exchange Ratio is fixed and will not
be adjusted for changes in the relative prices of Norwest Common Stock and
AMFED Common Stock, unless the Termination Measurement Price is less than
$30.25. See "--Terms of the Merger."
EFFECTIVE DATE AND TIME OF THE MERGER
Subject to the terms and conditions of the Merger Agreement, the Effective
Time will be 11:59 p.m., Reno, Nevada time on the Effective Date. The
Effective Date will be the date on which the Articles of Merger are filed with
the Nevada Secretary of State. Unless the parties agree on a different date of
filing, the Articles of Merger will be filed ten business days following
approval of the Merger Agreement by AMFED's stockholders. All required
regulatory approvals have been received as of the date of this Proxy
Statement-Prospectus. The Closing will occur on the Effective Date, which
Norwest and AMFED anticipate will occur as soon as practicable following the
Special Meeting. See "--Terms of the Merger," "--Conditions to the Merger,"
and "--Regulatory Approvals."
NO DISSENTERS' RIGHTS
The holders of AMFED Common Stock will not have dissenters' rights under
applicable provisions of the Nevada General Corporation Law.
SURRENDER OF CERTIFICATES
As soon as practicable after the Effective Time, Norwest Bank Minnesota,
National Association, acting in the capacity of exchange agent for Norwest
(the "Exchange Agent"), will mail to each holder of record of shares of AMFED
Common Stock a form of letter of transmittal, together with instructions for
the exchange of such holder's stock certificates for a certificate
representing Norwest Common Stock.
STOCKHOLDERS OF AMFED SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY
RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS.
Upon surrender to the Exchange Agent of one or more certificates for AMFED
Common Stock, together with a properly completed letter of transmittal, there
will be issued and mailed to the holder a certificate representing the number
of whole shares of Norwest Common Stock to which such holder is entitled and,
if applicable, a check for the amount representing any fractional share
(without interest). A certificate for Norwest Common Stock may be issued in a
name other than the name in which the surrendered certificate is registered
only if (i) the certificate surrendered is properly endorsed and is otherwise
in proper form for transfer and (ii) the person requesting the issuance of
such certificate either pays to the Exchange Agent any transfer or other taxes
required by reason of the issuance of a certificate for such shares in a name
other than the registered holder of the certificate surrendered or establishes
to the satisfaction of the Exchange Agent that such taxes have been paid or
are not due.
All Norwest Common Stock issued pursuant to the Merger will be deemed issued
as of the Effective Time. No dividends in respect of the Norwest Common Stock
with a record date after the Effective Time will be paid to the former
stockholders of AMFED entitled to receive certificates for shares of Norwest
Common Stock until such stockholders surrender their certificates representing
shares of AMFED Common Stock. Upon such surrender, there shall be paid to the
stockholder in whose name the certificates representing such shares of Norwest
Common Stock are issued any dividends the record and payment dates of which
shall have been after the Effective Time and before the date of such
surrender. After such surrender, there shall be paid to the person
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in whose name the certificate representing such shares of Norwest Common Stock
is issued, on the appropriate dividend payment date, any dividend on such
shares of Norwest Common Stock which shall have a record date after the
Effective Time, as the case may be, and prior to the date of surrender, but a
payment date subsequent to the surrender. In no event shall the persons
entitled to receive such dividends be entitled to receive interest on amounts
payable as dividends.
CONDITIONS TO THE MERGER
The obligation of AMFED to consummate the Merger is subject to the
satisfaction of the following conditions: (i) the approval and adoption of the
Merger Agreement and the transactions contemplated thereby by a majority of
the outstanding shares of AMFED Common Stock; (ii) Norwest shall have
performed in all material respects all of its agreements contained in the
Merger Agreement required to be performed on or prior to the Effective Date,
and the representations and warranties of Norwest contained in the Merger
Agreement shall be true in all material respects as of the Effective Date
except as contemplated or permitted by the Merger Agreement; (iii) AMFED shall
have received the opinion of Breyer & Aguggia, counsel to AMFED, to the effect
that as of the closing date of the Merger, the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code; (iv) Norwest shall have received all regulatory approvals
for the Merger and all waiting and appeal periods shall have expired; (v) the
absence of any order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by the Merger Agreement; (vi)
the authorization for listing on the NYSE and the CHX of the Norwest Common
Stock; and (vii) Norwest shall have obtained any and all material permits,
authorizations, consents, waivers and approvals. AMFED may waive satisfaction
of certain of the foregoing conditions.
The obligations of Norwest to consummate the Merger are subject to the
satisfaction of the following conditions: (i) AMFED shall have performed in
all material respects all of its obligations contained in the Merger Agreement
required to be performed by it prior to the Effective Date, and the
representations and warranties of AMFED contained in the Merger Agreement
shall be true in all material respects as of the closing date of the Merger
except as contemplated or permitted by the Merger Agreement; (ii) the approval
and adoption of the Merger Agreement and the transactions contemplated thereby
by a majority of the outstanding shares of AMFED Common Stock; (iii) Norwest
shall have received all regulatory approvals for the Merger and all waiting
and appeal periods shall have expired; (iv) AMFED shall have obtained any and
all material consents or waivers; (v) the absence of any order restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by the Merger Agreement; (vi) receipt of an opinion from Deloitte
& Touche LLP that the activities of AMFED will not preclude the Merger from
qualifying as a pooling of interests; (vii) the absence of any proceeding,
claim, or action seeking to impose liability on AMFED or any of its
subsidiaries relating to the release of hazardous substances; (viii) AMFED
shall have terminated the 1992 Option Plan, and, if necessary, shall have
obtained the consent of all holders of outstanding options thereunder to the
termination of such options upon the Merger in exchange for shares of Norwest
Common Stock computed based on the Exchange Ratio; (ix) the total number of
shares of AMFED Common Stock outstanding (including all common share
equivalents) shall not have exceeded 6,327,054; and (x) AMFED shall have taken
certain other actions, including the termination or amendment of certain
agreements, the payment to AMFED employees of accrued vacation and the
establishment of such accruals and reserves as are necessary to conform
AMFED's accounting and credit loss reserve practices to those of Norwest.
Norwest may waive satisfaction of certain of the foregoing conditions.
REGULATORY APPROVALS
The Merger is subject to prior approval by the Federal Reserve Board under
the BHC Act and by the OTS under the provisions of the Home Owners Loan Act
("HOLA"). Approval of the Federal Reserve Board was received by letter dated
October 26, 1995. Approval of the OTS was received by letter dated November
13, 1995.
The Merger is also subject to the approval of the Department of Banking and
Financial Institutions of the State of Nevada. Approval of the State of Nevada
was received by letter dated November 13, 1995.
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The approval of any application merely implies satisfaction of regulatory
criteria for approval, which do not include review of the Merger from the
standpoint of the adequacy of the consideration to be received by, or fairness
to, stockholders. Regulatory approvals do not constitute an endorsement or
recommendation of the proposed Merger.
Norwest and AMFED are not aware of any governmental approvals or compliance
with banking laws and regulations that are required for consummation of the
Merger other than those described above. Should any other approval or action
be required, it is presently contemplated that such approval or action would
be sought. There can be no assurance that any such approval or action, if
needed, could be obtained and, if such approvals or actions are obtained,
there can be no assurance as to the timing thereof. The Merger cannot proceed
in the absence of all requisite regulatory approvals. See "--Conditions to the
Merger," "--Effective Date and Time of the Merger," and "--Waiver, Amendment,
and Termination."
CONDUCT OF BUSINESS PENDING THE MERGER
AMFED has agreed in the Merger Agreement to maintain its corporate existence
in good standing and to conduct its business in the ordinary and usual manner,
including the extension of credit in accordance with existing lending
policies, except that AMFED has agreed not to make, without the prior written
consent of Norwest, any new loan or modify, restructure, or renew any existing
loan (except pursuant to commitments made prior to July 21, 1995) to any
borrower if the amount of the resulting loan, when aggregated with all other
loans or extensions of credit to such person, would exceed $3,000,000. In the
Merger Agreement, AMFED has also agreed, among other things, that it will not,
without the prior written consent of Norwest: (i) enter into any material
agreement, contract, or commitment in excess of $100,000 except banking
transactions in the ordinary course of business and in accordance with
policies and procedures in effect on July 21, 1995; (ii) make any equity
investments; (iii) declare, set aside, make, or pay any dividend or other
distribution with respect to its capital stock, except with respect to the
payment prior to the Effective Date of 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 only if paid 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 stockholders 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; (iv) sell or otherwise
dispose of any of its assets or properties other than in the ordinary course
of business; (v) fail to maintain proper business and accounting records in
accordance with generally accepted accounting principles; and (vi) issue or
sell or authorize for issuance or sale or grant options or other rights with
respect to the issuance, sale, or conversion of shares of capital stock. The
AMFED Board anticipates declaring a cash dividend not to exceed $.07 per share
for the quarter ending December 31, 1995, payable on January 2, 1996 to
holders of record of AMFED Common Stock as of December 7, 1995. There can be
no assurance, however, that the AMFED Board will declare, set aside, make or
pay such dividend or any other dividend or distribution with respect to
AMFED's capital stock.
CERTAIN COVENANTS
The Merger Agreement provides that prior to the Effective Date, AMFED will
(i) establish such additional accruals and reserves as may be necessary to
conform AMFED's accounting and credit loss reserve practices to those of
Norwest and Norwest's plans with respect to the conduct of AMFED's business
following the Merger and to provide for costs and expenses related to the
consummation of the transactions contemplated by the Merger Agreement; (ii)
obtain, at its own expense, and deliver environmental assessment reports on
certain properties; (iii) not take any action with respect to AMFED which
would disqualify the Merger as a pooling of interests for accounting purposes;
and (iv) take all necessary corporate and other action and use its best
efforts to obtain all approvals of regulatory authorities, consents, and other
approvals to carry out the transactions contemplated by the Merger Agreement.
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The Merger Agreement also provides that, prior to the Effective Date,
Norwest will (i) give AMFED notice of the receipt of all regulatory approvals;
(ii) permit AMFED and its representatives to examine Norwest's books, records,
and properties, and to interview Norwest's officers, employees, and agents,
for a period of up to 15 days prior to the mailing of this Proxy Statement-
Prospectus and 15 days prior to the Effective Date; (iii) file all documents
necessary to list the Norwest Common Stock to be issued in the Merger on the
NYSE and the CHX and use its best efforts to effect such listings; (iv) take
all necessary corporate and other action and use its best efforts to obtain
all approvals of regulatory authorities, consents, and other approvals to
carry out the transactions contemplated by the Merger Agreement; and (v) not
take any action with respect to Norwest that would disqualify the Merger as a
pooling of interests for accounting purposes.
NO SOLICITATION
AMFED has agreed in the Merger Agreement that neither it nor any of its
subsidiaries, nor any director, officer, representative, or agent of AMFED or
any of its subsidiaries, will solicit, authorize the solicitation of, or,
except to the extent, based on advice of counsel, legally advisable for the
discharge of the fiduciary duties of the AMFED Board under applicable law,
enter into any discussions with any party other than Norwest concerning any
offer or possible offer (i) to purchase any shares of common stock, any option
or warrant to purchase any shares of common stock, any securities convertible
into any shares of common stock, or any other equity security of AMFED or any
of its subsidiaries; (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 of its subsidiaries, except in
the ordinary course of business; or (iv) to merge, consolidate, or otherwise
combine with AMFED or any of its subsidiaries.
WAIVER, AMENDMENT, AND TERMINATION
The parties may, in writing, give any consent, take any action with respect
to termination of the Merger Agreement, or waive any inaccuracies in the
representations and warranties of the other party or compliance by the other
party with any of the covenants and conditions in the Merger Agreement.
At any time before the time of filing the parties may amend the Merger
Agreement by action of their respective Boards of Directors or pursuant to
authority delegated by their respective Boards of Directors; provided,
however, that no amendment after approval of the Merger by AMFED stockholders
shall be made which adversely affects the consideration to be received by
AMFED stockholders.
The Merger Agreement provides that it may be terminated at any time prior to
the time of filing (i) by mutual written consent of the parties; (ii) by
either party by written notice to the other if the Merger shall not have been
consummated by June 30, 1996, unless such failure of consummation is due to
the failure of the party seeking termination to perform or observe in all
material respects the covenants and agreements to be performed or observed by
it under the Merger Agreement; (iii) by either party by written notice to the
other if any court or governmental authority of competent jurisdiction shall
have issued a final order restraining, enjoining, or otherwise prohibiting the
consummation of the transactions contemplated by the Merger Agreement; (iv) by
AMFED if the Termination Measurement Price is less than $30.25 and Norwest, in
its sole discretion does not elect to adjust the Exchange Ratio to a number
determined by dividing 31.00 by the Termination Measurement Price; or (v)
Norwest if the AMFED Board does not publicly recommend approval of the Merger
Agreement or withdraws, modifies or amends its recommendation in any respect
materially adverse to Norwest.
EFFECT ON EMPLOYEE BENEFIT PLANS
The Merger Agreement provides that, subject to any eligibility requirements
applicable to such plans, employees of AMFED shall be entitled to participate
in those Norwest employee benefit and welfare plans specified in the Merger
Agreement. The eligible employees of AMFED shall enter each of such plans no
later than the first day of the calendar quarter which begins at least 32 days
after the Effective Date.
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Eligible AMFED employees will receive credit for past service for the
purpose of determining certain benefits under certain of Norwest's benefit
plans.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
The directors and executive officers of AMFED beneficially owned a total of
227,100 shares of AMFED Common Stock (representing 3.85% of all outstanding
shares of AMFED Common Stock) on November 24, 1995. The directors and
executive officers will receive the same consideration for their shares,
including any shares which they may acquire prior to the Effective Time
pursuant to the exercise of stock options, as the other stockholders of AMFED.
Certain members of AMFED's management and the AMFED Board have certain
interests in the Merger that are in addition to their interest as stockholders
of AMFED generally. The AMFED Board was aware of these interests and
considered them, among other matters, in approving the Merger Agreement and
the transactions contemplated thereby.
EMPLOYMENT AGREEMENTS. Mr. Houston, the Chief Executive Officer of AMFED and
the Bank, Mr. Downs, the President of AMFED and the Bank, Mr. Kerr, the Chief
Financial Officer and Treasurer of AMFED and the Bank, and Ms. Coy, Executive
Vice President and Chief Operating Officer of AMFED and the Bank, have
employment agreements with AMFED and the Bank. In addition, Mr. Thomas, Senior
Vice President of the Bank, and Mr. Warden, Senior Vice President of the Bank,
have employment agreements with the Bank. The Merger Agreement provides that
Norwest will honor the terms of such agreements. The employment agreements
provide for severance payments and other benefits in the event of involuntary
termination of employment of such officers or a change in the capacity or
circumstances in which they are employed in connection with any change in
control of AMFED or the Bank. The severance payments will equal 2.99 times the
officer's average annual compensation during the preceding five years which,
will result in a severance payment to Mr. Houston of approximately $902,000,
to Mr. Downs of approximately $553,000, to Mr. Kerr of approximately $368,000,
to Ms. Coy of approximately $450,000, to Mr. Thomas of approximately $330,000,
and to Mr. Warden of approximately $325,000. In addition, for a period of
three years following the Effective Time, the officers will also continue to
receive other employee benefits, including life, disability and health
insurance.
AMFED 1992 STOCK OPTION INCENTIVE PLAN. Under the 1992 Option Plan, options
to purchase shares of AMFED Common Stock have been issued to directors and key
employees of AMFED. Pursuant to the Merger Agreement, each option will be
terminated and exchanged for a number of shares of Norwest Common Stock
determined by dividing (A) the excess of the number of options shares
multiplied by the Termination Measurement Price multiplied by the Exchange
Ratio over the aggregate exercise price of the option shares by (B) the
Termination Measurement Price. Non-employee directors of AMFED currently hold
options to purchase an aggregate of 61,660 shares of AMFED Common Stock. Under
this arrangement, such directors will receive an aggregate of 63,207 shares of
Norwest Common Stock with a total value of approximately $ , using the
November , 1995 closing price of Norwest Common Stock of $ per share.
The executive officers of AMFED hold options to acquire the following number
of shares of AMFED Common Stock: Mr. Houston, 129,782; Mr. Downs, 78,866; Mr.
Kerr, 25,910; Ms. Coy, 38,663; Mr. Thomas, 19,069; Mr. Warden, 17,774; and Ms.
Moore, Senior Vice President of the Bank, 9,512. Pursuant to the Merger
Agreement, such options will be cancelled and the officers will receive shares
of Norwest Common Stock having the value indicated, using the November ,
1995 closing price of Norwest Common Stock of $ per share: Mr. Houston,
$ ; Mr. Downs, $ ; Mr. Kerr, $ ; Ms. Coy, $ ;
Mr. Thomas, $ ; Mr. Warden, $ ; and Ms. Moore, $ .
DIRECTORS' AND OFFICERS' LIABILITY. For the first six years after the
Effective Time, Norwest will ensure that all rights to indemnification and all
limitations of liability existing in favor of directors and officers of AMFED
in AMFED's Articles of Incorporation and Bylaws or similar governing documents
of AMFED's subsidiaries shall continue in full force and effect. In addition,
for a period of three years after the Effective Time, Norwest will use all
reasonable efforts to cause all directors and officers of AMFED to continue to
be covered by AMFED's directors and officers liability insurance policy at an
annual cost not to exceed 150% of AMFED's premium payment for AMFED's current
policy.
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BOARD OF DIRECTORS. Following the Effective Date of the Merger, the Board of
Directors of the Bank will consist of at least five, but not more than seven,
members to be designated by Norwest's regional president from among the
members of the Board of Directors of the Bank. The initial retainer for each
board member will be not less than $1,000 per month and each member will serve
for a term of one year.
STOCK OPTION AGREEMENT BETWEEN NORWEST AND AMFED
As a condition to Norwest's entering into the Merger Agreement, AMFED and
Norwest entered into a Stock Option Agreement, dated as of July 22, 1995,
pursuant to which AMFED granted Norwest the Option entitling Norwest 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 (i) any person (other than Norwest or any of its
subsidiaries) acquires 20% or more of the outstanding shares of AMFED Common
Stock; or (ii) AMFED or any of its subsidiaries, without Norwest's prior
written consent, shall have entered into an agreement with a third party to
effect 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.
The Option Agreement will terminate at the earliest to occur of (i) the time
immediately prior to the Effective Time, (ii) nine months after the first
occurrence of a Purchase Event, (iii) 15 months after the termination of the
Merger Agreement following the occurrence of a Preliminary Purchase Event,
(iv) termination of the Merger 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 Merger
Agreement by Norwest due to AMFED's failure to perform or observe in all
material respects its covenants and obligations thereunder.
"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 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 to acquire beneficial ownership, 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 offer 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 Merger Agreement and such breach would entitle
Norwest to terminate the Merger Agreement or (y) the stockholders of AMFED
shall not have approved the Merger 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 Merger Agreement, or the AMFED Board
shall have withdrawn or modified in a manner adverse to Norwest its
recommendation to the stockholders of AMFED; (v) the AMFED Board does not
recommend that the stockholders of AMFED approve the Merger Agreement; and
(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 (vi) any party other than
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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.
Under the BHC Act, Norwest may not acquire 5% or more of the outstanding
shares of AMFED without the prior approval of the Federal Reserve Board.
Certain other regulatory approvals may also be 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
after the occurrence of a Preliminary Purchase Event. 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 "Repurchase Event," subject to certain exceptions, and prior to
termination of the Option, at the request of Norwest, AMFED will be obligated
(i) to repurchase the Option and any Option Shares theretofore purchased
pursuant to the Option at prices determined as set forth in the Option
Agreement and (ii) to reimburse 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. A Repurchase Event is defined as (i) any
person (other than Norwest or a Norwest Subsidiary) acquiring beneficial
ownership of 20% or more of AMFED's Common Stock or (ii) consummation of an
Acquisition Transaction.
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 shares
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 material 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, to acquire stock 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 Repurchase Event has occurred as of the date hereof.
The Option Agreement is intended to increase the likelihood that the Merger
will be consummated in accordance with the terms of the Merger 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 Merger 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.
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of certain federal income tax consequences of
the Merger that are generally applicable to AMFED stockholders. This
discussion is based on currently existing provisions of the Code, existing
regulations thereunder (including final, temporary or proposed), and current
administrative rulings and court decisions, all of which are subject to
change. Any such change, which may or may not be retroactive, could alter the
tax consequences described herein. The following discussion is intended only
as a summary of certain principal federal income tax consequences of the
Merger and does not purport to be a complete analysis or listing of the all of
the potential tax effects relevant to a decision on whether to vote in favor
of approval of the Merger Agreement.
The Merger is expected to qualify as a reorganization under Section 368(a)
of the Code. Except for cash received in lieu of a fractional share interest
in Norwest Common Stock, holders of shares of AMFED Common Stock will
recognize no gain or loss on the receipt of Norwest Common Stock.
Consummation of the Merger is conditioned upon the receipt by AMFED of an
opinion of Breyer & Aguggia, special counsel to AMFED, to the effect that if
the Merger is consummated in accordance with the terms set forth in the Merger
Agreement (i) the Merger will constitute a reorganization within the meaning
of Section 368(a) of the Code; (ii) no gain or loss will be recognized by
AMFED stockholders who exchange all of their AMFED Common Stock solely for
shares of Norwest Common Stock (except for cash received in lieu of fractional
shares); (iii) the basis of shares of Norwest Common Stock received by the
stockholders of AMFED will be the same as the basis of shares of AMFED Common
Stock exchanged therefor; and (iv) the holding period of the shares of Norwest
Common Stock received by such stockholders will include the holding period of
the shares of AMFED Common Stock exchanged therefor, provided such shares were
held as capital assets as of the Effective Time.
The opinion of counsel, which will be delivered on the Closing Date, is
filed as an exhibit to the Registration Statement, and the foregoing is only a
summary of such tax consequences as described in the opinion. An opinion of
counsel only represents counsel's best legal judgment, and has no binding
effect or official status of any kind, and no assurance can be given that
contrary positions may not be taken by the Internal Revenue Service (the
"IRS") or a court considering the issues. Neither AMFED nor Norwest has
requested or will request a ruling from the IRS with regard to the federal
income tax consequences of the Merger.
THE FOREGOING IS A GENERAL SUMMARY OF ALL OF THE MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER TO AMFED STOCKHOLDERS, WITHOUT REGARD TO THE
PARTICULAR FACTS AND CIRCUMSTANCES OF EACH STOCKHOLDER'S TAX SITUATION AND
STATUS. EACH AMFED STOCKHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR
REGARDING ANY SUCH SPECIFIC TAX SITUATION AND STATUS, INCLUDING THE
APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN LAWS AND THE
POSSIBLE EFFECT OF CHANGES IN FEDERAL AND OTHER TAX LAWS.
RESALE OF NORWEST COMMON STOCK
The shares of Norwest Common Stock issuable to stockholders of AMFED upon
consummation of the Merger have been registered under the Securities Act. Such
shares may be traded freely and without restriction by those stockholders not
deemed to be "affiliates" of AMFED or Norwest as that term is defined in the
rules under the Securities Act. Norwest Common Stock received by those
stockholders of AMFED who are deemed to be "affiliates" of AMFED may be resold
without registration as provided for by Rule 145, or as otherwise permitted
under the Securities Act. Persons who may be deemed to be affiliates of AMFED
generally include individuals or entities that control, are controlled by or
are under common control with, AMFED, and may include the executive officers
and directors of AMFED as well as certain principal stockholders of AMFED. In
the Merger Agreement, AMFED has agreed to use its best efforts to cause each
AMFED stockholder who is an executive officer or director of AMFED or who may
otherwise reasonably be deemed to be an affiliate of
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AMFED to enter into an agreement with Norwest providing that such affiliate
will not sell, transfer, or otherwise dispose of the shares of Norwest Common
Stock to be received by such person in the Merger except in compliance with
the applicable provisions of the Securities Act and the rules and regulations
promulgated thereunder. This Proxy Statement-Prospectus does not cover any
resales of Norwest Common Stock received by affiliates of AMFED.
STOCK EXCHANGE LISTING
The Merger Agreement provides for the filing by Norwest of listing
applications with the NYSE and the CHX covering the shares of Norwest Common
Stock issuable upon consummation of the Merger. It is a condition to the
consummation of the Merger that such shares of Norwest Common Stock shall have
been authorized for listing on the NYSE and the CHX.
ACCOUNTING TREATMENT
It is anticipated that the Merger will be accounted for as a pooling of
interests transaction in accordance with generally accepted accounting
principles.
Under the pooling of interests method of accounting, the historical basis of
the assets and liabilities of Norwest and AMFED will be combined at the
Effective Time and carried forward at their previously recorded amounts, and
the stockholders' equity accounts of AMFED will be combined with Norwest's on
Norwest's consolidated balance sheet. Income and other financial statements of
Norwest will not be restated retroactively because the Merger is not material
to the financial statements of Norwest.
In order for the Merger to qualify for pooling of interests accounting
treatment, among other things, substantially all (90% or more) of the
outstanding AMFED Common Stock must be exchanged for Norwest Common Stock.
AMFED has agreed not to take any action that would disqualify the Merger from
pooling of interests accounting treatment by Norwest.
The unaudited pro forma data contained in this Proxy Statement-Prospectus
has been prepared using the pooling of interests method of accounting to
account for the Merger. See "SUMMARY--Comparative Per Common Share Data."
EXPENSES
Except as otherwise provided in the Merger Agreement, Norwest and AMFED will
each pay their own expenses in connection with the Merger, including fees and
expenses of their respective accountants and counsel.
CERTAIN DIFFERENCES IN RIGHTS OF STOCKHOLDERS
If the holders of AMFED Common Stock approve the Merger Agreement and the
Merger is subsequently consummated, stockholders of AMFED will become
stockholders of Norwest. AMFED is a corporation organized under and governed
by the Nevada General Corporation Law (the "NGCL"). Norwest is a corporation
organized under and governed by the Delaware General Corporation Law (the
"DGCL"). The following summary describes certain differences between holding
Norwest Common Stock and AMFED Common Stock to the extent such differences
arise because of differences between Norwest's Restated Certificate of
Incorporation (the "Norwest Certificate"), By-Laws, and rights plan and
AMFED's Articles of Incorporation (the "AMFED Articles") and Bylaws. This
summary is qualified in its entirety by reference to the DGCL, the Norwest
Certificate, Norwest's By-Laws and rights plan, the NGCL, and the AMFED
Articles and Bylaws.
AUTHORIZED STOCK
AMFED. The authorized capital stock of AMFED consists of 60,000,000 shares
of AMFED Common Stock, $.01 par value per share, and 6,000,000 shares of
serial preferred stock, no par value per share. As of
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September 30, 1995, there were 6,058,130 shares of AMFED Common Stock issued,
of which 5,888,430 shares were outstanding and 169,700 were held as treasury
shares. There were no shares of preferred stock outstanding as of September
30, 1995.
NORWEST. The Norwest Certificate authorizes the issuance of 500,000,000
shares of common stock, par value $1 2/3 per share, 5,000,000 shares of
preferred stock, without par value, and 4,000,000 shares of preference stock.
At September 30, 1995, 342,699,461 shares of Norwest Common Stock were issued,
of which 337,931,133 were outstanding and 4,768,328 were held as treasury
shares, and 2,129,168 shares of preferred stock were outstanding, consisting
of 1,127,125 shares of 10.24% Cumulative Preferred Stock, 980,000 shares of
Cumulative Tracking Preferred Stock (of which 25,000 shares are held by a
subsidiary of Norwest), 13,311 shares of ESOP Plan Cumulative Convertible
Preferred Stock, and 33,732 shares of 1995 ESOP Plan Cumulative Convertible
Preferred Stock. In addition, 1,250,000 shares of preferred stock are reserved
for issuance under the Rights Agreement dated as of November 22, 1988, between
Citibank, N.A. as Rights Agent, and Norwest (the "Rights Agreement"). Norwest
has also authorized for issuance from time to time and registered with the
Commission an additional 1,700,000 shares of preferred stock. Norwest has also
authorized for issuance from time to time and registered or filed for
registration with the Commission, pursuant to two universal shelf registration
statements, an indeterminate number of securities (the "Shelf Securities")
with an aggregate initial offering price, as of September 30, 1995, not to
exceed $2,800,000,000. The Shelf Securities may be issued as preferred stock
or as securities convertible into shares of preferred stock or common stock.
Based on the current number of shares of preferred stock and preference stock
authorized for issuance under the Norwest Certificate, the maximum number of
shares of preferred stock, preference stock, and common stock, respectively,
that could be issued pursuant to the effective shelf registration statements,
when added to shares of preferred stock and common stock already reserved for
issuance, issued, or outstanding, could not exceed, respectively, 5,000,000
shares of preferred stock, 4,000,000 shares of preference stock, and
500,000,000 shares of common stock. All or any portion of the authorized but
unissued preferred stock, preference stock, or Shelf Securities issuable as
preferred stock or convertible into preferred stock or common stock, may be
issued by the Board of Directors of Norwest without further action by
stockholders. Holders of preferred stock or preference stock have certain
rights and preferences with respect to dividends and upon liquidation that are
superior to those of holders of common stock. The relative rights and
preferences of any preferred stock or preference stock issued in the future
may be established by the Board of Directors of Norwest (the "Norwest Board")
without stockholder action, provided that each share of preference stock will
not be entitled to more than one vote per share. Although Norwest has no
current plans for the issuance of any shares of preferred stock or preference
stock, except as disclosed in this Proxy Statement-Prospectus, such shares,
when and if issued, could have dividend, liquidation, voting, and other rights
superior to those of the common stock.
Subject to any prior rights of any preferred stock or preference stock then
outstanding, holders of common stock are entitled to receive such dividends as
are declared by the Norwest Board out of funds legally available for that
purpose. For information concerning legal limitations on the ability of
Norwest's banking subsidiaries to supply funds to Norwest, see "CERTAIN
REGULATORY CONSIDERATIONS." Subject to the rights, if any, of any preferred
stock or preference stock then outstanding, all voting rights are vested in
the holders of common stock, each share being entitled to one vote. Subject to
any prior rights of any preferred stock or preference stock, in the event of
liquidation, dissolution, or winding up of Norwest, holders of shares of
common stock are entitled to receive pro rata any assets distributable to
stockholders in respect of shares held by them. Holders of shares of common
stock do not have any preemptive right to subscribe for any additional
securities which may be issued by Norwest. The outstanding shares of Norwest
Common Stock are, and the shares offered hereby will be, fully paid and
nonassessable. The transfer agent and registrar for Norwest Common Stock is
Norwest Bank Minnesota, N.A. Each share of common stock also includes, and
each share offered hereby will include, a right to purchase certain preferred
stock. See "--Rights Plans--Norwest" below.
The foregoing description of the material terms of Norwest Common Stock does
not purport to be complete and is qualified in its entirety by reference to
Article Fourth of the Norwest Certificate.
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ELECTION AND REMOVAL OF DIRECTORS
AMFED. AMFED'S Articles of Incorporation provide that the AMFED Board shall
consist of not less than one nor more than 25 members, with the current number
set at ten. The AMFED Board may change the number of directors within the
range set forth in AMFED's Articles of Incorporation by resolution. Changes in
the size of the range of the AMFED Board may be made by an amendment to
AMFED's Articles of Incorporation, which must be approved by 80% of the
outstanding shares entitled to vote. AMFED's Articles of Incorporation provide
for a Board of Directors divided into three classes, with the members of each
class of directors being elected for a term of three years and with one class
being elected per year. This method of electing directors makes a change in
the composition of the AMFED Board, and a potential change in control of a
corporation, a lengthier and more difficult process than if all directors were
elected each year.
AMFED's Articles of Incorporation provide that at a meeting of stockholders
called expressly to remove directors, any director may be removed by a vote of
the holders of at least 80% of the shares then entitled to vote at an election
of directors. The Articles of Incorporation of AMFED provide for the filling
of vacancies by a two-thirds vote of the AMFED Board and that directors so
elected may hold office for a term expiring at the annual meeting at which the
term of the class to which the director has been elected expires.
NORWEST. The DGCL provides that directors are elected by a plurality of the
votes of the shares entitled to vote on such election present in person or by
proxy at the meeting at which directors are elected. In addition, stockholders
of a Delaware corporation, unless the corporation's Certificate of
Incorporation otherwise provides, are entitled to one vote for each share of
capital stock held, and are also entitled to exercise cumulative voting rights
for directors, if the corporation's Certificate of Incorporation permits such
cumulative voting. The DGCL also permits removal of any director or all
directors of a Delaware corporation by the holders of a majority of the shares
entitled to vote for directors and permits vacancies on the board of directors
to be filled by a majority of the directors then in office.
Norwest currently has 14 directors who serve for one-year terms. The Norwest
Certificate does not permit cumulative voting in the election of directors to
the Norwest Board, and each stockholder of Norwest may cast one vote in the
election of directors for each share held of record by such stockholder. Under
the Norwest By-Laws, any or all directors may be removed, with or without
cause, by the holders of a majority of the shares then entitled to vote at an
election of directors. Vacancies on the Norwest Board may be filled by a
majority vote of the directors then in office.
RIGHTS PLANS
AMFED. Unlike Norwest, AMFED has not adopted any stockholder rights plan or
issued any similar rights to the holders of AMFED Common Stock. One Norwest
Right (as defined below) will be attached to each share of Norwest Common
Stock issued in the Merger to AMFED stockholders.
NORWEST. On November 22, 1988, the Norwest Board declared a dividend of one
preferred share purchase right (collectively, the "Norwest Rights") for each
outstanding share of Norwest Common Stock. The dividend was paid on December
9, 1988, to stockholders of record on that date. Holders of shares of Norwest
Common Stock issued subsequent to that date, including those to be issued in
the Merger, receive the Norwest Rights with their shares. The Norwest Rights
trade automatically with shares of Norwest Common Stock and become exercisable
only under certain circumstances. The Norwest Rights are designed to protect
the interests of Norwest and its stockholders against coercive takeover
tactics. The purpose of the Norwest Rights is to encourage potential acquirors
to negotiate with Norwest's Board of Directors prior to attempting a takeover
and to give the Norwest Board leverage in negotiating on behalf of all
stockholders the terms of any proposed takeover. The Norwest Rights may, but
are not intended to, deter takeover proposals.
Until exercised, the Norwest Rights, in and of themselves, do not confer any
rights on their holders as stockholders of Norwest including, without
limitation, the right to vote or receive dividends. Upon becoming
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exercisable, each Norwest Right will entitle the registered holder to purchase
from Norwest one four-hundredth of a share of Norwest Series A Junior
Participating Preferred Stock (collectively, the "Junior Preferred Shares").
The purchase price for each one four-hundredth of a Junior Preferred Share is
$175.00. The purchase price is subject to adjustment upon the occurrence of
certain events, including stock dividends on the Junior Preferred Shares or
issuance of warrants for, or securities convertible on certain terms into,
Junior Preferred Shares. The number of Norwest Rights outstanding and the
number of Junior Preferred Shares issuable upon exercise of the Norwest Rights
are subject to adjustment in the event of a stock split of, or a stock
dividend on, Norwest Common Stock.
The Norwest Rights will become exercisable only if a person or group
acquires or announces an offer to acquire 25% or more of the outstanding
shares of Norwest Common Stock. This triggering percentage may be reduced to
no less than 15% by the Norwest Board prior to the time the Norwest Rights
become exercisable. The Norwest Rights have certain additional features that
will be triggered upon the occurrence of specified events:
(1) If a person or group acquires at least the triggering percentage of
Norwest Common Stock, the Norwest Rights permit holders of the Norwest
Rights, other than such person or group, to acquire shares of Norwest
Common Stock at 50% of such shares' market value. However, this feature
will not apply if a person or group which owns less than the triggering
percentage acquires at least 85% of the outstanding shares of Norwest
Common Stock pursuant to a cash tender offer for 100% of the outstanding
Norwest Common Stock.
(2) After a person or group acquires at least the triggering percentage
and before the acquiror owns 50% of the outstanding shares of Norwest
Common Stock, the Board of Directors may exchange each Norwest Right, other
than Norwest Rights owned by such acquiror, for one share of Norwest Common
Stock or one four-hundredth of a Junior Preferred Share.
(3) In the event of certain business combinations involving Norwest or
the sale of 50% or more of the assets or earning power of Norwest, the
Norwest Rights permit holders of the Norwest Rights to purchase the stock
of the acquiror at 50% of such shares' market value.
The Junior Preferred Shares will not be redeemable. Each Junior Preferred
Share will be entitled to a minimum preferential quarterly dividend payment of
$1.00 per share but will be entitled to an aggregate dividend of 400 times the
dividend declared per share of Norwest Common Stock. In the event of
liquidation, the holders of the Junior Preferred Shares will be entitled to a
minimum preferential liquidation payment of $400.00 per share but will be
entitled to an aggregate payment of 400 times the payment made per share of
Norwest Common Stock. Each Junior Preferred Share will have 400 votes, voting
together with the Norwest Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which Norwest Common stock is exchanged,
each Junior Preferred Share will be entitled to receive 400 times the amount
received per share of Norwest Common Stock. These rights are protected by
customary antidilution provisions.
At any time prior to the acquisition by a person or group of the triggering
percentage or more of the outstanding shares of Norwest Common Stock, the
Board of Directors may redeem the Norwest Rights in whole, but not in part, at
a price of $.0025 per Norwest Right (the "Redemption Price"). The redemption
of the Norwest Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Norwest Rights, the right to
exercise such Rights will terminate and the only remaining right of the
holders of Norwest Rights will be to receive the Redemption Price.
The Norwest Rights will expire on November 23, 1998, unless extended or
earlier redeemed by Norwest. Generally, the terms of the Norwest Rights may be
amended by the Board of Directors without the consent of the holders of the
Norwest Rights.
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AMENDMENT OF CORPORATE CHARTER AND BYLAWS
AMFED. AMFED's Articles of Incorporation may be amended only if the
amendment is first approved by two-thirds of the AMFED Board and thereafter
approved by the vote of the holders of a majority of the outstanding shares of
AMFED Common Stock, except that the provisions of the Articles of
Incorporation governing (i) meetings of stockholders and cumulative voting,
(ii) notice requirements for nominations and proposals, (iii) the number,
filling of vacancies and staggered terms of directors, (iv) removal of
directors, (v) acquisition of capital stock, (vi) approval of certain business
combinations, (vii) indemnification of officers and directors, (viii)
elimination of directors liability, (ix) amendments to bylaws, and (x) the
manner of amending the Articles of Incorporation may not be repealed, altered,
amended or rescinded except by the vote of the holders of at least 80% of the
outstanding shares of AMFED. The Bylaws of AMFED may be amended by a majority
vote of the AMFED Board or by the holders of a least 80% of the outstanding
shares of AMFED.
NORWEST. Under the DGCL, Norwest's Certificate may be amended only if the
proposed amendment is approved by the Norwest Board and thereafter approved by
a majority of the outstanding stock entitled to vote thereon and by a majority
of the outstanding stock of each class entitled to vote thereon as a class.
Norwest's By-Laws may be amended by a majority of the Norwest Board or by a
majority of the outstanding stock entitled to vote thereon.
REQUIRED VOTE FOR AUTHORIZATION OF CERTAIN ACTIONS
In addition to being subject to the laws of Nevada and Delaware,
respectively, both AMFED and Norwest, as a savings and loan and bank holding
company, respectively, are subject to various provisions of federal law with
respect to mergers, consolidations, and certain other corporate transactions.
See "CERTAIN REGULATORY CONSIDERATIONS."
AMFED. Under Nevada law, except as otherwise provided in the NGCL, any plan
of merger or share exchange involving AMFED would require adoption by the
AMFED Board, who would generally be required to recommend its approval to
stockholders, who in turn would be required to approve the plan by a vote of a
majority of the outstanding shares. With respect to a plan of merger, no vote
of the stockholders of AMFED is required if AMFED is the surviving corporation
and (i) AMFED's Articles of Incorporation would remain unchanged after the
merger, (ii) each stockholder of AMFED immediately before the merger would
hold the same number of shares, with identical designations, preferences,
limitations and relative rights, after the merger, (iii) the number of voting
shares of AMFED stock to be issued in the merger would not exceed 20% of the
voting shares of AMFED stock immediately before the merger and (iv) the number
of shares of AMFED stock entitling holders to participate without limitation
in distributions to be issued in the merger would not exceed 20% of the shares
of AMFED stock entitling holders to participate without limitation in
distributions outstanding immediately before the merger. Nevada's "fair price"
statute restricts certain business combinations (e.g., mergers and
dispositions of assets of a corporation or any subsidiary having an aggregate
market value of 5% or more of the aggregate market value of the corporation's
consolidated assets or the total market value of the corporation's outstanding
stock) between a corporation and an interested stockholder (e.g., a beneficial
owner of 10% or more of the voting power of the outstanding shares of a
corporation). The fair price statute generally precludes a corporation from
engaging in any business combination with an interested stockholder within
three years after the acquisition pursuant to which the stockholder became an
interested stockholder, unless either (i) the business combination or the
acquisition pursuant to which the interested stockholder became interested was
approved by the board of directors before the acquisition, (ii) the business
combination is approved by the affirmative vote of the holders of a majority
of the outstanding shares not beneficially owned by the interested stockholder
or his affiliates or associates at a meeting called for that purpose at least
three years after the acquisition pursuant to which the interested stockholder
became interested, or (iii) certain minimum price criteria are satisfied and
the combination is not consummated before three years after the acquisition
pursuant to which the interested stockholder became interested.
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NORWEST. The vote of a majority of the outstanding shares of Norwest Common
Stock entitled to vote thereon is required to approve a merger or
consolidation involving Norwest or the sale, lease, or exchange of
substantially all of Norwest's corporate assets. However, no vote of the
stockholders of Norwest is required in connection with a merger if Norwest is
the survivor and (i) the related agreement of merger does not amend Norwest's
Certificate, (ii) each share of capital stock outstanding immediately before
the merger is to be an identical outstanding or treasury share of Norwest
after the merger, and (iii) the number of shares of capital stock to be issued
in the merger (or to be issuable upon conversion of any convertible
instruments to be issued in the merger) does not exceed 20% of the shares of
Norwest's capital stock outstanding immediately before the merger.
DISSENTERS' RIGHTS
AMFED. Under the NGCL, stockholders of a corporation are entitled to dissent
from, and payment of the fair value of their shares in the event of, a merger
or plan of exchange, unless the stockholder holds shares of the surviving
corporation and (i) the articles of incorporation of the surviving corporation
will remain unchanged, (ii) the stockholder will continue to hold the same
number of shares with the same rights after the merger, and (iii) the number
of shares outstanding immediately after the merger will not exceed by more
than 20% the total number of voting shares of the surviving corporation
outstanding immediately before the merger. However, stockholders will not have
such dissenters' rights if the class of shares of the corporation held by such
stockholder is listed on a national securities exchange or held of record by
more than 2,000 stockholders, unless such stockholders are required under the
plan of merger or exchange to accept for such shares something other than cash
or shares of the surviving corporation or another corporation listed on a
national securities exchange or held of record by at least 2,000 stockholders
of record. Based on the terms of the Merger, stockholders of AMFED are not
entitled to assert dissenters' rights in connection with the Merger.
NORWEST. Pursuant to section 262 of the DGCL, a holder of capital stock of a
Delaware corporation is generally entitled to receive payment of the appraised
value of his or her shares if such stockholder dissents from a merger or
consolidation and complies with the procedures set forth in Section 262 of the
DGCL for exercising such rights. However, appraisal rights are not available
in merger or consolidation transactions to holders of (i) shares either listed
on a national stock exchange or designated as a national market system
security on an interdealer quotation system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000 persons, or (ii)
shares of the corporation surviving a merger unless, in either case, holders
of such stock are required by the terms of the merger or consolidation to
accept anything other than (a) shares of the surviving or resulting
corporation; (b) shares of stock of another corporation so listed or held of
record by not fewer than 2,000 persons; and/or (c) cash in lieu of fractional
shares of such corporations. Appraisal rights are not available for a sale of
assets or an amendment to the certificate. Because shares of Norwest Common
Stock are listed on the NYSE and the CHX and because Norwest currently has
more than 2,000 stockholders of record, holders of Norwest Common Stock are
not, subject to the express exceptions noted above, entitled to any rights of
appraisal in connection with proposed mergers or consolidations involving
Norwest.
SPECIAL MEETINGS
AMFED. AMFED's Bylaws provide that a special meeting of stockholders may be
called by the President, the Board of Directors, any two or more directors, or
by one or more stockholders holding in the aggregate 10% or more of the shares
entitled to vote at the special meeting.
NORWEST. The By-Laws of Norwest provide that a special meeting of
stockholders may be called only by the Chairman of the Board, a Vice Chairman,
the President, or a majority of the Board of Directors. Accordingly, holders
of Norwest Common stock do not have the right to call a special meeting.
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LIMITATION OF DIRECTOR LIABILITY AND INDEMNIFICATION
AMFED. AMFED's Articles of Incorporation require indemnification of
directors, officers and employees to the fullest extent permitted by Nevada
law. The NGCL provides for indemnification of directors, officers, employees
and agents for expenses (including attorney's fees) actually and reasonably
incurred in connection with the defense or settlement of any threatened,
pending or completed action or suit if such director, officer, employee or
agent acted in good faith and in a manner he or she reasonably believed to be
in, or nor opposed to, the best interest of AMFED and, with respect to any
criminal action or proceeding, had no reasonable grounds to believe his or her
conduct was unlawful. AMFED's Articles of Incorporation provide further that
the expenses of officers and directors incurred in defending a civil or
criminal action, suit or proceeding must be paid by AMFED as they are incurred
and in advance of the final disposition of the action, suit or proceeding,
upon receipt of an undertaking by or on behalf of the director or officer to
repay the amount if it is ultimately determined by a court of competent
jurisdiction that he or she is not entitled to be indemnified by AMFED.
In addition, AMFED's Articles of Incorporation provide that directors and
officers of AMFED shall have no liability to AMFED or its stockholders for
damages for breach of fiduciary duty as a director or officer except for
damage arising from acts or omissions that involve intentional misconduct,
fraud or a knowing violation of law, or the improper payment of dividends.
NORWEST. The Norwest Certificate provides that a director (including an
officer who is also a director) of Norwest shall not be liable personally to
Norwest or its stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability arising out of (a) any breach of the
director's duty of loyalty to Norwest or its stockholders, (b) acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) payment of a dividend or approval of a stock
repurchase in violation of Section 174 of the DGCL, or (d) any transaction
from which the director derived an improper personal benefit. This provision
protects Norwest directors against personal liability for monetary damages
from breaches of their duty of care. However, it does not eliminate the
director's duty of care. For example, this provision in the Norwest
Certificate has no effect on the availability of equitable remedies, such as
an injunction or rescission, based upon a director's breach of his duty of
care.
The Norwest Certificate further provides that Norwest must indemnify, to the
fullest extent authorized by the DGCL, each person who was or is made a party
to, is threatened to be made a party to, or is involved in, any action, suit,
or proceeding because he is or was a director or officer of Norwest (or was
serving at the request of Norwest as a director, trustee, officer, employee,
or agent of another entity) while serving in such capacity against all
expenses, liabilities, or loss incurred by such person in connection
therewith, provided that indemnification in connection with a proceeding
brought by such person will be permitted only if the proceeding was authorized
by the Norwest Board. The Norwest Certificate also provides that Norwest must
pay expenses incurred in defending the proceedings specified above in advance
of their final disposition, provided that if so required by the DGCL, such
advance payments for expenses incurred by a director or officer may be made
only if he undertakes to repay all amounts so advanced if it is ultimately
determined that the person receiving such payments is not entitled to be
indemnified.
The Norwest Certificate authorizes Norwest to provide similar
indemnification to employees or agents of Norwest.
Pursuant to the Norwest Certificate, Norwest may maintain insurance, at its
expense, to protect itself and any directors, officers, employees, or agents
of Norwest or another entity against any expense, liability, or loss,
regardless of whether Norwest has the power or obligation to indemnify that
person against such expense, liability, or loss under the DGCL.
The right to indemnification is not exclusive of any other right which any
person may have or acquire under any statute, provision of the Norwest
Certificate or By-Laws, agreement, vote of stockholders, or disinterested
directors, or otherwise.
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ACTION WITHOUT A MEETING
AMFED. Any action which may be taken at a stockholders' meeting may be taken
by written consent signed by stockholders holding the number of shares
required for such action at a meeting of stockholders.
NORWEST. Section 228 of the DGCL permits any action required or permitted to
be taken at a stockholders' meeting to be taken by written consent signed by
the holders of the number of shares that would have been required to effect
the action at an actual meeting of the stockholders. The DGCL also provides
that a corporation's certificate of incorporation may restrict or even
prohibit stockholders' action without a meeting. The Norwest Certificate does
not restrict or prohibit stockholders' action without a meeting.
DIVIDENDS
AMFED. The NGCL permits a corporation to make distributions to its
stockholders so long as the corporation will be able to pay its debts as they
become due in the usual course of business and its total assets are greater
than the sum of its total liabilities plus the amount that would be needed, if
it were to be dissolved at the time of distribution, to satisfy the
preferential rights upon dissolution of stockholders whose preferential rights
are superior to those receiving the distribution.
NORWEST. Delaware corporations may pay dividends out of surplus or, if there
is no surplus, out of net profits for the fiscal year in which declared and
for the preceding fiscal year. Section 170 of the DGCL also provides that
dividends may not be paid out of net profits if, after the payment of the
dividend, capital is less than the capital represented by the outstanding
stock of all classes having a preference upon the distribution of assets.
Norwest and AMFED are subject to the same Federal Reserve Board policies
regarding payment of dividends, which generally limit dividends to operating
earnings. See "CERTAIN REGULATORY CONSIDERATIONS."
PROPOSAL OF BUSINESS, NOMINATION OF DIRECTOR
AMFED. AMFED's Articles of Incorporation generally provide that any
stockholder desiring to make a nomination for the election of directors or a
proposal for new business at a meeting of stockholders must submit written
notice to AMFED at least 30 days but less than 40 days in advance of the
meeting, together with certain information relating to the nomination or new
business. Failure to comply with these advance notice requirements will
preclude such nominations or new business from being considered at the
meeting. However, if less than 31 days notice of the meeting is given, such
written notice by the stockholder must be delivered not later than the 10th
day following the day on which notice of the meeting was mailed to
stockholders.
NORWEST. The Norwest By-Laws contain detailed advance notice and
informational procedures which must be complied with in order for a
stockholder to nominate a person to serve as a director. The Norwest By-Laws
generally require a stockholder to give notice of a proposed nominee in
advance of the stockholders meeting at which directors will be elected. In
addition, the Norwest By-Laws contain detailed advance notice and
informational procedures which must be followed in order for a Norwest
stockholder to propose an item of business for consideration at a meeting of
Norwest stockholders.
COMPARATIVE PER SHARE PRICES AND DIVIDENDS
Norwest Common Stock is listed on the NYSE and AMFED's Common Stock is
traded on the Nasdaq National Market. The following table sets forth the high
and low sales prices per share of the Norwest Common Stock as reported on the
NYSE Composite Tape and AMFED Common Stock as reported on the Nasdaq National
Market, and the cash dividends paid on such Norwest Common Stock and AMFED
Common Stock, for the below quarterly periods, which correspond to the
companies' respective quarterly fiscal periods for financial reporting
purposes.
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<TABLE>
<CAPTION>
NORWEST COMMON STOCK AMFED COMMON STOCK
------------------------ -----------------------
HIGH LOW DIVIDENDS HIGH LOW DIVIDENDS
------- ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
1993
First Quarter................ $26.000 20.625 0.145 22.000 16.750 --
Second Quarter............... 28.375 22.875 0.165 22.000 17.750 0.050
Third Quarter................ 28.000 25.625 0.165 26.750 21.000 0.050
Fourth Quarter............... 29.000 22.500 0.165 26.250 22.750 0.050
1994
First Quarter................ 27.375 22.250 0.185 26.250 19.875 0.050
Second Quarter............... 28.250 23.125 0.185 22.750 19.250 0.060
Third Quarter................ 27.500 24.750 0.185 24.875 19.750 0.060
Fourth Quarter............... 25.000 21.000 0.210 22.750 19.000 0.060
1995
First Quarter................ 26.250 22.625 0.210 24.500 20.750 0.060
Second Quarter............... 29.375 25.125 0.210 25.000 22.250 0.070
Third Quarter................ 32.750 26.875 0.240 31.750 23.750 0.070
Fourth Quarter...............
(through November , 1995)
</TABLE>
CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, Norwest is subject to supervision and examination
by the Federal Reserve Board. Norwest's banking subsidiaries are subject to
supervision and examination by applicable federal and state banking agencies.
After Norwest's acquisition of AMFED, the Bank will be a separate savings
association subsidiary of Norwest and, as a result, Norwest will also be a
savings and loan holding company registered under HOLA subject to the
supervision and regulation by the OTS. The deposits of Norwest's banking
subsidiaries are primarily insured by the BIF; in addition, deposits
attributable to certain savings associations previously acquired by Norwest
are insured by the SAIF. As a result, such banking subsidiaries are subject to
regulation by the FDIC. In addition to the impact of regulation, commercial
banks are affected significantly by the actions of the Federal Reserve Board
as it attempts to control the money supply and credit availability in order to
influence the economy.
DIVIDEND RESTRICTIONS
Various federal and state statutes and regulations limit the amount of
dividends the subsidiary banks can pay to Norwest without regulatory approval.
The approval of the OCC is required for any dividend by a national bank if the
total of all dividends declared by the bank in any calendar year would exceed
the total of its net profits, as defined by regulation, for that year combined
with its retained net profits for the preceding two years less any required
transfers to surplus or a fund for the retirement of any preferred stock. In
addition, a national bank may not pay a dividend in an amount greater than its
net profits then on hand after deducting its losses and bad debts. For this
purpose, bad debts are defined to include, generally, loans which have matured
and are in arrears with respect to interest by six months or more, other than
such loans which are well secured and in the process of collection. Under
these provisions Norwest's national bank subsidiaries could have declared, as
of September 30, 1995, aggregate dividends of at least $270.7 million without
obtaining prior regulatory approval and without reducing the capital of the
banks below minimum regulatory levels. Norwest also has several state bank
subsidiaries that are subject to state regulations limiting dividends;
however, the amount of dividends payable by Norwest's state bank subsidiaries,
with or without state regulatory approval, would represent an immaterial
contribution to Norwest's revenues.
If, in the opinion of the applicable regulatory authority, a bank under its
jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the bank, could
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<PAGE>
include the payment of dividends), such authority may require, after notice
and hearing, that such bank cease and desist from such practice. The Federal
Reserve Board, the OCC, and the FDIC have issued policy statements which
provide that FDIC-insured banks and bank holding companies should generally
pay dividends only out of current operating earnings.
HOLDING COMPANY STRUCTURE
Norwest is a legal entity separate and distinct from its banking and
nonbanking subsidiaries. Accordingly, the right of Norwest, and thus the
rights of Norwest's creditors, to participate in any distribution of the
assets or earnings of any subsidiary is necessarily subject to the prior
claims of creditors of such subsidiary, except to the extent that claims of
Norwest in its capacity as a creditor may be recognized. The principal sources
of Norwest's revenues are dividends and fees from its subsidiaries.
Norwest's banking subsidiaries are subject to restrictions under federal law
which limit the transfer of funds by the subsidiary banks to Norwest and its
nonbank subsidiaries, whether in the form of loans, extensions of credit,
investments, or asset purchases. Such transfers by any subsidiary bank to
Norwest or any nonbank subsidiary are limited in amount to 10% of the bank's
capital and surplus and, with respect to Norwest and all such nonbank
subsidiaries, to an aggregate of 20% of such bank's capital and surplus.
Furthermore, such loans and extensions of credit are required to be secured in
specified amounts.
The Federal Reserve Board has a policy to the effect that a bank holding
company is expected to act as a source of financial and managerial strength to
each of its subsidiary banks and to commit resources to support each such
subsidiary bank. This support may be required at times when Norwest may not
have the resources to provide it. Any capital loans by Norwest to any of the
subsidiary banks are subordinate in right of payment to deposits and to
certain other indebtedness of such subsidiary bank. In addition, the Crime
Control Act of 1990 provides that in the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.
A depository institution insured by the FDIC can be held liable for any loss
incurred by, or reasonably expected to be incurred by, the FDIC after August
9, 1989, in connection with (i) the default of a commonly controlled FDIC-
insured depository institution or (ii) any assistance provided by the FDIC to
a commonly controlled FDIC-insured depository institution in danger of
default. "Default" is defined generally as the appointment of a conservator or
receiver and "in danger of default" is defined generally as the existence of
certain conditions indicating that a "default" is likely to occur in the
absence of regulatory assistance.
Federal law (12 U.S.C. (S)55) permits the OCC to order the pro rata
assessment of stockholders of a national bank whose capital stock has become
impaired, by losses or otherwise, to relieve a deficiency in such national
bank's capital stock. This statute also provides for the enforcement of any
such pro rata assessment of stockholders of such national bank to cover such
impairment of capital stock by sale, to the extent necessary, of the capital
stock of any assessed stockholder failing to pay the assessment. Similarly,
the laws of certain states provide for such assessment and sale with respect
to banks chartered by such states. Norwest, as the sole stockholder of most of
its subsidiary banks, is subject to such provisions.
CAPITAL REQUIREMENTS
Under the Federal Reserve Board's risk-based capital guidelines for bank
holding companies, the minimum ratio of total capital to risk-adjusted assets
(including certain off-balance sheet items, such as stand-by letters of
credit) is 8%. At least half of the total capital is to be comprised of common
stock, minority interests, and noncumulative perpetual preferred stock ("Tier
1 capital"). The remainder ("Tier 2 capital") may consist of hybrid capital
instruments, perpetual debt, mandatory convertible debt securities, a limited
amount of subordinated debt, other preferred stock, and a limited amount of
the allowance for credit losses. In addition, the Federal Reserve Board's
minimum "leverage ratio" (the ratio of Tier 1 capital to quarterly average
total assets)
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<PAGE>
guidelines for bank holding companies provide for a minimum leverage ratio of
3% for bank holding companies that meet certain specified criteria, including
that they have the highest regulatory rating. All other bank holding companies
are required to maintain a leverage ratio of 3% plus an additional cushion of
1% to 2%. The guidelines also provide that banking organizations experiencing
internal growth or making acquisitions are expected to maintain strong capital
positions substantially above the minimum supervisory levels, without
significant reliance on intangible assets. Furthermore, the guidelines
indicate that the Federal Reserve Board will continue to consider a "tangible
Tier 1 leverage ratio" in evaluating proposals for expansion or new
activities. The tangible Tier 1 leverage ratio is the ratio of a banking
organization's Tier 1 capital, less all intangibles, to total assets, less all
intangibles. Each of Norwest's banking subsidiaries is also subject to capital
requirements adopted by applicable regulatory agencies which are substantially
similar to the foregoing. At September 30, 1995, Norwest's Tier 1 and total
capital (the sum of Tier 1 and Tier 2 capital) to risk-adjusted assets ratios
were 8.01% and 10.10%, respectively, and Norwest's leverage ratio was 5.74%.
Neither Norwest nor any subsidiary bank has been advised by the appropriate
federal regulatory agency of any specific leverage ratio applicable to it.
AMFED and Bank are subject to capital requirements adopted by the OTS, which
are similar but not identical to those issued by the Federal Reserve Board and
the OCC. Under the OTS' capital guidelines, a savings association is required
to maintain tangible capital of at least 1.5% of tangible assets, core
(leverage) capital of at least 3% of the association's adjusted total assets
and Tier 1 capital of at least 4% and risk-based capital of at least 8% of
risk-weighted assets. At September 30, 1995, AMFED's tangible ratio was 7.34%,
its core (leverage) capital ratio was 7.34%, Tier 1 capital ratio was 12.15%
of risk-weighted assets and its total risk-based capital ratio was 12.52%.
As a result of a federal law enacted in 1991 that required each federal
banking agency to revise its risk-based capital standards to ensure that those
standards take adequate account of interest rate risk, concentration of credit
risk and the risks of nontraditional activities, each of the federal banking
agencies has revised the risk-based capital guidelines described above to take
account of concentration of credit risk and risk of nontraditional activities.
In addition, the Federal Reserve Board, the FDIC and the OCC recently adopted
a new rule that amends, effective September 1, 1995, the capital standards to
include explicitly a bank's exposure to declines in the economic value of its
capital due to changes in interest rates as a factor to be considered in
evaluating a bank's interest rate exposure. Such agencies have issued for
comment a joint policy statement that describes the process to be used to
measure and assess the exposure of a bank's net economic value to changes in
interest rates. These agencies have indicated that in the second step of this
regulation process they intend to issue a proposed rule that would propose to
establish an explicit minimum capital charge for interest rate risk based on
the level of a bank's measured interest rate exposure. The agencies intend to
implement the second step after the agencies and the banking industry have had
more experience with the proposed supervisory and measurement process. None of
Norwest, AMFED or the Bank believes that these recent proposals and revisions
to the capital guidelines will materially impact its operations.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December 1991, Congress enacted the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA"), which substantially revised the bank
regulatory and funding provisions of the Federal Deposit Insurance Act and
makes revisions to several other federal banking statutes. Among other things,
FDICIA requires the federal banking regulators to take "prompt corrective
action" in respect of FDIC-insured depository institutions that do not meet
minimum capital requirements. FDICIA establishes five capital tiers: "well
capitalized," "adequately capitalized," "undercapitalized," "significantly
undercapitalized," and "critically undercapitalized." Under applicable
regulations, an FDIC-insured depository institution is defined to be well
capitalized if it maintains a leverage ratio of at least 5%, a risk-adjusted
Tier 1 capital ratio of at least 6%, and a risk-adjusted total capital ratio
of at least 10%, and is not subject to a directive, order, or written
agreement to meet and maintain specific capital levels. An insured depository
institution is defined to be adequately capitalized if its meets all of its
minimum capital requirements as described above. An insured depository
institution will be
48
<PAGE>
considered undercapitalized if it fails to meet any minimum required measure,
significantly undercapitalized if it has a risk-adjusted total capital ratio
of less than 6%, risk-adjusted Tier 1 capital ratio of less than 3%, or a
leverage ratio of less than 3%, and critically undercapitalized if it fails to
maintain a level of tangible equity equal to at least 2% of total assets. An
insured depository institution may be deemed to be in a capitalization
category that is lower than is indicated by its actual capital position if it
receives an unsatisfactory examination rating.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to a
wide range of limitations on operations and activities, including growth
limitations, and are required to submit a capital restoration plan. The
federal banking agencies may not accept a capital plan without determining,
among other things, that the plan is based on realistic assumptions and is
likely to succeed in restoring the depository institution's capital. In
addition, for a capital restoration plan to be acceptable, the depository
institution's parent holding company must guarantee that the institution will
comply with such capital restoration plan. The aggregate liability of the
parent holding company is limited to the lesser of (i) an amount equal to 5%
of the depository institution's total assets at the time it became
undercapitalized and (ii) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with all capital standards
applicable with respect to such institution as of the time it fails to comply
with the plan. If a depository institution fails to submit an acceptable plan,
it is treated as if it were significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets, and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver or conservator.
FDICIA, as amended by the Reigle Community Development and Regulatory
Improvement Act of 1994 enacted on August 22, 1994, directs that each federal
banking agency prescribe standards, by regulation or guideline, for depository
institutions relating to internal controls, information systems, internal
audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, asset quality, earnings, stock
valuation, and such other operational and managerial standards as the agency
deems appropriate. The FDIC, in consultation with the other federal banking
agencies, has adopted a final rule and guidelines with respect to internal and
external audit procedures and internal controls in order to implement those
provisions of FDICIA intended to facilitate the early identification of
problems in financial management of depository institutions. On July 10, 1995,
the federal banking agencies published the final rules implementing three of
the safety and soundness standards required by FDICIA, including operational
and managerial standards, asset quality and earnings standards, and
compensation standards. The impact of such standards on Norwest has not yet
been fully determined, but management does not believe it will be material.
FDICIA also contains a variety of other provisions that may affect the
operations of Norwest, including new reporting requirements, revised
regulatory standards for real estate lending, "truth in savings" provisions,
and the requirement that a depository institution give 90 days' notice to
customers and regulatory authorities before closing any branch.
Under other regulations promulgated under FDICIA a bank cannot accept
brokered deposits (that is, deposits obtained through a person engaged in the
business of placing deposits with insured depository institutions or with
interest rates significantly higher than prevailing market rates) unless (i)
it is well capitalized or (ii) it is adequately capitalized and receives a
waiver from the FDIC. A bank that cannot receive brokered deposits also cannot
offer "pass-through" insurance on certain employee benefit accounts, unless it
provides certain notices to affected depositors. In addition, a bank that is
adequately capitalized and that has not received a waiver from the FDIC may
not pay an interest rate on any deposits in excess of 75 basis points over
certain prevailing market rates. There are no such restrictions on a bank that
is well capitalized. At September 30, 1995, all of Norwest's banking
subsidiaries were well capitalized and therefore were not subject to these
restrictions.
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<PAGE>
FDIC INSURANCE
Each BIF member institution pays FDIC insurance premiums based on the
institution's annual assessment rate assigned to it by the FDIC. The
assessment rate is based on the institution's capitalization risk category and
"supervisory subgroup." An institution's caplitalization risk category is
based on the FDIC's determination of whether the institution is well
capitalized, adequately capitalized or less than adequately capitalized. An
institution's supervisory subgroup is based on the FDIC's assessment of the
financial condition of the institution and the probability that FDIC
intervention or other corrective action will be required. Subgroup A
institutions are financially sound institutions with few minor weaknesses;
Subgroup B institutions are institutions that demonstrate weaknesses which, if
not corrected, could result in significant deterioration; and Subgroup C
institutions are institutions for which there is a substantial probability
that the FDIC will suffer a loss in connection with the institution unless
effective action is taken to correct the areas of weakness. For the 1995
calendar year, the assessment rate ranges from 4 cents per $100 of domestic
deposits (for well capitalized Subgroup A institutions) to 31 cents (for
undercapitalized Subgroup C institutions). Norwest's subsidiary banks have
been assigned an assessment rate of 4 cents per $100 of domestic deposits for
the 1995 calendar year. The FDIC announced recently that, for well capitalized
Subgroup A institutions, it would eliminate insurance premiums altogether for
the 1996 calendar year. Norwest incurred $79.2 million of FDIC insurance
expense in 1994 and, as of September 30, 1995, had received $20.6 million in
FDIC insurance premium refunds.
Deposits insured by SAIF held by Norwest bank subsidiaries as a result of
previous savings association acquisitions by Norwest continue to be assessed
at the applicable SAIF insurance premium rate. Current federal law provides
that the SAIF assessment rate may not be less than 0.18% from January 1, 1994
through December 31, 1997. After December 31, 1997, the SAIF assessment rate
must be a rate determined by the FDIC to be appropriate to increase the SAIF's
reserve ratio to 1.25% of insured deposits or such higher percentage as the
FDIC determines to be appropriate, but the assessment rate may not be less
than 0.15%. In order to mitigate the potential effects of a BIF/SAIF premium
disparity, Congress recently proposed legislation that would, among other
things, recapitalize the SAIF by imposing a special one-time assessment on
SAIF deposits. The proposed legislation also contemplates the merger of the
BIF and the SAIF into one insurance fund after the SAIF is recapitalized. As a
result of such pending legislation and to provide for such special assessment
when and if imposed, Norwest has established a reserve of $23.5 million based
on an estimated insurance premium rate of 66 cents per $100 of insured
deposits, which reserve has been funded primarily by the refund of BIF
insurance premiums. The effect of this legislation, if adopted, is not
anticipated to be material to Norwest.
DIVIDEND REINVESTMENT AND OPTIONAL CASH PAYMENT PLAN
Norwest currently has an automatic Dividend Reinvestment and Optional Cash
Payment Plan which provides in substance, for those stockholders who elect to
participate, that dividends on Norwest Common Stock will be reinvested in
shares of Norwest Common Stock at market price (as defined in the plan). The
plan also permits participants to invest through voluntary cash payments,
within certain dollar limitations, in additional shares of Norwest Common
Stock at the market price (as defined in the plan) of such stock at the time
of purchase. It is anticipated that after the Effective Time of the Merger,
Norwest will continue to offer its Dividend Reinvestment and Optional Cash
Payment Plan and that stockholders of AMFED who receive Norwest Common Stock
in the Merger will have the right to participate therein.
EXPERTS
The consolidated financial statements of Norwest and subsidiaries as of
December 31, 1994 and 1993, and for each of the years in the three-year period
ended December 31, 1994, incorporated by reference herein, have been
incorporated herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
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The consolidated financial statements of AMFED as of December 31, 1994 and
1993, and for each of the years in the three-year period ended December 31,
1994, incorporated by reference in the Proxy Statement of AMFED, which is
referred to and made a part of this Registration Statement, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report
(which report expresses an unqualified opinion and includes an explanatory
paragraph referring to the adoption of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," effective January 1, 1993)
which is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
LEGAL OPINIONS
A legal opinion to the effect that the shares of Norwest Common Stock
offered hereby, when issued in accordance with the Merger Agreement, will be
validly issued and fully paid and nonassessable, has been rendered by Stanley
S. Stroup, Executive Vice President and General Counsel of Norwest
Corporation. At September 30, 1995, Mr. Stroup was the beneficial owner of
108,053 shares and held options to acquire 247,410 additional shares of
Norwest Common Stock.
Certain legal matters in connection with the Merger will be passed upon for
AMFED by Breyer & Aguggia, 1300 I Street, N.W., Suite 470 East, Washington,
D.C. 20005.
MANAGEMENT OF NORWEST AND ADDITIONAL INFORMATION
Certain information relating to the executive compensation, voting
securities and the principal holders thereof, certain relationships and
related transactions, and other related matters concerning Norwest is included
or incorporated by reference in its Annual Report on Form 10-K for the year
ended December 31, 1994, which are incorporated in this Proxy Statement-
Prospectus by reference. Certain information regarding voting securities of
AMFED and the principal holders thereof is incorporated by reference to
AMFED's Annual Report on Form 10-K for the year ended December 31, 1994 (which
incorporates portions of AMFED's Proxy Statement dated March 24, 1995). See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." Stockholders of AMFED
desiring copies of such documents may contact Norwest or AMFED, as
appropriate, at the addresses or phone numbers indicated under "AVAILABLE
INFORMATION" above.
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APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
AND
AGREEMENT AND PLAN OF MERGER
<PAGE>
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 + .5D by (B) the Norwest Measurement Price,
where D 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");
A-1
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(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
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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
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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.
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(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
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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
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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
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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
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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;
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(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 (S)78.378 to (S)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. (S)55 (1982), all of such
shares so owned by Norwest are fully paid and nonassessable and are owned by
it free and clear of any lien, claim, charge, option, encumbrance or agreement
with respect thereto. Each Norwest Subsidiary is a corporation or national
banking association duly organized, validly existing, duly qualified to do
business and in good standing under the laws of its jurisdiction of
incorporation, and has corporate power and authority to own or lease its
properties and assets and to carry on its business as it is now being
conducted.
(c) Norwest Capitalization. The authorized capital stock of Norwest consists
of (i) 5,000,000 shares of Preferred Stock, without par value, of which as of
the close of business on 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
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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
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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.
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(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.
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(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
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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.
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(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
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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
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<PAGE>
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 practicable, 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").
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<PAGE>
(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 (S)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
A-19
<PAGE>
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
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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
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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
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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.
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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.
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<PAGE>
(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
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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 to the 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.
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<PAGE>
(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 willful
and material breach of the warranties and representations made by it, or
willful 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.
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<PAGE>
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 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.
/s/ Les Biller /s/ E. R. Houston
By: _________________________________ By: _________________________________
Executive Vice President Chief Executive Officer
Its: ________________________________ Its: ________________________________
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<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BETWEEN
AMFED FINANCIAL, INC.
A NEVADA CORPORATION
(THE SURVIVING CORPORATION)
AND
AF MERGER CO.
A NEVADA CORPORATION
(THE MERGED CORPORATION)
This Agreement and Plan of Merger dated as of , 19 , between
AMFED FINANCIAL, INC., a Nevada corporation (hereinafter sometimes called
"AMFED" and sometimes called the "surviving corporation") and AF MERGER CO., a
Nevada corporation ("Merger Co.") (said corporations being hereinafter
sometimes referred to as the "constituent corporations"),
Whereas, Merger Co., a wholly-owned subsidiary of Norwest Corporation, was
incorporated by Articles of Incorporation filed in the office of the Secretary
of State of the State of Nevada on , 19 , and said corporation is now
a corporation subject to and governed by the provisions of the Nevada Business
Corporation Act . Merger Co. has authorized capital stock of 1,000 shares of
common stock having a par value of $1.00 per share ("Merger Co. Common
Stock"), of which 1,000 shares were outstanding as of the date hereof; and
Whereas, AMFED was incorporated by Articles of Incorporation filed in the
office of the Secretary of State of the State of Nevada on October 8, 1992 and
said corporation is now a corporation subject to and governed by the
provisions of the Nevada Business Corporation Act. AMFED has authorized
capital stock of 66,000,000 consisting of an authorized 60,000,000 shares of
Common Stock, $.01 par value ("AMFED Common Stock"), of which 5,888,430 shares
were outstanding and shares were held in the treasury as of ,
and 6,000,000 shares of Preferred Stock, no par value per share of which no
shares were outstanding and no shares were held in the treasury as of
; and
Whereas, Norwest Corporation and AMFED are parties to an Agreement and Plan
of Reorganization dated as of July , 1995 (the "Reorganization Agreement"),
setting forth certain representations, warranties and covenants in connection
with the merger provided for herein; and
Whereas, the directors, or a majority of them, of each of the constituent
corporations respectively deem it advisable for the welfare and advantage of
said corporations and for the best interests of the respective shareholders of
said corporations that said corporations merge and that Merger Co. be merged
with and into AMFED, with AMFED continuing as the surviving corporation, on
the terms and conditions hereinafter set forth in accordance with the
provisions of the Nevada Business Corporation Act, which statute permits such
merger; and
Whereas, it is the intent of the parties to effect a merger which qualifies
as a tax-free reorganization pursuant to Sections 368(a)(1)(A) of the Internal
Revenue Code, as amended, by virtue of the provisions of Section 368(a)(2)(E)
of the Code and that as a condition to the obligations of the parties
hereunder that the Merger be treated as a "pooling" for accounting purposes;
Now, Therefore, the parties hereto, subject to the approval of the
shareholders of Merger Co., in consideration of the premises and of the mutual
covenants and agreements contained herein and of the benefits to accrue to the
parties hereto, have agreed and do hereby agree that Merger Co. shall be
merged with and into AMFED pursuant to the laws of the State of Delaware, and
do hereby agree upon, prescribe and set forth the terms and conditions of the
merger of Merger Co. with and into AMFED, the mode of carrying said merger
into effect, the manner and basis of converting the shares of AMFED Common
Stock and Preferred Stock and
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<PAGE>
unexercised options of AMFED convertible into AMFED Common Stock ("Options")
into shares of common stock of Norwest of the par value of $1 2/3 per share
("Norwest Common Stock"), and such other provisions with respect to said
merger as are deemed necessary or desirable, as follows:
First: At the time of merger Merger Co. shall be merged with and into AMFED,
one of the constituent corporations, which shall be the surviving corporation,
and the separate existence of Merger Co. shall cease and the name of the
surviving corporation shall be AMFED Financial, Inc.
Second: The Articles of Incorporation of AMFED at the time of merger shall
be amended as set forth below and, as so amended, shall be the Articles of
Incorporation of the surviving corporation until further amended according to
law:
[Amend to change name, number of directors, etc.]
Third: The By-Laws of AMFED at the time of merger shall be and remain the
By-Laws of the surviving corporation until amended according to the provisions
of the Articles of Incorporation of the surviving corporation or of said By-
Laws.
Fourth: The following persons at the time of merger shall be and remain the
directors of the surviving corporation and shall hold office from the time of
merger until their respective successors are elected and qualify:
[List Names]
Fifth: The following persons at the time of merger shall be and remain the
officers of the surviving corporation and shall hold office from the time of
merger until their respective successors are elected or appointed and qualify:
[List Names]
Sixth: The manner and basis of converting the shares of AMFED Common Stock
and Options into cash or shares of Norwest Common Stock shall be as follows:
1. (a) 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");
(b) 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");
(c) 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 nonassessable shares of Norwest Common Stock determined
by dividing (A) the sum of 32 + .5D by (B) the Norwest Measurement Price,
where D equals the amount of increase of the Norwest Measurement Price in
excess of $30.00 ("C Exchange Ratio");
(d) 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'
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<PAGE>
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) ("D Exchange Ratio");
(e) In the event that Norwest, in its sole discretion, makes the election
pursuant to paragraph 9(a)(iv) of the Reorganization Agreement, 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) of the Reorganization Agreement) (the "E
Exchange Ratio");
(f) The shares of AMFED Common Stock subject to each unexercised Option
(as defined in paragraph 4(p) of the Reorganization 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 Norwest,
in its sole discretion, makes the election pursuant to paragraph (a)(iv) of
the Reorganization Agreement, the E Exchange Ratio, as applicable over (2)
the aggregate exercise price of the Option Shares by (B) the Termination
Measurement Price;
(g) 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
(h) 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 transactions
contemplated by the Reorganization Agreement.
2. As soon as practicable after the merger becomes effective, each holder
of a certificate for shares of AMFED Common Stock outstanding immediately
prior to the time of merger and of Options unexercised prior to the time of
merger, the holder of which shall have entered into the Agreement referred
to in 1(c) above, shall be entitled, upon surrender of such certificate or
instrument representing Options for cancellation to the surviving
corporation or to Norwest Bank Minnesota, National Association, as the
designated agent of the surviving corporation (the "Agent"), to receive a
new certificate for the number of whole shares of Norwest Common Stock to
which such holder shall be entitled on the basis set forth in paragraph 1
above. Until so surrendered each certificate which, immediately prior to
the time of merger, represented shares of AMFED Common Stock or instrument
representing an Option shall not be transferable on the books of the
surviving corporation but shall be deemed to evidence the right to receive
(except for the payment of dividends as provided below) ownership of the
number of whole shares of Norwest Common Stock into which such shares of
AMFED Common Stock or Options have been converted on the basis above set
forth; provided, however, until the holder of such certificate for AMFED
Common Stock or instrument representing Options shall have surrendered the
same for exchange as above set forth, no dividend payable to holders of
record of Norwest Common Stock as of any date subsequent to the effective
date of merger shall be paid to such holder with respect to the Norwest
Common Stock, if any, represented by such certificate, but, upon surrender
and exchange thereof as herein provided, there shall be paid by the
surviving corporation or the Agent to the record holder of such certificate
for Norwest Common Stock issued in exchange therefor an amount with respect
to such shares of Norwest Common Stock equal to all dividends that shall
have been paid or become payable to holders of record of Norwest Common
Stock between the effective date of merger and the date of such exchange.
3. If between the date of the Reorganization Agreement and the time of
merger, shares of Norwest Common Stock shall be changed into a different
number of shares or a different class of shares by reason
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<PAGE>
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, if any, into which a
share of AMFED Common Stock or an Option shall be converted on the basis
above set forth, will be appropriately and proportionately adjusted so that
the number of such shares of Norwest Common Stock into which a share of
AMFED Common Stock or Options shall be converted will equal the number of
shares of Norwest Common Stock which the holders of a share of AMFED Common
Stock or Options would have received pursuant to such Common Stock
Adjustment had the record date therefor been immediately following the time
of merger and (ii) if a Norwest Common Stock Adjustment occurs between the
date of the Reorganization Agreement and any date that the closing price of
a share of Norwest Common Stock is used for purposes of the Reorganization
Agreement or this 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 other 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.
4. No fractional shares of Norwest Common Stock and no certificates or
scrip certificates therefor shall be issued to represent any such
fractional interest, and any holder of a fractional interest shall be paid
an amount of cash equal to the product obtained by multiplying the
fractional share interest to which such holder is entitled by the
Termination Measurement Price.
5. Each share of Merger Co. Common Stock issued and outstanding at the
time of merger shall be converted into and exchanged for shares of the
surviving corporation after the time of merger.
6. At the Effective Date the stock transfer agent books of AMFED shall be
closed and no transfer of shares of AMFED Common Stock or Options shall be
made thereafter. In the event that after the Effective Date, certificates
or Options are presented to AMFED they shall be canceled and exchanged for
Norwest Common Stock.
Seventh: The merger provided for by this Agreement shall be effective as
follows:
1. The effective date of merger shall be the date on which Articles of
Merger (as described in subparagraph 1(b) of this Article Seventh) shall be
delivered to and filed by the Secretary of State of the State of Nevada;
provided, however, that all of the following actions shall have been taken in
the following order:
a. This Agreement shall be approved and adopted on behalf of Merger Co.
and AMFED in accordance with the Nevada Business Corporation Act; and
b. Articles of merger (with this Agreement attached as part thereof) with
respect to the merger, setting forth the information required by the Nevada
Business Corporation Act, shall be executed by the President or a Vice
President of Merger Co. and by the Secretary or an Assistant Secretary of
Merger Co., and by the President or a Vice President of AMFED and by the
Secretary or an Assistant Secretary of AMFED, and shall be filed in the
office of the Secretary of State of the State of Nevada in accordance with
the Nevada Business Corporation Act.
2. The merger shall become effective as of 11:59 p.m., Minneapolis,
Minnesota time (the "time of merger") on the effective date of merger.
Eighth: At the time of merger:
1. The separate existence of Merger Co. shall cease, and the corporate
existence and identity of AMFED shall continue as the surviving corporation.
2. The merger shall have the other effects prescribed by Section of
the Nevada Business Corporation Act.
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<PAGE>
Ninth: The following provisions shall apply with respect to the merger
provided for by this Agreement:
1. The surviving corporation shall (i) file with the Secretary of State of
the State of Nevada an agreement that it may be served with process within or
without the State of Nevada in the courts of the State of Nevada in any
proceeding for the enforcement of any obligation of Merger Co. and in any
proceeding for the enforcement of the rights of a dissenting shareholder of
Merger Co. against AMFED, and (ii) file with said Secretary of State an
agreement that it will promptly pay to the dissenting shareholders of Merger
Co. the amount, if any, to which such dissenting shareholders will be entitled
under the provisions of the Nevada Business Corporation Act with respect to
the rights of dissenting shareholders.
2. The registered office of the surviving corporation in the State of Nevada
shall be , and the name of the registered agent of AMFED at
such address is The Corporation Trust Company.
3. If at any time the surviving corporation shall consider or be advised
that any further assignment or assurance in law or other action is necessary
or desirable to vest, perfect or confirm in the surviving corporation the
title to any property or rights of Merger Co. acquired or to be acquired as a
result of the merger provided for herein, the proper officers and directors of
AMFED and Merger Co. may execute and deliver such deeds, assignments and
assurances in law and take such other action as may be necessary or proper to
vest, perfect or confirm title to such property or right in the surviving
corporation and otherwise carry out the purposes of this Agreement.
4. For the convenience of the parties and to facilitate the filing of this
Agreement, any number of counterparts hereof may be executed and each such
counterpart shall be deemed to be an original instrument.
5. This Agreement and the legal relations among the parties hereto shall be
governed by and construed in accordance with the laws of the State of Nevada.
6. This Agreement cannot be altered or amended except pursuant to an
instrument in writing signed by both of the parties hereto.
7. At any time prior to the filing of Articles of Merger with the Secretary
of State of the State of Nevada, subject to the provisions of the
Reorganization Agreement this Agreement may be terminated upon approval by the
Boards of Directors of either of the constituent corporations notwithstanding
the approval of the shareholders of either constituent corporation.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement and Plan of
Merger to be signed in their respective corporate names by the undersigned
officers and their respective corporate seals to be affixed hereto, pursuant
to authority duly given by their respective Boards of Directors, all as of the
day and year first above written.
AMFED Financial, Inc.
By: _________________________________
Its: ________________________________
(Corporate Seal)
Attest:
_____________________________________
Secretary
AF Merger Co.
By: _________________________________
Its: ________________________________
(Corporate Seal)
Attest:
_____________________________________
Secretary
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<PAGE>
EXHIBIT B
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
Attn: Secretary
Gentlemen:
I have been advised that I might be considered to be an "affiliate," as that
term is defined for purposes of paragraphs (c) and (d) of Rule 145 ("Rule
145") promulgated by the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act") of AMFED
Financial, Inc., a Nevada corporation ("AMFED").
Pursuant to an Agreement and Plan of Reorganization, dated as of ,
1995, (the "Reorganization Agreement"), between AMFED and Norwest Corporation,
a Delaware corporation ("Norwest") it is contemplated that a wholly-owned
subsidiary of Norwest will merge with and into AMFED (the "Merger") and as a
result, I will receive in exchange for each share of Common Stock, par value
$.01 per share, of AMFED ("AMFED Common Stock") owned by me immediately prior
to the Effective Time of the Merger (as defined in the Reorganization
Agreement), a number of shares of Common Stock, par value $1 2/3 per share, of
Norwest ("Norwest Common Stock"), as more specifically set forth in the
Reorganization Agreement.
I hereby agree as follows:
I will not offer to sell, transfer or otherwise dispose of any of the shares
of AMFED Common Stock or Norwest Common Stock held by me during the 30 days
prior to the Effective Time of the Merger.
I will not offer to sell, transfer or otherwise dispose of any of the shares
of Norwest Common Stock issued to me pursuant to the Merger (the "Stock")
except (a) in compliance with the applicable provisions of Rule 145, (b) in a
transaction that is otherwise exempt from the registration requirements of the
Securities Act, or (c) in an offering registered under the Securities Act.
I will not sell, transfer or otherwise dispose of the Stock or in any way
reduce my risk relative to any shares of the Stock issued to me pursuant to
the Merger until such time as financial results covering at least 30 days of
post-Merger combined operations of AMFED and Norwest have been published.
I consent to the endorsement of the Stock issued to me pursuant to the
Merger with a restrictive legend which will read substantially as follows:
"The shares represented by this certificate were issued in a transaction
to which Rule 145 promulgated under the Securities Act of 1933, as amended
(the "Act"), applies, and may be sold or otherwise transferred only in
compliance with the limitations of such Rule 145, or upon receipt by
Norwest Corporation of an opinion of counsel reasonably satisfactory to it
that some other exemption from registration under the Act is available, or
pursuant to a registration statement under the Act."
Norwest's transfer agent shall be given an appropriate stop transfer order
and shall not be required to register any attempted transfer of the shares of
the Stock, unless the transfer has been effected in compliance with the terms
of this letter agreement.
It is understood and agreed that this letter agreement shall terminate and
be of no further force and effect and the restrictive legend set forth above
shall be removed by delivery of substitute certificates without such legend,
and the related stop transfer restrictions shall be lifted forthwith, if (a)
(i) any such shares of Stock shall
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<PAGE>
have been registered under the Securities Act for sale, transfer or other
disposition by me or on my behalf and are sold, transferred or otherwise
disposed of, or (ii) any such shares of Stock are sold in accordance with the
provisions of paragraphs (c), (e), (f) and (g) of Rule 144 promulgated under
the Securities Act, or (iii) I am not at the time an affiliate of Norwest and
have been the beneficial owner of the Stock for at least two years (or such
other period as may be prescribed thereunder) and Norwest has filed with the
Commission all of the reports it is required to file under the Securities
Exchange Act of 1934, as amended, during the preceding twelve months, or (iv)
I am not and have not been for at least three months an affiliate of Norwest
and have been the beneficial owner of the Stock for at least three years (or
such other period as may be prescribed by the Securities Act, and the rules
and regulations promulgated thereunder), or (v) Norwest shall have received an
opinion of counsel acceptable to Norwest to the effect that the stock transfer
restrictions and the legend are not required, and (b) financial results
covering at least 30 days of post-Merger combined operations have been
published.
I have carefully read this letter agreement and the Reorganization Agreement
and have discussed their requirements and other applicable limitations upon my
ability to offer to sell, transfer or otherwise dispose of shares of the
Stock, to the extent I felt necessary, with my counsel or counsel for AMFED.
Sincerely,
_____________________________________
A-35
<PAGE>
APPENDIX B
STOCK OPTION AGREEMENT
<PAGE>
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
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<PAGE>
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
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<PAGE>
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,
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<PAGE>
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. (S) 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
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<PAGE>
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
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<PAGE>
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
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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 exercisable 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
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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
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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.
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<PAGE>
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
/s/ Les Biller
By: _________________________________
Name: Les Biller
Title: Executive Vice President
AMFED Financial, Inc.
/s/ E.R. Houston
By: _________________________________
Name: E.R. Houston
Title: Chief Executive Officer
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APPENDIX C
OPINION OF MERRILL LYNCH & CO.
<PAGE>
July 21, 1995
AMFED Financial, Inc.
2330 S. Virginia Street
Reno, Nevada 89502
Members of the Board:
AMFED Financial, Inc. ("AMFED") and Norwest Corporation ("Norwest") propose
to enter into an agreement dated July 21, 1995 (the "Agreement") pursuant to
which AMFED will be merged with a wholly owned subsidiary of Norwest in a
transaction (the "Merger") in which each outstanding share of AMFED's common
stock, par value $0.01 per share (the "AMFED Shares"), will be converted into
the right to receive a number of shares of (the "Exchange Ratio") of the
common stock, par value $1 2/3 per share, of Norwest (the "Norwest Shares").
The terms and conditions of the Merger are more fully set forth in the
Agreement. In connection with the Merger, the parties also propose to enter
into an agreement (the "Option Agreement") pursuant to which AMFED will grant
an option to acquire approximately 19.9% of AMFED's common share outstanding
at a price of $26.00 per share. The terms and conditions of the Merger are
more fully set forth in the Agreement and the Option Agreement.
You have asked us whether, in our opinion, the proposed Exchange Ratio in
the Merger is fair to the holders of AMFED Shares (other than Norwest) from a
financial point of view.
In arriving at the opinion set forth below, we have, among other things:
(1) Reviewed AMFED's Annual Reports, Forms 10-K and related financial
information for the three fiscal years ended December 31, 1994 and AMFED's
Quarterly Report on Form 10-Q and the related unaudited financial
information for the quarterly period ending March 31, 1995;
(2) Reviewed Norwest's Annual Reports, Forms 10-K and related financial
information for the three fiscal years ended December 31, 1994 and
Norwest's Quarterly Report on Forms 10-Q and the related unaudited
financial information for the quarterly period ending March 31, 1995;
(3) Reviewed certain information, including financial forecasts and
assumptions regarding incremental income resulting from the Merger,
relating to the business, earnings, assets and prospects of AMFED and
Norwest, furnished to us by the senior management of AMFED and Norwest;
(4) Conducted discussions with members of senior management of AMFED and
Norwest concerning their respective financial condition, businesses,
earnings, assets and prospects and such management's view as to the future
financial performance of AMFED and Norwest, as the case may be;
(5) Reviewed the historical market prices and trading activity for the
AMFED Shares and Norwest Shares and compared them, respectively, with that
of certain publicly traded companies which we deemed to be relevant;
(6) Compared the respective results of operations of AMFED and Norwest
with those of certain companies which we deemed to be relevant;
(7) Compared the proposed financial terms of the Merger contemplated by
the Agreement with the financial terms of certain other mergers and
acquisitions which we deemed to be relevant;
(8) Analyzed, based upon the information provided by AMFED's and
Norwest's senior management, the pro forma impact of the transaction on the
earnings and book value per share, consolidated capitalization and certain
balance sheet and profitability ratios of Norwest;
(9) Participated in discussions and negotiations among representatives of
AMFED and Norwest;
(10) Reviewed a draft of the Agreement dated July 19, 1995;
(11) Reviewed a draft of the Option Agreement dated July 19, 1995; and
(12) Reviewed such other financial studies and analyses and performed
such other investigations and took into account such other matters as we
deemed necessary.
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In preparing our opinion, we have assumed and relied upon the accuracy and
completeness of all financial and other information supplied or otherwise made
available to us for purposes of this opinion, and we have not independently
verified such information or undertaken an independent evaluation or appraisal
of the assets or liabilities of AMFED or Norwest nor have we been furnished
any such evaluation or appraisal. We are not experts in the evaluation of
allowance for loan losses, and we have not made an independent evaluation of
the adequacy of the allowances for loan losses of AMFED or Norwest nor have we
reviewed any individual credit files, and we have assumed that the aggregate
allowance for loan losses are adequate to cover such losses and will be
adequate on a pro forma basis for the combined entity. We have assumed and
relied upon the senior management of AMFED referred to above as to the
reasonableness and achievability of the financial and operating forecasts
furnished by AMFED (and the assumptions and bases therefore). In that regard,
we have assumed with your consent that such information, including, without
limitation, financial forecasts, projected incremental income and adequacy of
reserves, reflect the best currently available estimates and judgment of the
senior management of AMFED and Norwest as to the expected future financial
performance of AMFED, Norwest or the combined entity as the case may be. Our
opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to us as of, the date hereof.
Our opinion has been rendered without regard to the necessity for, or level
of, any restrictions, obligations, undertakings or divestitures which may be
imposed or required in the course of obtaining regulatory approvals for the
Merger.
We have been retained by the Board of Directors of AMFED as an independent
contractor to act as financial advisor to AMFED with respect to the Merger and
will receive a fee for our services. We have within the past three years
provided financial advisory, investment banking and other services to AMFED
and Norwest and received customary fees for the rendering of such services. In
addition, in the ordinary course of our securities business, we may actively
trade debt and/or equity securities of AMFED or Norwest and their respective
affiliates for our own account and the accounts of our customers, and we
therefore may from time to time hold a long or short position in such
securities. Our Opinion is directed to the Board of Directors of AMFED and may
not be relied upon by any other person, nor does it constitute a
recommendation to any shareholder of AMFED as to how such a shareholder should
vote at any shareholder meeting of AMFED held in connection with the merger.
On the basis of, and subject to the foregoing, we are of the opinion that
the Exchange Ratio is fair to the holders of AMFED Shares (other than Norwest)
from a financial point of view.
Very truly yours,
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated
By: _________________________________
Director--Merrill Lynch & Co.
Investment Banking Group
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
-----------------------------------------
Section 145 of the Delaware General Corporation Law authorizes indemnification
of directors and officers of a Delaware corporation under certain circumstances
against expenses, judgments, and the like in connection with an action, suit, or
proceeding. Article Fourteenth of Norwest's Certificate of Incorporation
provides for broad indemnification of directors and officers.
Item 21. Exhibits and Financial Statement Schedules
------------------------------------------
Exhibits: Parenthetical references to exhibits in the description of Exhibits
- --------- 3.1, 3.1.1, 3.1.2, 3.1.3, and 3.2 below are incorporated by reference
from such exhibits to the indicated reports of Norwest filed with the
Securities and Exchange Commission under File No. 1-2979.
2.1 -- Agreement and Plan of Reorganization, dated as of July 21, 1995,
between AMFED Financial, Inc. and Norwest Corporation (included in
Proxy Statement-Prospectus as Appendix A).
2.2 -- Form of Agreement and Plan of Merger between AMFED Financial, Inc.
and Merger Co. (included in Proxy Statement-Prospectus as part of
Appendix A).
3.1 -- Restated Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3(b) to Norwest's Current Report on Form 8-K
dated June 28, 1993 and Exhibit 3 to Norwest's Current Report on Form
8-K dated July 3, 1995).
3.1.1 -- Certificate of Designations of Powers, Preferences, and Rights of
Norwest ESOP Cumulative Convertible Preferred Stock (incorporated by
reference to Exhibit 4 to Norwest's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994).
3.1.2 -- Certificate of Designations of Powers, Preferences, and Rights of
Norwest Cumulative Tracking Preferred Stock (incorporated by
reference to Exhibit 3 to Norwest's Current Report on Form 8-K dated
January 9, 1995).
3.1.3 -- Certificate of Designations of Powers, Preferences, and Rights of
Norwest 1995 ESOP Cumulative Convertible Preferred Stock
(incorporated by reference to Exhibit 4 to Norwest's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1995).
3.1.4 -- Certificate eliminating the Certificate of Designations with respect
to the Cumulative Convertible Preferred Stock, Series B (incorporated
by reference to Exhibit 3(a) to Norwest's Current Report on Form 8-K
dated November 1, 1995).
3.2 -- By-Laws, as amended (incorporated by reference to Exhibit 4(c) to
Norwest's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1991).
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<PAGE>
4 -- Rights Agreement, dated as of November 22, 1988, between Norwest
Corporation and Citibank, N.A. (incorporated by reference to Exhibit
1 to Norwest's Form 8-A dated December 6, 1988).
4.1 -- Certificate of Adjustment, dated July 21, 1989, to Rights Agreement
(incorporated by reference to Exhibit 3 to Norwest's Form 8 dated
July 21, 1989).
4.2 -- Certificate of Adjustment, dated June 28, 1993, to Rights Agreement
(incorporated by reference to Exhibit 4 to Norwest's Form 8-A/A dated
June 29, 1993).
5 -- Opinion of Stanley S. Stroup, counsel to Norwest.
8 -- Form of Opinion of Breyer & Aguggia.
23.1 -- Consent of Stanley S. Stroup (included as part of Exhibit 5 filed
herewith).
23.2 -- Consent of Breyer & Aguggia.
23.3 -- Consent of KPMG Peat Marwick LLP.
23.4 -- Consent of Deloitte & Touche LLP.
24 -- Powers of Attorney.
99 -- Form of proxy for Special Meeting of Shareholders of AMFED Financial,
Inc.
Item 22. Undertakings
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
posteffective amendment to this registration statement (i) to include
any prospectus required by section 10(a)(3) of the Securities Act of
1933, (ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent posteffective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement, and (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a posteffective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
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<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(d) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(f) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(g) The undersigned registrant hereby undertakes to supply by means of a
posteffective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis, State of
Minnesota, on the 22nd day of November, 1995.
NORWEST CORPORATION
By: /s/ Richard M. Kovacevich
-------------------------
Richard M. Kovacevich
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed on the 22nd day of November, 1995, by the following
persons in the capacities indicated:
/s/ Richard M. Kovacevich President and Chief Executive Officer
- ------------------------------- (Principal Executive Officer)
Richard M. Kovacevich
/s/ John T. Thornton Executive Vice President and Chief
- ------------------------------- Financial Officer
John T. Thornton (Principal Financial Officer)
/s/ Michael A. Graf Senior Vice President and Controller
- ------------------------------- (Principal Accounting Officer)
Michael A. Graf
DAVID A. CHRISTENSEN )
GERALD J. FORD )
PIERSON M. GRIEVE )
CHARLES M. HARPER )
WILLIAM A. HODDER )
LLOYD P. JOHNSON ) A majority of the
REATHA CLARK KING ) Board of Directors*
RICHARD M. KOVACEVICH )
RICHARD S. LEVITT )
RICHARD D. McCORMICK )
CYNTHIA H. MILLIGAN )
IAN M. ROLLAND )
STEPHEN E. WATSON )
MICHAEL W. WRIGHT )
- ---------
*Richard M. Kovacevich, by signing his name hereto, does hereby sign this
document on behalf of each of the directors named above pursuant to powers of
attorney duly executed by such persons.
/s/ Richard M. Kovacevich
-------------------------
Richard M. Kovacevich
Attorney-in-Fact
II-4
<PAGE>
INDEX TO EXHIBITS
Exhibit Form of
Number Description* Filing
- ------- ------------ ------------
2.1 Agreement and Plan of Reorganization, dated as of July
21, 1995, between AMFED Financial, Inc. (included in
Proxy Statement-Prospectus as Appendix A).
2.2 Form of Agreement and Plan of Merger between AMFED
Financial, Inc. and Merger Co. (included in Proxy
Statement-Prospectus as part of Appendix A).
3.1 Restated Certificate of Incorporation, as amended
(incorporated by reference to Exhibit 3(b) to Norwest's
Current Report on Form 8-K dated June 28, 1993 and
Exhibit 3 to Norwest's Current Report on Form 8-K dated
July 3, 1995).
3.1.1 Certificate of Designations of Powers, Preferences, and
Rights of Norwest ESOP Cumulative Convertible Preferred
Stock (incorporated by reference to Exhibit 4 to
Norwest's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1994).
3.1.2 Certificate of Designations of Powers, Preferences, and
Rights of Norwest Cumulative Tracking Preferred Stock
(incorporated by reference to Exhibit 3 to Norwest's
Current Report on Form 8-K dated January 9, 1995).
3.1.3 Certificate of Designations of Powers, Preferences, and
Rights of Norwest 1995 ESOP Cumulative Convertible
Preferred Stock (incorporated by reference to Exhibit 4
to Norwest's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1995).
3.1.4 Certificate eliminating the Certificate of Designations
with respect to the Cumulative Convertible Preferred
Stock, Series B (incorporated by reference to Exhibit
3(a) to Norwest's Current Report on Form 8-K dated
November 1, 1995).
3.2 By-Laws, as amended (incorporated by reference to Exhibit
4(c) to Norwest's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1991).
4 Rights Agreement, dated as of November 22, 1988, between
Norwest Corporation and Citibank, N.A. (incorporated by
reference to Exhibit 1 to Norwest's Form 8-A dated
December 6, 1988).
<PAGE>
Exhibit Form of
Number Description* Filing
- ------- ------------ ------------
4.1 Certificate of Adjustment, dated July 21, 1989, to Rights
Agreement (incorporated by reference to Exhibit 3 to
Norwest's Form 8 dated July 21, 1989).
4.2 Certificate of Adjustment, dated June 28, 1993, to Rights
Agreement (incorporated by reference to Exhibit 4 to
Norwest's Form 8-A/A dated June 29, 1993).
5 Opinion of Stanley S. Stroup, counsel to Norwest. Electronic
Transmission
8 Form of Opinion of Breyer & Aguggia Electronic
Transmission
23.1 Consent of Stanley S. Stroup (included as part of Exhibit
5 filed herewith).
23.2 Consent of Breyer & Aguggia. Electronic
Transmission
23.3 Consent of KPMG Peat Marwick LLP. Electronic
Transmission
23.4 Consent of Deloitte & Touche LLP. Electronic
Transmission
24 Powers of Attorney. Electronic
Transmission
99 Form of proxy for Special Meeting of Shareholders of Electronic
AMFED Financial, Inc. Transmission
________________________
* Parenthetical references to exhibits in the description of Exhibits 3.1,
3.1.1, 3.1.2, 3.1.3, 3.1.4 and 3.2 are incorporated by reference from such
exhibits to the indicated reports of Norwest filed with the SEC under File
No. 1-2979.
<PAGE>
EXHIBIT 5
[LETTERHEAD OF STANLEY S. STROUP]
November 22, 1995
Board of Directors
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1000
Ladies and Gentlemen:
In connection with the proposed registration under the Securities Act of
1933, as amended, of up to 7,800,000 shares of the common stock (the "Shares"),
par value $1 2/3 per share, of Norwest Corporation (the "Corporation"), a
Delaware corporation, which are proposed to be issued by the Corporation in
connection with the merger (the "Merger") of a wholly owned subsidiary of the
Corporation with AMFED Financial, Inc., a Nevada corporation, I have examined
such corporate records and other documents, including the Registration Statement
on Form S-4 relating to the Shares, and have reviewed such matters of law as I
have deemed necessary for this opinion, and I advise you that in my opinion:
1. The Corporation is a corporation duly organized and existing under the
laws of the State of Delaware.
2. All necessary corporate action on the part of the Corporation has been
taken to authorize the issuance of the Shares in connection with the Merger,
and, when issued as described in the Registration Statement, the Shares will be
legally and validly issued, fully paid, and nonassessable.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Stanley S. Stroup
<PAGE>
EXHIBIT 8
FORM OF FEDERAL TAX OPINION
___________________, 1996
Board of Directors
AMFED Financial, Inc.
2330 South Virginia Street
Reno, Nevada 89502
Gentlemen:
You have requested our opinions as to the federal income tax
consequences of the proposed merger (the "Merger") of a wholly-owned subsidiary
("Merger Co.") of Norwest Corporation ("Norwest") with and into AMFED Financial,
Inc. ("AMFED") pursuant to the Agreement and Plan of Reorganization dated July
21, 1995 by and among Norwest and AMFED (the "Merger Agreement").
In issuing the opinions set forth in this letter, we have relied upon
(1) factual representations made by Merger Co. and Norwest in written statements
dated ________, 1996 and the factual representations made by AMFED in written
statements dated _________, 1996 (the "Representations"), (2) the Merger
Agreement, and (3) the facts, information and documentation set forth in the
Registration Statement on Form S-4 of Norwest filed with the Securities and
Exchange Commission in connection with the Merger ( the "Registration
Statement").
The opinions set forth in this letter are predicated upon our
understanding of the facts set forth in the Merger Agreement, the
Representations, and the Registration Statement. Any change in such facts may
adversely affect our opinions. Furthermore, as explained below, our opinions
are based upon our understanding of the existing provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), currently applicable regulations
promulgated under the Code, current published administrative positions of the
Internal Revenue Service such as revenue rulings and revenue procedures, and
existing judicial decisions, all of which are subject to change either
prospectively or retroactively. Any change in such authorities may adversely
affect our opinions. We assume no obligation to update our opinions for any
deletions or additions to or modification of any law applicable to the Merger.
Based on our review of the Merger Agreement, the Representations, and
the Registration Statement, and assuming that the transactions described therein
are completed as described, our opinions as to federal income tax consequences
of the Merger are as follows.
1. Provided that the Merger Agreement qualifies as a statutory merger
under the laws of the state of Nevada, the Merger will constitute a
reorganization within the meaning of
<PAGE>
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code. Merger Co. and AMFED will
each be a "party to a reorganization" within the meaning of Section 368(b) of
the Code.
2. Pursuant to Section 354(a)(1) of the Code, no gain or loss will be
recognized by AMFED shareholders who exchange all of their AMFED common stock
solely for shares of Norwest's voting common stock.
3. Pursuant to Section 358(a)(1) of the Code, the basis of the
Norwest voting common stock received by those AMFED shareholders receiving
solely Norwest common stock will be the same, in each instance, as the basis of
the AMFED common stock surrendered in exchange therefor.
4. Pursuant to Section 1223(1) of the Code, the holding period of
Norwest voting common stock received by the AMFED shareholders (including any
fractional shares to which they may be entitled) will include, in each instance,
the period during which the AMFED common stock surrendered in exchange therefor
was held, provided the AMFED common stock is held as a capital asset in the
hands of the AMFED shareholders on the date of exchange.
5. Pursuant to Revenue Ruling 66-365, 1966-2 C.B. 116, and Revenue
Procedure 77-41, 1977-2 C.B. 574, if a cash payment is received by a shareholder
of AMFED in lieu of a fractional share interest of Norwest voting stock, the
cash payment will be treated as received by the shareholder as a distribution in
redemption of that fractional share interest and will be treated as a
distribution in full payment in exchange for the fractional share redeemed
subject to the provisions and limitations of Section 302 of the Code and
considering the application of Section 318 of the Code.
We express no opinion with regard to the federal income tax
consequences of the Merger not addressed expressly by the above opinions. In
addition, we express no opinion as to any state, local or foreign tax
consequences with respect to the Merger.
This opinion is being furnished only to you in connection with the
Merger and solely for your benefit in connection therewith and may not be used
or relied upon for any other purpose and may not be circulated, quoted or
otherwise referred to for any other purpose without our express written consent.
The shareholders of AMFED should consult with a qualified tax advisor
with respect to any reporting requirements which may be applicable, or to any
tax considerations other than those expressly mentioned herein.
Very truly yours,
BREYER & AGUGGIA
<PAGE>
EXHIBIT 23.2
[LETTERHEAD OF BREYER & AGUGGIA]
November 20, 1995
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479
Ladies and Gentlemen:
We consent to the summarization of our federal tax opinion in the registration
statement of Norwest Corporation on Form S-4 and to the references to our firm
under the headings of the registration statement entitled "SUMMARY--Certain U.S.
Federal Income Tax Consequences," "THE MERGER--Certain U.S. Federal Income Tax
Consequences" and "LEGAL OPINIONS." We also consent to the inclusion of such
opinion as an exhibit to the registration statement.
/s/ Breyer & Aguggia
BREYER & AGUGGIA
<PAGE>
EXHIBIT 23.3
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
Independent Auditors' Consent
-----------------------------
The Board of Directors
Norwest Corporation:
We consent to the use of our report dated January 18, 1995 incorporated herein
by reference and to the reference to our firm under the heading "EXPERTS" in the
prospectus. Our report refers to the Corporation's adoption of Financial
Accounting Standards Board's Statements of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits," No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" and No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions."
/s/ KPMG Peat Marwick LLP
November 21, 1995
Minneapolis, Minnesota
<PAGE>
EXHIBIT 23.4
[LETTERHEAD OF DELOITTE & TOUCHE LLP]
INDEPENDENT AUDITORS' CONSENT
-----------------------------
We consent to the incorporation by reference in this Registration
Statement on Form S-4 of our report dated January 30, 1995 (which report
expresses an unqualified opinion and includes an explanatory paragraph referring
to the adoption of Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," effective January 1, 1993), appearing in and
incorporated by reference in the Annual Report on Form 10-K of AMFED Financial,
Inc. for the year ended December 31, 1994 and to the reference to us under the
heading "EXPERTS" in the Prospectus, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
November 21, 1995
Reno, Nevada
<PAGE>
EXHIBIT 24
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ David A. Christensen
----------------------------
David A. Christensen
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Gerald J. Ford
----------------------
Gerald J. Ford
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Pierson M. Grieve
-------------------------
Pierson M. Grieve
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Charles M. Harper
-------------------------
Charles M. Harper
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ William A. Hodder
-------------------------
William A. Hodder
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Lloyd P. Johnson
------------------------
Lloyd P. Johnson
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Reatha Clark King
-------------------------
Reatha Clark King
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Richard M. Kovacevich
-----------------------------
Richard M. Kovacevich
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Richard S. Levitt
-------------------------
Richard S. Levitt
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Richard D. McCormick
----------------------------
Richard D. McCormick
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Cynthia H. Milligan
---------------------------
Cynthia H. Milligan
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Ian M. Rolland
----------------------
Ian M. Rolland
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Stephen E. Watson
-------------------------
Stephen E. Watson
<PAGE>
NORWEST CORPORATION
Power of Attorney
of Director and/or Officer
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint LLOYD P. JOHNSON, RICHARD M. KOVACEVICH, STANLEY S. STROUP, JOHN T.
THORNTON AND LAUREL A. HOLSCHUH, and each or any one of them, the undersigned's
true and lawful attorneys-in-fact, with power of substitution, for the
undersigned and in the undersigned's name, place and stead, to sign and affix
the undersigned's name as such director and/or officer of said Corporation to a
Registration Statement on Form S-4 or other applicable form, and all amendments,
including post-effective amendments, thereto, to be filed by said Corporation
with the Securities and Exchange Commission, Washington, D.C., in connection
with the registration under the Securities Act of 1933, as amended, of up to
7,800,000 shares of Common Stock of the Corporation which may be issued in
connection with the acquisition by the Corporation of AMFED Financial, Inc. and
its subsidiaries, and to file the same, with all exhibits thereto and other
supporting documents, with said Commission, granting unto said attorneys-in-
fact, and each of them, full power and authority to do and perform any and all
acts necessary or incidental to the performance and execution of the powers
herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney this
14th day of July, 1995.
/s/ Michael W. Wright
-------------------------
Michael W. Wright
<PAGE>
EXHIBIT 99
AMFED FINANCIAL, INC.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints __________, _________, and ________ as
proxies to vote all shares of Common Stock the undersigned is entitled to vote
at the Special Meeting of Shareholders of AMFED Financial, Inc. ("AMFED") to be
held at the John Ascuaga's Nugget Hotel, 1100 Nugget Avenue, Sparks, Nevada, at
10:00 a.m. on Wednesday, January 3, 1996, or at any adjournment thereof, as
follows, hereby revoking any proxy previously given:
1. To consider and vote upon a proposal to approve the Agreement and Plan of
Reorganization, dated as of July 21, 1995 (including the Agreement and Plan of
Merger attached thereto), between AMFED and Norwest Corporation ("Norwest"), a
Delaware corporation, a copy of which is included in the accompanying Proxy
Statement-Prospectus as Appendix A, under the terms of which (i) a wholly-owned
subsidiary of Norwest would be merged with AMFED (the "Merger"), with AMFED as
the surviving corporation, and (ii) each outstanding share of common stock, par
value $.01 per share, of AMFED would be converted into 1.0251 shares of common
stock, par value $1-2/3 per share, of Norwest in accordance with the provisions
of the Agreement and Plan of Reorganization; and to authorize such further
action by the Board of Directors and officers of AMFED as may be necessary or
appropriate to carry out the intent and purposes of the Merger.
FOR [_] AGAINST [_] ABSTAIN [_]
2. In his discretion on such matters as may properly come before the meeting
or any adjournment thereof; all as set out in the Notice and Proxy Statement-
Prospectus relating to the meeting.
Shares represented by this proxy will be voted as directed by the
shareholder. The Board of Directors recommends a vote "FOR" proposal 1. If no
direction is supplied, the proxy will be voted "FOR" proposal 1.
Dated: __________________________, 1995.
_______________________________________
(Please sign exactly as name appears at left.)
_____________________________________________
(If stock is owned by more than one person,
all owners should sign. Persons signing as
executors, administrators, trustees, or in
similar capacities should so indicate.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
