<PAGE>
As filed with the Securities and Exchange Commission on December 5, 1996
Registration No. 333- xxxxxx
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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)
<TABLE>
<CAPTION>
Delaware 6711 41-0449260
<S> <C> <C>
(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
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
612-667-8858
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Robert J. Kaukol Ronald J. Frappier
Norwest Corporation Jenkens & Gilchrist, P.C.
Norwest Center 1445 Ross Avenue, Suite 3200
Sixth and Marquette Dallas, Texas 75202-2799
Minneapolis, Minnesota 55479-1026
----------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of the Registration
Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to Be to Be Offering Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
<S> <S> <S> <S> <S>
Common Stock 5,000,000 (2) N/A $74,099,203(3) $22,454.28
(par value $1-2/3 per share) (1)
</TABLE>
(1) Each share of the registrant's common stock includes one preferred stock
purchase right.
(2) Based upon the maximum number of shares that may be issued in the
transaction described herein.
(3) Estimated solely for the purpose of computing the registration fee, in
accordance with Rule 457(f), based upon the book value as of
September 30, 1996 of all shares of common to be acquired by the registrant
in the transaction described herein.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
[CENTRAL LETTERHEAD]
December 13, 1996
Dear Shareholder:
A special meeting of shareholders of Central Bancorporation, Inc.
("Central") will be held on January 15, 1997 to approve the Agreement and
Plan of Reorganization dated September 16, 1996 (the "Merger Agreement")
between Central and Norwest Corporation ("Norwest") pursuant to which Central
will become a wholly-owned subsidiary of Norwest (the "Merger"). If the
Merger Agreement is approved and the Merger becomes effective, you will be
entitled to receive 1.7745 shares of Norwest common stock for each share of
Central common stock you own at the time the Merger becomes effective.
Central's board of directors has, by unanimous vote of all directors
present, approved the Merger Agreement as being advisable and in your best
interests as a shareholder of Central and recommends that you approve the
Merger Agreement. Keefe, Bruyette & Woods, Inc., Central's financial advisor
in connection with the Merger, has rendered an opinion to Central's board of
directors that, as of the date hereof, the consideration to be received in
the Merger by shareholders of Central is fair from a financial point of view.
You will also be asked at the meeting to approve certain payments to be
made to J. Andy Thompson and Stuart W. Murff (collectively, the "Employment
Payments") pursuant to one or more employee benefit plans of Central and/or
Central Bank & Trust and certain employment/noncompete agreements among
Norwest, Central and, respectively, Messrs. Thompson and Murff. In order for
the Employment Payments to be tax deductible expenses to Central and Norwest
for federal income tax purposes and to avoid a 20% nondeductible excise tax
on the Employment Payments, the Internal Revenue Code requires a 75% vote of
disinterested shareholders of Central to approve the Employment Payments.
Central's board of directors, by unanimous vote of all directors present, has
recommended approval of the Employment Payments.
Enclosed with this letter are a notice of special meeting, which sets
forth the time and location of the special meeting, and a Proxy
Statement-Prospectus, which describes in more detail the terms and conditions
of the Merger and Employment Payments and discusses the background of and
reasons for the Merger and Employment Payments. Please carefully review and
consider the information in the Proxy Statement-Prospectus. The Merger
Agreement and Employment Agreements are included in the Proxy
Statement-Prospectus as Appendix A and Appendix B, respectively. Additional
information concerning Norwest, including its most recent annual report on
Form 10-K and its quarterly reports on Form 10-Q for the current year, may be
obtained from Norwest as indicated in the Proxy Statement-Prospectus under
the section entitled "Incorporation of Certain Documents by Reference."
Your vote is very important. The Merger will not occur unless it is
approved by the holders of the required number of shares of Central common
stock.
Please mark, date, sign and return the enclosed proxy in the enclosed
postage prepaid envelope as soon as possible, regardless of whether you plan
to attend the special meeting. 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. If you
attend the meeting, you may vote in person if you wish, even though you have
previously returned your proxy.
J. Andy Thompson
CHAIRMAN AND CEO
<PAGE>
CENTRAL BANCORPORATION, INC.
777 WEST ROSEDALE
FORT WORTH, TEXAS 76104
(817) 347-8100
----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 15, 1997
----------------
A special meeting (the "Special Meeting") of shareholders of Central
Bancorporation, Inc., a Texas corporation ("Central"), will be held at 777
West Rosedale, Fort Worth, Texas, on January 15 , 1997 at 3:00 p.m., central
time, for the following purposes:
1. To approve the Agreement and Plan of Reorganization dated
September 16, 1996 (the "Merger Agreement") between Central and Norwest
Corporation ("Norwest") pursuant to which a wholly-owned subsidiary of
Norwest will merge with and into Central and Central will become a wholly-
owned subsidiary of Norwest, upon the terms and subject to the conditions set
forth in the Merger Agreement, a copy of which is attached as an appendix to
the accompanying Proxy Statement-Prospectus.
2. To obtain shareholder approval of certain payments to J. Andy
Thompson, Chairman and Chief Executive Officer of Central, and Stuart W.
Murff, President and Director of Central, following consummation of the
Merger pursuant to one or more employee benefit plans of Central and/or
Central Bank & Trust and certain employment/noncompete agreements among
Norwest, Central and, respectively, Messrs. Thompson and Murff.
Shareholder approval is required under Section 280G of the Internal
Revenue Code for such payments to be tax deductibe expenses to Central and
Norwest for federal income tax purposes and to avoid a 20% nondeductible
excise tax on such payments. Copies of the employment/noncompete
agreements are attached as an appendix to the accompanying Proxy
Statement-Prospectus.
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Only shareholders of record on the books of Central at the close of business
on December 12, 1996 will be entitled to vote at the Special Meeting or any
adjournments or postponements 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
Karen L. Sweeney
CORPORATE SECRETARY
December 13, 1996
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PLEASE COMPLETE, SIGN AND DATE YOUR PROXY AND PROMPTLY MAIL IT IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. YOU MAY
REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN THE PROXY STATEMENT-
PROSPECTUS AT ANY TIME BEFORE IT IS EXERCISED.
PLEASE DO NOT SEND IN ANY SHARE CERTIFICATES AT THIS TIME.
- -------------------------------------------------------------------------------
<PAGE>
CENTRAL BANCORPORATION, INC.
PROXY STATEMENT
FOR A SPECIAL MEETING OF SHAREHOLDERS
----------------
NORWEST CORPORATION
PROSPECTUS
SHARES OF COMMON STOCK
----------------
This Proxy Statement-Prospectus is being provided to you in connection with
the solicitation of your proxy by the board of directors of Central
Bancorporation, Inc. ("Central") for use at a special meeting of Central's
shareholders to be held on January 15, 1997 (the "Special Meeting"). Central's
board of directors has called the Special Meeting to (i) approve the Agreement
and Plan of Reorganization dated September 16, 1996 (including all exhibits, the
"Merger Agreement") between Central and Norwest Corporation ("Norwest") and (ii)
approve certain payments (collectively, the "Employment Payments") to J. Andy
Thompson, Chairman and Chief Executive Officer of Central, and Stuart W. Murff,
President and Director of Central, following consummation of the Merger.
The Merger Agreement provides for the merger of a wholly-owned subsidiary
of Norwest with and into Central (the "Merger"), with the net effect of the
Merger being that Central will become a wholly-owned subsidiary of Norwest. If
the Merger Agreement is approved and the Merger becomes effective, you will be
entitled to receive 1.7745 shares (the "Exchange Ratio") of Norwest common
stock, par value $1-2/3 per share ("Norwest Common Stock"), for each share of
Central common stock, par value $2.50 per share ("Central Common Stock"), owned
by you immediately prior to the Merger.
The Employment Payments will be made to Messrs. Thompson and Murff pursuant
to one or more employee benefit plans of Central and/or Central Bank & Trust and
certain employment/noncompete agreements dated September 16, 1996 (the
"Employment Agreements") among Norwest, Central and, respectively, Messrs.
Thompson and Muff. Shareholder approval of the Employment Payments is required
for such payments to be tax deductibe expenses to Central and Norwest for
federal income tax purposes and to avoid a 20% nondeductible excise tax on such
payments.
A copy of the Merger Agreement and copies of the Employment Agreements have
been included in this Proxy Statement-Prospectus as Appendix A and Appendix B,
respectively, and are incorporated herein by reference.
Norwest has filed a registration statement on Form S-4 (File No. 333- )
(the "Registration Statement") with the Securities and Exchange Commission
(the "Commission") registering under the Securities Act of 1933, as amended (the
"Securities Act"), the shares of Norwest Common Stock to be issued in the
Merger. In addition to serving as the proxy statement of Central in connection
with the Special Meeting, this document constitutes the prospectus of Norwest
filed as part of the Registration Statement.
Norwest Common Stock trades on the New York Stock Exchange ("NYSE") and the
Chicago Stock Exchange ("CHX") under the symbol NOB. The closing price of
Norwest Common Stock as reported on the NYSE on ____________, 1996 was $______
per share. There is no established public market for shares of Central Common
Stock.
NORWEST, ITS BANKING SUBSIDIARIES AND MANY OF ITS NONBANKING SUBSIDIARIES
ARE SUBJECT TO SIGNIFICANT REGULATION BY A NUMBER OF FEDERAL AND STATE AGENCIES.
THIS REGULATION MAY AFFECT NORWEST'S EARNINGS AND/OR RESTRICT ITS ABILITY TO PAY
DIVIDENDS ON NORWEST COMMON STOCK. SEE "CERTAIN REGULATORY CONSIDERATIONS
PERTAINING TO NORWEST."
THE SHARES OF NORWEST COMMON STOCK OFFERED BY THIS PROXY STATEMENT-
PROSPECTUS ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK
OR NONBANK SUBSIDIARY OF NORWEST AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
<PAGE>
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.
----------------
All information concerning Norwest contained in this Proxy Statement-
Prospectus has been provided by Norwest, and all information concerning Central
contained in this Proxy Statement-Prospectus has been provided by Central.
This Proxy Statement-Prospectus is dated as of December 13, 1996 and,
together with the accompanying form of proxy, is first being mailed to
shareholders of Central on or about December 13, 1996.
<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION..................................................... 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................... 4
DOCUMENTS ENCLOSED WITH THIS PROXY STATEMENT-PROSPECTUS................... 5
EXPLANATORY NOTE AND DEFINITIONS OF CERTAIN ITEMS......................... 6
SUMMARY................................................................... 7
Parties to the Merger................................................. 7
Special Meeting and Vote Required..................................... 7
The Merger............................................................ 8
Market Information.................................................... 9
Comparison of Rights of Holders of Central Common Stock and
Norwest Common Stock................................................ 10
Comparative Per Common Share Data..................................... 11
Selected Consolidated Financial Data.................................. 12
COMPARATIVE PER SHARE PRICES AND DIVIDENDS................................ 16
MEETING INFORMATION....................................................... 17
General............................................................... 17
Record Date; Voting Rights; Vote Required............................. 17
Voting and Revocation of Proxies...................................... 17
Solicitation of Proxies............................................... 18
THE MERGER................................................................ 19
General............................................................... 19
Background of and Reasons for the Merger.............................. 19
Opinion of Central's Financial Advisor................................ 21
Merger Consideration.................................................. 25
Dissenters' Rights.................................................... 26
Surrender of Certificates............................................. 28
Conditions to the Merger.............................................. 28
Regulatory Approvals.................................................. 29
Conduct of Business Pending the Merger................................ 30
No Solicitation....................................................... 30
Certain Additional Agreements......................................... 31
Termination of the Merger Agreement................................... 31
Amendment of the Merger Agreement..................................... 34
Waiver of Performance of Obligations.................................. 34
Effect on Employee Benefit Plans...................................... 34
Interests of Certain Persons in the Merger............................ 34
U. S. Federal Income Tax Consequences................................. 35
Resale of Norwest Common Stock........................................ 37
Stock Exchange Listing................................................ 37
Accounting Treatment.................................................. 37
Expenses.............................................................. 38
EMPLOYMENT PAYMENTS....................................................... 38
COMPARISON OF RIGHTS OF HOLDERS OF CENTRAL COMMON STOCK AND
NORWEST COMMON STOCK...................................................... 39
General............................................................... 39
Directors............................................................. 39
Amendment of Articles or Certificate of Incorporation and Bylaws...... 40
Shareholder or Stockholder Approval of Mergers and Asset
Sales............................................................... 40
Appraisal Rights...................................................... 41
Special Meetings...................................................... 41
Action Without a Meeting.............................................. 42
Limitation of Director Liability...................................... 42
Indemnification of Officers and Directors............................. 42
Dividends............................................................. 43
Proposal of Business; Nomination of Directors......................... 43
2
<PAGE>
CERTAIN REGULATORY CONSIDERATIONS PERTAINING TO NORWEST................... 44
General............................................................... 44
Dividend Restrictions................................................. 44
Holding Company Structure............................................. 45
Acquisitions.......................................................... 46
Capital Requirements.................................................. 46
Federal Deposit Insurance Corporation Improvement Act of 1991......... 47
FDIC Insurance........................................................ 48
EXPERTS................................................................... 49
LEGAL OPINIONS............................................................ 49
MANAGEMENT OF NORWEST AND ADDITIONAL INFORMATION.......................... 49
APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION
APPENDIX B EMPLOYMENT AGREEMENTS
APPENDIX C OPINION OF KEEFE, BRUYETTE & WOODS, INC.
APPENDIX D TEXAS BUSINESS CORPORATION ACT, ARTICLES 5.11, 5.12 AND 5.13
3
<PAGE>
AVAILABLE INFORMATION
Norwest and Central are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file annual, quarterly and current reports, proxy
statements and other information with the Commission. You may review and
copy such reports, proxy statements and other information at the public
reference facilities of the Commission, located in Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, Suite 1300, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. You may also access these materials through the
Commission's Web site on the Internet located at http://www.sec.gov. You may
obtain copies of these materials at prescribed rates by writing to the
Commission, Public Reference Section, 450 Fifth Street, N.W., Washington,
D.C. 20549. You may also review annual, quarterly and current reports, proxy
statements and other information concerning Norwest 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.
As permitted by the Commission, this Proxy Statement-Prospectus does not
contain all of the information set forth in the Registration Statement and
the exhibits thereto. You may review or obtain a copy of the Registration
Statement in the manner described above.
In deciding whether to approve the Merger Agreement, you should rely only
on the information contained or incorporated by reference in this Proxy
Statement-Prospectus. Neither Norwest nor Central has authorized any person
to provide you with any additional or contrary information or representations
concerning either company or the Merger.
The information contained in this Proxy Statement-Prospectus is as of
December 13, 1996. You should not assume that the delivery to you of this
Proxy Statement-Prospectus or the issuance to you of shares of Norwest Common
Stock means that there has been no change in the business prospects,
financial condition or other affairs of Norwest or Central since December 13,
1996 or that the information contained or incorporated by reference in this
Proxy Statement-Prospectus is correct or complete as of any time after
December 13, 1996. The Commission allows Norwest and Central to update much
of the information contained or incorporated by reference in this Proxy
Statement-Prospectus pursuant to their subsequent filings with the Commission
(see "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" below).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
As permitted by the Commission, Norwest has incorporated into this Proxy
Statement-Prospectus certain information contained in documents filed by
Norwest with the Commission. These documents contain important information
concerning Norwest and its business prospects and financial condition.
Except to the extent superseded by the information contained in this Proxy
Statement-Prospectus, the information contained in each document incorporated
by reference is considered to be part of this Proxy Statement-Prospectus and
therefore to have been provided to you at the time you receive this Proxy
Statement-Prospectus. In addition, each document filed by Norwest with the
Commission subsequent to the date hereof and prior to the Special Meeting
will be incorporated into and considered part of this Proxy
Statement-Prospectus. There may be information contained in these documents
that supersedes or modifies statements and other information contained or
incorporated by reference in this Proxy Statement-Prospectus. Generally, you
will not receive a copy of any of these documents unless you request a copy
in the manner described below.
The following Norwest documents have been incorporated by reference in
this Proxy Statement-Prospectus. Each document was filed with the Commission
under file number 1-2979.
4
<PAGE>
(1) Norwest's annual report on Form 10-K for the year ended December 31,
1995;
(2) Norwest's quarterly reports on Form 10-Q for the quarters ended
March 31, 1996, June 30, 1996 and September 30, 1996;
(3) Norwest's current reports on Form 8-K dated January 17, 1996,
February 20, 1996, as amended pursuant to Form 8-K/A, February 26,
1996, April 17, 1996, July 2, 1996, July 15, 1996, and October 14,
1996;
(4) Norwest's current report on Form 8-K dated April 30, 1996 containing a
description of the Norwest Common Stock; and
(5) Norwest's registration statement on Form 8-A dated December 6, 1988,
as amended pursuant to Form 8-A/A dated June 29, 1993, relating to
preferred stock purchase rights attached to shares of Norwest Common
Stock.
YOU MAY OBTAIN COPIES OF THE FOREGOING DOCUMENTS (OTHER THAN CERTAIN
EXHIBITS) UPON REQUEST IN WRITING OR BY TELEPHONE AS FOLLOWS:
CORPORATE SECRETARY
NORWEST CORPORATION
NORWEST CENTER
SIXTH AND MARQUETTE
MINNEAPOLIS, MN 55479-1026
TELEPHONE (612) 667-8655
FAX (612) 667-4399
TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, YOUR REQUEST SHOULD BE RECEIVED BY
NORWEST BY JANUARY 8, 1997.
DOCUMENTS ENCLOSED WITH THIS PROXY STATEMENT-PROSPECTUS
As permitted by the Commission, Central has elected to provide you with
copies of the following documents rather than including certain information
contained in these documents in this Proxy Statement-Prospectus:
(1) Central's annual report to shareholders for the year ended
December 31, 1995;
(2) Central's annual report on Form 10-K for the year ended December 31,
1995; and
(3) Central's quarterly reports on Form 10-Q for the quarters ended
March 30, 1996, June 30, 1996 and September 30, 1996.
ADDITIONAL COPIES OF THESE DOCUMENTS ARE AVAILABLE UPON REQUEST IN
WRITING OR BY TELEPHONE AS FOLLOWS:
CORPORATE SECRETARY
CENTRAL BANCORPORATION, INC.
777 WEST ROSEDALE
FORT WORTH, TEXAS 76104
TELEPHONE (817) 347-8100
FAX (817) 335-5430
TO ENSURE TIMELY DELIVERY OF ANY OF THESE DOCUMENTS, YOUR REQUEST SHOULD BE
RECEIVED BY CENTRAL BY NO LATER THAN JANUARY 8, 1997.
5
<PAGE>
EXPLANATORY NOTE AND DEFINITIONS OF CERTAIN TERMS
Central is incorporated under the laws of the state of Texas and is
governed by the Texas Business Corporation Act and Central's articles of
incorporation and bylaws (as amended and in effect as of the date of this
Proxy Statement-Prospectus, the "TBCA," "Central Articles" and "Central
Bylaws," respectively). Norwest is incorporated under the laws of the state
of Delaware and is governed by the Delaware General Corporation Law and
Norwest's restated certificate of incorporation and bylaws (as amended and in
effect as of the date of this Proxy Statement-Prospectus, the "DGCL,"
"Norwest Certificate" and "Norwest Bylaws," respectively). The TBCA uses the
term "shareholder" to refer to a holder of capital stock of a Texas
corporation. The DGCL uses the term "stockholder" to refer to a holder of
capital stock of a Delaware corporation. Accordingly, this Proxy
Statement-Prospectus uses the term "shareholder" to refer to a holder of
Central Common Stock and the term "stockholder" to refer to a holder of
Norwest Common Stock.
6
<PAGE>
SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION RELATING TO THE MERGER.
THERE MAY BE ADDITIONAL INFORMATION CONTAINED ELSEWHERE IN THIS DOCUMENT OR
IN THE DOCUMENTS INCORPORATED BY REFERENCE THAT MAY AFFECT YOUR DECISION
WHETHER TO APPROVE THE MERGER. FOR THAT REASON, YOU SHOULD READ THIS
DOCUMENT (INCLUDING THE APPENDICES), AS WELL AS THE DOCUMENTS INCORPORATED BY
REFERENCE, IN THEIR ENTIRETY. SEE "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" FOR A LIST OF THE DOCUMENTS INCORPORATED BY REFERENCE AND
INSTRUCTIONS ON HOW TO OBTAIN COPIES OF THESE DOCUMENTS.
PARTIES TO THE MERGER
NORWEST. Norwest Corporation ("Norwest") is a diversified financial
services company organized under the laws of Delaware in 1929 and registered
under the Bank Holding Company Act of 1956, as amended (the "Bank Holding
Company Act"). Through its subsidiaries and affiliates, Norwest provides
retail, commercial and corporate banking services, as well as a variety of
other financial services, including 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, mortgage-backed securities
servicing, and venture capital investment.
At September 30, 1996, Norwest had consolidated total assets of $78.4
billion, total deposits of $48.0 billion and total stockholders' equity of
$5.9 billion. Based on total assets at September 30, 1996, Norwest was the
12th largest commercial banking organization in the United States.
Norwest's principal executive offices are located at Norwest Center,
Sixth and Marquette, Minneapolis, Minnesota 55479, and its telephone number
is (612) 667-1234. As used in this Prospectus, the term "Norwest" means
Norwest and its consolidated subsidiaries.
Additional information concerning Norwest is included in Norwest's
documents incorporated herein by reference. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
CENTRAL. Central, a Texas corporation organized in 1979, is a bank
holding company registered under the Bank Holding Company Act. Central owns,
indirectly through a wholly-owned subsidiary, all of the issued and
outstanding shares of capital stock of one state banking corporation, Central
Bank & Trust, Fort Worth, Texas ("CBT" or the "Bank"). Substantially all of
Central's revenues are derived from CBT.
CBT was founded in 1947 and is currently in its 49th year of operation.
CBT is engaged in a general, full-service commercial banking and consumer
banking business through 24 full-service branch-banking facilities in
Tarrant, Dallas and Johnson Counties, Texas.
At September 30, 1996, Central had consolidated total assets of $1.1
billion, total deposits of $998 million and total shareholders' equity of $74
million. Additional information regarding Central is included in the Central
documents delivered herewith. See "DOCUMENTS ENCLOSED WITH THIS PROXY
STATEMENT-PROSPECTUS."
SPECIAL MEETING AND VOTE REQUIRED
SPECIAL MEETING. The Special Meeting will be held on January 15, 1997 at
777 West Rosedale, Fort Worth, Texas for the purpose of voting on proposals
to approve the Merger Agreement and the Employment Agreements. Only holders
of record of Central Common Stock at the close of business on December 12,
1996 (the "Record Date") will be entitled to receive notice of and to vote at
the Special Meeting. At the Record Date, there were 2,648,637 shares of
Central
7
<PAGE>
Common Stock outstanding and entitled to vote at the Special Meeting. 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 a majority of the outstanding shares of Central Common
Stock. Holders of Central Common Stock are entitled to one vote per share
owned of record on the Record Date. If a majority of the votes eligible to
be cast by the holders of Central Common Stock do not vote in favor of
approval of the Merger Agreement, Central will remain a separate entity. See
"MEETING INFORMATION--RECORD DATE; VOTING RIGHTS; VOTE REQUIRED."
THE MERGER
EFFECT OF THE MERGER. If the Merger Agreement is approved and the Merger
becomes effective, a wholly-owned subsidiary of Norwest will merge with and
into Central and Central, as the surviving corporation in the Merger, will
become a wholly-owned subsidiary of Norwest. In the Merger, each share of
Central Common Stock outstanding immediately prior to the Effective Time of
the Merger will be automatically converted into and exchanged for the right
to receive shares of Norwest Common Stock based on the Exchange Ratio. See
"THE MERGER--MERGER CONSIDERATION."
RECOMMENDATION OF THE CENTRAL BOARD. At a meeting of Central's board of
directors (the "Central Board") held on September 16, 1996, after considering
the terms and conditions of the Merger Agreement, the Central Board
unanimously approved the Merger Agreement. The Central Board believes that
the Merger is advisable and in the best interests of Central and its
shareholders and recommends that shareholders of Central approve the Merger
Agreement. For a discussion of the circumstances surrounding the Merger and
the factors considered by the Central Board in making its recommendation, see
"THE MERGER--BACKGROUND OF AND REASONS FOR THE MERGER."
OPINION OF CENTRAL'S FINANCIAL ADVISOR. The Central Board retained Keefe,
Bruyette & Woods, Inc. ("Keefe") to act as financial advisor in connection
with the Merger. Keefe, Bruyette & Woods has delivered its written opinion to
the Central Board that, as of the date of this Proxy Statement-Prospectus,
the consideration to be received in the Merger by Central's shareholders is
fair from a financial point of view. The opinion of Keefe is attached as
Appendix C to this Proxy Statement-Prospectus. Shareholders 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 CENTRAL'S FINANCIAL ADVISOR."
CONDITIONS TO THE MERGER; TERMINATION OF THE MERGER AGREEMENT. The
obligations of Norwest and Central to effect the Merger are subject to the
satisfaction or, if permissible under the Merger Agreement, waiver of a
number of conditions, in addition to approval of the Merger Agreement by
Central's shareholders. The Merger Agreement is subject to termination by
one or more parties at any time prior to the Effective Time of the Merger
upon the occurrence of certain specified events. See "THE MERGER--CONDITIONS
TO THE MERGER" AND "--TERMINATION OF THE MERGER AGREEMENT."
REGULATORY APPROVALS. The Merger is subject to the approval of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"). Norwest has filed an application with the Federal Reserve Board
requesting approval of the Merger; however, there can be no assurance that
the necessary regulatory approval will be obtained or as to the timing or
conditions of such approval. The Merger is also subject to certain filing
and other requirements of the Texas Department of Banking. See "THE
MERGER--REGULATORY APPROVALS."
EFFECTIVE TIME AND CLOSING OF THE MERGER. If the Merger Agreement is
approved at the Special Meeting and all other conditions to the Merger have
been satisfied or waived, the parties expect the Merger to become effective
at 11:59 p.m. on the date that articles of merger relating to
8
<PAGE>
the Merger (the "Articles of Merger") are filed with the Texas Secretary of
State in accordance with the relevant provisions of the TBCA (the "Effective
Time of the Merger"). The parties expect to file the Articles of Merger with
the Texas Secretary of State as soon as practicable following approval of the
Merger Agreement at the Special Meeting. See "THE MERGER--CONDITIONS TO THE
MERGER" AND "--REGULATORY APPROVALS."
NO SOLICITATION. Subject to certain exceptions, Central and its
subsidiaries, and their respective directors, officers, representatives and
agents, are prohibited under the Merger Agreement from directly or indirectly
soliciting, authorizing the solicitation of or entering into any discussions
with any party other than Norwest concerning certain transactions involving
the acquisition of Central's capital stock or assets. See "THE MERGER--NO
SOLICITATION."
INTERESTS OF CERTAIN PERSONS IN THE MERGER. In the Merger, Central's
directors and executive officers will receive the same consideration for
their shares of Central Common Stock as the other shareholders of Central
will receive for their shares of Central Common Stock. Certain members of the
Central Board and management, however, may be deemed to have interests in the
Merger that are in addition to and separate from the interests of Central's
shareholders generally. These interests include, among others, the
Employment Payments, provisions in the Merger Agreement relating to the
continuation of certain director and officer indemnification rights and the
maintenance of certain directors' and officers' liability insurance policies.
See "THE MERGER--INTERESTS OF CERTAIN PERSONS IN THE MERGER" AND "EMPLOYMENT
PAYMENTS."
DIRECTORS AND OFFICERS OF CENTRAL AFTER THE MERGER. Following the
Effective Time of the Merger, Norwest will be the sole shareholder of Central
and, for that reason, will be in a position to elect or appoint all of the
directors and officers of Central.
DISSENTERS' RIGHTS. Holders of Central Common Stock will have the right
to dissent with respect to their shares of Central Common Stock. For more
information concerning dissenters' rights and the procedures to be followed
to exercise such rights, see "THE MERGER--DISSENTERS' RIGHTS."
U.S. FEDERAL INCOME TAX CONSEQUENCES. It is the intent of the parties
that the Merger qualify as a tax-free reorganization under Sections
368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986, as
amended (the "Code"), which should result in no gain or loss being recognized
by Central's shareholders upon the receipt of Norwest Common Stock solely in
exchange for such Central Common Stock pursuant to the Merger (except to the
extent of other cash received in lieu of fractional shares or as a result of
exercising dissenters' appraisal rights).. The Merger's effectiveness is
conditioned upon the receipt by Central of a written opinion of its counsel
to that effect. See "THE MERGER--U.S. FEDERAL INCOME TAX CONSEQUENCES."
THE U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE MERGER MAY BE DIFFERENT
FOR PARTICULAR TYPES OF CENTRAL SHAREHOLDERS OR IN LIGHT OF EACH CENTRAL
SHAREHOLDER'S PERSONAL INVESTMENT CIRCUMSTANCES. FOR THAT REASON, CENTRAL
SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE S
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 AND THE
POSSIBLE EFFECT OF CHANGES IN SUCH LAWS.
MARKET INFORMATION
On September 13, 1996, the last business day preceding public
announcement of the Merger Agreement, and on , 1996, the
last practicable date prior to the mailing of this Proxy Statement-Prospectus,
the closing price per share of Norwest Common Stock (as reported on the NYSE
composite tape) was $40.75 and $______, respectively. There is no established
public market for shares of Central Common Stock.
The market price for Norwest Common Stock will fluctuate between the date
of this Proxy Statement-Prospectus and the Effective Time of the Merger,
which will be a period of several
9
<PAGE>
weeks. The market value per share of the Norwest Common Stock that Central's
shareholders 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 Time of the Merger. Central's shareholders are advised
to obtain current market quotations for Norwest Common Stock.
Comparison of Rights of Holders of Central Common Stock and Norwest Common Stock
As of the date of this Proxy Statement-Prospectus, the rights of
Central's shareholders are governed by the TBCA and the Central Articles and
Central Bylaws. At the Effective Time of the Merger, Central's shareholders
will become stockholders of Norwest. For that reason, their rights will
thereafter be governed by the DGCL and the Norwest Certificate and Norwest
Bylaws. See "COMPARISON OF RIGHTS OF HOLDERS OF CENTRAL COMMON STOCK AND
NORWEST COMMON STOCK."
10
<PAGE>
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
Central Common Stock on a historical and 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 and the
related effects on the historical financial statements of Norwest, see "THE
MERGER--ACCOUNTING TREATMENT.") The historical data for Norwest and Central
for each of the years in the three-year period ended December 31, 1995 are
derived from the respective audited consolidated financial statements of
Norwest and Central (including the related notes thereto) for such three-year
period. The historical data for Norwest and Central for the nine-month
period ended September 30, 1996 are derived from the respective unaudited
consolidated financial statements of Norwest and Central (including the
related notes thereto) for such nine-month period. The data are 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
become effective prior to the periods indicated. The above-referenced
audited and unaudited consolidated financial statements of Norwest are
incorporated by reference into this Proxy Statement-Prospectus. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." The above-referenced
audited and unaudited consolidated financial statements of Central are
included in Central's annual report on Form 10-K for the year ended December
31, 1995 and Central's quarterly report on Form 10-Q for the quarter ended
September 30, 1996. See "DOCUMENTS ENCLOSED WITH THIS PROXY
STATEMENT-PROSPECTUS."
COMPARATIVE PER COMMON SHARE DATA
<TABLE>
<CAPTION>
Norwest Common Stock Central Common Stock
--------------------- ------------------------
Pro Forma Pro Forma
Historical Combined Historical Equivalent
---------- --------- ---------- -----------
<S> <S>
BOOK VALUE (1):
September 30, 1996 $15.53 15.53 28.25 27.56
December 31, 1995 14.20 14.20 25.73 25.20
DIVIDENDS DECLARED (2):
Nine Months Ended
September 30, 1996 0.780 0.780 0.300 1.384
Year Ended
December 31, 1995 0.900 0.900 0.400 1.597
December 31, 1994 0.765 0.765 0.390 1.357
December 31, 1993 0.640 0.640 0.290 1.136
NET INCOME (3):
Nine Months Ended
September 30, 1996 2.26 2.25 3.04 3.99
Year Ended
December 31, 1995 2.73 2.72 3.64 4.83
December 31, 1994 2.41 2.40 3.07 4.26
December 31, 1993 1.86 1.86 3.11 3.30
</TABLE>
(1) The pro forma combined book value per share of Norwest Common Stock
represents the historical total combined common stockholders' equity for
Norwest and Central divided by total pro forma common shares of the
combined entities, based on the Exchange Ratio of 1.7745 and assuming the
issuance in the Merger of 4,700,000 shares of Norwest Common Stock in
exchange for 2,648,637 shares of Central Common Stock. The pro forma
equivalent book value per share of Central represents the pro forma
combined book value per share multiplied by the Exchange Ratio of 1.7745.
(2) Assumes no changes in cash dividends per share by Norwest. The pro forma
equivalent dividends per share of Central Common Stock represent cash
dividends declared per share of Norwest Common Stock multiplied by the
Exchange Ratio of 1.7745.
11
<PAGE>
(3) The pro forma combined net income per share of Norwest Common Stock (based
on fully diluted net income and weighted average number of common and
common equivalent shares) is based upon the combined historical net income
for Norwest and Central divided by the average pro forma common and common
equivalent shares of the combined entities. The pro forma equivalent net
income per share of Central Common Stock represents the pro forma combined
net income per share multiplied by the Exchange Ratio of 1.7745.
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth certain selected historical consolidated
financial information for Norwest and Central. The income statement and
balance sheet data for Norwest and Central included in the selected
consolidated financial data for each of the years in the five-year period
ended December 31, 1995 are derived from the respective audited consolidated
financial statements of Norwest and Central for such five-year period. The
selected financial data for the nine-month periods ended September 30, 1996
and 1995 are derived from the respective unaudited consolidated financial
statements of Norwest and Central for such periods. All financial data
derived from unaudited financial statements reflect, in the respective
opinions of Norwest's and Central's management, all adjustments (consisting
of only normal recurring adjustments) necessary for a fair presentation of
such data. Results for the nine-month period ended September 30, 1996 are
not necessarily indicative of the results that may be expected for any other
interim period or for the year as a whole. The data for Norwest should be
read in conjunction with Norwest's consolidated financial statements
(including the notes thereto) incorporated herein by reference. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." The data for Central
should be read in conjunction with Central's consolidated financial
statements (including the related notes thereto) included in Central's annual
report on Form 10-K for the year ended December 31, 1995 and its quarterly
report for the quarter ended September 30, 1996. See "DOCUMENTS ENCLOSED
WITH THIS PROXY STATEMENT-PROSPECTUS."
12
<PAGE>
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
NORWEST CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30
YEARS ENDED DECEMBER 31
-------------------- -----------------------------------------------------
1996 1995 1995 1994 1993(1) 1992(2) 1991
--------- --------- --------- --------- --------- --------- ---------
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Interest income.............................. $ 4,710.1 4,153.3 5,717.3 4,393.7 3,946.3 3,806.4 4,025.9
Interest expense............................. 1,955.1 1,771.6 2,448.0 1,590.1 1,442.9 1,610.6 2,150.3
--------- --------- --------- --------- --------- --------- ---------
Net interest income........................ 2,755.0 2,381.7 3,269.3 2,803.6 2,503.4 2,195.8 1,875.6
Provision for credit losses.................. 281.1 216.5 312.4 164.9 158.2 270.8 406.4
Non-interest income.......................... 1,826.5 1,325.9 1,848.2 1,638.3 1,585.0 1,273.7 1,064.0
Non-interest expenses........................ 2,986.7 2,447.4 3,382.3 3,096.4 3,050.4 2,553.1 2,041.5
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes................... 1,313.7 1,043.7 1,422.8 1,180.6 879.8 645.6 491.7
Income tax expense........................... 467.9 347.4 466.8 380.2 266.7 175.6 73.4
--------- --------- --------- --------- --------- --------- ---------
Income before cumulative effect of a change
in accounting method........................ 845.8 696.3 956.0 800.4 613.1 470.0 418.3
Cumulative effect on years prior to 1992 of
change in accounting method................. -- -- -- -- -- (76.0) --
--------- --------- --------- --------- --------- --------- ---------
Net income................................... $ 845.8 696.3 956.0 800.4 613.1 394.0 418.3
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
PER COMMON SHARE DATA
Net income per share:
Primary:
Before cumulative effect of a change in
accounting method......................$
2.262.042.762.451.891.441.33
Cumulative effect on years prior to 1992
of change in accounting method.......... -- -- -- -- -- (0.25) --
--------- --------- --------- --------- --------- --------- ---------
Net income............................... $ 2.26 2.04 2.76 2.45 1.89 1.19 1.33
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Fully diluted:
Before cumulative effect of a change in
accounting method....................... $ 2.26 2.01 2.73 2.41 1.86 1.42 1.32
Cumulative effect on years prior to 1992
of change in accounting method.......... -- -- -- -- -- (0.23) --
--------- --------- --------- --------- --------- --------- ---------
Net income............................... $ 2.26 2.01 2.73 2.41 1.86 1.19 1.32
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Dividends declared per common share.......... $ 0.780 0.660 0.900 0.765 0.640 0.540 0.470
BALANCE SHEET DATA
At period end:
Total assets............................... $78,427.6 71,411.9 72,134.4 59,315.9 54,665.0 50,037.0 45,974.5
Long-term debt............................. 13,250.1 12,686.3 13,676.8 9,186.3 6,850.9 4,553.2 3,686.6
Total stockholders' equity................. 5,938.4 4,940.1 5,312.1 3,846.4 3,760.9 3,371.8 3,192.3
</TABLE>
13
<PAGE>
(1) On January 14, 1994, First United Bank Group, Inc. ("First
United"), a $3.9 billion bank holding company headquartered in
Albuquerque, New Mexico, was acquired in a pooling of interests
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 charges 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 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.
14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
CENTRAL BANCORPORATION, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30 YEARS ENDED DECEMBER 31
---------------------- ------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Interest income $52,978 44,381 59,790 49,390 43,638 43,402 46,443
Interest expense 24,913 20,704 27,789 19,491 16,092 18,370 26,014
------- ------ ------ ------ ------ ------ -------
Net interest income 28,065 23,677 32,001 29,899 27,546 25,032 20,429
Provision for loan losses 747 675 900 500 200 2,200 2,865
Noninterest income 9,305 7,779 10,404 9,047 8,046 7,089 6,537
Noninterest expense 26,436 21,673 29,265 27,774 26,377 22,569 19,962
------- ------ ------ ------ ------ ------ -------
Income before income taxes 10,187 9,108 12,240 10,672 9,015 7,352 4,139
Income tax expense 2,209 2,086 2,723 2,650 2,292 1,623 1,725
------- ------ ------ ------ ------ ------ -------
Income before items below 7,978 7,022 9,517 8,022 6,723 5,729 2,414
Extraordinary item -- -- -- -- -- 356 659
Cumulative effect of change in
accounting method -- -- -- -- 1,370 -- --
------- ------ ------ ------ ------ ------ -------
Net income $7,978 7,022 9,517 8,022 8,093 6,085 3,073
------- ------ ------ ------ ------ ------ -------
PER COMMON SHARE DATA
Net income per share before
cumulative effect of change
in accounting method $3.04 2.68 3.64 3.07 2.58 2.20 0.93
Extraordinary item -- -- -- -- -- 0.14 0.25
Cumulative effect of change
in accounting method -- -- -- -- 0.53 0.14 0.25
Net income per share $3.04 2.68 3.64 3.07 3.11 2.34 1.18
------- ------ ------ ------ ------ ------ -------
------- ------ ------ ------ ------ ------ -------
Dividends per share $0.30 0.30 0.40 0.39 0.29 0.24 0.24
BALANCE SHEET DATA
At period end:
Total assets $1,127,680 907,810 926,634 881,566 735,759 637,805 572,047
Long-term debt 3,800 -- 2,500 500 -- -- --
Total stockholders' equity 74,099 64,778 67,329 55,326 52,222 44,624 39,164
</TABLE>
15
<PAGE>
COMPARATIVE PER SHARE PRICES AND DIVIDENDS
The following table sets forth the high and low sales prices per share of
the Norwest Common Stock and Central Common Stock, and the cash dividends
paid on such Norwest Common Stock and Central Common Stock, for the below
quarterly periods, which correspond to the companies' respective quarterly
fiscal periods for financial reporting purposes. The prices for Norwest
Common Stock are as reported on the NYSE. The prices for Central Common
Stock are based on relatively infrequent transactions, as there is no
established market for Central Common Stock. he prices set forth below may
not necessarily reflect the market price of Central Common Stock for the
periods indicated.
<TABLE>
<CAPTION>
Norwest Central
Common Stock Common Stock
------------------------- ----------------------
High Low Dividends High Low Dividends
---- --- --------- ---- --- ---------
<S> <C> <C> <C> <C> <C> <C>
1993
First Quarter . . . . . . . . . . . . . . . . . .$ 26.000 20.625 0.145 12.88 12.60 0.06
Second Quarter. . . . . . . . . . . . . . . . . . 28.375 22.875 0.165 16.00 15.50 0.07
Third Quarter . . . . . . . . . . . . . . . . . . 28.000 25.625 0.165 17.25 16.00 0.08
Fourth Quarter. . . . . . . . . . . . . . . . . . 29.000 22.500 0.165 18.00 17.25 0.08
1994
First Quarter . . . . . . . . . . . . . . . . . . 27.375 22.250 0.185 18.00 18.00 0.09
Second Quarter. . . . . . . . . . . . . . . . . . 28.250 23.125 0.185 21.50 20.50 0.10
Third Quarter . . . . . . . . . . . . . . . . . . 27.500 24.750 0.185 21.50 21.50 0.10
Fourth Quarter. . . . . . . . . . . . . . . . . . 25.000 21.000 0.210 22.00 21.50 0.10
1995
First Quarter . . . . . . . . . . . . . . . . . . 26.250 22.625 0.210 22.25 22.00 0.10
Second Quarter. . . . . . . . . . . . . . . . . . 29.375 25.125 0.210 22.25 22.25 0.10
Third Quarter . . . . . . . . . . . . . . . . . . 32.750 26.875 0.240 23.50 23.25 0.10
Fourth Quarter. . . . . . . . . . . . . . . . . . 34.750 29.250 0.240 23.50 23.00 0.10
1996
First Quarter . . . . . . . . . . . . . . . . . . 37.125 30.500 0.240 27.50 27.50 0.10
Second Quarter. . . . . . . . . . . . . . . . . . 37.500 33.000 0.270 28.50 28.50 0.10
Third Quarter . . . . . . . . . . . . . . . . . . 41.000 32.000 0.270 40.00 30.00 0.10
Fourth Quarter. . . . . . . . . . . . . . . . . .
(through ____________, 1996)
</TABLE>
16
<PAGE>
MEETING INFORMATION
GENERAL
This Proxy Statement-Prospectus is being furnished to holders of
Central Common Stock in connection with the solicitation of proxies by the
Central Board for use at the Special Meeting to be held on January 15, 1997
and at any adjournments or postponements thereof. At the Special Meeting,
shareholders of Central will consider and vote upon a proposal to approve the
Merger Agreement. The Central Board is not aware as of the date of this
Proxy Statement-Prospectus of any business to be acted upon at the Special
Meeting other than the proposals to approve the Merger Agreement and approve
the Employment Payments. If 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.
RECORD DATE; VOTING RIGHTS; VOTE REQUIRED
The Central Board has fixed the close of business on December 12,
1996 as the record date for the determination of shareholders of Central
entitled to receive notice of and to vote at the Special Meeting (the "Record
Date"). On the Record Date there were 2,648,637 shares of Central Common
Stock outstanding and entitled to vote. Holders of Central Common Stock are
entitled to one vote per share held of record on the Record Date. The
presence in person or by proxy at the Special Meeting of the holders of a
majority of the shares of Central Common Stock outstanding on the Record Date
will constitute a quorum for the transaction of business at the Special
Meeting.
Under the TBCA and the Central Articles and Central Bylaws,
approval of the Merger Agreement will require the affirmative vote of the
holders of a majority of the shares of Central Common Stock. Directors and
executive officers of Central and their affiliates beneficially owned as of
the Record Date an aggregate of ___________, or approximately ____%, of the
outstanding shares of Central Common Stock. Directors and executive officers
of Central intend to vote all shares of Central Common Stock held in their
individual capacities in favor of approval of the Merger Agreement. If a
majority of the votes eligible to be cast by the holders of Central Common
Stock do not vote in favor of approval of the Merger Agreement, Central will
remain a separate entity. 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.
VOTING AND REVOCATION OF PROXIES
Shares of Central 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 Central Common Stock represented by such
proxy will be voted FOR approval of the Merger Agreement and FOR approval of
the Employment Payments. 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 Central 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 by 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
17
<PAGE>
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 will not be counted 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 shares of Central Common Stock outstanding on the Record Date. Because
the proposal to approve the Merger Agreement 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.
SOLICITATION OF PROXIES
In addition to solicitation by mail, directors, officers and
employees of Central may solicit proxies from the shareholders of Central,
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. Central will bear its own expenses in connection with
any solicitation of proxies for the Special Meeting. See "THE
MERGER--EXPENSES."
THE MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING ARE OF GREAT IMPORTANCE
TO THE SHAREHOLDERS OF CENTRAL. SHAREHOLDERS 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
CENTRAL IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
18
<PAGE>
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, A COPY OF WHICH IS ATTACHED AS APPENDIX A TO THIS PROXY
STATEMENT-PROSPECTUS AND INCORPORATED HEREIN BY REFERENCE. SHAREHOLDERS ARE
URGED TO READ THE MERGER AGREEMENT IN ITS ENTIRETY.
PARENTHETICAL REFERENCES ARE TO SECTIONS OF THE MERGER AGREEMENT.
GENERAL
At the Effective Time of the Merger, a wholly-owned subsidiary of
Norwest will be merged with and into Central, with Central being the
surviving corporation in the Merger. Following the Merger, Central will be a
wholly-owned subsidiary of Norwest. Except with respect to fractional shares
and shares as to which dissenters' rights have been exercised, if the Merger
Agreement is approved and the Merger becomes effective, each share of Central
Common Stock outstanding immediately prior to the Effective Time of the
Merger will be automatically converted into and exchanged for the right to
receive shares of Norwest Common Stock based on the Exchange Ratio. See
"--MERGER CONSIDERATION" below. Following the Effective Time of the Merger,
Norwest will be the sole shareholder of Central. Shares of Norwest Common
Stock issued and outstanding immediately before the Effective Time of the
Merger will remain issued and outstanding immediately after the Effective
Time of the Merger.
BACKGROUND OF AND REASONS FOR THE MERGER
During early 1996, informal discussions were initiated by Norwest
and another bank holding company ("Bank Holding Co. No. 2") regarding their
respective interest in Central. In April 1996, Bank Holding Co. No. 2
initially discussed its interest in acquiring Central, including certain
acquisition values, which the management of Central determined were
sufficient to warrant further consideration. As a result, Central's
management began to explore the various strategic alternatives available to
Central, including (i) a strategy of independence focusing on efficiencies
and internal growth, (ii) growth by acquisition of smaller banks, (iii) a
merger of equals and (iv) a sale of Central. In addition, Central had an
existing relationship with Keefe, which had kept the management of Central
abreast of recent developments with respect to such issues. Historically,
the Central Board had chosen to maintain a strategy of acquiring smaller
banks within its geographic market and developing business opportunities from
its existing customer base.
In May 1996, representatives of Central contacted representatives
of Norwest to solicit Norwest's interest in Central, pursuant to which
Norwest indicated its interest. During June 1996, representatives of Central
met with and provided financial and non-financial information to Norwest and
Bank Holding Co. No. 2, each of which signed a confidentiality agreement, for
the purpose of determining a more definitive value of Central. After the
delivery of such information, the management of Central received positive
preliminary expressions of interest from each of Bank Holding Co. No. 2 and
Norwest.
On July 31, 1996, Central engaged Keefe to act as financial advisor
to Central and to evaluate the various proposals. On August 26, 1996,
Central invited Norwest to conduct certain due diligence investigations at
the offices of Central.
On August 29, 1996, the management of Central began definitive
negotiations with Norwest. On September 9, 1996, management of Central met
with Norwest at Norwest's offices in Minneapolis, and the parties discussed a
number of important contract terms. On September 13, 1996, a special meeting
of the Central Board was held to review the proposal submitted by Norwest and
the status of discussions with Bank Holding Co. No. 2. After evaluating the
proposal with Keefe, the Central Board authorized the continuance of efforts
to negotiate an acceptable definitive agreement. On September 16, 1996, at a
special meeting of the Central
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Board, the Central Board upon the unanimous vote of all directors present
approved the Merger Agreement. Representatives of Central and Norwest
completed negotiations and signed the Merger Agreement as of September 16,
1996.
The terms of the Merger Agreement, including the Exchange Ratio,
are the result of arm's-length negotiations between Central and Norwest and
their respective representatives. The Central Board believes that the Merger
is fair to and in the best interests of Central's shareholders. In reaching
its decision to recommend approval of the Merger, the Central Board
considered a number of factors. The Central Board did not assign any
relative or specific weights to the individual factors considered. Among
other things, the Central Board considered:
THE PROSPECTS FOR REMAINING INDEPENDENT. In this regard, the
Central Board considered the competitive and technological challenges arising
before Central and the banking and financial services industries and the
fundamental need for increasing financial resources to meet such challenges.
The Central Board considered the current trends in the banking industry,
including the likelihood of continuing consolidation and increasing
competition in the banking and financial services industries, the growing
importance of financial resources, market positions and economies of scale to
a banking institution's ability to compete successfully in this changing
environment and the increasing cost of technology. After thorough analysis,
the Central Board concluded that there would be substantial risk involved in
attempting to attain the necessary growth through internal means to meet such
challenges and that there was a limited number of attractive acquisition
targets for Central within the State of Texas. The Central Board concluded
that the range of values on a sale basis generally exceeded the present value
of Central's shares on a basis assuming the reasonable implementation of
business strategies by Central. The Central Board felt that a business
combination with Norwest would result in both greater short-term and
long-term value to Central's shareholders than other alternatives available,
including remaining independent.
FINANCIAL TERMS OF THE MERGER. The Central Board considered the
Exchange Ratio in relation to the book value, assets and earnings projections
of Central, information concerning the financial condition, results of
operations and prospects of Central, including the projected return on assets
and return on equity, the financial terms of other recent business
combinations in the banking industry, and the opinion of Keefe as to the
fairness of the Exchange Ratio to holders of Central Common Stock from a
financial point of view. The Central Board believes that the holders of
Central Common Stock would initially benefit from the Merger through the
ability to obtain, in a tax-free exchange, ownership of shares in a larger
enterprise with greater financial resources and broader and more diversified
classes of products, while allowing those shareholders who wish to dispose of
their interest for cash the opportunity to do so in the open market provided
by the New York Stock Exchange. Certain holders of Central's Common Stock
would be subject to transfer restrictions on the shares of Norwest Common
Stock received in the Merger. After considering a number of potential
bidders, the Central Board determined Norwest to be the most attractive
potential merger partner. The terms of the Merger Agreement provide
protection to Central's shareholders by allowing Central the opportunity to
terminate the Merger Agreement in the event that another potential acquiror
makes a competitive bid for Central (subject to the payment of a $3.5 million
termination fee to Norwest under certain conditions). See "THE MERGER --
TERMINATION OF THE MERGER AGREEMENT." The Central Board also reviewed and
considered a compilation of financial terms and trends of other recent
business combinations in the banking industry and determined that the
financial terms of the Merger were comparable to such other transactions.
CENTRAL FINANCIAL AND OTHER INFORMATION CONCERNING NORWEST. Such
information included, but was not limited to, the financial condition, asset
quality, historical and projected earnings and operations of Norwest and the
market price and book value of Norwest Common Stock. In addition, the
Central Board considered the future growth prospects of Norwest following the
Merger and the potential synergies and economies of scale expected to be
realized from the Merger.
INVESTMENT LIQUIDITY. The shares of Norwest Common Stock to be
received in the Merger by holders of Central Common Stock will be listed for
trading on the New York Stock Exchange
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and should provide Central's shareholders with increased investment liquidity
due to the increased market capitalization of Norwest.
The Central Board believes that Central's businesses can be
substantially enhanced by the financial resources and diversified operations
of Norwest, that the Merger will produce a financial institution better able
to meet the competitive and technological challenges in the banking and
financial services industries and that combining Central with Norwest will
result in economies of scale and increase the market served by Central in the
State of Texas.
THE CENTRAL BOARD BELIEVES THAT THE TERMS OF THE MERGER ARE FAIR TO
AND IN THE BEST INTEREST OF CENTRAL'S SHAREHOLDERS. THE CENTRAL BOARD HAS,
BY UNANIMOUS VOTE OF ALL DIRECTORS PRESENT, APPROVED THE MERGER AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMENDS THAT CENTRAL'S
SHAREHOLDERS APPROVE AND ADOPT THE MERGER AGREEMENT.
OPINION OF CENTRAL'S FINANCIAL ADVISOR
Central retained Keefe to render an opinion with respect to the
fairness from a financial point of view of the consideration to be received
by the holders of Central Common Stock in the Merger. Keefe was selected by
Central on the basis of its qualifications, its previous experience in
similar transactions and its reputation in the banking and investment
communities. Keefe is a nationally recognized investment banking firm and, as
part of its investment banking business, is continually engaged in the
valuation of bank, bank holding company, and thrift institution securities in
connection with acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements and
valuations for various other purposes. As specialists in the securities of
banking companies, Keefe has experience in, and knowledge of, the valuation
of banking enterprises. Keefe has acted exclusively for the Central Board in
rendering its fairness opinion and will receive a fee from Central for its
services.
In the ordinary course of its business as a broker-dealer, Keefe
may, from time to time, purchase securities from, and sell securities to,
Central and Norwest, and as a market maker in securities, Keefe may from time
to time have a long or short position in, and buy or sell, equity securities
of Central and Norwest for its own account and for the accounts of its
customers. To the extent that Keefe has any such position as of the date of
the fairness opinion attached as Appendix C hereto, it has been disclosed to
Central.
At the September 13, 1996 special meeting of the Central Board,
Keefe rendered its oral opinion to the Central Board to the effect that, as
of such date, the consideration to be received by the holders of Central
Common Stock, as expressed in the Exchange Ratio was fair to the holders of
Central Common Stock from a financial point of view. Keefe has also
delivered a written opinion to the Central Board dated as of the date of this
Joint Proxy Statement-Prospectus to the effect that, as of such date, the
Exchange Ratio was fair to the holders of Central Common Stock from a
financial point of view.
THE FULL TEXT OF KEEFE'S OPINION IS ATTACHED AS APPENDIX C TO THIS
JOINT 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. CENTRAL SHAREHOLDERS ARE URGED TO READ THE
OPINION IN ITS ENTIRETY FOR A DESCRIPTION OF THE PROCEDURES FOLLOWED,
ASSUMPTIONS MADE, MATTERS CONSIDERED AND QUALIFICATIONS AND LIMITATIONS ON
THE REVIEW UNDERTAKEN BY KEEFE IN CONNECTION THEREWITH.
Keefe's opinion is directed only to the Norwest offer and does not
constitute a recommendation to any holder of Central Common Stock as to how
such shareholder should vote at the Special Meeting.
In connection with its opinion, Keefe reviewed, analyzed and relied
upon the following material relating to the financial and operating condition
of Central and Norwest: (i) the Merger Agreement; (ii) Annual Reports to
Stockholders for the three years ended December 31, 1995 for
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Central and Norwest; (iii) certain interim reports to holders of Central
Common Stock and Norwest Common Stock and Quarterly Reports on Form 10-Q of
Central and Norwest and certain other communications from Central and Norwest
to their respective shareholders; (iv) other financial information concerning
the businesses and operations of Central and Norwest furnished to Keefe by
Central and Norwest for the purpose of Keefe's analysis, including certain
internal financial analyses and forecasts for Central and Norwest prepared by
senior management of Central and Norwest; (v) certain publicly available
information concerning the trading of, and the trading market for, the
Norwest Common Stock; and (vi) certain publicly available information with
respect to banking companies and the nature and terms of certain other
transactions that Keefe considered relevant to its inquiry. Additionally, in
connection with its written opinion attached as Appendix C to this Joint
Proxy Statement-Prospectus, Keefe reviewed a draft of this Joint Proxy
Statement-Prospectus in substantially the form hereof. Keefe also held
discussions with senior management of Central and Norwest concerning their
past and current operations, financial condition and prospects, as well as
the results of regulatory examinations. Keefe also considered such financial
and other factors as it deemed appropriate under the circumstances and took
into account its assessment of general economic, market and financial
conditions and its experience in similar transactions, as well as its
experience in securities valuation and its knowledge of banks, bank holding
companies and thrift institutions generally. Keefe's opinion was necessarily
based upon conditions as they existed and could be evaluated on the date
thereof and the information made available to Keefe through the date thereof.
In conducting its review and arriving at its opinion, Keefe relied
upon and assumed the accuracy and completeness of all of the financial and
other information provided to it or publicly available, and Keefe did not
attempt to verify such information independently. Keefe relied upon the
managements of Central and Norwest as to the reasonableness and achievability
of the financial and operating forecasts (the assumptions and bases therefor)
provided to Keefe and assumed that such forecasts reflected the best
available estimates and judgments of such managements and that such forecasts
will be realized in the amounts and in the time periods estimated by such
managements. Keefe also assumed, without independent verification, that the
aggregate allowances for loan losses for Central and Norwest are adequate to
cover such losses. Keefe did not make or obtain any evaluations or appraisals
of the property of Central or Norwest, nor did Keefe examine any individual
loan credit files. Keefe was informed by Central, and assumed for purposes
of its opinion, that the Merger would be accounted for as a pooling of
interests under generally accepted accounting principles.
Prior to rendering the written opinion attached to Appendix C to
this Joint Proxy Statement/Prospectus, Keefe reviewed with the Central Board
financial aspects of the proposed Merger and rendered an oral opinion as to
the fairness of the Exchange Ratio to the Central Board on September 13,
1996. Set forth below is a summary of the material factors considered by and
valuation methodologies presented by Keefe to the Central Board on September
13, 1996 and utilized by Keefe in connection with rendering its opinion as to
the fairness, from a financial point of view, of the Exchange Ratio to
holders of Central Common Stock.
ANALYSIS OF THE NORWEST AND COMPETING OFFER. Keefe reviewed
certain historical financial information for Central and Norwest and
calculated the imputed value of the Norwest offer to holders of Central
Common Stock. Keefe calculated the exchange ratio which the offer
represents, based on a Norwest stock price at September 12, 1996 of $38.88,
at 1.7745 for a value to holders of Central Common Stock as of September 12,
1996 equivalent to $68.99 per share of Central Common Stock. The offer
represents the following multiples: 2.56 times June 30, 1996 stated fully
diluted book value of $26.93; 3.01 times June 30, 1996 fully diluted tangible
book value of $22.92; 17.60 times Central's latest 12 months' earnings per
share of $3.92; 15.89 times Central's latest 12 months' "normalized" earnings
per share of $4.34; and 14.62 times Central's 1997 earnings estimate of $4.72
per share. In comparison, Bank Holding Co. No.2's offer, as based on its
stock price as of September 12, 1996, was approximately $1.25 per share lower
to holders of Cental Common Stock. "Normalized" earnings was an estimate
developed by Keefe, with Central's management's input, as to what Central
might have earned if the results and effects of First American Savings Bank
had been included in Central's earnings for the full trailing twelve month
period.
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ANALYSIS OF SELECTED MERGER TRANSACTIONS. Keefe reviewed certain
financial data related to a set of recent comparable bank acquisitions in
Metropolitan Texas areas which included the following transactions
(identified by acquirer/acquiree): NationsBank/Charter Bancshares, Norwest
Corporation/Benson Financial, Compass Bancshares/Poast Oak Bank, Compass
Bancshares/Equitable BankShares, Cullen/Frost Bankers/Park NB of Houston,
Comerica Inc./QuestStar Bank, N.A., Norwest Corporation/Liberty National
Bank, Coastal Bancorp/Texas Capital Bancshares, Texas Bancorp Shares/Camino
Real Bancshares, Victoria Bankshares/Cattlemen's Financial, Norwest
Corporation/Valley-Hi Inv. Co, Northern Trust/Tanglewood Bancshares,
Cullen/Frost Bankers/National Commerce Bank, Compass Bancshares/Southwest
Bankers, Comerica Inc./Lockwood Banc Group, First Interstate/BancWest
Bancorp, and Sterling Bancshares/Enterprise Bank.
Keefe calculated average transaction multiples (measured as of the
date of the specific transaction announcement) for the premium to the
target's earnings (trailing 12 months), the premium to the target's book
value, and the premium to the target's tangible book value for all deals in
the comparable sample for the entire time period from 1993 through 1996 as
well as the stratified periods of 1993, 1994, and the 1995 - 1996 period.
Average premium to earnings were 11.60 times, 7.20 times, 11.20 times and
12.40 times, respectively. This compares to the implied value of the Norwest
offer of 17.60 times. Average multiples / book were 1.96times, 1.41times,
2.10times, 2.01times, respectively, which compares to the Norwest implied
multiple of 2.56times. Average multiples to tangible book were 2.07times,
1.45times, 2.37times, 2.10times which compares to the Norwest offer of
3.01times.
No company or transaction used as a comparison in the above
analysis is identical to Central, Norwest or the Merger. Accordingly, an
analysis of the results of the foregoing is not mathematical; rather, it
involves complex considerations and judgments concerning differences in
financial and operating characteristics of the companies and other factors
that could affect the public trading value of the companies to which they are
being compared.
Keefe characterized in general terms the financial performance and
market performance of Norwest and Bank Holding Co. No. 2 to its knowledge of
peer companies. Keefe discussed comparisons of assets size, profitability,
capital strength, bond market ratings, earnings history, prospects (as
determined from a national recognized composite earnings reporting and
estimates service), and stock market performance. Keefe commented that
Norwest was an above average profitability performer as compared to the
average regional and super-regional banking companies. In addition, Keefe
pointed out that Norwest's fully diluted earnings per share growth rate of
15.0% over a five year period ending in 1995 exceeded the industry average
for the same period.
Keefe further reviewed with the Central Board the current year and
future year price to earnings ratios for both Norwest and Bank Holding Co.
No. 2 comparing them with an overall price to earnings ratio for the banking
industry covered by Keefe (more than 150 commercial banking companies).
Further, Keefe compared the estimated five year earnings per share growth
projections and recommendations of securities analysts for Norwest, Bank
Holding Co. No. 2 and six other super-regional or national banking companies
with a strong Texas presence. Keefe observed that the estimated price to
earnings ratio for Norwest based on a composite earnings estimate of
securities analysts following Norwest and compiled by a nationally recognized
service (the "Composite Estimate") was 11.1 times for 1997 and 12.5 times for
1996 compared with a Keefe index of 10.1 times for 1997 and 11.4 times for
1996. Keefe further went on to describe its review of the composite estimate
of securities analysts expected five year growth rate in earnings per share
and an average of buy and sell recommendations for Norwest, Bank Holding Co.
No. 2, and six other super-regional and national banks with a strong Texas
presence. Keefe noted that Norwest had a projected five year growth rate of
12.1% in earnings per share, which compared favorably with the projected five
year growth rates for Bank Holding Co. No. 2 and the other six banking
companies in the review group. Similarly, Norwest had the highest average of
"buy" recommendations of the banking companies in the review group.
In addition, Keefe discussed with the Board the liquidity and
trading volume of Norwest's shares and Bank Holding Co. No. 2's shares.
Keefe's conclusion was that the Norwest shares represented a more liquid
investment than Bank Holding Co. No. 2's shares.
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DISCOUNTED CASH FLOW ANALYSIS. Keefe estimated the present value
of the future streams of after-tax cash flows of Central as a stand alone,
independent entity through the year 2000 under certain base case and high
performance projections, and then a subsequent sale to a larger financial
institution. The analysis was based on several assumptions, including an
earnings per share estimate of $4.77 in 1997 under the base case scenario and
$4.91 in 1997 under the high performance scenario. A terminal value was
calculated for 2000 by multiplying Central's projected 2000 earnings by a
price/earnings multiple of 10.5 - 15.5 times trailing earnings. The terminal
valuation and the estimated earnings were discounted at rates of 12% - 17%,
producing present values of $36.02-$64.64 under the base case scenario and
$37.98-$68.24 under the high performance scenario.
Furthermore, Keefe analyzed the potential present values that
holders of Central Common Stock might receive if they were to pursue a stand
alone strategy until the year 2000 and then seek a sale of the company.
Keefe discussed with the Board that such an analysis rests on numerous
assumptions and forecasts relating to Central's performance over time, the
market for bank securities, and the competitive positions of various
potential acquirers and Central competitors in its market place among other
factors. However, subject to the numerous above limitations and
qualifications, one potential method to analyze Central's value in a control
sale would be to analyze the value of the cost savings an acquirer might
achieve if it were to purchase Central and then add a certain amount of that
value to Central's stand alone value. Keefe calculated the present value of
the future cost savings assuming certain projections for Central's non
interest expense base and the assumption that Norwest would be able to
eliminate varying amounts of these expenses and convert the savings to net
income. Keefe calculated the approximate present value of the cost savings to
be between $8.85-$30.56 assuming cost savings between 20% and 45%, terminal
multiples between 10.5x and 16.5x, and a cost sharing ratio that gave
Central's shareholders 70% of the benefits received from such cost savings
applied to the year 2000 cost savings estimate. Keefe compared these
potential stand alone values and the potential value to be derived from
sharing in the cost savings value to the potential value provided to holders
of Central Common Stock in the Merger.
In addition to assumptions discussed above, the discounted cash
flow analysis was based upon various assumptions concerning earnings growth
rates, dividend rates and terminal values, which assumptions are themselves
based upon many factors and assumptions many of which are beyond the control
of Central and Norwest. As indicated below, this analysis is not necessarily
indicative of actual values or actual future results and does not purport to
reflect the prices at which any security may trade at the present time or any
time in the future.
The summary contained herein provides a description of the material
analyses prepared by Keefe in connection with the rendering of its opinion.
The summary set forth above does not purport to be a complete description of
the analyses performed by Keefe in connection with the rendering of its
opinion. The preparation of a fairness opinion is not necessarily
susceptible to partial analysis or summary description. Keefe believes that
its analyses and the summary set forth above must be considered as a whole
and that selecting portions of its analyses without considering all analyses,
or selecting part of the above summary, without considering all factors and
analyses, would create an incomplete view of the processes underlying the
analyses set forth in Keefe's presentations and opinion. The ranges of
valuations resulting from any particular analysis described above should not
be taken to be Keefe's view of the actual value of Central and Norwest. The
fact that any specific analysis has been referred to in the summary above is
not meant to indicate that such analysis was given greater weight than any
other analyses.
In performing its analyses, Keefe made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of Central and Norwest.
The analyses performed by Keefe 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 Keefe's analysis of the fairness, from a financial point of
view, of the Norwest offer and were provided to the Central Board in
connection with the delivery of Keefe's opinion. The analyses do not purport
to be appraisals or to reflect the prices at which a company actually might
be sold or the prices at which any securities may trade at the present time
or at any time in the future. In
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addition, as described above, Keefe's opinion, along with its presentation to
the Central Board, was just one of many factors taken into consideration by
the Central Board in unanimously approving the Merger Agreement.
Keefe was engaged by Central on July 31, 1996 pursuant to the
engagement letter dated as of July 1, 1996 (the "Keefe Engagement Letter").
Under the terms of the Keefe Engagement Letter, Central has agreed to pay
Keefe a cash fee of $30,000 promptly after the execution of the Keefe
engagement letter. In addition, Central has agreed to pay Keefe a cash fee of
$120,000 concurrently with the first to be executed of an agreement in
principle or a definitive agreement contemplating, among other transactions,
the consummation of a transaction involving a merger or sale of Central with
another party. Additionally, at the closing of such transaction a cash fee
equal to 0.50% of the market value of the aggregate consideration offered in
exchange for the outstanding shares of Central up to a value of $160,000,000
plus 1.50% of such consideration over $160,000,000 will be paid to Keefe (the
"Contingent Fee") less such fees paid prior to the Contingent Fee.
MERGER CONSIDERATION
SHARES OF NORWEST COMMON STOCK. Except with respect to fractional
shares as described below and shares as to which dissenters' rights have been
exercised, if the Merger Agreement is approved and the Merger becomes
effective, each share of Central Common Stock outstanding immediately prior
to the Effective Time of the Merger will be automatically converted into and
exchanged for 1.7745 shares of Norwest Common Stock (the "Exchange Ratio").
(SECTIONS 1(a) AND 2(c))
THE PRICE OF NORWEST COMMON STOCK, AND THUS THE VALUE OF THE
CONSIDERATION TO BE RECEIVED IN THE MERGER BY CENTRAL'S SHAREHOLDERS, WILL
FLUCTUATE BETWEEN THE DATE OF THIS PROXY STATEMENT-PROSPECTUS AND THE
EFFECTIVE TIME OF THE MERGER. THERE CAN BE NO ASSURANCE THAT THE PRICE OF
NORWEST COMMON STOCK AS OF THE EFFECTIVE TIME OF THE MERGER WILL BE THE SAME
AS THE PRICE OF NORWEST COMMON STOCK AS OF THE DATE OF THIS PROXY
STATEMENT-PROSPECTUS OR AS OF THE DATE OF THE SPECIAL MEETING.
CASH IN LIEU OF REMAINING FRACTIONAL SHARES. In the event the
aggregate number of shares of Norwest Common Stock to be received in the
Merger by a Central shareholder does not equal a whole number, the holder
will receive cash in lieu of the fractional share. The cash payment will be
equal to the product of the fractional part of the share of Norwest Common
Stock multiplied by the average of the closing prices of a share of Norwest
Common Stock as reported on the NYSE's composite tape for the five trading
days ending on the day immediately preceding the Special Meeting. (SECTION
1(c))
DISSENTERS' RIGHTS
The following is a summary of the rights of dissenting shareholders
pursuant to Texas law and does not purport to be a complete statement
thereof. The summary is qualified in its entirety by reference to Articles
5.11 through 5.13 of the TBCA, copies of which are set forth in full in
Appendix D to this Proxy Statement-Prospectus.
Record holders of Central Common Stock will have the right under
the TBCA to dissent with respect to the Merger and, subject to certain
conditions, receive a cash payment equal to the fair value of their shares.
ANY SHAREHOLDER WHO WISHES TO ASSERT HIS OR HER DISSENTER'S RIGHTS MUST CAUSE
CENTRAL TO RECEIVE, BEFORE THE SPECIAL MEETING, A WRITTEN OBJECTION TO THE
MERGER STATING THAT SUCH SHAREHOLDER'S RIGHT TO DISSENT WILL BE EXERCISED IF
THE MERGER IS EFFECTIVE AND GIVING THE SHAREHOLDER'S ADDRESS TO WHICH ANY
NOTICES SHOULD BE SENT, AND SUCH SHAREHOLDER MAY NOT VOTE ANY OF HIS OR HER
SHARES IN FAVOR OF THE MERGER AGREEMENT. VOTING AGAINST THE MERGER AGREEMENT
IS NOT SUFFICIENT, IN AND OF ITSELF, FOR A SHAREHOLDER TO ASSERT HIS OR HER
DISSENTER'S RIGHTS.
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In the event Central's shareholders approve the Merger Agreement at
the Special Meeting, Central is required to deliver or mail a written notice
to all shareholders who are entitled to demand payment for their shares no
later than 10 days after the Effective Time of the Merger. Any shareholder
to whom a notice is sent by Central and who desires to exercise his or her
dissenter's rights must, within 10 days from the delivery or mailing of
Central's notice, make written demand on Central for the payment of the fair
value of his or her shares. Pursuant to the TBCA, the fair value of the
shares is the value thereof as of the day immediately preceding the Special
Meeting, excluding any appreciation or depreciation in anticipation of the
Merger. The demand must state the number of shares owned by the shareholder
and the fair value of the shares as estimated by the shareholder. Any
shareholder who does not demand payment for his or her shares within the 10
day period is bound by the Merger. Upon receiving a demand for payment from
a dissenting shareholder, Central must make an appropriate notation of the
demand in its shareholder records. Within 20 days after making such demand,
the dissenting shareholder must submit his or her share certificates to
Central for notation thereon that demand has been made.
Within 20 days after Central's receipt of a demand from a
dissenting shareholder, it must deliver or mail to the shareholder a written
notice that either accepts the amount claimed in the shareholder's demand as
the fair value of the shares or sets forth Central's estimate of the fair
value of the shares. If the shareholder's amount is accepted, the notice
must state that Central will pay that amount to the shareholder within 90
days after the date the Merger was effected, upon surrender of the
certificates for the shareholder's shares, duly endorsed. If the notice
includes Central's estimate of the fair value of the shares, such notice must
also include an offer to pay the amount of that estimate to the shareholder
within 90 days after the date the Merger was effected, upon receipt of notice
within 60 days after that date from the shareholder that he or she agrees to
accept that amount and surrenders the certificates for the shareholder's
shares. The failure of a dissenting shareholder to submit his or her share
certificates for notation terminates such shareholder's right to dissent, at
the option of Central, unless a court of competent jurisdiction for good and
sufficient cause otherwise directs.
If, within 60 days after the date on which the Merger was effected,
the value of the shares is agreed upon by Central and the dissenting
shareholder, then payment for the shares must be made by Central to the
shareholder within 90 days after the date on which the Merger was effected,
upon the shareholder's surrender of the certificates, duly endorsed. Upon
payment of the agreed value, the shareholder ceases to have any interest in
the shares or Central.
If, however, within 60 days after the date on which the Merger was
effected, the dissenting shareholder and Central do not agree upon the value
of the shares, then either may, within an additional 60 days after the
expiration of the first 60 day period, file a petition in any court of
competent jurisdiction in Tarrant County, Texas, asking the court to
determine the fair value of the shareholder's shares. If the petition is
filed by the shareholder, Central must, within 10 days after service of the
petition upon it, file in the office of the clerk of the court a list
containing the names and addresses of all shareholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by Central. If the petition is filed by
Central, then the petition must be accompanied by such list. The clerk of
the court then gives notice of the time and place fixed for the hearing by
the court of the petition by registered mail to Central and each of the
shareholders named on the list at the addresses stated therein, and the
shareholders as notified and Central are bound by the final judgment of the
court.
After the hearing of the petition, the court determines the
shareholders who have complied with the foregoing procedure and become
entitled to the valuation of and payment for their shares and appoints one or
more appraisers to determine that value. The appraisers may examine the
books and records of Central and are required to afford a reasonable
opportunity to the interested parties to submit pertinent evidence as to the
value of the shares. The appraisers then determine the fair value of the
shares of all of the shareholders entitled to payment for their shares and
file their report of that value in the office of the clerk of the court, who
gives notice of such filing to the parties in interest. After hearing any
exceptions to the report, the court then determines the fair value of the
shares of all the shareholders entitled to payment and directs Central to pay
that value, together with interest thereon, beginning 91 days after the date
on
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which the Merger was effected until the date of the judgment, to the
shareholders entitled to payment, upon surrender of the certificates for
their shares, duly endorsed. Upon payment of the judgment, the dissenting
shareholders cease to have any interest in those shares or Central. The
court allows the appraisers a reasonable fee as court costs, and all court
costs are allotted between the parties in a manner as the court determines to
be fair and equitable.
Any shareholder who has demanded payment for his or her shares may
withdraw such demand at any time before payment for the shares or before any
petition is filed seeking a determination of the fair value of the shares
and, with the consent of Central, after any such petition is filed. If (i)
the demand is withdrawn, (ii) Central has terminated the shareholder's rights
under Article 5.12 because of the failure of the shareholder to submit the
certificates for his or her shares for notation of demand, (iii) no petition
is timely filed, or (iv) after hearing the petition, the court determines the
shareholder is not entitled to the relief provided by Article 5.12, then the
shareholder is conclusively presumed to have approved the Merger and is bound
thereby, and his or her status as a shareholder is restored and he or she is
entitled to receive any dividends paid to shareholders in the interim.
In the absence of fraud, the remedy provided by Article 5.12 of the
TBCA to a shareholder objecting to the proposed Merger is the exclusive
remedy for the recovery of the value of his or her shares and, if Central
complies with Article 5.12, then any shareholder who fails to comply with the
requirements of Article 5.12 is not entitled to bring suit for the recovery
of the value of his or her shares or money damages to the shareholder with
respect to the Merger.
SURRENDER OF CERTIFICATES
Promptly following the Effective Time of the Merger, 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 Central 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.
SHAREHOLDERS OF CENTRAL 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 Central 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 remaining 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 of the Merger. No dividends in
respect of the Norwest Common Stock with a record date after the Effective
Time of the Merger will be paid to the former shareholders of Central
entitled to receive certificates for shares of Norwest Common Stock until
such shareholders surrender their certificates representing shares of Central
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 of the Merger and before the date of such
surrender. After such surrender, there shall be paid to the person in whose
name the certificate representing such shares of Norwest Common Stock is
issued, on the appropriate dividend payment date, any dividend on such shares
of Norwest Common Stock which shall
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have a record date after the Effective Time of the Merger, 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
CONDITIONS TO THE OBLIGATIONS OF NORWEST AND CENTRAL. The
obligations of both Norwest and Central to effect the Merger are subject to
the satisfaction as of the Effective Time of the Merger or, if permissible
under the Merger Agreement, waiver of a number of conditions, including,
among others, the following: (i) the approval of the Merger Agreement by the
requisite vote of Central's shareholders; (ii) the receipt of all requisite
regulatory approvals; (iii) the absence of any order issued by any court or
governmental authority of competent jurisdiction restraining, enjoining or
otherwise prohibiting consummation of the Merger; and (iv) the effectiveness
of the Registration Statement. (SECTIONS 6 AND 7)
CONDITIONS TO THE OBLIGATION OF CENTRAL. The obligation of Central
to effect the Merger is subject to the satisfaction as of the Effective Time
of the Merger or, if permissible under the Merger Agreement, waiver of
certain additional conditions, including, among others, the following: (i)
the performance by Norwest in all material respects of the agreements made by
Norwest in the Merger Agreement and the truthfulness in all material respects
of the representations made by Norwest in the Merger Agreement; (ii) the
approval for listing on the NYSE and CHX of the shares of Norwest Common
Stock to be issued in the Merger; and (iii) the receipt of an opinion of
counsel to Central at the closing of the Merger regarding certain federal
income tax consequences of the Merger. (SECTION 6) See "-- U.S. FEDERAL
INCOME TAX CONSEQUENCES."
CONDITIONS TO THE OBLIGATION OF NORWEST. The obligation of Norwest
to effect the Merger is subject to the satisfaction as of the Effective Time
of the Merger or, if permissible under the Merger Agreement, waiver of
certain additional conditions, including, among others, the following: (i)
the performance by Central in all material respects of the agreements made by
Central in the Merger Agreement and the truthfulness in all material respects
of the representations made by Central in the Merger Agreement; (ii) the
absence of any condition or requirement in any approval, license or consent
relating to the Merger that, in the good faith judgment of Norwest, is
unreasonably burdensome to Norwest; (iii) the Merger shall qualify for
pooling of interests accounting treatment and Norwest shall have received
from KPMG Peat Marwick LLP an opinion to that effect; and (iv) at any time
since September 16, 1996 (the date of the Merger Agreement) the total number
of shares of Central Common Stock outstanding and subject to issuance upon
exercise (assuming for this purpose that phantom shares and other share
equivalents constitute Central Common Stock) of all warrants, options,
conversion rights (including equity securities convertible into Central
Common Stock), phantom shares or other share equivalents shall not have
exceeded 2,648,637.
See SECTIONS 6 AND 7 OF THE MERGER AGREEMENT for additional
conditions to the Merger becoming effective.
REGULATORY APPROVALS
The Merger is subject to prior approval by the Federal Reserve
Board under the Bank Holding Company Act. Norwest has filed an application
with the Federal Reserve Board requesting approval of the Merger; however,
there can be no assurance that the necessary regulatory approval will be
obtained or as to the timing of or conditions placed on such approval. The
Merger is also subject to certain filing and other requirements of the Texas
Department of Banking.
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, shareholders. Regulatory approvals do not constitute an
endorsement or recommendation of the proposed Merger.
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Norwest and Central are not aware of any governmental approvals or
compliance with banking laws and regulations that are required for the Merger
to become effective other than those described above. The parties currently
intend to seek to obtain any other approval and to take any other action that
may be required to effect the Merger. There can be no assurance that any
required approval or action can be obtained or taken prior to the Special
Meeting. The receipt of all necessary regulatory approvals is a condition to
effecting the Merger. See "--CONDITIONS TO THE MERGER" AND "--TERMINATION OF
THE MERGER AGREEMENT."
CONDUCT OF BUSINESS PENDING THE MERGER
BY CENTRAL. Central, and each of its subsidiaries, is required to
maintain its corporate existence in good standing, maintain the general
character of its businesses and conduct its businesses in the ordinary and
usual manner. In addition, without the prior written consent of Norwest,
neither Central nor any subsidiary of Central may (i) make any extensions of
credit aggregating in excess of $500,000 to a person or entity that was not a
borrower as of the September 16, 1996 (the date of the Merger Agreement);
(ii) engage in any loan transaction or series of contemporaneous loan
transactions involving an aggregate of more than $250,000 with any borrower
who had aggregate extensions of credit in excess of $1,000,000 as of
September 16, 1996; (iii) enter into any material agreement, contract or
commitment exceeding $50,000 (other than banking transactions in the ordinary
course of business and in accordance with policies and procedures in effect
on September 16, 1996); (iv) make any investments except investments in the
ordinary course of business in accordance with past practice; (v) issue or
sell or authorize for issuance or sale, or grant any options or make other
agreements with respect to the issuance or sale or conversion of, any shares
of its capital stock, except that Central may issue shares of Central Common
Stock upon exercise of one or more of the Central Stock Options; (vi) sell or
otherwise dispose of any of its assets or properties other than in the
ordinary course of business; (vii) declare, set aside, make or pay any
dividend or other distribution with respect to its capital stock except that
(A) prior to the record date for the regular cash dividend, if any, declared
on Norwest Common Stock for the second quarter of 1997 (the "Norwest Dividend
Record Date") the Central Board may declare and pay, in accordance with past
practice, dividends not to exceed an annualized rate of $0.40 per share of
Central Common Stock, (B) if the Effective Time of the Merger is after the
Norwest Dividend Record Date the Central Board may declare and pay cash
dividends on Central Common Stock in an amount not to exceed, in the
aggregate, the amount that would have been received by the holders of
4,700,000 shares of Norwest Common Stock between the Norwest Dividend Record
Date and the Effective Time of the Merger, PROVIDED that holders of Central
Common Stock shall be entitled to either a dividend on Central Common Stock
or Norwest Common Stock, but not both, in the calendar quarter in which the
closing of the Merger (as described in the Merger Agreement) shall occur, and
(C) any dividend declared by the board of directors of a subsidiary of
Central in accordance with applicable law and regulation; (viii) redeem,
purchase or otherwise acquire, directly or indirectly, any of the capital
stock of Central; or (ix) increase the compensation of any director, officer
or executive employee of Central, except pursuant to existing compensation
plans and practices (including bonus plans), PROVIDED that Central may, in
addition, accrue and pay bonuses and deferred compensation obligations in
accordance with the provisions of the Merger Agreement. (SECTION 4)
BY NORWEST. Norwest is required to conduct and to cause its
significant subsidiaries to conduct their respective businesses in compliance
with all material obligations and duties imposed by laws, regulations, rules
and ordinances or by judicial orders, judgments and decrees applicable to
them or to their businesses or properties. (SECTION 5)
SEE SECTIONS 4 AND 5 OF THE MERGER AGREEMENT for additional
restrictions on the conduct of business by Central and Norwest pending the
Merger.
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NO SOLICITATION
Central and its subsidiaries, and their respective directors,
officers, representatives and agents, are prohibited under the Merger
Agreement from directly or indirectly soliciting, authorizing the
solicitation of or, except to the extent that the Central Board shall
conclude in good faith, after taking into account the written advice of its
outside counsel, that to fail to do so could reasonably be determined to
violate its fiduciary obligations under applicable law, entering into any
discussions with any third party concerning any offer or possible offer to
(i) except as otherwise permitted under the Merger Agreement with respect to
the Central Stock Options, purchase (A) any shares of common stock, (B) any
option or warrant to purchase shares of common stock, (C) any security
convertible into shares of common stock or (D) any other equity security of
Central or any of its subsidiaries; (ii) make a tender or exchange offer for
any shares of common stock or other equity security of Central or any of its
subsidiaries; (iii) purchase, lease or otherwise acquire the assets of
Central or any of its subsidiaries except in the ordinary course of business;
or (iv) merge, consolidate or otherwise combine with Central or any of its
subsidiaries. If any third party makes an offer or inquiry to Central or any
of its subsidiaries concerning any of the foregoing, Central or the
subsidiary, as applicable, is required to promptly disclose such offer or
inquiry (including the terms thereof) to Norwest. (SECTION 4(h))
CERTAIN ADDITIONAL AGREEMENTS
CENTRAL. Central has also agreed under the Merger Agreement to (i)
if requested by Norwest, terminate or amend, effective as of the Effective
Time of the Merger, certain employee benefit plans of Central and its
subsidiaries; (ii) establish such additional accruals and reserves as may be
necessary to conform Central's accounting and credit loss reserve practices
and methods to those of Norwest and Norwest's plans with respect to the
conduct of Central's business after the Effective Time of the Merger and, to
the extent permitted by generally accepted accounting principles, provide for
costs and expenses related to effecting the transactions contemplated by the
Merger Agreement; (iii) obtain and deliver environmental assessment reports
on certain properties; (iv) obtain and deliver title commitments and boundary
surveys for each of its bank facilities; and (v) use its best efforts to
obtain and deliver to Norwest at least 32 days prior to the Effective Time of
the Merger signed representations substantially in the form attached as
Exhibit B to the Merger Agreement from each executive officer, director of
shareholder of Central who may reasonably be deemed an "affiliate" of Central
within the meaning of each term used in Rule 145 of the Securities Act.
(SECTION 4)
NORWEST. Norwest has agreed under the Merger Agreement to (i) take
certain action to maintain Central's directors' and officers' liability
insurance policies in effect as of the date of the Merger Agreement; (ii) for
a period of up to 15 days prior to the Closing, permit Central and its
representatives to examine the books, records and properties of Norwest and
to interview officers, employees and agents of Norwest; and (iii) cause each
Central Stock Option outstanding immediately prior to the Effective Time of
the Merger to be converted into an option to purchase shares of Norwest
Common Stock. (SECTION 5) For more information concerning the directors'
and officers' liability insurance policies, SEE "--INTERESTS OF CERTAIN
PERSONS IN THE MERGER." For more information concerning the conversion of
Central Stock Options, SEE "--MERGER CONSIDERATION."
For information concerning additional agreements and covenants of
Central and Norwest, SEE SECTIONS 4 AND 5 OF THE MERGER AGREEMENT.
TERMINATION OF THE MERGER AGREEMENT
BY NORWEST OR CENTRAL. Subject to the satisfaction of certain
notice requirements, either Norwest or Central may terminate the Merger
Agreement at any time prior to the Effective Time of the Merger, whether
before or after approval of the Merger Agreement by Central's shareholders,
pursuant to the mutual written consent of each party or upon the occurrence
or existence of any of the following events or conditions: (i) the Merger
has not become effective by May 31, 1997,
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unless such failure of the Merger to become effective 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; (ii) any court or governmental authority of competent
jurisdiction shall have issued a final order restraining, enjoining or
otherwise prohibiting the transactions contemplated by the Merger Agreement;
and (iii) the Central Board shall have determined in good faith that a
Takeover Proposal (as defined below) constitutes a Superior Proposal (as
defined below), PROVIDED Central is not entitled to terminate the Merger
Agreement for this reason unless (A) it has not breached any of its
nonsolicitation covenants contained in the Merger Agreement and (B) it
delivers to Norwest the termination fee as described below. A termination of
the Merger Agreement pursuant to (iii) above is referred to herein as a
"Superior Proposal Termination Event."
BY CENTRAL. Subject to the satisfaction of certain notice
requirements, Central may terminate the Merger Agreement within five business
days after the end of the Index Measurement Period (as defined below) if (A)
BOTH the Norwest Measurement Price (as defined below) is less than $34 and
the number obtained by dividing the Norwest Measurement Price by 40.75 (the
closing price of Norwest Common Stock on the trading day immediately
preceding the date of the Merger Agreement) is less than the number obtained
by dividing the Final Index Price (as defined below) by the Initial Index
Price (as defined below) and subtracting 0.15 from such quotient; or (B) the
Norwest Average Price (as defined below) is less than $32.
BY NORWEST. Subject to the satisfaction of certain notice
requirements, Norwest may terminate the Merger Agreement if (i) the Central
Board fails to recommend approval of the Merger Agreement or withdraws or
modifies in a manner materially adverse to Norwest its approval or
recommendation of approval of the Merger Agreement; (ii) after an agreement
to engage in or the occurrence of an Acquisition Event (as defined below) or
after a third party shall have made a proposal to Central or Central's
shareholders to engage in an Acquisition Event, the Merger Agreement is not
approved by Central's shareholders at the Special Meeting; or (iii) a meeting
of Central's shareholders to approve the Merger Agreement is not held by June
30, 1997 and Central has failed to comply with its obligations to call and
caused to be held such meeting as provided in the Merger Agreement. A
termination of the Merger Agreement pursuant to (i), (ii) or (iii) above is
referred to herein as a "Nonperformance Termination Event."
DEFINITIONS. For purposes of the Merger Agreement:
"Acquisition Event" means any of the following: (i) a merger,
consolidation or similar transaction involving Central, its
intermediate bank holding company (the "Holding Company"), its bank
subsidiary (the "Bank") or any successor to Central, the Holding
Company or the Bank, (ii) a purchase, lease or other acquisition in
one or a series of related transactions of assets of Central or any
of its subsidiaries representing 25% or more of the consolidated
assets of Central and its subsidiaries or (iii) a purchase or other
acquisition (including by way of merger, consolidation, share
exchange or any similar transaction) in one or a series of related
transactions of beneficial ownership of securities representing 25%
or more of the voting power of Central or any of its subsidiaries in
each case with or by a person or entity other than Norwest or an
affiliate of Norwest.
"Company Market Capitalization" means (a) the price of one share
of the common stock of a given company at the close of the trading
day immediately preceding the date of the Merger Agreement
multiplied by (b) the number of shares of common stock of such
company outstanding as of June 30, 1996 (adjusted for any stock
dividend, reclassification, recapitalization, exchange of shares or
similar transaction between June 30, 1996 and the close of the
trading day immediately preceding the date of the Merger Agreement).
"Final Index Price" means the sum of the following,
calculated for each of the companies in the Index Group: (a) the
Final Price for each such company multiplied by (b) the Weighting
Factor (as defined below) for each such company.
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"Final Price" of any company in the Index Group means the
average of the daily closing prices of a share of common stock of
such company, as reported on the consolidated transaction reporting
system for the market or exchange on which such common stock is
principally traded, during the Index Measurement Period.
"Index Group" means all of those companies listed below the
common stock of which is publicly traded and as to which there is,
during the period of 20 trading days ending on the date immediately
preceding the Special Meeting (the "Index Measurement Period"), no
pending publicly announced proposal for such company to be acquired,
nor has there been any proposal by such company publicly announced
subsequent to the day before the date of the Merger Agreement to
acquire another company in exchange for stock where, if the company
to be acquired were to become a subsidiary of the acquiring company,
the company to be acquired would be a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X promulgated by the Commission
nor has there been any program publicly announced subsequent to the
date before the date of the Merger Agreement to repurchase 5% or
more of the outstanding shares of such company's common stock:
BancOne Corporation, Bank of Boston Corporation, The Bank of New
York Company, Inc., BankAmerica Corporation, Barnett Banks, Inc.,
Comerica, Inc., CoreStates Financial Corporation, First Bank System,
Inc., First Chicago NBD Corporation, First Union Corporation, Fleet
Financial, KeyCorp, Mellon Bank Corporation, National City
Corporation, PNC Financial Corporation, Signet Banking Corporation,
Suntrust Banks, Inc., U.S. Bancorp, Wachovia Corporation and Wells
Fargo Company.
"Initial Index Price" means the sum of the following, calculated
for each of the companies in the Index Group: (a) the closing price
per share of common stock of each such company on the trading day
immediately preceding the date of the Merger Agreement multiplied by
(b) the Weighting Factor (as defined below) for each such company.
"Norwest Average Price" means the average of the closing prices
of a share of Norwest Common Stock as reported on the NYSE
consolidated tape during the period of 15 trading days ending on the
day immediately preceding the Special Meeting.
"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 Index
Measurement Period.
"Superior Proposal" means a bona fide proposal or offer made by
a person to acquire Central pursuant to a tender or exchange offer, a
merger, consolidation or other business combination or an acquisition
of all or substantially all of the assets of Central and its
subsidiaries on terms which the Central Board shall determine in good
faith, after taking into account the advice of counsel, to be more
favorable to Central and its shareholders than the transactions
contemplated by the Merger Agreement.
"Takeover Proposal" means a bona fide proposal or offer by a
person to make a tender or exchange offer, or to engage in a merger,
consolidation or other business combination involving Central or to
acquire in any manner a substantial equity interest in, or all or
substantially all of the assets of, Central.
"Total Market Capitalization" means the sum of the Company Market
Capitalization for each of the companies in the Index Group.
"Weighting Factor" for any given company means the Company Market
Capitalization for such company divided by the Total Market
Capitalization.
TERMINATION FEE. Central is required to pay Norwest a termination
fee in the amount of $3,500,000 upon either (i) the occurrence of a Superior
Proposal Termination Event or (ii) the occurrence of a Nonperformance
Termination Event, PROVIDED in the case of a Nonperformance
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Termination Event such fee will be due only if prior to such termination or
within 12 months after such termination either (A) Central, the Holding
Company or the Bank or any successor to Central, the Holding Company or the
Bank shall have entered into an agreement to engage in an Acquisition Event
or an Acquisition Event shall have occurred or (B) the Central Board shall
have authorized or approved any Acquisition Event or shall have publicly
announced an intention to authorize or approve, or shall have recommended
that Central's shareholders approve or accept, any Acquisition Event.
See SECTION 9 OF THE MERGER AGREEMENT for more information
concerning the circumstances under which the Merger Agreement may be
terminated and the consequences to the parties of such termination. The
foregoing discussion is qualified in its entirety by reference to Section 9
of the Merger Agreement.
AMENDMENT OF MERGER AGREEMENT
The Merger Agreement may be amended by the parties thereto,
pursuant to action taken by their respective boards of directors or pursuant
to authority delegated by their respective boards of directors, at any time
before or after approval of the Merger Agreement by Central's shareholders,
PROVIDED that, after the Merger Agreement is approved by Central's
shareholders, no amendment can be made to the Merger Agreement that changes
in a manner materially adverse to Central's shareholders the consideration to
be received by Central's shareholders in the Merger. (SECTION 17)
WAIVER OF PERFORMANCE OF OBLIGATIONS
Any of the parties to the Merger Agreement may, by a signed
writing, give any consent, take any action with respect to the termination of
the Merger Agreement or otherwise, or waive any of the inaccuracies in the
representations and warranties of the other party or compliance by the other
party with any of the covenants or conditions contained in the Merger
Agreement. (SECTION 16)
EFFECT ON EMPLOYEE BENEFIT PLANS
The Merger Agreement provides that, subject to any eligibility
requirements applicable to such plans, employees of Central shall be entitled
to participate in those Norwest employee benefit and welfare plans specified
in the Merger Agreement. The eligible employees of Central 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 Time of the Merger. Central's
employees will generally continue to participate in welfare and retirement
plans maintained by Central until entering Norwest's plans. Eligible Central
employees will receive credit for past service for the purpose of determining
certain benefits under certain but not all of Norwest's benefit plans.
(SECTION 8) Interests of Certain Persons in the Merger
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Shareholders should be aware that certain members of the Central
Board and management of Central have interests in the Merger in addition to
and separate from the interests of shareholders of Central generally. The
Central Board is aware of these interests, and considered them among other
matters in approving the Merger Agreement and the transactions contemplated
thereby, including the Merger. Adoption and approval of the Merger Agreement
by the shareholders of Central will also constitute approval of the following
benefits to be received by the directors, executive officers and employees of
Central.
INDEMNIFICATION AND INSURANCE. Pursuant to the Merger Agreement,
Norwest is required to insure that all rights to indemnification and all
limitations of liability existing in favor of directors and officers of
Central and its subsidiaries pursuant to the Central Articles, Central
Bylaws, similar governing documents of Central subsidiaries and
indemnification agreements between
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Central or its subsidiaries and their directors and officers shall continue
in full force and effect. In addition, for a period of three years after the
effective time, Norwest will use reasonable efforts to cause the directors
and officers of Central and its subsidiaries to continue to be covered by
Central's directors' and officers' liability insurance policy (or
substantially equivalent coverage) at an annual cost not to exceed 125% of
Central's premium payment for Central's current coverage.
EXECUTIVE RETENTION/SEVERANCE AGREEMENTS. During 1996, Central
entered into various executive retention/severance agreements with certain
officers. These are intended to reward the officers for continued service to
Central, including continued cooperation and effort to accommodate and
facilitate a change in corporate control of Central, and to provide for a
fair severance payment in the event the officers were not retained after a
change in control. The approval of the Merger Agreement at the Special
Meeting will constitute a change of control under such agreements. As a
result of such approval, Michael Tyler, Brian Garrison, James Prunty and
Danny Coleman would have the right to receive a cash bonus equal 150% of
their respective base salaries for the current year plus their respective
bonuses for the previous year in the event of (i) a termination of their
employment for good reason or (ii) an involuntary termination of employment
other than by reason of death, disability or for cause, as such terms are
defined therein. In addition, such officers would continue to be eligible to
participate in certain employee benefit plans of Central. Moreover,
approximately 29 officers of Central would have the right to receive a cash
payment in an amount equal to one-half of such officer's base compensation
and certain severance benefits in the event of (i) a termination of
employment by the officer for good reason or (ii) an involuntary termination
of employment other than by reason of death, disability or for cause, as such
terms are defined therein. In no event shall any payment described above
exceed the amount deductible for income tax purposes under the Code.
If pursuant to the provisions described above, severance payments
are required to be made to Messrs. Tyler, Garrison, Prunty and Coleman, the
amounts of such payments will be $228,000, $264,069, $225,000 and $229,500,
respectively.
During 1996, Central also entered into executive
retention/severance agreements with J. Andy Thompson and Stuart W. Murff.
These agreements were rescinded prior to Messrs. Thompson and Murff entering
into the Employment Agreements. See "EMPLOYMENT PAYMENTS" for a discussion
of the terms and conditions of the Employment Agreements, including the
nature and amount of the payments to Messrs. Thompson and Murff thereunder.
EXECUTIVE DEFERRED COMPENSATION PLANS. Under the terms of deferred
compensation plans adopted by Central and the Bank, Central will be required
to pay deferred compensation to certain officers of Central and the Bank
shortly after consummation of the Merger. A portion of these deferred
compensation payments would not yet have been due and payable in the absence
of the change of control of Central that will occur as a result of the
Merger. Set forth below is the amount of each officer's deferred
compensation payment that will be accelerated as a result of the Merger. The
amounts for Thompson and Murff constitute part of the Employment Payments to
be approved by shareholders at the Special Meeting. See "EMPLOYMENT
PAYMENTS."
Thompson $349,205
Murff $265,351
Garrison $133,356
Turner $164,283
Tyler $92,001
Coleman $92,001
Prunty $89,958
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Total $1,186,155
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U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material federal income tax
consequences of the Merger that are generally applicable to holders of shares
of Central Common Stock. The summary is based on the Internal Revenue Code
of 1986, as amended (the "Code"), existing and proposed regulations
thereunder, Internal Revenue Service ("IRS") rulings and pronouncements,
reports of congressional committees, judicial decisions and current
administrative rulings and practice, all as in effect on the date hereof, all
of which are subject to change at any time, and any such change may be
applied retroactively in a manner that could adversely affect a holder of
shares of Central Common Stock. The discussion below does not address all of
the federal income tax consequences that may be relevant to shareholders
entitled to special treatment under the Code (for example, dealers in
securities, banks, insurance companies, tax-exempt entities, foreign
corporations, and individuals who are not citizens or residents of the United
States) or to holders who acquired their shares of Central Common Stock
through the exercise of employee stock options or otherwise as compensation.
Moreover, the discussion below does not address the applicable state, local
or foreign tax laws. This summary also assumes that the shares of Central
Common Stock are held as a "capital assets" within the meaning of Section
1221 of the Code. The following discussion is intended only as a summary of
the material federal income tax consequences of the Merger and does not
purport to be a complete analysis or listing of all of the potential tax
effects relevant to a decision on whether to vote in favor of approval of the
Merger Agreement.
Central or Norwest will not seek any rulings from the IRS with
respect to any of the federal income tax consequences of the Merger. There
can be no assurance that the IRS will not take a different position
concerning the tax consequences of the Merger or that any such position would
not be sustained.
Central and Norwest will report the Merger as a reorganization
under Section 368(a) of the Code. As a result, except for cash received in
lieu of remaining fractional shares in Norwest Common Stock, holders of
shares of Central Common Stock will recognize no gain or loss on the receipt
of Norwest Common Stock in exchange therefor. The Merger's effectiveness is
conditioned upon the receipt by Central of a written opinion of counsel to
Central, substantially to the effect that, for U.S. 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 Central Common Stock upon receipt of
Norwest Common Stock solely in exchange for such Central Common Stock
pursuant to the Merger (except to the extent cash received in lieu of
fractional shares or as a result of exercising dissenter's or appraisal
rights); (iii) the basis of the Norwest Common Stock received by the holders
of shares of Central Common Stock will be the same as the basis of the shares
of Central Common Stock exchanged therefor, decreased by the tax basis
allocated to any fractional share interest exchanged for cash; and (iv) the
holding period of the shares of Norwest Common Stock received by the
shareholders of Central will include the holding period of the Central Common
Stock exchanged therefor, provided such shares were held as a capital asset
as of the Effective Time of the Merger.
Such opinion is subject to certain customary representations and
assumptions including, but not limited to, the representation from the
management of Central that there is no plan or intention by the shareholders
of Central who own five percent (5%) or more of the Central Common Stock, and
to the best of the knowledge of the management of Central, there is no plan
or intention on the part of the remaining shareholders of Central Common
Stock to sell, exchange, or otherwise dispose of a number of shares of
Norwest Common Stock received in the transaction that would reduce the
Central shareholders' ownership of Norwest Common Stock to a number of shares
having a value, as of the date of the transaction, of less than fifty percent
(50%) of the value of all of the formerly outstanding stock of Central as of
the same date.
The form of the opinion of counsel, the original of which will be
delivered at the closing of the Merger, is filed as an exhibit to the
Registration Statement. An opinion of counsel only represents counsel's best
legal judgment and has no binding effect on the IRS or the courts and
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no assurance can be given that contrary positions may not be taken by the IRS
or a court considering the issues.
THE FOREGOING IS A GENERAL SUMMARY OF THE MATERIAL S OF THE MERGER
TO CENTRAL SHAREHOLDERS, WITHOUT REGARD TO THE PARTICULAR FACTS AND
CIRCUMSTANCES OF EACH SHAREHOLDER'S TAX SITUATION AND STATUS. EACH CENTRAL
SHAREHOLDER 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 shareholders of
Central upon the Merger becoming effective have been registered under the
Securities Act. Such shares may be traded freely and without restriction by
those shareholders not deemed to be "affiliates" of Central or Norwest as
that term is defined in the rules under the Securities Act. Norwest Common
Stock received by those shareholders of Central who are deemed to be
"affiliates" of Central 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 Central generally include individuals or
entities that control, are controlled by or are under common control with,
Central and may include the executive officers and directors of Central as
well as certain principal shareholders of Central. In the Merger Agreement,
Central has agreed to use its best efforts to cause each shareholder who, in
the opinion of counsel to Central, is an affiliate of Central to enter into
an agreement with Norwest providing that such affiliate will not (i) offer to
sell, transfer or otherwise dispose of, during the 30 days immediately prior
to the Effective Time of the Merger, any shares of Central Common Stock; (ii)
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 or (iii) sell, transfer or otherwise dispose of the
shares of Norwest Common Stock to be received by such persons in the Merger
or in any way reduce such shareholder's risk relative to such shares until
such time as financial results covering at least 30 days of post-Merger
combined operations of Central and Norwest have been published. (SECTION
4(l)) This Proxy Statement-Prospectus does not cover any resales of Norwest
Common Stock received by affiliates of Central.
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 the Merger becoming effective. Consummation of the
Merger is conditioned on the authorization for listing of such shares on the
NYSE and CHX. (SECTION 6)
ACCOUNTING TREATMENT
The parties anticipate that the Merger will qualify for pooling of
interests accounting treatment. Under the pooling of interests method of
accounting, the historical basis of the assets and liabilities of Norwest and
Central will be combined at the Effective Time of the Merger and carried
forward at their previously recorded amounts, and the stockholders' equity
accounts of Central will be combined with Norwest's stockholders' equity
accounts 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 consolidated financial statements of Norwest.
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In order for the Merger to qualify for pooling of interests
accounting treatment, among other things, at least 90% of the outstanding
Central Common Stock must be exchanged for Norwest Common Stock. Central and
Norwest have each agreed not to take any action that would disqualify the
Merger from pooling of interests accounting treatment by Norwest.
The unaudited pro forma data included in this Proxy
Statement-Prospectus for the Merger have been prepared using the pooling of
interests method of accounting. SEE "SUMMARY--COMPARATIVE PER COMMON SHARE
DATA."
EXPENSES
Except as otherwise provided in the Merger Agreement, Norwest and
Central will each pay their own expenses in connection with the Merger,
including fees and expenses of their respective independent auditors and
counsel.
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EMPLOYMENT PAYMENTS
THE FOLLOWING IS A SUMMARY OF THE EMPLOYMENT PAYMENTS THAT WILL BE
PAID TO J. ANDY THOMPSON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF CENTRAL,
AND STUART MURFF, PRESIDENT AND DIRECTOR OF CENTRAL PURSUANT TO THE
EMPLOYMENT AGREEMENTS AND CERTAIN EMPLOYEE BENEFIT PLANS OF CENTRAL AND/OR
THE BANK. THE SUMMARY OF THE RELEVANT TERMS AND CONDITIONS OF THE EMPLOYMENT
AGREEMENTS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE EMPLOYMENT
AGREEMENTS, COPIES OF WHICH ARE SET FORTH IN APPENDIX B TO THIS PROXY
STATEMENT-PROSPECTUS AND INCORPORATED HEREIN BY REFERENCE.
AMOUNT AND NATURE OF EMPLOYMENT PAYMENTS. Messrs. Thompson and
Murff will receive total Employment Payments of $1,410,538 and $1,081,601,
respectively, consisting of (a) payments to be received pursuant to the
Employment Agreements and (b) the accelerated portion of certain deferred
compensation to be paid pursuant to deferred compensation plans of Central
and/or the Bank. By voting FOR approval of the Employment Payments, you will
be approving the payment of all of the Employment Payments.
EMPLOYMENT AGREEMENT PAYMENTS. The term of each
Employment Agreement commences as of the Effective Time of the Merger and
continues for a period of two months thereafter. During such term, Messrs.
Thompson and Murff will be regular, full-time employees of Central,
performing transition duties assigned to them by Norwest. For a period of 18
months following expiration of the term of the Employment Agreements, Messrs.
Thompson and Murff will be restricted from competing with Norwest in the
manner specified in the Employment Agreements.
Under the terms of the Employment Agreements, Messrs.
Thompson and Murff will receive payments of $1,061,333 and $816,250,
respectively, consisting of (i) base compensation payments totaling $66,333
and $54,417, respectively, payable in monthly installments over the two-month
term of the Employment Agreements; (ii) severance payments of $398,000 and
$272,083, respectively, payable upon expiration of the term of the Employment
Agreements, and (iii) non-compete payments of $597,000 and $489,750,
respectively, payable upon expiration of the term of the Employment
Agreements.
DEFERRED COMPENSATION PAYMENTS. In addition to the
payments made pursuant to the Employment Agreements, Messrs. Thompson and
Murff will receive Employment Payments of $349,205 and $265,352,
respectively, pursuant to deferred compensation plans of Central and/or the
Bank. These amounts represent the portion of their deferred compensation
payments that will be accelerated as a result of the Merger. See "THE
MERGER--INTERESTS OF CERTAIN PERSONS IN THE MERGER."
APPROVAL OF EMPLOYMENT PAYMENTS. Section 280G of the Code will
disallow the deduction for any portion of the Employment Payments
characterized as an "excess parachute payment." Also, Section 4999 of the
Code will impose a 20% nondeductible excise tax on the recipients for any
portion of the Employment Payments characterized as an "excess parachute
payment." To be "parachute payments," the Employment Payments must (i) be in
the nature of compensation to the recipients, (ii) be contingent on a change
in ownership of Central and (iii) exceed three times the average annual
compensation paid to the recipients by Central over the preceding five years.
Assuming the foregoing condition is satisfied, the Employment
Payments will be treated as "excess parachute payments" only to the extent
the present value of such payments exceeds the average annual compensation
for the recipients for the last five years. If the foregoing condition is
not satisfied, the Employment Payments are not deemed "parachute payments"
and consequently cannot be "excess parachute payments."
The Employment Payments appear to be in the nature of compensation
to Messrs. Thompson and Murff. A change in ownership of Central will occur
as a result of the Merger, and the Employment Payments will exceed three
times the average annual compensation paid to Messrs. Thompson and Murff over
the preceding five year period. Accordingly, unless exempted
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in the manner described below, the Employment Payments may be parachute
payments, a portion of which may be excess parachute payments.
The adverse federal income tax consequences to Central and to the
recipients may be avoided if such payments are approved by the vote of
disinterested shareholders owning in excess of 75% of the shares of Common
Stock after adequate disclosure to all such shareholders of all material
facts concerning the payments. The disclosure set forth in this Proxy
Statement-Prospectus is intended as adequate disclosure to all shareholders
of all material facts concerning the Employment Payments.
Approval of the Employment Payments will require the affirmative
vote of the holders owning in excess of 75% of the outstanding shares of
Central Common Stock not held, directly or indirectly, by Messrs. Thompson
and Murff. Mr. Thompson holds 162,467 shares and Mr. Murff holds 3,223
shares, so the affirmative vote of in excess of 75% of the remaining
2,457,687 shares, or 1,843,266 shares of Central Common Stock, is required
for approval of the Employment Payments.
For purposes of the shareholder vote discussed above, any
shareholder of Central who is not an individual may exercise its vote through
any person authorized by the entity to vote such shares. However, if a
substantial portion of the assets of the entity consists of Central Common
Stock, approval of the Employment Payments must be made by the persons who
hold, immediately before consummation of the Merger, in excess of 75% of the
voting power of the entity. Accordingly, if a shareholder is not an
individual, then such entity will be required to represent to Central, by
execution of the Proxy, either than (i) the entity owns (directly or
indirectly) one percent or less of the Central Common Stock (by value), or
(ii) the total value of the Central Common Stock owned (directly or
indirectly) by the entity is less than one-third (by value) of the assets of
the entity, or (iii) the entity's Central Common Stock is one-third or more
of its assets, but (a) approval of the payment of the Employment Payments
have been approved by a separate vote of the persons who hold, as of the
Record Date, more than 75% of the voting power of the entity, and (b) the
entity's stock and the stock of any member of an affiliated group of which
the entity is a member is not readily tradable on an established securities
market or otherwise.
Finally, even without the shareholder vote referenced above, any
portion of a parachute payment will be reduced to the extent, if any, that
Central can show by clear and convincing evidence that some or all of such
payment is "reasonable compensation" for services to be rendered to Central
after the Merger. Any portion of an excess parachute payment will be reduced
to the extent, if any, that Central can show by clear and convincing evidence
that some or all of such payment is "reasonable compensation" for services
rendered to Central prior to the Merger.
THE BOARD OF CENTRAL UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE
PROPOSAL TO PAY THE EMPLOYMENT PAYMENTS TO J. ANDY THOMPSON AND STUART W.
MURFF.
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COMPARISON OF RIGHTS OF HOLDERS OF
CENTRAL COMMON STOCK AND NORWEST COMMON STOCK
GENERAL
Central is incorporated under the laws of the state of Texas.
Norwest is incorporated under the laws of the state of Delaware. The rights
of Central's shareholders are currently governed by the TBCA and the Central
Articles and Central Bylaws. If Central's shareholders approve the Merger
Agreement and the Merger becomes effective, shareholders of Central will
become stockholders of Norwest. For that reason, after the Effective Time of
the Merger, their rights will be governed by the DGCL and the Norwest
Certificate and Norwest Bylaws.
THE FOLLOWING IS A COMPARISON OF CERTAIN RIGHTS OF HOLDERS OF
CENTRAL COMMON STOCK WITH THE RIGHTS OF HOLDERS OF NORWEST COMMON STOCK. IT
IS NOT INTENDED TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO THE RELEVANT PROVISIONS OF THE LAWS AND DOCUMENTS DISCUSSED BELOW.
ADDITIONAL INFORMATION CONCERNING THE RIGHTS OF HOLDERS OF NORWEST COMMON
STOCK IS PROVIDED IN NORWEST'S CURRENT REPORT ON FORM 8-K DATED APRIL 30,
1996 FILED WITH THE COMMISSION AND INCORPORATED HEREIN BY REFERENCE. SEE
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
DIRECTORS
CENTRAL. The Central Bylaws provide for a board of directors
consisting of not less than 1 nor more than 15 persons, each serving for a
term of one year or until his or her earlier death, resignation or removal.
The number of directors of Central is currently fixed at 8. Directors of
Central may be removed with or without cause by the affirmative vote of the
holders of a majority of the shares of Central capital stock entitled to vote
thereon. Vacancies on the Central Board may be filled by an annual or
special meeting of the shareholders called for such purpose or by a majority
of the remaining directors. Directors of Central are elected by plurality of
the votes of shares of Central capital stock entitled to vote thereon present
in person or by proxy at the meeting at which directors are elected. The
Central Articles do not currently permit cumulative voting for the election
of directors.
NORWEST. The Norwest Bylaws provide for a board of directors
consisting of not less than 10 nor more than 23 persons, each serving for a
term of one year or until his or her earlier death, resignation or removal.
The number of directors of Norwest is currently fixed at 14. Directors of
Norwest may be removed with or without cause by the affirmative vote of the
holders of a majority of the shares of Norwest capital stock entitled to vote
thereon. Vacancies on the Norwest Board may be filled by a majority of the
remaining directors or, in the event a vacancy is not so filled or if no
director remains, by the stockholders. Directors of Norwest are elected by
plurality of the votes of shares of Norwest capital stock entitled to vote
thereon present in person or by proxy at the meeting at which directors are
elected. The Norwest Certificate does not currently permit cumulative voting
in the election of directors
AMENDMENT OF ARTICLES OR CERTIFICATE OF INCORPORATION AND BYLAWS
CENTRAL. Under the TBCA, certain amendments to the articles of
incorporation require the affirmative vote of the holders of at least
two-thirds of the outstanding shares entitled to vote thereon, unless any
class or series of shares is entitled to vote thereon as a class, in which
event the proposed amendment shall be adopted upon receiving the affirmative
vote of the holders of at least two-thirds of the shares within each class or
series entitled to vote thereon as a class and of at least two-thirds of the
total outstanding shares entitled to vote thereon. The Central Bylaws
provide that the Bylaws may be amended by a majority of the Central Board.
NORWEST. The Norwest 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
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thereon as a class. The Norwest Bylaws may be amended by a majority of the
Norwest Board or by a majority of the outstanding stock entitled to vote
thereon. Shares of Norwest Preferred Stock and Norwest Preference Stock
currently authorized in the Norwest Certificate may be issued by the Norwest
Board without amending the Norwest Certificate or otherwise obtaining the
approval of Norwest's stockholders.
SHAREHOLDER OR STOCKHOLDER APPROVAL OF MERGERS AND ASSET SALES
IN ADDITION TO BEING SUBJECT TO THE LAWS OF TEXAS AND DELAWARE,
RESPECTIVELY, AS DISCUSSED BELOW, BOTH CENTRAL AND NORWEST, AS BANK HOLDING
COMPANIES, ARE SUBJECT TO VARIOUS PROVISIONS OF FEDERAL LAW WITH RESPECT TO
MERGERS, CONSOLIDATIONS AND CERTAIN OTHER CORPORATE TRANSACTIONS. SEE
"CERTAIN REGULATORY CONSIDERATIONS PERTAINING TO NORWEST."
CENTRAL. The TBCA requires certain mergers to be approved by
holders of at least two-thirds of the outstanding shares entitled to vote
thereon, unless there is a class of stock that is entitled to vote as a
class, in which event the merger must be approved by the holders of
two-thirds of the outstanding shares of each class of stock entitled to vote
as a class and by the holders of two-thirds of the outstanding shares
otherwise entitled to vote; PROVIDED that the articles of incorporation may
require a vote of a different number, not less than a majority, of the shares
outstanding. The Central Articles do provide for a different number of
shares for approval of a merger. The Central Articles provide that any
action of the Corporation, which under the TBCA requires approval by the
holders of two-thirds or any other fraction in excess of 50% of the shares
entitled to vote thereon, be deemed effective and properly authorized by the
vote of the holders of more than 50% of the shares entitled to vote thereon.
For that reason, as described above, the affirmative vote of at least a
majority of the Central Common Stock is required for a merger with Norwest.
NORWEST. Except as described below, the affirmative 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 all or substantially all of Norwest's
corporate assets. No vote of the stockholders is required, however, in
connection with a merger in which Norwest is the surviving corporation and
(i) the agreement of merger for the merger does not amend in any respect the
Norwest 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.
APPRAISAL RIGHTS
CENTRAL. Shareholders of Texas corporations are entitled to
exercise certain dissenters' rights in the event of a sale, lease, exchange,
or other disposition of all, or substantially all, of the property and assets
of the corporation, and with the exception discussed below, a merger or
consolidation. Under Section 5.11 of the TBCA, however, shareholders do not
have dissenters' rights if, in connection with a merger, the stock of the
corporation held by the shareholder is either listed on a national securities
exchange or is held of record by not less than 2,000 shareholders and,
pursuant to the plan of merger, such shareholder is not required to accept
for his shares any consideration other than (a) shares of stock of a
corporation which, immediately after the effective date of the merger, (i)
are listed on a national securities exchange or (ii) are held of record by
not less than 2,000 shareholders, and (b) cash in lieu of fractional shares
otherwise entitled to be received. A Central shareholder will receive merger
consideration that satisfies the provisions of subsections (a) and (b) above;
however, because the Central Common Stock is not listed on a national
securities exchange and is held of record by fewer than 2,000 holders,
dissenters rights will be available to Central shareholders. SEE "THE
MERGER--DISSENTERS' RIGHTS."
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NORWEST. Section 262 of the DGCL provides for stockholder
appraisal rights in connection with mergers and consolidations generally;
HOWEVER, appraisal rights are not available to holders of any class or series
of stock that, at the record date fixed to determine stockholders entitled to
receive notice of and to vote at the meeting to act upon the agreement of
merger or consolidation, were either (i) listed on a national securities
exchange or designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc. or
(ii) held of record by more than 2,000 stockholders, so long as stockholders
receive shares of the surviving corporation or another corporation whose
shares are so listed or designated or held by more than 2,000 stockholders.
Norwest Common Stock is listed on the NYSE and the CHX and currently held by
more than 2,000 stockholders. For these reasons, assuming that the other
conditions described above are satisfied, holders of Norwest Common Stock
will not have appraisal rights in connection with mergers and consolidations
involving Norwest.
SPECIAL MEETINGS
CENTRAL. Under the TBCA, a special meeting of shareholders of a
Texas corporation may be called by either (a) the president, the board of
directors, or such other person or persons as authorized by the articles of
incorporation or the bylaws, or (b) the holders of shares entitled to cast
not less than ten percent (10%) of all shares entitled to vote at the special
meeting, unless a different percentage, not to exceed fifty percent (50%), is
provided for in the articles of incorporation.
NORWEST. Under the DGCL, special meetings of stockholders may be
called by the board of directors or by such persons as may be authorized in
the certificate of incorporation or bylaws. The Norwest Bylaws 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 Norwest Board. As
such, holders of Norwest Common Stock do not have the ability to call a
special meeting of stockholders.
ACTION WITHOUT A MEETING
CENTRAL. Under the TBCA, shareholders may act without a meeting if
a consent in writing to such action is signed by all shareholders; provided,
however, that the articles of incorporation may provide that any action
required or permitted to be taken at a shareholder's meeting may be taken
without a meeting pursuant to the written consent of the holders of the
number of shares that would have been required to effect the action at an
actual meeting of the shareholders.
NORWEST. As permitted by Section 228 of the DGCL and the Norwest
Certificate, any action required or permitted to be taken at a stockholders'
meeting may be taken without a meeting pursuant to the written consent of the
holders of the number of shares that would have been required to effect the
action at an actual meeting of the stockholders.
LIMITATION OF DIRECTOR LIABILITY
CENTRAL. The Texas Miscellaneous Corporation Laws Act permits a
corporation to set limits on the extent of a director's liability. The
Central Articles limit, to the fullest extent now or hereafter permitted by
the TBCA, liability of Central's directors to Central or its shareholders for
monetary damages for a breach of such director's fiduciary duty. This
provision presently limits a director's liability except for (1) a breach of
duty of loyalty to Central or its shareholders, (2) a failure to act in good
faith that constitutes a breach of duty to Central or where a director
engages in intentional misconduct or knowingly violates the law, (3) a
transaction from which the director obtains an improper benefit, and (4) an
act or omission for which liability is expressly provided for by statute.
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 (i) any
breach
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of the director's duty of loyalty to Norwest or its stockholders, (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) payment of a dividend or approval of a stock
repurchase in violation of Section 174 of the DGCL, or (iv) any transaction
from which the director derived an improper personal benefit. This provision
protects Norwest's directors against personal liability for monetary damages
from breaches of their duty of care. It does not eliminate the director's
duty of care and 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.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
CENTRAL. TBCA provides that a corporation may indemnify an
individual only if the individual (i) acted in good faith, (ii) in a manner
he reasonably believed, in the case of conduct in his official capacity, was
in the corporation's best interests and, in all other cases, that his conduct
was at least not opposed to the corporation's interests, and (iii) in the
case of any criminal proceeding, had no reasonable cause to believe that his
conduct was unlawful. The Central Articles provide that directors shall be
indemnified, and officers and employees may be indemnified against
liabilities arising from their service as directors, officers, (or serving at
the request of Central as director, officer, partner, venturer, proprietor,
trustee, employee, agent, or similar functionary of another entity) to the
fullest extent permitted by law, including (upon receipt of a written
affirmation of such individual's good faith belief that he has met the
standard of conduct required for indemnification, and an undertaking to repay
such advances if the officer or director is found to have not met the
required standard of conduct) payment in advance of a final disposition of a
director's or officer's expenses and attorneys' fees incurred in defending
any action, suit or proceeding, other than in the case of an action, suit or
proceeding brought about by Central on its own behalf against an officer.
SEE THE MERGER"--INTERESTS OF CERTAIN PERSONS IN THE MERGER."
NORWEST. The Norwest Certificate 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 Norwest Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.
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DIVIDENDS
IN ADDITION TO RESTRICTIONS IMPOSED UNDER TEXAS AND DELAWARE LAW,
RESPECTIVELY, AS DISCUSSED BELOW, NORWEST AND CENTRAL ARE SUBJECT TO FEDERAL
RESERVE BOARD POLICIES REGARDING PAYMENT OF DIVIDENDS, WHICH GENERALLY LIMIT
DIVIDENDS TO OPERATING EARNINGS. SEE "CERTAIN REGULATORY CONSIDERATIONS
PERTAINING TO NORWEST."
CENTRAL. Under the TBCA, a Texas corporation may make
distributions if the distribution does not exceed the corporation's surplus
and the corporation would not become insolvent after giving effect to the
distribution. Holders of Central Common Stock are entitled to receive
dividends ratably when, as and if declared by the Central Board from assets
legally available therefor, after payment of all dividends on Central
preferred stock.
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.
PROPOSAL OF BUSINESS, NOMINATION OF DIRECTORS
CENTRAL. The Central Bylaws provide that special meetings of
shareholders of Central may be called by the Chairman of the Board, the
President, the Board of Directors, or holders of at least 25% of all shares
entitled to vote at the proposed special meeting.
NORWEST. The Norwest Bylaws 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 Bylaws
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 Bylaws 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.
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CERTAIN REGULATORY CONSIDERATIONS
PERTAINING TO NORWEST
NORWEST, ITS BANKING SUBSIDIARIES AND MANY OF ITS NONBANKING
SUBSIDIARIES ARE SUBJECT TO REGULATION BY A NUMBER OF DIFFERENT FEDERAL AND
STATE AGENCIES. THESE REGULATIONS ARE INTENDED PRIMARILY TO PROTECT
DEPOSITORS AND OTHER PURCHASERS OF FINANCIAL SERVICES. THEY ARE NOT IN PLACE
TO PROTECT STOCKHOLDERS OR OTHER INVESTORS. PLEASE READ THIS SECTION
CAREFULLY, AS NORWEST'S EARNINGS MAY BE AFFECTED SIGNIFICANTLY BY THE
REGULATORY ENVIRONMENT WITHIN WHICH IT AND ITS SUBSIDIARIES OPERATE.
GENERAL
As a bank holding company, Norwest is subject to regulation,
supervision and examination by the Federal Reserve Board. Under the Bank
Holding Company Act, a bank holding company generally may not directly or
indirectly acquire ownership or control of more than 5% of the voting
securities or all or substantially all of the assets of any company,
including a bank or bank holding company, without the prior approval of the
Federal Reserve Board. In addition, a bank holding company is generally
prohibited under the Bank Holding Company Act from engaging in nonbanking
activities, subject to certain exceptions.
Norwest's banking and savings association subsidiaries are subject
to regulation, supervision and examination by applicable federal and state
banking agencies. The deposits of Norwest's banking subsidiaries are
primarily insured by the Bank Insurance Fund; deposits attributable to
certain of Norwest's savings associations are insured by the Savings
Association Insurance Fund (the "SAIF"). For that reason, such banking and
savings association subsidiaries are subject to regulation by the FDIC. In
addition to the impact of regulation, commercial banks and savings
associations 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
Norwest is a legal entity separate and distinct from its banking
and other subsidiaries. Its principal source of funds to pay dividends on
its common and preferred stock and debt service on its debt is dividends from
its subsidiaries. Various federal and state statutes and regulations limit
the amount of dividends that may be paid to Norwest by its banking
subsidiaries without regulatory approval.
The approval of the Office of the Comptroller of the Currency
("OCC") 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 that
are well secured and in the process of collection.
The payment of dividends to Norwest by its savings association
subsidiary is subject to similar restrictions imposed by the Office of Thrift
Supervision. 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-chartered bank subsidiaries, with or
without state regulatory approval, would represent an immaterial contribution
to Norwest's revenues.
If, in the opinion of the applicable regulatory authority, a bank
under its jurisdiction is engaged in or is about to engage in an unsafe or
unsound practice (which, depending on the financial condition of the bank,
could include the payment of dividends), such authority may
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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. For that reason, 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. Section 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.
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ACQUISITIONS
Under the provisions of the Reigle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the "Reigle-Neal Act"), Norwest
Corporation, as a bank holding company, may acquire banks located in any
state regardless of the state law in effect at the time. The Reigle-Neal Act
also provides for interstate branching of banks. Specifically, under the
Reigle-Neal Act, national and state-chartered banks will be permitted to
merge across state lines commencing on June 1, 1997. States may opt out of
the interstate banking provisions of the Reigle-Neal Act by taking action
prior to June 1, 1997. States also may elect to have the interstate banking
provisions become effective prior to June 1, 1997 by opting in early.
Norwest's acquisitions of banking institutions and other companies
generally are subject to the prior approval of the Federal Reserve Board and
any applicable federal or state regulatory authorities. In addition, under
the provisions of the Reigle-Neal Act, bank mergers are subject to deposit
concentration limits of 10% nationwide and 30% in any one state, unless it is
Norwest's initial entry into the state. Individual states may also impose
restrictions on the amount of deposits any one bank may control in the state.
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 stockholders' equity, 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. The
risk-based guidelines also specify that all intangibles, including core
deposit intangibles, as well as mortgage servicing rights ("MSRs") and
purchased credit card relationships ("PCCRs"), be deducted from Tier 1
capital. The guidelines, however, grandfather identifiable assets (other
than MSRs and PCCRs) acquired on or before February 19, 1992 and permit the
inclusion of readily marketable MSRs and PCCRs in Tier 1 capital to the
extent that (i) MSRs and PCCRs do not collectively exceed 50% of Tier 1
capital and (ii) PCCRs do not exceed 25% of Tier 1 capital. For such
purposes, MSRs and PCCRs each are included in Tier 1 capital only up to the
lesser of (i) 90% of their fair market value (which must be determined
quarterly) and (ii) 100% of the remaining unamortized book value of such
assets. The OCC has adopted substantially similar regulations.
In addition, the Federal Reserve Board's minimum "leverage ratio"
(the ratio of Tier 1 capital to quarterly average total assets) 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 that are
substantially similar to the foregoing. At September 30, 1996, Norwest's
Tier 1 and total capital (the sum of Tier 1 and Tier 2 capital) to
risk-adjusted assets ratios were 8.62% and 10.57%, respectively, and
Norwest's leverage ratio was 6.12%. Neither Norwest nor any subsidiary bank
has been advised by the appropriate federal regulatory agency of any specific
leverage ratio applicable to it.
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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 adopted a rule that amended, 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
issued for comment a joint policy statement that described the process to be
used to measure and assess the exposure of a bank's net economic value to
changes in interest rates. In June 1996, these agencies elected not to
pursue a standardized supervisory measure and explicit capital charge for
interest rate risk. In supervising interest rate risk, the agencies intend
to emphasize reliance on internal measures of risk, promotion of sound risk
management practices, and other means to identify those institutions that
appear to be taking excessive risk. Norwest does not believe these 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 depository institutions insured by the
Federal Deposit Insurance Corporation (the "FDIC") 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 it meets all of its
minimum capital requirements as described above. An insured depository
institution will be considered undercapitalized if it fails to meet any
minimum required measure, significantly undercapitalized if it has a
risk-adjusted total capital ratio of less than 6%, risk-adjusted Tier 1
capital ratio of less than 3% or a leverage ratio of less than 3% and
critically undercapitalized if it fails to maintain a level of tangible
equity equal to at least 2% of total assets. An insured depository
institution may be deemed to be in a capitalization category that is lower
than is indicated by its actual capital position if it receives an
unsatisfactory examination rating.
FDICIA generally prohibits a depository institution from making any
capital distribution (including payment of a dividend) or paying any
management fee to its holding company if the depository institution would
thereafter be undercapitalized. Undercapitalized depository institutions are
subject to a wide range of limitations on operations and activities,
including growth limitations, and are required to submit a capital
restoration plan. The federal banking agencies may not accept a capital plan
without determining, among other things, that the plan is based on realistic
assumptions and is likely to succeed in restoring the depository
institution's capital. In addition, for a capital restoration plan to be
acceptable, the depository institution's parent holding company must
guarantee that the institution will comply with such 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
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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,
in order to facilitate the early identification of problems in financial
management of depository institutions, the OCC, the Federal Reserve Board,
the FDIC and the Office of Thrift Supervision (collectively, the "agencies")
each establish certain standards, by regulation or guideline, for the insured
depository institutions and depository institution holding companies for
which it is the primary federal regulator. Under FDICIA, as amended, the
agencies must establish three types of standards: (1) operational and
managerial standards, (2) compensation standards, and (3) such standards
relating to asset quality, earnings, and stock valuation as they determine to
be appropriate. On July 10, 1995, the agencies adopted a final rule
establishing deadlines for submission and review of safety and soundness
compliance plans. In conjunction with this final rule, the agencies adopted
interagency guidelines establishing safety and soundness standards for
internal controls and information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
asset quality, earnings, and compensation, fees and benefits. Although
management has not yet fully assessed the impact of these guidelines on
Norwest, it does not believe the impact 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.
FDIC INSURANCE
Each member of the Bank Insurance Fund ("BIF") 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 capitalization
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. The FDIC
assessment rate ranges from zero to 27 cents per $100 of domestic deposits,
with Subgroup A institutions assessed at a rate of zero and Subgroup C
institutions assessed at a rate of 27 cents. The FDIC may increase or
decrease the assessment rate schedule on a semiannual basis. An increase in
the rate assessed one or more of Norwest's banking subsidiaries could have a
material adverse effect on Norwest's earnings, depending on the amount of the
increase. The FDIC is authorized to terminate a depository institution's
deposit insurance upon a finding by the FDIC that the institution's financial
condition is unsafe or unsound or that the institution has engaged in unsafe
or unsound practices or has violated any applicable rule, regulation, order
or condition enacted
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or imposed by the institution's regulatory agency. The termination of
deposit insurance with respect to one or more of Norwest's subsidiary
depository institutions could have a material adverse effect on Norwest's
earnings, depending on the collective size of the particular institutions
involved.
Deposits insured by the SAIF held by Norwest's bank subsidiaries as
a result of 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 passed legislation that will,
among other things, recapitalize the SAIF by imposing a special one-time
assessment on SAIF deposits. The legislation also authorizes the merger of
the BIF and the SAIF into one insurance fund effective January 1, 1999,
subject to certain conditions. Norwest recorded a SAIF recapitalization
assessment of $19 million (before applicable income taxes) in the third
quarter of 1996.
DEPOSITOR PREFERENCE
Under the Federal Deposit Insurance Act, claims of holders of
domestic deposits and certain claims of administrative expenses and employee
compensation against an FDIC-insured depository institution have priority
over other general unsecured claims against the institution in the
"liquidation or other resolution" of the institution by a receiver.
EXPERTS
The consolidated financial statements of Norwest and subsidiaries
as of December 31, 1995 and 1994, and for each of the years in the three-year
period ended December 31, 1995, incorporated by reference herein, have been
incorporated herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Central and subsidiaries
as of December 31, 1995 and 1994, and for each of the years in the three-year
period ended December 31, 1995, incorporated by reference herein, have been
incorporated herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP refers to a change in the method of
accounting for impairment of loans receivable in 1995, a change in the method
of accounting for investment securities in 1994, and a change in the method
of accounting for income taxes in 1993.
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, 1996, Mr. Stroup was the beneficial owner of
104,247 shares and held options, exercisable within 60 days from September
30, 1996, to acquire 240,493 additional shares of Norwest Common Stock.
The material tax consequences of the Merger to Central's
shareholders will be passed upon for Central by Jenkens & Gilchrist, a
Professional Corporation.
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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, 1995, which is incorporated in this Proxy
Statement-Prospectus by reference. SEE "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE." Shareholders of Central desiring copies of such documents may
contact Norwest or Central, as appropriate, at the addresses or phone numbers
indicated under "AVAILABLE INFORMATION."
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APPENDIX A
AGREEMENT
AND
PLAN OF REORGANIZATION
<PAGE>
AGREEMENT
AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") entered into as of
the 16th day of September, 1996, by and between CENTRAL BANCORPORATION, INC.
("Central"), a Texas 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 Central (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
Central of the par value of $2.50 per share ("Central 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 Central pursuant to the Merger Agreement, with
Central as the surviving corporation, in which merger each share of Central
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 equal to the Norwest Share Amount
(as defined below). The "Norwest Share Amount" shall be an amount determined by
(A) dividing 4,700,000 by (B) the sum of (i) the number of shares of Central
Common Stock outstanding immediately prior to the Effective Time of the Merger,
plus (ii) the number of shares of Central Common Stock issuable pursuant to the
exercise of Central Options (as defined below) or other rights to acquire
Central Common Stock outstanding immediately prior to the Effective Time of the
Merger.
(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,
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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 the number of shares of Norwest
Common Stock into which a share of Central 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 Central Common Stock shall be converted will equal the number of shares
of Norwest Common Stock which holders of shares of Central 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.
(c) FRACTIONAL SHARES. No fractional shares of Norwest Common Stock and
no certificates or scrip certificates therefor shall be issued to represent any
such fractional interest, and any holder thereof shall be paid an amount of cash
equal to the product obtained by multiplying the fractional share interest to
which such holder is entitled by the average of the closing prices of a share of
Norwest Common Stock as reported by the consolidated tape of the New York Stock
Exchange for each of the five (5) trading days ending on the day immediately
preceding the meeting of shareholders required by paragraph 4(c) of this
Agreement.
(d) MECHANICS OF CLOSING 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 Texas within ten (10) business days following the satisfaction or
waiver of all conditions precedent set forth in Sections 6 and 7 of this
Agreement or on such other date as may be agreed to by the parties (the "Closing
Date"). Each of the parties agrees to use its best efforts to cause the Merger
to be completed as soon as practicable after the receipt of final regulatory
approval of the Merger and the expiration of all required waiting periods. The
time that the filing referred to in the first sentence of this paragraph is made
is herein referred to as the "Time of Filing". The day on which such filing is
made and accepted is herein referred to as the "Effective Date of the Merger".
The "Effective Time of the Merger" shall be 11:59 p.m. Fort Worth, Texas 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 Central 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.
2. REPRESENTATIONS AND WARRANTIES OF CENTRAL. Central represents and
warrants to Norwest as follows:
(a) ORGANIZATION AND AUTHORITY. Central is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas, is
duly qualified to do business and is in good standing in all jurisdictions where
its ownership or leasing of
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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 Central and
the Central 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. Central is registered as a bank holding company with the Federal
Reserve Board under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). Central has furnished Norwest true and correct copies of its articles of
incorporation and by-laws, as amended.
(b) CENTRAL'S SUBSIDIARIES. Schedule 2(b) sets forth a complete and
correct list of all of Central's subsidiaries as of the date hereof
(individually a "Central Subsidiary" and collectively the "Central
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
Central. No equity security of any Central 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 Central Subsidiary is bound to issue additional shares
of its capital stock, or any option, warrant or right to purchase or acquire any
additional shares of its capital stock. Subject to the Texas Business
Corporation Act, all of such shares so owned by Central 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 Central Subsidiary
is a corporation duly organized, validly existing, duly qualified to do business
and in good standing under the laws of its jurisdiction of incorporation, and
has corporate power and authority to own or lease its properties and assets and
to carry on its business as it is now being conducted. Except as set forth on
Schedule 2(b), Central does not own beneficially, directly or indirectly, more
than 5% of any class of equity securities or similar interests of any
corporation, bank, business trust, association or similar organization, and is
not, directly or indirectly, a partner in any partnership or party to any joint
venture.
(c) CAPITALIZATION. The authorized capital stock of Central consists
of 5,000,000 shares of common stock, $2.50 par value, of which as of the
close of business on June 30, 1996, 2,623,377 shares were outstanding and no
shares were held in the treasury. As of the date hereof, there are
outstanding options (each, a "Central Option") to purchase an aggregate of
25,260 shares of Central Common Stock under the 1988 Incentive Stock Option
Plan of Texas Security Bancshares, Inc. The maximum number of shares of
Central Common Stock (assuming for this purpose that phantom shares and other
share-equivalents constitute Central 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 were exercised is 2,648,637.
All of the outstanding shares of capital stock of Central have been duly and
validly authorized and issued and are fully paid and nonassessable. Except
as set forth in Schedule 2(c), there are no outstanding subscriptions,
contracts, conversion privileges, options, warrants, calls, preemptive rights
or other rights obligating Central or any Central Subsidiary to issue, sell
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or otherwise dispose of, or to purchase, redeem or otherwise acquire, any
shares of capital stock of Central or any Central Subsidiary. Since June 30,
1996 no shares of Central capital stock have been purchased, redeemed or
otherwise acquired, directly or indirectly, by Central or any Central
Subsidiary and, except as set forth on Schedule 2(c), no dividends or other
distributions have been declared, set aside, made or paid to the shareholders
of Central.
(d) AUTHORIZATION. Central 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 Central and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of Central. Subject to such approvals of shareholders and of
government agencies and other governing boards having regulatory authority over
Central as may be required by statute or regulation, this Agreement and the
Merger Agreement are valid and binding obligations of Central enforceable
against Central in accordance with their respective terms.
Except as set forth on Schedule 2(d), neither the execution, delivery and
performance by Central of this Agreement or the Merger Agreement, nor the
consummation of the transactions contemplated hereby and thereby, nor compliance
by Central 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 Central or any Central Subsidiary under
any of the terms, conditions or provisions of (x) its articles of incorporation
or by-laws or (y) any material note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which Central or
any Central Subsidiary is a party or by which it may be bound, or to which
Central or any Central Subsidiary or any of the properties or assets of Central
or any Central 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 Central, violate any judgment, ruling, order, writ, injunction,
decree, statute, rule or regulation applicable to Central or any Central
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 BHC Act or the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 ("HSR Act"), and filings required to effect the Merger under Texas 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
Central of the transactions contemplated by this Agreement and the Merger
Agreement.
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(e) CENTRAL FINANCIAL STATEMENTS. The consolidated balance sheets of
Central and Central's Subsidiaries as of December 31, 1995 and 1994 and related
consolidated statements of income, shareholders' equity and cash flows for the
three years ended December 31, 1995, together with the notes thereto, certified
by KMPG Peat Marwick LLP and included in Central's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995 (the "Central 10-K") as filed with
the Securities and Exchange Commission (the "SEC"), and the unaudited
consolidated statements of financial condition of Central and Central's
Subsidiaries as of June 30, 1996 and the related unaudited consolidated
statements of income, shareholders' equity and cash flows for the six (6) months
then ended included in Central's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1996 as filed with the SEC (collectively, the "Central
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 Central and Central's
Subsidiaries at the dates and the consolidated results of operations and cash
flows of Central and Central's Subsidiaries for the periods stated therein.
(f) REPORTS. Since December 31, 1990, Central and each Central Subsidiary
has filed all reports, registrations and statements, together with any required
amendments thereto, that it was required to file, if any, 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 Federal Deposit Insurance Corporation (the
"FDIC"), (iv) the United States Comptroller of the Currency (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 "Central Reports". As of their
respective dates, the Central Reports complied in all material respects with all
the rules and regulations promulgated by the SEC, the Federal Reserve Board, the
FDIC, the Comptroller and applicable state securities or banking authorities, as
the case may be, and did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Copies of all the Central Reports have been
made available to Norwest by Central.
(g) PROPERTIES AND LEASES. Except as may be reflected in the Central
Financial Statements and except for any lien for current taxes not yet
delinquent, Central and each Central 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 Central's
consolidated balance sheet as of June 30, 1996 included in Central's Quarterly
Report on Form 10-Q, 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 Central or any Central Subsidiary pursuant to which Central or such
Central Subsidiary, as lessee, leases real or personal property, which leases
are described on Schedule 2(g), are valid and effective in
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accordance with their respective terms, and there is not, under any such lease,
any material existing default by Central or such Central Subsidiary or any event
which, with notice or lapse of time or both, would constitute such a material
default. Substantially all Central's and each Central Subsidiary's buildings
and equipment in regular use have been well maintained and are in good and
serviceable condition, reasonable wear and tear excepted.
(h) TAXES. Each of Central and the Central Subsidiaries has filed all
federal, state, county, local and foreign tax returns, including information
returns, required to be filed by it, and paid all taxes owed by it, including
those with respect to income, withholding, social security, unemployment,
workers compensation, franchise, ad valorem, premium, excise and sales taxes,
and no taxes shown on such returns to be owed by it or assessments received by
it are delinquent. The federal income tax returns of Central and the Central
Subsidiaries for the fiscal year ended December 31, [1992] 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 Central nor any Central Subsidiary is a party to any
pending action or proceeding, nor is any such action or proceeding threatened by
any governmental authority, for the assessment or collection of taxes, interest,
penalties, assessments or deficiencies and (ii) no issue has been raised by any
federal, state, local or foreign taxing authority in connection with an audit or
examination of the tax returns, business or properties of Central or any Central
Subsidiary which has not been settled, resolved and fully satisfied. Each of
Central and the Central Subsidiaries has paid all taxes owed or which it is
required to withhold from amounts owing to employees, creditors or other third
parties. The consolidated balance sheet as of June 30, 1996, 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 Central and the Central Subsidiaries with respect
to all periods through the date thereof.
(i) ABSENCE OF CERTAIN CHANGES. Since December 31, 1995 there has been no
change in the business, financial condition or results of operations of Central
or any Central 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 Central and the Central Subsidiaries taken as a whole (other than
changes in banking laws or regulations, or interpretations thereof, that affect
the banking industry generally or changes in the general level of interest
rates).
(j) COMMITMENTS AND CONTRACTS. Except as set forth on Schedule 2(j),
neither Central nor any Central Subsidiary is a party or subject to any of the
following (whether written or oral, express or implied):
(i) any employment contract or understanding (including any
understandings or obligations with respect to severance or termination pay
liabilities or fringe benefits) with any present or former officer,
director, employee
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or consultant (other than those which are terminable at will by Central or
such Central 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 Central or any Central
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, Central or any Central Subsidiary may carry on its business (other
than as may be required by law or applicable regulatory authorities);
(v) any other contract or agreement which is a "material
contract" within the meaning of Item 601(b)(10) of Regulation S-K; or
(vi) any lease with annual rental payments aggregating $10,000
or more; or
(vii) any agreement or commitment with respect to the Community
Reinvestment Act with any state or federal bank regulatory authority or any
other party; or
(viii) any current or past agreement, contract or understanding
with any current or former director, officer, employee, consultant,
financial adviser, broker, dealer, or agent providing for any rights of
indemnification in favor of such person or entity.
(k) LITIGATION AND OTHER PROCEEDINGS. Central has furnished Norwest
copies of (i) all attorney responses to the request of the independent auditors
for Central with respect to loss contingencies as of December 31, 1995 in
connection with the Central financial statements included in the Central 10-K,
and (ii) a written list of legal and regulatory proceedings filed against
Central or any Central Subsidiary since said date. Neither Central nor any
Central Subsidiary is a party to any pending or, to the best knowledge of
Central, 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
Central and the Central Subsidiaries taken as a whole.
(l) INSURANCE. Central and each Central Subsidiary maintains in effect
the insurance described (including type of policy, premiums, limits, term, and
the period
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during which each policy has been maintained) in Schedule 2(l) and has furnished
true and correct copies of such policies to Norwest. All such policies are in
full force and effect.
(m) COMPLIANCE WITH LAWS. Central and each Central Subsidiary has all
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, federal, state, local or foreign
governmental or regulatory bodies that are required in order to permit it to own
or lease its properties and assets and to carry on its business as presently
conducted and that are material to the business of Central or such Central
Subsidiary; all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to the best knowledge of Central, no
suspension or cancellation of any of them is threatened; and all such filings,
applications and registrations are current. The conduct by Central and each
Central 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 Central nor any Central 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 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 Central or any Central Subsidiary
which reasonably could be expected to have a material adverse effect on the
business or properties of Central and the Central Subsidiaries taken as a whole.
(n) LABOR. No work stoppage involving Central or any Central Subsidiary
is pending or, to the best knowledge of Central, threatened. Neither Central
nor any Central 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 Central or such Central
Subsidiary. Employees of Central and the Central Subsidiaries are not
represented by any labor union nor are any collective bargaining agreements
otherwise in effect with respect to such employees.
(o) MATERIAL INTERESTS OF CERTAIN PERSONS. Except as set forth on
Schedule 2(o), to the best knowledge of Central no officer or director of
Central or any Central 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 Central or any Central
Subsidiary.
Schedule 2(o) sets forth a correct and complete list of any loan from
Central or any Central Subsidiary to any present officer, director, employee or
any associate or related interest of any such person which was required under
Regulation O of the Federal Reserve Board to be approved by or reported to
Central's or such Central Subsidiary's Board of Directors.
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(p) CENTRAL 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 Central or any Central Subsidiary acts as the
plan sponsor as defined in ERISA Section 3(16)(B), and with respect to
which any liability under ERISA or otherwise exists or may be incurred by
Central or any Central 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), Central or the Central 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. Central 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) 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 Central, 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
Central, 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 Central and the Central 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.
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(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 Central or any Central
Subsidiary under any Plan or otherwise, (ii) materially increase any
benefits otherwise payable under any Plan or (iii) result in the
acceleration of the time of payment or vesting of any such benefits to any
material extent.
(q) PROXY STATEMENT, ETC. None of the information regarding Central and
the Central Subsidiaries supplied or to be supplied by Central 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 Central Common Stock pursuant to the provisions of the Merger
Agreement (the "Registration Statement"), (ii) the proxy statement to be mailed
to Central'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. All documents which Central and
the Central 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.
(r) REGISTRATION OBLIGATIONS. Except as set forth on Schedule 2(r),
neither Central nor any Central 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 for Keefe, Bruyette & Woods, Inc.,
neither Central nor any Central 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 Central or any Central Subsidiary in connection
with this Agreement and the Merger Agreement or the transactions contemplated
hereby and thereby.
(t) ADMINISTRATION OF TRUST ACCOUNTS. Central and each Central Subsidiary
has properly administered in all respects material and which could reasonably be
expected to be material to the financial condition of Central and the Central
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 a trustee, agent,
custodian, personal representative, guardian, conservator or investment advisor,
in accordance with the terms of the governing documents and applicable state and
federal law and regulation and common law. Neither Central, any Central
Subsidiary, nor any director, officer or employee of Central or any Central
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 Central and the Central 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 Central nor any Central 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 Central and the Central Subsidiaries, taken as a
whole. To the best of Central's knowledge, all parties with whom Central or any
Central Subsidiary has material leases, agreements or contracts or who owe to
Central or any Central Subsidiary material obligations other than with respect
to those arising in the ordinary course of the banking business of the Central
Subsidiaries are in compliance therewith in all material respects.
(v) ENVIRONMENTAL LIABILITY. There is no legal, administrative, or other
proceeding, claim, or action of any nature seeking to impose, or that could
result in the imposition of, on Central or any Central 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 ("CERCLA"), pending or to the best of
Central's knowledge, threatened against Central or any Central Subsidiary the
result of which has had or could reasonably be expected to have a material
adverse effect upon Central and Central's Subsidiaries taken as a whole; to the
best of Central's knowledge there is no reasonable basis for any such
proceeding, claim or action; and to the best of Central's knowledge neither
Central nor any Central 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. Central has provided Norwest with copies of
all environmental assessments, reports, studies and other related
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information in its possession with respect to each bank facility and each non-
residential OREO property.
3. REPRESENTATIONS AND WARRANTIES OF NORWEST. Norwest represents and
warrants to Central as follows:
(a) ORGANIZATION AND AUTHORITY. Norwest is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
is duly qualified to do business and is in good standing in all jurisdictions
where its ownership or leasing of property or the conduct of its business
requires it to be so qualified and failure to be so qualified would have a
material adverse effect on Norwest and its subsidiaries taken as a whole and has
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted. Norwest is registered as a bank
holding company with the Federal Reserve Board under the BHC Act.
(b) NORWEST SUBSIDIARIES. Schedule 3(b) sets forth a complete and correct
list as of December 31, 1995, of Norwest's Significant Subsidiaries (as defined
in Regulation S-X promulgated by the SEC) (individually a "Norwest Subsidiary"
and collectively the "Norwest Subsidiaries"), all shares of the outstanding
capital stock of each of which, except as set forth in Schedule 3(b), are owned
directly or indirectly by Norwest. No equity security of any Norwest Subsidiary
is or may be required to be issued to any person or entity other than Norwest by
reason of any option, warrant, scrip, right to subscribe to, call or commitment
of any character whatsoever relating to, or security or right convertible into,
shares of any capital stock of such subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any Norwest Subsidiary is
bound to issue additional shares of its capital stock, or options, warrants or
rights to purchase or acquire any additional shares of its capital stock.
Subject to 12 U.S.C. Section 55 (1982), all of such shares so owned by Norwest
are fully paid and nonassessable and are owned by it free and clear of any lien,
claim, charge, option, encumbrance or agreement with respect thereto. Each
Norwest Subsidiary is a corporation or national banking association duly
organized, validly existing, duly qualified to do business and in good standing
under the laws of its jurisdiction of incorporation, and has corporate power and
authority to own or lease its properties and assets and to carry on its business
as it is now being conducted.
(c) NORWEST CAPITALIZATION. The authorized capital stock of Norwest
consists of (i) 5,000,000 shares of Preferred Stock, without par value, of which
as of the close of business on December 31, 1995, 1,127,125 shares of 10.24%
Cumulative Preferred Stock at $100 stated value, 980,000 shares of Cumulative
Tracking Preferred Stock, at $200 stated value, 12,984 shares of ESOP Cumulative
Convertible Preferred Stock, at $1,000 stated value, and 24,572 shares of 1995
ESOP Cumulative Convertible Preferred Stock, at $1,000 stated value, were
outstanding; (ii) 4,000,000 shares of Preference Stock, without par value, of
which as of the close of business on December 31, 1995, no shares were
outstanding; and (iii) 500,000,000 shares of Common Stock, $1-2/3 par value, of
which as of the close of business on December 31, 1995, 352,760,457 shares were
outstanding and 5,571,696 shares were held in the treasury. All of the
outstanding shares of capital stock
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of Norwest have been duly and validly authorized and issued and are fully paid
and nonassessable.
(d) AUTHORIZATION. Norwest has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement by Norwest and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of Norwest. No approval or consent by the stockholders of Norwest is
necessary for the execution and delivery of this Agreement and the Merger
Agreement and the consummation of the transactions contemplated hereby and
thereby. Subject to such approvals of government agencies and other governing
boards having regulatory authority over Norwest as may be required by statute or
regulation, this Agreement is a valid and binding obligation of Norwest
enforceable against Norwest in accordance with its terms.
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 with or in compliance with the provisions of the
Securities Act, the Exchange Act, the securities or blue sky laws of the various
states or filings, consents, reviews, authorizations, approvals or exemptions
required under the BHC Act or the HSR Act, and filings required to effect the
Merger under Texas 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, 1995 and 1994 and related
consolidated statements of income, stockholders' equity and cash flows for the
three years ended December 31, 1995, together with the notes thereto, certified
by KPMG Peat Marwick and included in Norwest's Annual Report on Form 10-K for
the fiscal year ended
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December 31, 1995 (the "Norwest 10-K") as filed with the SEC, and the unaudited
consolidated balance sheets of Norwest and its subsidiaries as of June 30, 1996
and the related unaudited consolidated statements of income and cash flows for
the six (6) months then ended included in Norwest's Quarterly Report on Form 10-
Q for the fiscal quarter ended June 30, 1996, as filed with the SEC
(collectively, the "Norwest Financial Statements"), have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis and present fairly (subject, in the case of financial statements for
interim periods, to normal recurring adjustments) the consolidated financial
position of Norwest and its subsidiaries at the dates and the consolidated
results of operations, changes in financial position and cash flows of Norwest
and its subsidiaries for the periods stated therein.
(f) REPORTS. Since December 31, 1990, Norwest and each Norwest Subsidiary
has filed all reports, registrations and statements, together with any required
amendments thereto, that it was required to file with (i) the SEC, including,
but not limited to, Forms 10-K, Forms 10-Q and proxy statements, (ii) the
Federal Reserve Board, (iii) the FDIC, (iv) the Comptroller and (v) any
applicable state securities or banking authorities. All such reports and
statements filed with any such regulatory body or authority are collectively
referred to herein as the "Norwest Reports". As of their respective dates, the
Norwest Reports complied in all material respects with all the rules and
regulations promulgated by the SEC, the Federal Reserve Board, the FDIC, the
Comptroller and any applicable state securities or banking authorities, as the
case may be, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(g) PROPERTIES AND LEASES. Except as may be reflected in the Norwest
Financial Statements and except for any lien for current taxes not yet
delinquent, Norwest and each Norwest Subsidiary has good title free and clear of
any material liens, claims, charges, options, encumbrances or similar
restrictions to all the real and personal property reflected in Norwest's
consolidated balance sheet as of June 30, 1996 included in Norwest's Quarterly
Report on Form 10-Q, and all real and personal property acquired since such
date, except such real and personal property has been disposed of in the
ordinary course of business. All leases of real property and all other leases
material to Norwest or any Norwest Subsidiary pursuant to which Norwest or such
Norwest Subsidiary, as lessee, leases real or personal property, are valid and
effective in accordance with their respective terms, and there is not, under any
such lease, any material existing default by Norwest or such Norwest Subsidiary
or any event which, with notice or lapse of time or both, would constitute such
a material default. Substantially all Norwest's and each Norwest Subsidiary's
buildings and equipment in regular use have been well maintained and are in good
and serviceable condition, reasonable wear and tear excepted.
(h) TAXES. Each of Norwest and the Norwest Subsidiaries has filed all
material federal, state, county, local and foreign tax returns, including
information returns, required to be filed by it, and paid or made adequate
provision for the payment of all taxes owed by
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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, 1995, 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 May 1, 1996 neither Norwest nor any Norwest Subsidiary is a party or subject
to any of the following (whether written or oral, express or implied):
(i) any labor contract or agreement with any labor union;
(ii) any contract not made in the ordinary course of business
containing covenants which materially limit the ability of Norwest or any
Norwest Subsidiary to compete in any line of business or with any person or
which involve any material restriction of the geographical area in which,
or method by which, Norwest or any Norwest Subsidiary may carry on its
business (other than as may be required by law or applicable regulatory
authorities);
(iii) any other contract or agreement which is a "material
contract" within the meaning of Item 601(b)(10) of Regulation S-K.
(k) LITIGATION AND OTHER PROCEEDINGS. Neither Norwest nor any Norwest
Subsidiary is a party to any pending or, to the best knowledge of Norwest,
threatened, claim, action, suit, investigation or proceeding, or is subject to
any order, judgment or decree, except for matters which, in the aggregate, will
not have, or cannot reasonably be
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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 May 1, 1996, 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
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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.
(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.
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(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, (ii) the Proxy Statement, or (iii) any other
documents to be filed with the SEC or any regulatory authority in connection
with the transactions contemplated hereby or by the Merger Agreement will, at
the respective times such documents are filed with the SEC or any regulatory
authority and, in the case of the Registration Statement, when it becomes
effective and, with respect to the Proxy Statement, when mailed, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading or, in the case
of the Proxy Statement or any amendment thereof or supplement thereto, at the
time of the meeting of shareholders referred to in paragraph 4(c), be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for such meeting. All documents which Norwest and
the Norwest Subsidiaries are responsible for filing with the SEC and any other
regulatory authority in connection with the Merger will comply as to form in all
material respects with the provisions of applicable law.
(q) BROKERS AND FINDERS. Neither Norwest nor any Norwest Subsidiary nor
any of their respective officers, directors or employees has employed any broker
or finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder's fees, and no broker or finder has acted directly
or indirectly for Norwest or any Norwest Subsidiary in connection with this
Agreement and the Merger Agreement or the transactions contemplated hereby and
thereby.
(r) NO DEFAULTS. Neither Norwest nor any Norwest Subsidiary is in
default, nor has any event occurred which, with the passage of time or the
giving of notice, or both, would constitute a default under any material
agreement, indenture, loan agreement or other instrument to which it is a party
or by which it or any of its assets is bound or to which any of its assets is
subject, the result of which has had or could reasonably be expected to have a
material adverse effect upon Norwest and its subsidiaries taken as a whole. To
the best of Norwest's knowledge, all parties with whom Norwest or any Norwest
Subsidiary has material leases, agreements or contracts or who owe to Norwest or
any Norwest Subsidiary material obligations other than with respect to those
arising in the ordinary course of the banking business of the Norwest
Subsidiaries are in compliance therewith in all material respects.
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<PAGE>
(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, CERCLA, 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.
(u) REGULATORY APPROVAL. Norwest is aware of no circumstance, in existence
as of the date hereof, which would prevent the transactions contemplated by this
Agreement and the Merger Agreement from being approved by the Federal Reserve
Board.
4. COVENANTS OF CENTRAL. Central 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, Central, and each Central
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 requirement shall be deemed to be waived as to any loan approval request
to which Norwest has made no response by the end of the second business day
following the day of receipt of the request by a representative designated by
Norwest in writing) (A) make any extensions of credit aggregating in excess of
$500,000 to a person or entity that is not a borrower as of the date hereof, or
(B) engage in any loan transaction or series of contemporaneous loan
transactions involving an aggregate of more than $250,000 with any borrower who
has aggregate extensions of credit in excess of $1,000,000 as of the date
hereof; maintain proper business and accounting records in accordance with
generally accepted principles, PROVIDED, HOWEVER, that Central agrees to
implement and to cause the Central Subsidiaries to implement Central's
restructuring plan, as disclosed to Norwest as of the date hereof; maintain its
properties in good repair and condition, ordinary wear and tear excepted;
maintain in all material respects presently existing insurance coverage; use its
best efforts to preserve its business organization intact, to keep the services
of its present principal employees and to preserve its good will and the good
will of its suppliers, customers and others having business relationships with
it;
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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 Central and
each Central Subsidiary the non-compliance with which reasonably could be
expected to have a material adverse effect on Central and the Central
Subsidiaries taken as a whole; and permit Norwest and its representatives
(including KPMG Peat Marwick LLP) upon prior notice to Central to examine its
and its subsidiaries books, records and properties and to interview officers,
employees and agents at all reasonable times when it is open for business. No
such examination by Norwest or its representatives either before or after the
date of this Agreement shall in any way affect, diminish or terminate any of the
representations, warranties or covenants of Central herein expressed.
(b) Except as otherwise contemplated or required by this Agreement, from
the date hereof until the Effective Time of the Merger, Central and each Central
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 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 Central may issue shares of Central Common Stock
upon the exercise of outstanding stock options described in Schedule 4(b);
authorize or incur any long-term debt (other than deposit liabilities);
mortgage, pledge or subject to lien or other encumbrance any of its properties,
except in the ordinary course of business; enter into any material agreement,
contract or commitment in excess of $50,000 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 in the
ordinary course of business, in accordance with past practice; 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 (i) between the date hereof and the record date for
the regular cash dividend, if any, declared on Norwest Common Stock for the
second quarter of 1997 ("Record Date"), the Board of Directors of Central may
declare and pay, in accordance with past practice, dividends not to exceed an
annualized rate of $0.40 per share of Central Common Stock, (ii) if the
Effective Date of the Merger is after the Record Date, Central may declare and
pay cash dividends on Central Common Stock in an amount not to exceed, in the
aggregate, the amount which would have been received by the holders of 4,700,000
shares of Norwest Common Stock between such Record Date and the Effective Date
of the Merger, PROVIDED, HOWEVER, that the shareholders of Central shall be
entitled to either a dividend on Central Common Stock or Norwest Common Stock,
but not both, in the calendar quarter in which the Closing shall occur, and
(iii) any dividend declared by the Board of Directors of a Central Subsidiary in
accordance with applicable law and regulation; redeem, purchase or otherwise
acquire, directly or indirectly, any of the capital stock of Central; increase
the compensation of any officers, directors or executive employees, except
pursuant to existing compensation plans and practices (including bonus
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plans), PROVIDED, HOWEVER, that Central may, in addition, accrue and pay
bonuses and deferred compensation obligations in accordance with Schedule 4(b)
attached hereto, and PROVIDED, FURTHER, HOWEVER, that such bonus and deferred
compensation amounts shall be calculated without regard to the effect of the
accruals and reserves taken in accordance with paragraph 4(m) hereof; sell or
otherwise dispose of any shares of the capital stock of any Central 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 Central 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 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 Central will (i)
cause proper notice of such meeting to be given to its shareholders in
compliance with the Texas Business Corporation Act and other applicable law and
regulation, and (ii) except to the extent that the Board of Directors of Central
shall conclude in good faith, after taking into account the advice of counsel,
that to do so would violate its fiduciary obligations under applicable law, (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) Central will furnish or cause to be furnished to Norwest all the
information concerning Central and its subsidiaries required for inclusion in
the Registration Statement referred to in paragraph 5(c) hereof, or any
statement or application made by Norwest to any governmental body in connection
with the transactions contemplated by this Agreement. Any financial statement
for any fiscal year provided under this paragraph must include the audit opinion
and the consent of KMPG Peat Marwick LLP to use such opinion in such
Registration Statement.
(e) Central will take all necessary corporate and other action and use its
best efforts to obtain all approvals of regulatory authorities, consents and
other approvals required of Central to carry out the transactions contemplated
by this Agreement and will cooperate with Norwest to obtain all such approvals
and consents required of Norwest.
(f) Central 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) Central will hold in confidence all documents and information
concerning Norwest and its subsidiaries furnished to Central 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 Central'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
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shown to be previously known to Central, in the public domain, or later acquired
by Central 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 Central, nor any Central Subsidiary, nor any director,
officer, representative or agent thereof, will, directly or indirectly, solicit,
authorize the solicitation of or except to the extent that the Board of
Directors of Central shall conclude in good faith, after taking into account the
written advice of its outside counsel, that to fail to do so could reasonably be
determined to violate its fiduciary obligations under applicable law, enter into
any negotiations with any corporation, partnership, person or other entity or
group (other than Norwest) concerning any offer or possible offer (i) except as
otherwise permitted by paragraph 4(b) with respect to the Central Options, 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 Central or any Central 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 Central or any Central Subsidiary except in the ordinary course of business,
or (iv) to merge, consolidate or otherwise combine with Central or any Central
Subsidiary. If any corporation, partnership, person or other entity or group
makes an offer or inquiry to Central or any Central Subsidiary concerning any of
the foregoing, Central or such Central Subsidiary will promptly disclose such
offer or inquiry, including the terms thereof, to Norwest.
(i) Central 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) Central and each Central Subsidiary will take all action necessary or
required (i) to terminate or amend, if requested by Norwest, all qualified
pension and welfare benefit plans and all non-qualified benefit plans and
compensation arrangements as of the Effective Date of the Merger to facilitate
the merger of such plans with Norwest plans without gaps in coverage for
participants in the plans and without duplication of costs caused by the
continuation of such plans after coverage is available under Norwest plans, and
(ii) 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 Central nor any Central Subsidiary shall take any action which
with respect to Central would disqualify the Merger as a "pooling of interests"
for accounting purposes.
(l) Central 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
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Central who may reasonably be deemed an "affiliate" of Central within the
meaning of such term as used in Rule 145 under the Securities Act.
(m) Central shall establish such additional accruals and reserves as may be
necessary to conform Central's accounting and credit loss reserve practices and
methods to those of Norwest and Norwest's plans with respect to the conduct of
Central's business following the Merger and, to the extent permitted by
generally accepted accounting principles, to provide for the costs and expenses
relating to the consummation by Central of the Merger and the other transactions
contemplated by this Agreement.
(n) Central shall obtain, at its sole expense, Phase I environmental
assessments for each bank facility and each non-residential OREO property. Oral
reports of such environmental assessments shall be delivered to Norwest no later
than four (4) weeks and written reports shall be delivered to Norwest no later
than eight (8) weeks from the date of this Agreement. Central shall obtain, at
its sole expense, Phase II environmental assessments for properties identified
by Norwest on the basis of the results of such Phase I environmental
assessments. Central 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
within four (4) weeks of execution of the definitive agreement.
(o) Central shall obtain, at its sole expense, commitments for title
insurance and boundary surveys for each bank facility which shall be delivered
to Norwest no later than four (4) weeks from the date of this Agreement.
5. COVENANTS OF NORWEST. Norwest covenants and agrees with Central as
follows:
(a) From the date hereof until the Effective Time of the Merger, Norwest
will maintain its corporate existence in good standing; conduct, and cause the
Norwest Subsidiaries to conduct, their respective businesses in compliance with
all material obligations and duties imposed on them by all laws, governmental
regulations, rules and ordinances, and judicial orders, judgments and decrees
applicable to Norwest or the Norwest Subsidiaries, their businesses or their
properties; maintain all books and records of it and the Norwest Subsidiaries,
including all financial statements, in accordance with the accounting principles
and practices consistent with those used for the Norwest Financial Statements,
except for changes in such principles and practices required under generally
accepted accounting principles.
(b) Norwest will furnish to Central all the information concerning Norwest
required for inclusion in a proxy statement or statements to be sent to the
shareholders of Central, or in any statement or application made by Central to
any governmental body in connection with the transactions contemplated by this
Agreement.
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(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 Central pursuant to the Merger Agreement, and will use its best
efforts to cause the Registration Statement to become effective. At the time
the Registration Statement becomes effective, the Registration Statement will
comply in all material respects with the provisions of the Securities Act and
the published rules and regulations thereunder, and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not false or
misleading, and at the time of mailing thereof to the Central shareholders, at
the time of the Central 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 Central or any Central
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 Central 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 Central 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 Central to obtain all such approvals and consents required by Central.
(h) Norwest will hold in confidence all documents and information
concerning Central and Central's Subsidiaries furnished to it and its
representatives in connection with
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<PAGE>
the transactions contemplated by this Agreement and will not release or disclose
such information to any other person, except as required by law and except to
its outside professional advisers in connection with this Agreement, with the
same undertaking from such professional advisers. If the transactions
contemplated by this Agreement shall not be consummated, such confidence shall
be maintained and such information shall not be used in competition with Central
(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 Central. If the
transactions contemplated by this Agreement shall not be consummated, Norwest
agrees that for a period of eighteen (18) months following termination of this
Agreement Norwest will not directly solicit for employment any officer or
employee of Central who was introduced to Norwest during its due diligence
review of Central prior to the date hereof; PROVIDED, HOWEVER, that nothing
herein shall prohibit Norwest from interviewing or hiring any officer or
employee of Central who responds to a general employment solicitation placed by
or on behalf of Norwest in a publication of general circulation.
(i) Norwest will file any documents or agreements required to be filed in
connection with the Merger under the Texas 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 Central 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 furnish Central with copies, prior to filing, of the
nonconfidential portions of the applications referred to in paragraph 7(e) and
shall give Central notice of receipt of the regulatory approvals referred to in
paragraph 7(e).
(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. Norwest shall use its best efforts to obtain and
deliver to Central, prior to the Effective Date of the Merger, signed
representations from the directors and executive officers of Norwest to the
effect that, except for DE MINIMUS dispositions which will not disqualify the
Merger as a pooling of interests, they will not dispose of shares of Norwest or
Central during the period commencing 30 days prior to the Effective Date and
ending upon publication by Norwest of financial results including at least 30
days of combined operations of Central and Norwest.
(n) For a period not exceeding fifteen days prior to the Closing Date,
Norwest will permit Central 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
Central or its representatives shall in any way
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<PAGE>
affect, diminish or terminate any of the representations, warranties or
covenants of Norwest herein expressed.
(o) Norwest shall take such actions on its part as may be necessary to
cause each Central Option outstanding immediately prior to the Effective Time of
the Merger to become and represent an option to purchase (i) the number of
shares of Norwest Common Stock (a "Substitute Option") determined by multiplying
the number of shares of Central Common Stock subject to such Central Option by
the Norwest Share Amount, at an exercise price per share of Norwest Common Stock
equal to the exercise price per share of Central Common Stock divided by the
Norwest Share Amount. After the Effective Time of the Merger, each Substitute
Option shall be exercisable upon the same terms and conditions as were
applicable to the related Central Option immediately prior to the Effective Time
of the Merger except that the exercise price per share of Norwest Common Stock
shall be as provided above in this paragraph 5(o). The number of shares of
Norwest Common Stock subject to each Substitute Option, as determined herein,
shall be rounded to the nearest whole share. Norwest shall (i) register under
the Securities Act on Form S-8 or other appropriate form (and use its best
efforts to maintain the effectiveness thereof) all shares of Norwest Common
Stock issuable pursuant to the Substitute Options, (ii) cause such shares to be
authorized for listing on the New York Stock Exchange and the Chicago Stock
Exchange, and (iii) reserve a sufficient number of such shares for issuance upon
such exercise.
(p) With respect to the indemnification of directors and officers and with
respect to directors' and officers' insurance, Norwest agrees as follows:
(i) 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 Central or any
Central Subsidiary, (an "Indemnified Party" and, collectively, the
"Indemnified Parties") in Central 's Articles of Incorporation or By-laws
or similar governing documents of any Central Subsidiary, as applicable in
the particular case and as in effect on the date hereof, shall, with
respect to claims arising from (A) facts or events that occurred before the
Effective Time of the Merger, or (B) this Agreement or any of the
transactions contemplated by this Agreement, whether in any case asserted
or arising before or after 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 Central or any Central Subsidiary, in which case
all of such rights to indemnification and limitations on liability shall be
deemed to survive and continue as contractual rights notwithstanding any
such liquidation or consolidation or merger; PROVIDED, HOWEVER, that in the
event of liquidation or sale of substantially all of the assets of Central,
Norwest shall guarantee, to the extent of the net asset value of Central or
any Central Subsidiary as of the Effective Date of the Merger, the
indemnification obligations of Central or any Central Subsidiary to the
extent of indemnification obligations of Central and the
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Central 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 Central or any Central Subsidiary to a greater extent than Central or
any Central Subsidiary is, as of the date of this Agreement, required to
indemnify any such person;
(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 any Indemnified Party for any
legal expenses of other counsel or any other expenses subsequently incurred
by such Indemnified Party in connection with the defense thereof, except
that if Norwest elects not to assume such defense or counsel for the
Indemnified Party advises that there are issues which raise conflicts of
interest between Norwest and the Indemnified Party, the Indemnified Party
may retain counsel satisfactory to them, and Norwest shall pay the
reasonable fees and expenses of such counsel for the Indemnified Party
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) such Indemnified Party
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 its best efforts to cause to be maintained in
effect the current policies of directors' and officers' liability insurance
maintained by Central (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 Norwest shall not be required
to maintain the coverage for employees (other than directors and officers)
which is currently included in the directors' and officers' liability
policies maintained by Central; and PROVIDED, FURTHER, 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 per
annum in excess of 125% of the amount of the annual premiums paid as of the
date hereof by Central for such insurance (the "Maximum Amount") and
provided further that, prior to the Effective Time of the Merger, Central
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
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<PAGE>
the annual 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 an annual 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 CENTRAL. The obligation of
Central 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 Central:
(a) Except as they may be affected by transactions contemplated hereby and
except to the extent such representations and warranties are by their express
provisions made as of a specified date and except for activities or transactions
after the date of this Agreement made in the ordinary course of business and not
expressly prohibited by this Agreement, the representations and warranties
contained in paragraph 3 hereof shall be true and correct in all respects
material to Norwest and its subsidiaries taken as a whole as if made at the Time
of Filing.
(b) Norwest shall have, or shall have caused to be, performed and observed
in all material respects all covenants, agreements and conditions hereof to be
performed or observed by it and Merger Co. at or before the Time of Filing.
(c) Central 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 Central required for approval of a plan of merger in accordance with the
provisions of Central's Articles of Incorporation and the Texas Business
Corporation Act.
(e) Norwest shall have received approval by the Federal Reserve Board and
by such other governmental agencies as may be required by law of the
transactions
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<PAGE>
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 Central 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) Central shall have received an opinion, dated the Closing Date, of
counsel to Central, 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 Central 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 Central will be the
same as the basis of Central Common Stock exchanged therefor; and (iv) the
holding period of the shares of Norwest Common Stock received by the
shareholders of Central will include the holding period of the Central Common
Stock, provided such shares of Central 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), Central and the Board of Directors of Central shall have received an
opinion of Keefe, Bruyette & Woods, Inc. addressed to Central and the Board of
Directors of Central, 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 of Keefe, Bruyette & Woods, Inc. deems
appropriate or necessary, to the effect that the consideration to be received by
stockholders of Central pursuant to the Merger is fair from a financial point of
view. Central shall promptly provide a copy of such opinion to Norwest upon
receipt.
7. CONDITIONS PRECEDENT TO OBLIGATION OF NORWEST. The obligation of
Norwest to effect the Merger shall be subject to the satisfaction at or before
the Time of Filing of the following conditions, which may be waived in writing
by Norwest:
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(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 Central and the Central Subsidiaries taken as a whole as if
made at the Time of Filing.
(b) Central 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 Central required for approval of a plan of merger in accordance with the
provisions of Central's Articles of Incorporation and the Texas 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 Central, 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 Central or any Central Subsidiary that, in the good faith judgment
of Norwest, is unreasonably burdensome to Norwest.
(f) Central and each Central Subsidiary shall have obtained any and all
material consents or waivers from other parties to loan agreements, leases or
other contracts material to Central's or such subsidiary's business required for
the consummation of the Merger, and Central and each Central 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 KPMG Peat Marwick LLP, as
Central's auditors and at Central's expense, an opinion to that effect.
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<PAGE>
(i) At any time since the date hereof the total number of shares of
Central Common Stock outstanding and subject to issuance upon exercise (assuming
for this purpose that phantom shares and other share-equivalents constitute
Central 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 [2,648,637].
(j) The Registration Statement (as amended or supplemented) shall have
become effective under the Securities Act and shall not be subject to any stop
order, and no action, suit, proceeding or investigation by the SEC to suspend
the effectiveness of the Registration Statement shall have been initiated and be
continuing, or have been threatened or be unresolved. Norwest shall have
received all state securities law or blue sky authorizations necessary to carry
out the transactions contemplated by this Agreement.
(k) Norwest shall have received from the Chief Executive Officer and Chief
Financial Officer of Central a letter, dated as of the effective date of the
Registration Statement and updated through the date of Closing, in form and
substance satisfactory to Norwest, to the effect that:
(i) the interim quarterly financial statements of Central included or
incorporated by reference in the Registration Statement are prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with the audited financial statements of Central;
(ii) the amounts reported in the interim quarterly
financial statements of Central agree with the general ledger of
Central;
(iii) the annual and quarterly financial statements of
Central and the Central Subsidiaries included in, or incorporated by
reference in, the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
Securities Act and the published rules and regulations thereunder;
(iv) from the date of the most recent unaudited
consolidated financial statements of Central and the Central
Subsidiaries as may be included in the Registration Statement to a
date 5 days prior to the effective date of the Registration Statement
or 5 days prior to the Closing, there are no increases in long-term
debt, changes in the capital stock or decreases in stockholders'
equity of Central and the Central Subsidiaries, except in each case
for changes, increases or decreases which the Registration Statement
discloses have occurred or may occur or which are described in such
letters. For the same period, there have been no decreases in
consolidated net interest income, consolidated net interest income
after provision for credit losses, consolidated income before income
taxes, consolidated net income and net income per share amounts of
Central and the Central Subsidiaries, or in income before equity in
undistributed income of
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<PAGE>
subsidiaries, in each case as compared with the comparable period of
the preceding year, except in each case for changes, increases or
decreases which the Registration Statement discloses have occurred or
may occur or which are described in such letters;
(v) they have reviewed certain amounts, percentages, numbers of
shares and financial information which are derived from the general
accounting records of Central and the Central Subsidiaries, which
appear in the Registration Statement under the certain captions to be
specified by Norwest, and have compared certain of such amounts,
percentages, numbers and financial information with the accounting
records of Central and the Central Subsidiaries and have found them to
be in agreement with financial records and analyses prepared by
Central included in the annual and quarterly financial statements,
except as disclosed in such letters.
(l) Central and the Central Subsidiaries considered as a whole shall not
have sustained since December 31, 1995 any material loss or interference with
their business from any civil disturbance or any fire, explosion, flood or other
calamity, whether or not covered by insurance.
(m) There shall be no reasonable basis for any proceeding, claim or action
of any nature seeking to impose, or that could result in the imposition on
Central or any Central 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 Central and its subsidiaries taken as a whole.
(n) Since June 30, 1996, no change shall have occurred and no
circumstances shall exist which has had or might reasonably be expected to have
a material adverse effect on the financial condition, results of operations,
business of Central and the Central Subsidiaries taken as a whole (other than
changes in banking laws or regulations, or interpretations thereof, that affect
the banking industry generally or changes in the general level of interest
rates). No action taken by Central solely in order to comply with the
requirements of paragraph 4(m) hereof shall be deemed to have a material adverse
effect for purposes of this paragraph 7(n).
8. EMPLOYEE BENEFIT PLANS. Each person who is an employee of Central or
any Central Subsidiary as of the Effective Date of the Merger ("Central
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 Central 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
(and not subject to pre-existing condition exclusions, except with respect to
the Norwest Long Term Care Plan) and shall enter each
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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 it is
Norwest's intent that the transition from the Central plans to the Norwest plans
be facilitated without gaps in coverage to the participants and without
duplication in costs to Norwest):
Medical Plan
Dental Plan
Vision Plan
Short Term Disability Plan
Long Term Disability Plan
Long Term Care Plan
Flexible Benefits Plan
Basic Group Life Insurance Plan
Group Universal Life Insurance Plan
Dependent Group Life Insurance Plan
Business Travel Accident Insurance Plan
Accidental Death and Dismemberment Plan
Severance Pay Plan
Vacation Program
For the purpose of determining each Central Employee's benefit for the year in
which the Merger occurs under the Norwest vacation program, vacation taken by a
Central Employee in the year in which the Merger occurs will be deducted from
the total Norwest benefit. Central Employees shall receive credit for years of
service to Central, the Central Subsidiaries and any predecessors of the Central
Subsidiaries (to the extent credited under the vacation programs of Central and
the Central Subsidiaries) for the purpose of determining benefits under the
Norwest vacation program.
No Central Employee who is eligible to receive a separation payment, as
described on Schedule 2(i)(c), shall be eligible to participate in the Norwest
Severance Pay Plan. Central Employees who participate in the Norwest
Severance Pay Plan shall receive credit for years of service to Central, the
Central Subsidiaries and any predecessors of the Central Subsidiaries (to the
extent credited under the severance programs of Central and the Central
Subsidiaries) for the purpose of determining benefits under such plan.
(b) EMPLOYEE RETIREMENT BENEFIT PLANS.
Each Central 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 Central and
the Central Subsidiaries for the purpose of satisfying any eligibility and
vesting periods applicable to the SIP, to the extent credited under the
respective employee retirement benefit plans of Central and the Central
Subsidiaries), 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 Central Employee shall be eligible for participation, subject to any
applicable eligibility requirements (with full credit for years of past service
to Central and the Central Subsidiaries, to the extent credited under the
respective employee retirement benefit plans of Central and Central
Subsidiaries, for the purpose of satisfying any applicable eligibility and
vesting periods, but without credit for years of past service to Central and the
Central Subsidiaries for purposes of benefit accruals), in the Norwest Pension
Plan under the terms thereof and shall enter the Norwest Pension Plan no later
than the first day of the calendar quarter which is at least 32 days after the
Effective Date of the Merger.
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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;
(ii) by either of the parties hereto upon written notice to the
other party if the Merger shall not have been consummated byMay 31, 1997
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 Central 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; or
(iv) by Central, within five business days after the end of the
Index Measurement Period (as defined in subparagraph (c)(ii) below),
(A) if both of the following conditions are satisfied:
(1) the Norwest Measurement Price (as defined in
subparagraph (c)(ii) below) is less than $34; and
(2) the number obtained by dividing the Norwest
Measurement Price by the closing price of Norwest Common Stock on
the trading day immediately preceding the date of this Agreement
is less than the number obtained by dividing the Final Index
Price (as defined in subparagraph (c) below) by the Initial Index
Price (as defined in subparagraph (c) below) and subtracting 0.15
from such quotient; or
(B) if the Norwest Average Price is less than $32. The
"Norwest Average Price" is defined as the average of the closing
prices of a share of
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Norwest Common Stock as reported on the consolidated tape of the New
York Stock Exchange during the period of 15 trading days ending on the
day immediately preceding the meeting of the shareholders of Central
held to vote on this Agreement and the Merger Agreement.
(v) by either Norwest or Central upon written notice to the other
party if the Board of Directors of Central shall in good faith determine
that a Takeover Proposal constitutes a Superior Proposal; PROVIDED,
HOWEVER, that Central shall not be permitted to terminate this Agreement
pursuant to this paragraph (a)(v) unless (i) it has not breached any
covenant contained in paragraph 4(h) and (ii) it delivers to Norwest
simultaneously with such notice of termination the fee referred to in
paragraph 9(d) below. As used in this Agreement; (i) "Takeover Proposal"
means a bona fide proposal or offer by a person to make a tender or
exchange offer, or to engage in a merger, consolidation or other business
combination involving Central or to acquire in any manner a substantial
equity interest in, or all or substantially all of the assets of, Central,
and (ii) "Superior Proposal" means a bona fide proposal or offer made by a
person to acquire Central pursuant to a tender or exchange offer, a merger,
consolidation or other business combination or an acquisition of all or
substantially all of the assets of Central and the Central Subsidiaries on
terms which the Board of Directors of Central shall determine in good
faith, after taking into account the advice of counsel, to be more
favorable to Central and its shareholders than the transactions
contemplated hereby.
(vi) by Norwest upon written notice to Central if (A) the Board of
Directors of Central fails to recommend, withdraws, or modifies in a manner
materially adverse to Norwest, its approval or recommendation of this
Agreement, or the transactions contemplated hereby, (B) after an agreement
to engage in or the occurrence of an Acquisition Event (as defined below)
or after a third party shall have made a proposal to Central or Central 's
shareholders to engage in an Acquisition Event, the transactions
contemplated hereby are not approved at the meeting of Central shareholders
contemplated by paragraph 4(c), or (C) the meeting of Central shareholders
contemplated by paragraph 4(c) is not held prior to June 30, 1997 and
Central has failed to comply with its obligations under paragraph 4(c).
"Acquisition Event" means any of the following: (i) a merger,
consolidation or similar transaction involving Central, its intermediate
bank holding company ("Holding Company"), its bank subsidiary (the "Bank")
or any successor to Central, the Holding Company or the Bank, (ii) a
purchase, lease or other acquisition in one or a series of related
transactions of assets of Central or any of the Central Subsidiaries
representing 25% or more of the consolidated assets of Central and the
Central Subsidiaries or (iii) a purchase or other acquisition (including by
way of merger, consolidation, share exchange or any similar transaction) in
one or a series of related transactions of beneficial ownership of
securities representing 25% or more of the voting power of Central or any
Central Subsidiary in each case with or by a person or entity other than
Norwest or an affiliate of Norwest.
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<PAGE>
(b) Termination of this Agreement under this paragraph 9 shall not
release, or be construed as so releasing, either party hereto from any liability
or damage to the other party hereto arising out of the breaching party's wilful
and material breach of the warranties and representations made by it, or wilful
and material failure in performance of any of its covenants, agreements, duties
or obligations arising hereunder, and the obligations under paragraphs 4(g),
5(h) and 10 shall survive such termination.
(c) For purposes of this paragraph 9:
(i) The "Company Market Capitalization" shall mean (a) the price of
one share of the common stock of a given company at the close of the
trading day immediately preceding the date of this Agreement multiplied by
(b) the number of shares of common stock of such company outstanding as of
June 30, 1996 (adjusted for any stock dividend, reclassification,
recapitalization, exchange of shares or similar transaction between
June 30, 1996 and the close of the trading day immediately preceding the
date of this Agreement).
(ii) The "Index Group" shall mean all of those companies listed on
Exhibit C the common stock of which is publicly traded and as to which
there is, during the period of 20 trading days ending on the day
immediately preceding the meeting of the shareholders of Central held to
vote on this Agreement and the Merger Agreement (the "Index Measurement
Period"), no pending publicly announced proposal for such company to be
acquired, nor has there been any proposal by such company publicly
announced subsequent to the day before the date of this Agreement to
acquire another company in exchange for stock where, if the company to be
acquired were to become a subsidiary of the acquiring company, the company
to be acquired would be a "significant subsidiary" as defined in Rule 1-02
of Regulation S-X promulgated by the SEC nor has there been any program
publicly announced subsequent to the day before the date of this Agreement
to repurchase 5% or more of the outstanding shares of such company's common
stock. 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 Index
Measurement Period.
(iii) The "Initial Index Price" shall mean the sum of the following,
calculated for each of the companies in the Index Group: (a) the closing
price per share of common stock of each such company on the trading day
immediately preceding the date of this Agreement multiplied by (b) the
Weighting Factor (as defined below) for each such company.
(iv) The "Final Index Price" shall mean the sum of the following,
calculated for each of the companies in the Index Group: (a) the Final
Price for each such company multiplied by (b) the Weighting Factor (as
defined below) for each such company.
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(v) The "Final Price" of any company in the Index Group shall mean the
average of the daily closing prices of a share of common stock of such
company, as reported on the consolidated transaction reporting system for
the market or exchange on which such common stock is principally traded,
during the Index Measurement Period.
(vi) The "Total Market Capitalization" shall mean the sum of the
Company Market Capitalization for each of the companies in the Index Group.
(vii) The "Weighting Factor" for any given company shall mean the
Company Market Capitalization for such company divided by the Total Market
Capitalization.
If a Common Stock Adjustment occurs with respect to the shares of Norwest
or any company in the Index Group between the date of this Agreement and the
Central shareholder meeting date, the closing prices for the common stock of
such company shall be appropriately and proportionately adjusted for the
purposes of the definitions above so as to be comparable to what the price would
have been if the record date of the Common Stock Adjustment had been immediately
following the Effective Time of the Merger.
(d) If this Agreement is terminated pursuant to paragraphs 9(a)(v) or
9(a)(vi), and if terminated pursuant to paragraph 9(a)(vi) and prior thereto or
within 12 months after such termination:
(i) Central, the Holding Company or the Bank or any successor to
Central, the Holding Company or the Bank shall have entered into an
agreement to engage in an Acquisition Event (as defined above) or an
Acquisition Event shall have occurred; or
(ii) the Board of Directors of Central shall have authorized or
approved an Acquisition Event or shall have publicly announced an intention
to authorize or approve or shall have recommended that the shareholders of
Central approve or accept any Acquisition Event,
then Central shall promptly, but in no event later than five business days after
the first of such events shall have occurred, pay Norwest a fee equal to
$3,500,000.
(e) If this Agreement is terminated pursuant to this paragraph 9, Norwest
shall immediately pay Central an amount equal to Central's actual expenses in
connection with obtaining the environmental assessments, asbestos surveys, title
commitments and boundary surveys required by paragraphs 4(n) and 4(o) hereof.
10. EXPENSES. Except as otherwise provided in paragraph 9 hereof, all
expenses in connection with this Agreement and the transactions contemplated
hereby, including
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<PAGE>
without limitation legal and accounting fees, incurred by Central and Central
Subsidiaries shall be borne by Central, and all such expenses incurred by
Norwest shall be borne by Norwest.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, but shall not be assignable by either party hereto without the prior
written consent of the other party hereto.
12. THIRD PARTY BENEFICIARIES. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto.
13. NOTICES. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be in writing and shall be delivered in
person or shall be mailed by first class registered or certified mail, postage
prepaid, addressed as follows:
If to Norwest:
Norwest Corporation
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Secretary
If to Central:
Central Bancorporation, Inc.
777 West Rosedale
Fort Worth, TX 76104
Attention: J. Andy Thompson, Chairman & CEO
With a copy to:
Jenkens & Gilchrist, P.C.
1445 Ross Avenue, Suite 3200
Dallas, TX 75202-2799
Attention: Charles E. Greef, Esq.
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.
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<PAGE>
15. CAPTIONS. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement.
16. WAIVER AND OTHER ACTION. Either party hereto may, by a signed
writing, give any consent, take any action pursuant to paragraph 9 hereof or
otherwise, or waive any inaccuracies in the representations and warranties by
the other party and compliance by the other party with any of the covenants and
conditions herein.
17. AMENDMENT. At any time before the Time of Filing, the parties hereto,
by action taken by their respective Boards of Directors or pursuant to authority
delegated by their respective Boards of Directors, may amend this Agreement;
provided, however, that no amendment after approval by the shareholders of
Central 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 Texas.
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.
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 CENTRAL BANCORPORATION, INC.
By: /s/ Ken Murray By: /s/ J. Andy Thompson
------------------------ ------------------------
Its: Executive Vice President Its: Chairman/CEO
----------------------- ------------------------
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<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
Between
CENTRAL BANCORPORATION, INC.
a Texas corporation
(the surviving corporation)
AND
[MERGER CO.]
a Texas corporation
(the merged corporation)
This Agreement and Plan of Merger dated as of __________, 19__, between
CENTRAL BANCORPORATION, INC.("Central"), a Texas corporation (hereinafter
sometimes called "Central" and sometimes called the "surviving corporation") and
[MERGER CO.], a Texas corporation ("Merger Co.")(said corporations being
hereinafter sometimes referred to as the "constituent corporations"),
WHEREAS, Merger Co., a wholly-owned subsidiary of Norwest Corporation
("Norwest"), was incorporated by Articles of Incorporation filed in the office
of the Secretary of State of the State of Texas on _________, and said
corporation is now a corporation subject to and governed by the provisions of
the Texas Business Corporation Law. Merger Co. has authorized capital stock of
_________ shares of common stock, par value of $___ per share ("Merger Co.
Common Stock"). As of _______, 19___, there were _____ shares of Merger Co.
Common Stock outstanding and _____ shares were held in the treasury; and
WHEREAS, Central was incorporated by Articles of Incorporation filed in the
office of the Secretary of State of the State of Texas on May 29, 1979, and said
corporation is now a corporation subject to and governed by the provisions of
the Texas Business Corporation Law, with an authorized capital stock consisting
of 5,000,000 shares of common stock, par value $2.50 per share ("Central Common
Stock") of which ____________ shares were outstanding and _________ shares were
held in the treasury as of ___________ , 19__; and
WHEREAS, Norwest and Central are parties to an Agreement and Plan of
Reorganization dated as of __________, 1996 (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 corporation 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 Central, with Central continuing as the surviving corporation, on
the terms and conditions hereinafter set forth in accordance with the provisions
of the Texas Business Corporation Act, which statute permits such merger;
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<PAGE>
NOW, THEREFORE, the parties hereto, subject to the approval of the
shareholders of Merger Co. and Central, 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 Central pursuant to the laws of the State of
Texas, and do hereby agree upon, prescribe and set forth the terms and
conditions of the merger of Merger Co. with and into Central, the mode of
carrying said merger into effect, the manner and basis of converting the shares
of Central Common Stock into shares of common stock, par value $1-2/3 per share,
of Norwest ("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
Central, 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 remain "Central Bancorporation, Inc."
SECOND: The Articles of Incorporation of Central 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 amended according to law:
[Amend to change name, number of directors, etc.]
THIRD: The By-Laws of Central 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: At the time of merger, the following-named persons shall become
the directors of the surviving corporation and shall hold office from the time
of merger until their respective successors are elected and qualify:
________________________
________________________
________________________
FIFTH: The officers of Merger Co. at the time of merger shall become 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.
SIXTH: The manner and basis of converting the shares of Central Common
Stock shall be as follows:
1. Each of the shares of Central Common Stock outstanding immediately
prior to the time of merger (other than shares as to which statutory
dissenters' rights have been exercised) shall at the time of merger, by
virtue of the merger and without any action on the part of the holder or
holders thereof, be converted into and exchanged for _____ shares of
Norwest Common Stock.
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<PAGE>
2. As soon as practicable after the merger becomes effective, each holder
of a certificate for shares of Central Common Stock outstanding immediately
prior to the time of merger shall be entitled, upon surrender of such
certificate 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 Central Common Stock 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 Central Common Stock have been converted on
the basis above set forth; provided, however, until the holder of such
certificate for Central Common Stock 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 of any
reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment, or if a stock dividend thereon shall be declared
with a record date within such period, then the number of shares of Norwest
Common Stock, if any, into which a share of Central Common Stock shall be
converted on the basis above set forth, will be appropriately and
proportionately adjusted so that the number of such shares of Norwest
Common Stock into which a share of Central Common Stock shall be converted
will equal the number of shares of Norwest Common Stock which the holders
of shares of Central Common Stock would have received pursuant to such
reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment, or stock dividend had the record date therefor been
immediately following the time of merger.
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 average
of the closing prices of a share of Norwest Common Stock as reported by the
consolidated tape of the New York Stock Exchange for each of the
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<PAGE>
five (5) trading days ending on the day immediately preceding the meeting
of shareholders held to approve the merger.
5. Each share of Merger Co. Common Stock issued and outstanding at the
time of merger shall be converted into and exchanged for one (1) share of
the surviving corporation after the time of merger.
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 the 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 Texas;
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 Central in accordance with the Texas 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 Texas 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 Central and by the Secretary or an Assistant Secretary of
Central, and shall be filed in the office of the Secretary of State of
the State of Texas in accordance with the Texas Business Corporation
Act; and
2. The merger shall become effective as of 11:59 p.m. (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 Central shall continue as the surviving
corporation.
2. The merger shall have the other effects prescribed by Section 5.06 of
the Texas Business Corporation Act.
NINTH: The following provisions shall apply with respect to the merger
provided for by this Agreement:
1. If at any time Central 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 Central 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 Central and Merger Co. may
execute and deliver such deeds, assignments and assurances in law and take
such other action as may be
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<PAGE>
necessary or proper to vest, perfect or confirm title to such property or
right in Central and otherwise carry out the purposes of this Agreement.
2. 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.
3. 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
Texas.
4. This Agreement cannot be altered or amended except pursuant to an
instrument in writing signed by both of the parties hereto.
5. At any time prior to the filing of Articles of Merger with the
Secretary of State of the State of Texas, this Agreement may be terminated
in accordance with the terms of the Reorganization Agreement upon approval
by the Board 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.
[MERGER CO.]
By: ________________________
Its: ________________________
Attest:
__________________________
Secretary
CENTRAL BANCORPORATION, INC.
By: _________________________
Its: _________________________
Attest:
___________________________
Secretary
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<PAGE>
APPENDIX B
EMPLOYMENT AGREEMENTS
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of September 16, 1996, between
J. Andy Thompson ("Employee"), Central Bancorporation, Inc. ("Central") and
Norwest Corporation ("Norwest").
WHEREAS, Employee is currently employed as Chief Executive Officer of
Central and Chairman of the Board of Central Bank and Trust which is a
subsidiary of Central; and
WHEREAS, Central and Norwest are contemporaneously entering into an
Agreement and Plan of Reorganization, dated as of September 16, 1996 (the
"Merger Agreement") pursuant to which a wholly owned subsidiary of Norwest will
be merged with and into Central (the "Acquisition"); and
WHEREAS, the parties desire to enter into an Employment Agreement with
respect to Employee's obligations and compensation following the Acquisition,
and to resolve any potential or pending claims that Employee may now have
against Central or Norwest.
NOW THEREFORE, the parties agree as follows:
1. EFFECTIVE DATE AND TERM. The Effective Date of this Agreement shall be the
date immediately following the Acquisition. The Term of this Agreement shall be
the period from the Effective Date through the following two (2) months
("Term").
2. EMPLOYEE'S SERVICES. Commencing upon the Effective Date of this Agreement
and continuing through the Term, Employee shall be a regular, full-time employee
of Central and shall perform all of the transition duties as assigned by
Norwest.
3. BASE COMPENSATION. Employee shall be paid base compensation effective
January 1, 1997 at the rate of Three Hundred Ninty Eight Thousand Dollars
($398,000) per annum during the term of this Employment Agreement.
4. BENEFITS. Upon the Effective Date of this Agreement, Employee shall be
eligible to participate in the Central's employee benefit plans available to
regular full-time employees of Central and in accordance with all of the terms
of said benefit plans. In addition, upon the Effective Date, the Employee shall
also be eligible to receive the perquisites available to other executives at his
level within Norwest and its affiliates.
B-1
<PAGE>
5. SEVERANCE PAY. Upon the expiration of this Agreement, Employee shall be
deemed to be subject to a position elimination as defined by the Norwest
Corporation Severance Pay Plan the ("Plan") and shall be eligible to receive
severance pay and benefits as described in the Plan based upon the Employee's
years of service for Central and Norwest. Based on the current Plan, the
Employee's current service and Employee's position, the enhanced severance
opportunity under the Norwest severance Pay Plan includes twelve (12) months of
Base Compensation.
6. NON-COMPETE. In consideration for a payment to be made to Employee
following the end of the Term of this agreement, Employee agrees that for a
period of eighteen (18) months following the Term he will not, by himself or
through associates, agents, employees, or others, directly or indirectly, in the
county of Tarrant, Texas:
i. serve as an employee, officer, director or principal
shareholder of any bank, savings and loan association or savings bank;
ii. solicit the financial services business of any current
customer of Norwest or prospective customer of Norwest seeking
commercial banking services; or
iii. solicit, recruit or hire any person who is an employee,
officer or director of Norwest for any purpose.
Norwest shall pay Employee a gross amount of Five Hundred Ninety Seven Thousand
Dollars ($597,000) at the end of the Term of this Agreement. If Employee
violates the provisions set forth above at anytime prior to the payment
described herein, he shall not be entitled to this payment. If this payment has
already been made to Employee at the time Employee violates the provisions of
this paragraph, Employee shall immediately repay the full amount of the payment
to the Bank.
7. TERMINATION. This Employment Agreement shall terminate on the earlier of:
(a) The day concluding the two (2) month period immediately
following the Effective Date.
(b) Prior to the end of the Term set forth above, upon:
i. the Employee's death; or
ii. receipt of notice of termination by Employee from
Central arising from the commission of a fraudulent or dishonest
act by Employee or upon the Employee's violation of Central or
Norwest policy.
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<PAGE>
8. DEATH OR TERMINATION OF EMPLOYEE. In the event of the death or termination
of the Employee, all amounts earned by Employee prior to his death or
termination shall be payable to the Employee or to a designated beneficiary as
circumstances dictate and this Agreement shall then terminate. This does not
include any payment pursuant to paragraph 5 above.
9. CONFIDENTIALITY. The parties hereto agree to keep the terms of this
Agreement confidential. Norwest and Central shall disclose the terms herein
only as necessary to perform their duties hereunder or as required by law.
Employee shall not disclose any terms herein except as required by law. In
addition, Employee agrees that all information he receives or has access to in
his position as Chief Executive Officer of the Central shall forever be treated
by him as confidential and as proprietary property of Central and Norwest.
Employee agrees that at no time during or following the Term of this Agreement,
will he disclose any such information outside of Central or Norwest, except in
the performance of his assigned duties on behalf of the Central and Norwest
which is not remedied immediately upon notification from Norwest
10. INDEMNIFICATION. As an officer of Central, if in the course of performing
his assigned job duties Employee is named as an individual defendant in any
litigation, he shall be entitled to indemnification by the Central as set forth
in its Articles of Association or Bylaws. This shall remain in effect even
after the end of the employment relationship.
11. WAIVER. No waiver of any term, condition or provision shall be effective
for any purpose whatsoever unless such waiver is in writing and signed by the
appropriate party.
12. GOVERNING LAW AND ENFORCEABILITY. This agreement shall be governed by and
construed in accordance with the laws of the State of Texas. In the event that
a court of competent jurisdiction shall determine that any provision set forth
herein is void, invalid, or unenforceable, such void, invalid, or unenforceable
provision shall be deemed to be severable from and shall be severed from this
Agreement, and this Agreement shall be construed and enforced as if such severed
provision had never been a part hereof.
13. AMENDMENT AND ASSIGNMENT. The parties may not modify or amend this
Employment Agreement unless said amendment is in writing and is signed by all
parties. This Agreement is personal in nature as to the Employee and may not be
assigned by him. The terms of this Agreement shall innure to the benefit of the
Central and Norwest and their successors and assigns.
14. MERGER. This Agreement includes the entire agreement between the Employee,
Central and Norwest regarding the subject matter hereof and supersedes any and
all verbal or written agreements between Employee and Central or Norwest.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have set their hands as of the date
first written above.
CENTRAL BANCORPORATION, INC.
By: /s/ Stuart W. Murff
-------------------------
Its President
-------------------------
NORWEST CORPORATION
By: /s/ John E. Ganoe
---------------------------
Its: Executive Vice President
---------------------------
/s/ J. Andy Thompson
----------------------------------
Employee
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<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of September 16, 1996, between
Stuart Murff ("Employee"), Central Bancorporation, Inc. ("Central") and Norwest
Corporation ("Norwest").
WHEREAS, Employee is currently employed as Vice Chairman of Central Bank
and Trust which is a subsidiary of Central; and
WHEREAS, Central and Norwest are contemporaneously entering into an
Agreement and Plan of Reorganization, dated as of September 16, 1996 (the
"Merger Agreement") pursuant to which a wholly owned subsidiary of Norwest will
be merged with and into Central (the "Acquisition"); and
WHEREAS, the parties desire to enter into an Employment Agreement with
respect to Employee's obligations and compensation following the Acquisition,
and to resolve any potential or pending claims that Employee may now have
against Central or Norwest.
NOW THEREFORE, the parties agree as follows:
1. EFFECTIVE DATE AND TERM. The Effective Date of this Agreement shall be the
date immediately following the Acquisition. The Term of this Agreement shall be
the period from the Effective Date through the following two (2) months
("Term").
2. EMPLOYEE'S SERVICES. Commencing upon the Effective Date of this Agreement
and continuing through the Term, Employee shall be a regular, full-time employee
of Central and shall perform all of the transition duties as assigned by
Norwest.
3. BASE COMPENSATION. Employee shall be paid base compensation effective
January 1, 1997 at the rate of Three Hundred Twenty Six Thousand, Five Hundred
Dollars ($326,500) per annum during the term of this Employment Agreement.
4. BENEFITS. Upon the Effective Date of this Agreement, Employee shall be
eligible to participate in the Central's employee benefit plans available to
regular full-time employees of Central and in accordance with all of the terms
of said benefit plans. In addition, upon the Effective Date, the Employee shall
also be eligible to receive the perquisites available to other executives at his
level within Norwest and its affiliates.
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<PAGE>
5. SEVERANCE PAY. Upon the expiration of this Agreement, Employee shall be
deemed to be subject to a position elimination as defined by the Norwest
Corporation Severance Pay Plan (the "Plan") and shall be eligible to receive
severance pay and benefits as described in the Plan based upon the Employee's
years of service for Central and Norwest. Based on the current Plan, Employee's
service and Employee's position, the enhanced severance opportunity under the
Norwest Severance Pay Plan includes ten (10) months of Base Compensation.
6. NON-COMPETE. In consideration for a payment to be made to Employee
following the end of the Term of this agreement, Employee agrees that for a
period of eighteen (18) months following the Term he will not, by himself or
through associates, agents, employees, or others, directly or indirectly, in the
county of Tarrant, Texas
i. serve as an employee, officer, director or principal
shareholder of any bank, savings and loan association
or savings bank;
ii. solicit the financial services business of any current
customer of Norwest or prospective customer of Norwest
seeking commercial banking services; or
iii. solicit, recruit or hire any person who is an employee,
officer or director of Norwest for any purpose.
Norwest shall pay employee a gross amount of Four Hundred Eighty Nine Thousand,
Seven Hundred Fifty Dollars ($489,750) at the end of the Term of this agreement.
If Employee violates the provisions set forth above at anytime prior to the
payment described herein, he shall not be entitled to this payment. If this
payment has already been made to Employee at the time Employee violates the
provisions of this paragraph, Employee shall immediately repay the full amount
of the payment to the Bank.
7. TERMINATION. This Employment Agreement shall terminate on the earlier of:
(a) The day concluding the two (2) month period immediately
following the Effective Date.
(b) Prior to the end of the Term set forth above, upon:
i. the Employee's death; or
ii. receipt of notice of termination by Employee from
Central arising from the commission of a
fraudulent or dishonest act by Employee or upon
the Employee's violation of Central or Norwest
policy.
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<PAGE>
8. DEATH OR TERMINATION OF EMPLOYEE. In the event of the death or termination
of the Employee, all amounts earned by Employee prior to his death or
termination shall be payable to the Employee or to a designated beneficiary as
circumstances dictate and this Agreement shall then terminate. This does not
include any payment pursuant to paragraph 5 above.
9. CONFIDENTIALITY. The parties hereto agree to keep the terms of this
Agreement confidential. Norwest and Central shall disclose the terms herein
only as necessary to perform their duties hereunder or as required by law.
Employee shall not disclose any terms herein except as required by law. In
addition, Employee agrees that all information he receives or has access to in
his position as Vice Chairman of the Central shall forever be treated by him as
confidential and as proprietary property of Central and Norwest. Employee
agrees that at no time during or following the Term of this Agreement, will he
disclose any such information outside of Central or Norwest, except in the
performance of his assigned duties on behalf of the Central and Norwest which is
not remedied immediately upon notification from Norwest
10. INDEMNIFICATION. As an officer of Central, if in the course of performing
his assigned job duties Employee is named as an individual defendant in any
litigation, he shall be entitled to indemnification by the Central as set forth
in its Articles of Association or Bylaws. This shall remain in effect even
after the end of the employment relationship.
11. WAIVER. No waiver of any term, condition or provision shall be effective
for any purpose whatsoever unless such waiver is in writing and signed by the
appropriate party.
12. GOVERNING LAW AND ENFORCEABILITY. This agreement shall be governed by and
construed in accordance with the laws of the State of Texas. In the event that
a court of competent jurisdiction shall determine that any provision set forth
herein is void, invalid, or unenforceable, such void, invalid, or unenforceable
provision shall be deemed to be severable from and shall be severed from this
Agreement, and this Agreement shall be construed and enforced as if such severed
provision had never been a part hereof.
13. AMENDMENT AND ASSIGNMENT. The parties may not modify or amend this
Employment Agreement unless said amendment is in writing and is signed by all
parties. This Agreement is personal in nature as to the Employee and may not be
assigned by him. The terms of this Agreement shall innure to the benefit of the
Central and Norwest and their successors and assigns.
14. MERGER. This Agreement includes the entire agreement between the Employee,
Central and Norwest regarding the subject matter hereof and supersedes any and
all verbal or written agreements between Employee and Central or Norwest.
B-7
<PAGE>
IN WITNESS WHEREOF, the undersigned have set their hands as of the date
first written above.
CENTRAL BANCORPORATION, INC.
By: /s/ J. Andy Thompson
-------------------------------
Its Chairman/CEO
-------------------------------
NORWEST CORPORATION
By: /s/ John E. Ganoe
--------------------------------
Its: Executive Vice President
------------------------------
/s/ Stuart W. Murff
-----------------------------------
Employee
B-8
<PAGE>
APPENDIX C
OPINION OF KEEFE, BRUYETTE & WOODS, INC.
<PAGE>
December __, 1996
Board of Directors
Central Bancorporation, Inc.
777 West Rosedale
Fort Worth, TX 76113
Gentlemen:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to the stockholders of Central Bancorporation,
Inc. ("Central") of the exchange ratio in the proposed merger (the "Merger") in
which a wholly-owned subsidiary of Norwest Corporation ("Norwest") will merge
with and into Central, such that Central will become a wholly-owned subsidiary
of Norwest, pursuant to the Agreement and Plan of Reorganization, dated as of
September 16, 1996, between Central and Norwest (the "Agreement"). Pursuant to
the terms of the Agreement, each outstanding share of common stock, par value
$2.50 per share, of Central (the "Common Shares") will be converted into 1.7745
shares of common stock, par value $1-2/3 per share, of Norwest.
Keefe, Bruyette & Woods, Inc., as part of its investment banking business,
is continually engaged in the valuation of bank and bank holding company
securities in connection with acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements and
valuations for various other purposes. As specialists in the securities of
banking companies, we have experience in, and knowledge of, the valuation of the
banking enterprises. In the ordinary course of our business as a broker-dealer,
we may, from time to time purchase securities from, and sell securities to,
Central and Norwest, and as a market maker in securities, we may from time to
time have a long or short position in, and buy or sell, debt or equity
securities of Central and Norwest for our own account and for the accounts of
our customers. To the extent we have any such position as of the date of this
opinion it has been disclosed to Central. We have acted exclusively for the
Board of Directors of Central in rendering this fairness opinion and will
receive a fee from Central for our services.
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<PAGE>
Central Bancorporation, Inc.
Board of Directors
Page 2
In connection with this opinion, we have reviewed, analyzed and relied upon
material bearing upon the financial and operating condition of Central and
Norwest and the Merger, including among other things, the following: (i) the
Agreement; (ii) the Registration Statement on Form S-4 (including the proxy
statement-prospectus dated ___________, 199_ for the special meeting of
stockholders of Central to be held in connection with the Merger); (iii) Annual
Reports to Stockholders and Annual Reports on Form 10-K for the three years
ended December 31, 1995 of Central and Norwest; (iv) certain interim reports to
stockholders and Quarterly Reports on Form 10-Q of Central and Norwest and
certain other communications from Central and Norwest to their respective
stockholders; and (v) other financial information concerning the businesses and
operations of Central and Norwest furnished to us by Central and Norwest for
purposes of our analysis. We also have held discussions with senior management
of Central and Norwest regarding the past and current business operations,
regulatory relations, financial condition and future prospects of their
respective companies and such other matters as we have deemed relevant to our
inquiry. In addition, we have compared certain financial for Central and
certain financial and stock market information for Norwest with similar
information for certain other companies the securities of which are publicly
traded, reviewed the financial terms of certain recent business combinations in
the banking industry and performed such other studies and analyses as we
considered appropriate.
In conducting our review and arriving at our opinion, we have relied upon
the accuracy and completeness of all of the financial and other information
provided to us or publicly available and we have not assumed any responsibility
for independently verifying the accuracy or completeness of any of such
information. We have relied upon the management of Central and Norwest as to
the reasonableness and achievability of the financial and operating forecasts
and projections (and the assumptions and bases therefor) provided to us, and we
have assumed that such forecasts and projections reflect the best currently
available estimates and judgments of such managements and that such forecasts
and projections will be realized in the amounts and in the time periods
currently estimated by such managements. We are not experts in the independent
verification of the adequacy of allowances for loan and lease losses and we have
assumed, with your consent, that the aggregate allowances for loan and lease
losses for Central and Norwest are adequate to cover such losses. In rendering
our opinion, we have not made or obtained any evaluations or appraisals of the
property of Central or Norwest, nor have we examined any individual credit
files.
We have considered such financial and other factors as we have deemed
appropriate under the circumstances, including, among others, the following:
(i) the historical and current financial position and results of operations of
Central and Norwest; (ii) the assets and liabilities of Central and Norwest; and
(iii) the nature and terms of certain other merger transactions involving banks
and bank holding companies.
C-2
<PAGE>
Central Bancorporation, Inc.
Board of Directors
Page 3
We have also taken into account our assessment of general economic, market and
financial conditions and our experience in other transactions, as well as our
experience in securities valuation and knowledge of the banking industry
generally. Our opinion is necessarily based upon conditions as they exist and
can be evaluated on the date hereof and the information made available to us
through the date hereof.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the exchange ratio in the Merger is fair, from a financial point of
view, to the holders of the Common Stock.
Very truly yours,
KEEFE, BRUYETTE & WOODS, INC.
C-3
<PAGE>
APPENDIX D
TEXAS BUSINESS CORPORATION ACT
ARTICLES 5.11, 5.12 AND 5.13
<PAGE>
ART. 5.11 RIGHTS OF DISSENTING SHAREHOLDERS IN THE EVENT OF CERTAIN CORPORATE
ACTIONS
A. Any shareholder of a domestic corporation shall have the right to
dissent from any of the following corporate actions:
(1) Any plan of merger to which the corporation is a
party if shareholder approval is required by Article 5.03 or 5.16
of this Act and the shareholder holds shares of a class or series
that was entitled to vote thereon as a class or otherwise:
(2) Any sale, lease, exchange or other disposition
(not including any pledge, mortgage, deed of trust or trust
indenture unless otherwise provided in the articles of
incorporation) of all, or substantially all, the property and
assets, with or without good will, of a corporation requiring the
special authorization of the shareholders as provided by this
Act;
(3) Any plan of exchange pursuant to Article 5.02 of
this Act in which the shares of the corporation of the class or
series held by the shareholder are to be acquired.
B. Notwithstanding the provisions of Section A of this Article, a
shareholder shall not have the right to dissent from any plan of
merger in which there is a single surviving or new domestic or
foreign corporation, or from any plan of exchange, if (1) the
shares held by the shareholder are part of a class shares of
which are listed on a national securities exchange, or are held
of record by not less than 2,000 holders, on the record date
fixed to determine the shareholders entitled to vote on the plan
of merger or the plan of exchange, and (2) the shareholder is not
required by the terms of the plan of merger or the plan of
exchange to accept for his shares any consideration other than
(a) shares of a corporation that, immediately after the effective
time of the merger or exchange, will be part of a class or series
of shares of which are (i) listed, or authorized for listing upon
official notice of issuance, on a national securities exchange,
or (ii) held of record by not less than 2,000 holders, and (b)
cash in lieu of fractional shares otherwise entitled to be
received.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955.
Amended by Acts 1957, 55th Leg., p. 111, ch. 54, Section 10;
Acts 1973, 63rd Leg., p. 1508, ch. 545, Section 36, eff.
Aug. 27, 1973; Acts 1989, 71st Leg., ch. 801, Section 34, eff.
Aug. 28, 1989; Acts 1991, 72nd Leg., ch. 901, Section 32, eff.
Aug 26, 1991.
D-1
<PAGE>
ART. 5.12 PROCEDURE FOR DISSENT BY SHAREHOLDERS AS TO SAID CORPORATE ACTIONS
A. Any shareholder of any domestic corporation who has the right to
dissent from any of the corporate actions referred to in Article 5.11
of this Act may exercise that right to dissent only by complying with
the following procedures:
(1) (a) With respect to proposed corporate action that is
submitted to a vote of shareholders at a meeting, the shareholder
shall file with the corporation, prior to the meeting, a written
objection to the action, setting out that the shareholder's right to
dissent will be exercised if the action is effective and giving the
shareholder's address, to which notice thereof shall be delivered or
mailed in that event. If the action is effected and the shareholder
shall not have voted in favor of the action, the corporation, in the
case of action other than a merger, or the surviving or new
corporation (foreign or domestic) or other entity that is liable to
discharge the shareholder's right of dissent, in the case of a merger,
shall, within ten (10) days after the action is effected, deliver or
mail to the shareholder written notice that the action has been
effected, and the shareholder may, within ten (10) days from the
delivery or mailing of the notice, make written demand on the
existing, surviving, or new corporation (foreign or domestic) or other
entity, as the case may be, for payment of the fair value of the
shareholder's shares. The fair value of the shares shall be the value
thereof as of the day immediately preceding the meeting, excluding any
appreciation or depreciation in anticipation of the proposed action.
The demand shall state the number and class of the shares owned by the
shareholder and the fair value of the shares as estimated by the
shareholder. Any shareholder failing to make demand within the ten
(10) day period shall be bound by the action.
(b) With respect to proposed corporate action that is
approved pursuant to Section A of Article 9.10 of this Act, the
corporation, in the case of action other than a merger, and the
surviving or new corporation (foreign or domestic) or other entity
that is liable to discharge the shareholder's right of dissent, in the
case of a merger, shall, within ten (10) days after the date the
action is effected, mail to each shareholder of record as of the
effective date of the action notice of the fact and date of the action
and that the shareholder may exercise the shareholder's right to
dissent from the action. The notice shall be accompanied by a copy of
this Article and any articles or documents filed by the Corporation
with the Secretary of State to effect the action. If the
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<PAGE>
shareholder shall not have consented to the taking of the action, the
shareholder may, within twenty (20) days after the mailing of the
notice, make written demand on the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be,
for payment of the fair value of the shareholder's shares. The fair
value of the shares shall be the value thereof as of the date the
written consent authorizing the action was delivered to the
corporation pursuant to Section A of Article 9.10 of this Act,
excluding any appreciation or depreciation in anticipation of the
action. The demand shall state the number and class of shares owned
by the dissenting shareholder and the fair value of the shares as
estimated by the shareholder. Any shareholder failing to make demand
within the twenty (20) day period shall be bound by the action.
(2) Within twenty (20) days after receipt by the existing,
surviving, or new corporation (foreign or domestic) or other entity,
as the case may be, of a demand for payment made by a dissenting
shareholder in accordance with Subsection (1) of this Section, the
corporation (foreign or domestic) or other entity shall deliver or
mail to the shareholder a written notice that shall either set out
that the corporation (foreign or domestic) or other entity accepts the
amount claimed in the demand and agrees to pay that amount within
ninety (90) days after the date on which the action was effected, and,
in the case of shares represented by certificates, upon the surrender
of the certificates duly endorsed, or shall contain an estimate by the
corporation (foreign or domestic) or other entity of the fair value of
the shares, together with an offer to pay the amount of that estimate
within ninety (90) days after the date on which the action was
effected, upon receipt of notice within sixty (60) days after that
date from the shareholder that the shareholder agrees to accept that
amount and, in the case of shares represented by certificates, upon
the surrender of the certificates duly endorsed.
(3) If, within sixty (60) days after the date on which the
corporate action was effected, the value of the shares is agreed upon
between the shareholder and the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be,
payment for the shares shall be made within ninety (90) days after the
date on which the action was effected and, in the case of shares
represented by certificates, upon surrender of the certificates duly
endorsed. Upon payment of the agreed value, the shareholder shall
cease to have any interest in the shares or in the corporation.
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<PAGE>
B. If, within the period of sixty (60) days after the date on which the
corporate action was effected, the shareholder and the existing,
surviving, or new corporation (foreign or domestic) or other entity,
as the case may be, do not so agree, then the shareholder or the
corporate (foreign or domestic) or other entity may, within sixty (60)
days after the expiration of the sixty (60) day period, file a
petition in any court of competent jurisdiction in the county in which
the principal office of the domestic corporation is located, asking
for a finding and determination of the fair value of the shareholder's
shares. Upon the filing of any such petition by the shareholder,
service of a copy thereof shall be made upon the corporation (foreign
or domestic) or other entity, which shall, within ten (10) days after
service, file in the office of the clerk of the court in which the
petition was filed a list containing the names and addresses of all
shareholders of the domestic corporation who have demanded payment for
their shares and with whom agreements as to the value of their shares
have not been reached by the corporation (foreign or domestic) or
other entity. If the petition shall be filed by the corporation
(foreign or domestic) or other entity, the petition shall be
accompanied by such a list. The clerk of the court shall give notice
of the time and place fixed for the hearing of the petition by
registered mail to the corporation (foreign or domestic) or other
entity and to the shareholders named on the list at the addresses
therein stated. The forms of the notices by mail shall be approved by
the court. All shareholders thus notified and the corporation
(foreign or domestic) or other entity shall thereafter be bound by the
final judgment of the court.
C. After the hearing of the petition, the court shall determine the
shareholders who have complied with the provisions of this Article and
have become entitled to the valuation of and payment for their shares,
and shall appoint one or more qualified appraisers to determine that
value. The appraisers shall have power to examine any of the books
and records of the corporation the shares of which they are charged
with the duty of valuing, and they shall make a determination of the
fair value of the shares upon such investigation as to them may seem
proper. The appraisers shall also afford a reasonable opportunity to
the parties interested to submit to them pertinent evidence as to the
value of the shares. The appraisers shall also have such power and
authority as may be conferred on Masters in Chancery by the Rules of
Civil Procedure or by the order of their appointment.
D. The appraisers shall determine the fair value of the shares of the
shareholders adjudged by the court to be entitled to payment for their
shares and shall file their report of that value in the office of the
clerk of the court. Notice of the filing of the report shall be
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<PAGE>
given by the clerk to the parties in interest. The report shall be
subject to exceptions to be heard before the court both upon the law
and the facts. The court shall by its judgment determine the fair
value of the shares of the shareholders entitled to payment for their
shares and shall direct the payment of that value by the existing,
surviving, or new corporation (foreign or domestic) or other entity,
together with interest thereon, beginning 91 days after the date on
which the applicable corporate action from which the shareholder
elected to dissent was effected to the date of such judgment, to the
shareholders entitled to payment. The judgment shall be payable to
the holders of uncertificated shares immediately but to the holders of
shares represented by certificates only upon, and simultaneously with,
the surrender to the existing, surviving, or new corporation (foreign
or domestic) or other entity, as the case may be, of duly endorsed
certificates for those shares. Upon payment of the judgment, the
dissenting shareholders shall cease to have any interest in those
shares or in the corporation. The court shall allow the appraisers a
reasonable fee as court costs, and all court costs shall be allotted
between the parties in the manner that the court determines to be fair
and equitable.
E. Shares acquired by the existing, surviving, or new corporation
(foreign or domestic) or other entity, as the case may be, pursuant
to the payment of the agreed value of the shares or pursuant to
payment of the judgment entered for the value of the shares, as in
this Article provided, shall, in the case of a merger, be treated as
provided in the plan of merger and, in all other cases, may be held
and disposed of by the corporation as in the case of other treasury
shares.
F. The provisions of this Article shall not apply to a merger if, on the
date of filing of the articles of merger, the surviving corporation is
the owner of all the outstanding shares of the other corporations,
domestic or foreign, that are parties to the merger.
G. In the absence of fraud in the transaction, the remedy provided by
this Article to a shareholder objecting to any corporate action
referred to in Article 5.11 of this Act is the exclusive remedy for
the recovery of the value of his shares or money damages to the
shareholder with respect to the action. If the existing, surviving,
or new corporation (foreign or domestic) or other entity, as the case
may be, complies with the requirements of this Article, any
shareholder who fails to comply with the requirements of this Article
shall not be entitled to bring suit for the recovery of the value of
his shares or money damages to the shareholder with respect to the
action.
D-5
<PAGE>
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sept. 6, 1955. Amended by
Acts 1967, 60th Leg., p. 1721, ch. 657 Section 12, eff. June 17, 1967;
Acts 1983, 68th Leg., p. 2570, ch. 442 Section 9, eff. Sept. 1, 1983;
Acts 1987, 70th Leg., ch. 93, Section 27, eff. Aug. 31, 1987; Acts
1989, 71st Leg., ch. 801, Section 35, eff. Aug 28, 1989; Acts 1993,
73rd Leg., ch 215, Section 2.16, eff. Sept. 1, 1993.
D-6
<PAGE>
ART. 5.13 PROVISIONS AFFECTING REMEDIES OF DISSENTING SHAREHOLDERS
A. Any shareholder who has demanded payment for his shares in
accordance with either Article 5.12 or 5.16 of this Act shall not
thereafter be entitled to vote or exercise any other rights of a
shareholder except the right to receive payment for his shares
pursuant to the provisions of those articles and the right to
maintain an appropriate action to obtain relief on the ground
that the corporate action would be or was fraudulent, and the
respective shares for which payment has been demanded shall not
thereafter be considered outstanding for the purposes of any
subsequent vote of shareholders.
B. Upon receiving a demand for payment from any dissenting
shareholder, the corporation shall make an appropriate notation
thereof in its shareholder records. Within twenty (20) days
after demanding payment for his shares in accordance with either
Article 5.12 or 5.16 of this Act, each holder of certificates
representing shares so demanding payment shall submit such
certificates to the corporation for notation thereon that such
demand has been made. The failure of holders of certificated
shares to do so shall, at the option of the corporation,
terminate such shareholder's rights under Articles 5.12 and 5.16
of this Act unless a court of competent jurisdiction for good and
sufficient cause shown shall otherwise direct. If uncertificated
shares for which payment has been demanded or shares represented
by a certificate on which notation has been so made shall be
transferred, any new certificate issued therefor shall bear
similar notation together with the name of the original
dissenting holder of such shares and a transferee of such shares
shall acquire by such transfer no rights in the corporation other
than those which the original dissenting shareholder had after
making demand for payment of the fair value thereof.
C. Any shareholder who has demanded payment for his shares in
accordance with either Article 5.12 or 5.16 of this Act may
withdraw such demand at any time before payment for his shares or
before any petition has been filed pursuant to Article 5.12 or
5.16 of this Act asking for a finding and determination of the
fair value of such shares, but no such demand may be withdrawn
after such payment has been made or, unless the corporation shall
consent thereto, after any such petition has been filed. If,
however, such demand shall be withdrawn as hereinbefore provided,
or if pursuant to Section B of this Article the corporation shall
terminate the shareholder's rights under Article 5.12 or 5.16 of
this Act, as the case may be, or if no petition asking for a
D-7
<PAGE>
finding and determination of a fair value of such shares by a
court shall have been filed within the time provided in Article
5.12 or 5.16 of this Act, as the case may be, or if after the
hearing of a petition filed pursuant to Article 5.12 or 5.16, the
court shall determine that such shareholder is not entitled to
the relief provided by those articles, then, in any such case,
such shareholder and all persons claiming under him shall be
conclusively presumed to have approved and ratified the corporate
action from which he dissented and shall be bound thereby, the
right of such shareholder to be paid the fair value of his shares
shall cease, and his status as a shareholder shall be restored
without prejudice to any corporate proceedings which may have
been taken during the interim, and such shareholder shall be
entitled to receive any dividends or other distributions made to
shareholders in the interim.
Acts 1955, 54th Leg., p. 239, ch. 64, eff. Sep. 6, 1955.
Amended by Acts 1967, 60th Leg., p. 1723, ch. 657 Section
13, eff. June 17, 1967; Acts 1983, 68th Leg., p. 2573, ch. 442,
Section 10, eff. Sept. 1, 1983; Acts 1993, 73rd Leg., ch. 215,
Section 2.17, eff. Sept. 1, 1993.
D-8
<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 Restated 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, 3.1.4, 3.2, 4.1, 4.2 and
4.3 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 September 16, 1996
between Central Bancorporation, Inc. and Norwest Corporation
(included in Proxy Statement-Prospectus as 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 of Designations with respect to the 1996 ESOP
Cumulative Convertible Preferred Stock (incorporated by reference
to Exhibit 3 to Norwest's Current Report on Form 8-K dated
February 26, 1996).
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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4.1 -- 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).
4.2 -- 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).
4.3 -- 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 Jenkens & Gilchrist, P.C.
23.1 -- Consent of Stanley S. Stroup (included as part of Exhibit 5 filed
herewith).
23.2 -- Consent of KPMG Peat Marwick LLP.
23.3 -- Consent of KPMG Peat Marwick LLP.
23.4 -- Consent of Jenkens & Gilchrist, P.C.
24 -- Powers of Attorney.
99 -- Form of proxy for Special Meeting of Shareholders of Central
Bancorporation, 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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) (Section
230.424(b) of this chapter) if, in the aggregate,
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<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a posteffective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(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
II-3
<PAGE>
the changes in volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement. 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.
II-4
<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 December 2, 1996.
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 December 2, 1996 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 )
BENJAMIN F. MONTOYA )
IAN M. ROLLAND )
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-5
<PAGE>
INDEX TO EXHIBITS
Exhibit Form of
Number Description* Filing
2.1 Agreement and Plan of Reorganization dated
September 16, 1996 between Central Bancorporation,
Inc. and Norwest Corporation (included in Proxy
Statement-Prospectus as 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 of Designations with respect to the
1996 ESOP Cumulative Convertible Preferred Stock
(incorporated by reference to Exhibit 3 to
Norwest's Current Report on Form 8-K dated
February 26, 1996).
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).
4.1 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).
4.2 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).
<PAGE>
Exhibit Form of
Number Description* Filing
4.3 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 Jenkens & Gilchrist, P.C.
Electronic Transmission
23.1 Consent of Stanley S. Stroup (included as part of
Exhibit 5 filed herewith).
23.2 Consent of KPMG Peat Marwick LLP. Electronic
Transmission
23.3 Consent of KPMG Peat Marwick LLP. Electronic
Transmission
23.4 Consent of Jenkens & Gilchrist, P.C. Electronic
Transmission
24 Powers of Attorney Electronic Transmission
99 Form of proxy for Special Meeting of Shareholders
of Electronic Central Bancorporation, 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, 3.2, 4.1, 4.2 and 4.3 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]
December 2, 1996
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 5,000,000 shares of common stock, par value $1-2/3
per share (the "Shares"), of Norwest Corporation, a Delaware corporation (the
"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 Central Bancorporation, Inc., a Texas 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
JENKENS & GILCHRIST
A PROFESSIONAL CORPORATION
FOUNTAIN PLACE
1445 ROSS AVENUE, SUITE 3200
DALLAS, TX 75202
(214) 855-4500
TELECOPIER (214) 855-4300
Central Bancorporation, Inc.
777 West Rosedale
Fort Worth, Texas 76104
Re: Certain Material Federal Income Tax Consequences in Connection With
Merger of MergerCo. With and Into Central Bancorporation, Inc.
("Central")
Gentlemen:
Norwest, a Delaware corporation, filed on December __, 1996 with the
Securities and Exchange Commission (the "Commission") Registration Statement No.
_______ (the "Registration Statement") on Form S-4 under the Securities Act of
1933, as amended (the "Securities Act"). The Registration Statement was filed
in connection with issuance of shares of the common stock of Norwest Corporation
("Norwest") pursuant to the merger of MergerCo., a Texas corporation and wholly
owned subsidiary of Norwest ("MergerCo"), with and into Central, a Texas
corporation (the"Merger"). Except as otherwise indicated, capitalized terms
used herein shall have the meanings assigned to them in the Registration
Statement.
Jenkens & Gilchrist, a Professional Corporation (the "Firm"), has acted as
counsel to Central in connection with the Merger. You have requested the
opinions set forth in Section I hereof regarding certain of the material federal
income tax consequences to the shareholders of Central anticipated to result
from the Merger. Section I of this letter (the "Opinion Letter") contains the
Firm's opinion. Section II of this Opinion Letter contains limitations on the
opinion.
I. OPINION
Based upon our analysis of the applicable authorities and subject to the
limitations set forth in Section II, the Firm is of the opinion that for federal
income tax purposes:
1. The Merger will constitute a reorganization within the meaning of
sections 368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986, as
amended (the "Code").
<PAGE>
Central Bancorporation, Inc.
January _, 1997
Page 2
2. No gain or loss will be recognized by the holders of Central Common
Stock upon receipt of Norwest Common Stock solely in exchange for such Central
Common Stock pursuant to the Merger (except to the extent of cash received in
lieu of fractional shares or as a result of exercising dissenter's or appraisal
rights).
3. The basis of the Norwest Common Stock received by the shareholders of
Central will be the same as the basis of the Central Common Stock exchanged
therefor, decreased by the tax basis allocated to any fractional share exchanged
for cash.
4. The holding period of the shares of Norwest Common Stock received by
the shareholders of Central will include the holding period of the Central
Common Stock exchanged therefor, provided such shares were held as a capital
asset as of the Effective Time of the Merger.
II. LIMITATIONS
1. Except as otherwise indicated, the opinions set forth in Section I are
based upon the Code and its legislative history, the regulations promulgated
thereunder, judicial decisions and current administrative rulings and practices
of the Internal Revenue Service, all as in effect on the date of this Opinion
Letter. These authorities may be amended or revoked at any time. Any such
changes may or may not be retroactive with respect to transactions entered into
or contemplated prior to such changes and could significantly alter the
conclusions reached in this Opinion Letter. There is no assurance that
legislative, judicial or administrative changes will not occur in the future.
The Firm assumes no obligation to update or modify this Opinion Letter to
reflect any developments that may occur after the date of this Opinion Letter.
2. The opinions set forth in Section I are not binding on the Internal
Revenue Service or the courts. Additionally, the Firm's opinions set forth
herein are dependent upon the accuracy of the representations contained in the
Certificates signed by officers of Norwest and Central and attached hereto as
Exhibit "A." The Firm has relied upon those representations and any inaccuracy
in the representations could adversely affect the opinions stated in Section I.
3. In connection with this Opinion Letter, the Firm has examined and is
familiar with originals or copies, certified or otherwise identified, of such
documents and records and such statutes, regulations and other instruments as it
deemed necessary or advisable for the purposes of the opinions set forth herein,
including (i) the Registration Statement and (ii) the Merger Agreement. The
Firm has assumed that all signatures on all documents presented to it are
genuine, that all documents submitted to it as originals are accurate originals
thereof, that all information submitted to it was accurate and complete, and
that all persons executing and delivering originals or copies of documents
examined by it were competent to execute and deliver such documents.
4. The Firm is expressing its opinions only as to those matters expressly
set forth in Section I. No opinion should be inferred as to any other matters.
<PAGE>
Central Bancorporation, Inc.
January _, 1997
Page 3
5. This Opinion Letter is issued for your benefit and no other person or
entity may rely hereon without the express written consent of the Firm.
Respectfully submitted,
Jenkens & Gilchrist,
A Professional Corporation
By:
------------------------------------
William P. Bowers, for the Firm
<PAGE>
EXHIBIT 23.2
[LETTERHEAD OF KPMG PEAT MARWICK LLP MINNEAPOLIS]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Norwest Corporation:
We consent to the use of our report dated January 17, 1996 incorporated herein
by reference and to the reference to our firm under the heading "EXPERTS" in the
prospectus. Our report refers to Norwest Corporation's adoption in 1995 of the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 122, "Accounting for Mortgage Servicing Rights, an amendment of
FASB Statement No. 65."
/s/ KPMG Peat Marwick LLP
Minneapolis, Minnesota
December 2, 1996
<PAGE>
EXHIBIT 23.3
[LETTERHEAD OF KPMG PEAT MARWICK LLP-FORT WORTH]
Independent Auditors' Consent
The Board of Directors
Central Bancorporation, Inc.:
We consent to incorporation by reference herein of our report dated February 1,
1996, with respect to the consolidated balance sheet of Central Bancorporation,
Inc. and subsidiaries as of December 31, 1995 and 1994, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1995, which report
appears in the December 31, 1995, annual report on Form 10-K of Central
Bancorporation, Inc. and the reference to our Firm under the heading "Experts"
in the prospectus. Our report refers to a change in the method of accounting
for impairment of loans in 1995, a change in the method of accounting for
investment securities in 1994, and a change in the method of accounting for
income taxes in 1993.
/s/ KPMG PEAT MARWICK LLP
Forth Worth, Texas
December 2, 1996
<PAGE>
EXHIBIT 23.4
CONSENT OF LEGAL COUNSEL
Consent is given to the reference to this firm under the caption "Legal
Opinons" in the Registration Statement as having rendered the opinion in the
"U.S. Federal Income Tax Consequences" section of such Registration Statement.
In giving this consent, the Firm does not thereby admit that it comes into the
category of persons whose consent is required under section 7 of the Securities
Act or the rules and regulations of the Commission promulgated thereunder.
Dallas, Texas
December 2, 1996 /s/ Jenkens & Gilchrist,
A Professional Corporation
<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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/s/ Benjamin F. Montoya
---------------------------
Benjamin F. Montoya
<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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/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 5,000,000 shares of Common Stock of the Corporation which may be issued
in connection with the acquisition by the Corporation of Central Bancorporation,
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 23rd day of July, 1996.
/s/ Michael W. Wright
-------------------------
Michael W. Wright
<PAGE>
EXHIBIT 99
CENTRAL BANCORPORATION, 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 Central
Bancorporation, Inc. ("Central") to be held at the offices of Central located at
777 West Rosedale, Fort Worth, Texas on January 15, 1997, or at any adjournment
thereof, as follows, hereby revoking any proxy previously given:
1. To approve the Agreement and Plan of Reorganization dated September
16, 1996 (the "Merger Agreement") between Central and Norwest Corporation
("Norwest") pursuant to which a wholly-owned subsidiary of Norwest will merge
with Central and Central will become a wholly-owned subsidiary of Norwest (the
"Merger"), all upon the terms and subject to the conditions set forth in the
Merger Agreement, a copy of which is included as Appendix A in the accompanying
Proxy Statement-Prospectus; and to authorize such further action by the board of
directors and officers of Bancorp as may be necessary or appropriate to carry
out the intent and purposes of the Merger.
FOR / / AGAINST / / ABSTAIN / /
2. To approve certain payments to J. Andy Thompson, Chairman and Chief
Executive Officer of Central, following consumation of the Merger, pursuant to
an employment/noncompete agreement, a copy of which is included in Appendix B to
the accompanying Proxy Statement-Prospectus.
FOR / / AGAINST / / ABSTAIN / /
3. To approve certain payments to Stuart W. Murff, President and Director
of Central, following consummation of the Merger, pursuant to an
employment/noncompete agreement, a copy of which is included in Appendix B to
the accompanying Proxy Statement-Prospectus.
FOR / / AGAINST / / ABSTAIN / /
4. 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: __________________________, 199__.
_______________________________________
(Please sign exactly as name appears at left.)
<PAGE>
_______________________________________
(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.
