<PAGE> 1
As filed with the Securities and Exchange Commission on
------------------------
Registration No. 333-
-------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
------------------
NORWEST CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 6711 41-0449260
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1000
612-667-1234
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------
Stanley S. Stroup
Executive Vice President and General Counsel
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 Marcus A. Watts
Norwest Corporation Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P
Norwest Center 3400 Texas Commerce Tower
Sixth and Marquette 600 Travis
Minneapolis, Minnesota 55479-1026 Houston, Texas 77002
------------------
Approximate date of commencement of proposed sale of the securities to
the public: As soon as practicable after the effective date of the
Registration Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box.
CALCULATION OF REGISTRATION FEE
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===============================================================================================================
Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to Be to Be Offering Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 9,000,000 N/A $316,150,412(3) $109,017
(par value $1-2/3 per share)(1) Shares (2)
===============================================================================================================
</TABLE>
(1) Each share of the registrant's common stock includes one preferred stock
purchase right.
(2) Based upon the maximum number of shares that may be issued in the
transaction described herein.
(3) Estimated solely for purposes of computing the registration fee, in
accordance with Rule 457(f), based upon (i) a maximum number of 8,515,836
outstanding shares of common stock of Victoria Bankshares, Inc. to be
acquired by the registrant in the transaction described herein (assuming
the exercise in full of all options, warrants, conversion rights and other
rights with respect thereto), and (ii) the average of the high and low
sales prices of the common stock of Victoria Bankshares, Inc. as reported
on the Nasdaq National Market on February 12, 1996.
<PAGE> 2
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> 3
NORWEST CORPORATION
Cross Reference Sheet
Pursuant to Regulation S-K, Item 501(b)
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Form S-4 Item Prospectus Heading
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<S> <C> <C>
1. Forepart of Registration Statement Outside Front Cover Page
and Outside Front Cover Page of of Prospectus
Prospectus
2. Inside Front and Outside Back Cover Available Information;
Pages of Prospectus Incorporation of Certain
Documents by Reference;
Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Summary
Charges and Other Information
4. Terms of the Transaction The Merger; Norwest Capital
Stock and Rights; Comparison
of Rights of Holders of Victoria
Common Stock and Norwest
Common Stock
5. Pro Forma Financial Information *
6. Material Contracts with the Company The Merger
Being Acquired
7. Additional Information Required for *
Reoffering by Persons and Parties
Deemed to be Underwriters
8. Interests of Named Experts and Counsel Legal Opinions
9. Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities
10. Information with Respect to S-3 Summary; The Merger; Norwest
Registrants Capital Stock and Rights;
Comparison of Rights of Holders
of Victoria Common Stock and
Norwest Common Stock; Certain
Regulatory Considerations
11. Incorporation of Certain Information Incorporation of Certain
by Reference Documents by Reference;
Management of Norwest and
Additional Information
12. Information with Respect to S-2 or *
S-3 Registrants
</TABLE>
<PAGE> 4
NORWEST CORPORATION
Cross Reference Sheet
Pursuant to Regulation S-K, Item 501(b)
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<CAPTION>
Form S-4 Item Prospectus Heading
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<S> <C> <C>
13. Incorporation of Certain Documents *
by Reference
14. Information with Respect to *
Registrants Other Than S-2 or S-3
Registrants
15. Information with Respect to S-3 Incorporation of Certain
Companies Documents By Reference
16. Information with Respect to *
S-2 or S-3 Companies
17. Information with Respect to Companies *
Other Than S-2 or S-3 Companies
18. Information If Proxies, Consents Meeting Information; The
or Authorizations Are to Be Solicited Merger--No Dissenters' Rights;
Management of Norwest and
Additional Information
19. Information If Proxies, Consents, or *
Authorizations Are Not to Be Solicited
in an Exchange Offer
</TABLE>
- ---------------------
*Item is omitted because answer is negative or item is inapplicable.
<PAGE> 5
VICTORIA BANKSHARES, INC.
ONE O'CONNOR PLAZA
VICTORIA, TEXAS 77902
, 1996
Dear Shareholder:
A special meeting of shareholders of Victoria Bankshares, Inc. ("Victoria")
will be held on , 1996 to consider and vote upon a proposal to
approve the Agreement and Plan of Merger dated November 12, 1995 (the "Merger
Agreement") among Victoria, Norwest Corporation ("Norwest") and a wholly-owned
subsidiary of Norwest ("Sub") pursuant to which Sub will be merged with and into
Victoria (the "Merger"). If the Merger Agreement is approved and the Merger
becomes effective, Victoria will become a wholly-owned subsidiary of Norwest and
holders of Victoria common stock will be entitled to receive 1.05 shares of
Norwest common stock for each share of Victoria common stock.
Victoria's board of directors has by unanimous vote of all directors
present approved the Merger Agreement as being advisable and in the best
interests of Victoria's shareholders and recommends that you vote for approval
of the Merger Agreement. J.P. Morgan Securities Inc., Victoria's financial
advisor in connection with the Merger, has rendered an opinion to Victoria's
board of directors to the effect that as of the date hereof the consideration to
be received by Victoria's common shareholders in the Merger is fair from a
financial point of view.
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
discusses the background and reasons for the Merger. Please carefully review and
consider the information in the Proxy Statement-Prospectus. Additional
information concerning Norwest, including its 1994 annual report on Form 10-K
and its 1995 first, second and third quarter reports on Form 10-Q, 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. 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.
CHARLES R. HRDLICKA
Chairman of the Board and
Chief Executive Officer
<PAGE> 6
VICTORIA BANKSHARES, INC.
ONE O'CONNOR PLAZA
VICTORIA, TEXAS 77902
(512) 573-9432
---------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 1996
---------------------
A special meeting (the "Special Meeting") of shareholders of Victoria
Bankshares, Inc., a Texas corporation ("Victoria"), will be held at
, on , 1996, at
: m., central standard time, for the following purposes:
1. To consider and vote upon a proposal to approve the Agreement and
Plan of Merger dated November 12, 1995 (the "Merger Agreement") among
Victoria, Norwest Corporation ("Norwest") and Norwest Sub Corporation, a
wholly-owned subsidiary of Norwest Corporation ("Sub"). The Merger
Agreement provides for the merger of Sub with and into Victoria and for
Victoria to become a wholly-owned subsidiary of Norwest. A copy of the
Merger Agreement is attached as an appendix to the accompanying Proxy
Statement-Prospectus.
2. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only shareholders of record on the books of Victoria at the close of
business on , 1996 will be entitled to vote at the Special Meeting
or any adjournments thereof.
Your attention is directed to the Proxy Statement-Prospectus accompanying
this notice for a more complete statement regarding the matters to be acted upon
at the Special Meeting.
By Order of the Board of Directors
GREGORY SPRAWKA
Secretary
, 1996
- --------------------------------------------------------------------------------
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> 7
PROXY STATEMENT OF
VICTORIA BANKSHARES, INC.
FOR A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 1996
---------------------
PROSPECTUS
OF
NORWEST CORPORATION
COMMON STOCK
---------------------
This Proxy Statement-Prospectus is being furnished to holders of the common
stock, par value $1.00 per share ("Victoria Common Stock"), of Victoria
Bankshares, Inc., a Texas corporation ("Victoria"), in connection with the
solicitation of proxies by the board of directors of Victoria (the "Victoria
Board") for a special meeting of Victoria's shareholders to be held on
, 1996 (the "Special Meeting").
At the Special Meeting, Victoria's shareholders will consider and vote upon
a proposal to approve the Agreement and Plan of Merger dated November 12, 1995
(the "Merger Agreement") among Victoria, Norwest Corporation, a Delaware
corporation ("Norwest"), and Norwest Sub Corporation, a Texas corporation and a
wholly-owned subsidiary of Norwest ("Sub"), pursuant to which Sub will be merged
with and into Victoria (the "Merger"). If the Merger is approved and becomes
effective, Victoria will become a wholly-owned subsidiary of Norwest and, except
with respect to fractional shares as described herein, each holder of Victoria
Common Stock will be entitled to receive 1.05 shares of the common stock, par
value $1 2/3 per share ("Norwest Common Stock"), of Norwest for each share of
Victoria Common Stock. A copy of the Merger Agreement is attached as Appendix A
to this Proxy Statement-Prospectus and incorporated herein by reference.
Norwest will issue approximately 8,513,000 shares of Norwest Common Stock
in the Merger, representing approximately % of the total shares of Norwest
Common Stock outstanding as of the date of this Proxy Statement-Prospectus.
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 such shares under the Securities Act of 1933, as
amended (the "Securities Act"). In addition to serving as the proxy statement 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 Composite Tape on ,
1996 was $ per share. Victoria Common Stock is traded in the
over-the-counter market and quoted on the Nasdaq National Market System under
the symbol "VICT." The last reported sale price of Victoria Common Stock on
, 1996 was $ per share.
All information concerning Norwest contained in this Proxy
Statement-Prospectus has been provided by Norwest, and all information
concerning Victoria contained in this Proxy Statement-Prospectus has been
provided by Victoria.
This Proxy Statement-Prospectus and the accompanying form of proxy are
first being mailed to shareholders of Victoria on or about , 1996.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF NORWEST COMMON STOCK OFFERED BY THIS PROXY STATEMENT-PROSPECTUS
ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR
SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
---------------------
The date of this Proxy Statement-Prospectus is , 1996.
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
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PAGE
----
<S> <C>
AVAILABLE INFORMATION................................................................. 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE....................................... 5
EXPLANATORY NOTE AND DEFINITIONS OF CERTAIN TERMS..................................... 6
SUMMARY............................................................................... 7
Parties to the Merger............................................................... 7
Norwest.......................................................................... 7
Victoria......................................................................... 7
Sub.............................................................................. 8
Special Meeting and Vote Required................................................... 8
The Merger.......................................................................... 8
Effect of the Merger............................................................. 8
Recommendation of Victoria's Board of Directors.................................. 8
Opinion of Victoria's Financial Advisor.......................................... 9
Conditions to the Merger; Termination of the Merger Agreement.................... 9
Regulatory Approvals............................................................. 9
Effective Time and Closing of the Merger......................................... 9
No Solicitation.................................................................. 9
Interests of Certain Persons in the Merger....................................... 9
Directors and Officers of Victoria after the Merger.............................. 10
No Dissenters' Rights............................................................ 10
Certain U.S. Federal Income Tax Consequences..................................... 10
Accounting Treatment............................................................. 10
Market Information.................................................................. 11
Comparison of Rights of Holders of Victoria Common Stock and Norwest Common Stock... 11
Comparative Per Common Share Data................................................... 11
Selected Consolidated Financial Data................................................ 12
Norwest.......................................................................... 13
Victoria......................................................................... 15
MEETING INFORMATION................................................................... 16
General............................................................................. 16
Record Date; Voting Rights; Vote Required........................................... 16
Voting and Revocation of Proxies.................................................... 16
Solicitation of Proxies............................................................. 17
THE MERGER............................................................................ 18
General............................................................................. 18
Background and Reasons for the Merger............................................... 18
Opinion of Victoria's Financial Advisor............................................. 20
Merger Consideration................................................................ 26
No Dissenters' Rights............................................................... 26
Surrender of Certificates........................................................... 26
Conditions to the Merger............................................................ 27
Conditions to the Obligations of Norwest and Victoria............................ 27
Conditions to the Obligation of Norwest.......................................... 27
Conditions to the Obligation of Victoria......................................... 28
Regulatory Approvals................................................................ 28
Conduct of Business Pending the Merger.............................................. 28
No Solicitation..................................................................... 29
Certain Agreements.................................................................. 30
Termination of the Merger Agreement................................................. 30
By Norwest or Victoria........................................................... 30
</TABLE>
2
<PAGE> 9
<TABLE>
<CAPTION>
PAGE
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<S> <C>
By Norwest....................................................................... 30
By Victoria...................................................................... 30
Definitions...................................................................... 31
Termination Fee.................................................................. 32
Amendment of the Merger Agreement................................................... 32
Waiver of Performance of Obligations................................................ 32
Effect on Employee Benefit Plans.................................................... 32
Interests of Certain Persons in the Merger.......................................... 32
Certain U.S. Federal Income Tax Consequences........................................ 34
Resale of Norwest Common Stock...................................................... 34
Stock Exchange Listing.............................................................. 35
Accounting Treatment................................................................ 35
Expenses............................................................................ 35
NORWEST CAPITAL STOCK AND RIGHTS...................................................... 36
General............................................................................. 36
Norwest Common Stock................................................................ 36
Norwest Preferred Stock; Norwest Preference Stock................................... 37
Rights Plan......................................................................... 37
Dividend Reinvestment and Optional Cash Payment Plan................................ 38
Shares Registered under the Securities Act.......................................... 38
COMPARISON OF RIGHTS OF HOLDERS OF VICTORIA COMMON STOCK AND NORWEST COMMON STOCK..... 39
General............................................................................. 39
Directors........................................................................... 39
Amendment of Articles or Certificate of Incorporation and Bylaws.................... 39
Shareholder or Stockholder Approval of Mergers and Asset Sales...................... 40
Appraisal Rights.................................................................... 40
Special Meetings.................................................................... 41
Action Without a Meeting............................................................ 41
Limitation of Director Liability.................................................... 41
Indemnification of Officers and Directors........................................... 42
Dividends........................................................................... 42
Proposal of Business; Nomination of Director........................................ 43
COMPARATIVE PER SHARE PRICES AND DIVIDENDS............................................ 44
CERTAIN REGULATORY CONSIDERATIONS..................................................... 45
General............................................................................. 45
Dividend Restrictions............................................................... 45
Holding Company Structure........................................................... 45
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 MERGER
APPENDIX B OPINION OF J.P. MORGAN SECURITIES INC.
</TABLE>
3
<PAGE> 10
AVAILABLE INFORMATION
Norwest and Victoria are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, file reports, proxy statements and other information with
the Commission.
The reports, proxy statements and other information filed by Norwest and
Victoria with the Commission can be inspected and copied at the public reference
facilities of the Commission, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the regional offices of the Commission located at Seven World
Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials can be
obtained at prescribed rates by writing to the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549. Reports, proxy
statements and other information filed by Norwest also may be inspected at the
offices of the New York Stock Exchange at 20 Broad Street, New York, New York
10005 and at the offices of the Chicago Stock Exchange at One Financial Place,
440 South LaSalle Street, Chicago, Illinois 60605. In addition, materials filed
by Victoria are available for inspection at the offices of The Nasdaq Stock
Market, 1735 K Street, Washington, D.C. 20006.
This Proxy Statement-Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits thereto. Certain portions
of the Registration Statement have been omitted pursuant to the rules and
regulations of the Commission. Reference is hereby made to such omitted portions
for further information with respect to Norwest, Victoria and the shares of
Norwest Common Stock offered hereby. Statements contained herein concerning the
provisions of certain documents are necessarily summaries of such documents, and
each statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission or attached hereto as an appendix.
---------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING
BEEN MADE OR AUTHORIZED BY NORWEST OR VICTORIA. THIS PROXY STATEMENT-PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE,
THE NORWEST COMMON STOCK OFFERED BY THIS PROXY STATEMENT-PROSPECTUS, NOR DOES IT
CONSTITUTE THE SOLICITATION OF A PROXY, IN ANY JURISDICTION TO OR FROM ANY
PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROXY STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF
SECURITIES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF NORWEST OR VICTORIA SINCE THE
DATE OF THIS PROXY STATEMENT-PROSPECTUS OR THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
4
<PAGE> 11
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Proxy Statement-Prospectus incorporates by reference documents that
are not presented herein or delivered herewith. Copies of such documents as
filed with the Commission (other than exhibits thereto not specifically
incorporated by reference therein) are available without charge, upon written or
oral request, in the case of documents relating to Norwest, to Laurel A.
Holschuh, Secretary, Norwest Corporation, Norwest Center, Sixth and Marquette,
Minneapolis, Minnesota 55479-1026, telephone (612) 667-8655 or, in the case of
documents relating to Victoria, to Gregory Sprawka, Secretary, Victoria
Bankshares, Inc., One O'Connor Plaza, Victoria, Texas 77902, telephone (512)
573-9432. In order to ensure timely delivery of the documents, any request
should be made by , 1996 [five business days prior to date of
meeting].
The following documents filed with the Commission by Norwest (File No.
1-2979) pursuant to the Exchange Act are incorporated by reference in this Proxy
Statement-Prospectus:
1. Norwest's Annual Report on Form 10-K for the year ended December 31,
1994;
2. Norwest's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995 and September 30, 1995; and
3. Norwest's Current Reports on Form 8-K dated January 9, 1995, January
27, 1995, February 17, 1995, April 21, 1995, July 3, 1995, September
13, 1995, October 4, 1995, November 1, 1995, January 24, 1996 and
February, 1996.
The following documents filed with the Commission by Victoria (File No.
0-8037) pursuant to the Exchange Act are incorporated by reference in this Proxy
Statement-Prospectus.
1. Victoria's Annual Report on Form 10-K, as amended pursuant to Form
10-K/A, for the year ended December 31, 1994;
2. Victoria's Quarterly Reports on Form 10-Q for the quarters ended March
31, 1995, June 30, 1995 and September 30, 1995; and
3. Victoria's Current Report on Form 8-K dated January 30, 1996.
All documents filed by Norwest and Victoria with the Commission pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the Special Meeting shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of such filing. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes
hereof to the extent that a statement contained herein or in any other
subsequently filed document that also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part hereof.
5
<PAGE> 12
EXPLANATORY NOTE AND DEFINITIONS OF CERTAIN TERMS
Victoria is incorporated under the laws of the state of Texas and is
governed by the Texas Business Corporation Act and Victoria's articles of
incorporation and bylaws (as amended and in effect as of the date of this Proxy
Statement-Prospectus, the "TBCA," "Victoria Articles" and "Victoria 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 Victoria Common Stock and the term "stockholder" to refer
to a holder of Norwest Common Stock.
As used in this Proxy Statement-Prospectus, unless the context otherwise
requires, "Norwest" means Norwest and its consolidated subsidiaries, "Sub" means
Norwest Sub Corporation, a wholly-owned subsidiary of Norwest, "Victoria" means
Victoria and its consolidated subsidiaries and the "Bank" means Victoria Bank &
Trust Company, a wholly-owned subsidiary of Victoria.
6
<PAGE> 13
SUMMARY
The following summary of certain information relating to the Merger is not
intended to be complete and is qualified in all respects by the more detailed
information contained or incorporated by reference in this Proxy
Statement-Prospectus and the appendices hereto. Shareholders of Victoria are
urged to read this Proxy Statement-Prospectus and the appendices hereto in their
entirety.
PARTIES TO THE MERGER
Norwest. Norwest is a diversified financial services company which was
organized under the laws of Delaware in 1929 and is registered under the Bank
Holding Company Act of 1956, as amended (the "Bank Holding Company Act").
Norwest owns subsidiaries engaged in banking and in a variety of related
businesses. Norwest provides retail, commercial and corporate banking services
to its customers through banks located in Arizona, Colorado, Illinois, Indiana,
Iowa, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio,
South Dakota, Texas, Wisconsin and Wyoming. Norwest provides additional
financial services to its customers through subsidiaries engaged in various
businesses, principally mortgage banking, consumer finance, equipment leasing,
agricultural finance, commercial finance, securities brokerage and investment
banking, insurance agency services, computer and data processing services, trust
services, mortgage-backed securities servicing, and venture capital investment.
At December 31, 1995, Norwest had consolidated total assets of $72.1 billion,
total deposits of $42.0 billion and total stockholders' equity of $5.3 billion.
Based on total assets at December 31, 1995, Norwest was the 13th largest
commercial banking organization in the United States. Norwest regularly explores
opportunities for acquisitions of financial institutions and related businesses.
Generally, management of Norwest does not make a public announcement about an
acquisition until a definitive agreement has been signed. Norwest has entered
into definitive agreements for the acquisition of various financial
institutions, including Victoria, having aggregate total assets at December 31,
1995 of $6.6 billion. In January 1996, Norwest Mortgage, Inc., a subsidiary of
Norwest, signed a definitive agreement to acquire substantially all of the
assets of Prudential Home Mortgage Company, Inc., including $40 billion of its
servicing portfolio. Certain of these acquisitions were completed subsequent to
December 31, 1995, and the others remain subject to regulatory approval and are
expected to be completed by the end of the second quarter of 1996. No assurance
can be given regarding the timing, the likelihood or the business or financial
effect of any possible acquisition; however, none of these acquisitions is
individually significant or material to the consolidated financial statements of
Norwest. Norwest's principal executive offices are located at Norwest Center,
Sixth and Marquette, Minneapolis, Minnesota 55479-1000, and its telephone number
is 612-667-1234. Additional information concerning Norwest is included in the
Norwest documents incorporated by reference herein. See "SUMMARY -- Selected
Consolidated Financial Data," "AVAILABLE INFORMATION," "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" and "CERTAIN REGULATORY CONSIDERATIONS."
Victoria. Victoria is a Texas corporation organized in 1973. It is a bank
holding company registered with the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") under the Bank Holding Company Act.
Substantially all of Victoria's revenues are derived from the Bank, an indirect
wholly-owned banking subsidiary of Victoria.
The Bank is a Texas banking association headquartered in Victoria, Texas,
and a wholly-owned commercial bank subsidiary of Victoria Financial Services,
Inc. The Bank wholly owns Central Computers, Inc. and Victoria Capital
Corporation. The Bank conducts a general, full-service commercial and consumer
banking business through 42 banking offices located in 33 communities and 22
counties in South Central Texas.
On December 31, 1995, Victoria and its subsidiaries had consolidated assets
of $2.0 billion, consolidated deposits of $1.7 billion and total shareholders'
equity of $190.3 million. Additional information regarding Victoria is included
in the Victoria documents incorporated by reference herein. See "AVAILABLE
INFORMATION"; "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE,"
"SUMMARY -- Selected Consolidated Financial Data" and "RECENT DEVELOPMENTS".
7
<PAGE> 14
Sub. Sub was organized as a Texas corporation on November 16, 1995 solely
for the purpose of effecting the Merger and the other transactions contemplated
by the Merger Agreement. Sub has no assets or properties and has not conducted
any business activities to date other than incident to its formation and in
connection with the Merger.
SPECIAL MEETING AND VOTE REQUIRED
Special Meeting. The Special Meeting will be held on , 1996 at
, Victoria, Texas for the purpose of voting on a proposal to
approve the Merger Agreement. Only holders of record of Victoria Common Stock at
the close of business on , 1996 (the "Record Date") will be entitled
to receive notice of and to vote at the Special Meeting. At such date, there
were shares of Victoria Common Stock outstanding. Each share of
Victoria Common Stock is entitled to one vote. For additional information
relating to the Special Meeting, see "MEETING INFORMATION."
Vote Required. Approval of the Merger Agreement requires the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Victoria
Common Stock. Certain shareholders of Victoria are obligated pursuant to
agreements with Norwest, subject to certain conditions, to vote all shares of
Victoria Common Stock held by them on the Record Date (an aggregate of
3,195,010, or approximately 38.4%, of the shares of Victoria Common Stock
outstanding on the Record Date) in favor of approval of the Merger Agreement.
See "THE MERGER -- Certain Agreements." Directors and executive officers of
Victoria (other than the shareholders described in the preceding sentence) and
their affiliates beneficially owned an aggregate of 29,925 shares (not including
shares that may be acquired upon the exercise of stock options), or
approximately 0.4% of the shares of Victoria Common Stock outstanding on the
Record Date. Norwest beneficially owned 409,000 shares of Victoria Common Stock
on the Record Date. If at least two-thirds of the votes eligible to be cast do
not vote in favor of approval of the Merger Agreement, Victoria will continue to
act as a separate entity and a going concern. A failure to vote, either by not
returning the enclosed proxy or by checking the "Abstain" box thereon, will have
the same effect as a vote against approval of the Merger Agreement. See "MEETING
INFORMATION -- Record Date; Voting Rights; Vote Required."
THE MERGER
Effect of the Merger. If the Merger Agreement is approved and the Merger
becomes effective, Sub will be merged with and into Victoria and Victoria, as
the surviving corporation in the Merger, will become a wholly-owned subsidiary
of Norwest. In the Merger, each outstanding share of Victoria Common Stock will
be automatically converted into the right to receive 1.05 shares of Norwest
Common Stock (the "Exchange Ratio"). In lieu of issuing fractional shares of
Norwest Common Stock, Norwest will pay cash to the holders of Victoria Common
Stock who would otherwise be entitled to receive fractional shares. See "THE
MERGER--Merger Consideration."
Recommendation of Victoria's Board of Directors. At a meeting of the
Victoria Board held on November 12, 1995, after considering the terms and
conditions of the Merger Agreement and obtaining the advice of its financial
advisor, the Victoria Board by unanimous vote of all directors present approved
the Merger Agreement. The Victoria Board believes that the Merger is advisable
and in the best interests of Victoria and its shareholders and recommends that
shareholders of Victoria vote "FOR" approval of the Merger Agreement. For a
discussion of the circumstances surrounding the Merger and the factors
considered by the Victoria Board in making its recommendation, see "THE
MERGER -- Background and Reasons for the Merger."
Opinion of Victoria's Financial Advisor. The Victoria Board retained J.P.
Morgan Securities Inc. ("J.P. Morgan") to act as financial advisor in connection
with the Merger. J.P. Morgan has delivered its written opinion to the Victoria
Board that, as of the date of this Proxy Statement-Prospectus, the Exchange
Ratio is fair to the holders of Victoria Common Stock from a financial point of
view. The opinion of J.P. Morgan is attached as Appendix B 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
8
<PAGE> 15
the reviews undertaken in connection therewith. For additional information, see
"THE MERGER -- Opinion of Victoria's Financial Advisor."
Conditions to the Merger; Termination of the Merger Agreement. The
obligations of Norwest and Victoria 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 Victoria's
shareholders. The Merger Agreement allows one or more parties to the Merger to
terminate the Merger Agreement if one or more of these conditions are not
satisfied or waived. The Merger Agreement may also be terminated at any time
prior to the Merger becoming effective by mutual consent of Norwest and Victoria
and by either Norwest or Victoria if the Merger has not been effected on or
before September 30, 1996 provided the party seeking to terminate the Merger
Agreement is not then in default. In addition, the Merger Agreement may be
terminated by Victoria if the Victoria Board receives a takeover proposal from a
third party and determines that such proposal constitutes a Superior Proposal
(as defined below). See "THE MERGER -- Conditions to the Merger" and
"-- Termination of the Merger Agreement."
Regulatory Approvals. The Merger is subject to the approval of the Federal
Reserve Board and the state of Texas, which are pending as of the date hereof.
There can be no assurances that the necessary regulatory approvals will be
obtained or as to the timing of or conditions placed on such approvals. 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 (the
"Effective Time") upon the filing with the Texas Secretary of State of articles
of merger relating to the Merger (the "Articles of Merger") and the issuance by
the Texas Secretary of State of a certificate of merger acknowledging that the
Articles of Merger are in the form required by and have been executed in
accordance with the relevant provisions of the TBCA. 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. The closing
of the Merger (the "Closing") will be held on the date the Articles of Merger
are filed with the Texas Secretary of State. See "THE MERGER -- Conditions to
the Merger" and "-- Regulatory Approvals."
No Solicitation. Subject to certain exceptions, Victoria and its
subsidiaries, and their respective directors, officers, representatives and
agents, have agreed under the Merger Agreement not to directly or indirectly
solicit, authorize the solicitation of or enter into any discussions with any
third party concerning certain transactions involving the acquisition of
Victoria pursuant to a tender or exchange offer, a merger, consolidation or
other business combination or a sale of all or substantially all of the assets
of Victoria. The Victoria Board may enter into discussions concerning such
transactions if, after taking into account the written advice of its outside
counsel, the Victoria Board concludes in good faith that the failure to do so
could reasonably be determined to violate its fiduciary duties under applicable
law. Victoria is obligated to pay Norwest a termination fee of $5,000,000 under
certain specified circumstances in the event the Merger is not effected and
Victoria engages in an Acquisition Event (as defined below) with a third party
as determined by the Merger Agreement. See "THE MERGER -- No Solicitation" and
"-- Termination of the Merger Agreement."
Interests of Certain Persons in the Merger. As of the Record Date,
Victoria's directors and executive officers beneficially owned a total of
3,224,935 shares of Victoria Common Stock, representing 38.7% of all outstanding
shares of Victoria Common Stock on such date. Norwest beneficially owned 409,000
of shares of Victoria Common Stock as of the Record Date, representing 4.9% of
all outstanding shares of Victoria Common Stock on such date. In the Merger, the
directors and executive officers will receive the same consideration for their
shares as the other shareholders of Victoria receive for theirs.
Certain members of the Victoria Board and management of Victoria have
interests in the Merger that are in addition to and separate from the interests
of shareholders of Victoria generally. These interests include, among others,
provisions in the Merger Agreement relating to the continuation of director and
officer indemnification rights, the acceleration of vesting of employee stock
options, rights under certain executive
9
<PAGE> 16
retention/severance agreements, and the acceleration of vesting and subsequent
liquidation of Victoria's Supplemental Executive Retirement Program.
Pursuant to the executive retention/severance agreements and the
Supplemental Executive Retirement Program, Charles R. Hrdlicka, Chairman of the
Board and Chief Executive Officer of Victoria, will be entitled to receive
$187,500 and $1,076,000, respectively, upon consummation of the Merger. Five
other executive officers of Victoria will be eligible to receive $374,625 in the
aggregate under the executive retirement/severance agreements and 34 other
officers and former officers of Victoria will be eligible to receive $1,927,000
in the aggregate under the Supplemental Executive Retirement Program.
See "THE MERGER -- Interests of Certain Persons in the Merger."
Directors and Officers of Victoria after the Merger. The directors and
officers of Sub as of the Effective Time will be the directors and officers of
Victoria after the Effective Time until their respective successors are duly
elected or appointed and have qualified in the manner provided in the Victoria
Articles and Victoria Bylaws. As a condition to Norwest's obligation to effect
the Merger, Victoria is required to deliver to Norwest letters of resignation
for each current director and officer of Victoria who will not be a director or
officer of Sub as of the Effective Time. Following the Effective Time, Norwest
will be the sole shareholder of Victoria and, for that reason, will be in a
position to elect or appoint all of the directors and officers of Victoria. See
"THE MERGER -- Conditions to the Merger."
No Dissenters' Rights. Victoria's shareholders are not entitled to
dissenters' rights with respect to the Merger. See "THE MERGER -- No Dissenters'
Rights".
Certain U.S. Federal Income Tax Consequences. The Merger is intended to be
a tax-free reorganization so that no gain or loss will be recognized by
Victoria's shareholders, except with respect to cash received for any fractional
shares. The Merger's effectiveness is conditioned upon the receipt by Victoria
and Norwest of a written opinion of Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P., counsel to Victoria, substantially to the effect that: (i) the Merger
will be treated for federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"); (ii) Victoria and Norwest will each be a party to that reorganization
within the meaning of Section 368(a) of the Code; (iii) neither Victoria nor
Norwest will recognize any gain or loss as a result of the Merger and (iv)
Victoria's shareholders will not recognize any gain or loss as a result of the
Merger, other than to the extent that such shareholders receive cash in lieu of
fractional shares.
The U.S. federal income tax considerations of the Merger may be different
for particular types of Victoria shareholders or in light of each Victoria
shareholder's personal investment circumstances. For that reason, Victoria
shareholders are urged to consult their own tax advisors concerning the U.S.
federal income tax considerations that may be relevant to them in connection
with the Merger, as well as the application to them of any state, local,
foreign, or other tax laws. See "THE MERGER -- Certain U.S. Federal Income Tax
Consequences."
Accounting Treatment. The parties anticipate that the Merger will be
accounted for as a pooling of interests by Norwest under generally accepted
accounting principles. The Merger Agreement provides that a condition to the
Merger becoming effective is the receipt of a letter from Arthur Andersen LLP,
Victoria's independent auditors, to the effect that activities of Victoria do
not preclude the Merger from qualifying for pooling of interests accounting
treatment. See "THE MERGER -- Conditions to the Merger" and "-- Accounting
Treatment."
10
<PAGE> 17
MARKET INFORMATION
The following table sets forth the closing price per share of Norwest
Common Stock (as reported on the NYSE Composite Tape) and of Victoria Common
Stock (as quoted on the Nasdaq National Market) and the equivalent per share
price for Victoria Common Stock giving effect to the Exchange Ratio on (i)
November 10, 1995, the last business day preceding public announcement of the
Merger Agreement and (ii) , 1996, the last practicable date prior to
the mailing of this Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
NORWEST VICTORIA EQUIVALENT PRICE
COMMON STOCK COMMON STOCK PER VICTORIA SHARES(1)
------------ ------------ ----------------------
<S> <C> <C> <C>
November 10, 1995..................... $32.50 $36.00 $ 34.125
, 1996....................
</TABLE>
- ---------------
(1) The equivalent price per share of Victoria Common Stock at each specified
date was determined by multiplying the last reported sale price of a share
of Norwest Common Stock on such date by the Exchange Ratio.
The market price for Norwest Common Stock will fluctuate between the date
of this Proxy Statement-Prospectus and the Effective Time, which will be a
period of several weeks. The market value per share of the Norwest Common Stock
that Victoria 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. Victoria shareholders are advised to obtain
current market quotations for Norwest Common Stock. See "COMPARATIVE PER SHARE
PRICES AND DIVIDENDS."
COMPARISON OF RIGHTS OF HOLDERS OF VICTORIA COMMON STOCK AND NORWEST COMMON
STOCK
As of the date of this Proxy Statement-Prospectus, the rights of Victoria's
shareholders are governed by the TBCA and the Victoria Articles and Victoria
Bylaws. At the Effective Time, Victoria's shareholders will become stockholders
of Norwest. As such, their rights will thereafter be governed by the DGCL and
the Norwest Certificate and Norwest Bylaws. See "COMPARISON OF RIGHTS OF HOLDERS
OF VICTORIA COMMON STOCK AND NORWEST COMMON STOCK."
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
Victoria Common Stock on a historical and a pro forma equivalent basis giving
effect to the Merger using the pooling of interests method of accounting. For a
description of the pooling of interests method of accounting with respect to the
Merger and the related effects on the historical financial statements of
Norwest, see "THE MERGER -- Accounting Treatment." The historical data for
Norwest and Victoria for each of the years in the three-year period ended
December 31, 1994 are derived from the respective audited consolidated financial
statements of Norwest and Victoria, including the related notes thereto, for
such three-year period. Such audited consolidated financial statements of
Norwest and Victoria are incorporated by reference into this Proxy
Statement-Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." The
historical data for Norwest and Victoria for the year ended December 31, 1995
are derived from the unaudited consolidated financial statements of Norwest and
Victoria. 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.
11
<PAGE> 18
COMPARATIVE PER COMMON SHARE DATA
<TABLE>
<CAPTION>
NORWEST COMMON STOCK VICTORIA COMMON STOCK
----------------------- -----------------------
PRO FORMA PRO FORMA
HISTORICAL COMBINED HISTORICAL EQUIVALENT
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
BOOK VALUE(1):
December 31, 1995................................. $14.20 14.39 22.89 15.11
December 31, 1994................................. 10.79 11.06 21.68 11.61
DIVIDENDS DECLARED (2):
Year Ended
December 31, 1995.............................. $0.900 0.900 0.73 0.945
December 31, 1994.............................. 0.765 0.765 0.52 0.803
December 31, 1993.............................. 0.640 0.640 0.40 0.672
December 31, 1992.............................. 0.540 0.540 0.31 0.567
NET INCOME(3):
Year Ended
December 31, 1995.............................. $ 2.73 2.69 1.83 2.82
December 31, 1994.............................. 2.41 2.40 2.05 2.52
December 31, 1993.............................. 1.86 1.87 2.47 1.96
December 31, 1992.............................. 1.19 1.21 2.64 1.27
</TABLE>
- ---------------
(1) The pro forma combined book value per share of Norwest Common Stock is based
upon the historical total combined common stockholders' and shareholders'
equity for Norwest and Victoria divided by total pro forma common shares of
the combined entities assuming conversion of the outstanding Victoria Common
Stock at a ratio of 1.05 shares of Norwest Common Stock for each share of
Victoria Common Stock. The data presented assume 8,515,836 outstanding
shares of Victoria Common Stock, after the exercise of all stock options,
and exclude 409,000 shares of Victoria Common Stock held by Norwest. The
aggregate number of shares of Norwest Common Stock assumed to be issued in
the Merger is 8,512,178. See "THE MERGER -- Terms of the Merger." The pro
forma equivalent book value per share of Victoria represents the pro forma
combined amount multiplied by the Exchange Ratio.
(2) Assumes no changes in cash dividends per share. The pro forma equivalent
dividends per share of Victoria Common Stock represent cash dividends
declared per share of Norwest Common Stock multiplied by the Exchange Ratio.
(3) The pro forma combined net income per share of Norwest Common Stock (based
on fully diluted net income and weighted average shares outstanding) is
based upon the combined historical net income for Norwest and Victoria
divided by the average pro forma common shares of the combined entities. The
pro forma equivalent net income per share of Victoria Common Stock
represents the pro forma combined net income per share multiplied by the
Exchange Ratio.
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth certain selected historical consolidated
financial information for Norwest and Victoria. The income statement and balance
sheet data for Norwest and Victoria included in the selected consolidated
financial data for each of the five years in the period ended December 31, 1994
are derived from the respective audited consolidated financial statements of
Norwest and Victoria for such five-year period. The selected consolidated
financial data for the year ended December 31, 1995 are derived from the
respective unaudited historical financial statements of Norwest and Victoria.
All financial information derived from unaudited financial statements reflects,
in the respective opinions of management of Norwest and Victoria, all
adjustments necessary for a fair presentation of such data. This information
should be read in conjunction with the consolidated financial statements of
Norwest and Victoria and the related notes thereto, included in documents
incorporated herein by reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
12
<PAGE> 19
SELECTED CONSOLIDATED FINANCIAL DATA
NORWEST CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
---------------------------------------------------------------------
1995 1994 1993(1) 1992(2) 1991 1990(3)
--------- --------- --------- --------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
INCOME STATEMENT DATA
Interest income............... $ 5,717.3 $ 4,393.7 $ 3,946.3 $ 3,806.4 $ 4,025.9 $ 3,885.8
Interest expense.............. 2,448.0 1,590.1 1,442.9 1,610.6 2,150.3 2,320.1
--------- --------- --------- --------- --------- ---------
Net interest income........ 3,269.3 2,803.6 2,503.4 2,195.8 1,875.6 1,565.7
Provision for credit losses... 312.4 164.9 158.2 270.8 406.4 433.0
Non-interest income........... 1,865.0 1,638.3 1,585.0 1,273.7 1,064.0 896.3
Non-interest expenses......... 3,399.1 3,096.4 3,050.4 2,553.1 2,041.5 1,744.5
--------- --------- --------- --------- --------- ---------
Income before income
taxes.................... 1,422.8 1,180.6 879.8 645.6 491.7 284.5
Income tax expense............ 466.8 380.2 266.7 175.6 73.4 115.1
--------- --------- --------- --------- --------- ---------
Income before cumulative
effect of a change in
accounting method.......... 956.0 800.4 613.1 470.0 418.3 169.4
Cumulative effect on years
prior to 1992 of change in
accounting method.......... -- -- -- (76.0) -- --
--------- --------- --------- --------- --------- ---------
Net income.................... $ 956.0 $ 800.4 $ 613.1 $ 394.0 $ 418.3 $ 169.4
========= ========= ========= ========= ========= =========
PER COMMON SHARE DATA
Net income per share:
Primary:
Before cumulative effect
of a change in
accounting method..... $ 2.76 $ 2.45 $ 1.89 $ 1.44 $ 1.33 $ 0.59
Cumulative effect on years
prior to 1992 of change in
accounting method.......... -- -- -- (0.25) -- --
--------- --------- --------- --------- --------- ---------
Net income.................... $ 2.76 $ 2.45 $ 1.89 $ 1.19 $ 1.33 $ 0.59
========= ========= ========= ========= ========= =========
Fully diluted:
Before cumulative effect
of a change in
accounting method..... $ 2.73 $ 2.41 $ 1.86 $ 1.42 $ 1.32 $ 0.59
Cumulative effect on
years prior to 1992 of
change in accounting
method................ -- -- -- (0.23) -- --
-------- -------- -------- -------- -------- --------
Net income.................... $ 2.73 $ 2.41 $ 1.86 $ 1.19 $ 1.32 $ 0.59
======== ======== ======== ======== ======== ========
Dividends declared per common
share...................... $ 0.900 $ 0.765 $ 0.640 $ 0.540 $ 0.470 $ 0.423
BALANCE SHEET DATA
At period end:
Total assets.................. $72,134.4 $59,315.9 $54,665.0 $50,037.0 $45,974.5 $43,523.0
Long-term debt................ 13,676.8 9,186.3 6,850.9 4,553.2 3,686.6 3,066.0
Total stockholders' equity.... 5,312.1.. 3,846.4 3,760.9 3,371.8 3,192.3 2,434.0
</TABLE>
13
<PAGE> 20
- ---------------
(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.
(3) On April 19, 1991, United Banks of Colorado, Inc. ("United"), a $5.5
billion bank holding company headquartered in Denver, Colorado, merged
with Norwest in a pooling of interests transaction. Norwest's historical
results have been restated to include the historical results of United.
Appropriate Norwest items reflect United's special provisions for credit
losses and writedowns for other real estate owned, which together totaled
$165 million, and $31 million of charges for expected reorganization and
restructuring costs for the year ended December 31, 1990. The special
provisions were due to deterioration of several large commercial loan
relationships, the anticipated results of the then recent examination by
the Office of the Comptroller of the Currency, and the anticipated impact
of the Resolution Trust Corporation's accelerated efforts to liquidate
foreclosed properties at deep discounts.
14
<PAGE> 21
SELECTED CONSOLIDATED FINANCIAL DATA
VICTORIA BANKSHARES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------------
1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
INCOME STATEMENT DATA
Interest income.............. $ 118.8 $ 105.0 $ 101.8 $ 104.9 $ 121.7 $ 125.7
Interest expense............. 51.4 38.4 37.1 43.3 69.1 79.6
--------- -------- -------- -------- -------- --------
Net interest income....... 67.4 66.6 64.7 61.6 52.6 46.1
Provision for loan losses.... 0.2 -- 0.2 0.5 0.3 2.7
Non-interest income.......... 29.6 27.5 27.0 23.8 21.4 17.1
Non-interest expenses........ 74.2 68.4 70.0 63.3 59.8 57.9
--------- -------- -------- -------- -------- --------
Income before income
taxes................... 22.6 25.7 21.5 21.6 13.9 2.6
Income tax expense........... 7.5 8.7 7.2 2.1 0.4 (1.3)
--------- -------- -------- -------- -------- --------
Income before items below.... 15.1 17.0 14.3 19.5 13.5 3.9
Extraordinary items.......... -- -- -- -- (0.2) (0.3)
Cumulative effect of change
in accounting method...... -- -- 4.8 -- -- --
--------- -------- -------- -------- -------- --------
Net income................... $ 15.1 $ 17.0 $ 19.1 $ 19.5 $ 13.3 $ 3.6
========= ======== ======== ======== ======== ========
PER COMMON SHARE DATA
Net income per share before
cumulative effect of
change in accounting
method.................... $ 1.83 $ 2.05 $ 1.85 $ 2.64 $ 1.80 $ 0.48
Cumulative effect of change
in accounting method...... -- -- 062 -- -- --
--------- -------- -------- -------- -------- --------
Net income per share......... $ 1.83 $ 2.05 $ 2.47 $ 2.64 $ 1.80 $ 0.48
========= ======== ======== ======== ======== ========
Dividends per common share... $ 0.73 $ 0.52 $ 0.40 $ 0.31 $ 0.03 $ 0.02
BALANCE SHEET DATA
At period end:
Total assets......... $ 1,963.0 $1,814.4 $1,841.9 $1,612.1 $1,634.5 $1,617.0
Long-term debt....... -- 1.7 -- 4.0 11.6 13.0
Total shareholders'
equity............. 190.3 179.2 167.9 133.3 115.8 102.7
</TABLE>
15
<PAGE> 22
MEETING INFORMATION
GENERAL
This Proxy Statement-Prospectus is being furnished to holders of Victoria
Common Stock in connection with the solicitation of proxies by the Victoria
Board for use at the Special Meeting to be held on , 1996 and at any
adjournments or postponements thereof. At the Special Meeting, shareholders of
Victoria will consider and vote upon a proposal to approve the Merger Agreement.
The Victoria 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 proposal to approve the Merger Agreement. 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 Victoria Board has fixed the close of business on , 1996 as
the record date for the determination of shareholders of Victoria entitled to
receive notice of and to vote at the Special Meeting (the "Record Date"). On the
Record Date there were shares of Victoria Common Stock outstanding.
Each holder of Victoria Common Stock is 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 Victoria 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 Victoria Articles and
Victoria Bylaws, approval of the Merger Agreement will require the affirmative
vote of the holders of at least two-thirds of the shares of Victoria Common
Stock outstanding on the Record Date.
Certain shareholders of Victoria are obligated pursuant to agreements with
Norwest, subject to certain conditions, to vote all shares of Victoria Common
Stock held by them on the Record Date (an aggregate of 3,195,010, or
approximately 38.4%, of the shares of Victoria Common Stock outstanding on the
Record Date) in favor of approval of the Merger Agreement. Directors and
executive officers of Victoria (other than the shareholders described in the
preceding sentence) and their affiliates beneficially owned on the Record Date
an aggregate of 29,925, or approximately 0.4%, of the shares of Victoria Common
Stock outstanding on the Record Date. See "THE MERGER -- Certain Agreements."
VOTING AND REVOCATION OF PROXIES
Shares of Victoria 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 Victoria Common Stock represented by such proxy will be voted FOR
approval of the Merger Agreement. Any proxy given pursuant to this solicitation
may be revoked by the person giving it at any time before the proxy is voted by
filing either an instrument revoking it or a duly executed proxy bearing a later
date with the secretary of Victoria prior to or at the Special Meeting or by
voting the shares subject to the proxy in person at the Special Meeting.
Attendance at the Special Meeting will not in and of itself constitute a
revocation of a proxy.
A proxy may indicate that all or a portion of the shares represented
thereby are not being voted with respect to a specific proposal. This could
occur, for example, when a broker is not permitted to vote shares held in street
name on certain proposals in the absence of instructions from the beneficial
owner. Shares that are not voted with respect to a specific proposal will be
considered as not present for such proposal, even though such shares will be
considered present for purposes of determining a quorum and voting on other
proposals. Abstentions on a specific proposal will be considered as present but
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 at least two-thirds of
the shares of Victoria 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,
16
<PAGE> 23
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
Victoria may solicit proxies from the shareholders of Victoria, 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.
Victoria 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 VICTORIA. 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
VICTORIA IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
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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.
GENERAL
At the Effective Time, Sub will be merged with and into Victoria, with
Victoria being the surviving corporation in the Merger. Following the Merger,
Victoria will be a wholly-owned subsidiary of Norwest. Except with respect to
fractional shares, if the Merger is approved and becomes effective, shareholders
of Victoria will receive 1.05 shares of Norwest Common Stock for each share of
Victoria Common Stock held by them immediately prior to the Effective Time and
each share of Sub will be converted into one share of Victoria Common Stock.
Following the Effective Time, Norwest will be the sole shareholder of Victoria.
Shares of Norwest Common Stock issued and outstanding immediately before the
Effective Time will remain issued and outstanding immediately after the
Effective Time.
The market price for Norwest Common Stock will fluctuate between the date
of this Proxy Statement-Prospectus and the Effective Time. The market value of
the shares of Norwest Common Stock that shareholders of Victoria receive at the
Effective Time may be more or less than the market value of the shares on the
date of this Proxy Statement-Prospectus.
BACKGROUND AND REASONS FOR THE MERGER
During the Summer of 1995, the Victoria Board began to explore various
strategic alternatives for the future. The Victoria Board discussed the
consolidation in the financial institution industry, the competitive and
technological challenges arising before Victoria and the fundamental need for
increasing financial resources to meet such challenges. In August and early
September of 1995, the Victoria Board decided to engage an investment banking
firm to assist the Victoria Board in studying its strategic alternatives and in
connection therewith contacted and interviewed several such firms. In late
September 1995, Victoria engaged J.P. Morgan for that purpose.
On October 3, 1995 at a special meeting of the Victoria Board, J.P. Morgan
discussed various strategic alternatives 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
Victoria. According to J.P. Morgan, the target projections required to meet the
desired efficiencies and internal growth while remaining independent were
aggressive and involved substantial risk. Further, the high premiums expected by
selling banks made the acquisition strategy difficult. In addition, J.P.
Morgan's review indicated that there were no attractive candidates for a merger
of equals. J.P. Morgan concluded that, given the current market conditions,
Victoria's growth prospects and the prospects for a sale, it was an opportune
time to pursue a sales strategy.
On October 18, 1995 at a special meeting of the Victoria Board, the
Victoria Board together with J.P. Morgan continued its discussion and evaluation
of Victoria's strategic alternatives. At this meeting, J.P. Morgan discussed
potential acquirors as well as various pricing and valuation methods and
strategies. After discussing the various strategic alternatives, potential
acquirors and sales strategies, the Victoria Board concluded that the sales
alternative was the optimal strategy for maximizing shareholder value and that
Norwest was the most attractive candidate. The Victoria Board authorized J.P.
Morgan to contact Norwest to determine interest in a possible combination of
Victoria and Norwest.
On October 19, 1995, Charles Hrdlicka, Chairman of the Victoria Board,
informed Ken Murray, Executive Vice President of Norwest, that J.P. Morgan had
been engaged by Victoria and would contact Norwest regarding a possible business
combination. Initial discussions indicated an interest from both parties and
Norwest and Victoria signed a confidentiality agreement on October 20, 1995
which contained a 10 day exclusivity period which ended on October 30, 1995. On
October 23, 1995, representatives of J.P. Morgan met with representatives of
Norwest and delivered an information booklet compiled by J.P. Morgan regarding
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Victoria. On October 27, 1995, Norwest delivered to J.P. Morgan a proposal
indicating its interest in acquiring 100% of the outstanding stock of Victoria
at an anticipated exchange ratio of 1.05 shares of Norwest Common Stock for each
outstanding share of Victoria Common Stock subject to the completion of
Norwest's due diligence, negotiation of an acceptable definitive agreement and
other contingencies.
On October 31, 1995, a special meeting of the Victoria Board was held to
review the proposal submitted by Norwest. After evaluating the proposal with
J.P. Morgan, the Victoria Board authorized (i) the continuance of exclusive
discussions with Norwest through November 17, 1995, (ii) the commencement of due
diligence by Norwest with respect to Victoria and by Victoria with respect to
Norwest, and (iii) the commencement of efforts to negotiate an acceptable
definitive agreement.
On November 10 and 11, 1995, representatives from Victoria, J.P. Morgan and
Victoria's legal counsel met with representatives from Norwest in an attempt to
negotiate a final transaction and definitive agreement to recommend to the
Victoria Board. The negotiations included extended discussions regarding the
exchange ratio and lock-ups proposed by Norwest. On November 12, 1995, at a
special meeting of the Victoria Board, the Victoria Board upon the unanimous
vote of all directors present approved the Merger Agreement subject to final
negotiations of remaining contract terms. Representatives of Victoria and
Norwest completed negotiations and signed the Merger Agreement as of November
12, 1995.
The terms of the Merger Agreement, including the Exchange Ratio, are the
result of arm's-length negotiations between Victoria and Norwest and their
respective representatives. The Victoria Board believes that the Merger is fair
to and in the best interests of Victoria's shareholders. In reaching its
decision to recommend approval of the Merger, the Victoria Board considered a
number of factors. The Victoria Board did not assign any relative or specific
weights to the individual factors considered. Among other things, the Victoria
Board considered:
The Prospects for Remaining Independent. In this regard, the Victoria Board
considered the competitive and technological challenges arising before Victoria
and the banking and financial services industries and the fundamental need for
increasing financial resources to meet such challenges. The Victoria 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 Victoria 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 Victoria within the state of Texas.
The Victoria Board concluded that the range of values on a sales basis generally
exceeded the present value of Victoria's shares on a basis assuming the
reasonable implementation of business strategies by Victoria. The Victoria Board
determined that a business combination with Norwest would result in both greater
short-term and long-term value to Victoria's shareholders than other
alternatives available, including remaining independent.
Financial Terms of the Merger. The Victoria Board considered the Exchange
Ratio in relation to the book value, assets and earnings projections of
Victoria; information concerning the financial condition, results of operations
and prospects of Victoria, 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 J.P. Morgan as to the fairness of the
Exchange Ratio to holders of Victoria Common Stock from a financial point of
view. The Victoria Board believes that the holders of Victoria 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 Victoria's Common Stock would be subject to transfer
restrictions on the shares of Norwest Common Stock received in the Merger. See
"THE MERGER -- Certain Agreements" and "-- Resale of Norwest Common Stock."
After considering a number of potential bidders, the Victoria Board determined
Norwest to be the most attractive potential merger partner. The terms of the
Merger Agreement provide protection to Victoria's shareholders by allowing
Victoria the opportunity to
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terminate the Merger Agreement in the event that another potential acquiror
makes a competitive bid for Victoria (subject to the payment of a $5,000,000
termination fee to Norwest under certain conditions). See "THE
MERGER -- Termination of Merger Agreement." The Victoria 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 compared favorably to such other transactions.
Certain 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 Victoria
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 Victoria Common Stock will be listed for trading on the
New York Stock Exchange and should provide Victoria's shareholders with
increased investment liquidity.
The Victoria Board believes that Victoria'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 Victoria with Norwest will result in economies of
scale and increase the market served by Victoria in the state of Texas.
THE VICTORIA BOARD BELIEVES THAT THE TERMS OF THE MERGER ARE FAIR TO AND IN
THE BEST INTEREST OF VICTORIA'S SHAREHOLDERS. THE VICTORIA BOARD HAS, BY
UNANIMOUS VOTE OF ALL DIRECTORS PRESENT, APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMENDS THAT VICTORIA'S SHAREHOLDERS
APPROVE AND ADOPT THE MERGER AGREEMENT.
OPINION OF VICTORIA'S FINANCIAL ADVISOR
Pursuant to an engagement letter dated September 28, 1995, Victoria
retained J.P. Morgan as its financial advisor in connection with the Merger.
At the meeting of the Victoria Board on November 12, 1995, J.P. Morgan
rendered its oral opinion to the Victoria Board that, as of such date, the
Exchange Ratio was fair from a financial point of view to holders of Victoria
Common Stock. J.P. Morgan has confirmed its November 12, 1995 oral opinion by
delivering its written opinion to the Victoria Board, dated the date of this
Proxy Statement-Prospectus, that, as of such date, the Exchange Ratio was fair
from a financial point of view to holders of Victoria Common Stock. No
limitations were imposed by the Victoria Board upon J.P. Morgan with respect to
the investigations made or procedures followed by it in rendering its opinions.
THE FULL TEXT OF THE WRITTEN OPINION OF J.P. MORGAN DATED AS OF THE DATE OF
THIS PROXY STATEMENT-PROSPECTUS, WHICH SETS FORTH THE ASSUMPTIONS MADE, MATTERS
CONSIDERED AND LIMITS ON THE REVIEW UNDERTAKEN, IS ATTACHED AS APPENDIX B TO
THIS PROXY STATEMENT-PROSPECTUS AND IS INCORPORATED HEREIN BY REFERENCE.
VICTORIA SHAREHOLDERS ARE URGED TO READ THE OPINION IN ITS ENTIRETY. J.P.
MORGAN'S WRITTEN OPINION IS ADDRESSED TO THE VICTORIA BOARD, IS DIRECTED ONLY TO
THE EXCHANGE RATIO AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY VICTORIA
SHAREHOLDER AS TO HOW SUCH SHAREHOLDER SHOULD VOTE AT THE SPECIAL MEETING. THE
SUMMARY OF THE OPINION OF J.P. MORGAN SET FORTH IN THIS PROXY
STATEMENT-PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT
OF SUCH OPINION.
In arriving at its opinions, J.P. Morgan reviewed, among other things, in
the case of its November 12, 1995 opinion, a draft of the Merger Agreement and,
in the case of its opinion dated the date of this Proxy Statement-Prospectus,
the Merger Agreement and this Proxy Statement-Prospectus; the audited annual
financial statements of Victoria and Norwest for the fiscal years ended December
31, 1994 and December 31, 1993; in the case of its November 12, 1995 opinion,
the unaudited quarterly financial statements of Victoria and Norwest for the
period ended September 30, 1995 and, in the case of its opinion dated the date
of this Proxy Statement-Prospectus, the unaudited financial statements of
Victoria and Norwest for the period ended December 31, 1995; current and
historical market prices of Victoria Common Stock and Norwest Common
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Stock; certain publicly available information concerning the businesses of
Victoria and Norwest and of certain other companies engaged in businesses
comparable to Victoria and Norwest, and the reported prices for certain other
companies' securities deemed comparable; publicly available terms of certain
transactions involving companies comparable to Victoria and the consideration
paid for such companies; the terms of other relevant business combinations; and
certain internal financial analyses and forecasts prepared by Victoria and its
management. J.P. Morgan also held discussions with certain members of the
management of Victoria and Norwest with respect to certain aspects of the
Merger, and the past and current business operations, financial condition and
future prospects and operations of Victoria and Norwest, the effects of the
Merger on the financial condition and future prospects of Victoria and Norwest,
and certain other matters believed necessary or appropriate to J.P. Morgan's
inquiry. In addition, J.P. Morgan reviewed such other financial studies and
analyses and considered such other information as it deemed appropriate for the
purposes of its opinion.
J.P. Morgan relied upon and assumed, without independent verification, the
accuracy and completeness of all information that was publicly available or was
furnished to it by Victoria or Norwest or otherwise reviewed by J.P. Morgan, and
J.P. Morgan has not assumed any responsibility or liability therefor. J.P.
Morgan has not conducted any valuation or appraisal of any assets or
liabilities, nor have any valuations or appraisals been provided to J.P. Morgan.
In relying on financial analyses and forecasts provided to J.P. Morgan, J.P.
Morgan has assumed that they have been reasonably prepared based on assumptions
reflecting the best currently available estimates and judgments by management of
Victoria as to the expected future results of operations and financial condition
of Victoria and Norwest to which such analyses or forecasts relate. J.P. Morgan
has also assumed that the Merger will have the tax consequences described in
discussions with, and materials furnished to J.P. Morgan by, representatives of
Victoria, and that the other transactions contemplated by the Merger Agreement
will be consummated as described in the Merger Agreement. J.P. Morgan has
assumed that, based on its reliance on information publicly available or
otherwise provided by Victoria or Norwest, loss allowances for each of
Victoria's and Norwest's loan portfolios are, in the aggregate, adequate to
cover all losses with respect to such portfolios.
The projections furnished to J.P. Morgan for Victoria were prepared by the
management of Victoria. Victoria does not publicly disclose internal management
projections of the type provided to J.P. Morgan in connection with J.P. Morgan's
analysis of the Merger, and such projections were not prepared with a view
toward public disclosure. These projections were based on numerous variables and
assumptions that are inherently uncertain and may be beyond the control of
management, including, without limitation, factors related to general economic
and competitive conditions and prevailing interest rates. Accordingly, actual
results could vary significantly from those set forth in such projections.
J.P. Morgan's opinions are based on economic, market and other conditions
as in effect on, and the information made available to J.P. Morgan as of, the
date of such opinions. Subsequent developments may affect the written opinion
dated as of the date of this Proxy Statement-Prospectus, and J.P. Morgan does
not have any obligation to update, revise, or reaffirm such opinion.
J.P. Morgan expressed no opinion as to the price at which Norwest Common
Stock will trade at any future time or as to the effect of the Merger on the
trading price of Norwest Common Stock. Such trading price may be affected by a
number of factors, including but not limited to (i) the total or partial
disposition of Norwest Common Stock by shareholders within a short period of
time after the effective date of the Merger, (ii) changes in prevailing interest
rates and other factors which generally influence the price of securities, (iii)
adverse changes in the current capital markets, (iv) adverse changes in the
financial condition, business, assets, results of operations or prospects of
Victoria or of Norwest and (v) any necessary actions by or restrictions of
federal, state or other governmental agencies or regulatory authorities.
In accordance with customary investment banking practice, J.P. Morgan
employed generally accepted valuation methods in reaching its opinion. The
following is a summary of the material financial analyses utilized by J.P.
Morgan in connection with providing its opinion.
Summary of Proposed Transaction. J.P. Morgan reviewed the terms of the
proposed Merger, including the Exchange Ratio, the price per share offered, the
dividends per share, the resulting percentage ownership of the combined company
that would be held by Norwest stockholders immediately following the Merger and
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the estimated impact upon 1997 earnings per share. J.P. Morgan also analyzed the
impact of the proposed Merger on Victoria, including the impact on estimated
1997 earnings per share and the change in tangible book value per share. This
analysis showed, among other things, that Victoria shareholders would own an
estimated 2.4% of the combined entity upon consummation of the Merger and would
have an annual dividend of $1.01 per share (based upon Norwest's current per
common share dividend amount) representing an increase of 57.5% over Victoria's
current per share common dividend amount and that (based upon the closing share
price of Victoria Common Stock on November 10, 1995 and the Exchange Ratio of
1.05) the per share price to holders of Victoria Common Stock in the Merger was
$34.13, which represented a premium of 15.7% over the November 7, 1995 closing
price of Victoria Common Stock of $29.50 per share. The November 7, 1995 closing
price is used to determine a relevant premium to market calculation due to the
significant stock price appreciation of Victoria Common Stock in the market
immediately prior to the Merger announcement.
Pro Forma Merger Analysis. J.P. Morgan analyzed certain pro forma effects
resulting from the Merger based on (i) projected 1996 and 1997 earnings for
Victoria based on projections prepared by the management of Victoria as well as
projected earnings estimates of equity analysts as compiled by Institutional
Brokers Estimate System ("IBES") (a brokers' earnings estimate and survey) for
Victoria and Norwest and (ii) expense savings of 25% of Victoria's operating
expenses. This analysis indicated that the Merger would be neutral to the
shareholders of Norwest from an earnings per share perspective in 1997.
Contribution Analysis. J.P. Morgan compared the relative contribution to
the combined entity upon consummation of the Merger attributable to each of
Victoria and Norwest as of September 30, 1995. This analysis showed, among other
things, that Victoria and Norwest would contribute to the combined entity upon
consummation of the Merger approximately 2.6% and 97.4%, respectively, of total
assets; 1.8% and 98.2%, respectively, of total loans; 3.9% and 96.1%,
respectively, of total deposits; and 3.4% and 96.6%, respectively, of total
equity. In addition, J.P. Morgan computed the relative contribution of each of
Victoria and Norwest in terms of income statement items, including net interest
income, non-interest income, non-interest expense and net income based on year
to date September 30, 1995, annualized results. This analysis showed that
Victoria and Norwest would contribute 1.5% and 98.5%, respectively, of net
income for 1995. J.P. Morgan also noted that on a pro forma basis, the
shareholders of Victoria and the stockholders of Norwest would own 2.4% and
97.6%, respectively, of the combined entity upon consummation of the Merger
(using the Exchange Ratio).
Stock Trading Analysis. J.P. Morgan reviewed and analyzed the historical
trading prices for the shares of Victoria Common Stock and Norwest Common Stock
on a daily basis from November 10, 1994 to November 10, 1995. J.P. Morgan also
compared the historical trading prices of Norwest Common Stock with a selection
of 18 regional U.S. banking organizations (collectively, the "Selected Regional
Bank Index") with operations that, for purposes of J.P. Morgan's analysis, may
be considered similar to Norwest on a daily basis from November 10, 1994 to
November 10, 1995 and on a monthly basis from November 29, 1985 to November 10,
1995. The Selected Regional Bank Index is composed of the following banks: Banc
One Corporation; Bank of Boston Corporation; Barnett Banks, Inc.; Boatmen's
Bancshares, Inc.; CoreStates Financial Corp.; First Interstate Bancorp; First
Union Corporation; Fleet Financial Group, Inc.; KeyCorp; Mellon Bank
Corporation; NBD Bancorp, Inc.; NationsBank Corporation; PNC Bank Corp.;
Republic New York Corporation; SunTrust Banks, Inc.; U.S. Bancorp; Wachovia
Corporation; and Wells Fargo & Company. Additionally, J.P. Morgan analyzed the
stock price performance of Norwest relative to the Selected Regional Bank Index
according to the multiples of price to previous four quarters' earnings per
share and price to book value on a monthly basis from November 30, 1990 to
November 10, 1995.
Other Analyses. J.P. Morgan also reviewed selected investment research
reports on, and earnings estimates for, Norwest and analyzed available
information regarding the ownership of Norwest Common Stock. In addition, J.P.
Morgan prepared an overview of the historical financial performance of Norwest,
and analyzed its deposit market share, its business mix, its loan portfolio, as
well as information concerning its nonperforming assets.
Selected Company Analysis. J.P. Morgan reviewed and compared actual and
estimated selected financial and stock market information for Victoria with
corresponding information for the following peer groups: 74 publicly traded,
U.S. banking organizations with assets between $1 billion and $3 billion
(collectively, the
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"Selected Peer Group Banks"); four publicly traded, southwestern banking
organizations with assets between $1 billion and $5 billion (collectively, the
"Selected Southwestern Peer Group Banks"); and the 18 publicly traded, regional
U.S. banking organizations comprising the Selected Regional Bank Index listed
above under Stock Trading Analysis above. Due to considerations of comparability
regarding the size, location and operating and trading characteristics, the
Selected Peer Group Banks and the Selected Southwestern Peer Group Banks were
used in evaluating a relevant value range for Victoria; the Selected Regional
Bank Index was used as a third basis of reference in addition to the Selected
Peer Group Banks and the Selected Southwestern Peer Group Banks in evaluating
the performance of Victoria. The analysis conducted by J.P. Morgan regarding the
selected peer groups, referring collectively to the above identified peer
groups, was based on publicly available information and median IBES estimates
for the selected peer groups and Victoria. The Selected Peer Group Banks include
the following 74 U.S. banking organizations: AMCORE Financial, Inc.; Banknorth
Group, Inc.; BancorpSouth, Inc.; Brenton Banks, Inc.; BSB Bancorp; BT Financial
Corporation; California Bancshares, Inc.; Capital Bancorporation, Inc.; Carolina
First Corporation; CB Bancshares, Inc.; Capital Bancorp; Commercial Bank of New
York; Community Bank System, Inc.; Community First Bankshares, Inc.; Chemical
Financial Corporation; CNB Bancshares, Inc.; Chittenden Corporation; Commerce
Bancorp, Inc.; CPB Inc.; Cole Taylor Financial Group, Inc.; City National
Corporation; First National Bancorp; FNB Corporation; Firstbank of Illinois Co.;
FirstBank Puerto Rico; First Commerce Bancshares, Inc.; First Commonwealth
Financial Corporation; First Financial Bancorp; First Michigan Bank Corp.; First
Midwest Bancorp, Inc.; F & M National Corporation; First Western Bancorp, Inc.;
Fort Wayne National Corporation; GBC Bancorp; Hancock Holding Company; Heritage
Financial Services, Inc.; Homeland Bankshares Corporation; Hubco, Inc.; Hawkeye
Bancorporation; Imperial Bancorp; Intercontinental Bank; Jefferson Bankshares,
Inc.; Liberty Bancorp, Inc.; Mid-America Bancorp; Metrobank; Mid Am, Inc.; Mark
Twain Bancshares, Inc.; National Bancorp of Alaska, Inc.; NBT Bancorp, Inc.;
North Fork Bancorporation; National Penn Bancshares, Inc.; Provident Bankshares
Corporation; Peoples First Corporation; Pikeville National Corporation; Park
National Corporation; Republic Bancorp Inc.; River Forest Bancorp, Inc.; Silicon
Valley Bancshares; S&T Bancorp, Inc.; Susquehanna Bancshares, Inc.; Trust
Company of New Jersey; First Financial Corporation; Trans Financial, Inc.;
TrustCo Bank Corp. NY; USBANCORP, Inc.; United Bankshares, Inc.; United Counties
Bancorporation; First United Bancshares, Inc.; UST Corporation; ValliCorp
Holdings, Inc.; Vermont Financial Services Corp.; Westamerica Bancorporation;
WesBanco, Inc.; and Whitney Holding Corporation. The Selected Southwestern Peer
Group Banks include the following four U.S. banking organizations: BOK Financial
Corporation, Cullen/Frost Bankers, Inc., Liberty Bancorp, Inc., and Whitney
Holding Corp.
The Selected Company Analysis generated using the peer groups referred to
above indicated, among other things, that, based on market prices as of November
10, 1995 and financial data as of September 30, 1995 (subject, in the case of
Norwest data, to certain adjustments to give pro forma effect to Norwest's
pending acquisition of AMFED Financial, Inc. and its completed acquisition of
The Foothill Group, Inc.), (i) the median previous four quarters' price-earnings
per share multiple was 13.4x for the Selected Peer Group Banks, 13.0x for the
Selected Southwestern Peer Group Banks and 12.1x for the Selected Regional Bank
Index, as compared to a November 7, 1995 corresponding multiple of 15.5x for
Victoria, (ii) the median estimated 1995 price-earnings multiple was 13.0x for
the Selected Peer Group Banks, 13.5x for the Selected Southwestern Peer Group
Banks and 11.2x for the Selected Regional Bank Index, as compared to a November
7, 1995 corresponding multiple of 15.7x for Victoria, (iii) the median estimated
1996 price-earnings multiple was 11.6x for the Selected Peer Group Banks, 11.9x
for the Selected Southwestern Peer Group Banks and 9.9x for the Selected
Regional Bank Index, as compared to a November 7, 1995 corresponding multiple of
14.5x for Victoria, (iv) the median ratio of price as a multiple of book value
per share was 1.61x for the Selected Peer Group Banks, 1.61x for the Selected
Southwestern Peer Group Banks and 1.73x for the Selected Regional Bank Index, as
compared to a November 7, 1995 corresponding ratio of 1.30x for Victoria, (v)
the median ratio of price as a multiple of tangible book value per share was
1.76x for the Selected Peer Group Banks, 2.04x for the Selected Southwestern
Peer Group Banks and 2.21x for the Selected Regional Bank Index, as compared to
a November 7, 1995 corresponding ratio of 1.58x for Victoria, and (vi) the
median price to assets was 14.4% for the Selected Peer Group Banks, 14.0% for
the Selected Southwestern Peer Group Banks and 14.1% for the Selected Regional
Bank Index, as compared to a
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November 7, 1995 corresponding multiple of 12.5% for Victoria. Additionally, for
each of the Selected Peer Group Indexes referred to above, the Selected Company
Analysis referred to a shareholder return analysis based on dividend yields and
median IBES long-term growth estimates and a number of measures of operating
performance including the following: return on average assets, return on average
equity, efficiency ratio, net interest margin, loans as a percentage of
deposits, equity as a percentage of assets, tangible equity as a percentage of
tangible assets, Tier 1 capital ratio, total capital ratio, non-performing
assets as a percentage of loans plus other real estate owned, loan loss reserves
as a percentage of loans, loan loss reserves as a percentage of non-performing
loans, and net charge-offs as a percentage of average loans. The Selected
Company Analysis, which, for valuation purposes, was based on the Selected Peer
Group Banks and Selected Southwestern Peer Group Banks, implied a trading value
range for Victoria Common Stock of $23.55 to $38.08 per share.
Discounted Dividend Stream Analysis. Using a discounted dividend stream
analysis, J.P. Morgan estimated the present value of the future streams of
after-tax cash flows that Victoria could produce through earnings and distribute
to shareholders assuming Victoria continued to operate as a stand-alone entity.
This analysis did not take into account the effect of cost savings expected as a
result of the Merger. In this analysis, Victoria's after-tax cash flows were
made subject to an assumed, targeted dividend payout ratio of 35% in each year
of the projection period. Victoria's earnings per share were estimated to grow
at a rate varying from 5.0% to 10.0% over the projection period. Additionally,
J.P. Morgan estimated the terminal values for Victoria Common Stock using the
multiples of 9x, 10x, 11x and 12x on estimated, forward-looking earnings per
share for the year ending December 31, 2000. The projected dividend streams and
terminal values were then discounted to present values using discount rates of
8.2%, 8.7%, 9.2%, 9.7% and 10.2%. This discounted dividend stream analysis
implied a reference range of values for Victoria Common Stock of $17.26 to
$29.81 per share.
Selected Transaction Analysis. J.P. Morgan analyzed certain information
compiled by SNL Securities, L.P. (a data firm that monitors and publishes
transaction summaries and descriptions of mergers and acquisitions in the
financial services industry) relating to (i) 10 bank transactions announced
between January 1, 1995 and November 6, 1995 in which the aggregate
consideration was between $100 million and $500 million (the "Relevant U.S. Bank
Acquisitions"), (ii) 11 bank acquisitions announced between January 1, 1995 and
November 6, 1995 in which the target's return on average assets was less than
1.0% and the aggregate consideration was greater than $50 million (the "Selected
ROAA U.S. Bank Acquisitions"), (iii) 19 bank acquisitions announced between
January 1, 1995 and November 6, 1995 in which the target's equity to assets was
greater than 8.5% and the aggregate consideration was greater than $50 million
(the "Selected E/A U.S. Bank Acquisitions") and (iv) the following bank
acquisitions of Norwest (the "Norwest Acquisitions"): AMFED Financial, Inc.;
State National Bank; Goldenbanks of Colorado, Inc.; Independent Bancorp of
Arizona. The 10 bank acquisitions comprising the Relevant U.S. Bank Acquisitions
include: Peoples Heritage Financial Group's acquisition of Bank of New Hampshire
Corporation; Washington Mutual Bank's acquisition of Western Bank; Mercantile
Bancorporation, Inc.'s acquisition of Hawkeye Bancorporation; NationsBank
Corporation's acquisition of Intercontinental Bank; Union Planters Corporation's
acquisition of Capital Bancorporation; Meridian Bancorp, Inc.'s acquisition of
United Counties Bancorporation; Norwest Corporation's acquisition of State
National Bank; First Commerce Corporation's acquisition of Central Corporation;
Comerica Incorporated's acquisition of Metrobank; and Bank of New York Company,
Inc.'s acquisition of Putnam Trust Company. The 11 bank acquisitions comprising
the Selected ROAA U.S. Bank Acquisitions include: CoreStates Financial Corp.'s
acquisition of Meridian Bancorp, Inc.; NationsBank Corporation's acquisition of
Bank South Corporation; Chemical Banking Corp.'s acquisition of Chase Manhattan
Corporation; Boatmen's Bancshares, Inc.'s acquisition of Fourth Financial
Corporation; City National Corporation's acquisition of First Los Angeles Bank;
First American Corporation's acquisition of First City Bancorporation; Summit
Bancorporation's acquisition of Garden State Bancshares, Inc.; Union Bank's
acquisition of BanCal Tri-State Corporation; Comerica Incorporated's acquisition
of Metrobank; Fleet Financial Group, Inc.'s acquisition of Shawmut National
Corporation; and National City Corporation's acquisition of United Bancorp of
Kentucky. The 19 bank acquisitions comprising the Selected E/A U.S. Bank
Acquisitions include: Regions Financial Corporation's acquisition of First
National Bancorp; Washington Mutual Bank's acquisition of Western Bank; Whitney
Holding Corporation's acquisition of First Citizens
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BancStock, Inc.; NationsBank Corporation's acquisition of Bank South
Corporation; Boatmen's Bancshares, Inc.'s acquisition of Fourth Financial
Corporation; First Bank System, Inc.'s acquisition of FirsTier Financial, Inc.;
Mercantile Bancorp, Inc.'s acquisition of Hawkeye Bancorporation; Banc One
Corporation's acquisition of Premier Bancorp, Inc.; PNC Bank Corp's acquisition
of Midlantic Corporation; BancorpSouth, Inc's acquisition of Wes-Tenn Bancorp,
Inc.; National Commerce Corporation's acquisition of Alabama National Bancorp;
Meridian Bancorp, Inc.'s acquisition of United Counties Bancorporation; Union
Bank's acquisition of BanCal Tri-State Corporation; First Commerce Corporation's
acquisition of Central Corporation; US Bancorp's acquisition of West One
Bancorp; First Tennessee National Corporation's acquisition of Financial
Investment Corporation; National Australia Bank's acquisition of Michigan
National Corporation; Western Bank's acquisition of Pacific Bank, NA; and Staten
Island Savings Bank's acquisition of Gateway Bancorp, Inc.
The Selected Transaction Analysis, referring collectively to the above
comparable transactions groups, indicated that (i) the median market premium for
the Relevant U.S. Bank Acquisitions, the Selected ROAA U.S. Bank Acquisitions,
the Selected E/A U.S. Bank Acquisitions and the Norwest Acquisitions were 26.2%,
28.2%, 25.3% and 26.7%, respectively, as compared to a November 7, 1995
corresponding market premium of 15.7% in the Merger; (ii) the median values of
the consideration paid on a price per share basis as a multiple of the previous
four quarters' earnings per share in the Relevant U.S. Bank Acquisitions, the
Selected ROAA U.S. Bank Acquisitions, the Selected E/A U.S. Bank Acquisitions
and the Norwest Acquisitions were 15.1x, 16.6x, 14.9x and 13.9x, respectively,
as compared to a corresponding multiple of the previous four quarters' earnings
per share of 18.0x in the Merger; (iii) the median values of the consideration
paid as a multiple of book value in the Relevant U.S. Bank Acquisitions, the
Selected ROAA U.S. Bank Acquisitions, the Selected E/A U.S. Bank Acquisitions
and the Norwest Acquisitions were 2.16x, 1.79x, 1.90x and 1.97x, respectively,
as compared to a corresponding multiple of fully diluted book value of 1.50x in
the Merger; (iv) the median values of the consideration paid as a multiple of
tangible book value in the Relevant U.S. Bank Acquisitions, the Selected ROAA
U.S. Bank Acquisitions, the Selected E/A U.S. Bank Acquisitions and the Norwest
Acquisitions were 2.31x, 2.03x, 2.10x and 2.12x, respectively, as compared to a
corresponding multiple of fully diluted tangible book value of 1.82x in the
Merger; and (v) the median tangible book premium to core deposits of the
consideration to be paid in the Relevant U.S. Bank Acquisitions, the Selected
ROAA U.S. Bank Acquisitions, the Selected E/A U.S. Bank Acquisitions and the
Norwest Acquisitions were 12.1%, 10.2%, 13.3% and 9.2%, respectively, as
compared to a corresponding tangible book premium to core deposits of 9.0% in
the Merger; and (vi) the median price to assets of the consideration paid in the
Relevant U.S. Bank Acquisitions, the Selected ROAA U.S. Bank Acquisitions, the
Selected E/A U.S. Bank Acquisitions and the Norwest Acquisitions were 18.2%,
14.9%, 20.0% and 13.5%, respectively, as compared to a corresponding price to
assets of 14.9% in the Merger. The Selected Transaction Analysis, which was
based on the medians of the above transaction multiples for the Relevant U.S.
Bank Acquisitions, the Selected ROAA U.S. Bank Acquisitions, the Selected E/A
U.S. Bank Acquisitions and the Norwest Acquisitions, implied a value range for
Victoria Common Stock of $26.35 to $48.88 per share.
In connection with its opinion dated the date of this Proxy
Statement-Prospectus, J.P. Morgan reviewed the analyses used to render its
November 12, 1995 oral opinion to the Victoria Board by performing procedures to
update certain of such analyses and by reviewing the assumptions upon which such
analyses were based and the factors considered in connection therewith.
The summary set forth above does not purport to be a complete description
of the analyses or data presented by J.P. Morgan. The preparation of a fairness
opinion is a complex process and is not necessarily susceptible to partial
analysis or summary description. J.P. Morgan believes that the summary set forth
above and its analyses must be considered as a whole and that selecting portions
thereof, without considering all of its analyses, could create an incomplete
view of the processes underlying its analyses and opinion. J.P. Morgan based its
analyses as set forth above under the description of each such analysis. J.P.
Morgan analyses are not necessarily indicative of actual values or actual future
results that might be achieved, which values and results may be higher or lower
than those indicated. Moreover, J.P. Morgan's analysis are not and do not
purport to be appraisals or otherwise reflective of the prices at which
businesses actually could be bought or sold.
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As part of its investment banking business, J.P. Morgan and its affiliates
are continually engaged in the valuations of businesses and their securities in
connection with mergers and acquisitions, investments for passive and control
purposes, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate,
and other purposes. The Victoria Board selected J.P. Morgan to act as Victoria's
financial advisor with respect to the Merger based on J.P. Morgan's substantial
experience in mergers and acquisitions and its familiarity with Victoria.
For services rendered in connection with the Merger, Victoria has paid J.P.
Morgan a fee of $75,000 and has agreed to pay J.P. Morgan an additional fee in
an amount equal to .65% of the Transaction Value (as defined below) up to and
including $264 million, plus 1.0% of that portion of the Transaction Value in
excess of $264 million but less than or equal to $298 million, plus 3.0% of that
portion of the Transaction Value in excess of $298 million; provided that the
maximum total fee which may be received by J.P. Morgan shall not exceed .85% of
the Transaction Value. Transaction Value means the aggregate consideration
received by Victoria and/or its shareholders (treating shares issuable upon
exercise of options, warrants, or other rights of conversion as outstanding) in
the Merger at the time of consummation, plus, without duplication, the value of
any securities, cash or other assets distributed in connection with the Merger
to shareholders of Victoria. In addition, Victoria has agreed to reimburse J.P.
Morgan for all reasonable expenses incurred by J.P. Morgan in connection with
its services, and to indemnify J.P. Morgan against certain liabilities relating
to or arising out of its engagement, including liabilities under the securities
laws.
J.P. Morgan has no other financial advisory or other relationships with
Victoria. J.P. Morgan and its affiliates have maintained banking and other
business relationships with Norwest, including acting as underwriter for
Norwest.
In the ordinary course of their businesses, J.P. Morgan and its affiliates
may actively trade the equity and debt securities of Victoria and Norwest for
their own accounts or for the account of customers and, accordingly, may at any
time hold long or short positions in such securities.
MERGER CONSIDERATION
Except with respect to fractional shares as described herein, if the Merger
Agreement is approved and the Merger becomes effective, each share of Victoria
Common Stock outstanding immediately prior to the Effective Time will
automatically be converted into 1.05 shares of Norwest Common Stock. Norwest
will not issue any fractional shares of Norwest Common Stock in the Merger.
Norwest will pay cash to each holder of Victoria Common Stock who would
otherwise be entitled to receive a fractional share of Norwest Common Stock. The
cash payment will be equal to the product of the fractional part of the share of
Norwest Common Stock multiplied by the average closing price per share of
Norwest Common Stock as reported on the consolidated tape of the NYSE over the
five trading day period ending on the trading day immediately preceding the date
of the Special Meeting.
NO DISSENTERS' RIGHTS
The TBCA provides that if the shares held by a shareholder are part of a
class, shares of which 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, and the shareholder is not required by the plan of merger to accept for
his shares any consideration other than shares of a corporation that,
immediately after the effective time of the merger, will be part of a class or
series of shares which are held of record by not less than 2,000 holders and
cash in lieu of fractional shares otherwise entitled to be recovered, then such
shareholder is not entitled to dissenter's rights. As a result, the Victoria
shareholders do not have dissenters' rights with respect to the Merger.
SURRENDER OF CERTIFICATES
Promptly following the Effective Time, Norwest Bank Minnesota, National
Association, acting in the capacity of exchange agent for Norwest (the "Exchange
Agent"), will mail to each holder of record of shares of Victoria 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.
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SHAREHOLDERS OF VICTORIA 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
Victoria Common Stock, together with a properly completed letter of transmittal,
there will be issued and mailed to the holder a certificate representing the
number of whole shares of Norwest Common Stock to which such holder is entitled
and, if applicable, a check for the amount representing any fractional share
(without interest). A certificate for Norwest Common Stock may be issued in a
name other than the name in which the surrendered certificate is registered only
if (i) the certificate surrendered is properly endorsed and is otherwise in
proper form for transfer and (ii) the person requesting the issuance of such
certificate either pays to the Exchange Agent any transfer or other taxes
required by reason of the issuance of a certificate for such shares in a name
other than the registered holder of the certificate surrendered or establishes
to the satisfaction of the Exchange Agent that such taxes have been paid or are
not due.
All Norwest Common Stock issued pursuant to the Merger will be deemed
issued as of the Effective Time. No dividends in respect of the Norwest Common
Stock with a record date after the Effective Time will be paid to the former
shareholders of Victoria entitled to receive certificates for shares of Norwest
Common Stock until such shareholders surrender their certificates representing
shares of Victoria Common Stock. Upon such surrender, there shall be paid to the
stockholder in whose name the certificates representing such shares of Norwest
Common Stock are issued any dividends the record and payment dates of which
shall have been after the Effective Time and before the date of such surrender.
After such surrender, there shall be paid to the person in whose name the
certificate representing such shares of Norwest Common Stock is issued, on the
appropriate dividend payment date, any dividend on such shares of Norwest Common
Stock which shall have a record date after the Effective Time, as the case may
be, and prior to the date of surrender, but a payment date subsequent to the
surrender. In no event shall the persons entitled to receive such dividends be
entitled to receive interest on amounts payable as dividends.
CONDITIONS TO THE MERGER
Conditions to the Obligations of Norwest and Victoria. The obligations of
both Norwest and Victoria to effect the Merger are subject to the satisfaction
as of the Effective Time or, if permissible under the Merger Agreement, waiver
of a number of conditions, including the following: (i) the approval of the
Merger Agreement by the requisite vote of Victoria's shareholders; (ii) the
receipt of all requisite regulatory approvals; (iii) the absence of any order in
any action or proceeding before any foreign, federal or state court or
governmental agency or other foreign, federal or state regulatory or
administrative agency or commission that would prevent or make illegal the
consummation of the Merger; (iv) the effectiveness of the Registration
Statement; and (v) the receipt of an opinion of counsel to Victoria at the
Closing regarding certain federal income tax consequences of the Merger. See
"-- Certain U.S. Federal Income Tax Consequences" below.
Conditions to the Obligation of Norwest. The obligation of Norwest to
effect the Merger is subject to the satisfaction as of the Effective Time or, if
permissible under the Merger Agreement, waiver of certain additional conditions,
including the following (i) the performance by Victoria in all material respects
of the agreements made by Victoria in the Merger Agreement and the truthfulness
in all material respects of the representations made by Victoria in the Merger
Agreement; (ii) the receipt by Norwest of letters of resignation from each
current officer and director of Victoria who will not be an officer or director
of Sub as of the Effective Time; (iii) the absence of any condition or
requirement in any approval, license or consent relating to the Merger that, in
the reasonable judgment of Norwest, is unreasonably burdensome to Norwest; (iv)
the qualification of Victoria to engage in a pooling of interests transaction
and the receipt by Norwest of an opinion from Arthur Andersen LLP to that
effect; (v) the sum of the aggregate number of issued and outstanding shares of
Victoria Common Stock and the aggregate number of shares of Victoria Common
Stock issuable upon exercise or conversion of any security exercisable for or
convertible into shares of Victoria Common Stock shall not exceed 8,516,843
shares. See "-- Certain Agreements" and "-- Accounting Treatment."
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Conditions to the Obligation of Victoria. The obligation of Victoria to
effect the Merger is subject to the satisfaction as of the Effective Time or, if
permissible under the Merger Agreement, waiver of certain additional conditions,
including 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 by the
Victoria Board of an opinion from J.P. Morgan to the effect that the
consideration to be received by Victoria's shareholders in the Merger is fair
from a financial point of view. See "-- Opinion of Victoria's Financial Advisor"
above.
REGULATORY APPROVALS
The Merger is subject to prior approval by the Federal Reserve Board under
the Bank Holding Company Act and by the state of Texas. The approval of the
Federal Reserve Board and the state of Texas are both pending as of the date of
this Proxy Statement-Prospectus.
As part of its application to the Federal Reserve Board requesting approval
of the Merger, Norwest has agreed not to effect the Merger until it has (i)
entered into a sales agreement for the sale of the Bank's Bay City branch and
(ii) entered into a trust agreement providing for the divestiture of the Bay
City branch by an independent trustee if the sale of the branch has not been
completed within 180 days after the Effective Time. If the Federal Reserve Board
approves the Merger, it will be a condition to effecting the Merger that Norwest
shall have entered into such sale and trust agreements.
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.
Norwest and Victoria 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
Conduct of Business by Both Parties. Pursuant to the Merger Agreement, each
of Victoria and Norwest has agreed that, during the period from the date of the
Merger Agreement through the Effective Time, except as permitted in the Merger
Agreement or in writing by the other party, it will, and will cause its
respective subsidiaries to, (i) except as to Norwest's subsidiaries, maintain
their corporate existence in good standing; (ii) comply in all material respects
with all governmental laws, regulations, rules and ordinances and all judicial
orders, judgments and decrees applicable to their business and properties; (iii)
not take, and to use reasonable efforts to prevent any affiliate thereof from
taking, any action that would cause the Merger to not qualify for pooling of
interests accounting treatment; and (iv) perform their respective obligations
under each contract and agreement to which any of them is a party or to which
any of their assets is subject, except to the extent such failure to perform
would not have a material adverse effect on it and its respective subsidiaries,
taken as a whole, and except for obligations that it or its respective
subsidiaries may in good faith dispute.
Conduct of Business by Victoria. In addition to the foregoing requirements,
Victoria has agreed to conduct its business and the business of its subsidiaries
during the period from the Merger Agreement through the Effective Time in
accordance with the following restrictions.
Dividends. Except as permitted in the Merger Agreement or in writing by
Norwest, Victoria will not split, combine or reclassify any outstanding capital
stock or declare, set aside or pay any dividend payable in stock or any
extraordinary dividend payable in cash or other property with respect to its
capital stock whether now or
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hereafter outstanding; provided that between the date of the Merger Agreement
and the Effective Time Victoria may (i) pay the regular cash dividend on
Victoria Common Stock in the amount of $0.16 per share in the fourth quarter of
1995, (ii) declare and pay regular cash dividends on Victoria Common Stock in
amounts not to exceed $0.16 per share in each of the first two quarters of 1996
(provided that shareholders of Victoria will be entitled to a dividend on
Victoria Common Stock or Norwest Common Stock, but not both, in the calendar
quarter in which the Closing occurs), (iii) declare and pay a special cash
dividend on Victoria Common Stock in an amount not to exceed $0.09 per share in
the first quarter of 1996, and (iv) if the Effective Time is after the record
date for the regular cash dividend paid on Norwest Common Stock in the third
quarter of 1996, Victoria may declare and pay cash dividends on Victoria Common
Stock in an aggregate amount equal to the amount, if any, the holders of
Victoria Common Stock would have received as holders of Norwest Common Stock had
the Effective Time occurred on or before such record date (provided that
shareholders of Victoria will be entitled to a dividend on Victoria Common Stock
or Norwest Common Stock, but not both, in the calendar quarter in which the
Closing occurs).
Loan Transactions. Except as permitted in the Merger Agreement or in
writing by Norwest, Victoria will, and will cause its subsidiaries to, extend
credit only in accordance with their existing credit policies, except that,
without the prior written consent of Norwest, Victoria will not, and will not
permit any of its subsidiaries to, (i) extend any credit aggregating in excess
of $500,000 to any person or entity who or that was not a borrower as of the
date of the Merger Agreement; (ii) enter into 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 of the Merger Agreement or (iii) enter into any loan transaction
or series of contemporaneous loan transactions involving an aggregate of more
than $250,000 with any borrower who has an extension of credit on Victoria's
watch list on or after the date of the Merger Agreement.
Other Transactions. Except as permitted in the Merger Agreement or in
writing by Norwest, Victoria will not (i) issue, sell, pledge, dispose of or
encumber or permit any of its subsidiaries to issue, sell, pledge, dispose of or
encumber any capital stock of Victoria or any of its subsidiaries other than in
the ordinary course of business and consistent with past practice and not
relating to the borrowing of money or assets of Victoria or any of its
subsidiaries, provided Victoria and its subsidiaries may issue and sell capital
stock upon exercise of options outstanding as of the date of the Merger
Agreement; (ii) redeem, purchase or acquire or offer to acquire or permit any of
its subsidiaries to redeem, purchase or acquire or offer to acquire any of its
or their capital stock; (iii) authorize or incur any long-term debt (other than
deposit liabilities); (iv) mortgage, pledge or subject to any material lien or
other material encumbrance any of its properties, except in the ordinary course
of business; (v) enter into any agreement, contract or commitment requiring
payments by Victoria or any of its subsidiaries in excess of $100,000, except
banking transactions in the ordinary course of business and in accordance with
policies and procedures in effect as of the date of the Merger Agreement; (vi)
make any investments except investments in the ordinary course business; (vii)
increase the compensation of any officers, directors or executive employees,
except to the extent consistent with its past compensation plans and practices;
or (viii) sell or otherwise dispose of any of its assets or properties other
than in the ordinary course of business.
See Section 4.1 of the Merger Agreement for additional restrictions on the
conduct of Victoria's business and the business of its subsidiaries prior to the
Effective Time.
NO SOLICITATION
Subject to certain exceptions as discussed below, Victoria and its
subsidiaries, and their respective directors, officers, representatives and
agents, have agreed under the Merger Agreement not to directly or indirectly
solicit, authorize the solicitation of or enter into any discussions with any
third party concerning any offer or possible offer to (i) 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 Victoria or any of its subsidiaries; (ii) make a tender or
exchange offer for any shares of common stock or other equity security of
Victoria or any of its subsidiaries; (iii) purchase, lease or otherwise acquire
the assets of Victoria or any of its subsidiaries except in the ordinary course
of business; or (iv) merge,
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consolidate or otherwise combine with Victoria or any of its subsidiaries. If
any third party makes an offer or inquiry to Victoria or any of its subsidiaries
concerning any of the foregoing, Victoria or the subsidiary, as applicable, is
required to promptly disclose such offer or inquiry (including the terms
thereof) to Norwest.
The Victoria Board may enter into discussions concerning any of the
foregoing transactions if, after taking into account the written advice of its
outside counsel, the Victoria Board concludes in good faith that the failure to
do so could reasonably be determined to violate its fiduciary duties under
applicable law.
CERTAIN AGREEMENTS
The following shareholders of Victoria have agreed to vote an aggregate of
3,195,010 shares of Victoria Common Stock (representing 38.4% of all outstanding
shares of Victoria Common Stock) held by them on the Record Date in favor of the
Merger Agreement: Dennis O'Connor (663,791 shares); Tom O'Connor, Jr. (964,968
shares); D. H. Braman, Jr. (613,299 shares); R. J. Hewitt (391,601 shares); R.
W. Briggs, Jr. (246,320 shares); and Ralph R. Gilster, III (315,031 shares).
This agreement to vote in favor of the Merger Agreement shall terminate upon the
termination of the Merger Agreement, including a termination upon receipt by
Victoria of a Superior Proposal (as defined below), or by either party upon
notice to the other if the Merger has not been consummated by September 30,
1996.
TERMINATION OF THE MERGER AGREEMENT
By Norwest or Victoria. Subject to the satisfaction of certain notice
requirements, either Norwest or Victoria may terminate the Merger Agreement at
any time prior to the Effective Time, whether before or after approval of the
Merger Agreement by Victoria'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 been effected on or
before September 30, 1996, unless the inability to effect the Merger is due to
the failure of the party seeking to terminate the Merger Agreement to perform or
observe in all material respects the covenants and agreements required to be
performed or observed by such party under the Merger Agreement; (ii) the
Victoria Board determines as described below that a takeover proposal
constitutes a Superior Proposal (as defined below); (iii) there is entered a
final, unappealable order restraining, enjoining or otherwise preventing the
parties from effecting the Merger or any other transaction contemplated by the
Merger Agreement; or (iv) Victoria's shareholders do not approve the Merger
Agreement at the Special Meeting.
By Norwest. Subject to the satisfaction of certain notice requirements,
Norwest may also terminate the Merger Agreement at any time prior to the
Effective Time, whether before or after approval of the Merger Agreement by
Victoria's shareholders, upon the occurrence or existence of any of the
following events or conditions (each, a "Termination Triggering Event"): (i) the
Victoria Board withdraws or modifies in a manner materially adverse to Norwest
its approval or recommendation of the Merger Agreement; (ii) Victoria's
shareholders do not approve the Merger Agreement at the Special Meeting after
(A) a third party makes a proposal to Victoria or its shareholders to engage in
an Acquisition Event (as defined below), (B) Victoria or any of its subsidiaries
enters into an agreement with a third party to engage in an Acquisition Event or
(C) Victoria or any of its subsidiaries engages in an Acquisition Event; or
(iii) Victoria fails to perform certain obligations under the Merger Agreement
relating to the meeting of Victoria's shareholders to approve the Merger
Agreement and the meeting is not held prior to September 30, 1996.
By Victoria. Subject to the satisfaction of certain notice requirements,
Victoria may also terminate the Merger Agreement at any time within five days
after the Special Meeting but prior to the Effective Time, whether before or
after approval of the Merger Agreement by Victoria's shareholders, if the
average closing price per share of Norwest Common Stock as reported on the
consolidated tape of the NYSE for the ten full trading days ending on the day
immediately preceding the Special Meeting (the "Norwest Average Price") is less
than $28.00 per share and the number obtained by dividing the Norwest Average
Price by $32.50 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 the latter number so obtained.
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Definitions. For purposes of the Merger Agreement:
"Acquisition Event" means any of the following events: (i) a merger,
consolidation or similar transaction involving Victoria or the Bank or any
successors to Victoria or the Bank, (ii) a purchase, lease or other
acquisition in one or more series of related transactions involving the
assets of Victoria or any of its subsidiaries representing 25% or more of
the consolidated assets of Victoria and its subsidiaries or (iii) a
purchase or other acquisition (including pursuant to a merger,
consolidation, share exchange or similar transaction) in one or a series of
related transactions involving beneficial ownership of securities
representing 25% or more of the voting power of Victoria or any of its
subsidiaries in each case with or by a person or entity other than Norwest
or an affiliate of Norwest. An Acquisition Event does not include an
internal reorganization transaction or series of related transactions
involving solely Victoria and its subsidiaries.
"Company Market Capitalization" means (i) 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 (ii)
the number of shares of common stock of such company outstanding as of
September 30, 1995 (adjusted for any stock dividend, reclassification,
recapitalization, exchange of shares or similar transaction between
September 30, 1995 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: (i) the Final Price for each such
company multiplied by (ii) the Weighting Factor (as defined below) for each
such company.
"Final Price" of any company in the Index Group means the average of
the daily closing prices of a share of common stock for 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 (as defined below).
"Initial Index Price" means the sum of the following, calculated for
each of the companies in the Index Group: (i) 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 (ii) the Weighting
Factor for each such company.
"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
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.
"Index Group Companies" mean the following companies: BancOne
Corporation, Bank of Boston Corporation, BankAmerica Corporation, Barnett
Banks, Inc., Boatmen's Bancshares, Comerica, Inc., CoreStates Financial
Corporation, First Bank System, Inc., First Interstate, First of America
Bank Corporation, First Union Corporation, Fleet Financial, KeyCorp, Mellon
Bank Corporation, National City Corporation, Nations Bank, PNC Financial
Corporation, Suntrust Banks, Inc., U.S. Bancorp, Wachovia Corporation and
Wells Fargo.
"Index Measurement Period" means the period of ten trading days ending
on the day immediately preceding the date of the Special Meeting.
"Total Market Capitalization" means the sum of the Company Market
Capitalization for each of the companies in the Index Group.
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"Weighting Factor" for any given company means the Company Market
Capitalization for such company divided by the Total Market Capitalization.
"Superior Proposal" means a bona fide offer by a third party to
acquire Victoria pursuant to a tender or exchange offer, a merger,
consolidation or other business combination or a sale of all or
substantially all of the assets of Victoria and its subsidiaries on terms
such that, in the good faith determination of the Victoria Board after
taking into account the written advice of its outside counsel, the failure
of the Victoria Board to accept such proposal on behalf of Victoria could
reasonably be expected to violate its fiduciary duties under applicable
law.
Termination Fee. The Merger Agreement provides that Victoria will make a
cash payment to Norwest of $5,000,000 if the Merger Agreement is terminated by
reason of either (i) the occurrence of a Termination Triggering Event and (A)
the Victoria Board has authorized or approved an Acquisition Event, has publicly
announced its intention to authorize or approve an Acquisition Event or has
recommended that Victoria's shareholders approve or accept an Acquisition Event
or (B) Victoria or the Bank or any successor to either Victoria or the Bank has
entered into an agreement to engage in an Acquisition Event or an Acquisition
Event has occurred; or (ii) the occurrence of a Superior Takeover Proposal.
Victoria will be obligated to make such cash payment to Norwest within five
business days after the occurrence of the event or the existence of the
condition giving Norwest the right to terminate the Merger Agreement (as
described above).
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 Victoria's shareholders, provided that,
after the Merger Agreement is approved by Victoria's shareholders, no amendment
can be made to the Merger Agreement that by law requires the subsequent approval
of Victoria's shareholders unless such subsequent approval is given.
WAIVER OF PERFORMANCE OF OBLIGATIONS
The parties to the Merger Agreement may, at any time prior to the Effective
Time, (i) extend the time of performance of any of the obligations or other acts
of the parties required under the Merger Agreement, (ii) waive any inaccuracies
in the representations and warranties contained in the Merger Agreement or in
any document delivered pursuant thereto and (iii) waive compliance with any of
the agreements or conditions contained in the Merger Agreement that may be
legally waived.
EFFECT ON EMPLOYEE BENEFIT PLANS
The Merger Agreement provides that, subject to any eligibility requirements
applicable to such plans, employees of Victoria shall be entitled to participate
in those Norwest employee benefit and welfare plans specified in the Merger
Agreement. The eligible employees of Victoria 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. Eligible Victoria employees will receive credit for
past service for the purpose of determining certain benefits under certain of
Norwest's benefit plans.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Shareholders should be aware that certain members of the Victoria Board and
management of Victoria have interests in the Merger in addition to and separate
from the interests of shareholders of Victoria, generally. The board of
directors of Norwest and Victoria are aware of these interests, and have
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 Victoria will also constitute
approval of the following benefits to be received by the directors, executive
officers, and employees of Victoria.
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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 Victoria and its
subsidiaries pursuant to the Victoria Articles, Victoria Bylaws, similar
governing documents of Victoria subsidiaries and indemnification agreements
between Victoria or its subsidiaries and their directors and officers shall
continue in full force and effect. In addition, for a period of four years after
the effective time, Norwest will use reasonable efforts to cause the directors
and officers of Victoria and its subsidiaries to continue to be covered by
Victoria's directors' and officers' liability insurance policy (or substantially
equivalent coverage) at an annual cost not to exceed 200% of Victoria's premium
payment for Victoria's current coverage.
Executive Retention/Severance Agreements. On September 5, 1995, Victoria
entered into executive retention/severance agreements with its six executive
officers including Messrs. Charles R. Hrdlicka, Chairman and Chief Executive
Officer; David Jones, Executive Vice President -- Trust and Investments; John H.
Freeman III, Executive Vice President -- General Banking; Malcolm Duke,
Executive Vice President -- Operations and Administration; Dugan Smith,
Executive Vice President -- Credit Administration; and Gregory Sprawka,
Executive Vice President and Chief Financial Officer -- Finance and Treasury.
The executive retention/severance agreements are intended to reward the officers
for continued service to Victoria, including continued cooperation and effort to
accommodate and facilitate a change in corporate control of Victoria. In
consideration for this continued cooperation and effort to accommodate a change
of control, the agreements provide for the payment of a cash bonus in an amount
equal to one-half the officer's base compensation and severance benefits in the
event of an involuntary termination of employment other than by reason of death,
disability, or for cause as such terms are defined in the executive
retention/severance agreements, or termination of employment by the officer for
good cause as such term is defined in the executive retention/severance
agreement. Upon any such termination of employment, in addition to compensation
benefits already earned, the officer will be entitled to receive two times the
officer's annual base pay as of the Effective Time. No such payments, however,
can exceed the amount deductible for income tax purposes under the Code. The
approval of the Merger Agreement at the Special Meeting will constitute a change
of control under such retention/severance agreements.
It is anticipated that Messrs. Hrdlicka, Jones and Freeman will continue
their association with Victoria and the Bank as employees of Norwest or one of
its subsidiaries upon consummation of the Merger.
Upon the change of control occurring in connection with the Merger, the
bonuses due Messrs. Hrdlicka, Jones, Duke, Freeman, Smith and Sprawka will be
$187,500, $81,375, $77,500, $78,500, $68,500, and $68,500, respectively. If
pursuant to the provisions described above, severance payments are required to
be made to Messrs. Hrdlicka, Jones, Duke, Smith and Sprawka, the amounts of such
payments will be $750,000, $325,000, $310,000, $274,000 and $274,000,
respectively.
Pursuant to an agreement with Norwest and Victoria, Mr. Freeman has agreed
to modify his executive retention/severance agreement as follows. In lieu of
receiving the severance pay that he would otherwise be entitled to receive, Mr.
Freeman will continue his association with Victoria and the Bank as an employee
of Norwest or one of its subsidiaries at an annual salary of $118,000. Mr.
Freeman will also receive a one-time cash payment of $200,000 payable upon
consummation of the Merger.
Stock Options. The Victoria 1991 stock option plan provides that in the
event of change of control, including that which will occur upon consummation of
the Merger, each optionee may exercise his stock options with respect to the
full number of shares without regard to any vesting period provisions contained
in the optionee's agreement. Pursuant to this provision, Messrs. Hrdlicka,
Jones, Duke, Sprawka and Smith will be eligible to exercise options to purchase
55,000, 15,000, 12,000, 10,000 and 10,000 shares at $26.75 per share,
respectively. Mr. Freeman will be eligible to exercise options to purchase
10,000 shares at $22.125 per share. Twenty-three other officers as a group will
be eligible to exercise options to purchase 80,000 shares in the aggregate at
prices ranging between $22.625 and $27.875 per share.
Supplemental Executive Retirement Program. Victoria's Supplemental
Executive Retirement Program provides that in the event of a change of control
of Victoria, all participants will receive a minimum lump sum benefit, based on
years of service, equal to the amount the participant would have received had he
remained in
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employment until his normal retirement date assuming no increase in
compensation. Pursuant to this provision and upon the change of control
occurring in connection with the Merger, estimated payments will be required to
be made to Messrs. Hrdlicka, Jones, Freeman, Duke, Smith and Sprawka in the
amounts of $1,076,000, $246,000, $38,000, $76,000, $33,000 and $44,000,
respectively. Additionally, Edwin W. Dentler, director and retired executive
officer, will be entitled to receive $157,000 and 28 other executive officers
and former officers will be eligible to receive $1,333,000 in the aggregate.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of certain federal income tax consequences of
the Merger that are generally applicable to Victoria's shareholders. The
discussion is based on currently existing provisions of the Code, existing
regulations thereunder (including final, temporary or proposed) and current
administrative rulings and court decisions, all of which are subject to change.
Any such change, which may or may not be retroactive, could alter the tax
consequences described herein. The following discussion is intended only as a
summary of certain principal federal income tax consequences of the Merger and
does not purport to be a complete analysis or listing of the all of the
potential tax effects relevant to a decision on whether to vote in favor of
approval of the Merger Agreement.
The parties expect the Merger to qualify as a reorganization under Section
368(a) of the Code. Except for cash received in lieu of a fractional share
interest in Norwest Common Stock, holders of shares of Victoria Common Stock
will recognize no gain or loss on the receipt of Norwest Common Stock.
The Merger's effectiveness is conditioned upon the receipt by Victoria and
Norwest of a written opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.,
counsel to Victoria, substantially to the effect that: (i) the Merger will be
treated for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code; (ii) Victoria and Norwest will each be a party to
that reorganization within the meaning of Section 368(b) of the Code; (iii)
neither Victoria nor Norwest will recognize any gain or loss as a result of the
Merger and (iv) Victoria's shareholders will not recognize any gain or loss as a
result of the Merger, other than to the extent that such shareholders receive
cash in lieu of fractional shares.
The opinion of counsel, which will be delivered on the Closing Date, is
filed as an exhibit to the Registration Statement. The foregoing discussion is
only a summary of the tax consequences as described in the opinion. An opinion
of counsel only represents counsel's best legal judgment and has no binding
effect or official status of any kind, and no assurance can be given that
contrary positions may not be taken by the Internal Revenue Service (the "IRS")
or a court considering the issues. Neither Victoria nor Norwest has requested or
will request a ruling from the IRS with regard to the federal income tax
consequences of the Merger.
THE FOREGOING IS A GENERAL SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER TO VICTORIA SHAREHOLDERS, WITHOUT REGARD TO THE
PARTICULAR FACTS AND CIRCUMSTANCES OF EACH SHAREHOLDER'S TAX SITUATION AND
STATUS. EACH VICTORIA 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 Victoria
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 Victoria or Norwest as that term
is defined in the rules under the Securities Act. Norwest Common Stock received
by those shareholders of Victoria who are deemed to be "affiliates" of Victoria
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 Victoria generally include individuals or entities that control, are
controlled by or are under common control with, Victoria and may include the
executive officers and directors of Victoria as well as certain principal
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shareholders of Victoria. In the Merger Agreement, Victoria has agreed to use
its best efforts to cause each shareholder who, in the opinion of counsel to
Victoria, is an affiliate of Victoria 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, any
shares of Victoria 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 Victoria and Norwest have been published.
This Proxy Statement-Prospectus does not cover any resales of Norwest Common
Stock received by affiliates of Victoria.
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.
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
Victoria will be combined at the Effective Time and carried forward at their
previously recorded amounts, and the shareholders' equity accounts of Victoria
will be combined with Norwest's stockholder 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
financial statements of Norwest.
In order for the Merger to qualify for pooling of interests accounting
treatment, among other things, at least 90% of the outstanding Victoria Common
Stock must be exchanged for Norwest Common Stock. Victoria 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 Victoria
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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NORWEST CAPITAL STOCK AND RIGHTS
The following description of certain aspects of the capital stock of
Norwest and certain rights of Norwest's stockholders is not intended to be
complete and is qualified in its entirety by reference to Article FOURTH of the
Norwest Certificate and other documents incorporated by reference. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" and "COMPARISON OF RIGHTS OF
HOLDERS OF VICTORIA COMMON STOCK AND NORWEST COMMON STOCK."
GENERAL
Norwest is authorized to issue a total of 509,000,000 shares of capital
stock, consisting of 500,000,000 shares of Norwest Common Stock, 5,000,000
shares of preferred stock without par value ("Norwest Preferred Stock") and
4,000,000 shares of preference stock without par value ("Norwest Preference
Stock"). As of December 31, 1995, Norwest had issued (i) 358,332,153 shares of
Norwest Common Stock, of which 352,760,457 shares were outstanding and 5,571,696
shares were held as treasury shares, and (ii) 2,119,681 shares of Norwest
Preferred Stock, consisting of 1,127,125 shares of 10.24% Cumulative Preferred
Stock, 980,000 shares of Cumulative Tracking Preferred Stock (of which 25,000
shares are held by a subsidiary of Norwest), 12,984 shares of ESOP Cumulative
Convertible Preferred Stock and 24,572 shares of 1995 ESOP Cumulative
Convertible Preferred Stock. On January 2, 1996, all of the outstanding shares
of 10.24% Cumulative Preferred Stock and related depositary shares were redeemed
at the $100 stated value. Norwest had not issued any shares of Norwest
Preference Stock as of the date of this Proxy Statement-Prospectus.
Norwest's board of directors (the "Norwest Board") has designated 1,250,000
shares of Norwest Preferred Stock as Series A Junior Participating Preferred
Stock (the "Norwest Junior Preferred Shares") and reserved the Norwest Junior
Preferred Shares for issuance pursuant to a rights agreement dated November 22,
1988 between Norwest and Citibank, N.A., as the rights agent. See "-- Rights
Plan." Norwest had not issued any Norwest Junior Preferred Shares as of the date
of this Proxy Statement-Prospectus.
NORWEST COMMON STOCK
Each share of Norwest Common Stock entitles the holder thereof to one vote
on all matters submitted to a vote of stockholders. Holders of Norwest Common
Stock do not have any cumulative voting rights. For that reason, holders of a
majority of the shares of Norwest Common Stock entitled to vote in any election
of directors of Norwest may elect all of the directors standing for election.
Holders of Norwest Common Stock are entitled to receive ratably such dividends,
if any, as may be declared by the Norwest Board out of funds legally available
therefor, subject to (i) preferential dividend rights of all then outstanding
shares of Norwest Preferred Stock and Norwest Preference Stock, (ii) certain
legal restrictions on the ability of Norwest's banking and savings association
subsidiaries to distribute funds to Norwest and (iii) such restrictions as may
be imposed on Norwest from time to time pursuant to debt or credit facilities or
otherwise. See "CERTAIN REGULATORY CONSIDERATIONS." Holders of Norwest Common
Stock do not have any preemptive rights to purchase additional securities issued
by Norwest or rights to convert their shares of Norwest Common Stock into other
securities of Norwest. Upon the liquidation, dissolution or winding up of
Norwest, subject to the prior rights of all then outstanding shares of Norwest
Preferred Stock and Norwest Preference Stock, holders of Norwest Common Stock
are entitled to receive ratably the assets of Norwest available after the
payment of all debts and other liabilities. All outstanding shares of Norwest
Common Stock are duly authorized, validly issued and nonassessable. Norwest Bank
Minnesota, National Association, a subsidiary of Norwest, is the transfer agent
and registrar for shares of Norwest Common Stock.
Each share of Norwest Common Stock includes, and each share of Norwest
Common Stock issued in the Merger will include, a right to purchase one
four-hundredth of a Norwest Junior Preferred Share. See "-- Rights Plan"
The rights, preferences and privileges of holders of Norwest Common Stock
are subject to, and may be adversely affected by, the rights of holders of
Norwest Preferred Stock or Norwest Preference Stock. See "-- Norwest Preferred
Stock; Norwest Preference Stock."
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NORWEST PREFERRED STOCK; NORWEST PREFERENCE STOCK
The Norwest Board is authorized to issue shares of Norwest Preferred Stock
and Norwest Preference Stock in one or more series and to fix the relative
rights, preferences, privileges and restrictions thereof, including dividend
rates, conversion rights, voting rights, terms of redemption, liquidation
preferences, and the designation of any series and the number of shares
constituting such series, all without any vote or other action on the part of
stockholders; provided, however, that holders of Norwest Preference Stock will
not be entitled to more than one vote per share. The Norwest Board may issue
shares of Norwest Preferred Stock and Norwest Preference Stock at any time and
from time to time without any vote or other action on the part of stockholders.
The ability of the Norwest Board to issue shares of Norwest Preferred Stock
or Norwest Preference Stock, although providing flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or discouraging a third
party from acquiring, a majority of the outstanding voting stock of Norwest. For
a discussion of other provisions of the Norwest Certificate or Norwest Bylaws
that may delay, deter or prevent a tender offer or other takeover attempt, see
"-- Rights Plan" below.
RIGHTS PLAN
Norwest has in effect a rights plan (the "Rights Plan") pursuant to which
each share of Norwest Common Stock now outstanding, and each share of Norwest
Common Stock to be issued in the Merger, have attached to it one Preferred Stock
purchase right (a "Right") entitling the holder thereof to purchase one
four-hundredth of a Norwest Junior Preferred Share at a price of $175.00,
subject to customary antidilution adjustment. The Rights are not separable from,
and trade automatically with, the shares of Norwest Common Stock to which they
are attached. No separate certificates for the Rights will be issued. The Rights
are exercisable only upon the occurrence of certain specified events as
described below. All rights expire November 23, 1998, unless earlier exercised
by the holders thereof or redeemed or extended by Norwest. Until exercised, the
Rights in and of themselves do not confer any rights on their holders as
stockholders of Norwest, including but not limited to the right to vote or
receive dividends. Subject to certain limited exceptions, the Norwest Board may
amend or otherwise modify the provisions of the Rights and the Rights Plan
without any vote or other action on the part of the holders of the Rights.
The Rights are exercisable only if a person or group acquires or announces
an offer to acquire 25% or more (the "Triggering Percentage") of the outstanding
shares of Norwest Common Stock. The Norwest Board may, without any vote or other
action on the part of stockholders, reduce the Triggering Percentage to no less
than 15% at any time prior to the Rights becoming exercisable. The Rights have
certain additional rights that will be triggered upon the occurrence of
specified events:
(1) If a person or group acquires at least the Triggering Percentage
of Norwest Common Stock, the Rights permit the holders thereof, other than
such person or group, to acquire shares of Norwest Common Stock at 50% of
such shares' market value at the time. This feature will not apply,
however, if a person or group that owns less than the Triggering Percentage
acquires at least 85% of the outstanding shares of Norwest Common Stock
pursuant to a cash tender offer for 100% of the outstanding shares of
Norwest Common Stock.
(2) After a person or group acquires at least the Triggering
Percentage of Norwest Common Stock but before such person or group acquires
50% of the outstanding shares of Norwest Common Stock, the Norwest Board
may exchange each Right, other than Rights owned by such acquiror, for one
share of Norwest Common Stock or one four-hundredth of a Junior Preferred
Share.
(3) In the event of certain business combinations involving Norwest or
the sale of 50% or more of the assets or earning power of Norwest, the
Rights permit the holders thereof to purchase the stock of the acquiror at
50% of such shares' market value.
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Each Junior Preferred Share will have 400 votes, voting together with
shares of Norwest Common Stock. Each Junior Preferred Share will be entitled to
a minimum preferential quarterly dividend payment of $1.00 per share and will be
entitled to an aggregate dividend of 400 times the dividend declared per share
of Norwest Common Stock. In the event of a merger, consolidation or other
transaction in which Norwest Common stock is exchanged, each Junior Preferred
Share will be entitled to receive 400 times the amount received per share of
Norwest Common Stock. In the event of liquidation of Norwest, the holders of the
Junior Preferred Shares will be entitled to a minimum preferential liquidation
payment of $400 per share and will be entitled to an aggregate payment of 400
times the payment made per share of Norwest Common Stock. The Junior Preferred
Shares will not be redeemable. The rights of the Junior Preferred Shares are
protected by customary antidilution provisions.
The Norwest Board may redeem the Rights in whole, but not in part, at a
price of $.0025 per Right (the "Redemption Price") at any time prior to the
acquisition by a person or group of at least the Triggering Percentage of the
outstanding shares of Norwest Common Stock. The Norwest Board may effect the
redemption at such time, upon such terms and subject to such conditions as the
Norwest Board in its sole discretion may deem necessary or advisable.
Immediately upon redemption of the Rights, all rights of the holders thereof
(including the right to exercise the Rights) will terminate except for the right
to receive the Redemption Price.
The operation of the Rights Plan may result in immediate substantial
dilution to, or otherwise materially adversely affect, any person or group that
acquires the Triggering Percentage of Norwest Common Stock or otherwise triggers
a provision of the Rights Plan. For that reason, the existence of the Rights
Plan may have the effect of delaying, deterring or preventing a takeover of
Norwest.
DIVIDEND REINVESTMENT AND OPTIONAL CASH PAYMENT PLAN
Norwest has in effect an automatic Dividend Reinvestment and Optional Cash
Payment Plan that entitles participants to reinvest dividends on Norwest Common
Stock held by them in additional shares of Norwest Common Stock and, subject to
certain dollar limits, purchase additional shares of Norwest with voluntary cash
payments. The price at which shares of Norwest Common Stock are purchased under
the plan is equal to the fair market value of the Norwest Common Stock (as
calculated in accordance with the provisions of the plan) at the time of
purchase. All stockholders of Norwest (including former shareholders of Victoria
who receive shares of Norwest Common Stock in the Merger) are entitled to
participate in the plan as currently in effect.
SHARES REGISTERED UNDER THE SECURITIES ACT
Norwest has registered 1,700,000 shares of Preferred Stock under the Act,
all of which were available for issuance as of the date of this Proxy
Statement-Prospectus. Pursuant to other shelf registration statements filed with
the Commission, Norwest has also registered under the Securities Act an
indeterminate number of securities (the "Shelf Securities"), which Norwest may
issue as, among other securities, Norwest Preferred Stock or securities
convertible into Norwest Common Stock or Norwest Preferred Stock. As of December
31, 1995, Norwest had available for issuance Shelf Securities having an
aggregate initial public offering price of up to $1.925 billion. The Norwest
Board may issue the Shelf Securities at any time and from time to time without
any vote or other action on the part of stockholders.
No prediction can be made as to the effect, if any, that future sales of
shares of Norwest's capital stock will have on the market price of the Norwest
Common Stock prevailing from time to time. Sales of substantial amounts of
capital stock in the public market, or the perception that such sales could
occur, could adversely affect the prevailing market price of Norwest Common
Stock. Future sales of Norwest's capital stock may result in dilution to
existing stockholders.
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COMPARISON OF RIGHTS OF HOLDERS OF
VICTORIA COMMON STOCK AND NORWEST COMMON STOCK
GENERAL
Victoria is incorporated under the laws of the state of Texas. Norwest is
incorporated under the laws of the state of Delaware. The rights of Victoria's
shareholders are currently governed by the TBCA and the Victoria Articles and
Victoria Bylaws. If Victoria's shareholders approve the Merger Agreement and the
Merger becomes effective, shareholders of Victoria will become stockholders of
Norwest. For that reason, after the Effective Time, 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 Victoria
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. For additional
information concerning the rights of holders of Norwest Common Stock, see
"NORWEST CAPITAL STOCK AND RIGHTS."
DIRECTORS
Victoria. The Victoria Bylaws provide that unless the Victoria Board shall
determine by resolution the number of directors which shall constitute the
entire board of directors, the number shall be set forth in the Victoria
Articles. The Victoria Articles currently set the number of directors at 10.
Vacancies on the Victoria Board, other than by reason of an increase in the
number of directors, may be filled by the shareholders or by the affirmative
vote of a majority of the remaining directors though less than a quorum. Any
vacancy to be filled by reason of an increase in the number of directors may be
filled by the shareholders or by the Victoria Board for a term of office
continuing only until the next election of one or more directors by the
shareholders; provided, however, that during any period between any two
successive annual meetings of shareholders, the Victoria Board may not fill more
than two such directorships. The directors of a corporation shall be elected by
a plurality of the votes cast by the holders of shares entitled to vote in the
election of directors at a meeting of shareholders at which a quorum is present.
The Victoria Articles expressly prohibit cumulative voting in an 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 15. 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. See
"NORWEST CAPITAL STOCK AND RIGHTS -- Common Stock."
AMENDMENT OF ARTICLES OR CERTIFICATE OF INCORPORATION AND BYLAWS
Victoria. Under the TBCA, an amendment to the articles of incorporation
requires 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; provided that the articles of incorporation may
require the vote of a different number, not less than a majority, of the shares
outstanding. The Victoria Articles do not so specify. The Victoria Bylaws may be
amended by a majority of the Victoria Board or by a majority of the outstanding
stock entitled by vote thereon.
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
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a majority of the outstanding stock of each class entitled to vote 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. See "NORWEST CAPITAL STOCK AND RIGHTS -- Preferred Stock and
Preference Stock."
SHAREHOLDER OR STOCKHOLDER APPROVAL OF MERGERS AND ASSET SALES
In addition to being subject to the laws of Texas and Delaware,
respectively, both Victoria 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."
Victoria. The TBCA generally permits a merger to become effective without
the approval of the surviving corporation's shareholders if the articles of
incorporation of the surviving corporation do not change following the merger,
the amount of the surviving corporation's common stock to be issued or delivered
under the plan of merger does not exceed twenty percent (20%) of the total
shares of outstanding voting stock immediately prior to the acquisition, and the
board of directors of the surviving corporation adopts a resolution approving
the plan of merger. Where shareholder approval is required under the TBCA, the
merger must be approved by the holders of at least two-thirds of the outstanding
shares of the Texas corporation entitled to vote thereon, unless there is a
class of stock that is entitled to vote as a class (as is often the case), 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 Victoria
Articles do not provide for a different number of shares for approval of a
merger or permit the shares of any class or series to vote thereon and, as a
result, mergers must be approved by the holders of at least two-thirds of the
outstanding shares of Victoria. Victoria does not have any shares of capital
stock issued and outstanding which are entitled to vote as a class.
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
Victoria. 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 exceptions discussed below, a merger or consolidation.
Further, the TBCA has a provision which states that shareholders do not
have appraisal rights in connection with a merger where, on the record date
fixed to determine the shareholders entitled to vote on the merger or
consolidation, the stock of the corporation is listed on a national securities
exchange or is held of record by more than 2,000 shareholders. Notwithstanding
the above, under the TBCA, a shareholder will be entitled to dissent and be paid
for his shares if the shareholder is 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, are listed on a national securities
exchange or are held of record by not less than 2,000 shareholders, and (b) cash
in lieu of fractional shares otherwise entitled to be received. As a result,
assuming that the other
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conditions described above are satisfied, holders of Victoria Common Stock will
not have appraisal rights in connection with mergers and consolidations
involving Victoria.
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
Victoria. 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 meeting, unless a different
percentage, not to exceed fifty percent (50%), is provided for in the articles
of incorporation. The Victoria Bylaws provide that special meetings of
shareholders may be called at any time by the holders of at least ten percent
(10%) of the outstanding stock entitled to be voted at such meeting, the
Victoria Board, the Senior Chairman of the Victoria Board, the Chairman of the
Victoria Board, any Vice Chairman of the Victoria Board or the President.
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
Victoria. 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 the shareholders
may take action without a meeting if a consent in writing to such action is
signed by the shareholders having the minimum number of votes that would be
necessary to take such action at a meeting. The Victoria Articles do not contain
such a provision. The Victoria Bylaws allow shareholders to act without a
meeting only if all shareholders entitled to vote at the meeting give their
written consent.
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
Victoria. The TBCA permits a corporation to set limits on the extent of a
director's liability. Under the Victoria Articles, to the fullest extent allowed
by law, a director will not be liable to Victoria or its shareholders for
monetary damages for any breach of fiduciary duty as a director, except (i) for
breach of a director's duty of loyalty to the corporation or its shareholders,
(ii) an act or omission not in good faith or which involves intentional
misconduct or a knowing violation of law, (iii) any transaction from which the
director received an improper benefit, whether or not the benefit resulted from
an action taken within the scope of the director's office, (iv) an act or
omission for which the liability of a director is expressly provided for by
statute, or (v) an act related to an unlawful stock repurchase or payment of a
dividend.
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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 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
Victoria. The Victoria Bylaws require and permit indemnification of
officers, directors and others to the fullest extent required or permitted by
the TBCA. The TBCA permits a corporation to indemnify any officer, director,
employee or agent if such person acted in good faith and in a manner as such
person reasonably believed to be in, or not opposed to, the best interests of
the corporation. Indemnification is not allowed under the TBCA, absent a court
order to the contrary, if an officer, director, employee or agent of the
corporation is finally adjudged liable to the corporation. The Victoria Bylaws
permit Victoria to purchase and maintain, at its own cost and expense, insurance
on behalf of such persons to the fullest extent permitted by law.
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.
DIVIDENDS
In addition to restrictions imposed under Texas and Delaware law,
respectively, Norwest and Victoria are subject to Federal Reserve Board policies
regarding payment of dividends, which generally limit dividends to operating
earnings. See "CERTAIN REGULATORY CONSIDERATIONS."
Victoria. A Texas corporation may make distributions only out of surplus.
Holders of Victoria Common Stock are entitled to receive dividends ratably when,
as and if declared by the Victoria Board from assets legally available
therefrom, after payment of all dividends on Victoria preferred stock, if any is
outstanding. Holders of Victoria preferred stock (none of which is presently
outstanding) are entitled to cumulative cash dividends, payable quarterly, when,
as and if declared by the Victoria Board.
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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
Victoria. The Victoria Bylaws provide detailed advance notice and
informational procedures which shareholders must follow in order to nominate a
candidate to serve as a director or to propose an item of business for
consideration at a meeting of Victoria shareholders. No shareholder nomination
or proposal shall be effective unless made in accordance with these detailed
procedures.
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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COMPARATIVE PER SHARE PRICES AND DIVIDENDS
Norwest Common Stock is listed on the NYSE and Victoria Common Stock is
traded on the Nasdaq National Market. The following table sets forth the high
and low sales prices per share of the Norwest Common Stock as reported on the
NYSE Composite Tape and Victoria Common Stock as reported on the Nasdaq National
Market, and the cash dividends paid on such Norwest Common Stock and Victoria
Common Stock, for the below quarterly periods, which correspond to the
companies' respective quarterly fiscal periods for financial reporting purposes.
<TABLE>
<CAPTION>
NORWEST VICTORIA
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 27.25 23.75 0.10
Second Quarter.................. 28.375 22.875 0.165 27.00 21.50 0.10
Third Quarter................... 28.000 25.625 0.165 29.00 21.75 0.10
Fourth Quarter.................. 29.000 22.500 0.165 29.00 26.25 0.10
1994
First Quarter................... 27.375 22.250 0.185 27.75 23.75 0.13
Second Quarter.................. 28.250 23.125 0.185 27.25 24.00 0.13
Third Quarter................... 27.500 24.750 0.185 29.00 25.25 0.13
Fourth Quarter.................. 25.000 21.000 0.210 27.00 21.75 0.13
1995
First Quarter................... 26.250 22.625 0.210 26.50 21.75 0.25
Second Quarter.................. 29.375 25.125 0.210 26.50 23.75 0.16
Third Quarter................... 32.750 26.875 0.240 29.75 25.75 0.16
Fourth Quarter.................. 34.750 29.250 0.240 37.00 28.75 0.16
1996
First Quarter (through
, 1996).......... 0.25
</TABLE>
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CERTAIN REGULATORY CONSIDERATIONS
GENERAL
As a bank holding company, Norwest is subject to supervision and
examination by the Federal Reserve Board. Norwest's banking and savings
association subsidiaries are subject to 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 (the "BIF");
deposits attributable to certain of Norwest's savings associations are insured
by the Savings Association Insurance Fund (the "SAIF"). For that reason, such
banking subsidiaries are subject to regulation by the FDIC. In addition to the
impact of regulation, commercial banks are affected significantly by the actions
of the Federal Reserve Board as it attempts to control the money supply and
credit availability in order to influence the economy.
DIVIDEND RESTRICTIONS
Various federal and state statutes and regulations limit the amount of
dividends the subsidiary banks can pay to Norwest without regulatory approval.
The approval of the Office of the Comptroller of the Currency (the "OCC") is
required for any dividend by a national bank if the total of all dividends
declared by the bank in any calendar year would exceed the total of its net
profits, as defined by regulation, for that year combined with its retained net
profits for the preceding two years less any required transfers to surplus or a
fund for the retirement of any preferred stock. In addition, a national bank may
not pay a dividend in an amount greater than its net profits then on hand after
deducting its losses and bad debts. For this purpose, bad debts are defined to
include, generally, loans which have matured and are in arrears with respect to
interest by six months or more, other than such loans that are well secured and
in the process of collection. Under these provisions Norwest's national bank
subsidiaries could have declared, as of December 31, 1995, aggregate dividends
of at least $274.1 million without obtaining prior regulatory approval and
without reducing the capital of the banks below minimum regulatory levels.
Norwest also has several state bank subsidiaries that are subject to state
regulations limiting dividends; however, the amount of dividends payable by
Norwest's state bank subsidiaries, with or without state regulatory approval,
would represent an immaterial contribution to Norwest's revenues.
If, in the opinion of the applicable regulatory authority, a bank under its
jurisdiction is engaged in or is about to engage in an unsafe or unsound
practice (which, depending on the financial condition of the bank, could include
the payment of dividends), such authority may require, after notice and hearing,
that such bank cease and desist from such practice. The Federal Reserve Board,
the OCC, and the FDIC have issued policy statements which provide that
FDIC-insured banks and bank holding companies should generally pay dividends
only out of current operating earnings.
HOLDING COMPANY STRUCTURE
Norwest is a legal entity separate and distinct from its banking and
nonbanking subsidiaries. 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
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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. sec.55) permits the OCC to order the pro rata
assessment of stockholders of a national bank whose capital stock has become
impaired, by losses or otherwise, to relieve a deficiency in such national
bank's capital stock. This statute also provides for the enforcement of any such
pro rata assessment of stockholders of such national bank to cover such
impairment of capital stock by sale, to the extent necessary, of the capital
stock of any assessed stockholder failing to pay the assessment. Similarly, the
laws of certain states provide for such assessment and sale with respect to
banks chartered by such states. Norwest, as the sole stockholder of most of its
subsidiary banks, is subject to such provisions.
CAPITAL REQUIREMENTS
Under the Federal Reserve Board's risk-based capital guidelines for bank
holding companies, the minimum ratio of total capital to risk-adjusted assets
(including certain off-balance sheet items, such as stand-by letters of credit)
is 8%. At least half of the total capital is to be comprised of common stock,
minority interests and noncumulative perpetual preferred stock ("Tier 1
capital"). The remainder ("Tier 2 capital") may consist of hybrid capital
instruments, perpetual debt, mandatory convertible debt securities, a limited
amount of subordinated debt, other preferred stock, and a limited amount of the
allowance for credit losses. In addition, the Federal Reserve Board's minimum
"leverage ratio" (the ratio of Tier 1 capital to quarterly average total assets)
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 December
31, 1995, Norwest's Tier 1 and total capital (the sum of Tier 1 and Tier 2
capital) to risk-adjusted assets ratios were 8.11% and 10.18%, respectively, and
Norwest's leverage ratio was 5.65%. Neither Norwest nor any subsidiary bank has
been advised by the appropriate federal regulatory agency of any specific
leverage ratio applicable to it.
As a result of a federal law enacted in 1991 that required each federal
banking agency to revise its risk-based capital standards to ensure that those
standards take adequate account of interest rate risk, concentration of credit
risk and the risks of nontraditional activities, each of the federal banking
agencies has revised the risk-based capital guidelines described above to take
account of concentration of credit risk and risk of nontraditional activities.
In addition, the Federal Reserve Board, the FDIC and the OCC recently adopted a
new rule that amends, effective September 1, 1995, the capital standards to
include explicitly a bank's exposure to declines in the economic value of its
capital due to changes in interest rates as a factor to be considered in
evaluating a bank's interest rate exposure. Such agencies have issued for
comment a joint policy statement that describes the process to be used to
measure and assess the exposure of a bank's net economic value to changes in
interest rates. These agencies have indicated that in the second step of this
regulation
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<PAGE> 53
process they intend to issue a proposed rule that would propose to establish an
explicit minimum capital charge for interest rate risk based on the level of a
bank's measured interest rate exposure. The agencies intend to implement the
second step after the agencies and the banking industry have had more experience
with the proposed supervisory and measurement process. None of Norwest, Victoria
or the Bank believes that these recent proposals and revisions to the capital
guidelines will materially impact its operations.
FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
In December 1991, Congress enacted the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), which substantially revised the
bank regulatory and funding provisions of the Federal Deposit Insurance Act and
makes revisions to several other federal banking statutes. Among other things,
FDICIA requires the federal banking regulators to take "prompt corrective
action" in respect of 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 its meets all of its minimum capital requirements as described
above. An insured depository institution will be considered undercapitalized if
it fails to meet any minimum required measure, significantly undercapitalized if
it has a risk-adjusted total capital ratio of less than 6%, risk-adjusted Tier 1
capital ratio of less than 3% or a leverage ratio of less than 3% and critically
undercapitalized if it fails to maintain a level of tangible equity equal to at
least 2% of total assets. An insured depository institution may be deemed to be
in a capitalization category that is lower than is indicated by its actual
capital position if it receives an unsatisfactory examination rating.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to a wide
range of limitations on operations and activities, including growth limitations,
and are required to submit a capital restoration plan. The federal banking
agencies may not accept a capital plan without determining, among other things,
that the plan is based on realistic assumptions and is likely to succeed in
restoring the depository institution's capital. In addition, for a capital
restoration plan to be acceptable, the depository institution's parent holding
company must guarantee that the institution will comply with such capital
restoration plan. The aggregate liability of the parent holding company is
limited to the lesser of (i) an amount equal to 5% of the depository
institution's total assets at the time it became undercapitalized and (ii) the
amount which is necessary (or would have been necessary) to bring the
institution into compliance with all capital standards applicable with respect
to such institution as of the time it fails to comply with the plan. If a
depository institution fails to submit an acceptable plan, it is treated as if
it were significantly undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks. Critically
undercapitalized institutions are subject to the appointment of a receiver or
conservator.
FDICIA, as amended by the Reigle Community Development and Regulatory
Improvement Act of 1994 enacted on August 22, 1994, directs that each federal
banking agency prescribe standards, by regulation or guideline, for depository
institutions relating to internal controls, information systems, internal audit
systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, compensation, asset quality, earnings, stock valuation, and such other
operational and managerial standards as the agency deems appropriate. The FDIC,
in consultation with the other federal banking agencies, has adopted a final
rule and guidelines with respect to internal and external audit procedures and
internal controls in order to implement those provisions of FDICIA intended to
facilitate the early identification of problems in financial management of
depository institutions. On July 10, 1995, the federal banking agencies
published the final rules implementing three of the safety and soundness
standards required by FDICIA, including operational and
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<PAGE> 54
managerial standards, asset quality and earnings standards, and compensation
standards. The impact of such standards on Norwest has not yet been fully
determined, but management does not believe it will be material.
FDICIA also contains a variety of other provisions that may affect the
operations of Norwest, including new reporting requirements, revised regulatory
standards for real estate lending, "truth in savings" provisions, and the
requirement that a depository institution give 90 days' notice to customers and
regulatory authorities before closing any branch.
Under other regulations promulgated under FDICIA a bank cannot accept
brokered deposits (that is, deposits obtained through a person engaged in the
business of placing deposits with insured depository institutions or with
interest rates significantly higher than prevailing market rates) unless (i) it
is well capitalized or (ii) it is adequately capitalized and receives a waiver
from the FDIC. A bank that cannot receive brokered deposits also cannot offer
"pass-through" insurance on certain employee benefit accounts, unless it
provides certain notices to affected depositors. In addition, a bank that is
adequately capitalized and that has not received a waiver from the FDIC may not
pay an interest rate on any deposits in excess of 75 basis points over certain
prevailing market rates. There are no such restrictions on a bank that is well
capitalized. At December 31, 1995, all of Norwest's banking subsidiaries were
well capitalized and therefore were not subject to these restrictions.
FDIC INSURANCE
Each BIF member institution pays FDIC insurance premiums based on the
institution's annual assessment rate assigned to it by the FDIC. The assessment
rate is based on the institution's capitalization risk category and "supervisory
subgroup." An institution's 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 4 cents per $100 of domestic deposits (for
well capitalized Subgroup A institutions) to 31 cents (for undercapitalized
Subgroup C institutions). Norwest's subsidiary banks have been assigned an
assessment rate of 4 cents per $100 of domestic deposits. The FDIC has approved
regulations that would substantially eliminate deposit insurance premiums for
Norwest's banking subsidiaries in 1996. In 1995, Norwest incurred $69.9 million
of FDIC assessment expenses (net of $20.6 million in insurance premium refunds)
as compared with $79.2 million in 1994.
Deposits insured by SAIF held by Norwest 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 proposed legislation in September 1995 that would, among
other things, recapitalize the SAIF by imposing a special one-time assessment on
SAIF deposits. The proposed legislation also contemplates the merger of the BIF
and the SAIF into one insurance fund after the SAIF is recapitalized. This
legislation is included in the current balanced budget legislation and as such,
its approval has yet been finalized. As a result of such pending legislation and
to provide for such special assessment when and if imposed, Norwest has
established a reserve of $23.5 million based on an estimated insurance premium
rate of 66 cents per $100 of insured deposits, which reserve has been funded
primarily by the refund of BIF insurance premiums. The effect of this
legislation, if adopted, is not anticipated to be material to Norwest.
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EXPERTS
The consolidated financial statements of Norwest and subsidiaries as of
December 31, 1994 and 1993, and for each of the years in the three-year period
ended December 31, 1994, incorporated by reference herein, have been
incorporated herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Victoria, incorporated by
reference in this Proxy Statement-Prospectus, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
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
December 31, 1995, Mr. Stroup was the beneficial owner of 107,753 shares and
held options to acquire 247,410 additional shares of Norwest Common Stock.
Certain legal matters in connection with the Merger will be passed upon for
Victoria by Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P., 3400 Texas Commerce
Tower, Houston, Texas 77002.
MANAGEMENT OF NORWEST AND ADDITIONAL INFORMATION
Certain information relating to the executive compensation, voting
securities and the principal holders thereof, certain relationships and related
transactions, and other related matters concerning Norwest is included or
incorporated by reference in its Annual Report on Form 10-K for the year ended
December 31, 1994, which is incorporated in this Proxy Statement-Prospectus by
reference. Certain information regarding voting securities of Victoria and the
principal holders thereof is incorporated by reference to Victoria's Annual
Report on Form 10-K, as amended pursuant to Form 10-K/A, for the year ended
December 31, 1994, which is incorporated in this Proxy Statement-Prospectus by
reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE." Shareholders
of Victoria desiring copies of such documents may contact Norwest or Victoria,
as appropriate, at the addresses or phone numbers indicated under "AVAILABLE
INFORMATION" above.
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APPENDIX A
AGREEMENT AND PLAN OF MERGER
<PAGE> 57
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
November 12, 1995 by and among Norwest Corporation, a Delaware corporation
("Norwest"), Norwest Sub Corporation, a Texas corporation to be formed after the
date hereof as a wholly-owned subsidiary of Norwest ("Newco"), and Victoria
Bankshares, Inc., a Texas corporation ("Victoria").
WHEREAS, Norwest desires to affiliate with Victoria, and Victoria desires
to affiliate with Norwest in the manner provided in this Agreement;
WHEREAS, Norwest and Victoria believe that the Merger (hereinafter defined)
of Newco with and into Victoria in the manner provided by, and subject to the
terms and conditions set forth in, this Agreement and all exhibits, schedules
and supplements hereto is desirable and in the best interests of their
respective institutions and shareholders;
WHEREAS, Norwest and Victoria intend that the Merger shall qualify for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and shall
be recorded for accounting purposes as a pooling of interests; and
WHEREAS, the respective Boards of Directors of Norwest and Victoria have
approved this Agreement and the proposed transactions substantially on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions hereof, and
in accordance with the Texas Business Corporation Act (the "TBCA"), Newco shall
be merged with and into Victoria (the "Merger") as soon as practicable following
the satisfaction or waiver, if permissible, of the conditions set forth in
Article VII hereof. Following the Merger, Victoria shall continue as the
surviving corporation (the "Surviving Corporation") and the separate corporate
existence of Newco shall cease.
1.2 Effective Time. The Merger shall be consummated by the filing with the
Texas Secretary of State of Articles of Merger, in the form required by and
executed in accordance with the relevant provisions of the TBCA, and by the
issuance of a Certificate of Merger by the Texas Secretary of State. The date of
such issuance and filing or such other time and date as may be specified in such
Articles and Certificate of Merger shall be the "Effective Time."
1.3 Certain Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the TBCA.
1.4 Articles of Incorporation and Bylaws. The Articles of Incorporation
and the Bylaws of Victoria, in each case as in effect at the Effective Time,
shall be the Articles of Incorporation and Bylaws of the Surviving Corporation.
1.5 Directors and Officers. The directors and officers of Newco at the
Effective Time shall be the directors and officers of the Surviving Corporation
and shall hold office from the Effective Time until their respective successors
are duly elected or appointed and qualified in the manner provided in the
Articles of Incorporation and Bylaws of the Surviving Corporation, or as
otherwise provided by law.
1.6 Conversion of Shares; Fractional Shares. (a) Each share of Victoria's
common stock, par value $1.00 per share ("Victoria Common Stock"), issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and represent the right to receive the consideration payable as set forth
below (the "Merger Consideration") to the holder of record thereof, without
interest thereon, upon surrender of the certificates representing such shares of
<PAGE> 58
Victoria Common Stock (collectively, the "Shares"). For the purposes of
determining the number of Shares issued and outstanding, the number of Shares
issued and outstanding shall be increased by the number and class of Shares that
may be acquired upon exercise of any option entitling the holder thereof to
acquire Shares which is in effect or outstanding prior to the Effective Time;
provided, however, that the number of Shares issued and outstanding shall in no
event exceed 8,516,843.
(b) The aggregate number of shares of Norwest Common Stock payable as
Merger Consideration shall be a number equal to the Shares times the Exchange
Ratio (hereinafter defined). Each holder of Victoria Common Stock shall receive
for each share of Victoria Common Stock held immediately prior to the Effective
Time a number of shares of Norwest's common stock, par value $1-2/3 per share
("Norwest Common Stock"), equal to the Exchange Ratio. The "Exchange Ratio"
shall equal 1.05; provided, however, that if, between the date hereof and the
Effective Time, 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, stock split, reverse stock split,
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 Exchange Ratio will be appropriately and proportionately
adjusted so that the number of shares of Norwest Common Stock into which a share
of Victoria Common Stock shall be converted will equal the number of shares of
Norwest Common Stock which holders of shares of Victoria Common Stock would have
received pursuant to such Common Stock Adjustment had the record date therefor
been immediately following the Effective Time. If, during such period, a
dividend, other than a dividend described in the previous sentence and other
than a regular quarterly cash dividend, shall be declared on Norwest Common
Stock with a record date within such period, or any other increase in the number
of outstanding shares of Norwest Common Stock effected for no consideration,
then the Exchange Ratio will be appropriately and proportionately adjusted to
the extent necessary to prevent dilution of the interests of the Victoria
shareholders.
(c) Norwest will not issue any certificates (or scrip certificates) for any
fractional shares of Norwest Common Stock otherwise issuable pursuant to the
Merger. In lieu of issuing such fractional shares, Norwest shall pay cash to any
holder of Shares otherwise entitled to receive such fractional share. Such cash
payment shall be based on the average closing price per share for Norwest Common
Stock as reported by the consolidated tape of the New York Stock Exchange over a
five trading day period ending on the trading day immediately preceding the date
of the meeting of shareholders required by Section 6.4 (the "Shareholder Meeting
Date").
1.7 Closing. Upon the terms and subject to the conditions hereof, as soon
as practicable after the vote of the shareholders of Victoria in favor of the
approval and adoption of this Agreement and the satisfaction or waiver, if
permissible, of the conditions set forth in Article VII, the parties hereto
shall execute and deliver the Articles of Merger as described in Section 1.2,
and the parties hereto shall take all such other and further actions as may be
required by law to make the Merger effective. Prior to the filing referred to in
this Section, a closing (the "Closing") will be held at a mutually agreeable
location in Minneapolis, Minnesota (or such other place as the parties may
agree) for the purpose of confirming all of the foregoing. The date of such
Closing is referred to herein as the "Closing Date."
1.8 Exchange of Shares. (a) Norwest shall enter into an exchange agent
agreement with Norwest Bank Minnesota, National Association (the "Exchange
Agent") in substantially the form attached hereto as Exhibit A (the "Exchange
Agent Agreement") at or immediately prior to the Effective Time.
(b) Promptly after the Effective Time, the Exchange Agent shall mail to
each record holder of an outstanding certificate or certificates which as of the
Effective Time represented Shares (the "Certificates"), a form letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and instructions for use in effecting the
surrender of the Certificates for payment therefor. Upon surrender to the
Exchange Agent of a Certificate, together with such letter of transmittal duly
executed, the holder of such Certificate shall be entitled to receive in
exchange therefor Norwest Common Stock and the cash in lieu of fractional
shares, if any, in the amounts provided in Section 1.6, and such Certificate
shall forthwith be canceled. Norwest shall provide the Exchange Agent with
certificates for Norwest Common Stock and an aggregate
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amount of cash sufficient for the payment of cash in lieu of fractional shares,
as requested by the Exchange Agent, in the amounts provided in Section 1.6. No
dividend will be disbursed with respect to the shares of Norwest Common Stock
until the holder's Shares are surrendered in exchange therefor. If payment or
delivery of Norwest Common Stock is to be made to a person other than the person
in whose name the Certificate surrendered is registered, it shall be a condition
of payment that the Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
payment shall pay any transfer or other taxes required by reason of the payment
and delivery of Norwest Common Stock to a person other than the registered
holder of the Certificate surrendered or establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable. Until
surrendered in accordance with the provisions of this Section, each Certificate
shall represent for all purposes the right to receive the Merger Consideration
without any interest thereon.
(c) Each share of Newco's common stock, par value $1.00 per share ("Newco
Common Stock"), shall be converted into one share of the Surviving Corporation's
common stock, par value $1.00 per share ("Surviving Corporation Common Stock").
Immediately after such conversion, no shares of Newco Common Stock shall be
outstanding and Norwest shall be the sole holder of Surviving Corporation Common
Stock.
(d) After the Effective Time, the stock transfer ledger of Victoria shall
be closed and there shall be no transfers on the stock transfer books of
Victoria of the Shares which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be promptly presented to the Exchange Agent and
exchanged as provided in this Article.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF VICTORIA
Victoria hereby makes the representations and warranties set forth in this
Article to Norwest and Newco.
2.1 Organization and Qualification. Victoria and each of its subsidiaries
(collectively, the "Victoria Subsidiaries") is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction in
which it is chartered or organized, or is a state bank, duly organized and in
good standing under the laws of the jurisdiction in which it is chartered or
organized, and Victoria is a bank holding company under the Bank Holding Company
Act of 1956, as amended (the "BHCA"), and in good standing under all laws, rules
and regulations applicable to bank holding companies. Each of Victoria and the
Victoria Subsidiaries has all requisite power and authority and all necessary
governmental authorizations to conduct its business as now conducted, to own,
lease and operate its properties and assets as now owned, leased or operated and
to enter into and carry out its obligations under this Agreement, except in the
case of governmental authorizations where the failure to have such
authorizations would not have a material adverse effect on the financial
condition, results of operations or business of Victoria and the Victoria
Subsidiaries taken as a whole. Victoria and each of the Victoria Subsidiaries is
duly qualified as a foreign corporation to do business, and is in good standing,
in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification necessary,
except in such jurisdictions where the failure to be duly qualified would not,
either individually or in the aggregate, have a material adverse effect on the
financial condition, results of operations or business of Victoria and the
Victoria Subsidiaries, taken as a whole. Victoria has heretofore delivered to
Norwest true and complete copies of the Articles of Incorporation and Bylaws of
Victoria and the Victoria Subsidiaries as in existence on the date hereof.
Schedule 2.1 sets forth each of the Victoria Subsidiaries, the respective form
of entity and the respective jurisdiction of incorporation or organization.
Except as set forth on Schedule 2.1, Victoria 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 except in each case in a fiduciary capacity in the course
of its trust operations, and is not, directly or indirectly, a partner in any
partnership or party to any joint venture.
2.2 Victoria Capitalization. As of the date hereof, the authorized capital
stock of Victoria consists solely of 35,000,000 shares of Victoria Common Stock
and 1,000,000 shares of preferred stock, par value $1.00 per share (the
"Victoria Preferred Stock"). As of September 30, 1995, there were issued and
outstanding
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8,274,640 shares of Victoria Common Stock and no shares of Victoria Preferred
Stock. No shares of either Victoria Common Stock or Victoria Preferred Stock
were held as treasury shares as of September 30, 1995. A total of 300,000 shares
of Victoria Common Stock has been reserved for issuance pursuant to the stock
option plans described in this Section. All issued shares of Victoria Common
Stock are validly issued, fully paid and nonassessable and no holder thereof is
entitled to preemptive rights. As of the date hereof, there are outstanding
options (the "Victoria Options") to purchase an aggregate of 242,203 shares of
Victoria Common Stock under Victoria's 1991 Stock Option Plan. The maximum
number of shares of Victoria Common Stock (assuming for this purpose that
phantom shares and other share-equivalents constitute Victoria Common Stock)
that would be outstanding as of the Effective Time if all options, warrants,
conversion rights and other rights with respect thereto were exercised is
8,516,843. Victoria is not a party to, and is not aware of, any voting
agreement, voting trust or similar agreement or arrangement relating to any
class or series of its capital stock or any agreement or arrangement providing
for registration rights with respect to any capital stock or other securities of
Victoria. All outstanding shares of capital stock of the Victoria Subsidiaries
are owned by Victoria or a wholly-owned subsidiary of Victoria, free and clear
of all liens, charges, encumbrances, adverse claims and options of any nature.
Other than as set forth in this Section, there are not now, and at the Effective
Time there will not be, any (i) shares of capital stock or other equity
securities of Victoria outstanding (other than Victoria Common Stock issued
pursuant to the exercise of Victoria Options as described herein) or (ii)
outstanding options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any class of capital stock of
Victoria, or contracts, understandings or arrangements to which Victoria is a
party, or by which it is or may be bound, to issue additional shares of its
capital stock or options, warrants, scrip or rights to subscribe for, or
securities or rights convertible into or exchangeable for, any additional shares
of its capital stock. Since September 30, 1995, no shares of Victoria capital
stock have been purchased, redeemed or otherwise acquired, directly or
indirectly, by Victoria or any Victoria Subsidiary and, except as permitted by
Section 4.1(b) no dividends or other distributions have been declared, set
aside, made or paid to the shareholders of Victoria.
2.3 Authority Relative to the Agreement. Victoria has full corporate power
and authority to execute and deliver this Agreement and, except for the approval
by Victoria's shareholders, no further corporate proceedings on the part of
Victoria are necessary, to consummate the transactions contemplated hereby,
which have been duly and validly authorized by its Board of Directors. This
Agreement has been duly executed and delivered by Victoria and is a duly
authorized, valid, legally binding and enforceable obligation of Victoria in
accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to creditors' rights
generally and general equitable principles, and subject to such shareholder
approvals and such approval of regulatory agencies and other governmental
authorities having authority over Victoria or any of the Victoria Subsidiaries
as may be required by statute or regulation. On or prior to the date hereof the
Board of Directors of Victoria has determined to recommend approval of the
Merger to the shareholders of Victoria and such determination is in effect as of
the date hereof.
2.4 No Approvals or Notices Required; No Conflict. Except as set forth on
Schedule 2.4, neither the execution and delivery of this Agreement nor the
performance by Victoria of its obligations hereunder, nor the consummation of
the transactions contemplated hereby by Victoria, will (a) conflict with the
Charter or Bylaws of Victoria or any of the Victoria Subsidiaries; (b) assuming
satisfaction of the requirements set forth in clause (c) below, violate any
provision of law applicable to Victoria or any of the Victoria Subsidiaries; (c)
except for (i) requirements of Federal and state securities law, (ii)
requirements of Federal and state banking law, (iii) requirements of notice
filings in such foreign jurisdictions as may be applicable, and (iv) the filing
of Articles of Merger in accordance with the TBCA, require any consent or
approval of, or filing with or notice to, any public body or authority, domestic
or foreign, under any provision of law applicable to Victoria or any of the
Victoria Subsidiaries; or (d) require any consent, approval or notice under, or
violate, breach, be in conflict with or constitute a default (or an event that,
with notice or lapse of time or both, would constitute a default) under, or
permit the termination of any provision of, or result in the creation or
imposition of any lien upon any properties, assets or business of Victoria or
any of the Victoria Subsidiaries under, any note, bond, indenture, mortgage,
deed of trust, lease, franchise, permit, authorization, license, contract,
instrument or other agreement or commitment or any order, judgment or decree to
which Victoria or any of the Victoria
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Subsidiaries is a party or by which Victoria or any of the Victoria Subsidiaries
or any of its or their assets or properties is bound or encumbered, except those
that have already been given, obtained or filed, and except in any of the cases
enumerated in clauses (b) through (d) above, those that, in the aggregate, would
not have a material adverse effect on the financial condition, results of
operations or business of Victoria and the Victoria Subsidiaries, taken as a
whole.
2.5 Regulatory Reports and Agreements. Since December 31, 1990, each of
Victoria and the Victoria Subsidiaries has filed all applications, reports,
registrations and statements, together with any amendments required to be made
thereto, that are required to be filed with the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System, the Office of
the Comptroller of the Currency or any state banking regulatory agency
(collectively, the "Banking Regulators") or any other regulatory authority
having jurisdiction over Victoria and the Victoria Subsidiaries. Neither
Victoria nor any of the Victoria Subsidiaries is a party to any written
agreement or memorandum of understanding with, or a party to any commitment
letter or similar undertaking to, or is subject to any order or directive by, or
is a recipient of any extraordinary supervisory letter from, or has adopted any
board resolutions at the request of, any Banking Regulator which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit policies or its management, nor has Victoria or any of the
Victoria Subsidiaries been advised by any Banking Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such agreement, memorandum of understanding,
commitment letter or similar undertaking, order, directive or extraordinary
supervisory letter, or any such board resolutions.
2.6 SEC Filings. Since December 31, 1990, each of Victoria and the
Victoria Subsidiaries have filed all reports, registration statements and other
filings, together with any amendments required to be made with respect thereto,
that they have been required to file with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1993, as amended (the "Securities Act"),
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
reports, registration statements and other filings (including all notes,
exhibits and schedules thereto and documents incorporated by reference therein)
filed by Victoria with the SEC since December 31, 1990 through the date of this
Agreement, together with any amendments thereto, are sometimes collectively
referred to as the "Victoria SEC Filings." Victoria has heretofore delivered to
Norwest copies of the Victoria SEC Filings.
2.7 Commitments and Contracts. Except as set forth in Schedule 2.7,
neither Victoria nor any Victoria Subsidiary is a party or subject to any of the
following (whether written or oral, express or implied):
(a) any employment contract or understanding (including any understandings
or obligations with respect to severance or termination pay liabilities or
fringe benefits) with any present or former officer, director, employee or
consultant (other than those which are terminable at will by Victoria or such
Victoria Subsidiary) obligating Victoria to the payment of $25,000 or more
individually; provided, however, that any such contracts or understandings not
listed on Schedule 2.7 will exceed $250,000 in the aggregate;
(b) in addition to the plans listed on Schedule 2.13(a), 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
obligating Victoria to the payment of $25,000 or more individually or $100,000
in the aggregate;
(c) any labor contract or agreement with any labor union;
(d) any contract containing covenants which limit the ability of Victoria
or any Victoria Subsidiary to compete in any line of business or which involve
any restriction of the geographical area in which Victoria or any Victoria
Subsidiary may carry on its business (other than as may be required by law or
applicable regulatory authorities);
(e) any other contract or agreement which is a "material contract" within
the meaning of Item 601(b)(10) of Regulation S-K;
(f) any lease with annual rental payments by Victoria or any Victoria
Subsidiary aggregating $75,000 or more;
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(g) any agreement or commitment with respect to the Community Reinvestment
Act with any state or federal bank regulatory authority or any other party; or
(h) any agreement, contract or understanding with any current or former
director, officer, employee, consultant, or financial adviser providing for any
rights of indemnification in favor of such person or entity constituting
material obligations on the part of Victoria.
2.8 Victoria Financial Statements. The consolidated statements of
financial condition of Victoria and the Victoria Subsidiaries as of December 31,
1994 and 1993 and related consolidated statements of income, stockholders'
equity and cash flows for the three years ended December 31, 1994, together with
the notes thereto, certified by Arthur Andersen LLP and the unaudited
consolidated balance sheets of Victoria and the Victoria Subsidiaries as of
September 30, 1995 and the related unaudited consolidated statements of income
and cash flows for the nine months ended September 30, 1995 included in the
Victoria SEC Filings (collectively, the "Victoria Financial Statements") have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except, in the case of any financial statements
covering less than a fiscal year, for normal recurring adjustments), and present
fairly the consolidated financial position of Victoria and the Victoria
Subsidiaries at the dates stated therein and the consolidated results of
operations, changes in financial position and cash flows of Victoria and the
Victoria Subsidiaries for the periods stated therein.
2.9 Proxy Statement and Other Filings. None of the information regarding
Victoria and the Victoria Subsidiaries set forth in (a) the Proxy Statement
(hereinafter defined), (b) the Registration Statement (hereinafter defined) and
(c) any other documents to be filed with the SEC, the Banking Regulators or any
other regulatory authority in connection with the transactions contemplated
hereby will, at the respective times such documents are filed with the SEC, the
Banking Regulators or any other regulatory authority and, in the case of the
Proxy Statement, when mailed and, in the case of the Registration Statement,
when it becomes effective, be false or misleading with respect to any material
fact, or omit to state any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading and, 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 Section 6.4, be false or misleading with
respect to any material fact, or omit to state any material fact required to be
stated therein or necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for such meeting.
All documents which Victoria and the Victoria Subsidiaries are responsible for
filing with the SEC, the Banking Regulators or any other regulatory authority in
connection with the Merger will comply as to form in all material respects with
the provisions of applicable law.
2.10 Absence of Certain Changes. Since December 31, 1994, except as
contemplated by this Agreement or disclosed in the Victoria SEC Filings filed
with the SEC since that date, Victoria and the Victoria Subsidiaries have
conducted their business only in the ordinary and usual course, and there has
not been any change in the financial condition, results of operations or
business of Victoria or any Victoria Subsidiary which has had, or may reasonably
be expected to have, a material adverse effect on the financial condition,
results of operation or business of Victoria and the Victoria Subsidiaries,
taken as a whole.
2.11 Litigation. Victoria has made available to Norwest copies of (i) all
attorney responses to the request of the independent auditors for Victoria with
respect to loss contingencies as of December 31, 1994 in connection with the
Victoria financial statements included in the Victoria SEC Filings, and (ii) a
written list of pending material legal and regulatory proceedings filed against
Victoria or any Victoria Subsidiary since said date and before the date of this
Agreement. There are no claims, actions, suits, investigations or proceedings
pending or, to the knowledge of Victoria, threatened against or affecting
Victoria or any of the Victoria Subsidiaries or any of their respective
properties at law or in equity, or any of their respective employee benefit
plans or fiduciaries of such plans, or before or by any federal, state,
municipal or other governmental agency or authority, or before any arbitration
board or panel, wherever located, that individually or in the aggregate if
adversely determined would have, or may reasonably be expected to have, a
material adverse effect on the financial condition, results of operations or
business of Victoria and the Victoria Subsidiaries, taken as a whole.
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2.12 Tax Matters. Each of Victoria and the Victoria Subsidiaries has filed
all federal and state, and all material 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
Victoria and the Victoria Subsidiaries for the fiscal year ended December 31,
1991, 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 2.11, (i) neither Victoria nor any
Victoria Subsidiary is a party to any pending action or proceeding, nor is any
such action or proceeding threatened to the knowledge of Victoria by any
governmental authority, for the assessment or collection of taxes, interest,
penalties,assessments or deficiencies and (ii) except as previously disclosed to
Norwest, 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 Victoria or any Victoria Subsidiary which has not been
settled, resolved and fully satisfied. Each of Victoria and the Victoria
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 September 30, 1995 referred to in Section 2.8, includes
adequate provision for all accrued but unpaid federal, state, county, local and
foreign taxes, interest, penalties, assessments or deficiencies of Victoria and
the Victoria Subsidiaries with respect to all periods through the date thereof.
2.13 Employee Benefit Plan Matters. (a) 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 Victoria or any Victoria 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
Victoria or any Victoria Subsidiary are those set forth on Schedule 2.13(a) (the
"Plans"). No Plan is a "multi-employer plan" within the meaning of Section 3(37)
of ERISA.
(b) 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 2.13(b), Victoria or the Victoria 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. To the knowledge
of Victoria, each Plan which is subject to the qualification provisions of
Section 401(a) of the Code is "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.
(c) Except as set forth on Schedule 2.13 (c), 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.
(d) Except as disclosed in Schedule 2.13(d), and to the knowledge of
Victoria, 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 for which an
exemption under Section 408 of ERISA or Section 4975 of the Code is
inapplicable, or violated any of the fiduciary standards under Part 4 of Title I
of ERISA which could subject, to the knowledge of Victoria, 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 Victoria and the
Victoria Subsidiaries, taken as a whole.
(e) 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.
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(f) 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), during the last five Victoria Plan years which would result in a
material liability to Victoria and the Victoria Subsidiaries taken as a whole.
(g) Except as disclosed in Schedule 2.13(g), neither the execution and
delivery of this 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 Victoria or any
Victoria 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.
(h) Neither Victoria nor any Victoria Subsidiary has any obligation to
provide welfare benefits to any of its former employees, except to the extent
required by Section 4980B of the Code and Sections 601 through 608 of ERISA
(collectively, "COBRA").
2.14 Environmental Liability. There is no legal, administrative, or other
proceeding, claim, or action of any nature seeking the imposition, or that could
reasonably be expected to result in the imposition, on Victoria or any of the
Victoria Subsidiaries of any liability arising from the release of hazardous
substances under any local, state or federal environmental statute, regulation
or ordinance, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, pending or, to the
knowledge of Victoria, threatened against Victoria or any of the Victoria
Subsidiaries, the result of which has had or could reasonably be expected to
have a material adverse effect on the financial condition, results of operations
or business of Victoria and the Victoria Subsidiaries, taken as a whole; to the
knowledge of Victoria, there is no reasonable basis for any such proceeding,
claim or action; and, to the knowledge of Victoria, neither Victoria nor any of
the Victoria Subsidiaries is subject to any order, judgment, or decree by or
with any court or governmental authority imposing any such environmental
liability.
2.15 Properties and Leases. Except as may be reflected in the Victoria
Financial Statements and except for any lien for current taxes not yet
delinquent, Victoria or one of the Victoria Subsidiaries 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 Victoria's most
recent consolidated balance sheet included in the Victoria SEC Filings and all
real and personal property acquired since the date of such consolidated balance
sheet, 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 Victoria or any of the Victoria Subsidiaries pursuant to which
Victoria or any of the Victoria Subsidiaries, as lessee, leases real or personal
property, are valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any material existing default by
Victoria or any of the Victoria Subsidiaries or any event which, with notice or
lapse of time or both, would constitute such a material default. To the
knowledge of Victoria, substantially all Victoria's and each Victoria
Subsidiary's buildings and equipment in regular use have been well maintained
and are in good and serviceable condition, reasonable wear and tear excepted.
2.16 Certain Fees. Except as set forth in Schedule 2.16, neither Victoria
nor any of its officers, directors or employees, on behalf of Victoria or any of
the Victoria Subsidiaries or its or their respective Boards of Directors (or any
committee thereof), has employed any financial advisor, broker or finder or
incurred any liability for any financial advisory, brokerage or finders' fees or
commissions in connection with the transactions contemplated hereby.
2.17 Compliance with Law. Victoria and each of the Victoria Subsidiaries
is in compliance with all applicable laws, judgments, orders, rules and
regulations, domestic and foreign, except where failure to be in such compliance
would not have a material adverse effect on the financial condition, results of
operations or business of Victoria and the Victoria Subsidiaries, taken as a
whole.
2.18 No Defaults. Neither Victoria nor any of the Victoria Subsidiaries 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, in any material respect,
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
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had or could reasonably be expected to have a material adverse effect on the
financial condition, results of operations or business of Victoria and the
Victoria Subsidiaries, taken as a whole. To Victoria's knowledge, all parties
with whom Victoria or any Victoria Subsidiary has material leases, agreements or
contracts or who owe to Victoria or any Victoria Subsidiary material obligations
other than with respect to those arising in the ordinary course of the banking
business of the Victoria Subsidiaries are in compliance therewith in all
material respects.
2.19 Insurance. Victoria and each of the Victoria Subsidiaries is
presently insured or self insured, and during each of the past five calendar
years 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.
2.20 This section intentionally left blank.
2.21 Section 368 Representations. To the knowledge of Victoria:
(a) There is no plan or intention by any Victoria shareholder who owns 5%
or more of the total number of shares of Victoria Common Stock (a "5%
Shareholder"), and there is no plan or intention by any of the remaining
Victoria shareholders to sell or otherwise dispose of a number of shares of
Norwest Common Stock received pursuant to the Merger that would (i) reduce the
Victoria shareholders' holdings of Norwest Common Stock to a number of shares
having a total fair market value at the Effective Time of less than 50% of the
total fair market value of all of Victoria's capital stock outstanding
immediately prior to the Effective Time or (ii) reduce the 5% Shareholders'
holdings of Norwest Common Stock to a number of shares having a total fair
market value at the Effective Time of less than 50% of the total fair market
value of all Victoria's capital stock held by the 5% Shareholders immediately
prior to the Effective Time. For purposes of this Section, shares of Victoria's
capital stock sold, redeemed or otherwise disposed of prior or subsequent to and
as a part of the overall transaction contemplated by the Merger will be
considered to be capital stock of Victoria outstanding immediately prior to the
Merger;
(b) Norwest will not assume any debts or obligations of the holders of the
Shares as part of the Merger;
(c) There have not been any sales or redemptions of Victoria's capital
stock in contemplation of the Merger;
(d) The liabilities of Victoria assumed by Norwest as a part of the Merger
and the liabilities to which the transferred assets of Victoria are subject were
incurred by Victoria in the ordinary course of its business;
(e) Victoria and its shareholders will pay their own expenses which are
incurred in connection with the Merger;
(f) Victoria has not disposed of any assets (either as a dividend or
otherwise) constituting more than 10% of the fair market value of all of its
assets (ignoring any liabilities) at any time either during the past twelve
months or in contemplation of the Merger;
(g) Victoria is not an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code; and
(h) Victoria is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
2.22 Administration of Trust Accounts. Victoria and each Victoria
Subsidiary has properly administered in all respects material and which could
reasonably be expected to be material to the financial condition of Victoria and
the Victoria 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
Victoria, any Victoria Subsidiary, nor any director, officer or employee of
Victoria or any Victoria Subsidiary has committed breaches of trust with respect
to such fiduciary accounts which are material to or could reasonably be expected
to be material to the
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business, financial condition or results of operations of Victoria and the
Victoria 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.
2.23 Material Interests of Certain Persons. Except as set forth on
Schedule 2.23, to the knowledge of Victoria no officer or director of Victoria
or any Victoria Subsidiary, or any "associate" (as such term is defined in Rule
14a-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 Victoria or any Victoria Subsidiary.
Schedule 2.23 sets forth as of September 30, 1995 a correct and complete
list of (i) any loan from Victoria to any present officer, director, employee or
any associate of Victoria or any Victoria Subsidiary, or related interest of any
such person, and (ii) any loan from any Victoria Subsidiary to any such person
which was required under Regulation O of the Federal Reserve Board to be
approved by or reported to Victoria's or such Victoria Subsidiary's Board of
Directors.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NORWEST
Norwest hereby makes the representations and warranties set forth in this
Article to Victoria.
3.1 Organization and Qualification. Norwest and each of its Significant
Subsidiaries (as defined in Regulation S-X promulgated by the SEC) (individually
a "Norwest Subsidiary" and collectively, the "Norwest Subsidiaries") is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction in which it is chartered or organized, or is a national
bank, duly organized and in good standing under the laws of the jurisdiction in
which it is chartered or organized, and Norwest is a bank holding company under
the BHCA and in good standing under all laws, rules and regulations applicable
to bank holding companies. Norwest and each of the Norwest Subsidiaries has all
requisite power and authority and all necessary governmental authorizations to
conduct its business as now conducted, to own, lease and operate its properties
and assets as now owned, leased or operated and to enter into and carry out its
obligations under this Agreement, except where the failure to have such
governmental authority would not have a material adverse effect on the financial
condition, results of operations or business of Norwest and its subsidiaries
taken as a whole. Norwest and each of the Norwest Subsidiaries is duly qualified
as a foreign corporation to do business, and is in good standing, in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except in
such jurisdictions where the failure to be duly qualified does not and would
not, either individually or in the aggregate, have a material adverse effect on
the financial condition, results of operations or business of Norwest and its
subsidiaries taken as a whole. Norwest has heretofore delivered to Victoria true
and complete copies of Norwest's Certificate of Incorporation and Bylaws as in
existence on the date hereof. Schedule 3.1 sets forth each of the Norwest
Subsidiaries, the respective form of entity and the respective jurisdiction of
incorporation or organization.
3.2 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 September 30, 1995, 1,127,125 shares of 10.24%
Cumulative Preferred Stock at $100 stated value, 980,000 shares of Cumulative
Tracking Preferred Stock, 13,311 shares of ESOP Cumulative Convertible Preferred
Stock, at $1,000 stated value, and 33,732 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 September 30, 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 September 30, 1995, 339,434,003 shares were outstanding and
3,265,458 shares were held in the treasury. All of the outstanding shares of
capital stock of Norwest have been duly and validly authorized and issued and
are fully paid and nonassessable. The shares of Norwest Common Stock to be
issued by Norwest to the shareholders of Victoria pursuant to this Agreement
will, on such issuance and delivery to said shareholders pursuant to this
Agreement, be duly authorized, validly issued, fully
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paid and nonassessable. The shares of Norwest Common Stock to be delivered to
the shareholders of Victoria pursuant to this Agreement are and will be free of
any preemptive rights of the shareholders of Norwest.
3.3 Authority Relative to the Agreement. Norwest has full corporate power
and authority to execute and deliver this Agreement and no further corporate
proceedings on the part of Norwest are necessary to consummate the transactions
contemplated hereby, which have been duly and validly authorized by its Board of
Directors. This Agreement has been duly executed and delivered by Norwest and is
a duly authorized, valid, legally binding and enforceable obligation of Norwest
in accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to creditors' rights
generally and general equitable principles, and subject to such approval of
regulatory agencies and other governmental authorities having authority over
Norwest or any of the Norwest Subsidiaries as may be required by statute or
regulation.
3.4 No Approvals or Notices Required; No Conflict. Except as set forth on
Schedule 3.4, neither the execution and delivery of this Agreement nor the
performance by Norwest of its obligations hereunder, nor the consummation of the
transactions contemplated hereby by Norwest, will (a) conflict with the Charter
or Bylaws of Norwest or any of the Norwest Subsidiaries; (b) assuming
satisfaction of the requirements set forth in clause (c) below, violate any
provision of law applicable to Norwest or any of the Norwest Subsidiaries; (c)
except for (i) requirements of Federal and state securities law, (ii)
requirements of Federal and state banking law, (iii) requirements of notice
filings in such foreign jurisdictions as may be applicable, and (iv) the filing
of Articles of Merger in accordance with the TBCA, require any consent or
approval of, or filing with or notice to, any public body or authority, domestic
or foreign, under any provision of law applicable to Norwest or any of the
Norwest Subsidiaries; or (d) require any consent, approval or notice under, or
violate, breach, be in conflict with or constitute a default (or an event that,
with notice or lapse of time or both, would constitute a default) under, or
permit the termination of any provision of, or result in the creation or
imposition of any lien upon any properties, assets or business of Norwest or any
of the Norwest Subsidiaries under, any note, bond, indenture, mortgage, deed of
trust, lease, franchise, permit, authorization, license, contract, instrument or
other agreement or commitment or any order, judgment or decree to which Norwest
or any of the Norwest Subsidiaries is a party or by which Norwest or any of the
Norwest Subsidiaries or any of its or their assets or properties is bound or
encumbered, except those that have already been given, obtained or filed, and
except in any of the cases enumerated in clauses (b) through (d) above, those
that, in the aggregate, would not have a material adverse effect on the
financial condition, results of operations or business of Norwest and the
Norwest Subsidiaries, taken as a whole.
3.5 Regulatory Reports and Agreements. Since December 31, 1990, each of
Norwest and the Norwest Subsidiaries has filed all applications, reports,
registrations and statements, together with any amendments required to be made
thereto, that are required to be filed with the Banking Regulators or any other
regulatory authority having jurisdiction over Norwest and the Norwest
Subsidiaries. Neither Norwest nor any of the Norwest Subsidiaries is a party to
any written agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from, or
has adopted any board resolutions at the request of, any Banking Regulator which
restricts materially the conduct of its business, or in any manner relates to
its capital adequacy, its credit policies or its management, nor has Norwest or
any of the Norwest Subsidiaries been advised by any Banking Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such agreement, memorandum of understanding,
commitment letter or similar undertaking, order, directive or extraordinary
supervisory letter, or any such board resolutions.
3.6 SEC Filings. Since December 31, 1990, each of Norwest and the Norwest
Subsidiaries have filed all reports, registration statements and other filings,
together with any amendments required to be made with respect thereto, that they
have been required to file with the SEC under the Securities Act and the
Exchange Act. All reports, registration statements and other filings (including
all notes, exhibits and schedules thereto and documents incorporated by
reference therein) filed by Norwest with the SEC since December 31, 1990 through
the date of this Agreement, together with any amendments thereto, are sometimes
collectively referred to as the "Norwest SEC Filings." Norwest has heretofore
delivered to Victoria copies of Norwest's
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Form 10-K for the year ended December 31, 1994 and all of Norwest's Forms 10-Q
filed with the SEC since December 31, 1994, through the date of this Agreement.
3.7 Material Contracts. Except as set forth in Schedule 3.7, neither
Norwest nor any Norwest Subsidiary is a party or subject to any of the following
(whether written or oral, express or implied):
(a) any labor contract or agreement with any labor union;
(b) 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);
(c) any other contract or agreement which is a "material contract" within
the meaning of Item 601(b)(10) of Regulation S-K.
As of the date hereof, none of the Norwest subsidiary banks located in the State
of Texas has an unsatisfactory rating with respect to the Community Reinvestment
Act.
3.8 Norwest Financial Statements. The consolidated statements of financial
condition of Norwest and the Norwest Subsidiaries as of December 31, 1994 and
1993 and related consolidated statements of income, stockholders' equity and
cash flows for the three years ended December 31, 1994, together with the notes
thereto, certified by KPMG Peat Marwick LLP and the unaudited consolidated
balance sheets of Norwest and the Norwest Subsidiaries as of September 30, 1995
and the related unaudited consolidated statements of income and cash flows for
the nine months ended September 30, 1995 included in the Norwest SEC Filings
(collectively, the "Norwest Financial Statements") have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis (except, in the case of any financial statements covering less than a
fiscal year, for normal recurring adjustments), and present fairly the
consolidated financial position of Norwest and the Norwest Subsidiaries at the
dates stated therein and the consolidated results of operations, changes in
financial position and cash flows of Norwest and the Norwest Subsidiaries for
the periods stated therein.
3.9 Registration Statement and Other Filings. None of the information
regarding Norwest and the Norwest Subsidiaries supplied or to be supplied by
Norwest for inclusion in (a) the Registration Statement, (b) the Proxy
Statement, and (c) any other documents to be filed with the SEC, the Banking
Regulators or any other regulatory authority in connection with the transactions
contemplated hereby will, at the respective times such documents are filed with
the SEC, the Banking Regulators or any other regulatory authority and, in the
case of the Registration Statement, when it becomes effective and, in the case
of the Proxy Statement, when mailed, be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading and, 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 Section 6.4, be false or misleading with
respect to any material fact, or omit to state any material fact required to be
stated therein or 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, the Banking Regulators or any other regulatory authority in
connection with the Merger will comply as to form in all material respects with
the provisions of applicable law.
3.10 Absence of Certain Changes. Since December 31, 1994, except as
contemplated by this Agreement or disclosed in the Norwest SEC Filings filed
with the SEC since that date, Norwest and the Norwest Subsidiaries have
conducted their business only in the ordinary and usual course, and there has
not been any change in the financial condition, results of operations or
business 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 the Norwest Subsidiaries,
taken as a whole.
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3.11 Litigation. There are no claims, actions, suits, investigations or
proceedings pending or, to the knowledge of Norwest, threatened against or
affecting Norwest or any of the Norwest Subsidiaries or any of their respective
properties at law or in equity, or any of their respective employee benefit
plans or fiduciaries of such plans, or before or by any federal, state,
municipal or other governmental agency or authority, or before any arbitration
board or panel, wherever located, that individually or in the aggregate if
adversely determined would have, or may reasonably be expected to have, a
material adverse effect on the financial condition, results of operations or
business of Norwest and the Norwest Subsidiaries, taken as a whole.
3.12 Tax Matters. Each of Norwest and the Norwest Subsidiaries has filed
all material federal, state, county, local and foreign tax returns, including
information returns, required to be filed by it, and paid or made adequate
provision for the payment of all taxes owed by it, including those with respect
to income, withholding, social security, unemployment, workers compensation,
franchise, ad valorem, premium, excise and sales taxes, and no taxes shown on
such returns to be owed by it or assessments received by it are delinquent. The
federal income tax returns of Norwest and the Norwest Subsidiaries for the
fiscal year ended December 31, 1979, and for all fiscal years prior thereto, are
for the purposes of routine audit by the Internal Revenue Service closed because
of the statute of limitations, and no claims for additional taxes for such
fiscal years are pending. Except only as set forth on Schedule 3.12, (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.
3.13 Employee Benefit Plan Matters. (a) As of September 30, 1995, the only
"employee benefit plans" within the meaning of Section 3(3) of ERISA for which
Norwest or any Norwest Subsidiary acts as plan sponsor as defined in ERISA
Section 3(16)(B) with respect to which any liability under ERISA or otherwise
exists or may be incurred by Norwest or any Norwest Subsidiary are those set
forth on Schedule 3.13(a) (the "Norwest Plans"). No Norwest Plan is a
"multi-employer plan" within the meaning of Section 3(37) of ERISA.
(b) 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 3.13(b), 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.
(c) 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.
(d) Except as set forth on Schedule 3.13(d), 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.
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(e) Except as set forth on Schedule 3.13(e), 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.
(f) 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.
(g) Neither the execution and delivery of this 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.
3.14 Environmental Liability. There is no legal, administrative, or other
proceeding, claim, or action of any nature seeking the imposition, or that could
reasonably be expected to result in the imposition, on Norwest or any of the
Norwest Subsidiaries of any liability arising from the release of hazardous
substances under any local, state or federal environmental statute, regulation
or ordinance, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, pending or, to the
knowledge of Norwest, threatened against Norwest or any of the Norwest
Subsidiaries, the result of which has had or could reasonably be expected to
have a material adverse effect on the financial condition, results of operations
or business of Norwest and the Norwest Subsidiaries, taken as a whole; to the
knowledge of Norwest, there is no reasonable basis for any such proceeding,
claim or action; and, to the knowledge of Norwest, neither Norwest nor any of
the Norwest Subsidiaries is subject to any order, judgment, or decree by or with
any court or governmental authority imposing any such environmental liability.
3.15 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 or one of the Norwest Subsidiaries 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 most
recent consolidated balance sheet included in the Norwest SEC Filings and all
real and personal property acquired since the date of such consolidated balance
sheet, except such real and personal property as has been disposed of in the
ordinary course of business. All leases of real property and all other leases
material to Norwest or any of the Norwest Subsidiaries pursuant to which Norwest
or any of the Norwest Subsidiaries, as lessee, leases real or personal property,
are valid and effective in accordance with their respective terms, and there is
not, under any such leases, any material existing default by Norwest or any of
the Norwest Subsidiaries 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.
3.16 Certain Fees. Neither Norwest nor any of its officers, directors or
employees, on behalf of Norwest or any of the Norwest Subsidiaries or its or
their respective Boards of Directors (or any committee thereof), has employed
any financial advisor, broker or finder or incurred any liability for any
financial advisory, brokerage or finders' fees or commissions in connection with
the transactions contemplated hereby.
3.17 Compliance with Law. Norwest and each of the Norwest Subsidiaries is
in compliance with all applicable laws, judgments, orders, rules and
regulations, domestic and foreign, except where failure to be in such compliance
would not have a material adverse effect on the financial condition, results of
operations or business of Norwest and the Norwest Subsidiaries, taken as a
whole.
3.18 No Defaults. Neither Norwest nor any of the Norwest Subsidiaries 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, in any material respect,
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
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had or could reasonably be expected to have a material adverse effect on the
financial condition, results of operations or business of Norwest and the
Norwest Subsidiaries, taken as a whole. To 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.
3.19 Insurance. Norwest and each of the Norwest Subsidiaries is presently
insured or self insured, and during each of the past five calendar years 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.
ARTICLE IV
COVENANTS OF VICTORIA
4.1 Conduct of Business. Victoria covenants and agrees that, from the date
of this Agreement until the Effective Time, unless Norwest shall otherwise agree
in writing or as otherwise expressly contemplated by this Agreement:
(a) The business of Victoria and the Victoria Subsidiaries shall be
conducted only in, and Victoria and the Victoria Subsidiaries shall not take any
action except in, the ordinary course of business and consistent with past
practice. Victoria and each Victoria Subsidiary will: (i) maintain its corporate
existence in good standing except as set in Schedule 4.1(a); (ii) 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 first 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, (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, or (C) engage in any loan transaction or
series of contemporaneous loan transactions involving an aggregate of more than
$250,000 with any borrower who has an extension of credit on Victoria's watch
list on or after the date hereof; (iii) maintain in all material respects
business and accounting records in accordance with the accounting principles and
practices used for the Victoria Financial Statements, except for changes in such
principles and practices required under generally accepted accounting
principles;(iv) use commercially reasonable efforts to maintain its properties
in good repair and condition, ordinary wear and tear excepted; (v) use
commercially reasonable efforts to maintain in all material respects presently
existing insurance coverage; (vi) use all commercially reasonable efforts to
preserve its business organization intact, to keep the services of its present
principal employees and to preserve its goodwill and the goodwill of its
suppliers, customers and others having business relationships with it; (vii) use
its commercially reasonable efforts to obtain any approvals or consents required
to maintain existing real property leases, material contracts and other
contracts reasonably identified by Norwest in effect following the Merger;
(viii) comply in all material respects with all laws, regulations, ordinances,
codes, orders, licenses and permits applicable to the properties and operations
of Victoria and each Victoria Subsidiary the non-compliance with which
reasonably could be expected to have a material adverse effect on Victoria and
the Victoria Subsidiaries, taken as a whole; (ix) permit Norwest and its
representatives (including KPMG Peat Marwick LLP) to examine its and its
subsidiaries books, records and properties and to interview officers, employees
and agents at all reasonable times and in a reasonable manner 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 Victoria herein
expressed.
(b) Victoria shall not directly or indirectly do any of the following: (i)
issue, sell, pledge, dispose of or encumber, or permit any Victoria Subsidiary
to issue, sell, pledge, dispose of or encumber, (A) any capital
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stock of Victoria or any Victoria Subsidiary except upon the exercise of
Victoria Options outstanding as of the date of this Agreement or (B) other than
in the ordinary course of business and consistent with past practice and not
relating to the borrowing of money or any assets of Victoria or any Victoria
Subsidiary; (ii) amend or propose to amend the respective Charters or Bylaws of
Victoria or any Victoria Subsidiary, (iii) split, combine or reclassify any
outstanding capital stock, or declare, set aside or pay any dividend payable in
stock or any extraordinary dividend payable in cash or other property with
respect to its capital stock whether now or hereafter outstanding, provided,
however, that between the date hereof and the Effective Time, Victoria may (A)
pay the regular cash dividend on Victoria Common Stock in the amount of $0.16
per share in the fourth quarter of 1995, (B) declare and pay regular cash
dividends on Victoria Common Stock in amounts not to exceed $0.16 per share in
each of the first two quarters of 1996, provided, however, that the shareholders
of Victoria shall be entitled to either a dividend on Victoria Common Stock or
Norwest Common Stock, but not both, in the calendar quarter in which the Closing
shall occur, (C) declare and pay a special cash dividend on Victoria Common
Stock in an amount not to exceed $0.09 per share in the first quarter of 1996,
and (D) if the Effective Time is after the record date for the regular cash
dividend paid on Norwest Common Stock in the third quarter of 1996, Victoria may
declare and pay cash dividends on Victoria Common Stock in an aggregate amount
equal to the amount, if any, the holders of Victoria Common Stock would have
received as holders of Norwest Common Stock had the Effective Time been on or
before such record date, provided, however, that the shareholders of Victoria
shall be entitled to either a dividend on Victoria Common Stock or Norwest
Common Stock, but not both, in the calendar quarter in which the Closing shall
occur; (iv) redeem, purchase or acquire or offer to acquire, or permit any of
the Victoria Subsidiaries to redeem, purchase or acquire or offer to acquire,
any of its or their capital stock; (v) authorize or incur any long-term debt
(other than deposit liabilities); (vi) mortgage, pledge or subject to any
material lien or other material encumbrance any of its properties, except in the
ordinary course of business; (vii) enter into any agreement, contract or
commitment requiring payments by Victoria or any Victoria Subsidiary in excess
of $100,000 except banking transactions in the ordinary course of business and
in accordance with policies and procedures in effect on the date hereof; (viii)
make any investments except investments in the ordinary course of business; (ix)
enter into any arrangements relating to derivative securities; (x) amend or
terminate any Plan except as required by law and except that (A) Victoria
reserves the right to amend and/or terminate the Supplemental Executive
Retirement Plan (the "SERP"), in whole or in part, at any time, and to make
distributions therefrom in accordance with its terms provided, however, that no
such amendment shall have the effect of increasing the benefits otherwise
provided under the SERP as of the date hereof; (B) to the extent the SERP is
amended or terminated, any amounts that, but for such amendment, would have been
deferred into the SERP on account of statutory limitations affecting the
Victoria 401(k) Profit Sharing Plan, shall instead be paid directly to affected
participants, and (C) Victoria reserves the right to amend the Victoria 401(k)
Profit Sharing Plan to provide that any contributions that are limited by
statute which would otherwise have been contributed to the SERP (but cannot be
contributed due to the termination of the SERP) shall be paid directly to
affected participants; (xi) make any contributions to any Plan except as
required by the terms of such Plan in effect as of the date hereof; (xii)
increase the compensation of any officers, directors or executive employees,
except to an extent consistent with Victoria's past compensation plans and
practices; (xiii) sell or otherwise dispose of any shares of the capital stock
of any Victoria Subsidiary; (xiv) sell or otherwise dispose of any of its assets
or properties other than in the ordinary course of business; or (xv) except in
the ordinary course of business and consistent with past practice and prudent
banking practices, enter into any contract, agreement, commitment or arrangement
with respect to any of the matters set forth in this Section 4.1(b);
(c) Neither Victoria nor any of the Victoria Subsidiaries shall take, and
Victoria will use its reasonable efforts to prevent any affiliate of Victoria
from taking, any action that would cause the Merger not to be treated as a
"pooling of interests" for accounting purposes; and
(d) Victoria shall, and shall cause the Victoria Subsidiaries to, perform
their respective obligations under any contracts and agreements to which any of
them is a party or to which any of their assets is subject, except to the extent
such failure to perform would not have a material adverse effect on Victoria and
the Victoria Subsidiaries, taken as a whole, and except for such obligations as
Victoria or the Victoria Subsidiaries in good faith may dispute.
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4.2 Exchange Act Filings. From the date hereof to the Closing Date,
Victoria shall deliver to Norwest, when reasonably available, Victoria's
Quarterly Reports on Form 10-Q and Victoria's Annual Reports on Form 10-K, as
filed with the SEC, and any other filings made by Victoria with the SEC under
the Exchange Act.
4.3 No Shopping. Victoria, each Victoria Subsidiary and their respective
directors, officers, representatives or agents will not directly or indirectly,
solicit, authorize the solicitation of or except to the extent that the Board of
Directors of Victoria 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 discussions with any corporation, partnership, person or
other entity or group (other than Norwest) concerning any offer or possible
offer (i) to purchase any shares of common stock, any option or warrant to
purchase any shares of common stock, any securities convertible into any shares
of such common stock, or any other equity security of Victoria or any Victoria
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 Victoria or any Victoria Subsidiary except in the ordinary
course of business, or (iv) to merge, consolidate or otherwise combine with
Victoria or any Victoria Subsidiary. If any corporation, partnership, person or
other entity or group makes an offer or inquiry to Victoria or any Victoria
Subsidiary concerning any of the foregoing, Victoria or such Victoria Subsidiary
will promptly disclose such offer or inquiry, including the terms thereof, to
Norwest.
4.4 Affiliates' Agreements. Victoria shall enter into, and shall use its
best efforts to cause each shareholder who, in the opinion of counsel for
Victoria, is an "affiliate" (as defined in Rule 405 of the General Rules and
Regulations under the Securities Act) of Victoria to enter into, an agreement
substantially in the form of Exhibit B attached hereto within ten days after the
date hereof.
4.5 Directors' and Officers' Liability. Immediately prior to the Effective
Time, Victoria 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
(as defined in Section 6.11 of this Agreement) and known to Victoria, or
circumstances reasonably deemed by Norwest to be likely to give rise thereto, in
accordance with terms and conditions of the applicable policies.
4.6 Pension and Welfare Benefit Plans. Victoria and each Victoria
Subsidiary will take all action necessary or required (i) to terminate or amend,
if requested in writing by Norwest, all welfare benefit plans and to amend, if
requested in writing by Norwest, all qualified retirement plans to facilitate
the merger of such plans with Norwest plans without gaps in coverage for
participants in the plans and without duplication of costs caused by the
continuation of such plans after coverage is available under Norwest plans, and
all non-qualified benefit plans and compensation arrangements as of the
Effective Time, (ii) to amend the Plans to comply with the provisions of the TRA
and regulations thereunder and other applicable law, (iii) to submit application
to the Internal Revenue Service for a favorable determination letter for each of
the Plans which is subject to the qualification requirements of Section 401(a)
of the Code prior to the Effective Time. Norwest agrees to maintain and preserve
all "protected benefits" described under Section 411(d)(6) of the Code of any of
the Plans following the merger of any such Plan into a Norwest Plan. Victoria
retains the right prior to the Effective Time to amend the Victoria 401(k)
Profit Sharing Plan to provide for 100% vesting of participant accounts
thereunder as of the Effective Time. Victoria retains the right to make a
discretionary contribution to the Victoria 401(k) Profit Sharing Plan, in
accordance with past practices, not to exceed 10% of net profits for the 1995
Plan year. Victoria further retains the right to amend the Victoria 401(k)
Profit Sharing Plan to provide that the last day of the Plan year, for purposes
of making a discretionary contribution may be treated as the Effective Time, so
that Victoria may make a discretionary profit sharing contribution, in
accordance with past practices not to exceed 10% of net profits (calculated
without regard to the effect of Section 4.9) for that portion of the Plan year
immediately preceding the Effective Time.
4.7 Environmental Assessments. Victoria shall obtain, at Norwest's
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 eight (8) weeks and written reports
shall be delivered to Norwest no later than sixteen (16) weeks from the date of
this Agreement. Victoria shall obtain,
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at Norwest's expense, Phase II environmental assessments for properties
identified by Norwest on the basis of the results of such Phase I environmental
assessments.
4.8 Title and Survey Work. Victoria shall obtain to the extent requested
by Norwest, at Norwest's expense, commitments for title insurance and boundary
surveys for each bank facility owned by Victoria or any Victoria Subsidiary,
which shall be delivered to Norwest no later than eight (8) weeks from the date
of this Agreement.
4.9 Accruals and Reserves. Immediately prior to the Effective Time,
Victoria shall establish such additional accruals and reserves as may be
necessary to conform Victoria's accounting and credit loss reserve practices and
methods to those of Norwest and Norwest's plans with respect to the conduct of
Victoria's business following the Merger and to provide for the costs and
expenses relating to the consummation by Victoria of the Merger and the other
transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF NORWEST
5.1 Conduct of Business. Norwest covenants and agrees that, from the date
of this Agreement until the Effective Time, unless Victoria shall otherwise
agree in writing or as otherwise expressly contemplated by this Agreement:
(a) Norwest will: (i) maintain its corporate existence in good standing;
(ii) 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; (iii) maintain in all material respects
all books and records of it and the Norwest Subsidiaries, including all
financial statements, in accordance with the accounting principles and practices
used for the Norwest Financial Statements, except for changes in such principles
and practices required under generally accepted accounting principles.
(b) Neither Norwest nor any of the Norwest's Subsidiaries shall take, and
Norwest will use its reasonable efforts to prevent any affiliate of Norwest from
taking, any action that would cause the Merger not to be treated as a "pooling
of interests" for accounting purposes; and
(c) Norwest shall, and shall cause the Norwest Subsidiaries to, perform
their respective obligations under any contracts and agreements to which any of
them is a party or to which any of their assets is subject, except to the extent
such failure to perform would not have a material adverse effect on Norwest and
the Norwest Subsidiaries, taken as a whole, and except for such obligations as
Norwest or the Norwest Subsidiaries in good faith may dispute.
5.2 Exchange Act Filings. From the date hereof to the Closing Date,
Norwest shall deliver to Victoria, when reasonably available, Norwest's
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K (together with
Current Reports on Form 8-K filed since December 31, 1994) and Annual Report on
Form 10-K, as filed with the SEC.
5.3 Reservation and Listing of Norwest Common Stock. Norwest shall reserve
for issuance, out of its authorized but unissued capital stock, such number of
shares of Norwest Common Stock as may be issuable upon consummation of the
Merger. Norwest shall cause the shares of Norwest Common Stock to be issued upon
consummation of the Merger to be approved for listing on the New York Stock
Exchange and the Chicago Stock Exchange subject to official notice of issuance,
prior to the Closing Date.
5.4 Statutory Underwriters. From and after the Effective Time, Norwest
shall file all reports with the SEC necessary to permit the shareholders of
Victoria who may be deemed to be "underwriters" (within the meaning of Rule 145
of the General Rules and Regulations under the Securities Act) of the Victoria
Common Stock to sell Norwest Common Stock received by them in connection with
the Merger pursuant to Rules 144
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and 145(d) of the General Rules and Regulations under the Securities Act if they
would otherwise be so entitled; provided, however, that Norwest is otherwise
obligated to file such reports with the SEC.
5.5 Newco. Norwest shall, within 5 business days after the date hereof,
incorporate Newco as a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas and shall take such actions as may
be necessary to cause Newco's board of directors to ratify and approve the
Merger in accordance with the terms of this Agreement and agree to be bound by
the terms of this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access to Information. For a period not exceeding thirty days prior to
the Effective Time, Norwest shall, and shall cause the Norwest Subsidiaries and
its or their officers, directors, employees and representatives to, afford the
representatives of Victoria complete access during normal business hours to its
or their officers, employees, representatives, properties, books and records,
and shall furnish Victoria all financial, operating and other data and
information as Victoria through its representatives, reasonably may request. No
such examination by Victoria or its representatives shall in any way affect,
diminish or terminate any of the representations, warranties or covenants of
Norwest herein expressed.
6.2 Proxy Statement and Registration Statement. As promptly as practicable
after the date of this Agreement, Norwest and Victoria shall prepare and file
with the SEC a combined proxy and registration statement (the
"Proxy/Registration Statement") on Form S-4 (or on such other form as shall be
appropriate), which shall constitute the proxy statement (the "Proxy Statement")
of Victoria relating to the approval and adoption of the Merger and this
Agreement by the shareholders of Victoria, and the registration statement of
Norwest with respect to the Norwest Common Stock to be issued in connection with
the Merger (the "Registration Statement"). As promptly as practicable after
comments are received from the SEC on the Proxy/Registration Statement, Victoria
and Norwest shall make all reasonable efforts to cause the Proxy/Registration
Statement to become effective.
6.3 Confidentiality. (a) Victoria agrees to hold in confidence all, and
not to disclose to others for any reason whatsoever, any nonpublic information
received by it, any Victoria Subsidiary or its or their representatives from
Norwest, any Norwest Subsidiary or its or their representatives in connection
with the transactions contemplated hereby except (i) as required by law; (ii)
for disclosure to officers, directors, employees and representatives of Victoria
and the Victoria Subsidiaries as necessary in connection with the transactions
and filings contemplated hereby; and (iii) for information which becomes
publicly available other than through Victoria. In the event the Merger is not
consummated, Victoria shall return to Norwest all nonpublic documents and other
material obtained from Norwest, the Norwest Subsidiaries or its or their
representatives in connection with the transactions contemplated hereby, or
shall certify to Norwest that such information has been destroyed.
(b) Norwest agrees to hold in confidence all, and not to disclose to others
for any reason whatsoever, any nonpublic information received by it, any Norwest
Subsidiary or its or their representatives from Victoria, any Victoria
Subsidiary or its or their representatives in connection with the transactions
contemplated hereby except (i) as required by law; (ii) for disclosure to
officers, directors, employees and representatives of Norwest and the Norwest
Subsidiaries as necessary in connection with the transactions and filings
contemplated hereby; and (iii) for information which becomes publicly available
other than through Norwest. In the event the Merger is not consummated, Norwest
shall return to Victoria all nonpublic documents and other material obtained
from Victoria, the Victoria Subsidiaries or its or their representatives in
connection with the transactions contemplated hereby, or shall certify to
Victoria that such information has been destroyed.
6.4 Meetings of Shareholders. Victoria shall promptly take all action
reasonably necessary in accordance with the TBCA and its Articles of
Incorporation and Bylaws to convene a meeting of its shareholders to be held not
later than thirty (30) business days following the effective date of the
Registration Statement to consider and vote upon the adoption and approval of
the Merger and this Agreement by the affirmative vote of two-thirds of the
outstanding shares of Victoria Common Stock. Subject to its fiduciary
obligations under
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applicable law, the Board of Directors of Victoria (a) shall recommend at such
meeting that the shareholders of Victoria vote to adopt and approve the Merger
and this Agreement; (b) shall use its reasonable efforts to solicit from
shareholders of Victoria proxies in favor of such adoption and approval; and (c)
shall take all other action reasonably necessary to secure a vote of its
shareholders in favor of the adoption and approval of the Merger and this
Agreement.
6.5 Filings; Consents; Reasonable Efforts. Subject to the terms and
conditions of this Agreement, Norwest shall, and shall cause the Norwest
Subsidiaries to, and Victoria shall, and shall cause the Victoria Subsidiaries
to, (a) make all necessary filings with respect to the Merger and this Agreement
under the Securities Act, the Exchange Act and applicable blue sky or similar
securities laws required to consummate the transactions contemplated herein and
shall use all reasonable efforts to obtain required approvals and clearances
with respect thereto; (b) make all necessary filings under the BHCA and with the
Banking Regulators required to consummate the transactions contemplated herein;
(c) obtain all consents, waivers, approvals, authorizations and orders required
in connection with the authorization, execution and delivery of this Agreement
and the consummation of the transactions contemplated herein; and (d) take, or
cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated herein. Norwest shall
provide to Victoria and Victoria shall provide to Norwest, as soon as reasonably
practicable, all nonconfidential portions of applications filed with and
correspondence to or from the Banking Regulators related to the consummation of
the transactions contemplated herein. Victoria shall not, and shall not permit
any of the Victoria Subsidiaries to, take any action that would, or that
reasonably could be expected to, result in any of the representations and
warranties set forth in this Agreement becoming untrue or any of the conditions
to the Merger set forth in Article VII not being satisfied. Norwest shall not,
and shall not permit any of the Norwest Subsidiaries to, take any action that
would, or that reasonably could be expected to, result in any of the
representations and warranties set forth in this Agreement becoming untrue or
any of the conditions to the Merger set forth in Article VII not being
satisfied.
6.6 Notification of Certain Matters. Victoria shall give prompt notice to
Norwest, and Norwest shall give prompt notice to Victoria, orally and in
writing, of (a) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate at any time from the date
hereof to the Effective Time, (b) any material failure of Victoria, any Victoria
Subsidiary or any of their officers, directors, employees or agents, or Norwest,
any Norwest Subsidiary or any of their officers, directors, employees or agents,
as the case may be, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder, and (c) any fact or
event that would make it necessary to amend the Registration Statement or Proxy
Statement in order to render the statements therein not misleading or to comply
with applicable law. Victoria promptly shall advise Norwest orally and in
writing of any change or event having, or which, insofar as reasonably can be
foreseen, would have, a material adverse effect on Victoria and the Victoria
Subsidiaries, taken as a whole. Norwest promptly shall advise Victoria orally
and in writing of any change or event having, or which, insofar as reasonably
can be foreseen, would have, a material adverse effect on Norwest and the
Norwest Subsidiaries, taken as a whole.
6.7 Agreement to Defend. Subject to the fiduciary obligation of Victoria's
Board of Directors under applicable law, in the event any claim, action, suit,
investigation or other proceeding by any governmental body or other person or
other legal or administrative proceeding is commenced that questions the
validity or legality of the transactions contemplated hereby or seeks damages in
connection therewith, whether before or after the Effective Time, Norwest and
Victoria hereby agree to cooperate and use their reasonable efforts to defend
against and respond thereto.
6.8 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses.
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6.9 Employee Benefit Plans. Each person who is an employee of Victoria or
any Victoria Subsidiary as of the Effective Time ("Victoria 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 Victoria 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
(with full credit for years of past service to Victoria and Victoria
Subsidiaries, to the extent credited under the respective employee welfare
benefit plans of Victoria and Victoria Subsidiaries, and not subject to
pre-existing condition exclusions, except with respect to the Norwest Long Term
Care Plan) and shall enter each plan not later than the first day of the
calendar quarter which begins at least 32 days after the Effective Time
(provided, however, that the transition from the Victoria plans to the Norwest
plans shall be facilitated without gaps in coverage for participants and covered
dependents in the plans and it is Norwest's intention that such transition be
facilitated without duplication of costs caused by the continuation of such
plans after coverage is available under Norwest plans):
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 Victoria Employee's benefit for the year in
which the Merger occurs under the Norwest vacation program, vacation taken by a
Victoria Employee in the year in which the Merger occurs will be deducted from
the total Norwest benefit. Norwest shall credit each Victoria Employee for the
year during which coverage under the Norwest Medical Plan begins, with any
deductibles previously incurred during such year under the Victoria medical
plan. Norwest will offer all current participating retirees and their covered
dependents and those becoming eligible and choosing to participate in the
Victoria retiree medical plan prior to the Effective Time, access to Norwest's
retiree medical plan.
(b) Employee Retirement Benefit Plans.
Each Victoria 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 Victoria
and the Victoria 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 Victoria and Victoria
Subsidiaries), and shall enter the SIP not later than the first day of the
calendar quarter which is at least 32 days after the Effective Time.
The Victoria Profit Sharing 401(k) Plan shall be merged with the SIP following
the Merger and the outstanding plan loan balances under the Victoria Profit
Sharing 401(k) Plan shall be transferred over to and retained by the SIP, such
that the affected Victoria Employees who have outstanding loan balances (which
are not otherwise in default) under the Victoria Profit Sharing 401(k) Plan
immediately preceding the plan merger, shall not incur a taxable event upon the
plan merger.
Each Victoria Employee shall be eligible for participation, subject to any
applicable eligibility requirements (with full credit for years of past service
to Victoria and the Victoria Subsidiaries, to the extent credited under the
respective employee retirement benefit plans of Victoria and Victoria
Subsidiaries, for the purpose
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<PAGE> 78
of satisfying any applicable eligibility and vesting periods, but without credit
for years of past service to Victoria and the Victoria 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 Time.
In addition to the Norwest pension benefit described above, Norwest agrees
that the pension benefit earned under the Victoria Pension Plan for each
Victoria Employee entitled to such a benefit shall be computed using such
employee's compensation prior to subsequent termination of employment, rather
than using such employee's compensation prior to the Effective Time; provided,
however, that if, assuming no change in the actuarial assumptions in effect on
the date hereof, the assets in the Victoria Pension Plan as of December 31, 1995
do not exceed the accumulated pension benefit obligation computed using the
Victoria Employees' compensation as of December 31, 1995 (current service,
current pay) for such Plan by at least $3,000,000, then the parties agree
reasonably to adjust the pension benefit payable under the Victoria Pension Plan
for each Victoria Employee entitled to such a benefit using an amount which is
at least equal to such employee's compensation prior to the Effective Time but
less than such employee's compensation prior to subsequent termination of
employment. Victoria and Norwest agree to use their best efforts to determine
the amount of such assets and such accumulated pension benefit obligation and
calculate any necessary adjustments under this paragraph no later than March 15,
1996.
6.10 Public Announcement. Subject to written advice of legal counsel with
respect to legal requirements relating to public disclosure of matters related
to the subject matter of this Agreement, the timing and content of any
announcements, press releases or other public statements concerning the proposal
contained herein shall occur upon, and be determined by, the mutual consent of
Victoria and Norwest.
6.11 Indemnification; Directors' and Officers' Insurance. (a) Following
the Effective Time 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 of this Agreement, or who becomes prior to
the Effective Time, a director, officer, employee or agent of Victoria or any of
its Subsidiaries (each an "Indemnified Party" and, collectively, the
"Indemnified Parties") pursuant to Victoria's Articles of Incorporation or
By-laws or similar governing documents of any Victoria Subsidiary, and pursuant
to the terms of the indemnification agreements between Victoria or any Victoria
Subsidiary and its directors and/or officers approved by the Board of Directors
of Victoria on January 17, 1995, and in the form provided to Norwest, 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, 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, survive the Merger and shall continue in full force and effect
and be fully honored. Nothing contained in this Section 6.11 shall be deemed to
preclude the liquidation, consolidation or merger of Victoria or any Victoria
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 all or substantially all of
the assets of Victoria, Norwest shall guarantee, to the extent of the
consolidated net asset value of Victoria as of the Effective Time, the
indemnification obligations of Victoria or any Victoria Subsidiary to the extent
of indemnification obligations of Victoria and the Victoria Subsidiaries
described above. Notwithstanding anything to the contrary contained in this
Section 6.11(a), nothing contained herein shall require Norwest to indemnify any
person who was a director or officer of Victoria or any Victoria Subsidiary (or
a director or officer of a corporation, banking institution or other entity
acquired by Victoria or any Victoria Subsidiary with respect to claims based on,
or arising out of, or pertaining to, a matter which occurred prior to the
consummation of any such acquisition) to a greater extent than Victoria or any
Victoria Subsidiary is, as of the date of this Agreement, required to indemnify
any such person.
(b) Any Indemnified Party wishing to claim indemnification under Section
6.11, upon learning of any such claim, action, suit, proceeding or investigation
or circumstances likely to give rise thereto, shall promptly notify Norwest
thereof (the "Claim Notice"), but the failure to so notify shall not relieve
Victoria, any Victoria Subsidiary or Norwest or any Norwest Subsidiary of any
liability it may have to such Indemnified Party. In the event of any such claim,
action, suit, proceeding or investigation arising after the Effective Time,
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(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
subsequently incurred by such Indemnified Party in connection with the defense
thereof, except that if Norwest elects not to assume such defense within 15 days
of receiving the related Claim Notice 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 him or her, and Norwest shall pay the 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.
(c) For a period of four years after the Effective Time, Norwest shall use
reasonable efforts to cause to be maintained in effect the current policies of
directors' and officers' liability insurance maintained by Victoria and the
Victoria Subsidiaries (provided that Norwest may substitute therefor policies of
at least the same coverage and amounts 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; provided, however, that in no
event shall Norwest be obligated to expend, in order to maintain or provide
insurance coverage pursuant to this Section 6.11, any amount per annum in excess
of 200% of the amount of the annual premiums paid as of the date hereof by
Victoria for such insurance (the "Maximum Amount"). If the amount of 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.
(d) If Norwest or any of its successors or assigns (i) 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
(ii) 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 Section 6.11.
(e) The provisions of this Section 6.11 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party and his or her heirs and
representatives.
6.12 Shareholder Agreements. Victoria agrees to use its best efforts to
obtain from each of the persons listed on Schedule 6.12 an executed letter
agreement, in the form attached hereto as Exhibit D, within seven days of the
date hereof, pursuant to which such persons agree to vote their shares of
Victoria Common Stock in favor of the Merger.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 Conditions to the Obligations of Each Party to Effect the Merger. The
respective obligations of Norwest, Newco and Victoria to effect the Merger are
subject to the satisfaction of the following conditions at or prior to the
Closing Date:
(a) This Agreement and the Merger shall have been approved and adopted by
the requisite vote of the shareholders of Victoria as may be required by law, by
the rules of the Nasdaq National Market, and by any applicable provisions of its
Articles of Incorporation or Bylaws;
(b) There shall have been obtained any and all approvals of the Banking
Regulators, and any applicable waiting period with respect thereto shall have
expired;
(c) No order shall have been entered and remain in effect in any action or
proceeding before any foreign, federal or state court or governmental agency or
other foreign, federal or state regulatory or administrative agency or
commission that would prevent or make illegal the consummation of the Merger;
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<PAGE> 80
(d) The Registration Statement shall be effective on the Closing Date, and
all post-effective amendments filed shall have been declared effective or shall
have been withdrawn; and no stop order suspending the effectiveness thereof
shall have been issued and no proceedings for that purpose shall have been
initiated or, to the knowledge of the parties, threatened by the SEC;
(e) There shall have been obtained any and all material permits, approvals
and consents of securities or blue sky commissions of any jurisdiction and of
any other governmental body or agency that reasonably may be deemed necessary so
that the consummation of the Merger and the transactions contemplated thereby
will be in compliance with applicable laws, the failure to comply with which
would have a material adverse effect on the business, financial condition or
results of operations of Norwest, the Surviving Corporation and their
subsidiaries, taken as a whole after consummation of the Merger and any
applicable waiting period with respect thereto shall have expired;
(f) All approvals of private persons or corporations, (i) the granting of
which is necessary for the consummation of the Merger or the transactions
contemplated in connection therewith and (ii) the nonreceipt of which would have
a material adverse effect on the business, financial condition or results of
operations of Norwest, the Surviving Corporation and their subsidiaries, taken
as a whole after the consummation of the Merger, shall have been obtained; and
(g) Norwest and Victoria shall have received from Liddell, Sapp, Zivley,
Hill & LaBoon, L.L.P., a written opinion dated as of the date that the Proxy
Statement is first mailed to the shareholders of Norwest and Victoria to the
effect that (i) the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, (ii) Norwest
and Victoria will each be a party to that reorganization within the meaning of
Section 368(b) of the Code, (iii) Norwest or Victoria shall not recognize any
gain or loss as a result of the Merger, and (iv) the shareholders of Victoria
shall not recognize any gain or loss as a result of the Merger, other than to
the extent such shareholders receive cash in lieu of fractional shares, and such
opinion shall not have been withdrawn or modified in any material respect.
7.2 Conditions to the Obligations of Norwest and Newco to Effect the
Merger. The obligations of Norwest to effect the Merger are subject to the
satisfaction of the following conditions at or prior to the Closing Date:
(a) The representations and warranties of Victoria contained in Article II
shall be accurate in all material respects as of the Closing Date as though such
representations and warranties had been made at and as of that time; all of the
terms, covenants and conditions of this Agreement to be complied with and
performed by Victoria on or before the Closing Date shall have been duly
complied with and performed in all material respects, and a certificate to the
foregoing effect dated the Closing Date and signed by the chief executive
officer of Victoria shall have been delivered to Norwest;
(b) Since the date of this Agreement, no material adverse change in the
financial condition, results of operations, business or prospects of Victoria
and the Victoria Subsidiaries, taken as a whole, shall have occurred, and
Victoria and the Victoria Subsidiaries shall not have suffered any damage,
destruction or loss (whether or not covered by insurance) materially adversely
affecting the properties or business of Victoria and the Victoria Subsidiaries,
taken as a whole, and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer of Victoria shall have been
delivered to Norwest; and
(c) Victoria shall have furnished to Norwest letters of resignation from
those current officers and directors of Victoria who are not, as of the
Effective Time, directors or officers of Newco.
(d) No approvals, licenses or consents granted by any Banking Regulators or
other governmental or regulatory authority in connection with the transactions
contemplated by this Agreement shall contain any condition or requirement
relating to Victoria or any Victoria Subsidiary that, in the reasonable judgment
of Norwest, is unreasonably burdensome to Norwest.
(e) Victoria shall qualify to engage in a "pooling of interests"
transaction for accounting purposes and Norwest shall have received from Arthur
Andersen LLP an opinion to that effect.
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<PAGE> 81
(f) At any time since the date hereof the total number of shares of
Victoria Common Stock outstanding and subject to issuance upon exercise
(assuming for this purpose that phantom shares and other share-equivalents
constitute Victoria Common Stock) of all warrants, options, conversion rights,
phantom shares or other share-equivalents shall not have exceeded 8,516,843.
7.3 Conditions to the Obligations of Victoria to Effect the Merger. The
obligations of Victoria to effect the Merger are subject to the satisfaction of
the following conditions at or prior to the Closing Date:
(a) The representations and warranties of Norwest and Newco contained in
Article III shall be accurate in all material respects as of the Closing Date as
though such representations and warranties had been made at and as of that time;
all the terms, covenants and conditions of this Agreement to be complied with
and performed by Norwest on or before the Closing Date shall have been duly
complied with and performed in all material respects, and a certificate to the
foregoing effect dated the Closing Date and signed by the chief executive
officer of Norwest shall have been delivered to Victoria;
(b) Since the date of this Agreement, no material adverse change in the
financial condition, results of operations, business or prospects of Norwest and
the Norwest Subsidiaries, taken as a whole, shall have occurred, and Norwest and
the Norwest Subsidiaries shall not have suffered any damage, destruction or loss
(whether or not covered by insurance) materially adversely affecting the
properties or business of Norwest and the Norwest Subsidiaries, taken as a
whole, and a certificate to the foregoing effect dated the Closing Date and
signed by the chief executive officer of Norwest shall have been delivered to
Victoria; and
(c) The shares of Norwest Common Stock issuable upon consummation of the
Merger shall have been approved for listing on the New York Stock Exchange and
the Chicago Stock Exchange subject to official notice of issuance.
(d) Prior to the mailing of the Proxy Statement, Victoria and the Board of
Directors of Victoria shall have received an opinion of J. P. Morgan Securities,
Inc. addressed to Victoria and the Board of Directors of Victoria, 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 J. P.
Morgan Securities, Inc. deems appropriate or necessary, to the effect that the
consideration to be received by shareholders of Victoria pursuant to the Merger
is fair from a financial point of view. Victoria shall promptly provide a copy
of such opinion to Norwest upon receipt.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER; EXTENSION; NONSURVIVAL
8.1 Termination. This Agreement may be terminated and the Merger and the
other transactions contemplated herein may be abandoned at any time prior to the
Effective Time, whether prior to or after approval by the shareholders of
Norwest or Victoria:
(a) by mutual written consent of Norwest and Victoria;
(b) by either Norwest or Victoria upon written notice to the other party if
the Merger has not been effected on or before September 30, 1996 unless such
failure of consummation shall be due to the failure of the party seeking to
terminate to perform or observe in all material respects the covenants and
agreements hereof to be performed or observed by such party;
(c) by either Norwest or Victoria upon written notice to the other party if
a Takeover Proposal constitutes a Superior Proposal; provided, however, that
Victoria shall not be permitted to terminate this Agreement pursuant to this
Section 8.1(c) unless (i) it has not breached any covenant contained in Section
4.3 and (ii) it delivers to Norwest simultaneously with such notice of
termination the fee referred to in Section 8.2(b). As used in this 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 Victoria or to acquire in any manner a
substantial equity interest in, or all or substantially all of the assets of,
Victoria, and "Superior Proposal" means a Takeover Proposal which the
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Board of Directors of Victoria shall determine in good faith, after taking into
account the written advice of its outside counsel, that failure to accept such
proposal or offer would or could reasonably be expected to violate its fiduciary
duties under applicable law. The term "person" for purposes of this Agreement
has the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act and the rules and regulations thereunder but shall not include
Norwest.
(d) by either Norwest or Victoria upon written notice to the other party if
a final, unappealable order to restrain, enjoin or otherwise prevent a
consummation of this Agreement or the transactions contemplated in connection
herewith shall have been entered;
(e) by either Norwest or Victoria upon thirty days written notice if the
required approval of the shareholders of Victoria for the adoption and the
approval of the Merger and this Agreement is not received at the Victoria
shareholder meeting;
(f) by Norwest if (i) the Board of Directors of Victoria 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, (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
Victoria or Victoria's shareholders to engage in an Acquisition Event, the
transactions contemplated hereby are not approved at the meeting of Victoria
shareholders contemplated by Section 6.4, or (iii) the meeting of Victoria
shareholders contemplated by Section 6.4 is not held prior to September 30, 1996
and Victoria has failed to comply with its obligations under Section 6.4;
(g) by Victoria, within five business days after the Shareholder Meeting
Date, if both of the following conditions are satisfied:
(i) the average closing price per share of the Norwest Common Stock as
reported by the consolidated tape of the New York Stock Exchange for the
ten full trading days ending on the day immediately preceding the
Shareholder Meeting Date (the "Norwest Average Price") is less than $28.00;
and
(ii) the number obtained by dividing the Norwest Average Price by
$32.50 [the closing price of a share 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 below) by the
Initial Index Price (as defined below) and subtracting 0.15 from such
latter number.
For purposes of this Section 8.1(g):
"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
September 30, 1995 (adjusted for any stock dividend, reclassification,
recapitalization, exchange of shares or similar transaction between
September 30, 1995 and the close of the trading day immediately preceding
the date of this Agreement).
"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 10 trading days ending on the day immediately
preceding the Shareholder Meeting Date (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.
"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
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day immediately preceding the date of this Agreement multiplied by (b) the
Weighting Factor (as defined below) for each such company.
"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.
"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.
"Total Market Capitalization" shall mean the sum of the Company Market
Capitalization for each of the companies in the Index Group.
"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 date of
the Victoria shareholder meeting held to approve this Agreement 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.
8.2 Effect of Termination. (a) In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers or shareholders, other than the provisions
of Sections 6.3, 6.7 and 6.8 and this Article. Nothing contained in this Section
shall relieve any party from liability for a willful and material breach of the
representations and warranties made by it, or willful and material breach of any
of its covenants, agreements, duties or obligations under this Agreement.
(b) If this Agreement is terminated pursuant to Sections 8.1(c) or 8.1(f),
and if terminated pursuant to Section 8.1(f) and prior thereto or within 12
months after such termination:
(i) Victoria or its bank subsidiary (the "Bank") or any successor to
either Victoria or the Bank shall have entered into an agreement to engage
in an Acquisition Event (as defined below) or an Acquisition Event shall
have occurred; or
(ii) the Board of Directors of Victoria 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
Victoria approve or accept any Acquisition Event,
then Victoria 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
$5.0 million.
"Acquisition Event" means any of the following: (i) a merger, consolidation
or similar transaction involving Victoria, the Bank or any successor to either,
(ii) a purchase, lease or other acquisition in one or a series of related
transactions of assets of Victoria or its Subsidiaries representing 25% or more
of the consolidated assets of Victoria and the Victoria 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 Victoria or any Victoria subsidiary in each case with or by a person or
entity other than Norwest or an affiliate of Norwest. An Acquisition Event shall
not include an internal reorganization transaction or series of related
transactions involving solely Victoria and the Victoria Subsidiaries.
8.3 Amendment and Waiver. This Agreement may not be amended or
supplemented at any time, except by an instrument in writing signed on behalf of
each party hereto, provided that after this Agreement has been approved and
adopted by the shareholders of Victoria, this Agreement may be amended only as
may
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be permitted by applicable provisions of the TBCA. Any provision of this
Agreement may be waived at any time by the party that is, or whose shareholders
are, entitled to the benefits thereof. The waiver by any party hereto of any
condition or of a breach of another provision of this Agreement shall not
operate or be construed as a waiver of any other condition or subsequent breach.
The waiver by any party hereto of any of the conditions precedent to its
obligations under this Agreement shall not preclude it from seeking redress for
breach of this Agreement other than with respect to the condition so waived.
8.4 Extension. At any time prior to the Effective Time, the parties may
extend the time for the performance of any of the obligations or other acts of
the other parties hereto. Any agreement on the part of any party to any such
extension shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
8.5 Nonsurvival. None of the representations, warranties, covenants or
agreements in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time, except for the provisions of Article
I, Sections 6.3, 6.7, 6.8, 6.9 and 6.11, and this Article.
ARTICLE IX
GENERAL
9.1 Entire Agreement; Assignment. This Agreement (a) constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject matter hereof, and
(b) shall not be assigned by operation of law or otherwise, provided that
Norwest may assign its rights and obligations to any direct or indirect,
wholly-owned, subsidiary of Norwest, but no such assignment shall relieve
Norwest of its obligations hereunder if such assignee does not perform such
obligations.
9.2 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
9.3 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
9.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered, if delivered by hand delivery, courier or telecopy,
or three business days after mailing registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
<TABLE>
<S> <C>
if to Norwest: Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
Attention: Secretary
Telecopier No: (612) 667-4399
if to Victoria: Mr. Charles R. Hrdlicka
Chairman and Chief Executive Officer
Victoria Bankshares, Inc.
One O'Connor Plaza
Victoria, TX 77902
Telecopier No.: (512) 574-5164
</TABLE>
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<TABLE>
<S> <C>
with a copy to: Mr. Marcus A. Watts
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
3400 Texas Commerce Tower
600 Travis
Houston, Texas 77002
Telecopier No.: (713) 223-3717
</TABLE>
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
9.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
9.6 Descriptive Headings. The descriptive headings are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
9.7 No Third Party Beneficiaries. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
9.9 Incorporation by References. Any and all schedules, exhibits, annexes,
statements, reports, certificates or other documents or instruments referred to
herein or attached hereto are incorporated herein by reference hereto as though
fully set forth at the point referred to in the Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
day and year first above written.
NORWEST CORPORATION
By: /s/ JOHN E. GANOE
Name: John E. Ganoe
Title: Senior Vice President
Attest:
By: [ILLEGIBLE]
Secretary
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VICTORIA BANKSHARES, INC.
By: /s/ C. R. HRDLICKA
Name: C. R. Hrdlicka
Title: Chairman and Chief
Executive Officer
Attest:
By: /s/ GREGORY SPRAWKA
Secretary
Agreed to this 17th day of November 1995:
NORWEST SUB CORPORATION
By: /s/ STANLEY S. STROUP
Name: Stanley S. Stroup
Title: President
Attest:
By: [ILLEGIBLE]
Secretary
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EXHIBIT A
EXCHANGE AGENT AGREEMENT
Agreement dated as of , 19 by and between NORWEST CORPORATION,
a Delaware corporation ("Norwest"), and NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION (the "Agent").
WHEREAS pursuant to an Agreement and Plan of Merger dated as of November
, 1995, by and between Norwest, Norwest Sub Corporation, a Texas Corporation
("Newco") and Victoria Bankshares, Inc., a Texas corporation ("Victoria")(the
"Agreement"), Newco was merged with and into Victoria (the "Merger") effective
, 19 (the "Effective Date").
WHEREAS the Agent is the transfer agent and registrar for the common stock,
par value $1 2/3 per share, of Norwest ("Norwest Common Stock").
WHEREAS Norwest desires that the Agent act as exchange agent for the
purpose of effecting the distribution of Norwest Common Stock to the holders of
the common stock of Victoria, par value $1.00 per share ("Victoria Common
Stock").
NOW, THEREFORE, in consideration of the mutual covenants herein, the
parties agree as follows:
ARTICLE I
1. Norwest hereby irrevocably instructs the Agent, in its capacity as
transfer agent and registrar for Norwest Common Stock, to issue shares of
Norwest Common Stock from authorized but heretofore unissued stock to "Norwest
Bank Minnesota, N.A., Agent for Victoria Bankshares, Inc. Shareholders", as of
the Effective Date, and, in its capacity as exchange agent, to hold a
certificate or certificates for such shares, representing the aggregate number
of shares of Norwest Common Stock into which outstanding shares of Victoria
Common Stock were converted pursuant to the provisions of the Agreement (the
"Norwest Shares"). In addition, Norwest instructs the Agent to hold the sum of
$ (the "Fractional Share Fund"), which sum Norwest will transfer to the
Agent by wire transfer upon request of the Agent.
2. A complete and correct list of the holders of record of Victoria Common
Stock as of the close of business on the Effective Date, identifying each
shareholder by name, address and number of shares owned, have been previously
transmitted to the Agent by electronic means. No transfers have occurred since
the Effective Date.
ARTICLE II
1. The Agent undertakes to send Letters of Transmittal for Victoria Common
Stock, in the form attached hereto, to each holder of record ("Record Holder")
of an outstanding certificate or certificates which immediately prior to
.m. on the Effective Date (the "Effective Time") evidenced shares of
Victoria Common Stock and which after such Effective Time shall have been
converted into shares of Norwest Common Stock pursuant to the terms of the
Agreement, advising such Record Holder of the terms of such conversion and the
procedures for surrendering such certificate or certificates in exchange for a
certificate evidencing Norwest Common Stock.
2. The Agent covenants and agrees that as soon as practicable following
receipt by the Agent from a Record Holder of a certificate or certificates
representing Victoria Common Stock, accompanied by the appropriate Letter of
Transmittal duly completed and executed in accordance with the instructions
appearing therein, the Agent shall deliver to such Record Holder (or to a
transferee specified in such Letter of Transmittal) a certificate representing
full shares of Norwest Common Stock on the basis of shares of Norwest
Common Stock for each share of Victoria Common Stock surrendered. All shares
(and payments made pursuant to paragraphs 4 and 8 of this Article II) are to be
mailed by first class mail, postage prepaid.
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3. Certificates representing shares of Norwest Common Stock issued to the
following Record Holders or their transferees (who may reasonably be deemed an
"affiliate" of Victoria within the meaning of such term as used in Rule 145
under the Securities Act of 1933, as amended):
[List persons required to deliver Rule 145 letters]
- -------------------------- ------------------------- -------------------------
- -------------------------- ------------------------- -------------------------
- -------------------------- ------------------------- -------------------------
- -------------------------- ------------------------- -------------------------
- -------------------------- ------------------------- -------------------------
shall bear the following legend on the back of each certificate:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of 1933,
as amended (the "Act"), applies, and may be sold or otherwise transferred
only in compliance with the limitations of such Rule 145, or upon receipt
by Norwest Corporation of an opinion of counsel reasonably satisfactory to
it that some other exemption from registration under the Act is available,
or pursuant to a registration statement under the Act."
4. No certificate or scrip for a fractional share of Norwest Common Stock
shall be issued. In lieu of each fractional share, any Record Holder or
transferee who would otherwise be entitled to a fractional share of Norwest
Common Stock shall, upon surrender of his or her certificates representing
Victoria Common Stock, be paid the cash value of such fraction of a share of
Norwest Common Stock, which cash value shall be equal to the fraction multiplied
by $ (which is 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
for each of the five (5) trading days ending on the day immediately preceding
the meeting of shareholders of Victoria held to approve the Merger).
5. If any Record Holder shall report that his or her failure to surrender
any certificate representing shares of Victoria Common Stock is due to the loss,
misplacement or destruction of such certificate or certificates, the Agent shall
require such Record Holder to furnish a Bond of Indemnity Agreement, in form
satisfactory to the Agent and Norwest, before delivering to such Record Holder
(or his or her transferee) the certificate for the shares of Norwest Common
Stock to which he or she is entitled.
6. The Agent shall comply with all applicable Federal tax requirements with
respect to the exchange of certificates for shares of Victoria Common Stock for
Norwest Common Stock and payments for fractional shares. The Agent shall require
that each person surrendering certificates representing shares of Victoria
Common Stock properly complete and execute a Substitute Form W-9. In addition,
the Agent shall complete all required reporting on Forms 1099-B with respect to
the transaction.
7. The Agent shall cancel and return to Norwest the certificates for shares
of Victoria Common Stock exchanged after a period of one year.
8. The Agent shall receive and hold, for distribution without interest to
each Record Holder, and then distribute in accordance with the terms of the
Agreement, all dividends and other distributions paid on shares of Norwest
Common Stock to which such Record Holder is entitled. Norwest will ensure that
the Agent has sufficient funds and assets to make such dividends and
distributions.
ARTICLE III
1. The Agent:
(a) shall not be obligated to take any legal action hereunder which
might in its judgment involve any expense or liability unless it shall have
been furnished with reasonable indemnity from Norwest;
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(b) may rely on and shall be protected in acting on any certificate,
instrument, opinion, notice, letter, telegram, or other document or
security delivered to it and believed by it to be genuine and to have been
signed by the proper party or parties;
(c) may rely on and shall be protected in acting upon the written
instructions of the Secretary, Assistant Secretary or any Vice President of
Norwest; and
(d) may consult counsel satisfactory to it, who may be counsel to
Norwest, and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the opinion of
such counsel.
2. Norwest agrees to indemnify and hold the Agent harmless against any
loss, claim, liability or expense (including, without limitations, the costs and
expenses of defending against such loss, claim or liability) incurred without
gross negligence on its part arising out of or in connection with:
(a) the performance of its duties hereunder, or
(b) reliance by the Agent upon the information relating to the
Victoria Common Stock provided to the Agent by Victoria provided that, in
any case in which there is a discrepancy between such information and the
information contained in the certificate or certificates surrendered to the
Agent by a former holder of Victoria Common Stock for exchange under the
terms hereof, the Agent shall have a duty to inquire as to the reason for
such discrepancy.
3. Norwest agrees to pay the reasonable and customary fees of the Agent for
the services of the Agent in connection with this agreement and to reimburse the
Agent for all reasonable out-of-pocket expenses incurred by it pursuant to or in
connection with its services hereunder.
4. This agreement shall be construed and enforced in accordance with the
laws of the State of Minnesota and shall inure to the benefit of, and the
obligations created hereby shall be binding upon, the successors and assigns of
the parties hereto.
5. If a certificate representing shares of Victoria Common Stock is
submitted with a Letter of Transmittal with instructions to issue any
certificate representing Norwest Common Stock, or to make any fractional share
payment, in a name other than the name that appears on the certificate so
surrendered, the Agent shall not deliver such certificate or payment unless and
until the certificate surrendered is properly endorsed or accompanied by
appropriate stock powers (with signatures appearing on such endorsements or
stock powers and on the letter of transmittal Medallion guaranteed by an
eligible financial institution), and there has been provided to the Agent
payment on account of, or proof of payment of, any necessary stock transfer
taxes or a duly-executed exemption certificate or other evidence satisfactory to
the Agent that all such taxes have been paid or do not apply. The Agent shall
pay any transfer tax on account of which payment has been made to the Agent. A
letter of transmittal which is signed by a trustee, executor, administrator,
guardian, officer of a corporation, attorney-in-fact or other person acting in a
fiduciary or representative capacity should be accompanied by proper evidence of
the signer's authority to act (if the surrendered certificate is not registered
in the name of the fiduciary or representative). If more that one person is the
record holder of a surrendered certificate, each such holder must sign the
corresponding letter of transmittal.
6. The Agent shall maintain adequate records of all acts done by the Agent
in the performance of its duties under this agreement. Such records shall be
available for inspection at any time during normal business hours by any person
so authorized by Norwest.
7. This Agreement shall be for the benefit of the shareholders of Victoria
and may not be amended.
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IN WITNESS WHEREOF, the parties have executed and delivered this agreement.
NORWEST CORPORATION NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: By:
----------------------------------- ---------------------------
Its: Its:
---------------------------------- --------------------------
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EXHIBIT B
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
Attn: Secretary
Gentlemen:
I have been advised that I might be considered to be an "affiliate," as
that term is defined for purposes of paragraphs (c) and (d) of Rule 145 ("Rule
145") promulgated by the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act"), of Victoria
Bankshares, Inc., a Texas corporation ("Victoria").
Pursuant to an Agreement and Plan of Merger, dated as of November , 1995
(the "Agreement"), between Victoria and Norwest Corporation, a Delaware
corporation ("Norwest"), and Norwest Sub Corporation, a Texas corporation
("Newco"), it is contemplated that Newco, a wholly-owned subsidiary of Norwest,
will merge with and into Victoria (the "Merger") and as a result, I will receive
in exchange for each share of Common Stock, par value $1.00 per share, of
Victoria ("Victoria Common Stock") owned by me immediately prior to the
Effective Time (as defined in the Agreement), a number of shares of Common
Stock, par value $1 2/3 per share, of Norwest ("Norwest Common Stock"), as more
specifically set forth in the Agreement.
I hereby agree as follows:
I will not offer to sell, transfer or otherwise dispose of any of the
shares of Victoria Common Stock or Norwest Common Stock held by me during the 30
days prior to the Effective Time.
I will not offer to sell, transfer or otherwise dispose of any of the
shares of Norwest Common Stock issued to me pursuant to the Merger (the "Stock")
except (a) in compliance with the applicable provisions of Rule 145, (b) in a
transaction that is otherwise exempt from the registration requirements of the
Securities Act, or (c) in an offering registered under the Securities Act.
I will not sell, transfer or otherwise dispose of the Stock or in any way
reduce my risk relative to any shares of the Stock issued to me pursuant to the
Merger until such time as financial results covering at least 30 days of
post-Merger combined operations of Victoria and Norwest have been published.
I consent to the endorsement of the Stock issued to me pursuant to the
Merger with a restrictive legend which will read substantially as follows:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of 1933,
as amended (the "Act"), applies, and may be sold or otherwise transferred
only in compliance with the limitations of such Rule 145, or upon receipt
by Norwest Corporation of an opinion of counsel reasonably satisfactory to
it that some other exemption from registration under the Act is available,
or pursuant to a registration statement under the Act."
Norwest's transfer agent shall be given an appropriate stop transfer order
and shall not be required to register any attempted transfer of the shares of
the Stock, unless the transfer has been effected in compliance with the terms of
this letter agreement.
It is understood and agreed that this letter agreement shall terminate and
be of no further force and effect and the restrictive legend set forth above
shall be removed by delivery of substitute certificates without such legend, and
the related stop transfer restrictions shall be lifted forthwith, if (a) (i) any
such shares of Stock shall have been registered under the Securities Act for
sale, transfer or other disposition by me or on my behalf and are sold,
transferred or otherwise disposed of, or (ii) any such shares of Stock are sold
in accordance with the provisions of paragraphs (c), (e), (f) and (g) of Rule
144 promulgated under the Securities Act, or (iii) any such shares of Stock are
sold at a time when I am not an affiliate of Norwest and have been the
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beneficial owner of the Stock for at least two years (or such other period as
may be prescribed by the Securities Act, and the rules and regulations
promulgated thereunder) and Norwest has met the requirements of paragraph (c) of
Rule 144, or (iv) I am not and have not been for at least three months an
affiliate of Norwest and have been the beneficial owner of the Stock for at
least three years (or such other period as may be prescribed by the Securities
Act, and the rules and regulations promulgated thereunder), or (v) Norwest shall
have received an opinion of counsel reasonably acceptable to Norwest or a "no
action" letter obtained by the undersigned from the staff of the Commission to
the effect that the restrictions imposed by Rule 145 under the Securities Act no
longer apply to the undersigned, and (b) financial results covering at least 30
days of post-Merger combined operations have been published.
I have carefully read this letter agreement and the Agreement and have
discussed their requirements and other applicable limitations upon my ability to
offer to sell, transfer or otherwise dispose of shares of the Stock, to the
extent I felt necessary, with my counsel or counsel for Victoria.
Sincerely,
---------------------------------
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EXHIBIT C
BancOne Corporation
Bank of Boston Corporation
BankAmerica Corporation
Barnett Banks, Inc.
Boatmen's Bancshares
Comerica, Inc.
CoreStates Financial Corporation
First Bank System, Inc.
First Interstate
First of America Bank Corporation
First Union Corporation
Fleet Financial
KeyCorp
Mellon Bank Corporation
National City Corporation
Nations Bank
PNC Financial Corporation
Suntrust Banks, Inc.
U.S. Bancorp
Wachovia Corporation
Wells Fargo
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<PAGE> 94
EXHIBIT D
November , 1995
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
Ladies and Gentlemen:
We understand that Norwest Corporation ("Norwest") and Victoria Bankshares,
Inc. (the "Company") intend to enter into an Agreement and Plan of Merger (the
"Agreement") providing for a business combination between the Company and a
wholly-owned subsidiary of Norwest (the "Business Combination"), in which all of
the outstanding shares of capital stock of the Company will be exchanged for
shares of common stock of Norwest.
The undersigned is a shareholder of the Company and is entering into this
letter agreement to induce Norwest to consummate the proposed transaction in
accordance with the terms of the Agreement.
The undersigned confirms its agreement with you as follows:
1. The undersigned represents and warrants that Schedule I attached hereto
sets forth the shares of the Company's capital stock of which the undersigned is
the record or beneficial owner and that the undersigned is on the date hereof
the lawful owner of the number of shares set forth therein, free and clear of
all voting agreements and commitments of any kind and free and clear of all
liens and encumbrances except as set forth in Schedule I. Except as set forth in
Schedule I, the undersigned does not own or hold any rights to acquire any
additional shares of the Company's capital stock (by exercise of stock options,
warrants or otherwise) or any interest therein or any voting rights with respect
to any additional shares.
2. The undersigned agrees that the undersigned will not contract to sell,
or otherwise transfer or dispose of any shares of the Company's capital stock or
any interest therein or securities convertible thereinto or any voting rights
with respect thereto, other than (i) pursuant to the Business Combination, or
(ii) with the prior written consent of Norwest.
3. The undersigned agrees that all shares of the Company's capital stock
beneficially owned by the undersigned at the record date for any meeting of
stockholders of the Company called to consider and vote on the Business
Combination will be voted by the undersigned in favor of the Business
Combination.
This letter agreement shall terminate upon the termination of the Agreement
to be entered into with respect to the Business Combination, or by either party
upon notice to the other if the Business Combination has not been consummated by
September 30, 1996.
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Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
-----------------------------
Confirmed: November , 1995
NORWEST CORPORATION
By:
----------------------------
Its:
---------------------------
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<PAGE> 96
APPENDIX B
OPINION OF J. P. MORGAN SECURITIES INC.
<PAGE> 97
[Date of Proxy Statement]
The Board of Directors
Victoria Bankshares, Inc.
One O'Connor Plaza
Victoria, Texas 77902
Attn: Charles R. Hrdlicka
Chairman and Chief Executive Officer
Gentlemen:
You have requested our opinion as to the fairness, from a financial point
of view, to the common shareholders of Victoria Bankshares, Inc. (the "Company")
of the exchange ratio of 1.05 shares of common stock of Norwest Corporation
("Norwest") to be paid for each share of common stock of the Company (the
"Exchange Ratio") pursuant to the Agreement and Plan of Merger, dated as of
November 12, 1995 (the "Merger Agreement"), among the Company, Norwest and a
subsidiary of Norwest (the "Acquisition Subsidiary"). Pursuant to the Merger
Agreement, the Acquisition Subsidiary will merge with and into the Company, and
the Company will become a wholly-owned subsidiary of Norwest (the "Merger").
Please be advised that while certain provisions of the Merger are
summarized above, the terms of the Merger are more fully described in the Merger
Agreement. As a result, the description of the Merger and certain other
information contained herein is qualified in its entirety by reference to the
more detailed information appearing or incorporated by reference in the Merger
Agreement.
In arriving at our opinion, we have reviewed (i) the Merger Agreement, (ii)
the Proxy Statement-Prospectus of the Company and Norwest; (iii) the audited
annual financial statements of the Company and Norwest for the fiscal years
ended December 31, 1994 and December 31, 1993 and the unaudited financial
statements of the Company and Norwest for the period ended December 31, 1995;
(iv) current and historical market prices of the common stock of the Company and
Norwest; (v) certain publicly available information concerning the business of
the Company and Norwest and of certain other companies engaged in business
comparable to the Company and Norwest, and the reported prices for certain other
companies' securities deemed comparable; (vi) publicly available terms of
certain transactions involving companies comparable to the Company and the
consideration received for such companies; (vii) certain internal financial
analyses and forecasts prepared by the Company and its management; and (viii)
the terms of other relevant business combinations.
In addition, we have held discussions with certain members of the
management of the Company and Norwest with respect to certain aspects of the
Transaction, the past and current business operations of the Company and
Norwest, the financial condition and future prospects and operations of the
Company and Norwest, the effects of the Merger on the financial condition and
future prospects of the Company and Norwest, and certain other matters we
believed necessary or appropriate to our inquiry. We have reviewed such other
financial studies and analyses and considered such other information as we
deemed appropriate for the purposes of this opinion.
In performing such analysis, we have used such valuation methodologies as
we have deemed necessary or appropriate for the purposes of this opinion. Our
view is based on (i) our consideration of the information the Company and
Norwest have supplied to us to date, (ii) our understanding of the terms upon
which the Company and Norwest intend to consummate the Merger, (iii) the
currently contemplated capital structure and the anticipated credit standing of
Norwest upon consummation of the Merger, (iv) our application of sound
investment banking analysis premised on analyzing the long-term value of the
Company, and (v) the consummation of the Merger within the time periods
contemplated by the Merger Agreement.
In giving our opinion, we have relied upon and assumed, without independent
verification, the accuracy and completeness of all information that was publicly
available or was furnished to us by the Company and Norwest or otherwise
reviewed by J.P. Morgan, and we have not assumed any responsibility or liability
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<PAGE> 98
therefor. We have not conducted any valuation or appraisal of any assets or
liabilities, nor have any such valuations or appraisals been provided to us. In
relying on financial analyses and forecasts provided to us, we have assumed that
they have been reasonably prepared based on assumptions reflecting the best
currently available estimates and judgments by management as to the expected
future results of operations and financial condition of the Company and Norwest
to which such analyses or forecasts relate. We have also assumed that the Merger
will have the tax consequences described in discussions with, and materials
furnished to us by, representatives of the Company, and that the other
transactions contemplated by the Merger Agreement will be consummated as
described in the Merger Agreement. We have relied as to all legal matters
relevant to rendering our opinion upon the advice of counsel.
Our opinion is necessarily based on economic, market and other conditions
as in effect on, and the information made available to us as of, the date
hereof. It should be understood that subsequent developments may affect this
opinion and that we do not have any obligation to update, revise, or reaffirm
this opinion.
We are expressing no opinion herein as to the price at which the common
stock of Norwest will trade at any further time or as to the effect of the
Merger on the trading price of the common stock of Norwest. Such trading price
may be affected by a number of factors, including but not limited to (i) the
total or partial disposition of the common stock of Norwest by shareholders
within a short period of time after the effective date of the Merger; (ii)
changes in prevailing interest rates and other factors which generally influence
the price of securities; (iii) adverse changes in the current capital markets,
(iv) the occurrence of adverse changes in the financial condition, business,
assets, results of operations or prospects of the Company or Norwest, (v) any
necessary actions by or restrictions of federal, state or other governmental
agencies or regulatory authorities, and (vi) timely execution of all necessary
agreements to complete the Merger on terms and conditions that are acceptable to
all parties at interest.
We have acted as financial advisor to the Company with respect to the
proposed Merger and have received a fee from the Company for our services. We
will also receive an additional fee if the proposed Merger is consummated.
Please be advised that we have no other financial advisory or other
relationships with the Company. J.P. Morgan and its affiliates have maintained
banking and other relationships with Norwest, including acting as underwriter
for Norwest. In the ordinary course of their businesses, affiliates of J.P.
Morgan may actively trade the debt and equity securities of the Company or
Norwest for their own account or for the accounts of customers and, accordingly,
they may at any time hold long or short positions in such securities.
On the basis of and subject to the foregoing, it is our opinion as of the
date hereof that the Exchange Ratio to be received by the Company in the
proposed Merger is fair, from a financial point of view, to the common
shareholders of the Company.
This letter is provided to the Board of Directors of the Company in
connection with and for the purposes of its evaluation of the Merger. This
opinion does not constitute a recommendation to any shareholder of the Company
as to how such shareholder should vote with respect to the Merger. This opinion
may not be used, disclosed, referred to or communicated by you (in whole or in
part) to any third party for any purpose whatsoever except with our prior
written consent in each instance. This opinion may be reproduced in full in any
proxy or information statement mailed to shareholders of the Company, but may
not otherwise be disclosed publicly in any manner without our prior written
approval.
Very truly yours,
J.P. MORGAN SECURITIES INC.
By:
Name: Gail M. Rogers
Title: Managing Director
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<PAGE> 99
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, 3.14, 3.2, 4.1 and 4.2 below
are incorporated by reference from such exhibits to the
indicated reports of Norwest filed with the Securities and
Exchange Commission under File No. 1-2979.
2.1 -- Agreement and Plan of Merger dated November 12, 1995 among
Victoria Bankshares, Inc., Norwest Corporation and Norwest Sub
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 eliminating the Certificate of Designations with
respect to the Cumulative Convertible Preferred Stock, Series B
(incorporated by reference to Exhibit 3(a) to Norwest's Current
Report on Form 8-K dated November 1, 1995).
3.2 -- By-Laws, as amended (incorporated by reference to Exhibit 4(c)
to Norwest's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1991).
4 -- Rights Agreement, dated as of November 22, 1988, between Norwest
Corporation and Citibank, N.A. (incorporated by reference to
Exhibit 1 to Norwest's Form 8-A dated December 6, 1988).
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4.1 -- Certificate of Adjustment, dated July 21, 1989, to Rights
Agreement (incorporated by reference to Exhibit 3 to Norwest's
Form 8 dated July 21, 1989).
4.2 -- Certificate of Adjustment, dated June 28, 1993, to Rights
Agreement (incorporated by reference to Exhibit 4 to Norwest's
Form 8-A/A dated June 29, 1993).
5 -- Opinion of Stanley S. Stroup, counsel to Norwest.
8 -- Form of Opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
23.1 -- Consent of Stanley S. Stroup (included as part of Exhibit 5 filed
herewith).
23.2 -- Consent of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
23.3 -- Consent of KPMG Peat Marwick LLP.
23.4 -- Consent of Arthur Andersen LLP.
24 -- Powers of Attorney.
99 -- Form of proxy for Special Meeting of Shareholders of Victoria
Bankshares, Inc.
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a posteffective amendment to this registration statement
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, (ii) to reflect in the prospectus any
facts or events arising after the effective date of the
registration statement (or the most recent posteffective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the registration statement, and (iii) to include any material
information with respect to the plan of distribution not
previously disclosed in the registration statement or any
material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a posteffective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
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(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(d) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(f) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(g) The undersigned registrant hereby undertakes to supply by means of a
posteffective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE> 102
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 February 15, 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 February 15, 1996 by the following
persons in the capacities indicated:
<TABLE>
<S> <C>
/s/ Richard M. Kovacevich President and Chief Executive Officer
- --------------------------------- (Principal Executive Officer)
Richard M. Kovacevich
/s/ John T. Thornton Executive Vice President and Chief
- --------------------------------- Financial Officer
John T. Thornton (Principal Financial Officer)
/s/ Michael A. Graf Senior Vice President and Controller
- --------------------------------- (Principal Accounting Officer)
Michael A. Graf
DAVID A. CHRISTENSEN )
GERALD J. FORD )
PIERSON M. GRIEVE )
CHARLES M. HARPER )
WILLIAM A. HODDER )
LLOYD P. JOHNSON ) A majority of the
REATHA CLARK KING ) Board of Directors*
RICHARD M. KOVACEVICH )
RICHARD S. LEVITT )
RICHARD D. McCORMICK )
CYNTHIA H. MILLIGAN )
IAN M. ROLLAND )
STEPHEN E. WATSON )
MICHAEL W. WRIGHT )
</TABLE>
____________________
*Richard M. Kovacevich, by signing his name hereto, does hereby sign this
document on behalf of each of the directors named above pursuant to powers of
attorney duly executed by such persons.
/s/ Richard M. Kovacevich
-----------------------------
Richard M. Kovacevich
Attorney-in-Fact
II-4
<PAGE> 103
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Form of
Number Description* Filing
- ------ ------------ ------
<S> <C> <C>
2.1 Agreement and Plan of Merger dated November 12, 1995 among Victoria Bankshares, Inc., Norwest Corporation
and Norwest Sub 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 eliminating the Certificate of Designations with respect to the Cumulative Convertible
Preferred Stock, Series B (incorporated by reference to Exhibit 3(a) to Norwest's Current Report on Form 8-
K dated November 1, 1995).
3.2 By-Laws, as amended (incorporated by reference to Exhibit 4(c) to Norwest's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1991).
4 Rights Agreement, dated as of November 22, 1988, between Norwest Corporation and Citibank, N.A.
(incorporated by reference to Exhibit 1 to Norwest's Form 8-A dated December 6, 1988).
4.1 Certificate of Adjustment, dated July 21, 1989, to Rights Agreement (incorporated by reference to Exhibit 3
to Norwest's Form 8 dated July 21, 1989).
</TABLE>
<PAGE> 104
<TABLE>
<CAPTION>
Exhibit Form of
Number Description* Filing
- ------ ------------ ------
<S> <C> <C>
4.2 Certificate of Adjustment, dated June 28, 1993, to Rights
Agreement (incorporated by reference to Exhibit 4 to Norwest's
Form 8-A/A dated June 29, 1993).
5 Opinion of Stanley S. Stroup, counsel to Norwest. Electronic
Transmission
8 Form of Opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. Electronic
Transmission
23.1 Consent of Stanley S. Stroup (included as part of Exhibit 5 filed herewith).
23.2 Consent of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. Electronic
Transmission
23.3 Consent of KPMG Peat Marwick LLP. Electronic
Transmission
23.4 Consent of Arthur Andersen LLP. Electronic
Transmission
24 Powers of Attorney. Electronic
Transmission
99 Form of proxy for Special Meeting of Shareholders of Electronic
Victoria Bankshares, Inc. Transmission
</TABLE>
________________________
* 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 and 4.2 are incorporated by reference
from such exhibits to the indicated reports of Norwest filed with the SEC
under File No. 1-2979.
<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF STANLEY S. STROUP]
February 15, 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 9,500,000 shares of the common stock (the
"Shares"), par value $1-2/3 per share, of Norwest Corporation (the
"Corporation"), a Delaware corporation, which are proposed to be issued by the
Corporation in connection with the merger (the "Merger") of a wholly owned
subsidiary of the Corporation with Victoria Bankshares, 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> 1
EXHIBIT 8
FORM OF FEDERAL TAX OPINION
[LIDDELL, SAPP LETTERHEAD]
1996
------------------,
Victoria Bankshares, Inc.
One O'Connor Plaza
Victoria, Texas 77902
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Gentlemen:
You have requested our opinions as to the federal income tax consequences
of the proposed merger (the "Merger") of a wholly-owned subsidiary ("Sub") of
Norwest Corporation ("Norwest") with and into Victoria Bankshares, Inc.
("Victoria") pursuant to the Agreement and Plan of Merger dated November 12,
1995 by and among Sub, Norwest and Victoria (the "Merger Agreement").
In issuing the opinions set forth in this letter, we have relied upon (1)
factual representations made by Sub and Norwest in written statements dated
________, 1996 and the factual representations made by Victoria in written
statements dated ___________, 1996 (the "Representations"), (2) the Merger
Agreement, and (3) the facts, information and documentation set forth in the
Registration Statement on Form S-4 of Norwest filed with the Securities and
Exchange Commission in connection with the Merger (the "Registration
Statement").
The opinions set forth in this letter are predicated upon our
understanding of the facts set forth in the Merger Agreement, the
Representations and the Registration Statement. Any change in such facts may
adversely affect our opinions. Furthermore, as explained below, our opinions
are based upon our understanding of the existing provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), current applicable regulations
promulgated under the Code, current published administrative positions of the
Internal Revenue Service such as revenue rulings and revenue procedures, and
existing judicial decisions as of the date hereof, all of which are subject to
change either prospectively or retroactively. Any change in such authorities
<PAGE> 2
Victoria Bankshares, Inc.
Norwest Corporation
Page 2
may adversely affect our opinions. We assume no obligation to update our
opinions for any deletions or additions to or modifications of any law
applicable to the Merger.
Based on our review of the Merger Agreement, the Representations and the
Registration Statement, and assuming that the transactions described therein are
completed as described, our opinions as to federal income tax consequences of
the Merger are as follows:
1. Provided that the Merger Agreement qualifies as a statutory merger
under the laws of the state of Texas, the Merger will constitute a
reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Code.
2. Sub, Norwest and Victoria will each be a "party to a reorganization"
within the meaning of Section 368(b) of the Code.
3. Pursuant to Section 368(a)(1)(A) and 368(a)(2)(E) of the Code,
neither Norwest not Victoria will recognize any gain or loss as a result of the
Merger.
4. Pursuant to Section 354(a)(1) of the Code, no gain or loss will be
recognized by Victoria shareholders who exchange all of their Victoria common
stock solely for shares of Norwest's voting common stock.
5. Pursuant to Revenue Ruling 66-365, 1966-2 C.B. 116, and Revenue
Procedure 77-41, 1977-2 C.B. 574, if a cash payment is received by a shareholder
of Victoria in lieu of a fractional share interest of Norwest voting stock, the
cash payment will be treated as received by the shareholder as a distribution in
redemption of that fractional share interest and will be treated as a
distribution in full payment in exchange for the fractional share redeemed
subject to the provisions and limitations of Section 302 of the Code and
considering the application of Section 318 of the Code.
We express no opinion with regard to the federal income tax consequences
of the Merger not addressed expressly by the above opinions. In addition, we
express no opinion as to any state, local or foreign tax consequences with
respect to the Merger.
This opinion is being furnished only to you in connection with the Merger
and solely for your benefit in connection therewith and may not be used or
relied upon for any other purpose and may not be circulated, quoted or
otherwise referred to for any other purpose without our express written consent.
<PAGE> 3
Victoria Bankshares, Inc.
Norwest Corporation
Page 3
The shareholders of Victoria should consult with a qualified tax advisor
with respect to any reporting requirements which may be applicable, or to any
tax considerations other than those expressly mentioned herein.
Very truly yours,
<PAGE> 1
EXHIBIT 23.2
[LETTERHEAD OF LIDDELL, SAPP]
February 15, 1996
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479
Ladies and Gentlemen:
We consent to the summarization of our federal tax opinion in the registration
statement of Norwest Corporation on Form S-4 and to the references to our firm
under the headings of the registration statement entitled "SUMMARY--Certain
U.S. Federal Income Tax Consequences," "THE MERGER--Certain U.S. Federal
Income Tax Consequences" and "LEGAL OPINIONS." We also consent to the
inclusion of such opinion as an exhibit to the registration statement. In
giving this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, and the rules and regulations thereunder.
/s/ Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P.
LIDDELL, SAPP, ZIVLEY, HILL & LABOON, L.L.P.
<PAGE> 1
EXHIBIT 23.3
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
Independent Auditors' Consent
The Board of Directors
Norwest Corporation:
We consent to the use of our report dated January 18, 1995 incorporated herein
by reference and to the reference to our firm under the heading "EXPERTS" in
the prospectus. Our report refers to the Corporation's adoption of Financial
Accounting Standards Board's Statements of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits," No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" and No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions."
/s/ KPMG Peat Marwick LLP
February 15, 1996
Minneapolis, Minnesota
<PAGE> 1
EXHIBIT 23.4
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our report dated
January 17, 1995 incorporated by reference in Victoria Bankshares, Inc.'s
Form 10-K/A for the year ended December 31, 1994, and to all references to our
firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Houston, Texas
February 15, 1996
<PAGE> 1
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ David A. Christensen
------------------------------
David A. Christensen
<PAGE> 2
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Gerald J. Ford
------------------------------
Gerald J. Ford
<PAGE> 3
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Pierson M. Grieve
------------------------------
Pierson M. Grieve
<PAGE> 4
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Charles M. Harper
------------------------------
Charles M. Harper
<PAGE> 5
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ William A. Hodder
------------------------------
William A. Hodder
<PAGE> 6
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Lloyd P. Johnson
------------------------------
Lloyd P. Johnson
<PAGE> 7
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Reatha Clark King
------------------------------
Reatha Clark King
<PAGE> 8
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Richard M. Kovacevich
------------------------------
Richard M. Kovacevich
<PAGE> 9
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Richard S. Levitt
------------------------------
Richard S. Levitt
<PAGE> 10
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Richard D. McCormick
------------------------------
Richard D. McCormick
<PAGE> 11
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Cynthia H. Milligan
------------------------------
Cynthia H. Milligan
<PAGE> 12
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Ian M. Rolland
------------------------------
Ian M. Rolland
<PAGE> 13
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Stephen E. Watson
------------------------------
Stephen E. Watson
<PAGE> 14
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 9,500,000 shares of Common Stock of the
Corporation which may be issued in connection with the acquisition by the
Corporation of Victoria Bankshares, 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 26th day of September, 1995.
/s/ Michael W. Wright
------------------------------
Michael W. Wright
<PAGE> 1
EXHIBIT 99
VICTORIA BANKSHARES, INC.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Dennis O'Connor__________, Tom O'Connor,
Jr._________, and Charles R. Hrdlicka________ as proxies to vote all shares of
Common Stock the undersigned is entitled to vote at the Special Meeting of
Shareholders of Victoria Bankshares, Inc. ("Victoria") to be held at
_________________ on _______________________, or at any adjournment thereof, as
follows, hereby revoking any proxy previously given:
1. To consider and vote upon a proposal to approve the Agreement and
Plan of Merger dated November 12, 1995 (the "Merger Agreement") among Victoria,
Norwest Corporation ("Norwest") and Norwest Sub Corporation, a wholly-owned
subsidiary of Norwest ("Sub"), pursuant to which Sub will be merged with and
into Victoria and Victoria 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 Victoria as may be necessary or
appropriate to carry out the intent and purposes of the Merger.
FOR / / AGAINST / / ABSTAIN / /
2. In his discretion on such matters as may properly come before the
meeting or any adjournment thereof; all as set out in the Notice and Proxy
Statement-Prospectus relating to the meeting.
Shares represented by this proxy will be voted as directed by the
shareholder. The Board of Directors recommends a vote "FOR" proposal 1. If no
direction is supplied, the proxy will be voted "FOR" proposal 1.
Dated:________________________________, 1996.
______________________________________________
(Please sign exactly as name appears at left.)
______________________________________________
(If stock is owned by more than one person,
all owners should sign. Persons signing as
executors, administrators, trustees, or in
similar capacities should so indicate.)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
