<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 25, 1999
Registration No. 333-
==============================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------
WELLS FARGO & COMPANY
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 6712 41-0449260
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
420 MONTGOMERY STREET
SAN FRANCISCO, CALIFORNIA 94163
414-477-1000
(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
Wells Fargo & Company
420 Montgomery Street
San Francisco, California 94163
415-396-6019
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
COPIES TO:
ROBERT J. KAUKOL DAVID B. HOOPER
WELLS FARGO & COMPANY HOOPER LAW OFFICES
1050 17TH STREET, SUITE 120 115 NORTH 7TH EAST
DENVER, COLORADO 80265 RIVERTON, WYOMING 82501
__________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of the Registration
Statement.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to Be to Be Offering Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 675,000 N/A $8,416,361(2) $2,482.83(3)
(par value $1-2/3 per share) (1)
=====================================================================================================
</TABLE>
(1) Each share of the registrant's common stock includes one preferred stock
purchase right.
(2) Estimated solely for the purpose of computing the registration fee, in
accordance with Rule 457(f), based upon the book value as of September 30,
1998 of all shares of common stock to be acquired by the registrant in the
transaction described herein.
(3) Based on .000295 of the proposed maximum aggregate offering price.
__________________________
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>
[RIVERTON LETTERHEAD]
================================================================================
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<S> <C>
The board of directors of Riverton Stock Exchange composite transaction
State Bank Holding Company has reporting system for the period of 20
approved the acquisition of trading days ending on the day
Riverton by Wells Fargo & Company immediately before the special
(formerly named Norwest meeting.
Corporation). The acquisition is
subject to the approval of For example, if this average is $35,
Riverton's shareholders. A you would receive approximately 25.44
special meeting of shareholders shares of Wells Fargo common stock
will be held to vote on the for each share of Riverton common
proposed acquisition. The date, stock you own. If this average is
time and place of the meeting are $40, you would receive approximately
as follows: 22.26 shares of Wells Fargo common
stock for each share of Riverton
WEDNESDAY, MARCH 10, 1999 common stock.
9:00 A.M., LOCAL TIME
616 NORTH FEDERAL BOULEVARD The closing price of Wells Fargo
RIVERTON, WYOMING 82501 common stock on February ___, 1999
was $_____ a share.
If the acquisition is completed,
Wells Fargo will exchange a total Whether or not you plan to attend the
of $18,600,000 of its common stock meeting, please complete and mail the
for all of the outstanding common enclosed proxy card. If you sign,
stock of Riverton. Based on date and mail your proxy card without
20,893.5 shares of Riverton common indicating how you want to vote, your
stock outstanding, this works out proxy will be voted in favor of the
to approximately $890.23 of Wells acquisition. If you fail to return
Fargo common stock for each share your card, the effect will be the
of Riverton common stock. same as a vote against the
acquisition.
The exchange ratio, or the number
of shares of Wells Fargo common This Proxy Statement-Prospectus
stock you will receive for each provides detailed information about
share of Riverton common stock you the proposed acquisition. Please
own, will be determined by read this entire document carefully.
dividing the share value
(approximately $890.23) by the
average of the closing prices of a Alvin "Sparky" Olson
share of Wells Fargo common stock Chairman of the Board
as reported on the New York
</TABLE>
_______________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE WELLS FARGO COMMON STOCK TO BE
ISSUED OR DETERMINED IF THIS PROXY STATEMENT-PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF WELLS FARGO COMMON STOCK OFFERED BY THIS PROXY STATEMENT-
PROSPECTUS ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK
OR NONBANK SUBSIDIARY OF WELLS FARGO & COMPANY AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
WELLS FARGO & COMPANY, ITS BANKING SUBSIDIARIES AND MANY OF ITS NONBANKING
SUBSIDIARIES ARE SUBJECT TO EXTENSIVE REGULATION BY A NUMBER OF FEDERAL AND
STATE AGENCIES. THIS REGULATION MAY AFFECT, AMONG OTHER THINGS, WELLS FARGO'S
EARNINGS AND/OR RESTRICT ITS ABILITY TO PAY DIVIDENDS ON WELLS FARGO COMMON
STOCK. SEE "CERTAIN REGULATORY AND OTHER CONSIDERATIONS PERTAINING TO WELLS
FARGO" ON PAGE 43.
_______________________
Proxy Statement-Prospectus dated February 8, 1999.
First mailed to Riverton shareholders on or about February 8, 1999.
<PAGE>
RIVERTON STATE BANK HOLDING COMPANY
NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD
ON MARCH 10, 1999
TO THE SHAREHOLDERS OF
RIVERTON STATE BANK HOLDING COMPANY:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of Riverton State
Bank Holding Company, a Wyoming corporation ("Riverton"), will be held on
Wednesday, March 10, 1999, at 9:00 a.m., local time, at 616 North Federal
Boulevard, Riverton, Wyoming, for the following purposes:
1. To consider and vote upon a proposal to approve the Agreement and Plan of
Reorganization, dated as of September 17, 1998 (the "Reorganization
Agreement"), by and between Riverton and Norwest Corporation, a Delaware
corporation now named Wells Fargo & Company ("Wells Fargo"), pursuant to
which, among other things, a wholly-owned subsidiary of Wells Fargo will
merge with and into Riverton upon the terms and subject to the conditions
set forth in the Reorganization Agreement, as more fully described in the
Proxy Statement-Prospectus of which this Notice is a part.
2. To transact such other business as may properly be brought before the
special meeting and any adjournments or postponements of the special
meeting.
The board of directors of Riverton has fixed the close of business on
February 5, 1999 as the record date for determining those shareholders entitled
to vote at the special meeting and any adjournments or postponements of the
special meeting. Only shareholders of record on this date are entitled to notice
of, and to vote at, the special meeting and any adjournments or postponements of
the special meeting.
SHAREHOLDERS ARE ENTITLED TO ASSERT DISSENTERS' RIGHTS UNDER ARTICLE 13 OF THE
WYOMING BUSINESS CORPORATION ACT IN CONNECTION WITH THE MERGER DESCRIBED IN ITEM
1 ABOVE, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT-PROSPECTUS OF WHICH THIS
NOTICE IS A PART. A COPY OF ARTICLE 13 IS INCLUDED IN THE PROXY STATEMENT-
PROSPECTUS AS APPENDIX B. SHAREHOLDERS WHO DO NOT SATISFY THE REQUIREMENTS FOR
ASSERTING DISSENTERS' RIGHTS WILL FORFEIT THEIR RIGHT TO DEMAND AND RECEIVE
PAYMENT FOR THEIR SHARES UNDER ARTICLE 13.
By Order of the Board of Directors
Earl E. Coleman, Jr.
Secretary
<PAGE>
TABLE OF CONTENTS
IMPORTANT INFORMATION NOT INCLUDED IN THIS PROXY
STATEMENT-PROSPECTUS.................................................. 1
General.............................................................. 1
Norwest/Wells Fargo Merger........................................... 1
QUESTIONS AND ANSWERS
ABOUT THE MERGER...................................................... 2
QUESTIONS AND ANSWERS ABOUT
THIS PROXY STATEMENT-
PROSPECTUS............................................................ 3
SUMMARY............................................................... 4
Parties to the Merger................................................ 4
Reasons for the Merger;
Recommendation of Riverton's
Board of Directors................................................. 4
Required Vote; Voting Agreements..................................... 5
The Merger........................................................... 5
Comparative Per Common Share Data.................................... 9
Selected Historical Financial Information............................ 10
Share Prices and Dividends for
Wells Fargo Common Stock........................................... 12
GLOSSARY OF IMPORTANT TERMS........................................... 13
SPECIAL MEETING OF SHAREHOLDERS....................................... 15
Date, Time and Place of Special Meeting.............................. 16
Record Date.......................................................... 16
Voting Rights; Votes Required for Approval........................... 16
Voting Agreements.................................................... 16
Voting and Revocation of Proxies..................................... 16
Solicitation of Proxies.............................................. 16
Other Matters........................................................ 16
THE MERGER............................................................ 17
Purpose and Effect of the Merger..................................... 17
Background of and Reasons for the
Merger............................................................. 17
Additional Interests of Riverton's
Management in the Merger........................................... 17
Dissenters' Rights................................................... 17
Exchange of Certificates............................................. 18
Regulatory Approvals................................................. 19
Effect on Riverton's Employee
Benefit Plans...................................................... 20
Material U.S. Federal Income Tax Consequences of the Merger to
Riverton Shareholders............................................... 20
Resale of Wells Fargo Common Stock................................... 21
Stock Exchange Listing............................................... 21
Accounting Treatment................................................. 21
THE REORGANIZATION AGREEMENT.......................................... 22
Basic Plan of Reorganization......................................... 22
Representations and Warranties....................................... 23
Certain Covenants.................................................... 23
Conditions to the Completion of the
Merger............................................................. 24
Termination of the Reorganization
Agreement.......................................................... 24
Effect of Termination................................................ 24
Waiver and Amendment................................................. 25
Expenses............................................................. 25
COMPARISON OF RIGHTS OF
HOLDERS OF RIVERTON COMMON
STOCK AND WELLS FARGO COMMON
STOCK................................................................. 26
Capital Stock........................................................ 26
Rights Plan.......................................................... 26
Directors............................................................ 27
Amendment of Charter Document
and Bylaws......................................................... 27
Approval of Mergers and Asset Sales.................................. 27
Preemptive Rights.................................................... 28
Appraisal Rights..................................................... 28
Special Meetings..................................................... 28
Directors' Duties.................................................... 29
Action Without a Meeting............................................. 29
Limitation of Director Liability..................................... 29
Indemnification of Officers and Directors............................ 29
Dividends............................................................ 31
Corporate Governance Procedures;
Nomination of Directors............................................ 31
INFORMATION ABOUT RIVERTON............................................ 32
General.............................................................. 32
Legal Proceedings.................................................... 32
Market Price and Dividends........................................... 32
Beneficial Ownership of Riverton
Common Stock by Riverton
Management and Principal Stockholders.............................. 32
(i)
<PAGE>
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RIVERTON'S FINANCIAL CONDITION AND
RESULTS OF OPERATIONS................................................. 34
General.............................................................. 34
Nine Months Ended September 30,
1998 and 1997....................................................... 34
Years Ended December 31,
1997 and 1996....................................................... 35
Noninterest Expense.................................................. 40
Income Taxes......................................................... 40
Regulatory Capital Requirements...................................... 41
Asset and Liability Management....................................... 41
Liquidity............................................................ 41
Year 2000 Compliance................................................. 41
CERTAIN REGULATORY AND
OTHER CONSIDERATIONS PERTAINING
TO WELLS FARGO........................................................ 43
Bank Regulatory Agencies............................................. 43
Bank Holding Company Activities;
Interstate Banking................................................. 43
Dividend Restrictions................................................ 44
Holding Company Structure............................................ 45
Regulatory Capital Standards and
Related Matters.................................................... 46
FDIC Insurance....................................................... 48
Fiscal and Monetary Policies......................................... 49
Competition.......................................................... 49
EXPERTS............................................................... 49
LEGAL MATTERS......................................................... 50
INFORMATION CONCERNING
WELLS FARGO MANAGEMENT................................................ 50
WHERE YOU CAN FIND MORE
INFORMATION........................................................... 50
FINANCIAL STATEMENTS OF
RIVERTON STATE BANK HOLDNG COMPANY.................................... F-1
APPENDIX A AGREEMENT AND
PLAN OF
REORGANIZATION
APPENDIX B WYOMING BUSINESS
CORPORATION ACT
ARTICLE 13--
DISSENTERS' RIGHTS
(ii)
<PAGE>
IMPORTANT INFORMATION NOT INCLUDED
IN THIS PROXY STATEMENT-PROSPECTUS
GENERAL
This Proxy Statement-Prospectus incorporates important business and
financial information about Wells Fargo & Company (formerly named Norwest
Corporation) that is not included in or delivered with this document. The
documents containing this information are listed on page 50 and are available
to you without charge upon written or oral request to Wells Fargo's Corporate
Secretary as follows:
Corporate Secretary
Wells Fargo & Company
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Telephone (612) 667-8655
TO RECEIVE DOCUMENTS IN TIME FOR THE SPECIAL MEETING, YOUR REQUEST MUST BE
RECEIVED NO LATER THAN MARCH 3, 1999.
THE NORWEST/WELLS FARGO MERGER
On November 2, 1998, Wells Fargo & Company ("old Wells Fargo") merged into WFC
Holdings Corporation, a wholly-owned subsidiary of Norwest Corporation ("WFC
Holdings"). WFC Holdings was the surviving company in the merger. In connection
with the merger, Norwest Corporation changed its name to "Wells Fargo &
Company."
In this Proxy Statement-Prospectus, unless otherwise indicated, "Wells Fargo"
and "new Wells Fargo" refer to the company formerly named Norwest Corporation
and now named Wells Fargo & Company.
The combination of old Wells Fargo and Norwest Corporation was accounted for
as a pooling of interests. This means that Norwest Corporation's historical
financial statements incorporated into this document by reference to Norwest
Corporation's annual report on Form 10-K for the year ended December 31, 1997
and quarterly report on Form 10-Q for the quarter ended September 30, 1998 have
been restated as if Norwest Corporation and old Wells Fargo had been combined
for the periods presented in these reports. The supplemental consolidated
financial statements are included in the new Wells Fargo's current report on
Form 8-K filed with the Securities and Exchange Commission on January 19, 1999.
This report on Form 8-K supplements Norwest Corporation's Form 10-K for 1997 and
Form 10-Q for quarter ended September 30, 1998.
IN THIS PROXY STATEMENT-PROSPECTUS, UNLESS OTHERWISE INDICATED, THE FINANCIAL
STATEMENTS OF NORWEST CORPORATION HAVE BEEN RESTATED AS IF NORWEST CORPORATION
AND OLD WELLS FARGO HAD BEEN COMBINED FOR THE PERIODS PRESENTED.
For more information about the combination, you should review the following
documents filed with the Securities and Exchange Commission, each of which is
incorporated by reference into this Proxy Statement-Prospectus:
. Joint Proxy Statement-Prospectus of Norwest Corporation and old Wells Fargo
dated September 11, 1998 forming part of Norwest Corporation's Registration
Statement on Form S-4 filed with the Securities and Exchange Commission on
September 11, 1998 (Registration No. 333-63247).
. Current Report on Form 8-K dated November 2, 1998 and filed by Wells Fargo
& Company on November 16, 1998 reporting completion of the merger.
Copies of these documents are available, without charge, by contacting the
Wells Fargo Corporate Secretary at the address and telephone number set forth
above.
1
<PAGE>
QUESTIONS AND ANSWERS
ABOUT THE MERGER
Q: What do I need to do now?
A: Just sign the enclosed proxy card and mail it to Riverton in the enclosed
return envelope as soon as possible. This way, your shares will be
represented at the special meeting on March 10, 1999. Riverton's board of
directors recommends that you vote FOR the merger.
Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?
A: No. After the merger is completed, Wells Fargo will send you written
instructions for exchanging your stock certificates.
Q: WHAT WILL I RECEIVE FOR MY SHARES OF RIVERTON COMMON STOCK?
A: Wells Fargo will exchange $18,600,000 of its common stock for all of the
outstanding shares of Riverton common stock. Based on 20,893.5 shares of
Riverton common stock outstanding, this works out to approximately $890.23
of Wells Fargo common stock for each share of Riverton common stock.
Q: HOW MANY SHARES OF WELLS FARGO COMMON STOCK WILL I RECEIVE?
A: The exchange ratio, or the number of shares of Wells Fargo common stock you
will receive for each share of Riverton common stock you own, will be
determined by dividing the share value (approximately $890.23) by the
average of the closing prices of a share of Wells Fargo common stock as
reported on the New York Stock Exchange composite transaction reporting
system for the period of 20 trading days ending on the day immediately
before the special meeting.
For example, based on 20,893.5 shares of Riverton common stock outstanding,
if this average is $35, you would receive approximately 25.44 shares of
Wells Fargo common stock for each share of Riverton common stock you own. If
this average is $40, you would receive approximately 22.26 shares.
Q: WHAT ARE THE TAX CONSEQUENCES TO SHAREHOLDERS OF THE MERGER?
A: The exchange of Wells Fargo common stock for shares of Riverton common stock
generally will be tax free to Riverton shareholders for federal income tax
purposes. Riverton shareholders will recognize income or gain, however, as a
result of cash received instead of fractional shares. To review the tax
consequences to Riverton shareholders in greater detail, see page 20.
THIS TAX TREATMENT MAY NOT APPLY TO SOME RIVERTON SHAREHOLDERS BECAUSE OF
THEIR SPECIFIC CIRCUMSTANCES. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR FOR A
FULL UNDERSTANDING OF THE MERGER'S TAX CONSEQUENCES.
Q: WHEN WILL THE MERGER BE COMPLETED?
A: Riverton and Wells Fargo expect to complete the merger within several days
after the special meeting, assuming the required regulatory approvals have
been received by then.
Q: WHAT RIGHTS DO I HAVE IF I DISSENT FROM THE MERGER?
A: You have a right to the fair value of your Riverton common stock. See page
17 for information on your dissenters' rights and how to exercise them.
2
<PAGE>
QUESTIONS AND ANSWERS
ABOUT THE PROXY STATEMENT-PROSPECTUS
Q: WHAT IS THE PURPOSE OF THIS DOCUMENT?
A: This document serves as both a proxy statement of Riverton and a prospectus
of Wells Fargo. As a proxy statement, it's being provided to you because
Riverton's board of directors is soliciting your proxy for use at the
special meeting. As a prospectus, it's being provided to you because Wells
Fargo will exchange shares of its common stock for your shares of Riverton
common stock.
Q: DO I NEED TO READ THE ENTIRE DOCUMENT, INCLUDING THE APPENDICES?
A: Absolutely. Much of this Proxy Statement-Prospectus summarizes information
that is set forth in greater detail elsewhere in this document or in the
appendices to this document. Each summary is qualified in its entirety by
reference to the document being summarized. For example, the summary of the
terms of the Reorganization Agreement is qualified in its entirety by
reference to the full text of the Reorganization Agreement, a copy of which
is included as Appendix A. If there are any differences, the information in
the Reorganization Agreement will control over the information in the
summary. As a result, to fully understand the merger and your rights as a
Riverton shareholder, you'll need to read carefully this entire document
including appendices.
Q: IS THERE OTHER INFORMATION I SHOULD CONSIDER?
A: This Proxy Statement-Prospectus incorporates important business and
financial information about Wells Fargo that is not included in or delivered
with this document. For example, Wells Fargo's restated consolidated
financial statements for the year ended December 31, 1997 are not included
in this document. Instead, they are incorporated from Wells Fargo's current
report on Form 8-K filed with the SEC on January 19, 1999.
INFORMATION THAT IS INCORPORATED FROM ANOTHER DOCUMENT IS CONSIDERED PART OF
THIS pROXY sTATEMENT-pROSPECTUS. IT'S CONSIDERED TO HAVE BEEN DISCLOSED TO
YOU WHETHER OR NOT YOU ACTUALLY REVIEW THE INFORMATION.
Q: WHERE CAN I FIND THE INFORMATION THAT HAS BEEN INCORPORATED BY REFERENCE?
A: Information incorporated from other documents is available to you without
charge upon written or oral request. See page 50 under "Where You Can Find
More Information" for a list of the documents that Wells Fargo has
incorporated by reference into this Proxy Statement-Prospectus, and how to
obtain copies of these documents.
Q: WHAT ABOUT REPORTS FILED BY WELLS FARGO AFTER THE DATE OF THIS PROXY
STATEMENT-PROSPECTUS?
A: Reports filed by Wells Fargo with the SEC after the date of this Proxy
Statement-Prospectus may update, modify or correct information in the
documents incorporated by reference. You should review these reports, as
they could disclose a change in the business prospects, financial condition
or other affairs of Wells Fargo since the date of this Proxy Statement-
Prospectus.
3
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SUMMARY
-------
This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the
Merger fully, and for a more complete description of the legal terms of the
Merger, you should carefully read this document and the other information
available to you. See "Where You Can Find More Information."
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<CAPTION>
PARTIES TO THE MERGER
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WELLS FARGO & COMPANY........................ Wells Fargo is a diversified financial services
420 Montgomery Street company. Through its subsidiaries and affiliates,
San Francisco, California 94163 Wells Fargo provides retail, commercial, real estate
(415) 477-1000 and mortgage banking, asset management and consumer
finance, as well as a variety of other financial
services, including equipment leasing, agricultural
finance, securities brokerage and investment banking,
insurance agency services, computer and data
processing services, trust services, mortgage-backed
securities servicing, and venture capital investment.
At September 30, 1998, Wells Fargo had assets of
$195.8 billion, deposits of $130.0 billion and
stockholders' equity of $19.9 billion. Based on
assets at September 30, 1998, Wells Fargo was the 7th
largest commercial banking organization in the United
States.
RIVERTON STATE BANK
HOLDING COMPANY.............................. Riverton is a bank holding company which owns 100% of
616 North Federal Boulevard the outstanding stock of Riverton State Bank,
Riverton, Wyoming 82501 Riverton, Wyoming, and Dubois National Bank, Dubois,
(370) 856-2265 Wyoming. These banks have attracted deposits and
made loans primarily in Fremont County, Wyoming.
At September 30, 1998, Riverton had assets of $85.2
million, deposits of $75.3 million and stockholders'
equity of $8.4 million.
Reasons for the Merger;
RECOMMENDATION OF RIVERTON'S
BOARD OF DIRECTORS (SEE PAGE 17)............. To provide the shareholders of Riverton with a more
certain and accessible market to buy and sell shares.
To enable Riverton to compete more effectively with
multi-state banks presently operating in Fremont
County, Wyoming, which provide a more diversified mix
of financial services and can offer lower loan rates.
</TABLE>
4
<PAGE>
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<CAPTION>
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For reasons set forth above, Riverton's board of
directors believes the merger is in the best
interests of Riverton's shareholders.
RIVERTON'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT RIVERTON SHAREHOLDERS VOTE FOR APPROVAL OF THE
MERGER.
REQUIRED VOTE; VOTING AGREEMENTS............... The holders of at least two-thirds of the outstanding
shares of Riverton common stock must approve the
merger. Riverton's directors have agreed to vote in
favor of the merger all shares of Riverton common
stock beneficially owned by them at the record date
for the special meeting. At the record date, the
directors owned a total of 12,897 shares of Riverton
common stock, representing approximately 61.7% of the
shares of Riverton common stock outstanding at the
record date.
THE MERGER..................................... In the merger, a newly-formed, wholly-owned
subsidiary of Wells Fargo will merge with Riverton.
Riverton will be the surviving entity in the merger
and will become a wholly-owned subsidiary of Wells
Fargo.
WHAT RIVERTON SHAREHOLDERS
WILL RECEIVE (SEE PAGE 22)................... In the merger, Wells Fargo will exchange a total of
$18,600,000 of Wells Fargo common stock for all of
the outstanding shares of Riverton common stock.
Based on 20,893.5 shares of Riverton common stock
outstanding, Wells Fargo will exchange approximately
$890.23 of its common stock for each share of
Riverton common stock.
The exchange ratio, or the number of shares of Wells
Fargo common stock you will receive for each share of
Riverton common stock you own, will be determined by
dividing the share value (approximately $890.23) by
the average of the closing prices of a share of Wells
Fargo common stock as reported on the New York Stock
Exchange composite transaction reporting system
during the period of 20 consecutive trading days
ending on the day immediately before the special
meeting.
Wells Fargo will not issue fractional shares in the
merger. If the total number of shares of Wells Fargo
common stock you are entitled to receive in the
merger does not equal a whole number, Wells Fargo
will pay you cash instead of the fractional share.
</TABLE>
5
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<TABLE>
<CAPTION>
<S> <C>
MANAGEMENT AND OPERATIONS OF RIVERTON AND
THE BANK AFTER THE MERGER.................... When the merger is complete, Wells Fargo will own all
of the outstanding shares of Riverton common stock.
As a result, Wells Fargo will be able to elect or
appoint all of the directors and officers of Riverton.
As a result of the merger, Riverton Bank and Dubois
Bank will become indirect bank subsidiaries of Wells
Fargo. Wells Fargo expects that after the merger the
banks will provide products and services offered by
Wells Fargo affiliates.
ADDITIONAL INTERESTS OF RIVERTON'S
MANAGEMENT (SEE PAGE 17)..................... Riverton's management will receive the same
consideration for their shares of Riverton common
stock as you will.
Alvin "Sparky" Olson, Chairman and President of
Riverton, has entered into an employment and
noncompetition agreement with Wells Fargo. Under
this agreement, Mr. Olson will become an employee of
Wells Fargo for a period of two years beginning on
the day the merger is completed. See page 17 for a
discussion of this agreement.
Riverton's board of directors was aware of Mr.
Olson's employment agreement with Wells Fargo when it
approved the Reorganization Agreement.
CONDITIONS TO THE MERGER
(SEE PAGE 24)................................ A number of conditions must be satisfied before the
merger can be completed, including the following:
. The merger must be approved by the holders of at
least two thirds of the outstanding Riverton common
stock.
. The merger must be approved by governmental
authorities without unreasonably burdensome demands
on Wells Fargo.
. Riverton must receive a legal opinion that its
shareholders will not recognize any gain or loss for
federal income tax purposes as a result of the merger
(except for cash received in lieu of fractional
shares).
. There cannot be any change since December 31, 1997
that has had, or might reasonably be expected to
have, a material adverse effect on
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Riverton and the Banks taken as a whole.
. Riverton must be in full compliance with current
Federal Financial Institutions Examination Council
Year 2000 requirements and there must not be any
feature of Riverton's data processing, operating or
platform systems that would prevent those systems
from being converted to Wells Fargo's systems.
Some of the conditions to the merger are subject to
exceptions and/or to a "materiality" standard. Some
conditions may also be waived by the party entitled
to assert the condition.
REGULATORY APPROVALS (SEE PAGE 19)........... The merger is subject to the prior approval of the
Federal Reserve Board, as the regulator of bank
holding companies such as Wells Fargo. The merger is
also subject to the prior approval of the Wyoming
State Banking Commissioner.
The Federal Reserve Board approved the merger
effective as of January 19, 1999. [The Wyoming State
Banking Commissioner approved the merger effective as
of ______________.]
TERMINATION OF THE REORGANIZATION
AGREEMENT (SEE PAGE 24)...................... Wells Fargo and Riverton can mutually agree to
terminate the Reorganization Agreement without
completing the merger. Also, either party can
terminate the Reorganization Agreement under the
following circumstances:
. if a court or other governmental authority
prohibits the merger; or
. the merger is not completed by March 31, 1999,
unless the failure to complete the merger on or
before that date is the fault of the party seeking to
terminate.
ACCOUNTING TREATMENT (SEE PAGE 21)........... Wells Fargo expects to account for the merger under
the purchase method of accounting. Wells Fargo will
record, at fair value, the acquired assets and
assumed liabilities of Riverton. To the extent the
total purchase price exceeds the fair value of the
assets acquired and liabilities assumed, Wells Fargo
will record goodwill. Wells Fargo will include in
its consolidated results of operations the results of
Riverton's operations after the merger is completed.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
DISSENTERS' RIGHTS (SEE PAGE 17 AND
APPENDIX B)................................. Riverton shareholders who dissent from the merger are
entitled to receive the fair value of their shares of
Riverton common stock. To exercise this right,
dissenting shareholders must follow the procedures
outlined in Appendix B. Failure to comply strictly
with these procedures will result in the forfeiture
of dissenters' rights.
U.S. FEDERAL INCOME TAX
CONSEQUENCES (SEE PAGE 20)................... The merger has been structured so that Riverton
shareholders generally will not recognize any gain or
loss for U.S. federal income tax purposes as a result
of the merger (except for cash received in lieu of
fractional shares). The merger is conditioned on the
receipt by Riverton of a legal opinion to this effect.
THIS TAX TREATMENT MAY NOT APPLY TO CERTAIN RIVERTON
SHAREHOLDERS. YOU SHOULD CONSULT YOUR OWN TAX
ADVISOR FOR A FULL UNDERSTANDING OF THE MERGER'S TAX
CONSEQUENCES.
MARKET INFORMATION (SEE PAGE 12)............. Wells Fargo common stock is listed on the New York
Stock Exchange and the Chicago Stock Exchange under
the symbol "WFC." Before November 3, 1998, the
common stock traded under the symbol "NOB."
On September 16, 1998, the last full trading day
before Riverton and Wells Fargo signed the
Reorganization Agreement, Wells Fargo common stock
closed at $34.3125 per share. On February ___, 1999,
Wells Fargo common stock closed at $___ per share.
There is no public market for Riverton common stock.
</TABLE>
8
<PAGE>
COMPARATIVE PER COMMON SHARE DATA
The following table presents selected comparative per common share data for
Wells Fargo common stock on a historical and pro forma combined basis and for
Riverton common stock on a historical and pro forma equivalent basis. The
historical information for Wells Fargo has been restated to reflect the
combination of Norwest Corporation and old Wells Fargo under the "pooling of
interests" accounting method.
The information in the table should be read with (a) the selected historical
information (and related notes) for Wells Fargo and Riverton appearing elsewhere
in this Proxy Statement-Prospectus, (b) the complete financial statements of
Riverton appearing elsewhere in this Proxy Statement-Prospectus, and (c) the
restated financial statements of Wells Fargo included in the documents
incorporated by reference in this Proxy Statement-Prospectus. See "Where You
Can Find More Information." The information in the table is not necessarily
indicative of the results of the future operations of the combined entity or the
actual results that would have occurred had the Merger become effective prior to
the periods indicated.
The pro forma information in the table assumes that Wells Fargo will exchange
22.26 shares of its common stock for each share of Riverton common stock. See
"The Reorganization Agreement--Basic Plan of Reorganization." The pro forma
information also assumes the merger is accounted for using the purchase method
of accounting. See "The Merger--Accounting Treatment."
<TABLE>
<CAPTION>
WELLS FARGO COMMON STOCK RIVERTON COMMON STOCK
---------------------------------- -------------------------------------
PRO FORMA PRO FORMA
HISTORICAL COMBINED HISTORICAL EQUIVALENT
-------------- --------------- -------------- ------------------
<S> <C> <C> <C> <C>
BOOK VALUE (1):
September 30, 1998 $12.01 12.01 402.82 267.34
December 31, 1997 11.92 11.92 375.54 265.34
DIVIDENDS DECLARED (2):
Nine Months Ended September 30, 1998 0.515 0.515 12.00 11.464
Year Ended December 31, 1997 0.615 0.615 8.00 13.690
NET INCOME (3):
Basic:
Nine Months Ended September 30, 1998 1.31 1.31 39.73 29.16
Year Ended December 31, 1997 1.50 1.50 56.77 33.39
DILUTED:
Nine Months Ended September 30, 1998 1.29 1.29 39.73 28.72
Year Ended December 31, 1997 1.48 1.48 56.77 32.94
</TABLE>
______________________________________
(1) The pro forma combined book value per share of Wells Fargo common stock
represents the historical total combined common stockholders' equity for
Wells Fargo and Riverton divided by total pro forma common shares of the
combined entities. The pro forma equivalent book value per share of Riverton
common stock represents the pro forma combined book value per share of Wells
Fargo common stock multiplied by an assumed exchange ratio of 22.26.
(2) Assumes no changes in cash dividends per share by Wells Fargo. The pro forma
equivalent dividends per share of Riverton common stock represent cash
dividends declared per share of Wells Fargo common stock multiplied by an
assumed exchange ratio of 22.26.
(4) The pro forma combined net income per share of Wells Fargo common stock
(based on weighted average number of common and common equivalent shares)
is the combined historical net income for Wells Fargo and Riverton divided
by the average pro forma common and common equivalent shares of the
combined entities. The pro forma equivalent net income per share of
Riverton common stock represents the pro forma combined net income per
share multiplied by an assumed exchange ratio of 22.26.
9
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
The following selected financial information is to aid you in your analysis
of the financial aspects of the Merger. Except for the balance sheet data for
September 30, 1997, the information for Wells Fargo is derived from information
in its current report on Form 8-K filed with the SEC on January 19, 1999 and
should be read with that information. The current report on Form 8-K is
incorporated by reference into this Proxy Statement-Prospectus. See "Where You
Can Find More Information." The balance sheet data for September 30, 1997 for
Wells Fargo is derived from the quarterly reports on Form 10-Q of Norwest
Corporation and old Wells Fargo. The information for Riverton is derived from
its historical financial statements (and related notes) contained elsewhere in
this Proxy Statement-Prospectus.
WELLS FARGO & COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 YEARS ENDED DECEMBER 31
---------------------- --------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ---------- ----------- ------------ ----------- ----------
(In millions, except per share data)
INCOME STATEMENT DATA
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income.............. $ 10,458 10,159 13,602 12,841 9,802 8,159 7,707
Interest expense............. 3,769 3,691 4,954 4,619 3,879 2,745 2,547
-------- ------- ------- ------- ------- ------- -------
Net interest income.......... 6,689 6,468 8,648 8,222 5,923 5,414 5,160
Provision for credit losses.. 921 799 1,140 500 312 365 708
Non-interest income.......... 4,815 4,138 5,599 4,724 3,141 2,805 2,640
Non-interest expenses........ 7,042 6,675 8,914 8,679 5,551 5,217 5,183
-------- ------- ------- ------- ------- ------- -------
Income before income taxes 3,541 3,132 4,193 3,767 3,201 2,637 1,909
Income tax expense........... 1,397 1,283 1,694 1,539 1,213 995 779
-------- ------- ------- ------- ------- ------- -------
Net income................... $ 2,144 1,849 2,499 2,228 1,988 1,642 1,130
======== ======= ======= ======= ======= ======= =======
PER COMMON SHARE DATA
Net income:
Basic........................ $ 1.31 1.11 1.50 1.38 1.66 1.40 1.85
Diluted...................... 1.29 1.09 1.48 1.36 1.62 1.36 1.74
Dividends declared........... 0.515 0.450 0.615 0.525 0.450 0.383 0.320
BALANCE SHEET DATA
At period end:
Total assets................. $195,863 182,907 185,685 188,633 122,200 112,674 107,170
Long-term debt............... 18,486 17,516 17,335 18,142 16,726 12,039 11,072
Total stockholders' equity... 20,558 19,743 19,778 20,051 9,239 7,629 7,947
</TABLE>
10
<PAGE>
RIVERTON STATE BANK HOLDING COMPANY
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED
SEPTEMBER 30 DECEMBER 31
1998 1997 1997 1996
------------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
(In thousands, except per share data)
INCOME STATEMENT DATA
Interest income...................... $ 4,991.8 4,737.6 6,442.1 5,792.5
Interest expense..................... 2,020.9 1,799.5 2,490.1 2,240.1
--------- -------- -------- --------
Net interest income................. 2,970.9 2,938.1 3,952.0 3,552.4
Provision for losses on loans........ 72.0 54.0 160.3 60.0
Non-interest income.................. 454.9 413.4 544.5 499.8
Non-interest expenses................ 2,144.8 1,896.4 2,585.0 2,370.8
--------- -------- -------- --------
Income before income taxes.......... 1,209.0 1,401.1 1,751.2 1,621.5
Income tax expense................... 399.5 461.7 583.7 533.9
--------- -------- -------- --------
Net income........................... 809.5 939.4 1,167.5 1,087.6
PER COMMON SHARE DATA
Net income:
Basic............................... 39.73 45.60 56.77 52.81
Diluted............................. 39.73 45.60 56.77 52.81
Dividends declared................... 12.00 -- 8.00 6.00
BALANCE SHEET DATA
At period end:
Total assets........................ $85,195.1 85,556.8 84,920.8 73,988.0
Total liabilities................... 76,778.7 77,889.4 77,284.4 67,241.9
Total stockholders' equity.......... 8,416.4 7,667.4 7,636.4 6,746.1
</TABLE>
11
<PAGE>
SHARE PRICES AND DIVIDENDS FOR WELLS FARGO COMMON STOCK
The following table sets forth the high and low sales prices per share of the
Wells Fargo common stock, and the cash dividends paid on Wells Fargo common
stock, for the quarterly periods indicated. Wells Fargo common stock is listed
on the New York Stock Exchange and the Chicago Stock Exchange under the symbol
"WFC." Before November 3, 1998, the common stock was traded under the symbol
"NOB." The symbol was changed following the combination of Norwest Corporation
and old Wells Fargo on November 2, 1998.
The prices for Wells Fargo common stock are as reported on the New York Stock
Exchange. The cash dividend and stock price information for 1996 and the first
three quarters of 1997 has been adjusted to reflect the two-for-one split,
effected in the form of a 100% stock dividend, of Wells Fargo common stock on
October 10, 1997.
There is no public market for Riverton common stock.
<TABLE>
<CAPTION>
WELLS FARGO COMMON STOCK
------------------------------------------------------
HIGH LOW DIVIDENDS
----------------- ------------------ ---------------
1996
<S> <C> <C> <C>
First Quarter 18.5625 15.2500 0.120
Second Quarter 18.7500 16.5000 0.135
Third Quarter 20.5000 16.0000 0.135
Fourth Quarter 23.4375 20.3750 0.135
1997
First Quarter 26.6250 21.3750 0.150
Second Quarter 29.6250 22.1875 0.150
Third Quarter 32.1563 28.1250 0.150
Fourth Quarter 39.5000 29.7500 0.165
1998
First Quarter 43.8750 34.7500 0.165
Second Quarter 43.7500 34.0000 0.165
Third Quarter 39.7500 27.5000 0.185
Fourth Quarter 40.8750 30.1875 0.185
1999
First Quarter
(through February __, 1999)
</TABLE>
The timing and amount of future dividends will depend on earnings, cash
requirements, the financial condition of Wells Fargo and its subsidiaries,
applicable government regulations and other factors deemed relevant by Wells
Fargo's board of directors. As described in "Certain Regulatory Considerations
Pertaining to Wells Fargo Dividend Restrictions," various federal and state
laws limit the ability of affiliate banks to pay dividends to Wells Fargo.
Because of limitations on the ability of Wells Fargo Bank, N.A. to pay
dividends, OCC approval will likely be required before Wells Fargo Bank, N.A.
may pay dividends to the parent company. See "Regulatory and Other
Considerations Pertaining to Wells Fargo Dividend Restrictions."
12
<PAGE>
GLOSSARY OF IMPORTANT TERMS
Following are the meanings of some important terms used in this Proxy
Statement-Prospectus. Each term should be considered in the context in which it
is used. Because the Reorganization Agreement was entered into before Norwest
Corporation changed its name to "Wells Fargo & Company," the terms "Adjusted
Wells Fargo Shares" and "Wells Fargo Measurement Price" are referred to in the
Reorganization Agreement as the "Norwest Adjusted Shares" and "Norwest
Measurement Price," respectively.
<TABLE>
<CAPTION>
<S> <C>
ADJUSTED WELLS FARGO SHARES...................... The number determined by dividing $18,600,000 by
the Wells Fargo Measurement Price.
BANKS............................................ Riverton State Bank and Dubois National Bank, each
a wholly-owned banking subsidiary of Riverton.
BANK HOLDING COMPANY ACT......................... Bank Holding Company Act of 1956.
DGCL............................................. Delaware General Corporation Law.
EFFECTIVE DATE OF THE MERGER..................... The day on which Articles of Merger for the Merger
have been filed with and accepted by the Wyoming
Secretary of State.
EFFECTIVE TIME OF THE MERGER..................... 11:59 p.m., Riverton, Wyoming time, on the
Effective Date of the Merger.
EXCHANGE ACT..................................... Securities Exchange Act of 1934.
EXCHANGE RATIO................................... The number of shares of Wells Fargo common stock
that Wells Fargo will exchange in the Merger for
each share of Riverton common stock, as determined
in accordance with the formula in the
Reorganization Agreement.
FDI ACT.......................................... Federal Deposit Insurance Act.
FDIC............................................. Federal Deposit Insurance Corporation.
FEDERAL RESERVE BOARD............................ Board of Governors of the Federal Reserve System.
INTERSTATE BANKING ACT........................... Reigle-Neal Interstate Banking and Branching Act.
MERGER........................................... The statutory merger of a wholly-owned subsidiary
of Wells Fargo with Riverton pursuant to the terms
of the Reorganization Agreement. The Merger is
the means by which Wells Fargo will acquire
Riverton.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
OCC.............................................. Office of the Comptroller of the Currency.
RIVERTON COMMON STOCK............................ Riverton's common stock, no par value.
REORGANIZATION AGREEMENT......................... The Agreement and Plan of Reorganization dated as
of September 17, 1998 between Riverton State Bank
Holding Company and Norwest Corporation, now named
Wells Fargo & Company.
SEC.............................................. Securities and Exchange Commission.
SECURITIES ACT................................... Securities Act of 1933.
WELLS FARGO...................................... Wells Fargo & Company, formerly named Norwest
Corporation, and its consolidated subsidiaries.
WELLS FARGO COMMON STOCK......................... Wells Fargo's common stock, par value $1-2/3 per
share.
WELLS FARGO MEASUREMENT PRICE.................... The average of the closing prices of a share of
Wells Fargo common stock as reported on the New
York Stock Exchange Composite Transaction
reporting system during the period of 20 trading
days ending on the day immediately before the
special meeting.
</TABLE>
14
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS
-------------------------------
Riverton is sending you this Proxy Statement-Prospectus to provide you with
information concerning the Merger and to solicit your proxy for use at the
special meeting of shareholders. At the special meeting, shareholders of
Riverton will be asked to approve the Merger.
DATE, TIME AND PLACE OF SPECIAL MEETING
The date, time and place of the special meeting are as follows:
WEDNESDAY, MARCH 10, 1999
9:00 A.M., LOCAL TIME
616 NORTH FEDERAL BOULEVARD
Riverton, Wyoming 82501
RECORD DATE
Riverton's board of directors has established February 5, 1999 as the record
date for the meeting. Only shareholders of record on that date are entitled to
attend and vote at the special meeting.
VOTING RIGHTS; VOTES REQUIRED FOR APPROVAL
On the record date, there were 20,893.5 shares of Riverton common stock
outstanding and entitled to vote at the special meeting. The holders of
Riverton common stock are entitled to one vote per share. The presence, in
person or by proxy, at the special meeting of the holders of a majority of the
outstanding shares is necessary for a quorum. Approval of the Merger requires
the affirmative vote, in person or by proxy, of the holders of at least two-
thirds of the outstanding shares of Riverton common stock on the record date.
VOTING AGREEMENTS
The directors of Riverton have entered into voting agreements with Wells
Fargo under which they have agreed to vote in favor of the Merger all shares of
Riverton beneficially owned by them or that they have the sole or shared power
to vote or direct the vote at the record date for the special meeting, as
follows:
<TABLE>
<CAPTION>
Name Shares
--------------------------- --------
<S> <C>
Ray Blumeshine 1,208.5
Earl E. Coleman, Jr. 1,831.2
Melvin Fausset 2,376.0
David B. Hooper 2,053.5
Wayne Major 2,415.3
Alvin "Sparky" Olson 1,329.5
Ron Vosika 1,683.0
TOTAL 12,897.0
PERCENTAGE OF OUTSTANDING 61.7%
</TABLE>
15
<PAGE>
VOTING AND REVOCATION OF PROXIES
All shares of Riverton common stock represented at the special meeting by
a properly executed proxy will be voted in accordance with the instructions
indicated on the proxy, unless the proxy is revoked before a vote is taken. IF
YOU SIGN AND RETURN A PROXY WITHOUT VOTING INSTRUCTIONS, AND DO NOT REVOKE THE
PROXY, THE PROXY WILL BE VOTED FOR THE MERGER.
You may revoke your proxy at any time before it is voted by (a) filing
either an instrument revoking the proxy or a duly executed proxy bearing a later
date with the corporate secretary of Riverton before or at the special meeting
or (b) voting the shares subject to the proxy in person at the special meeting.
Attendance at the special meeting will not by itself result in your proxy being
revoked.
A proxy may indicate that all or a portion of the shares represented by
the proxy 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 the
name of a nominee 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 that proposal, even though the 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 the proposal.
The proposal to approve the Merger must be approved by the holders of at
least two-thirds of the outstanding shares of Riverton common stock. Because
approval of the Merger requires the affirmative vote of a specified percentage
of outstanding shares, not voting on the proposal will have the same effect as
voting against the proposal.
SOLICITATION OF PROXIES
In addition to solicitation by mail, directors, officers and employees of
Riverton may solicit proxies from Riverton shareholders, 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. Riverton will
bear its own expenses in connection with any solicitation of proxies for the
special meeting.
OTHER MATTERS
If an insufficient number of votes for the Merger is received before the
scheduled meeting date, Wells Fargo and Riverton may decide to postpone or
adjourn the special meeting. If this happens, proxies that have been received
that either have been voted for the Merger or contain no instructions will be
voted for adjournment.
Riverton's board of directors is not aware of any business to be brought
before the special meeting other than the proposals to approve the Merger. If
other matters are properly brought before the special meeting or any
adjournments or postponements of the meeting, the persons appointed as proxies
will have authority to vote the shares represented by properly executed proxies
in accordance with their discretion and judgment as to the best interests of
Riverton.
16
<PAGE>
THE MERGER
PURPOSE AND EFFECT OF THE MERGER
Wells Fargo is using the Merger to acquire Riverton. As a result of the
Merger, Riverton will become a wholly-owned subsidiary of Wells Fargo and
shareholders of Riverton will receive shares of Wells Fargo common stock for
their shares of Riverton common stock. Wells Fargo will own all of the
outstanding shares of Riverton common stock. Shareholders of Riverton will
become stockholders of Wells Fargo, and their rights will be governed by Wells
Fargo's restated certificate of incorporation and bylaws rather than Riverton's
articles of association and bylaws. See "Comparison of Rights of Holders of
Riverton Common Stock and Wells Fargo Common Stock."
BACKGROUND OF AND REASONS FOR THE MERGER
Riverton became interested in a merger with a large, diversified financial
services company primarily because Riverton felt it was necessary to provide
more financial services to its customers but found it difficult to do without
great expense given its limited capital base. Riverton was also interested in
developing a dependable and easily accessed market for its shareholders who
wished to either buy or sell shares of its stock. The proposed merger with
Wells Fargo enables Riverton to achieve both of these goals.
ADDITIONAL INTERESTS OF RIVERTON'S MANAGEMENT IN THE MERGER
Alvin "Sparky" Olson, Chairman and President of Riverton, has entered into
an employment and non-competition agreement with Wells Fargo. Under this
agreement, Mr. Olson will become a a regular, full-time employee of Wells Fargo
or an affiliate of Wells Fargo in the position of bank president. The term of
his employment will be for two years beginning on the Effective Date of the
Merger. Mr. Olson will be paid a base salary of $90,000 per annum. Mr. Olson
will be eligible to participate in Wells Fargo's employee benefit plans
available to regular, full-time employees of Wells Fargo in similar positions,
with the exception of Wells Fargo's severance plan.
In consideration of receiving a sum equal to one year's base salary, Mr.
Olson has agreed, among other things, not to engage in the commercial banking,
commercial finance or thrift business in Fremont County, Wyoming. This payment
is in addition to Mr. Olson's base compensation and is payable in 12 equal
installments beginning after his employment terminates.
DISSENTERS' RIGHTS
Shareholders of Riverton are entitled to assert dissenters' rights under
Article 13 of the Wyoming Business Corporation Act in connection with the
Merger. A copy of Article 13 is included as Appendix B. The following
discussion of dissenters' rights is qualified in its entirety by reference to
the provisions of Article 13, which is hereby incorporated by reference.
Notice of Intent to Demand Payment. Any shareholder who wishes to assert
dissenters' rights must do both of the following:
1. Cause Riverton to receive, before the vote on the Merger is taken at the
special meeting, written notice of the shareholder's intention to demand
payment for the shareholder's shares if the Merger is effectuated; and
17
<PAGE>
2. Not vote the shares in favor of the Merger.
Any shareholder who does not satisfy the requirements of Items 1 and 2 above is
not entitled to demand payment for the shareholder's shares under Article 13.
Demanding Payment for Shares. If the Merger is approved, Riverton will
give a written dissenters' notice to all shareholders who have satisfied the
requirements of Items 1 and 2 above and are entitled to demand payment for their
shares. The notice will be given no later than 10 days after the Effective Date
of the Merger and will describe the procedures dissenting shareholders must
follow to demand payment for their shares. The notice will also inform
dissenting shareholders of any restrictions on the transfer of their shares
after the payment demand is received by Riverton. Subject to very limited
exceptions, the demand for payment and deposit of share certificates are
irrevocable.
Shareholders who do not demand payment and deposit their share certificates
in the manner required, and by the date or dates set forth in the dissenters'
notice given by Riverton, are not entitled to payment for their shares under
Article 13.
Payment for Shares. Subject to certain limited exceptions, upon the later
of the Effective Date of the Merger or the receipt of a payment demand, Riverton
will pay to the dissenting shareholder the amount Riverton estimates to be the
fair value of the dissenting shareholder's shares, plus accrued interest. The
payment will be accompanied by, among other things, financial statements of
Riverton, a statement of Riverton's estimate of the fair value of the shares,
and an explanation of how interest was calculated.
Procedure if Dissatisfied with Payment Amount. If a dissenting shareholder
believes that the amount paid or offered by Riverton is less than the fair value
of the shares or that interest due was incorrectly calculated, the shareholder
may give written notice to Riverton of the shareholder's estimate of the fair
value of the shares and the amount of interest due and may demand payment of
such estimate, less any payment made by Riverton. A dissenting shareholder
waives this right unless the shareholder causes Riverton to receive the notice
within 30 days after Riverton pays or offers to pay the shareholder for the
shares.
Court Action to Resolve Payment Amount. If any dissenting shareholder
demands payment as provided in the immediately preceding paragraph, Riverton
may, within 60 days after receiving the payment demand, commence a proceeding
and petition a court to determine the fair value of the shares and accrued
interest. If Riverton does not commence the proceeding within this 60-day
period, it must pay to each dissenting shareholder whose demand remains
unresolved the amount demanded by the shareholder.
Each dissenting shareholder who is made a party to the court action is
entitled to the amount, if any, by which the court finds the fair value of the
dissenting shareholder's shares, plus interest, exceeds the amount paid by
Riverton.
EXCHANGE OF CERTIFICATES
After completion of the Merger, Norwest Bank Minnesota, National
Association, acting as exchange agent for Wells Fargo, will mail to each holder
of record of shares of Riverton common stock a form of letter of transmittal,
together with instructions for the exchange of the holder's Riverton stock
certificates for a certificate representing Wells Fargo common stock.
18
<PAGE>
RIVERTON SHAREHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY
RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS.
No dividend or other distribution declared on Wells Fargo common stock after
completion of the Merger will be paid to the holder of any certificates for
shares of Riverton common stock until after the certificates have been
surrendered for exchange.
When the exchange agent receives a surrendered certificate or certificates
from a shareholder, together with a properly completed letter of transmittal, it
will issue and mail to the shareholder a certificate representing the number of
shares of Wells Fargo common stock to which the shareholder is entitled, plus
the amount in cash of any remaining fractional share and any cash dividends that
are payable with respect to the shares of Wells Fargo common stock so issued.
No interest will be paid on the fractional share amount or amounts payable as
dividends or other distributions.
A certificate for Wells Fargo common stock may be issued in a name other
than the name in which the surrendered certificate is registered if (a) the
certificate surrendered is properly endorsed and accompanied by all documents
required to transfer the shares to the new holder and (b) the person requesting
the issuance of the Wells Fargo common stock certificate either pays to the
exchange agent in advance any transfer and other taxes due or establishes to the
satisfaction of the exchange agent that such taxes have been paid or are not
due.
The exchange agent will issue stock certificates for Wells Fargo common
stock in exchange for lost, stolen or destroyed certificates for Riverton common
stock upon receipt of a lost certificate affidavit and a bond indemnifying Wells
Fargo for any claim that may be made against Wells Fargo as a result of the
lost, stolen or destroyed certificates.
After completion of the Merger, no transfers will be permitted on the books
of Riverton. If, after completion of the Merger, certificates for Riverton
common stock are presented for transfer to the exchange agent, they will be
canceled and exchanged for certificates representing Wells Fargo common stock.
None of Wells Fargo, Riverton, the exchange agent or any other person will
be liable to any former holder of Riverton common stock for any amount delivered
in good faith to a public official pursuant to applicable abandoned property,
escheat or similar laws.
REGULATORY APPROVALS
The Merger is subject to the prior approval of the Federal Reserve Board. The
approval of the Federal Reserve Board is required because Wells Fargo is a bank
holding company registered under the Bank Holding Company Act. Wells Fargo has
filed an application with the Federal Reserve Board requesting approval of the
Merger. The Federal Reserve Board approved the application effective as of
January 19, 1999.
Because the merger will result in the acquisition by Wells Fargo of the
Banks, the Wyoming State Banking Commissioner must also approve the merger.
[The Wyoming State Banking Commissioner approved the merger effective as of
________________.]
The approval of an application means only that the regulatory criteria for
approval have been satisfied or waived. It does not mean that the approving
authority has determined that the consideration to be received by Riverton
shareholders is fair. Regulatory approval does not constitute an endorsement or
recommendation of the Merger.
19
<PAGE>
Wells Fargo and Riverton 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. Wells Fargo and Riverton
intend to seek 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 Merger cannot be completed unless all necessary regulatory approvals are
granted. In addition, Wells Fargo may elect not to complete the Merger if any
condition under which any regulatory approval is granted is unreasonably
burdensome to Wells Fargo. See "The Reorganization AgreementConditions to the
Completion of The Merger" and "Termination of the Reorganization Agreement."
EFFECT ON RIVERTON'S EMPLOYEE BENEFIT PLANS
The Reorganization Agreement provides that, subject to any eligibility
requirements applicable to such plans, employees of Riverton will be entitled to
participate in those Wells Fargo employee benefit and welfare plans specified in
the Reorganization Agreement. Eligible employees of Riverton will enter each of
such plans no later than the first day of the calendar quarter which begins at
least 32 days after completion of the Merger.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER TO RIVERTON
SHAREHOLDERS
The following is a summary of the anticipated U.S. federal income tax
consequences of the Merger to Riverton shareholders. The summary is based on
the parties' understanding of the U.S. federal income tax laws as currently in
effect and as currently interpreted. It does not cover issues of state, local
or foreign taxation. Nor does it address all aspects of U.S. federal income
taxation that may be important to particular shareholders in light of their
personal circumstances or to shareholders subject to special rules under U.S.
federal income tax laws. Future legislation, regulations, administrative
rulings and court decisions may alter the tax consequences summarized below.
The anticipated U.S. federal income tax consequences to Riverton
shareholders are as follows:
. A shareholder who receives shares of Wells Fargo common stock in exchange
for shares of Riverton common stock will not recognize any gain or loss
on the receipt of the shares of Wells Fargo common stock, except for cash
received in lieu of a fractional share. The shareholder's gain or loss on
the receipt of cash in lieu of a fractional share will equal the
difference between the cash received and the basis of the fractional
share exchanged.
. A shareholder's tax basis in the shares of Wells Fargo common stock
received will be the same as the shareholder's tax basis in the shares of
Riverton common stock exchanged in the Merger, less any cash received in
lieu of fractional shares.
. The holding period of the shares of Wells Fargo common stock received by
a shareholder will include the holding period of the shareholder's shares
of Riverton common stock exchanged in the Merger, but only if the shares
of Riverton common stock were held as a capital asset at the time the
Merger is completed.
Riverton is not required to complete the Merger unless it receives an
opinion of its counsel that these will be the U.S. federal income tax
consequences of the Merger. The opinion may make certain assumptions and may
rely on representations of the parties to the Merger as to factual matters. It
will
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represent counsel's judgment as to the tax status of the Merger under the Code
and will not be binding on the IRS. There is no assurance that the IRS will not
take a contrary position regarding the tax consequences of the Merger. Nor is
there is any assurance that the IRS would not prevail in the event the tax
consequences of the Merger were litigated.
RESALE OF WELLS FARGO COMMON STOCK
The Wells Fargo common stock issued in the Merger will be freely
transferable under the Securities Act, except for shares issued to Riverton
shareholders who are considered to be "affiliates" of Riverton or Wells Fargo
under Rule 145 under the Securities Act or of Wells Fargo under Rule 144 under
the Securities Act. The definition of "affiliate" is complex and depends on the
specific facts, but generally includes directors, executive officers, 10%
stockholders and other persons with the power to direct the management and
policies of the company in question.
Affiliates of Riverton may not sell the shares of Wells Fargo common stock
received in the Merger except (a) pursuant to an effective registration
statement under the Securities Act, (b) in compliance with an exemption from the
registration requirements of the Securities Act or (c) in compliance with Rule
144 and Rule 145 under the Securities Act. Generally, those rules permit
resales of stock received by affiliates so long as Wells Fargo has complied with
certain reporting requirements and the selling stockholder complies with certain
volume and manner of sale restrictions.
Riverton has agreed to use its best efforts to deliver to Wells Fargo signed
representations by each person who may be deemed to be an affiliate of Riverton
that the person will not sell, transfer or otherwise dispose of the shares of
Wells Fargo common stock to be received by the person in the Merger except in
compliance with the applicable provisions of the Securities Act and the rules
and regulations promulgated thereunder.
This Proxy Statement-Prospectus does not cover any resales of Wells Fargo
common stock received by affiliates of Riverton.
STOCK EXCHANGE LISTING
The shares of Wells Fargo common stock to be issued in the Merger will be
listed on the New York Stock Exchange and the Chicago Stock Exchange.
ACCOUNTING TREATMENT
Wells Fargo will account for the Merger as a purchase. Wells Fargo will
record, at fair value, the acquired assets and assumed liabilities of Riverton.
To the extent the total purchase price exceeds the fair value of the assets
acquired and liabilities assumed, Wells Fargo will record goodwill. Wells Fargo
will include in its results of operations the results of Riverton's operations
after the Merger.
The unaudited pro forma data included in this Proxy Statement-Prospectus for
the Merger have been prepared using the purchase method of accounting. See
"Summary--Comparative Per Common Share Data."
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THE REORGANIZATION AGREEMENT
The following is a summary of certain provisions of the Reorganization
Agreement, a copy of which is attached to this Proxy Statement-Prospectus as
Appendix A. The Reorganization Agreement is incorporated by reference into this
Proxy Statement-Prospectus.
This summary is qualified in its entirety by reference to the full text of
the Reorganization Agreement. Riverton shareholders are encouraged to read the
Reorganization Agreement carefully and in its entirety. Parenthetical
references are to the relevant paragraph or paragraphs of the Reorganization
Agreement.
BASIC PLAN OF REORGANIZATION
Structure. Wells Fargo will acquire Riverton pursuant to a merger of
Riverton with a newly-formed, wholly-owned subsidiary of Wells Fargo. Riverton
will be the surviving company in the Merger. Wells Fargo will exchange shares
of Wells Fargo common stock for all of the outstanding shares of Riverton common
stock, so that after the Merger Riverton will be a wholly-owned subsidiary of
Wells Fargo. (paragraph 1(a))
Consideration.
Wells Fargo common stock. As part of the Merger, each share of Riverton
common stock outstanding immediately before the Merger will be converted into
and exchanged for the number of shares of Wells Fargo common stock determined by
dividing the Adjusted Wells Fargo Shares by the number of shares of Riverton
common stock then outstanding. The number of Adjusted Wells Fargo Shares will
equal $18,600,000 divided by the Wells Fargo Measurement Price. The Wells Fargo
Measurement Price will be the average of the closing prices of a share of Wells
Fargo common stock as reported on the New York Stock Exchange Composite
Transaction reporting system during the period of 20 consecutive trading days
ending on the day immediately before the special meeting. (paragraph 1(a))
THE PRICE OF WELLS FARGO COMMON STOCK ON THE EFFECTIVE DATE OF THE MERGER
MAY BE HIGHER OR LOWER THAN THE WELLS FARGO MEASUREMENT PRICE. NO ADJUSTMENT
WILL BE MADE TO THE NUMBER OF SHARES OF WELLS FARGO COMMON STOCK YOU WILL
RECEIVE TO REFLECT FLUCTUATIONS IN THE PRICE OF WELLS FARGO COMMON STOCK
OCCURRING AFTER THE SPECIAL MEETING.
Cash in Lieu of Fractional Shares. If the aggregate number of shares of
Wells Fargo common stock you will receive in the Merger does not equal a whole
number, you will receive cash in lieu of the fractional share. The cash payment
will be equal to the product of the fractional part of the share of Wells Fargo
common stock multiplied by the average of the closing prices of a share of Wells
Fargo common stock as reported on the New York Stock Exchange Composite
Transaction reporting system during the period of five consecutive trading days
ending on the day immediately before the special meeting. (paragraph 1(c))
Completion of the Merger. Wells Fargo and Riverton expect the Merger to be
completed promptly after approval of the Merger by Riverton shareholders and the
satisfaction (or waiver) of the other conditions to completion contained in the
Reorganization Agreement, including the receipt of all required regulatory
approvals. (paragraph 1(d))
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REPRESENTATIONS AND WARRANTIES
The Reorganization Agreement contains various representations and warranties
by Wells Fargo and Riverton as to, among other things, (a) their organization
and legal authority to engage in their respective businesses, (b) their
capitalization, (c) their corporate authority to enter into the Reorganization
Agreement and complete the Merger, (d) the absence of certain material changes,
(e) compliance with laws, (f) material contracts, (g) absence of certain
litigation, and (h) undisclosed liabilities. (paragraphs 2 and 3) Because the
representations and warranties do not survive completion of the Merger, they
function primarily as a due diligence device and a closing condition (that is,
they must continue to be true in all material respects until the Merger is
completed).
CERTAIN COVENANTS
The Reorganization Agreement has a number of covenants and agreements that
govern the actions of Riverton and Wells Fargo pending completion of the Merger.
Some of the covenants and agreements are summarized below.
Conduct of Business.
Riverton. Under the Reorganization Agreement, Riverton and each Bank is
required to maintain its corporate existence in good standing, maintain the
general character of its business, conduct its business in the ordinary and
usual manner, and extend credit in accordance with existing lending policies.
Subject to certain exceptions, Riverton and each Bank is required to obtain the
consent of Wells Fargo before it makes any new loan or modifies, restructures or
renews any existing loan if the amount of the resulting loan, when combined with
all other loans to the customer, would exceed $100,000. The Reorganization
Agreement places restrictions on the ability of Riverton and the Banks to take
certain actions without Wells Fargo's consent, including (a) incurring
indebtedness, (b) granting rights to acquire shares of its capital stock, (c)
issuing shares of its capital stock, (d) declaring dividends or purchasing its
capital stock, except (1) if the Effective Date is after December 31, 1998,
dividends not to exceed an aggregate of $12 per share of Riverton common stock
declared and paid in accordance with past practice and (2) any dividend declared
by a Bank's board of directors in accordance with applicable law and regulation,
(e) selling its assets and (f) raising the compensation of its officers and
directors. (paragraphs 4(a) and (b)) Some of these restrictions apply only if
the amount in question exceeds a threshold dollar value.
Wells Fargo. Wells Fargo has agreed to conduct its business and to cause
its significant subsidiaries to conduct their respective businesses in
compliance with all material obligations and duties imposed by laws,
regulations, rules and ordinances or by judicial orders, judgments and decrees
applicable to them or to their businesses or properties.
Competing Transactions. Neither Riverton nor either Bank nor any director,
officer, representative or agent of Riverton or either Bank may, directly or
indirectly, solicit, authorize the solicitation of, or enter into any
discussions with, any third party concerning any offer or possible offer to (a)
purchase the common stock, any security convertible into the common stock, or
any other equity security of Riverton or either Bank, (b) make a tender or
exchange offer for any shares of its common stock or other equity security of
Riverton or either Bank, (c) purchase, lease or otherwise acquire the assets of
Riverton or either Bank except in the ordinary course of business or (d) merge,
consolidate or otherwise combine with Riverton or either Bank. Riverton and
each Bank, as applicable, has also agreed to promptly inform Wells Fargo if any
third party makes an offer or inquiry concerning any of the foregoing.
(paragraph 4(h))
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Other Covenants. The Reorganization Agreement contains various other
covenants, including covenants relating to the preparation and distribution of
this Proxy Statement-Prospectus, access to information, and the listing on the
New York Stock Exchange and Chicago Stock Exchange of the shares of Wells Fargo
common stock to be issued in the Merger. In addition, Riverton has agreed to
(a) establish such additional accruals and reserves as are necessary to conform
its accounting and credit loss reserve practices and methods to those of Wells
Fargo and Wells Fargo's plans with respect to the conduct of Riverton's business
after the Merger and (b) use its best efforts to deliver to Wells Fargo prior to
completion of the Merger signed representations substantially in the form
attached as Exhibit B to the Reorganization Agreement from each executive
officer, director or shareholder of Riverton who may reasonably be deemed an
"affiliate" of Riverton within the meaning of each term used in Rule 145 of the
Securities Act. (paragraphs 4(l) and 4(m)) and Exhibit B) See "The Merger
Resale of Wells Fargo Common Stock."
CONDITIONS TO THE COMPLETION OF THE MERGER
Under the Reorganization Agreement, various conditions are required to be
met before the parties are obligated to complete the Merger. These conditions
are customary and include such items as the receipt of shareholder, regulatory
and listing approval, and the receipt by Riverton of a favorable tax opinion.
(paragraphs 6 and 7) See "The Merger--Material U.S. Federal Income Tax
Consequences of the Merger to Riverton Shareholders."
The obligations of the parties are also subject to the continued accuracy of
the other party's representations and warranties, the performance by the other
party of its obligations under the Reorganization Agreement, and, subject to
certain exceptions, the absence of any changes that have had or might be
reasonably expected to have an adverse effect on Riverton. Some of the
conditions to the Merger are subject to exceptions and/or a "materiality"
standard. Certain conditions to the Merger may be waived by the party seeking
to assert the condition. (paragraphs 6 and 7)
TERMINATION OF THE REORGANIZATION AGREEMENT
Termination by Mutual Consent. Wells Fargo and Riverton can agree to
terminate the Reorganization Agreement at any time before completion of the
Merger. (paragraph 9(a)(i))
Termination by Either Wells Fargo or Riverton. Either Wells Fargo or
Riverton can terminate the Reorganization Agreement if any of the following
occurs:
. The Merger has not been completed by March 31, 1998 (provided this right
to terminate will not be available to a party whose failure to perform
in all material respects any obligation under the Reorganization
Agreement resulted in the failure of the Merger to occur on or before
that date). (paragraph 9(a)(ii))
. A court or governmental authority of competent jurisdiction has issued a
final order restraining, enjoining or otherwise prohibiting the
transactions contemplated by the Reorganization Agreement. (paragraph
9(a)(iii))
EFFECT OF TERMINATION
Generally, if either party terminates the Reorganization Agreement, it
becomes void without any liability to either party other than for willful and
material breaches occurring before termination; however, the provisions of the
Reorganization Agreement governing confidential information
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and expenses incurred in connection with the Merger continue in effect after
termination of the Reorganization Agreement. (paragraph 9(b))
WAIVER AND AMENDMENT
Either Wells Fargo or Riverton may waive any inaccuracies in the
representations and warranties of the other party or compliance by the other
party with any of the covenants or conditions contained in the Reorganization
Agreement. (paragraph 16)
Wells Fargo and Riverton can amend the Reorganization Agreement at any time
before the Merger is completed; however, the Reorganization Agreement prohibits
them from amending the Reorganization Agreement after Riverton shareholders
approve the Merger if the amendment would change in a manner adverse to Riverton
shareholders the consideration to be received by Riverton shareholders in the
Merger. (paragraph 17)
EXPENSES
Wells Fargo and Riverton will each pay their own expenses in connection
with the Merger, including fees and expenses of their respective independent
auditors and counsel. (paragraph 10)
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COMPARISON OF RIGHTS OF HOLDERS OF RIVERTON
COMMON STOCK AND WELLS FARGO COMMON STOCK
The rights of Riverton shareholders are currently governed by the Wyoming
Business Corporation Act and Riverton's articles of incorporation and bylaws.
Wells Fargo is incorporated under the laws the state of Delaware. The rights of
Wells Fargo stockholders are governed by the Delaware General Corporation Law
(DGCL) and Wells Fargo's restated certificate of incorporation and bylaws. Upon
completion of the Merger, Riverton shareholders will become stockholders of
Wells Fargo. As a result, their rights will be governed by the DGCL and Wells
Fargo's governing documents.
The following discussion compares certain rights of the holders of Riverton
common stock to the rights of the holders of Wells Fargo common stock. You can
find additional information concerning the rights of Wells Fargo stockholders in
Wells Fargo's restated certificate of incorporation and bylaws, in Wells Fargo's
current report on Form 8-K filed October 13, 1997, containing a description of
Wells Fargo common stock, and in Wells Fargo's registration statement on Form 8-
A dated October 21, 1998, containing a description of preferred stock purchase
rights attached to shares of common stock.
To the extent that information in the current report on Form 8-K filed
October 13, 1997 is inconsistent with the information below, you should rely on
the information below, as it is as of a more recent date.
Wells Fargo's restated certificate of incorporation and its bylaws, as well
as its current report on Form 8-K filed October 13, 1997 and its Form 8-A
registration statement dated October 21, 1998, are incorporated into this Proxy
Statement-Prospectus by reference. See "Where You Can Find More Information."
CAPITAL STOCK
Wells Fargo. Wells Fargo's restated certificate of incorporation currently
authorizes the issuance of 4,000,000,000 shares of Wells Fargo common stock, par
value $1-2/3 per share, 20,000,000 shares of preferred stock, without par value,
and 4,000,000 shares of preference stock, without par value. At December 31,
1998, there were 1,644,057,803 shares of Wells Fargo common stock outstanding,
6,535,362 shares of Wells Fargo preferred stock outstanding, and no shares of
Wells Fargo preference stock outstanding.
Riverton. Riverton's articles of incorporation authorize the issuance of
50,000 shares of stock, all of one class, and all of such shares shall be
without par value.
RIGHTS PLAN
Wells Fargo. Each share of Wells Fargo common stock (including shares that
will be issued in the Merger) has attached to it one preferred share purchase
right. Once exercisable, each right allows the holder to purchase a fractional
share of Wells Fargo's Series C Junior Participating Preferred Stock. A right,
by itself, does not confer on its holder any rights of a Wells Fargo
stockholder, including the right to vote or receive dividends, until the right
is exercised. The rights trade automatically with shares of Wells Fargo common
stock. The rights are designed to protect the interests of Wells Fargo and its
stockholders against coercive takeover tactics. The rights are intended to
encourage potential acquirors to negotiate on behalf of all stockholders the
terms of any proposed takeover. Although not their purpose, the rights may
deter takeover proposals.
Riverton. Riverton has no comparable rights plan.
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DIRECTORS
Wells Fargo. Wells Fargo's bylaws provide for a board of directors
consisting of not less than 10 nor more than 28 persons, each serving a term of
one year or until his or her earlier death, resignation or removal. The number
of directors of Wells Fargo is currently fixed at 24. Directors of Wells Fargo
may be removed with or without cause by the affirmative vote of the holders of a
majority of the shares of Wells Fargo capital stock entitled to vote thereon.
Vacancies on Wells Fargo's board of directors may be filled by majority vote of
the remaining directors or, in the event a vacancy is not so filled or if no
director remains, by the stockholders. Directors of Wells Fargo are elected by
plurality of the votes of shares of Wells Fargo capital stock entitled to vote
thereon present in person or by proxy at the meeting at which directors are
elected. Wells Fargo's restated certificate of incorporation does not currently
permit cumulative voting in the election of directors.
Riverton. Riverton's articles of incorporation provide for a board of
directors consisting of not less than three (3) persons nor more than eight (8)
persons, each serving a term of one year or until the next annual shareholder's
meeting. The number of directors of Riverton is currently fixed at seven (7).
Directors may be removed in the manner provided by the statutes of the State of
Wyoming which include removal with or without cause by the voting group of
shareholders who elected the director or by judicial proceeding upon a finding
that the director engaged in fraudulent or dishonest conduct, or gross abuse of
authority with respect to the corporation or where removal of the director is in
the best interest of the corporation. CUMULATIVE VOTING IS ALLOWED IN THE
ELECTION OF DIRECTORS.
AMENDMENT OF CHARTER DOCUMENT AND BYLAWS
Wells Fargo. Wells Fargo's restated certificate of incorporation may be
amended only if the proposed amendment is approved by Wells Fargo's board of
directors and thereafter approved by a majority of the outstanding stock
entitled to vote thereon and by a majority of the outstanding stock of each
class entitled to vote thereon as a class. Wells Fargo's bylaws may be amended
by a majority of Wells Fargo's board of directors or by a majority of the
outstanding stock entitled to vote thereon. Shares of Wells Fargo preferred
stock and Wells Fargo preference stock currently authorized in Wells Fargo's
restated certificate of incorporation may be issued by Wells Fargo's board of
directors without amending Wells Fargo's restated certificate of incorporation
or otherwise obtaining the approval of Wells Fargo's Stockholders.
Riverton. Riverton's articles of incorporation may be amended as provided
by the Wyoming Business Corporation Act, W.S. (S)17-16-1001, et seq, (1997, as
amended). Riverton's bylaws may be amended by a majority of Riverton's board of
directors subject to repeal or change by the vote of the shareholders.
APPROVAL OF MERGERS AND ASSET SALES
Wells Fargo. Except as described below, the affirmative vote of a majority
of the outstanding shares of Wells Fargo common stock entitled to vote thereon
is required to approve a Merger or merger involving Wells Fargo or the sale,
lease or exchange of all or substantially all of Wells Fargo's corporate assets.
No vote of the stockholders is required, however, in connection with a Merger in
which Wells Fargo is the surviving corporation and (a) the agreement of Merger
for the Merger does not amend in any respect Wells Fargo's restated certificate
of incorporation, (b) each share of capital stock outstanding immediately before
the Merger is to be an identical outstanding or treasury share of Wells Fargo
after the Merger and (c) the number of shares of capital stock to be issued in
the Merger (or to be
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issuable upon conversion of any convertible instruments to be issued in the
Merger) does not exceed 20% of the shares of Wells Fargo's capital stock
outstanding immediately before the Merger.
Riverton. The board of directors shall adopt a resolution recommending the
sale, lease, exchange or other disposition of all or substantially all of the
property and assets of the corporation; with or without its goodwill, and
directing the submission thereof to a vote at a meeting of shareholders at an
annual or a special meeting. At such meeting the shareholders may authorize the
sale, lease, exchange, or other disposition and may fix, or authorize the board
of directors to fix, any or all of the terms and conditions thereof. Such
authorization shall require the affirmative vote of two-thirds of the shares of
Riverton entitled to vote thereon.
PREEMPTIVE RIGHTS
Wells Fargo. Neither Wells Fargo's restated certificate of incorporation
nor its bylaws grants preemptive rights to its stockholders.
Riverton. Neither Riverton's articles of incorporation nor its bylaws
grant preemptive rights to its shareholders.
APPRAISAL RIGHTS
Wells Fargo. Section 262 of the DGCL provides for stockholder appraisal
rights in connection with consolidations and mergers 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 consolidation
or merger, were either (a) 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 (b) 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. Wells Fargo common stock
is listed on the New York Stock Exchange and the Chicago Stock Exchange and
currently held by more than 2,000 stockholders. As a result, assuming that the
other conditions described above are satisfied, holders of Wells Fargo common
stock will not have appraisal rights in connection with consolidations and
mergers involving Wells Fargo.
Riverton. Wyoming Business Corporation Act provides shareholders with
dissenters' rights in connection with consolidations and mergers. For a
specific discussion of the appraisal rights available to shareholders of
Riverton, see "The MergerDissenters' Rights."
SPECIAL MEETINGS
Wells Fargo. 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. Wells Fargo's 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 Wells Fargo's board of
directors. Holders of Wells Fargo common stock do not have the ability to call
a special meeting of stockholders.
Riverton. Special meetings of the shareholders may be called by the
President, a Vice President, the board of directors, or the holders of not less
than one-tenth of all shares entitled to vote at the meeting.
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DIRECTORS' DUTIES
Wells Fargo. The DGCL does not specifically enumerate directors' duties.
In addition, the DGCL does not contain any provision specifying what factors a
director must and may consider in determining a corporation's best interests.
However, judicial decisions in Delaware have established that, in performing
their duties, directors are bound to use that degree of care which ordinarily
prudent persons would use in similar circumstances.
Riverton. Wyoming law generally requires directors to discharge their
duties in good faith, with the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and in a manner the
director reasonably believes to be in or at least not opposed to the best
interests of the corporation.
ACTION WITHOUT A MEETING
Wells Fargo. As permitted by Section 228 of the DGCL and Wells Fargo's
restated certificate of incorporation, 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.
Riverton. Action required or permitted to be taken at a shareholders'
meeting may be taken without a meeting if notice of the proposed action is given
to all voting shareholders and the action is taken by the holders of all shares
entitled to vote on the action.
LIMITATION OF DIRECTOR LIABILITY
Wells Fargo. Wells Fargo's restated certificate of incorporation provides
that a director (including an officer who is also a director) of Wells Fargo
shall not be liable personally to Wells Fargo or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability arising
out of (a) any breach of the director's duty of loyalty to Wells Fargo or its
stockholders, (b) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) payment of a dividend
or approval of a stock repurchase in violation of Section 174 of the DGCL or (d)
any transaction from which the director derived an improper personal benefit.
This provision protects Wells Fargo'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.
Riverton. There are no provisions in Riverton's articles of incorporation
which limit director liability; however there are provisions in the bylaws,
articles of incorporation, and Wyoming Statutes which provide for
indemnification of directors as provided below.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Wells Fargo. Wells Fargo's restated certificate of incorporation provides
that Wells Fargo 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 Wells Fargo (or was serving at the request of Wells Fargo
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
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authorized by Wells Fargo's board of directors. Wells Fargo's restated
certificate of incorporation also provides that Wells Fargo 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. Wells Fargo's
restated certificate of incorporation authorizes Wells Fargo to provide similar
indemnification to employees or agents of Wells Fargo.
Pursuant to Wells Fargo's restated certificate of incorporation, Wells
Fargo may maintain insurance, at its expense, to protect itself and any
directors, officers, employees or agents of Wells Fargo or another entity
against any expense, liability or loss, regardless of whether Wells Fargo 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 Wells Fargo's
restated certificate of incorporation or Wells Fargo bylaws, agreement, vote of
stockholders or disinterested directors or otherwise.
Riverton. Riverton shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit or investigation (other than action by or in the right of the corporation),
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he acted
in good faith and in a manner he reasonably believed to be in the best interests
of the corporation and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful.
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee, or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in the best interest of the corporation; but no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person has been adjudged to be liable for negligence or misconduct in
the performance of his duty to the corporation unless and only to the extent
that the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability, but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnification for such expenses which such court deems proper.
Pursuant to Riverton's articles of incorporation and bylaws, Riverton may
maintain insurance at its expense to protect itself and any directors, officers,
employees and agents of Riverton or another entity against any expense,
liability or loss, regardless of whether Riverton has the power or obligation to
indemnify that person against such expense liability or loss under its bylaws or
articles of incorporation.
The right to indemnification is not exclusive of any other right which any
person may have or acquire under any statute, provision of Riverton's articles
of incorporation or bylaws, agreement, vote of shareholders or disinterested
directors or otherwise.
30
<PAGE>
DIVIDENDS
Wells Fargo. 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. Wells Fargo
is also subject to Federal Reserve Board policies regarding payment of
dividends, which generally limit dividends to operating earnings. See "Certain
Regulatory and Other Considerations Pertaining to Wells Fargo."
Riverton. Subject to restrictions by the Federal Reserve Bank, the OCC and
the Wyoming State Bank Examiner, Riverton may declare and pay dividends as
determined by the board of directors of so much of the net profits as they judge
proper, except that no dividends may be paid until the surplus fund of the bank
equals its common capital.
CORPORATE GOVERNANCE PROCEDURES; NOMINATION OF DIRECTORS
Wells Fargo. Wells Fargo's 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. Wells Fargo's 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, Wells
Fargo's bylaws contain detailed advance notice and informational procedures
which must be followed in order for a Wells Fargo stockholder to propose an item
of business for consideration at a meeting of Wells Fargo stockholders.
Riverton. Directors are elected at the annual meeting. Nominations for
directors may be made by any shareholder entitled to vote at the annual meeting.
All other business conducted at the annual meeting shall be that contained in
the notice of such meeting or as is properly brought before the meetings. The
business and affairs of the corporation are managed by the board of directors
except as otherwise provided by law.
31
<PAGE>
INFORMATION ABOUT RIVERTON
GENERAL
- -------
Riverton State Bank Holding Company (Riverton) is a Wyoming corporation which
owns all the issued and outstanding shares of Riverton State Bank located in
Riverton, Wyoming and Dubois National Bank located in Dubois, Wyoming. Riverton
State Bank has total assets of approximately $61.5 million and capital of
approximately $5.5 million as of December 31, 1998. Dubois National Bank has
total assets of $23.8 million and capital of approximately $2.1 million as of
December 31, 1998. Both banks operate in Fremont County, Wyoming which is
largely an agriculture and livestock area. The loans at both banks are divided
largely between agricultural-livestock operations, commercial loans and personal
loans. Both banks have enjoyed profitable years and substantial growth over the
past five years.
LEGAL PROCEEDINGS
- -----------------
There are no legal proceedings pending against Riverton or either of the
Banks. Each of the Banks has some collection activities pending which will not
in the opinion of Riverton's counsel have any material impact on the financial
condition of either Bank.
MARKET PRICE AND DIVIDENDS
- --------------------------
There is no established market for the stock of Riverton. Most transactions
have been by private agreement. Over the past three years the board of
directors of Riverton has authorized Riverton to acquire shares of its own stock
at book value. Riverton does not presently own any treasury shares.
Dividends have been paid by Riverton over the past several years and have
amounted to $6-$12 per share for each of the past three years. To support
growth, dividends have been restricted by the board of directors to
approximately 30% of net income.
BENEFICIAL OWNERSHIP OF RIVERTON COMMON STOCK BY RIVERTON MANAGEMENT AND
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of February 5, 1999, the names of the
directors and executive officers of Riverton and the number of shares of
Riverton common stock beneficially owned by them. (Beneficial ownership, for
this purpose, includes shares as to which a person may be deemed to have sole or
shared voting power or sole or shared investment power.) No persons other than
those named in the table own more than 5% of the outstanding shares of Riverton
common stock
<TABLE>
<CAPTION>
NAME SHARES POSITION
<S> <C> <C>
Ray Blumenshine 1208.5 ( 5.8%) Director
Earl E. Coleman, Jr. 1831.2 ( 8.8%) Secretary/Director
Melvin Fausset 2376.0 (11.4%) Director
David B. Hooper 2053.5 ( 9.8%) Director
Wayne Major 2415.3 (11.6%) Director
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Alvin "Sparky" Olson 1329.5 ( 6.4%) President/Director
Ron Vosika 1683.0 ( 8.1%) Director
</TABLE>
Colletively the above individuals own 61.7% of the issued and outstanding
shares of Riverton common stock.
33
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RIVERTON'S FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The following is Riverton management's discussion and analysis of the
significant factors affecting Riverton's financial condition and results of
operations. This discussion should be read in conjunction with Riverton's
audited financial statements and accompanying footnotes and other selected
financial data presented elsewhere herein.
Riverton's earnings depend primarily on Riverton's net interest income,
which is the difference between the income earned on Riverton's loans and
investments and the interest paid on its deposits. Among the factors affecting
net interest income are the type, volume and quality of Riverton's assets; the
type and volume of its deposits and the relative sensitivity of Riverton's
interest-earning assets and its interest-bearing deposits to changes in interest
rates. In addition, Riverton's income is significantly affected by the fees it
receives from other banking services, by its required provision or loan losses
and by the level of its operating expenses. All aspects of Riverton's
operations are affected generally by market, economic and competitive
conditions.
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
Financial Condition. At September 30, 1998, total assets were $85.2
million, an increase of $.3 million or .4% from $84.9 million at December 31,
1997. At September 30, 1998, total liabilities were $76.8 million, a decrease
of $.5 million or .6% from $77.3 million at December 31, 1998. As of September
30, 1998, Riverton remained in the "well-capitalized" category with the ratio of
total capital to risk-weighted assets in excess of 14%.
Earnings Performance. Net income for the nine months ended September 30,
1998, was $810,000 compared with $959,000 for the same period in 1997. Net
interest income totaled $2,898,000 through September 30, 1998, an increase of
$14,000 over the same period last year. The increase in net interest income
resulted from the overall growth in earning assets being greater than the growth
in interest-bearing deposits. The net interest margin for the nine month period
ended September 30, 1998, was 4.48% as compared with 5.38% for the same period
in 1997.
Riverton increased its provision for loan losses by $72,000 for the first
nine months of 1998, which was $18,000 more than the increase during the same
period in 1997. Net loan charge-offs for the first nine months of 1998 have
totaled $70,000, leaving a loan loss reserve of $627,000 or 1.15% of total loans
as of September 30, 1998.
Noninterest income for the first nine months of 1998 increased by $42,000
to $455,000 compared with the same period during 1997, primarily due to a
decrease in fees and service charges. Fees and service charges are subject to
fluctuation based on customer behavior. Noninterest expense for the first nine
months of 1998 increased $248,000 to $2,144,000, primarily due to an increase in
employee compensation and benefits.
34
<PAGE>
YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
Financial Condition.
December 31,
-----------------
1997 1996
------- -------
(Dollars in thousands)
ASSETS
<S> <C> <C>
Cash and due from banks $ 3,999 $ 3,780
Federal funds sold and interest-bearing deposits 13,434 4,308
Investment securities
Available for sale 3,022 3,171
Held to maturity 7,308 10,566
Loans 52,631 48,730
Less allowance for possible loans losses (625) (498)
------- -------
52,006 48,232
Bank premises and equipment 2,304 1,290
Accrued interest receivable 950 876
Deferred income taxes 141 41
Intangible assets 658 685
Other assets 1,099 1,039
------- -------
$84,921 $73,988
======= =======
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
December 31,
------------------------
1997 1996
----------- -----------
(Dollars in thousands)
LIABILITIES AND
STOCKHOLDERS' EQUITY
<S> <C> <C>
Liabilities
Deposits
Demand, non-interest bearing $17,042 $14,595
Demand, interest bearing 16,902 17,681
Savings 8,045 7,373
Time, $100,000 and over 11,019 7,471
Other time 23,032 18,831
------- -------
76,040 65,951
Note payable - 250
Federal funds purchased and securities sold
under repurchase agreements 132 221
Accrued interest payable and other liabilities 1,112 820
------- -------
Total liabilities 77,284 67,242
Stockholders' equity
Common stock 1,770 1,770
Capital in excess of par value 48 47
Retained earnings 5,981 4,976
Treasury stock (166) (68)
Net unrealized gain (loss) on available for
sale securities 4 21
------- -------
Total stockholders' equity 7,637 6,746
------- -------
$84,921 $73,988
======= =======
</TABLE>
Total assets increased $10.9 million during 1997 to $84.9 million, an
increase of 12.9%. Earning assets increased $9.7 million during 1997, primarily
due to an increase in federal funds sold and interest-bearing deposits. Total
deposits increased $10.1 million during 1997 to $76.0 million, primarily due to
an increase in time deposits. Stockholders' equity increased $891,000 after
dividends declared of $163,000 and the sale of $98,000 in treasury stock.
36
<PAGE>
Earnings Performance.
<TABLE>
<CAPTION>
Years ended December 31,
------------------------------
1997 1996
---------- --------
(Dollars in thousands)
<S> <C> <C>
Net interest income $ 3,952 $ 3,553
Provision for loan losses 160 60
Noninterest income 545 499
Noninterest expense 2,585 2,370
Net income after taxes 1,168 1,088
Return on average assets 1.47% 1.52%
Return on average shareholders' equity 15.36% 16.65%
Equity to assets 8.99% 9.12%
Loan loss reserve to average loans 1.19% 1.02%
Net interest margin 5.32% 5.05%
Loan-to-deposit ratio 68.39% 73.13%
Net Interest Income.
Years ended December 31,
--------------------------------------------------
1997 1996
----------------------------- -----------------------------
Interest Average Interest Average
Average earned or yield or Average earned or yield or
balance paid cost balance paid cost
------- ------ ------- ------- ------ ------
(Dollars in thousands)
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets
Interest-bearing deposits $ 4,032 $ 221 5.48% $ 5,914 $ 312 5.27%
Federal funds sold 2,994 168 5.61% 2,151 114 5.29%
Investment securities
Taxable 11,242 678 6.03% 8,463 512 6.05%
Tax exempt (1) 904 63 6.97% 1,343 93 6.92%
Loans 51,962 5,312 10.22% 46,832 4,763 10.17%
------- ------ --------- --------
Total interest-earning
assets 71,134 6,442 9.05% 64,703 5,794 8.95
Non-interest earning assets 8,320 - 6,934 -
------- ------ --------- --------
Total assets $79,454 $ 6,442 $71,637 $5,794
======= ====== ========= ========
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------------------------------
1997 1996
Interest Average Interest Average
Average earned or yield or Average earned or yield or
balance paid cost balance paid cost
------- --------- --------- ------- --------- ---------
(Dollars in thousands)
LIABILITIES AND
SHAREHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C> <C>
Interest-bearing liabilities
Interest-bearing deposits
Demand $17,100 $ 498 2.91% $17,217 $ 518 3.01%
Savings 8,117 228 2.81% 7,126 206 2.89%
Certificates of deposit 29,723 1,731 5.82% 25,366 1,466 5.78%
------- ------ ------- ---------
Total interest-bearing
deposits 54,940 2,457 4.47% 49,709 2,190 4.41%
Note payable 250 21 8.40% 450 37 8.22%
Other liabilities 132 12 8.91% 221 14 6.19%
------- ------ ------- ---------
Total interest-bearing
liabilities 55,322 2,490 4.50% 50,380 2,241 4.45%
Noninterest bearing
liabilities 16,526 14,724
------- -------
Total liabilities 71,848 65,104
Shareholders' equity 7,606 6,533
------- -------
Total liabilities and
shareholders' equity $79,454 $71,637
======= =======
Net interest income $3,952 $3,553
Net interest margin 5.55% 5.46%
Net interest spread 4.55% 4.50%
</TABLE>
(1) Tax-exempt income was not significant and thus has not been presented
on a tax-equivalent basis. Tax-exempt income of $63,000 and $93,000 was
recognized during the years ended December 31, 1997 and 1996, respectively.
Interest income increased $649,000 or 10.1% during 1997 to $6,442,000,
primarily due to a $5.1 million increase in average loans. The yield on earning
assets increased from 8.95% to 9.05%. Interest expense increased $250,000 to
$2,490,000 during 1997, primarily due to a $5.2 million increase in average
interest-bearing deposits. The overall rate on interest-bearing liabilities
increased slightly from 4.41% to 4.47%.
38
<PAGE>
The interest rate spread between earning assets and interest-bearing
liabilities increased slightly from 4.50% to 4.55% during 1997. During the same
period, net interest margin increased from 5.46% to 5.55%.
Allowance for Loan Losses. The allowance represents an amount which, in
management's judgement, will be adequate to absorb all probable losses that can
reasonably be anticipated based on current conditions. In determining the
adequacy of the allowance, Riverton evaluates the risk characteristics of the
loan portfolio. This evaluation takes into consideration factors including, but
not limited to, specific occurrences, general economic conditions, loan
portfolio composition and historical experience. Net charge-offs were .06% of
average loans on 1997 and .06% in 1996. An analysis of activity in the
allowance for credit losses is as follows (in thousands):
<TABLE>
<CAPTION>
Years ended December 31,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
Balance at beginning of year $ 498 $ 465
Provision charged to operations 160 60
Loans charged off (71) (129)
Loan recoveries 38 103
----- -----
Balance at end of year $ 625 $ 499
===== =====
</TABLE>
Loans are placed on nonaccrual status when Riverton believes that the
borrower's financial condition, after giving consideration to economic and
business conditions and collection efforts, is such that collection of interest
is doubtful. At December 31, 1997, nonaccrual loans amounted to $175,000 or
.35% of loans outstanding, compared with $287,000 or .59% of loans outstanding
at December 31, 1996. As of December 31, 1997 and 1996, the amounts of
performing loans past due 90 days or more were $141,000 (.27% of loans
outstanding) and $7,000 (.01% of loans outstanding), respectively.
The allowance for loan losses is not allocated to specific categories of
loans. However, based on Riverton's review of remaining collateral and/or
financial condition or identified loans with characteristically more than a
normal degree of risk, historical loan loss percentages, and economic
conditions, management believes the allowance for loan loses at September 30,
1997, is adequate to cover losses inherent in the portfolio.
39
<PAGE>
Noninterest Income. Noninterest income increased $46,000 or 8.45% for the
year ended December 31, 1997. The following table summarizes noninterest income
(in thousands):
Years ended December 31,
------------------------
1997 1996
------ ------
Service charges on deposit accounts $ 329 $ 291
Other noninterest income 216 208
----- -----
$ 545 $ 499
===== =====
NONINTEREST EXPENSE
Noninterest expense increased $215,000 or 8.32% for the year ended December
31, 1997. The following table summarizes noninterest expense (in thousands):
Years ended December 31,
------------------------
1997 1996
------ ------
Salaries and employee benefits $1,445 $1,312
Net occupancy expenses 117 97
Furniture and equipment 239 218
Other 784 743
------ ------
$2,585 $2,370
====== ======
INCOME TAXES
The provision for federal income taxes differs from the amount computed by
applying the federal income tax statutory rate on income at December 31, 1997
and 1996 as follows (in thousands):
1997 1996
------ ------
Taxes calculated as statutory rate $ 595 $ 551
Increase (decrease) resulting from
Tax-exempt interest (20) (31)
Amortization of nondeductible goodwill 9 9
Other, net - 5
----- -----
$ 584 $ 534
===== =====
40
<PAGE>
REGULATORY CAPITAL REQUIREMENTS
Riverton is subject to various regulatory capital requirements administered by
federal banking agencies. Failure to meet minimum capital requirements may
result in certain mandatory and possible additional discretionary actions by
regulators that, if undertaken, could have a direct material effect on
Riverton's assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices. Riverton's capital amounts
and classification are also subject to qualitative judgement by the regulators
about components, risk weighting and other factors. Qualitative measures
established by regulation to ensure capital adequacy require Riverton to
maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted
assets and of Tier 1 to average assets as calculated under regulatory accounting
practices.
At September 30, 1998, Riverton was "well-capitalized" as defined by
regulations adopted by the federal bank regulatory agencies. To be categorized
as "well-capitalized", a bank must maintain a risk-adjusted total capital ratio
of at least 10%, a Tier 1 capital ratio of at least 6% and a leverage ratio of
at least 5%, and is not subject to any order or written directive to maintain a
specific capital level. As of September 30, 1998, Riverton had total capital,
Tier 1 capital, and leverage ratios of 14.6%, 13.5%, and 9.2%, respectively, and
was not subject to any order or written directive to maintain a specific capital
level.
ASSET AND LIABILITY MANAGEMENT
The goal of the asset and liability management process is to manage the
structure of the balance sheet to provide the maximum level of net interest
income while maintaining acceptable levels of interest rate sensitivity, risk
and liquidity. Riverton's asset and liability committee monitors policies
governing investments, funding sources and overall interest sensitivity, risk
and liquidity. These policies form the framework for management of the asset
and liability process.
Interest sensitivity risk is the risk that future changes in interest rates
will reduce net interest income or the net market value of Riverton's balance
sheet. Market risk is the risk of loss from adverse changes in market prices
and rates. Riverton's market risk arises primarily from interest rate risk
inherent in its investing, lending and deposit-taking activities. Management
monitors the interest sensitivity and market risks to assess that Riverton is
within acceptable limits.
LIQUIDITY
Asset liquidity is provided by cash and assets which are readily
marketable, which can be pledged, or which will mature in the near future.
Interest-bearing deposits in financial institutions plus unpledged marketable
securities as a percentage of total deposits were 21.93% and 12.94% as of
December 31, 1997 and 1996, respectively.
Liability liquidity is provided by access to core funding sources,
principally various customers' interest-bearing deposit accounts in Riverton's
market area. Riverton does not have and does not solicit brokered deposits.
Repurchase agreements and short-term borrowing by Riverton are additional
sources of liquidity. These sources of liquidity are short-term in nature and
can be used by Riverton as necessary to fund asset growth and meet short-term
liquidity needs. The Bank had $132,000 and $221,000 in repurchase agreements as
of December 31, 1997 and 1996, respectively.
41
<PAGE>
YEAR 2000 COMPLIANCE
Riverton has formally initiated its Year 2000 project to insure that its
operational and financial systems will not be adversely affected by Year 2000
problems. Riverton has formed a Year 2000 project team and its board of
directors and management are supporting all compliance efforts and allocating
the necessary resources to ensure completion. An inventory of all systems and
products (including both information technology and non-informational technology
systems) that could be affected by the Year 2000 date change has been developed,
verified and categorized as to its importance to Riverton. The software for
Riverton's systems is provided through service bureaus and software vendors.
Riverton has contacted all of its third party vendors and software providers and
is requiring them to demonstrate and represent that the products provided are or
will be Year 2000 compliant and has planned a program of testing compliance.
The service bureau has asserted that it is Year 2000 compliant and pursuant to
applicable regulatory guidelines, Riverton is currently testing its system to
verify its assertion. Riverton has also surveyed its largest dollar deposit and
loan customers to determine their readiness for Year 2000.
Management does not expect the costs of bringing Riverton's systems into
Year 2000 compliance will have a material adverse effect on Riverton's financial
conditions, results of operations or liquidity. As of September 30, 1998,
Riverton has not incurred any significant costs in relation to Year 2000. The
largest potential risk to Riverton concerning Year 2000 is the malfunction of
its data processing system. In the event its data processing system does not
function properly, Riverton is prepared to perform functions manually. Riverton
believes it is in compliance with regulatory guidelines regarding Year 2000
compliance, including the timetable for achieving compliance.
42
<PAGE>
CERTAIN REGULATORY AND OTHER
CONSIDERATIONS PERTAINING TO WELLS FARGO
Wells Fargo and its banking subsidiaries are subject to extensive regulation
by federal and state agencies. The regulation of bank holding companies and
their subsidiaries is intended primarily for the protection of depositors,
federal deposit insurance funds and the banking system as a whole and is not in
place to protect stockholders or other investors.
As discussed in more detail below, this regulatory environment, among other
things, may (a) restrict Wells Fargo's ability to pay dividends on Wells Fargo
common stock, (b) require Wells Fargo to provide financial support to one or
more of its banking subsidiaries, (c) require Wells Fargo and its banking
subsidiaries to maintain capital balances in excess of those desired by
management, and/or (d) require Wells Fargo to pay higher deposit insurance
premiums as a result of the deterioration in the financial condition of
depository institutions in general.
BANK REGULATORY AGENCIES
Wells Fargo Corporation, as a bank holding company, is subject to regulation
by the Federal Reserve Board under the Bank Holding Company Act.
Wells Fargo's national banking subsidiaries are regulated by the OCC. Its
state-chartered banking subsidiaries are regulated primarily by the FDIC or the
Federal Reserve Board and applicable state banking agencies. Wells Fargo's
federally insured banking subsidiaries are also subject to regulation by the
FDIC.
Wells Fargo has other financial services subsidiaries that are subject to
regulation by the Federal Reserve Board and other applicable federal and state
agencies. For example, Wells Fargo's brokerage subsidiary is subject to
regulation by the SEC, the National Association of Securities Dealers, Inc. and
state securities regulators. Wells Fargo's insurance subsidiaries are subject
to regulation by applicable state insurance regulatory agencies. Other nonbank
subsidiaries of Wells Fargo are subject to the laws and regulations of both the
federal government and the various states in which they conduct business.
BANK HOLDING COMPANY ACTIVITIES; INTERSTATE BANKING
A bank holding company is generally prohibited under the Bank Holding Company
Act from engaging in nonbanking (i.e., commercial or industrial) activities,
subject to certain exceptions. Specifically, the activities of a bank holding
company, and those companies that it controls or in which it holds more than 5%
of the voting stock, are limited to banking or managing or controlling banks,
furnishing services to its subsidiaries and such other activities that the
Federal Reserve Board determines to be so closely related to banking as to be a
"proper incident thereto." In determining whether an activity is sufficiently
related to banking, the Federal Reserve Board will consider whether the
performance of such activity by the bank holding company can reasonably be
expected to produce benefits to the public (e.g., greater convenience, increased
competition or gains in efficiency) that outweigh possible adverse effects
(e.g., undue concentration of resources, decreased or unfair competition,
conflicts of interest or unsound banking practices).
Under the Interstate Banking Act, which became effective on September 29,
1995, a bank holding company may acquire banks in states other than its home
state, subject to any state requirement that the bank has been organized and
operating for a minimum period of time, not to exceed five years, and the
requirement that the bank holding company not control, prior to or following the
proposed acquisition, more than 10% of the total amount of deposits of insured
depository institutions nationwide or, unless
43
<PAGE>
the acquisition is the bank holding company's initial entry into the state, more
than 30% of such deposits in the state (or such lesser or greater amount set by
the state).
The Interstate Banking Act also authorizes banks to merge across state lines
(thereby creating interstate branches) effective June 1, 1997. States may opt
out of the Interstate Banking Act (thereby prohibiting interstate Mergers in the
state) or opt in early (thereby allowing interstate Mergers prior to June 1,
1997). Wells Fargo will be unable to consolidate its banking operations in one
state with those of another state if either state in question has opted out of
the Interstate Banking Act. The state of Montana has opted out until at least
the year 2001.
Wells Fargo's acquisitions of banking institutions and other companies
generally are subject to the prior approval of the Federal Reserve Board and
other applicable federal or state regulatory authorities. In determining
whether to approve a proposed bank acquisition, federal banking regulators will
consider, among other factors, the effect of the acquisition on competition, the
public benefits expected to be received from the consummation of the
acquisition, the projected capital ratios and levels on a post-acquisition
basis, and the acquiring institution's record of addressing the credit needs of
the communities it serves, including the needs of low and moderate income
neighborhoods, consistent with the safe and sound operation of the bank, under
the Community Reinvestment Act of 1977, as amended.
DIVIDEND RESTRICTIONS
Wells Fargo is a legal entity separate and distinct from its banking and other
subsidiaries. Its principal source of funds to pay dividends on its common and
preferred stock and debt service on its debt is dividends from its subsidiaries.
Various federal and state statutes and regulations limit the amount of dividends
that may be paid to Wells Fargo by its banking subsidiaries without regulatory
approval.
Most of Wells Fargo's banking subsidiaries are national banks. A national
bank must obtain the prior approval of the OCC to pay a dividend if the total of
all dividends declared by the bank in any calendar year would exceed the bank's
net income for that year combined with its retained net income for the preceding
two calendar years, less any required transfers to surplus or a fund for the
retirement of any preferred stock.
Wells Fargo's state-chartered banking subsidiaries also are subject to
dividend restrictions under applicable state law.
If, in the opinion of the applicable federal regulatory agency, a depository
institution 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), the regulator may require, after
notice and hearing, that such bank cease and desist from such practice. The OCC
has indicated that the payment of dividends would constitute an unsafe and
unsound practice if the payment would deplete a depository institution's capital
base to an inadequate level. Under the Federal Deposit Insurance Act, an
insured depository institution may not pay any dividend if the institution is
undercapitalized or if the payment of the dividend would cause the institution
to become undercapitalized. In addition, federal bank regulatory agencies have
issued policy statements which provide that depository institutions and their
holding companies should generally pay dividends only out of current operating
earnings.
The ability of Wells Fargo's banking subsidiaries to pay dividends to Wells
Fargo may also be affected by various minimum capital requirements for banking
organizations, as described below. In
44
<PAGE>
addition, the right of Wells Fargo to participate in the assets or earnings of a
subsidiary is subject to the prior claims of creditors of the subsidiary.
Wells Fargo Bank, N.A., with the express approval of the OCC, declared
dividends in 1997 and 1996 of $1.5 billion in excess of its net income of $2.0
billion for those years. As a result, before Wells Fargo Bank, N.A. may declare
dividends in 1998 without the prior approval of the OCC, it must have net income
of $1.5 billion plus an amount equal to or greater than the dividends desired to
be declared in 1998. Because it is not expected to have net income of $1.5
billion plus an amount equal to or greater than the dividends expected to be
declared in 1998, Wells Fargo Bank, N.A. must obtain the approval of the OCC
before any dividends are declared in 1998.
Holding Company Structure
Transfer of Funds from Banking Subsidiaries. Wells Fargo's banking
subsidiaries are subject to restrictions under federal law that limit the
transfer of funds or other items of value from such subsidiaries to Wells Fargo
and its nonbanking subsidiaries (including Wells Fargo, "affiliates") in so-
called "covered transactions." In general, covered transactions include loans
and other extensions of credit, investments and asset purchases, as well as
other transactions involving the transfer of value from a banking subsidiary to
an affiliate or for the benefit of an affiliate. Unless an exemption applies,
covered transactions by a banking subsidiary with a single affiliate are limited
to 10% of the banking subsidiary's capital and surplus and, with respect to all
covered transactions with affiliates in the aggregate, to 20% of the banking
subsidiary's capital and surplus. Also, loans and extensions of credit to
affiliates generally are required to be secured in specified amounts.
Source of Strength Doctrine. The Federal Reserve Board has a policy that a
bank holding company is expected to act as a source of financial and managerial
strength to each of its subsidiary banks and, under appropriate circumstances,
to commit resources to support each such subsidiary bank. This support may be
required at times when the bank holding company may not have the resources to
provide it. Capital loans by a bank holding company to any of its subsidiary
banks are subordinate in right of payment to deposits and certain other
indebtedness of the subsidiary bank. In addition, 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.
Depositor Preference. The FDI Act provides that, in the event of the
"liquidation or other resolution" of an insured depository institution, the
claims of depositors of the institution (including the claims of the FDIC as
subrogee of insured depositors) and certain claims for administrative expenses
of the FDIC as a receiver will have priority over other general unsecured claims
against the institution. If an insured depository institution fails, insured
and uninsured depositors, along with the FDIC, will have priority in payment
ahead of unsecured, nondeposit creditors, including the institution's parent
holding company.
Liability of Commonly Controlled Institutions. Under the FDI Act, an
insured depository institution is generally liable for any loss incurred, or
reasonably expected to be incurred, by the FDIC in connection with (a) the
default of a commonly controlled insured depository institution or (b) any
assistance provided by the FDIC to a commonly controlled 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.
45
<PAGE>
REGULATORY CAPITAL STANDARDS AND RELATED MATTERS
Risk-Based Capital. The Federal Reserve Board, the OCC and the FDIC have
adopted substantially similar risk-based and leverage capital guidelines for
banking organizations. The guidelines are intended to ensure that banking
organizations have adequate capital given the risk levels of their assets and
off-balance sheet commitments.
The risk-based capital ratio is determined by classifying assets and certain
off-balance sheet financial instruments into weighted categories, with higher
levels of capital being required for those categories perceived as representing
greater risk. Under the capital guidelines, a banking organization's total
capital is divided into tiers. "Tier 1 capital" consists of common equity,
retained earnings, qualifying noncumulative perpetual preferred stock, a limited
amount of qualifying cumulative perpetual preferred stock and minority interests
in the equity accounts of consolidated subsidiaries, less certain items such as
goodwill and certain other intangible assets. The remainder (Tier 2 and Tier 3
capital) consists of hybrid capital instruments, perpetual debt, mandatory
convertible debt securities, a limited amount of subordinated debt, preferred
stock that does not qualify as Tier 1 capital, and a limited amount of the
allowance for credit losses.
Under the Federal Reserve Board's risk-based capital guidelines for bank
holding companies, the minimum ratio of total capital (the sum of Tier 1, Tier 2
and Tier 3) to risk-adjusted assets (including certain off-balance sheet items,
such as stand-by letters of credit) is currently 8%. The minimum Tier 1 capital
to risk-adjusted assets is 4%. At December 31, 1998, Wells Fargo's total
capital and Tier 1 capital to risk-adjusted assets ratios were 10.9% and 8.1%,
respectively.
The Federal Reserve Board also requires bank holding companies to comply
with minimum leverage ratio guidelines. The leverage ratio is the ratio of a
bank holding company's Tier 1 capital to its total consolidated quarterly
average assets, less goodwill and certain other intangible assets. The
guidelines require a minimum leverage ratio of 3% for bank holding companies
that meet certain specified criteria, including having the highest supervisory
rating. All other bank holding companies are required to maintain a minimum
leverage ratio of 4% to 5%. The Federal Reserve Board has not advised Wells
Fargo of any specific leverage ratio applicable to it. At December 31, 1998,
Wells Fargo's leverage ratio was 6.6%.
The Federal Reserve Board's capital guidelines 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. Also, the guidelines
indicate that the Federal Reserve Board will 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 (excluding intangibles) to total assets (excluding intangibles).
Wells Fargo's banking subsidiaries are subject to risk-based and leverage
capital guidelines substantially similar to those imposed by the Federal Reserve
Board on bank holding companies.
Other Measures of Capital Adequacy and Safety and Soundness. In assessing a
banking organization's capital adequacy, federal bank regulatory agencies will
also consider the organization's credit concentration risk and risks associated
with nontraditional activities, as well as the organization's ability to manage
those risks. This evaluation will be performed as part of the organization's
regular safety and soundness examination.
Federal bank regulatory agencies require banking organizations that engage
in significant trading activity to calculate a capital charge for market risk.
Significant trading activity means trading activity
46
<PAGE>
of at least 10% of total assets or $1 billion, whichever is smaller, calculated
on a consolidated basis for bank holding companies. Federal bank regulators may
apply the market risk measure to other banks and bank holding companies as the
agency deems necessary or appropriate for safe and sound banking practices. Each
agency may exclude organizations that it supervises that otherwise meet the
criteria under certain circumstances. The market risk charge will be included in
the calculation of an organization's risk-based capital ratios.
As an additional means to identify problems in the financial management of
depository institutions, the FDI Act requires federal bank regulatory agencies
to establish certain non-capital safety and soundness standards for institutions
for which they are the primary federal regulator. The standards relate
generally to operations and management, asset quality, interest rate exposure
and executive compensation. The agencies are authorized to take action against
institutions that fail to meet such standards.
Prompt Corrective Action. The FDI Act requires federal bank regulatory
agencies to take "prompt corrective action" with respect to FDIC-insured
depository institutions that do not meet minimum capital requirements. A
depository institution's treatment for purposes of the prompt corrective action
provisions will depend upon how its capital levels compare to various capital
measures and certain other factors, as established by regulation.
Federal bank regulatory agencies have adopted regulations that classify
insured depository institutions into one of five capital-based categories. The
regulations use the total capital ratio, the Tier 1 capital ratio and the
leverage ratio as the relevant measures of capital. A depository institution is
(a) "well capitalized" if it has a risk-adjusted total capital ratio of at least
10%, a Tier 1 capital ratio of at least 6% and a leverage ratio of at least 5%
and is not subject to any order or written directive to maintain a specific
capital level; (b) "adequately capitalized" if it has a risk-adjusted total
capital ratio of at least 8%, a Tier 1 capital ratio of at least 4% and a
leverage ratio of at least 4% (3% in some cases) and is not well capitalized;
(c) "undercapitalized" if it fails to meet any of the required minimums for an
adequately capitalized institution; (d) "significantly undercapitalized" if it
has a risk-adjusted total capital ratio of less than 6%, a Tier 1 capital ratio
of less than 3% or a leverage ratio of less than 3%; and (e) "critically
undercapitalized" if its tangible equity is less than 2% of total assets. At
December 31, 1998, all of Wells Fargo's insured depository institutions met the
criteria for well capitalized institutions as set forth above.
A depository institution's primary federal bank regulator is authorized to
downgrade the institution's capital category to the next lower category upon a
determination that the institution is engaged in an unsafe or unsound condition
or is engaged in an unsafe or unsound practice. An unsafe or unsound practice
can include receipt by the institution of a less than satisfactory rating on its
most recent examination with respect to its asset quality, management, earnings
or liquidity.
The FDI Act 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 as a result be
undercapitalized. Undercapitalized depository institutions are subject to a
wide range of limitations on operations and activities (including asset growth)
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 the plan. The
aggregate liability of the parent holding company is limited to the lesser of
(a) 5% of the depository institution's total assets at the time it became
undercapitalized or (b) the amount which is necessary (or would have been
necessary) to bring the institution into compliance with all
47
<PAGE>
capital standards applicable with respect to the institution as of the time it
fails to comply with the plan. If an undercapitalized 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.
Under FDI Act regulations, a bank may not 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 (a) it is well capitalized or (b) it is
adequately capitalized and receives a waiver from the FDIC. A bank that may not
receive brokered deposits also may not offer "pass-through" insurance on certain
employee benefit accounts, unless it provides certain notices to affected
depositors. Also, a bank that is adequately capitalized and that has not
received a waiver from the FDIC may not pay an interest rate on any deposits in
excess of 75 basis points over certain prevailing market rates. There are no
such restrictions on a bank that is well capitalized.
FDIC INSURANCE
Through the Bank Insurance Fund (BIF), the FDIC insures the deposits of
Wells Fargo's depository institution subsidiaries up to prescribed per depositor
limits. The amount of FDIC assessments paid by each BIF member institution is
based on its relative risk of default as measured by regulatory capital ratios
and other factors. Specifically, the assessment rate is based on the
institution's capitalization risk category and supervisory subgroup category.
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 category 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 BIF assessment rate currently ranges from zero to 27 cents per $100 of
domestic deposits, with Subgroup A institutions assessed at a rate of zero and
Subgroup C institutions assessed at a rate of 27 cents. The FDIC may increase
or decrease the assessment rate schedule on a semiannual basis. An increase in
the BIF assessment rate could have a material adverse effect on Wells Fargo's
earnings, depending on the amount of the increase. The FDIC is authorized to
terminate a depository institution's deposit insurance upon a finding by the
FDIC that the institution's financial condition is unsafe or unsound or that the
institution has engaged in unsafe or unsound practices or has violated any
applicable rule, regulation, order or condition enacted or imposed by the
institution's regulatory agency. The termination of deposit insurance with
respect to one or more of Wells Fargo's subsidiary depository institutions could
have a material adverse effect on Wells Fargo's earnings, depending on the
collective size of the particular institutions involved.
All FDIC-insured depository institutions must pay an annual assessment to
provide funds for the payment of interest on bonds issued by the Financing
Corporation, a federal corporation chartered under the authority of the Federal
Housing Finance Board. The bonds (commonly referred to as FICO bonds) were
issued to capitalize the Federal Savings and Loan Insurance Corporation. FDIC-
insured
48
<PAGE>
depository institutions will continue to pay approximately 1.3 cents per $100 of
BIF-assessable deposits until the earlier of December 31, 1999 or the last
savings and loan association ceases to exist.
FISCAL AND MONETARY POLICIES
Wells Fargo's business and earnings are affected significantly by the fiscal
and monetary policies of the federal government and its agencies. Wells Fargo
is particularly affected by the policies of the Federal Reserve Board, which
regulates the supply of money and credit in the United States. Among the
instruments of monetary policy available to the Federal Reserve are (a)
conducting open market operations in United States government securities, (b)
changing the discount rates of borrowings of depository institutions, (c)
imposing or changing reserve requirements against depository institutions'
deposits, and (d) imposing or changing reserve requirements against certain
borrowing by banks and their affiliates. These methods are used in varying
degrees and combinations to directly affect the availability of bank loans and
deposits, as well as the interest rates charged on loans and paid on deposits.
For that reason alone, the policies of the Federal Reserve Board have a material
effect on the earnings of Wells Fargo's banking subsidiaries and, thus, those of
Wells Fargo.
COMPETITION
The financial services industry is highly competitive. Wells Fargo's
subsidiaries compete with financial services providers, such as banks, savings
and loan associations, credit unions, finance companies, mortgage banking
companies, insurance companies, and money market and mutual fund companies.
They also face increased competition from non-banking institutions such as
brokerage houses and insurance companies, as well as from financial services
subsidiaries of commercial and manufacturing companies. Many of these
competitors enjoy the benefits of advanced technology, fewer regulatory
constraints and lower cost structures.
The financial services industry is likely to become even more
competitive as further technological advances enable more companies to provide
financial services. These technological advances may diminish the importance of
depository institutions and other financial intermediaries in the transfer of
funds between parties.
EXPERTS
The supplemental consolidated financial statements of Wells Fargo and
subsidiaries as of December 31, 1997 and 1996, and for each of the years in the
three-year period ended December 31, 1997, incorporated by reference herein,
have been incorporated herein in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. KPMG's
report contains an explanatory paragraph that states that the supplemental
consolidated financial statements give retroactive effect to the merger of Wells
Fargo & Company into Norwest Corporation on November 2, 1998 which has been
accounted for as a pooling-of-interests as described in Note 1 to the
supplemental consolidated financial statements.
The financial statements of Riverton as of December 31, 1997 and 1996
and for each of the three years in the period ended December 31, 1997 included
in this Proxy Statement-Prospectus have been audited by Fortner, Bayens,
Levkulich and Co., P.C., independent auditors, as stated in their report
appearing herein, have been so included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
49
<PAGE>
LEGAL MATTERS
Stanley S. Stroup, Executive Vice President and General Counsel of
Wells Fargo, has rendered a legal opinion that the shares of Wells Fargo common
stock offered hereby, when issued in accordance with the Reorganization
Agreement, will be validly issued, fully paid and nonassessable. Mr. Stroup
beneficially owns shares of Wells Fargo common stock and options to purchase
additional shares of Wells Fargo common stock. As of the date of this Proxy
Statement-Prospectus, the number of shares Mr. Stroup owns or has the right to
acquire upon exercise of his options is, in the aggregate, less than 0.1% of the
outstanding shares of Wells Fargo common stock.
The material U.S. Federal income tax consequences of the Merger to
Riverton's shareholders and certain other legal matters will be passed upon for
Riverton by Brown, Drew, Massey and Sullivan, Casper, Wyoming.
INFORMATION CONCERNING WELLS FARGO MANAGEMENT
Information concerning executive compensation, the principal holders
of voting securities, certain relationships and related transactions, and other
related matters concerning Wells Fargo is included or incorporated by reference
in its annual report on Form 10-K/A for the year ended December 31, 1997. Wells
Fargo's annual report is incorporated by reference into this Proxy Statement-
Prospectus. Riverton shareholders who want a copy of this annual report or any
document incorporated by reference into the report may contact Wells Fargo at
the address or phone number indicated under "Where You Can Find More
Information."
WHERE YOU CAN FIND MORE INFORMATION
Wells Fargo files annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information filed by Wells Fargo at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. You can request copies of these documents, upon payment of a
duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Wells Fargo's SEC
filings are also available to the public from commercial document retrieval
services and on the SEC Internet site (http://www.sec.gov).
Wells Fargo filed a registration statement on Form S-4 to register
with the SEC the Wells Fargo common stock to be issued to Riverton shareholders
in the Merger. This Proxy Statement-Prospectus is part of that registration
statement. As allowed by SEC rules, this Proxy Statement-Prospectus does not
contain all of the information you can find in the registration statement or the
exhibits to the registration statement.
Some of the information you may want to consider in deciding how to
vote on the Merger is not physically included in this Proxy Statement-
Prospectus. Instead, the information is "incorporated by reference" to
documents filed as appendixes to this Proxy Statement-Prospectus or to documents
that have been filed by Wells Fargo with the SEC under SEC File No. 1-2979.
The Wells Fargo documents that have been incorporated by reference
consist of:
. Wells Fargo's quarterly reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998;
50
<PAGE>
. Wells Fargo's current reports on Form 8-K filed January 22, 1998,
April 20, 1998, April 22, 1998, June 8, 1998, June 9, 1998, June
12, 1998, July 22, 1998, August 5, 1998, October 21, 1998, October
22,1998 and November 16, 1998;
. Wells Fargo's registration statement on Form S-4 filed September
11, 1998 (Reg. No. 333-63247) containing the joint proxy statement-
prospectus of Norwest Corporation and old Wells Fargo.
. Wells Fargo's current report on Form 8-K filed October 13, 1997,
containing a description of the Wells Fargo common stock; and
. Wells Fargo's registration statement on Form 8-A dated October 21,
1998, containing a description of preferred stock purchase rights
attached to shares of Wells Fargo common stock.
. Wells Fargo's current report on Form 8-K filed January 19, 1999,
which includes, as Exhibit 99a, the supplemental consolidated
management's discussion and analysis of results of operations and
financial condition and supplemental financial statements of Wells
Fargo as of and for the three years ended December 31, 1997, and,
as Exhibit 99b, the supplemental consolidated management's
discussion and analysis of results of operations and financial
condition and supplemental financial statements of Wells Fargo as
of and for the nine months ended September 30, 1998.
All reports and proxy statements filed by Wells Fargo after the date
of this Proxy Statement-Prospectus and before the special meeting are
automatically incorporated by reference into this Proxy Statement-Prospectus.
This Proxy Statement-Prospectus may contain information that updates,
modifies or is contrary to information in one or more of the documents
incorporated by reference. Reports filed by Wells Fargo with the SEC after the
date of this Proxy Statement-Prospectus may also contain information that
updates, modifies or is contrary to information in the documents incorporated by
reference. You should review these reports, as they may disclose a change in the
business prospects, financial condition or other affairs of Wells Fargo since
the date of this Proxy Statement-Prospectus.
As explained above, you may read and copy all reports filed by Wells
Fargo with the SEC at the SEC's public reference rooms. Wells Fargo will
provide, without charge, copies of any report incorporated by reference into
this Proxy Statement-Prospectus, excluding exhibits other than those that are
specifically incorporated by reference to an exhibit in this Proxy Statement-
Prospectus. You may obtain a copy of any document incorporated by reference by
writing or calling Wells Fargo as follows:
Wells Fargo & Company
Corporate Secretary
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
(612) 667-8655
TO ENSURE DELIVERY OF THE COPIES IN TIME FOR THE SPECIAL MEETING, YOUR
REQUEST SHOULD BE RECEIVED BY WELLS FARGO BY MARCH 3, 1999.
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<PAGE>
- --------------------------------------------------------------------------------
IN DECIDING HOW TO VOTE ON THE MERGER, YOU SHOULD RELY ONLY ON THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT-
PROSPECTUS. NEITHER WELLS FARGO NOR RIVERTON HAS AUTHORIZED ANY PERSON TO
PROVIDE YOU WITH ANY INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN
THIS PROXY STATEMENT-PROSPECTUS. THIS PROXY STATEMENT-PROSPECTUS IS DATED
FEBRUARY 8, 1999. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS
PROXY STATEMENT-PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN SUCH DATE, AND
NEITHER THE MAILING TO YOU OF THIS PROXY STATEMENT-PROSPECTUS NOR THE ISSUANCE
TO YOU OF SHARES OF WELLS FARGO COMMON STOCK WILL CREATE ANY IMPLICATION TO THE
CONTRARY. THIS PROXY STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES, OR THE SOLICITATION OF A
PROXY, IN ANY JURISDICTION IN WHICH, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE ANY SUCH OFFER OR SOLICITATION.
- --------------------------------------------------------------------------------
52
<PAGE>
CONSOLIDATED FINANCIAL STATEMENTS
RIVERTON STATE BANK HOLDING COMPANY
AND SUBSIDIARIES
September 30, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
Independent Auditors' Report 3
Financial Statements
Consolidated Balance Sheet 4
Consolidated Statements of Income 5
Consolidated Statements of Comprehensive Income 6
Consolidated Statements of Stockholders' Equity 7
Consolidated Statements of Cash Flows 8
Notes to Consolidated Financial Statements 9
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Riverton State Bank Holding Company
Riverton, Wyoming
We have audited the accompanying consolidated balance sheet of Riverton
State Bank Holding Company and subsidiaries as of December 31, 1997 and the
related consolidated statements of income, comprehensive income, stockholders'
equity and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Riverton
State Bank Holding Company and subsidiaries at December 31, 1997 and the results
of their operations and cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ Fortner, Bayens, Levkulich and Co., P.C.
Denver, Colorado
October 1, 1998
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
September 30, -----------------------------
1998 1997 1996
--------------- ------------- -------------
(Unaudited) (Unaudited)
ASSETS
<S> <C> <C> <C>
Cash and due from banks $ 4,100,460 $ 3,999,411 $ 3,780,490
Interest-bearing deposits in banks 11,668,326 13,033,731 3,657,556
Investment securities
Held to maturity 7,369,679 7,307,592 10,565,946
Available for sale 1,529,879 3,021,736 3,170,666
------------- ------------- -------------
24,668,344 27,362,470 21,174,658
Federal funds sold 900,000 400,000 650,000
Loans 54,511,164 52,631,451 48,730,563
Less allowance for loan losses (626,700) (625,163) (498,401)
------------- ------------- -------------
53,884,464 52,006,288 48,232,162
Premises and equipment 2,579,393 2,303,879 1,289,855
Accrued interest receivable 1,178,263 949,530 876,368
Other assets 1,984,630 1,898,675 1,764,937
------------- ------------- -------------
Total assets $ 85,195,094 $ 84,920,842 $ 73,987,980
============= ============= =============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities
Deposits
Demand, non-interest bearing $ 16,654,394 $ 17,041,843 $ 14,594,757
Demand, interest bearing 17,365,891 16,902,247 17,681,829
Savings 8,004,316 8,045,422 7,372,672
Time 33,319,902 34,050,002 26,301,467
------------- ------------- -------------
75,344,503 76,039,514 65,950,725
Federal Home Loan Bank advances 115,405 - -
Other borrowed funds - 131,543 470,559
Accrued interest payable 385,695 444,053 338,708
Dividends payable 250,722 162,678 123,573
Accrued expenses and other liabilities 682,408 506,633 358,291
------------- ------------- -------------
Total liabilities 76,778,733 77,284,421 67,241,856
Commitments (notes G)
Stockholders' equity
Common stock - Authorized, 50,000 shares without par value;
20,893.5 issued 1,770,357 1,770,357 1,770,357
Capital surplus 100,716 48,024 46,869
Retained earnings 6,539,582 5,980,772 4,975,902
Unrealized gain on available for sale securities,
net of taxes 5,706 3,629 21,306
Less cost of common stock in treasury: 1997 - 558.8 shares; 1996 - 298 shares - (166,361) (68,310)
------------- ------------- -------------
Total stockholders' equity 8,416,361 7,636,421 6,746,124
------------- ------------- -------------
$ 85,195,094 $ 84,920,842 $ 73,987,980
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Nine months ended Years ended
September 30, December 31,
------------------------- --------------------------------------
1998 1997 1997 1996 1995
----------- ------------ ----------- ------------ -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Interest income
Loans, including fees $ 4,040,066 $ 3,946,216 $ 5,312,283 4,762,545 $ 4,298,629
Taxable investment securities 456,116 514,067 678,205 512,304 500,285
Tax exempt investment securities 2,614 62,042 62,968 92,761 93,378
Federal funds sold 52,893 48,260 167,513 113,521 61,908
Other interest income 440,136 167,015 221,110 311,375 89,319
----------- ------------ ----------- ----------- -----------
Total interest income 4,991,825 4,737,600 6,442,079 5,792,506 5,043,519
Interest expense
Deposits 2,015,158 1,773,622 2,456,413 2,189,339 1,768,137
Other 5,778 25,849 33,658 50,739 65,683
----------- ------------ ----------- ----------- -----------
Total interest expense 2,020,936 1,799,471 2,490,071 2,240,078 1,833,820
----------- ------------ ----------- ----------- -----------
Net interest income 2,970,889 2,938,129 3,952,008 3,552,428 3,209,699
Provision for possible loan losses 72,000 54,000 160,289 60,000 79,996
----------- ------------ ----------- ----------- -----------
Net interest income after provision for loan losses 2,898,889 2,884,129 3,791,719 3,492,428 3,129,703
Other income
Service charges on deposit accounts 275,334 250,484 329,420 291,464 277,013
Other income 179,551 162,906 215,119 208,371 228,821
----------- ------------ ----------- ----------- -----------
454,885 413,390 544,539 499,835 505,834
Other expenses
Salaries and employee benefits 1,158,116 1,086,179 1,445,208 1,312,140 1,165,204
Occupancy expenses of premises 110,357 78,357 117,442 96,718 93,114
Furniture and equipment expense 213,272 164,938 238,869 218,440 190,167
Other expenses 663,036 566,942 783,503 743,494 743,896
----------- ------------ ----------- ----------- -----------
2,144,781 1,896,416 2,585,022 2,370,792 2,192,381
----------- ------------ ----------- ----------- -----------
Income before income taxes 1,208,993 1,401,103 1,751,236 1,621,471 1,443,156
Income tax expense 399,461 461,726 583,688 533,845 471,527
----------- ------------ ----------- ----------- -----------
NET INCOME $ 809,532 $ 939,377 $ 1,167,548 $ 1,087,626 $ 971,629
=========== ============ =========== =========== ===========
Earnings per share of common stock outstanding $ 39.73 $ 45.60 $ 56.77 $ 52.81 $ 46.93
=========== ============ =========== =========== ===========
Average shares outstanding 20,376 20,602 20,567 20,704 20,704
=========== ============ =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
Nine months ended
September 30, Years ended December 31,
--------------------------- ------------------------------------------------
1998 1997 1997 1996 1995
------------ ------------ -------------- -------------- --------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Net income $ 809,532 $ 939,377 $ 1,167,548 $ 1,087,626 $ 971,629
Other comprehensive income
Unrealized gains (losses) on investment
securities available for sale 2,077 (17,390) (17,677) (23,380) 44,686
------------ ------------ -------------- -------------- --------------
Comprehensive income $ 811,609 $ 921,987 $ 1,149,871 $ 1,064,246 $ 1,016,315
============ ============ ============== ============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(All financial information for 1998, 1996 and 1995 is unaudited)
<TABLE>
<CAPTION>
Unrealized
gain (loss)
on securities
available
Common Capital Retained for sale, Treasury
Stock Surplus Earnings net of taxes Stock Total
------------ ----------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 $ 1,770,357 $ 45,749 $ 3,123,082 $ - $ (39,804) $ 4,899,384
Net income for the year - - 971,629 - - 971,629
Acquisition of 120 shares
of common stock - - - - (33,600) (33,600)
Sale of 26 shares of
common stock - 1,120 - - 5,094 6,214
Change in unrealized gains/
(losses) - - - 44,686 - 44,686
Cash dividends declared - $4
per share - - (82,862) - - (82,862)
------------ ----------- ------------ ------------- ------------ -------------
Balance at December 31, 1995 1,770,357 46,869 4,011,849 44,686 (68,310) 5,805,451
Net income for the year - - 1,087,626 - - 1,087,626
Change in unrealized gains/
(losses) - - - (23,380) - (23,380)
Cash dividends declared - $6
per share - - (123,573) - - (123,573)
------------ ----------- ------------ ------------- ------------ -------------
Balance at December 31, 1996 1,770,357 46,869 4,975,902 21,306 (68,310) 6,746,124
Net income for the year - - 1,167,548 - - 1,167,548
Acquisition of 270 shares
of common stock - - - - (99,900) (99,900)
Sale of 9.2 shares of
common stock - 1,155 - - 1,849 3,004
Change in unrealized gains/
(losses) - - - (17,677) - (17,677)
Cash dividends declared - $8
per common share - - (162,678) - - (162,678)
------------ ----------- ------------ ------------- ------------ -------------
Balance at December 31, 1997 1,770,357 48,024 5,980,772 3,629 (166,361) 7,636,421
Net income - - 809,532 - - 809,532
Sale of 558.8 shares
of common stock - 52,692 - - 166,361 219,053
Change in unrealized gains/
(losses) - - - 2,077 - 2,077
Cash dividends declared -$12
per share - - (250,722) - - (250,722)
------------ ----------- ------------ ------------- ------------ -------------
Balance at September 30, 1998 $ 1,770,357 $ 100,716 $ 6,539,582 $ 5,706 $ - $ 8,416,361
============ =========== ============ ============= ============ =============
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
Nine months ended Years ended
September 30, December 31,
-------------------------- ---------------------------------------
1998 1997 1997 1996 1995
------------ ----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C>
Operating activities
Net income $ 809,532 $ 939,377 $ 1,167,548 $ 1,087,626 $ 971,629
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 172,138 124,529 183,017 161,412 138,997
Provision for loan losses 72,000 54,000 160,289 60,000 79,996
Net loss on sales of assets - - (4,688) - -
Amortization of goodwill (20,475) (20,475) (27,300) (27,300) (27,300)
Provision for deferred income taxes (25,251) (24,498) (91,219) (37,671) (39,657)
Changes in accruals and deferrals
(Increase) decrease in accrued interest receivable (228,733) (269,235) (73,162) (28,794) (163,240)
(Increase) decrease in accrued interest payable (58,358) 34,680 105,345 79,668 128,218
Increase in accrued expense and other liabilities 175,775 154,999 148,342 111,493 1,286
(Increase) decrease in other assets (41,300) (11,803) (6,112) (11,204) 9,540
Other, net 983 (26,499) (34,874) 2,952 51,708
------------ ----------- ----------- ----------- -----------
Net cash provided by operating activities 856,311 955,075 1,527,186 1,398,182 1,151,177
Investing activities
Net cash provided (used) by:
Interest-bearing deposits with banks 1,365,405 (7,037,360) (9,376,175) (97,589) (2,711,899)
Loans outstanding (1,950,176) (5,723,795) (3,934,415) (2,348,613) (7,788,199)
Federal funds sold (500,000) 375,000 250,000 (350,000) (100,000)
Available-for-sale securities:
Maturities 1,519,297 1,192,483 1,197,292 29,140 36,214
Purchases (26,000) (1,067,325) (1,073,225) (1,553,760) (62,800)
Held-to-maturity securities:
Maturities 5,261,000 3,510,000 4,290,000 6,360,000 4,259,000
Purchases (5,322,362) (998,693) (998,693) (9,435,767) (994,493)
Purchases of premises and equipment (447,652) (1,059,207) (1,192,353) (430,523) (182,201)
------------ ----------- ----------- ----------- -----------
Net cash used in investing activities (100,488) (10,808,897) (10,837,569) (7,827,112) (7,544,378)
Financing activities
Net cash (used) provided by:
Deposits (695,011) 10,665,118 10,088,789 8,046,328 4,278,206
Other borrowed funds (16,138) (83,637) (339,016) (143,155) (37,309)
Treasury stock transactions, net 219,053 (696) (96,896) - (27,386)
Common stock dividends (162,678) (123,573) (123,573) (82,862) (41,379)
------------ ----------- ----------- ----------- -----------
Net cash provided by financing activities (654,774) 10,457,212 9,529,304 7,820,311 4,172,132
------------ ----------- ----------- ----------- -----------
Change in cash and cash equivalents 101,049 603,390 218,921 1,391,381 (2,221,069)
Cash and cash equivalents at beginning of year 3,999,411 3,780,490 3,780,490 2,389,109 4,610,178
------------ ----------- ----------- ----------- -----------
Cash and cash equivalents at end of year $ 4,100,460 $ 4,383,880 $ 3,999,411 $ 3,780,490 $ 2,389,109
============ =========== =========== =========== ===========
Supplemental disclosure of cash flow information
Cash paid for:
Income taxes $ 476,000 $ 489,200 $ 673,200 $ 581,223 $ 611,137
============ =========== =========== =========== ===========
Interest expense $ 2,079,294 $ 1,764,791 $ 2,384,726 $ 2,160,410 $ 1,705,602
============ =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
8
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE A - SUMMARY OF ACCOUNTING POLICIES
Nature of Operations
--------------------
Riverton State Bank Holding Company (the Company) was formed for the
purposes of owning shares of and acting as parent holding company for
Riverton State Bank and Dubois National Bank. The Company provides a full
range of banking and mortgage services to individual and corporate
customers principally in the Fremont County area. A majority of the
Company's loans are related to agricultural and real estate activities.
Borrowers' abilities to honor their loans are dependent upon the continued
economic viability of the area. The Company is subject to competition from
other financial institutions for loans and deposit accounts. The Company is
also subject to regulation by certain governmental agencies and undergoes
periodic examinations by those regulatory agencies.
BASIS OF FINANCIAL STATEMENT PRESENTATION
-----------------------------------------
The financial statements have been prepared in conformity with generally
accepted accounting principles. In preparing the financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of the balance
sheet and revenues and expenses for the period. Actual results could differ
significantly from those estimates.
Material estimates that are particularly susceptible to significant change
in the near-term relate to the determination of the allowance for loan
losses. In connection with the determination of the allowance for loan
losses, management obtains independent appraisals for significant properties
and assesses estimated future cash flows from borrowers' operations and the
liquidation of loan collateral.
Management believes that the allowance for loan losses is adequate. While
management uses available information to recognize loan losses, changes in
economic conditions may necessitate revisions in future years. In addition,
various regulatory agencies, as an integral part of their examination
process, periodically review the Company's allowance for loan losses. Such
agencies may require the Company to recognize additional losses based on
their judgments about information available to them at the time of their
examination.
9
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries, Riverton State Bank and Dubois National
Bank. All material intercompany transactions have been eliminated.
INTERIM FINANCIAL INFORMATION
-----------------------------
Financial information as of September 30, 1998 and for the nine months ended
September 30, 1998 and 1997, included herein, is unaudited. Such information
includes all adjustments (consisting only of normal recurring adjustments),
which are, in the opinion of management, necessary for a fair statement of
the financial information in the interim periods. The results of operations
for the nine months ended September 30, 1998 are not necessarily indicative
of the results for the full fiscal year.
Investment Securities
---------------------
Management determines the classification of debt securities at the time of
purchase and reevaluates such designation as of each balance sheet date.
Debt securities are classified as held-to-maturity when the Company has the
positive intent and ability to hold the securities to maturity. Held-to-
maturity securities are stated at amortized cost.
Debt securities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale securities are stated at fair value,
with the unrealized gains and losses, net of tax, reported as a component of
retained earnings in shareholders' equity.
The amortized cost of debt securities classified as held-to-maturity or
available-for-sale is adjusted for amortization of premiums and accretion of
discounts to maturity or, in the case of mortgage-backed securities, over
the estimated life of the security. Such amortization and accretion is
included as an adjustment to interest income from investments. Realized
gains and losses and declines in value judged to be other-than-temporary are
included in net securities gains (losses). The cost of securities sold is
based on the specific identification method.
10
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Loans
-----
Loans are reported at the principal amount outstanding, net of loan fees and
the allowance for loan losses. Interest on loans is calculated by using the
simple interest method on the daily balance of the principal amount
outstanding.
Loan fees which represent an adjustment to interest yield are deferred and
amortized over the estimated life of the loan. Commitment fees are amortized
over the period using the straight-line method.
Renegotiated loans are those loans on which concessions in terms have been
granted because of a borrower's financial difficulty. Interest is generally
accrued on such loans in accordance with the new terms.
The accrual of interest on impaired loans is discontinued when, in
management's opinion, the borrower may be unable to meet payments as they
become due. When interest accrual is discontinued, all unpaid accrued
interest is reversed. Interest income is subsequently recognized only to the
extend cash payments are received.
Loans on which the accrual of interest has been discontinued are designated
as nonaccrual loans. Accrual of interest on loans is discontinued either
when reasonable doubt exists as to the full, timely collection of interest
or principal or when a loan becomes contractually past due by ninety days or
more with respect to interest or principal. When a loan is placed on
nonaccrual status, all interest previously accrued but not collected is
reversed against current period interest income. Income on such loans is
then recognized only to the extent that cash is received and where the
future collection of principal is probable. Interest accruals are resumed on
such loans only when they are brought fully current with respect to interest
and principal and when, in the judgment of management, the loans are
estimated to be fully collectible as to both principal and interest.
11
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Provision for and Allowance for Loan Losses
-------------------------------------------
The allowance for loan losses is established through a provision for loan
losses charged to expenses. Loans are charged against the allowance for loan
losses when management believes that the collectibility of the principal is
unlikely or, with respect to consumer installment loans, according to an
established delinquency schedule. The allowance is an amount that management
believes will be adequate to absorb losses inherent in existing loans, leases
and commitments to extend credit, based on evaluations of the collectibility
and prior loss experience of loans, leases and commitments to extend credit.
The evaluations take into consideration such factors as changes in the nature
and volume of the portfolio, overall portfolio quality, loan concentrations,
specific problem loans, leases and commitments and current and anticipated
economic conditions that may affect the borrowers' ability to pay.
Premises and Equipment
----------------------
Premises and equipment are stated at cost. Depreciation and amortization is
provided for in amounts, principally on the straight-line method, sufficient
to relate the cost of depreciable assets to operations over their estimated
service lives.
INTANGIBLE ASSETS
-----------------
Goodwill, the price paid over the book value of acquired businesses, is
included in other assets and is amortized over periods up to 40 years.
Income Taxes
------------
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to temporary differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
12
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
Statement of Cash Flows
-----------------------
For purposes of the statement of cash flows, the Company has defined cash
equivalents as those amounts included in the balance sheet caption "Cash and
Due from Banks".
Earnings per Common Share
-------------------------
In February 1997, the FASB issued SFAS No. 128, EARNINGS PER SHARE. SFAS No.
128 establishes standards for computing and presenting earnings per share
(EPS) and applies to entities with publicly held common stock or potential
common stock. It also requires dual presentation of basic and diluted EPS on
the face of the income statement for all entities with complex capital
structures and requires a reconciliation of the numerator and denominator of
the basic EPS computation to the numerator and denominator of the diluted EPS
computation.
Basic earnings per share is computed by dividing net income available to
common shareholders by the weighted average number of common stock
outstanding during the year. Diluted earnings per share is computed by
dividing net income by the weighted average number of common stock and
dilutive potential common shares during the year. There are no securities
which have a dilutive effect at December 31, 1997, 1996, or 1995.
The table below presents a reconciliation of basic and diluted earnings per
share computations for the years ended December 31, 1997, 1996, and 1995:
1997 1996 1995
---------- ---------- --------
EARNINGS PER SHARE
------------------
Net income $1,167,548 $1,087,626 $971,629
Weighted average number of common
shares outstanding used in basic and
diluted EPS calculations 20,567 20,596 20,704
Basic EPS $ 56.77 $ 52.81 $ 46.93
Diluted EPS 56.77 52.81 46.93
13
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
New Accounting Standards
------------------------
Effective January 1, 1997, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities". The
adoption of SFAS No. 125 did not impact the Company's financial condition or
results of operations.
In February 1997, the Financial Accounting Standards Board (FASB) issued SFAS
No. 129, "Disclosure of Information About Capital Structure, " which codifies
existing disclosure requirements regarding capital structure. SFAS No. 129
did not have a significant impact on the Company's current capital structure
disclosures.
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income", (SFAS 130) and Statement of Financial
Accounting Standards No. 131, "Disclosures About Segments of an Enterprise
and Related Information" (SFAS 131). SFAS 130 requires disclosures of the
components of comprehensive income and the accumulated balance of other
comprehensive income within total stockholders' equity. SFAS 131 requires
disclosure of selected information about operating segments including segment
income, revenues and asset data. Operating segments, as defined in SFAS 131,
would include those components for which financial information is available
and evaluated regularly by the chief operating decision maker in assessing
performance and making resource allocation determinations for operating
components such as those which exceed 10 percent or more of combined revenue,
income, or assets. These standards are effective for fiscal years beginning
after December 15, 1997, and are not expected to have a material impact on
the Company's consolidated financial statements.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures About
Pensions and Other Postretirement Benefits", which revises employers'
disclosures about pension and other post retirement benefit plans and
suggests combined formats for presentation of pension and other
postretirement benefit disclosures. It is effective for fiscal years
beginning after December 15, 1997. Restatement of disclosures for earlier
periods provided for comparative purposes is required unless the information
is not readily available. This standard is not expected to have a material
impact on the Company's consolidated financial statements.
14
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE B - RESTRICTIONS ON CASH AND DUE FROM BANKS
Bank subsidiaries are required to maintain minimum average reserve balances
with the Federal Reserve Bank. The amount of those reserve balances was
approximately $449,000 at December 31, 1997.
NOTE C - INVESTMENT SECURITIES
The amortized cost and estimated market values of investments in debt
securities at December 31, are as follows:
<TABLE>
<CAPTION>
1997
-------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity
---------------------------
U.S. Treasury securities $ 7,229,592 $ 20,659 $ - $ 7,250,251
Obligations of states and
political subdivisions 78,000 - (205) 77,795
----------- ---------- ---------- -----------
$ 7,307,592 $ 20,659 $ (205) $ 7,328,046
=========== ========== ========== ===========
Securities available for sale
-----------------------------
U.S. Treasury securities $ 1,499,843 $ 2,222 $ - $ 1,502,065
U.S. government corporations
and agencies 1,066,795 3,276 - 1,070,071
Other securities 449,600 - - 449,600
----------- ---------- ---------- -----------
$ 3,016,238 $ 5,498 $ - $ 3,021,736
=========== ========== ========== ===========
</TABLE>
15
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE C - INVESTMENT SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
1996
-------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity
---------------------------
U.S. Treasury securities $10,447,946 $ 22,479 $ - $10,470,425
Obligations of states and
political subdivisions 88,000 498 - 88,498
Other securities 30,000 - - 30,000
----------- ---------- ---------- -----------
$10,565,946 $ 22,977 $ - $10,588,923
=========== ========== ========== ===========
Securities available for sale
-----------------------------
U.S. Treasury securities $ 1,497,618 $ 4,932 $ - $ 1,502,550
U.S. government corporations
and agencies 84,012 2,775 - 86,787
Obligations of states and political
subdivisions 1,174,754 24,575 - 1,199,329
Other securities 382,000 - - 382,000
----------- ---------- ---------- -----------
$ 3,138,384 $ 32,282 $ - $ 3,170,666
=========== ========== ========== ===========
</TABLE>
16
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE C - INVESTMENT SECURITIES (CONTINUED)
The amortized cost and estimated market value of investment securities (other
than equity securities) at December 31, 1997, by contractual maturity, are
shown below. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations with or
without call or prepayment penalties.
<TABLE>
<CAPTION>
Held to maturity Available for sale
---------------------- ----------------------
Estimated Estimated
Amortized Market Amortized Market
Cost Value Cost Value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Due in one year or less $6,241,414 $6,252,146 $1,499,843 $1,502,065
Due after one year through five years 1,051,178 1,060,884 1,004,849 1,006,502
Due after five years through ten years 15,000 15,016 61,946 63,569
Due after ten years - - - -
---------- ---------- ---------- ----------
$7,307,592 $7,328,046 $2,566,638 $2,572,136
========== ========== ========== ==========
</TABLE>
There were no gains or losses attributable to securities called prior to
maturity or from the sale of debt securities for the years ended December 31,
1997, 1996 and 1995.
Securities included in the accompanying balance sheet with a carrying value of
$6,632,087 and $9,095,964 at December 31, 1997 and 1996, respectively, are
pledged as collateral for public deposits and for other purposes as required
or permitted by law.
17
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE D - LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES
Major classifications of loans at December 31, are as follows:
1997 1996
------------ ------------
Commercial $ 7,770,224 $ 7,656,582
Agricultural 7,585,972 7,487,197
Construction 390,262 444,331
Consumer installment 8,644,297 7,743,372
Real estate 28,170,180 25,367,907
Overdrafts 125,820 92,979
------------ -----------
Gross loans 52,686,756 48,792,368
Less unearned income 55,305 61,805
------------ -----------
Net loans $ 52,631,451 $48,730,563
============ ===========
Transactions in the allowance for possible loan losses at December 31, are as
follows:
1997 1996 1995
-------- ----------- -----------
Balance at beginning of year $498,401 $ 465,231 $ 391,142
Provision for possible loan losses 160,289 60,000 79,996
Recoveries 37,985 102,158 24,378
Loans charged off (71,512) (128,988) (30,285)
-------- ----------- -----------
Balance at end of year $625,163 $ 498,401 $ 465,231
======== =========== ===========
18
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE D - LOANS AND ALLOWANCE FOR POSSIBLE LOAN LOSSES (CONTINUED)
The outstanding principal balance of loans having payments delinquent more
than sixty days amounted to $582,322 and $124,080 at December 31, 1997 and
1996, respectively.
Loans with a carrying value of $ 175,110, $106,176 and $28,553 have been
recognized as impaired at December 31, 1997, 1996 and 1995, respectively. The
average recorded investment in impaired loans during 1997, 1996 and 1995 was
$217,750, $213,250, and $39,750. The total allowance for loan losses related
to these loans was $38,299, $22,679 and $5,872 in 1997, 1996 and 1995,
respectively. Interest income on impaired loans of $16,963, $11,289 and $938
was recognized for cash payments received in 1997, 1996 and 1995,
respectively.
NOTE E - PREMISES AND EQUIPMENT
At December 31, premises and equipment, less accumulated depreciation,
consisted of the following:
1997
------------------------------------
Accumulated Net book
Cost depreciation value
---------- ------------ ----------
Land $ 278,747 $ - $ 278,747
Bank premises 1,643,057 448,053 1,195,004
Furniture and equipment 1,467,375 637,247 830,128
---------- ---------- ----------
$3,389,179 $1,085,300 $2,303,879
========== ========== ==========
19
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE E - PREMISES AND EQUIPMENT (CONTINUED)
1996
------------------------------------
Accumulated Net book
Cost depreciation value
---------- ------------ ----------
Land $ 278,747 $ - $ 278,747
Bank premises 1,006,933 440,544 566,389
Furniture and equipment 1,238,050 793,331 444,719
---------- ---------- ----------
$2,523,730 $1,233,875 $1,289,855
========== ========== ==========
NOTE F - DEPOSITS
The aggregate amount of short-term jumbo certificates of deposit, each with a
minimum denomination of $100,000, was approximately $15,099,000 and $8,895,000
at December 31, 1997 and 1996, respectively.
At December 31, 1997, the scheduled maturities of certificates of deposit are
as follows:
1998 $25,247,876
1999 5,539,323
2000 and thereafter 3,262,803
-----------
Total of maturing certificates $34,050,002
===========
NOTE G - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Company is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit and stand-by
letters of credit. Those instruments involve, to a varying degree, elements of
credit risk in excess of the amount recognized in the statement of financial
position. The contract amounts of those instruments reflect the extent of
involvement the Company has in particular classes of financial instruments.
20
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE G - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
(CONTINUED)
The Company's exposure to credit loss in the event of non-performance by the
other party to the financial instrument for commitments to extend credit and
standby letters of credit is represented by the contractual notional amount of
those instruments. The Company uses the same credit policies in making
commitments and conditional obligations as it does for on-balance-sheet
instruments.
Contract or
Notional Amount
----------------------
1997 1996
---------- ----------
Financial instruments whose contract amounts
represent credit risk
Commitments to extend credit $8,123,000 $6,177,000
Standby letters of credit 1,004,000 640,000
Commitments to extend credit are agreements to lend to a customer as long as
there are no violations of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Company evaluates each
customer's credit worthiness on a case-by-case basis. The amount of
collateral obtained if deemed necessary by the Company upon extension of
credit is based on management's credit evaluation. Collateral held varies, but
may include accounts receivable, inventory, property, plant and equipment and
income producing commercial properties.
Standby letters of credit are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities to customers.
21
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE H - OTHER BORROWED FUNDS
At December 31, 1997 other borrowed funds consisted of Federal Home Loan Bank
borrowings as follows:
Date of
Amortizing Notes Maturity Amount
---------------- ----------------- --------
6.78% Federal Home Land Bank note September 3, 2010 $83,181
5.38% Federal Home Land Bank note February 20, 2001 48,362
--------
$131,543
========
The amortizing notes are payable in monthly installments of principal and
interest, through January 2010. These notes are collateralized by a $250,000
Federal Home Loan Bank certificate of deposit.
Advances at December 31, 1997, have scheduled principal payments in future
years as follows:
Year Ending
December 31, Amount
------------ --------
1998 $21,517
1999 21,517
2000 21,517
2001 10,513
2002 6,517
Thereafter 49,962
--------
$131,543
========
22
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE I - INCOME TAXES
Following is an analysis of income taxes included in the statements of income:
1997 1996 1995
-------- -------- --------
Current federal tax provision $674,907 $571,516 $511,184
Deferred federal tax credit (91,219) (37,671) (39,657)
-------- -------- --------
Total income tax provision $583,688 $533,845 $471,527
======== ======== ========
Applicable income taxes for financial reporting purposes differ from the
amount computed by applying the statutory federal income tax rate for the
reasons in the table below:
1997 1996 1995
--------- --------- ---------
Tax at statutory rate (34%) $595,420 $551,300 $490,673
Tax effect of
Tax exempt interest (21,409) (31,539) (31,749)
Amortization of nondeductible goodwill 9,282 9,282 9,282
Other, net 395 4,802 3,320
--------- --------- ---------
Applicable income taxes $583,688 $533,845 $471,527
========= ========= =========
A deferred tax asset or liability is recognized for the tax consequences of
temporary differences in the recognition of revenue and expense for financial
reporting and tax purposes.
23
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE I - INCOME TAXES (CONTINUED)
Listed below are the components of the net deferred tax assets as of December
31:
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Deferred tax assets
Allowance for loan losses $130,280 $ 88,520
Deferred compensation 119,373 77,440
-------- --------
249,653 165,960
Deferred tax liabilities
Accelerated depreciation 85,665 80,704
Federal Home Loan Bank stock dividends 21,284 14,042
Other 1,868 30,704
-------- --------
108,817 125,450
Net deferred tax asset $140,836 $ 40,510
======== ========
</TABLE>
NOTE J - RELATED PARTY TRANSACTIONS
Below is an analysis of loans that were made to directors and executive
officers of the Company, and to corporations and others associated with those
individuals:
<TABLE>
<CAPTION>
<S> <C>
Balance at December 31, 1996 $2,261,993
New loans 1,142,813
Repayments (857,985)
----------
Balance at December 31, 1997 $2,546,821
==========
</TABLE>
NOTE K DEFERRED COMPENSATION PLAN
The Company has deferred compensation agreements with key employees. Vesting
is based on age and years of service. Life insurance contracts have been
purchased which may be used to fund these agreements. The charges to expense
were $123,000 in 1997, $107,000 in 1996 and $103,000 in 1995.
24
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE L - DIVIDEND RESTRICTIONS
The Company's primary funding source for common stock dividends are dividends
received from its bank subsidiaries. Payment of dividends to the Company by
its bank subsidiaries is subject to ongoing review by banking regulators and to
various statutory limitations.
NOTE M - REGULATORY MATTERS
The Company's subsidiary banks are subject to various regulatory capital
requirements administered by the federal banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory and possibly
additional discretionary, actions by regulators that, if undertaken, could have
a direct material effect on the Company's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Company's subsidiary banks must meet specific capital guidelines that
involve quantitative measures of the company's assets, liabilities, and certain
off-balance sheet items as calculated under regulatory accounting practices.
The Company's subsidiary banks capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the banks to maintain minimum amounts and ratios (set forth in the
table below) of total and Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier 1 capital (as defined) to
average assets (as defined). Management believes, as of December 31, 1997,
that the Company's subsidiary banks meets all capital adequacy requirements to
which it is subject.
As of December 31, 1997, the most recent notification from the Primary
Regulatory Agencies categorized both of the subsidiary banks as well-
capitalized under the regulatory framework for prompt corrective action.
To be categorized as well capitalized the Company's subsidiary banks must
maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage
ratios as set forth in the table. There are no conditions or events since that
notification that management believes have changed the institutions category.
25
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE M - REGULATORY MATTERS (CONTINUED)
Riverton State Bank
-------------------
<TABLE>
<CAPTION>
To be well
capitalized under
For capital prompt corrective
Actual adequacy purposes action provisions
--------------- --------------------------------------- ---------------------------------------
Amount Ratio Amount Ratio Amount Ratio
------- ------ ------------------ ---------------- ------------------ -----------------
(Amounts in thousands of dollars)
<S> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1997
Total capital greater than greater than greater than greater than
(to risk weighted assets) $5,469 13.2% or equal to $3,322 or equal to 8.0% or equal to $4,153 or equal to 10.0%
Tier 1 capital greater than greater than greater than greater than
(to risk weighted assets) 4,970 12.0% or equal to 1,661 or equal to 4.0 or equal to 2,492 or equal to 6.0
Tier 1 capital greater than greater than greater than greater than
(to average assets) 4,970 8.1% or equal to 2,449 or equal to 4.0 or equal to 3,061 or equal to 5.0
AS OF DECEMBER 31, 1996
Total capital greater than greater than greater than greater than
(to risk weighted assets) 4,821 13.4% or equal to 2,877 or equal to 8.0% or equal to 3,597 or equal to 10.0%
Tier 1 capital greater than greater than greater than greater than
(to risk weighted assets) 4,438 12.3% or equal to 1,439 or equal to 4.0 or equal to 2,158 or equal to 6.0
Tier 1 capital greater than greater than greater than greater than
(to average assets) 4,438 8.2% or equal to 2,176 or equal to 4.0 or equal to 2,719 or equal to 5.0
</TABLE>
26
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE M - REGULATORY MATTERS (CONTINUED)
Dubois National Bank
--------------------
<TABLE>
<CAPTION>
To be well
capitalized under
For capital prompt corrective
Actual adequacy purposes action provisions
--------------- --------------------------------------- ---------------------------------------
Amount Ratio Amount Ratio Amount Ratio
------- ------ ------------------ ---------------- ------------------ -----------------
(Amounts in thousands of dollars)
<S> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1997
Total capital greater than greater than greater than greater than
(to risk weighted assets) $2,058 15.6% or equal to $1,057 or equal to 8.0% or equal to $1,331 or equal to 10.0%
Tier 1 capital greater than greater than greater than greater than
(to risk weighted assets) 1,931 14.6% or equal to 528 or equal to 4.0 or equal to 793 or equal to 6.0
Tier 1 capital greater than greater than greater than greater than
(to average assets) 1,931 8.1% or equal to 959 or equal to 4.0 or equal to 1,198 or equal to 5.0
AS OF DECEMBER 31, 1996
Total capital greater than greater than greater than greater than
(to risk weighted assets) 1,892 15.8% or equal to 960 or equal to 8.0% or equal to 1,200 or equal to 10.0%
Tier 1 capital greater than greater than greater than greater than
(to risk weighted assets) 1,776 14.8% or equal to 480 or equal to 4.0 or equal to 720 or equal to 6.0
Tier 1 capital greater than greater than greater than greater than
(to average assets) 1,776 8.5% or equal to 835 or equal to 4.0 or equal to 1,044 or equal to 5.0
</TABLE>
27
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE N - PARENT COMPANY FINANCIAL INFORMATION
Summarized financial statements of the Company, on a parent
company only basis, as of December 31, are as follows:
<TABLE>
<CAPTION>
Balance Sheets
December 31,
1997 1996
-------- --------
<S> <C> <C> <C>
ASSETS
Cash 221,914 191,447
Current income taxes receivable 20,328 16,704
Investment in unconsolidated subsidiaries -
Riverton State Bank 4,969,924 4,438,128
Dubois National Bank 1,935,065 1,795,251
Equity in excess of net assets, less accumulated
amortization 658,168 685,467
---------- ---------
Total assets $7,805,399 $7,126,997
========== ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities
Accrued dividends payable $ 162,678 $ 123,573
Other liabilities 6,300 7,300
Long term notes payable - 250,000
---------- ---------
Total liabilities 168,978 380,873
Stockholders' equity
Common stock authorized, 50,000 shares
without par value; 20,893.5 shares issued 1,770,357 1,770,357
Capital surplus 48,024 46,869
Retained earnings 5,980,772 4,975,902
Net unrealized gain on available for sale
investment securities 3,629 21,306
Less cost of common stock in treasury: 1997 - 558.8
shares, 1996 298 shares (166,361) (68,310)
---------- ---------
Total stockholders' equity 7,636,421 6,746,124
---------- ---------
Total liabilities and stockholders' equity 7,805,399 7,126,997
========== ==========
</TABLE>
28
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE N - PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)
Statements of Income
For the years ended December 31,
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ---------
<S> <C> <C> <C>
Revenue
Dividends from unconsolidated subsidiary $ 550,000 $ 380,000 $ 290,000
Interest income 1,236 1,683 3,785
---------- ---------- ---------
551,236 381,683 293,785
Operating expenses
Interest expense on notes payable 21,871 37,085 56,725
Directors' fees 6,300 7,300 7,400
Professional fees 8,212 5,000 6,000
Directors' life insurance 17,920 17,920 -
Amortization expense on intangible goodwill 27,300 27,300 27,300
Miscellaneous 1,600 1,400 1,200
---------- ---------- ---------
83,203 96,005 98,625
Income before income taxes and equity
in undistributed net earnings of
unconsolidated subsidiary 468,032 285,678 195,160
Income tax benefit 10,228 16,695 22,965
---------- ---------- ---------
Income before equity in undistributed net
income of unconsolidated subsidiary 478,260 302,373 218,1225
Equity in undistributed net income of
unconsolidated subsidiary 689,287 785,253 753,504
---------- ---------- ---------
NET INCOME $1,167,548 $1,087,626 $ 971,629
========== ========== =========
</TABLE>
29
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE O - PARENT COMPANY FINANCIAL INFORMATION (CONTINUED)
Statements of Cash Flows
Years ended December 31,
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,167,548 $1,087,626 $ 971,629
Adjustments to reconcile net income to net
cash provided by operating activities
Equity in undistributed net income of
unconsolidated subsidiary (689,287) (785,253) (753,504)
Amortization of goodwill 27,299 27,300 27,300
Changes in operating assets and liabilities
Decrease in accrued expense and other liabilities (4,624) 6,160 8,096
---------- ---------- ---------
Net cash provided by operating activities 500,936 335,833 253,521
CASH FLOWS FROM FINANCING ACTIVITIES
Other borrowed funds (250,000) (250,000) (250,000)
Treasury stock transactions, net (98,896) - (27,386)
Cash dividends (123,573) (82,862) (41,379)
---------- ---------- ---------
Net cash provided from financing activities (470,469) (282,862) (258,765)
---------- ---------- ---------
Change in cash and cash equivalents 30,467 52,971 (5,244)
Cash at beginning of year 191,447 138,476 143,720
---------- ---------- ---------
Cash and cash equivalents at end of year $ 221,914 $ 191,447 $ 138,476
========== ========== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash received (paid) for:
Income taxes $ 56,992 $ 26,465 $ 28,901
========== ========== =========
Interest expense $ (21,871) $ (37,085) $ (56,725)
========== ========== =========
</TABLE>
30
<PAGE>
Riverton State Bank Holding Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997, 1996 and 1995
(All financial information for 1996 and 1995 is unaudited)
NOTE O - SUBSEQUENT EVENT
In August 1998, the Company declared a dividend of $250,722 or $12.00 per
share, payable January 1999.
In September 1998, the Company entered into an Agreement and Plan of
Reorganization (Agreement) with Norwest Corporation. Under the Agreement,
shareholders of the Company will exchange their stock for stock of Norwest
Corporation. The Agreement is subject to approval by the Company's
shareholders and certain regulatory authorities. It is anticipated the
exchange will be completed in the first quarter of 1999.
31
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
<PAGE>
AGREEMENT
AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") entered into as of
the 17th day of September, 1998, by and between RIVERTON STATE BANK HOLDING
COMPANY ("Riverton"), a Wyoming corporation, and NORWEST CORPORATION
("Norwest"), a Delaware corporation.
WHEREAS, the parties hereto desire to effect a reorganization whereby a
wholly-owned subsidiary of Norwest will merge with and into Riverton (the
"Merger") pursuant to an agreement and plan of merger (the "Merger Agreement")
in substantially the form attached hereto as Exhibit A, which provides, among
other things, for the conversion and exchange of the shares of Common Stock of
Riverton, no par value ("Riverton Common Stock") outstanding immediately prior
to the time the Merger becomes effective in accordance with the provisions of
the Merger Agreement into shares of voting Common Stock of Norwest of the par
value of $1-2/3 per share ("Norwest Common Stock"),
NOW, THEREFORE, to effect such reorganization and in consideration of the
premises and the mutual covenants and agreements contained herein, the parties
hereto do hereby represent, warrant, covenant and agree as follows:
1. BASIC PLAN OF REORGANIZATION
(a) Merger. Subject to the terms and conditions contained herein, a
------
wholly-owned subsidiary of Norwest (the "Merger Co.") will be merged by
statutory merger with and into Riverton pursuant to the Merger Agreement, with
Riverton as the surviving corporation, in which merger each share of Riverton
Common Stock outstanding immediately prior to the Effective Time of the Merger
(as defined below) (other than shares as to which statutory dissenters'
appraisal rights have been exercised) will be converted into and exchanged the
number of shares of Norwest Common Stock determined by dividing the Adjusted
Norwest Shares by the number of shares of Riverton Common Stock then
outstanding. The "Adjusted Norwest Shares" shall be a number equal to
$18,600,000 divided by the Norwest Measurement Price. The "Norwest Measurement
Price" is defined as the average of the closing prices of a share of Norwest
Common Stock as reported on the consolidated tape of the New York Stock Exchange
during the period of 20 trading days ending on the day immediately preceding the
meeting of shareholders required by paragraph 4(c) of this Agreement.
(b) Norwest Common Stock Adjustments. If, between the date hereof and the
--------------------------------
Effective Time of the Merger, shares of Norwest Common Stock shall be changed
into a different number of shares or a different class of shares by reason of
any reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment, or if a stock dividend thereon shall be declared with a
record date within such period (a "Common Stock Adjustment"), then the number of
shares of Norwest Common Stock into which a share of Riverton Common Stock shall
be converted pursuant to subparagraph (a), above,
-2-
<PAGE>
will be appropriately and proportionately adjusted so that the number of such
shares of Norwest Common Stock into which a share of Riverton Common Stock shall
be converted will equal the number of shares of Norwest Common Stock which
holders of shares of Riverton Common Stock would have received pursuant to such
Common Stock Adjustment had the record date therefor been immediately following
the Effective Time of the Merger.
(c) Fractional Shares. No fractional shares of Norwest Common Stock and
-----------------
no certificates or scrip certificates therefor shall be issued to represent any
such fractional interest, and any holder thereof shall be paid an amount of cash
equal to the product obtained by multiplying the fractional share interest to
which such holder is entitled by the average of the closing prices of a share of
Norwest Common Stock as reported by the consolidated tape of the New York Stock
Exchange for each of the five (5) trading days ending on the day immediately
preceding the meeting of shareholders required by paragraph 4(c) of this
Agreement.
(d) Mechanics of Closing Merger. Subject to the terms and conditions set
---------------------------
forth herein, the Merger Agreement shall be executed and it or Articles of
Merger or a Certificate of Merger shall be filed with the Secretary of State of
the State of Wyoming within ten (10) business days following the satisfaction or
waiver of all conditions precedent set forth in Sections 6 and 7 of this
Agreement or on such other date as may be agreed to by the parties (the "Closing
Date"). Each of the parties agrees to use its best efforts to cause the Merger
to be completed as soon as practicable after the receipt of final regulatory
approval of the Merger and the expiration of all required waiting periods. The
time that the filing referred to in the first sentence of this paragraph is made
is herein referred to as the "Time of Filing". The day on which such filing is
made and accepted is herein referred to as the "Effective Date of the Merger".
The "Effective Time of the Merger" shall be 11:59 p.m. Riverton, Wyoming time on
the Effective Date of the Merger. At the Effective Time of the Merger on the
Effective Date of the Merger, the separate existence of Merger Co. shall cease
and Merger Co. will be merged with and into Riverton pursuant to the Merger
Agreement.
The closing of the transactions contemplated by this Agreement and the
Merger Agreement (the "Closing") shall take place on the Closing Date at the
offices of Norwest, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota.
2. REPRESENTATIONS AND WARRANTIES OF RIVERTON. Riverton represents and
warrants to Norwest as follows:
(a) Organization and Authority. Riverton is a corporation duly organized,
--------------------------
validly existing and in good standing under the laws of the State of Wyoming, is
duly qualified to do business and is in good standing in all jurisdictions where
its ownership or leasing of property or the conduct of its business requires it
to be so qualified and failure to be so qualified would have a material adverse
effect on Riverton and the Riverton Subsidiaries taken as a whole and has
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted. Riverton is registered as a bank
-3-
<PAGE>
holding company with the Federal Reserve Board under the Bank Holding Company
Act of 1956, as amended (the "BHC Act"). Riverton has furnished Norwest true and
correct copies of its articles of incorporation and by-laws, as amended.
(b) Riverton's Subsidiaries. Schedule 2(b) sets forth a complete and
-----------------------
correct list of all of Riverton's subsidiaries as of the date hereof
(individually a "Riverton Subsidiary" and collectively the "Riverton
Subsidiaries"), all shares of the outstanding capital stock of each of which,
except as set forth on Schedule 2(b), are owned directly or indirectly by
Riverton. No equity security of any Riverton Subsidiary is or may be required
to be issued by reason of any option, warrant, scrip, preemptive right, right to
subscribe to, call or commitment of any character whatsoever relating to, or
security or right convertible into, shares of any capital stock of such
subsidiary, and there are no contracts, commitments, understandings or
arrangements by which any Riverton Subsidiary is bound to issue additional
shares of its capital stock, or any option, warrant or right to purchase or
acquire any additional shares of its capital stock. Subject to 12 U.S.C. (S) 55
(1982) and the Wyoming Business Corporation Act, all of such shares so owned by
Riverton are fully paid and nonassessable and are owned by it free and clear of
any lien, claim, charge, option, encumbrance or agreement with respect thereto.
Each Riverton Subsidiary is a corporation or national banking association duly
organized, validly existing, duly qualified to do business and in good standing
under the laws of its jurisdiction of incorporation, and has corporate power and
authority to own or lease its properties and assets and to carry on its business
as it is now being conducted. Except as set forth on Schedule 2(b), Riverton
does not own beneficially, directly or indirectly, more than 5% of any class of
equity securities or similar interests of any corporation, bank, business trust,
association or similar organization, and is not, directly or indirectly, a
partner in any partnership or party to any joint venture.
(c) Capitalization. The authorized capital stock of Riverton consists of
--------------
50,000 shares of common stock, no par value, of which as of the close of
business on June 30, 1998, 20,361.4 shares were outstanding and
532.1 shares were held in the treasury. The maximum number of shares of
Riverton Common Stock (assuming for this purpose that phantom shares and other
share-equivalents constitute Riverton Common Stock) that would be outstanding as
of the Effective Date of the Merger if all options, warrants, conversion rights
and other rights with respect thereto were exercised is 20,893.5. All of the
outstanding shares of capital stock of Riverton have been duly and validly
authorized and issued and are fully paid and nonassessable. Except as set forth
in Schedule 2(c), there are no outstanding subscriptions, contracts, conversion
privileges, options, warrants, calls, preemptive rights or other rights
obligating Riverton or any Riverton Subsidiary to issue, sell or otherwise
dispose of, or to purchase, redeem or otherwise acquire, any shares of capital
stock of Riverton or any Riverton Subsidiary. Since December 31, 1997, except
as set forth in Schedule 2(c), no shares of Riverton capital stock have been
purchased, redeemed or otherwise acquired, directly or indirectly, by Riverton
or any Riverton Subsidiary and except as set forth in Schedule 2(c), no
dividends or other distributions have been declared, set aside, made or paid to
the shareholders of Riverton.
-4-
<PAGE>
(d) Authorization. Riverton has the corporate power and authority to
-------------
enter into this Agreement and the Merger Agreement and, subject to any required
approvals of its shareholders, to carry out its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Merger Agreement by Riverton and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of Riverton. Subject to such approvals of shareholders and of
government agencies and other governing boards having regulatory authority over
Riverton as may be required by statute or regulation, this Agreement and the
Merger Agreement are valid and binding obligations of Riverton enforceable
against Riverton in accordance with their respective terms.
Except as set forth on Schedule 2(d), neither the execution, delivery and
performance by Riverton of this Agreement or the Merger Agreement, nor the
consummation of the transactions contemplated hereby and thereby, nor compliance
by Riverton with any of the provisions hereof or thereof, will (i) violate,
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of,
or result in the creation of, any lien, security interest, charge or encumbrance
upon any of the properties or assets of Riverton or any Riverton Subsidiary
under any of the terms, conditions or provisions of (x) its articles of
incorporation or by-laws or (y) any material note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or obligation to
which Riverton or any Riverton Subsidiary is a party or by which it may be
bound, or to which Riverton or any Riverton Subsidiary or any of the properties
or assets of Riverton or any Riverton Subsidiary may be subject, or (ii) subject
to compliance with the statutes and regulations referred to in the next
paragraph, to the best knowledge of Riverton, violate any judgment, ruling,
order, writ, injunction, decree, statute, rule or regulation applicable to
Riverton or any Riverton Subsidiary or any of their respective properties or
assets.
Other than in connection or in compliance with the provisions of the
Securities Act of 1933 and the rules and regulations thereunder (the "Securities
Act"), the Securities Exchange Act of 1934 and the rules and regulations
thereunder (the "Exchange Act"), the securities or blue sky laws of the various
states or filings, consents, reviews, authorizations, approvals or exemptions
required under the BHC Act or the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 ("HSR Act"), and filings required to effect the Merger under Wyoming
law, no notice to, filing with, exemption or review by, or authorization,
consent or approval of, any public body or authority is necessary for the
consummation by Riverton of the transactions contemplated by this Agreement and
the Merger Agreement.
(e) Riverton Financial Statements. The consolidated balance sheets of
-----------------------------
Riverton and Riverton's Subsidiaries as of December 31, 1997 and related
consolidated statements of income, shareholders' equity and cash flows for the
two years ended December 31, 1997, together with the notes thereto, certified by
Fortner, Bayens, Levkulich & Co., and the unaudited consolidated statements of
financial condition of Riverton and Riverton's
-5-
<PAGE>
Subsidiaries as of June 30, 1998 and the related unaudited consolidated
statements of income, shareholders' equity and cash flows for the six (6) months
then ended (collectively, the "Riverton Financial Statements"), will be, when
delivered to Norwest pursuant to paragraph 4(d) hereof, prepared in accordance
with generally accepted accounting principles applied on a consistent basis and
present fairly (subject, in the case of financial statements for interim
periods, to normal recurring adjustments) the consolidated financial position of
Riverton and Riverton's Subsidiaries at the dates and the consolidated results
of operations and cash flows of Riverton and Riverton's Subsidiaries for the
periods stated therein.
(f) Reports. Since December 31, 1992, Riverton and each Riverton
-------
Subsidiary has filed all reports, registrations and statements, together with
any required amendments thereto, that it was required to file with (i) the
Securities and Exchange Commission (the "SEC"), (ii) the Federal Reserve Board,
(iii) the Federal Deposit Insurance Corporation (the "FDIC"), (iv) the United
States Comptroller of the Currency (the "Comptroller") and (v) any applicable
state securities or banking authorities. All such reports and statements filed
with any such regulatory body or authority are collectively referred to herein
as the "Riverton Reports". As of their respective dates, the Riverton Reports
complied in all material respects with all the rules and regulations promulgated
by the SEC, the Federal Reserve Board, the FDIC, the Comptroller and applicable
state securities or banking authorities, as the case may be, and did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Copies of all the Riverton Reports have been made available to
Norwest by Riverton.
(g) Properties and Leases. Except as may be reflected in the Riverton
---------------------
Financial Statements and except for any lien for current taxes not yet
delinquent, Riverton and each Riverton Subsidiary have good title free and clear
of any material liens, claims, charges, options, encumbrances or similar
restrictions to all the real and personal property reflected in Riverton's
consolidated balance sheet as of December 31, 1997, and all real and personal
property acquired since such date, except such real and personal property as has
been disposed of in the ordinary course of business. All leases of real
property and all other leases material to Riverton or any Riverton Subsidiary
pursuant to which Riverton or such Riverton Subsidiary, as lessee, leases real
or personal property, which leases are described on Schedule 2(g), are valid and
effective in accordance with their respective terms, and there is not, under any
such lease, any material existing default by Riverton or such Riverton
Subsidiary or any event which, with notice or lapse of time or both, would
constitute such a material default. Substantially all Riverton's and each
Riverton Subsidiary's buildings and equipment in regular use have been well
maintained and are in good and serviceable condition, reasonable wear and tear
excepted.
(h) Taxes. Each of Riverton and the Riverton Subsidiaries has filed all
-----
federal, state, county, local and foreign tax returns, including information
returns, required to be filed by it, and paid all taxes owed by it, including
those with respect to income, withholding, social security, unemployment,
workers compensation, franchise, ad
-6-
<PAGE>
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 Riverton and the Riverton Subsidiaries for the fiscal year ended
December 31, 1994, and for all fiscal years prior thereto, are for the purposes
of routine audit by the Internal Revenue Service closed because of the statute
of limitations, and no claims for additional taxes for such fiscal years are
pending. Except only as set forth on Schedule 2(h), (i) neither Riverton nor any
Riverton Subsidiary is a party to any pending action or proceeding, nor is any
such action or proceeding threatened by any governmental authority, for the
assessment or collection of taxes, interest, penalties, assessments or
deficiencies and (ii) no issue has been raised by any federal, state, local or
foreign taxing authority in connection with an audit or examination of the tax
returns, business or properties of Riverton or any Riverton Subsidiary which has
not been settled, resolved and fully satisfied. Each of Riverton and the
Riverton 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 December 31, 1997, referred to in paragraph
2(e) hereof, includes adequate provision for all accrued but unpaid federal,
state, county, local and foreign taxes, interest, penalties, assessments or
deficiencies of Riverton and the Riverton Subsidiaries with respect to all
periods through the date thereof.
(i) Absence of Certain Changes. Since December 31, 1997 there has been no
--------------------------
change in the business, financial condition or results of operations of Riverton
or any Riverton 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 Riverton and the Riverton Subsidiaries taken as a whole.
(j) Commitments and Contracts. Except as set forth on Schedule 2(j),
-------------------------
neither Riverton nor any Riverton Subsidiary is a party or subject to any of the
following (whether written or oral, express or implied):
(i) any employment contract or understanding (including any
understandings or obligations with respect to severance or termination pay
liabilities or fringe benefits) with any present or former officer,
director, employee or consultant (other than those which are terminable at
will by Riverton or such Riverton Subsidiary);
(ii) any plan, contract or understanding providing for any bonus,
pension, option, deferred compensation, retirement payment, profit sharing
or similar arrangement with respect to any present or former officer,
director, employee or consultant;
(iii) any labor contract or agreement with any labor union;
(iv) any contract not made in the ordinary course of business
containing covenants which limit the ability of Riverton or any Riverton
Subsidiary to compete in any line of business or with any person or which
involve any
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<PAGE>
restriction of the geographical area in which, or method by which, Riverton
or any Riverton Subsidiary may carry on its business (other than as may be
required by law or applicable regulatory authorities);
(v) any other contract or agreement which is a "material contract"
within the meaning of Item 601(b)(10) of Regulation S-K; or
(vi) any lease with annual rental payments aggregating $10,000 or
more; or
(vii) any agreement or commitment with respect to the Community
Reinvestment Act with any state or federal bank regulatory authority or any
other party; or
(viii) any current or past agreement, contract or understanding with any
current or former director, officer, employee, consultant, financial
adviser, broker, dealer, or agent providing for any rights of
indemnification in favor of such person or entity.
(k) Litigation and Other Proceedings. Riverton has furnished (or will
--------------------------------
furnish when available pursuant to paragraph 4(d) hereof) Norwest copies of (i)
all attorney responses to the request of the independent auditors for Riverton
with respect to loss contingencies as of December 31, 1997 in connection with
the Riverton financial statements, and (ii) a written list of legal and
regulatory proceedings filed against Riverton or any Riverton Subsidiary since
said date. Neither Riverton nor any Riverton Subsidiary is a party to any
pending or, to the best knowledge of Riverton, threatened, claim, action, suit,
investigation or proceeding, or is subject to any order, judgment or decree,
except for matters which, in the aggregate, will not have, or cannot reasonably
be expected to have, a material adverse effect on the business, financial
condition or results of operations of Riverton and the Riverton Subsidiaries
taken as a whole.
(l) Insurance. Riverton and each Riverton Subsidiary is presently
---------
insured, and during each of the past five calendar years (or during such lesser
period of time as Riverton has owned such Riverton Subsidiary) has been insured,
for reasonable amounts with financially sound and reputable insurance companies
against such risks as companies engaged in a similar business would, in
accordance with good business practice, customarily be insured and has
maintained all insurance required by applicable law and regulation.
(m) Compliance with Laws. Riverton and each Riverton Subsidiary has all
--------------------
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, federal, state, local or foreign
governmental or regulatory bodies that are required in order to permit it to own
or lease its properties and assets and to carry on its business as presently
conducted and that are material to the business of Riverton or such Riverton
Subsidiary; all such permits, licenses, certificates
-8-
<PAGE>
of authority, orders and approvals are in full force and effect and, to the best
knowledge of Riverton, no suspension or cancellation of any of them is
threatened; and all such filings, applications and registrations are current.
The conduct by Riverton and each Riverton Subsidiary of its business and the
condition and use of its properties does not violate or infringe, in any respect
material to any such business, any applicable domestic (federal, state or local)
or foreign law, statute, ordinance, license or regulation. Neither Riverton nor
any Riverton Subsidiary is in default under any order, license, regulation or
demand of any federal, state, municipal or other governmental agency or with
respect to any order, writ, injunction or decree of any court. Except for
statutory or regulatory restrictions of general application and except as set
forth on Schedule 2(m), no federal, state, municipal or other governmental
authority has placed any restriction on the business or properties of Riverton
or any Riverton Subsidiary which reasonably could be expected to have a material
adverse effect on the business or properties of Riverton and the Riverton
Subsidiaries taken as a whole.
(n) Labor. No work stoppage involving Riverton or any Riverton Subsidiary
-----
is pending or, to the best knowledge of Riverton, threatened. Neither Riverton
nor any Riverton Subsidiary is involved in, or threatened with or affected by,
any labor dispute, arbitration, lawsuit or administrative proceeding which could
materially and adversely affect the business of Riverton or such Riverton
Subsidiary. Employees of Riverton and the Riverton Subsidiaries are not
represented by any labor union nor are any collective bargaining agreements
otherwise in effect with respect to such employees.
(o) Material Interests of Certain Persons. Except as set forth on
-------------------------------------
Schedule 2(o), to the best knowledge of Riverton no officer or director of
Riverton or any Riverton Subsidiary, or any "associate" (as such term is defined
in Rule l4a-1 under the Exchange Act) of any such officer or director, has any
interest in any material contract or property (real or personal), tangible or
intangible, used in or pertaining to the business of Riverton or any Riverton
Subsidiary.
Schedule 2(o) sets forth a correct and complete list of any loan from
Riverton or any Riverton Subsidiary to any present officer, director, employee
or any associate or related interest of any such person which was required under
Regulation O of the Federal Reserve Board to be approved by or reported to
Riverton's or such Riverton Subsidiary's Board of Directors.
(p) Riverton Benefit Plans.
----------------------
(i) The only "employee benefit plans" within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), for which Riverton or any Riverton 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 Riverton or
any Riverton Subsidiary are those set forth on Schedule 2(p) (the "Plans").
No Plan is a "multi-employer plan" within the meaning of Section 3(37) of
ERISA.
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<PAGE>
(ii) Each Plan is and has been in all material respects operated and
administered in accordance with its provisions and applicable law. Except
as set forth on Schedule 2(p), Riverton or the Riverton subsidiaries have
received favorable determination letters from the Internal Revenue Service
under the provisions of the Tax Reform Act of 1986 ("TRA `86") 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. Riverton
knows of no reason that any Plan which is subject to the qualification
provisions of Section 401(a) of the Code is not "qualified" within the
meaning of Section 401(a) of the Code and that each related trust is not
exempt from taxation under Section 501(a) of the Code.
(iii) The present value of all benefits vested and all benefits accrued
under each Plan which is subject to Title IV of ERISA did not, in each
case, as determined for purposes of reporting on Schedule B to the Annual
Report on Form 5500 of each such Plan as of the end of the most recent Plan
year exceed the value of the assets of the Plan allocable to such vested or
accrued benefits.
(iv) Except as disclosed in Schedule 2(p), and to the best knowledge of
Riverton, no Plan or any trust created thereunder, nor any trustee,
fiduciary or administrator thereof, has engaged in a "prohibited
transaction", as such term is defined in Section 4975 of the Code or
Section 406 of ERISA or violated any of the fiduciary standards under Part
4 of Title I of ERISA which could subject, to the best knowledge of
Riverton, 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 Riverton and the Riverton Subsidiaries
taken as a whole.
(v) No Plan which is subject to Title IV of ERISA or any trust created
thereunder has been terminated, nor have there been any "reportable events"
as that term is defined in Section 4043 of ERISA, with respect to any Plan,
other than those events which may result from the transactions contemplated
by this Agreement and the Merger Agreement.
(vi) No Plan or any trust created thereunder has incurred any
"accumulated funding deficiency", as such term is defined in Section 412 of
the Code (whether or not waived), since the effective date of ERISA.
(vii) Except as disclosed in Schedule 2(p), neither the execution and
delivery of this Agreement and the Merger Agreement nor the consummation of
the transactions contemplated hereby and thereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director
or employee or former employee of Riverton or any Riverton Subsidiary under
any Plan or otherwise, (ii) materially increase any benefits otherwise
payable under any Plan
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<PAGE>
or (iii) result in the acceleration of the time of payment or vesting of
any such benefits to any material extent.
(q) Proxy Statement, etc. None of the information regarding Riverton and
--------------------
the Riverton Subsidiaries supplied or to be supplied by Riverton for inclusion
in (i) a Registration Statement on Form S-4 to be filed with the SEC by Norwest
for the purpose of registering the shares of Norwest Common Stock to be
exchanged for shares of Riverton Common Stock pursuant to the provisions of the
Merger Agreement (the "Registration Statement"), (ii) the proxy statement to be
mailed to Riverton's shareholders in connection with the meeting to be called to
consider the Merger (the "Proxy Statement") and (iii) any other documents to be
filed with the SEC or any regulatory authority in connection with the
transactions contemplated hereby or by the Merger Agreement will, at the
respective times such documents are filed with the SEC or any regulatory
authority and, in the case of the Registration Statement, when it becomes
effective and, with respect to the Proxy Statement, when mailed, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading or, in the case
of the Proxy Statement or any amendment thereof or supplement thereto, at the
time of the meeting of shareholders referred to in paragraph 4(c), be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for such meeting. All documents which Riverton
and the Riverton Subsidiaries are responsible for filing with the SEC and any
other regulatory authority in connection with the Merger will comply as to form
in all material respects with the provisions of applicable law.
(r) Registration Obligations. Except as set forth on Schedule 2(r),
------------------------
neither Riverton nor any Riverton Subsidiary is under any obligation, contingent
or otherwise, which will survive the Merger by reason of any agreement to
register any of its securities under the Securities Act.
(s) Brokers and Finders. Neither Riverton nor any Riverton Subsidiary nor
-------------------
any of their respective officers, directors or employees has employed any broker
or finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder's fees, and no broker or finder has acted directly
or indirectly for Riverton or any Riverton Subsidiary in connection with this
Agreement and the Merger Agreement or the transactions contemplated hereby and
thereby.
(t) Administration of Trust Accounts. Riverton and each Riverton
--------------------------------
Subsidiary has properly administered in all respects material and which could
reasonably be expected to be material to the financial condition of Riverton and
the Riverton 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
Riverton, any Riverton Subsidiary, nor any director, officer or employee of
Riverton or any Riverton Subsidiary has committed any breach of trust with
respect to any such
-11-
<PAGE>
fiduciary account which is material to or could reasonably be expected to be
material to the financial condition of Riverton and the Riverton Subsidiaries
taken as a whole, and the accountings for each such fiduciary account are true
and correct in all material respects and accurately reflect the assets of such
fiduciary account.
(u) No Defaults. Neither Riverton nor any Riverton Subsidiary is in
-----------
default, nor has any event occurred which, with the passage of time or the
giving of notice, or both, would constitute a default, under any material
agreement, indenture, loan agreement or other instrument to which it is a party
or by which it or any of its assets is bound or to which any of its assets is
subject, the result of which has had or could reasonably be expected to have a
material adverse effect upon Riverton and the Riverton Subsidiaries, taken as a
whole. To the best of Riverton's knowledge, all parties with whom Riverton or
any Riverton Subsidiary has material leases, agreements or contracts or who owe
to Riverton or any Riverton Subsidiary material obligations other than with
respect to those arising in the ordinary course of the banking business of the
Riverton Subsidiaries are in compliance therewith in all material respects.
(v) Environmental Liability. There is no legal, administrative, or other
-----------------------
proceeding, claim, or action of any nature seeking to impose, or that could
result in the imposition of, on Riverton or any Riverton Subsidiary, any
liability relating to the release of hazardous substances as defined under any
local, state or federal environmental statute, regulation or ordinance
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ("CERCLA"), pending or to the
best of Riverton's knowledge, threatened against Riverton or any Riverton
Subsidiary the result of which has had or could reasonably be expected to have a
material adverse effect upon Riverton and Riverton's Subsidiaries taken as a
whole; to the best of Riverton's knowledge there is no reasonable basis for any
such proceeding, claim or action; and to the best of Riverton's knowledge
neither Riverton nor any Riverton Subsidiary is subject to any agreement, order,
judgment, or decree by or with any court, governmental authority or third party
imposing any such environmental liability. Riverton has provided Norwest with
copies of all environmental assessments, reports, studies and other related
information in its possession with respect to each bank facility and each non-
residential OREO property.
(w) Compliance with Year 2000 Requirements. Riverton is in full compliance
--------------------------------------
with current Federal Financial Institutions Examination Council ("FFIEC")
requirements relating to assessing and addressing Year 2000 business risk.
Riverton has made its Year 2000 project assessment and remediation plan
available to Norwest for review and has furnished Norwest with copies of all
communications between Riverton or any Riverton Subsidiary and regulators having
responsibility for overseeing compliance with such FFIEC requirements.
3. REPRESENTATIONS AND WARRANTIES OF NORWEST. Norwest represents and
warrants to Riverton as follows:
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<PAGE>
(a) Organization and Authority. Norwest is a corporation duly organized,
--------------------------
validly existing and in good standing under the laws of the State of Delaware,
is duly qualified to do business and is in good standing in all jurisdictions
where its ownership or leasing of property or the conduct of its business
requires it to be so qualified and failure to be so qualified would have a
material adverse effect on Norwest and its subsidiaries taken as a whole and has
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted. Norwest is registered as a bank
holding company with the Federal Reserve Board under the BHC Act.
(b) Norwest Subsidiaries. Schedule 3(b) sets forth a complete and correct
--------------------
list as of December 31, 1997, of Norwest's Significant Subsidiaries (as defined
in Regulation S-X promulgated by the SEC) (individually a "Norwest Subsidiary"
and collectively the "Norwest Subsidiaries"), all shares of the outstanding
capital stock of each of which, except as set forth in Schedule 3(b), are owned
directly or indirectly by Norwest. No equity security of any Norwest Subsidiary
is or may be required to be issued to any person or entity other than Norwest by
reason of any option, warrant, scrip, right to subscribe to, call or commitment
of any character whatsoever relating to, or security or right convertible into,
shares of any capital stock of such subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any Norwest Subsidiary is
bound to issue additional shares of its capital stock, or options, warrants or
rights to purchase or acquire any additional shares of its capital stock.
Subject to 12 U.S.C. (S) 55 (1982), all of such shares so owned by Norwest are
fully paid and nonassessable and are owned by it free and clear of any lien,
claim, charge, option, encumbrance or agreement with respect thereto. Each
Norwest Subsidiary is a corporation or national banking association duly
organized, validly existing, duly qualified to do business and in good standing
under the laws of its jurisdiction of incorporation, and has corporate power and
authority to own or lease its properties and assets and to carry on its business
as it is now being conducted.
(c) Norwest Capitalization. As of December 31, 1997, the authorized
----------------------
capital stock of Norwest consists of (i) 5,000,000 shares of Preferred Stock,
without par value, of which as of the close of business on December 31, 1997,
980,000 shares of Cumulative Tracking Preferred Stock, at $200 stated value, and
10,022 shares of ESOP Cumulative Convertible Preferred Stock, at $1,000 stated
value, 20,625 shares of 1995 ESOP Cumulative Convertible Preferred Stock, at
$1,000 stated value, 22,831 shares of 1996 ESOP Cumulative Convertible Preferred
Stock, at $1,000 stated value, and 22,927 shares of 1997 ESOP Cumulative
Convertible Preferred Stock, at $1,000 stated value, were outstanding; (ii)
4,000,000 shares of Preference Stock, without par value, of which as of the
close of business on December 31, 1997, no shares were outstanding; and (iii)
1,000,000,000 shares of Common Stock, $1-2/3 par value, of which as of the close
of business on December 31, 1997, 758,619,494 shares were outstanding and
10,493,685 shares were held in the treasury. However, on April 28, 1998, the
shareholders of Norwest approved an amendment to the Norwest Certificate of
Incorporation, effective June 8, 1998, to increase the number of shares of
Norwest common Stock which Norwest is authorized to issue from 1,000,000,000 to
2,000,000,000. All of the outstanding shares
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<PAGE>
of capital stock of Norwest have been duly and validly authorized and issued and
are fully paid and nonassessable.
On June 7, 1998, Norwest entered into an Agreement and Plan of Merger (the
"Wells Merger Agreement") by and between Norwest and Wells Fargo & Company, a
Delaware corporation ("Wells Fargo"), under which it is contemplated that Wells
Fargo will merge with and into Norwest, with Norwest as the surviving
corporation (the "Wells Merger"). The Wells Merger Agreement provides that,
prior to consummation of the Wells Merger, Norwest will amend its Restated
Certificate of Incorporation to provide that Norwest shall have authority to
issue an aggregate of 20,000,000 shares of Preferred Stock without par value,
4,000,000 of Preference Stock without par value, and 4,000,000,000 shares of
Common Stock of the par value of $1-2/3 per share.
(d) Authorization. Norwest has the corporate power and authority to enter
-------------
into this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement by Norwest and the consummation of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of Norwest. No approval or consent by the stockholders of Norwest is
necessary for the execution and delivery of this Agreement and the Merger
Agreement and the consummation of the transactions contemplated hereby and
thereby. Subject to such approvals of government agencies and other governing
boards having regulatory authority over Norwest as may be required by statute or
regulation, this Agreement is a valid and binding obligation of Norwest
enforceable against Norwest in accordance with its terms.
Neither the execution, delivery and performance by Norwest of this
Agreement or the Merger Agreement, nor the consummation of the transactions
contemplated hereby and thereby, nor compliance by Norwest with any of the
provisions hereof or thereof, will (i) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the creation of, any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Norwest or any Norwest Subsidiary under any of the terms, conditions or
provisions of (x) its certificate of incorporation or by-laws or (y) any
material note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which Norwest or any Norwest
Subsidiary is a party or by which it may be bound, or to which Norwest or any
Norwest Subsidiary or any of the properties or assets of Norwest or any Norwest
Subsidiary may be subject, or (ii) subject to compliance with the statutes and
regulations referred to in the next paragraph, to the best knowledge of Norwest,
violate any judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to Norwest or any Norwest Subsidiary or any of their
respective properties or assets.
Other than in connection with or in compliance with the provisions of the
Securities Act, the Exchange Act, the securities or blue sky laws of the various
states or filings, consents, reviews, authorizations, approvals or exemptions
required under the BHC Act or the HSR Act, and filings required to effect the
Merger under Wyoming law,
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<PAGE>
no notice to, filing with, exemption or review by, or authorization, consent or
approval of, any public body or authority is necessary for the consummation by
Norwest of the transactions contemplated by this Agreement and the Merger
Agreement.
(e) Norwest Financial Statements. The consolidated balance sheets of
----------------------------
Norwest and Norwest's subsidiaries as of December 31, 1997 and 1996 and related
consolidated statements of income, stockholders' equity and cash flows for the
three years ended December 31, 1997, together with the notes thereto, certified
by KPMG Peat Marwick LLP and included in Norwest's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997 (the "Norwest 10-K") as filed with
the SEC, and the unaudited consolidated balance sheets of Norwest and its
subsidiaries as of June 30, 1998 and the related unaudited consolidated
statements of income and cash flows for the six (6) months then ended included
in Norwest's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1998, as filed with the SEC (collectively, the "Norwest Financial Statements"),
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis and present fairly (subject, in the case of
financial statements for interim periods, to normal recurring adjustments) the
consolidated financial position of Norwest and its subsidiaries at the dates and
the consolidated results of operations, changes in financial position and cash
flows of Norwest and its subsidiaries for the periods stated therein.
(f) Reports. Since December 31, 1992, Norwest and each Norwest Subsidiary
-------
has filed all reports, registrations and statements, together with any required
amendments thereto, that it was required to file with (i) the SEC, including,
but not limited to, Forms 10-K, Forms 10-Q and proxy statements, (ii) the
Federal Reserve Board, (iii) the FDIC, (iv) the Comptroller and (v) any
applicable state securities or banking authorities. All such reports and
statements filed with any such regulatory body or authority are collectively
referred to herein as the "Norwest Reports". As of their respective dates, the
Norwest Reports complied in all material respects with all the rules and
regulations promulgated by the SEC, the Federal Reserve Board, the FDIC, the
Comptroller and any applicable state securities or banking authorities, as the
case may be, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(g) Properties and Leases. Except as may be reflected in the Norwest
---------------------
Financial Statements and except for any lien for current taxes not yet
delinquent, Norwest and each Norwest Subsidiary has good title free and clear of
any material liens, claims, charges, options, encumbrances or similar
restrictions to all the real and personal property reflected in Norwest's
consolidated balance sheet as of June 30, 1998 included in Norwest's Quarterly
Report on Form 10-Q for the period then ended, and all real and personal
property acquired since such date, except such real and personal property has
been disposed of in the ordinary course of business. All leases of real
property and all other leases material to Norwest or any Norwest Subsidiary
pursuant to which Norwest or such Norwest Subsidiary, as lessee, leases real or
personal property, are valid and effective in accordance with their respective
terms, and there is not, under any such lease,
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<PAGE>
any material existing default by Norwest or such Norwest Subsidiary or any event
which, with notice or lapse of time or both, would constitute such a material
default. Substantially all Norwest's and each Norwest Subsidiary's buildings and
equipment in regular use have been well maintained and are in good and
serviceable condition, reasonable wear and tear excepted.
(h) Taxes. Each of Norwest and the Norwest Subsidiaries has filed all
-----
material federal, state, county, local and foreign tax returns, including
information returns, required to be filed by it, and paid or made adequate
provision for the payment of all taxes owed by it, including those with respect
to income, withholding, social security, unemployment, workers compensation,
franchise, ad valorem, premium, excise and sales taxes, and no taxes shown on
such returns to be owed by it or assessments received by it are delinquent. The
federal income tax returns of Norwest and the Norwest Subsidiaries for the
fiscal year ended December 31, 1982, and for all fiscal years prior thereto, are
for the purposes of routine audit by the Internal Revenue Service closed because
of the statute of limitations, and no claims for additional taxes for such
fiscal years are pending. Except only as set forth on Schedule 3(h), (i)
neither Norwest nor any Norwest Subsidiary is a party to any pending action or
proceeding, nor to Norwest's knowledge is any such action or proceeding
threatened by any governmental authority, for the assessment or collection of
taxes, interest, penalties, assessments or deficiencies which could reasonably
be expected to have any material adverse effect on Norwest and its subsidiaries
taken as a whole, and (ii) no issue has been raised by any federal, state, local
or foreign taxing authority in connection with an audit or examination of the
tax returns, business or properties of Norwest or any Norwest Subsidiary which
has not been settled, resolved and fully satisfied, or adequately reserved for.
Each of Norwest and the Norwest Subsidiaries has paid all taxes owed or which it
is required to withhold from amounts owing to employees, creditors or other
third parties.
(i) Absence of Certain Changes. Since December 31, 1997, there has been
--------------------------
no change in the business, financial condition or results of operations of
Norwest or any Norwest Subsidiary which has had, or may reasonably be expected
to have, a material adverse effect on the business, financial condition or
results of operations of Norwest and its subsidiaries taken as a whole.
(j) Commitments and Contracts. Except as set forth on Schedule 3(j), as
-------------------------
of December 31, 1997 neither Norwest nor any Norwest Subsidiary is a party or
subject to any of the following (whether written or oral, express or implied):
(i) any labor contract or agreement with any labor union;
(ii) any contract not made in the ordinary course of business
containing covenants which materially limit the ability of Norwest or any
Norwest Subsidiary to compete in any line of business or with any person or
which involve any material restriction of the geographical area in which,
or method by which, Norwest or any Norwest Subsidiary may carry on its
business (other than as may be required by law or applicable regulatory
authorities);
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<PAGE>
(iii) any other contract or agreement which is a "material contract"
within the meaning of Item 601(b)(10) of Regulation S-K.
(k) Litigation and Other Proceedings. Neither Norwest nor any Norwest
--------------------------------
Subsidiary is a party to any pending or, to the best knowledge of Norwest,
threatened, claim, action, suit, investigation or proceeding, or is subject to
any order, judgment or decree, except for matters which, in the aggregate, will
not have, or cannot reasonably be expected to have, a material adverse effect on
the business, financial condition or results of operations of Norwest and its
subsidiaries taken as a whole.
(l) Insurance. Norwest and each Norwest Subsidiary is presently insured
---------
or self insured, and during each of the past five calendar years (or during such
lesser period of time as Norwest has owned such Norwest Subsidiary) has been
insured or self-insured, for reasonable amounts with financially sound and
reputable insurance companies against such risks as companies engaged in a
similar business would, in accordance with good business practice, customarily
be insured and has maintained all insurance required by applicable law and
regulation.
(m) Compliance with Laws. Norwest and each Norwest Subsidiary has all
--------------------
permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, federal, state, local or foreign
governmental or regulatory bodies that are required in order to permit it to own
or lease its properties or assets and to carry on its business as presently
conducted and that are material to the business of Norwest or such Subsidiary;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect, and to the best knowledge of Norwest, no suspension or
cancellation of any of them is threatened; and all such filings, applications
and registrations are current. The conduct by Norwest and each Norwest
Subsidiary of its business and the condition and use of its properties does not
violate or infringe, in any respect material to any such business, any
applicable domestic (federal, state or local) or foreign law, statute,
ordinance, license or regulation. Neither Norwest nor any Norwest Subsidiary is
in default under any order, license, regulation or demand of any federal, state,
municipal or other governmental agency or with respect to any order, writ,
injunction or decree of any court. Except for statutory or regulatory
restrictions of general application, no federal, state, municipal or other
governmental authority has placed any restrictions on the business or properties
of Norwest or any Norwest Subsidiary which reasonably could be expected to have
a material adverse effect on the business or properties of Norwest and its
subsidiaries taken as a whole.
(n) Labor. No work stoppage involving Norwest or any Norwest Subsidiary
-----
is pending or, to the best knowledge of Norwest, threatened. Neither Norwest
nor any Norwest Subsidiary is involved in, or threatened with or affected by,
any labor dispute, arbitration, lawsuit or administrative proceeding which could
materially and adversely affect the business of Norwest or such Norwest
Subsidiary. Except as set forth on Schedule 3(j), employees of Norwest and the
Norwest Subsidiaries are not represented by
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<PAGE>
any labor union nor are any collective bargaining agreements otherwise in effect
with respect to such employees.
(o) Norwest Benefit Plans.
---------------------
(i) As of January 1, 1998, the only "employee benefit plans" within
the meaning of Section 3(3) of ERISA for which Norwest or any Norwest
Subsidiary acts as plan sponsor as defined in ERISA Section 3(16)(B) with
respect to which any liability under ERISA or otherwise exists or may be
incurred by Norwest or any Norwest Subsidiary are those set forth on
Schedule 3(o) (the "Norwest Plans"). No Norwest Plan is a "multi-employer
plan" within the meaning of Section 3(37) of ERISA.
(ii) Each Norwest Plan is and has been in all material respects
operated and administered in accordance with its provisions and applicable
law. Except as set forth on Schedule 3(o), Norwest or the Norwest
Subsidiaries have received favorable determination letters from the
Internal Revenue Service under the provisions of TRA `86 for each of the
Norwest Plans to which the qualification requirements of Section 401(a) of
the Code apply. Norwest knows of no reason that any Norwest Plan which is
subject to the qualification provisions of Section 401(a) of the Code is
not "qualified" within the meaning of Section 401(a) of the Code and that
each related trust is not exempt from taxation under Section 501(a) of the
Code.
(iii) The present value of all benefits vested and all benefits accrued
under each Norwest Plan which is subject to Title IV of ERISA did not, in
each case, as determined for purposes of reporting on Schedule B to the
Annual Report on Form 5500 of each such Norwest Plan as of the end of the
most recent Plan year, exceed the value of the assets of the Norwest Plans
allocable to such vested or accrued benefits.
(iv) Except as set forth on Schedule 3(o), and to the best knowledge
of Norwest, no Norwest Plan or any trust created thereunder, nor any
trustee, fiduciary or administrator thereof, has engaged in a "prohibited
transaction", as such term is defined in Section 4975 of the Code or
Section 406 of ERISA or violated fiduciary standards under Part 4 of Title
I of ERISA, which could subject, to the best knowledge of Norwest, such
Norwest Plan or trust, or any trustee, fiduciary or administrator thereof,
or any party dealing with any such Norwest Plan or trust, to the tax or
penalty on prohibited transactions imposed by said Section 4975 or would
result in material liability to Norwest and its subsidiaries taken as a
whole.
(v) Except as set forth on Schedule 3(o), no Norwest Plan which is
subject to Title IV of ERISA or any trust created thereunder has been
terminated, nor have there been any "reportable events" as that term is
defined in Section 4043 of ERISA with respect to any Norwest Plan, other
than those events which
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<PAGE>
may result from the transactions contemplated by this Agreement and the
Merger Agreement.
(vi) No Norwest Plan or any trust created thereunder has incurred any
"accumulated funding deficiency", as such term is defined in Section 412 of
the Code (whether or not waived), during the last five Norwest Plan years
which would result in a material liability.
(vii) Neither the execution and delivery of this Agreement and the
Merger Agreement nor the consummation of the transactions contemplated
hereby and thereby will (i) result in any material payment (including,
without limitation, severance, unemployment compensation, golden parachute
or otherwise) becoming due to any director or employee or former employee
of Norwest under any Norwest Plan or otherwise, (ii) materially increase
any benefits otherwise payable under any Norwest Plan or (iii) result in
the acceleration of the time of payment or vesting of any such benefits to
any material extent.
(p) Registration Statement, etc. None of the information regarding
---------------------------
Norwest and its subsidiaries supplied or to be supplied by Norwest for inclusion
in (i) the Registration Statement, (ii) the Proxy Statement, or (iii) any other
documents to be filed with the SEC or any regulatory authority in connection
with the transactions contemplated hereby or by the Merger Agreement will, at
the respective times such documents are filed with the SEC or any regulatory
authority and, in the case of the Registration Statement, when it becomes
effective and, with respect to the Proxy Statement, when mailed, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein not misleading or, in the case
of the Proxy Statement or any amendment thereof or supplement thereto, at the
time of the meeting of shareholders referred to in paragraph 4(c), be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to
the solicitation of any proxy for such meeting. All documents which Norwest and
the Norwest Subsidiaries are responsible for filing with the SEC and any other
regulatory authority in connection with the Merger will comply as to form in all
material respects with the provisions of applicable law.
(q) Brokers and Finders. Neither Norwest nor any Norwest Subsidiary nor
-------------------
any of their respective officers, directors or employees has employed any broker
or finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder's fees, and no broker or finder has acted directly
or indirectly for Norwest or any Norwest Subsidiary in connection with this
Agreement and the Merger Agreement or the transactions contemplated hereby and
thereby.
(r) No Defaults. Neither Norwest nor any Norwest Subsidiary is in
-----------
default, nor has any event occurred which, with the passage of time or the
giving of notice, or both, would constitute a default under any material
agreement, indenture, loan agreement or other instrument to which it is a party
or by which it or any of its assets is bound or to which any of its assets is
subject, the result of which has had or could reasonably be
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<PAGE>
expected to have a material adverse effect upon Norwest and its subsidiaries
taken as a whole. To the best of Norwest's knowledge, all parties with whom
Norwest or any Norwest Subsidiary has material leases, agreements or contracts
or who owe to Norwest or any Norwest Subsidiary material obligations other than
with respect to those arising in the ordinary course of the banking business of
the Norwest Subsidiaries are in compliance therewith in all material respects.
(s) Environmental Liability. There is no legal, administrative, or other
-----------------------
proceeding, claim, or action of any nature seeking to impose, or that could
result in the imposition, on Norwest or any Norwest Subsidiary of any liability
relating to the release of hazardous substances as defined under any local,
state or federal environmental statute, regulation or ordinance including,
without limitation, CERCLA, pending or to the best of Norwest's knowledge,
threatened against Norwest or any Norwest Subsidiary, the result of which has
had or could reasonably be expected to have a material adverse effect upon
Norwest and its subsidiaries taken as a whole; to the best of Norwest's
knowledge there is no reasonable basis for any such proceeding, claim or action;
and to the best of Norwest's knowledge neither Norwest nor any Norwest
Subsidiary is subject to any agreement, order, judgment, or decree by or with
any court, governmental authority or third party imposing any such environmental
liability.
(t) Merger Co. As of the Closing Date, Merger Co. will be a corporation
---------
duly organized, validly existing, duly qualified to do business and in good
standing under the laws of its jurisdiction of incorporation, and will have
corporate power and authority to own or lease its properties and assets and to
carry on its business.
4. COVENANTS OF RIVERTON. Riverton covenants and agrees with Norwest as
follows:
(a) Except as otherwise permitted or required by this Agreement, from the
date hereof until the Effective Time of the Merger, Riverton, and each Riverton
Subsidiary will: maintain its corporate existence in good standing; maintain
the general character of its business and conduct its business in its ordinary
and usual manner; extend credit in accordance with existing lending policies,
except that it shall not, without the prior written consent of Norwest (which
consent requirement shall be deemed to be waived as to any loan approval request
to which Norwest has made no response by the end of the second business day
following the day of receipt of the request by a representative designated by
Norwest in writing), make any new loan or modify, restructure or renew any
existing loan (except pursuant to commitments made prior to the date of this
Agreement) to any borrower if the amount of the resulting loan, when aggregated
with all other loans or extensions of credit to such person, would be in excess
of $100,000; maintain proper business and accounting records in accordance with
generally accepted principles; maintain its properties in good repair and
condition, ordinary wear and tear excepted; maintain in all material respects
presently existing insurance coverage; use its best efforts to preserve its
business organization intact, to keep the services of its present principal
employees and to preserve its good will and the good will of its suppliers,
customers and others having business relationships with it; use its best efforts
to obtain
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<PAGE>
any approvals or consents required to maintain existing leases and other
contracts in effect following the Merger; comply in all material respects with
all laws, regulations, ordinances, codes, orders, licenses and permits
applicable to the properties and operations of Riverton and each Riverton
Subsidiary the non-compliance with which reasonably could be expected to have a
material adverse effect on Riverton and the Riverton Subsidiaries taken as a
whole; promptly upon request, provide access to Norwest and its representatives
to Riverton or any Riverton Subsidiary's bank application computer files and
provide or cause to be provided any vendor deconversion tape along with any
related support data and documentation; and 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 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 Riverton herein expressed.
(b) Except as otherwise contemplated or required by this Agreement, from
the date hereof until the Effective Time of the Merger, Riverton and each
Riverton Subsidiary will not (without the prior written consent of Norwest):
amend or otherwise change its articles of incorporation or association or by-
laws; issue or sell or authorize for issuance or sale, or grant any options or
make other agreements with respect to the issuance or sale or conversion of, any
shares of its capital stock, phantom shares or other share-equivalents, or any
other of its securities; authorize or incur any long-term debt (other than
deposit liabilities); mortgage, pledge or subject to lien or other encumbrance
any of its properties, except in the ordinary course of business; enter into any
material agreement, contract or commitment in excess of $10,000 except banking
transactions in the ordinary course of business and in accordance with policies
and procedures in effect on the date hereof; make any investments except
investments made by bank subsidiaries in the ordinary course of business for
terms of up to one (1) year and in amounts of $100,000 or less; amend or
terminate any Plan except as required by law; make any contributions to any Plan
except as required by the terms of such Plan in effect as of the date hereof;
declare, set aside, make or pay any dividend or other distribution with respect
to its capital stock except (i) if the Effective Time of the Merger is after
December 31, 1998, dividends not to exceed an aggregate of $12 per share
declared and paid in accordance with past practice, and (ii) any dividend
declared by a subsidiary's Board of Directors in accordance with applicable law
and regulation; redeem, purchase or otherwise acquire, directly or indirectly,
any of the capital stock of Riverton; increase the compensation of any officers,
directors or executive employees, except pursuant to existing compensation plans
and practices; sell or otherwise dispose of any shares of the capital stock of
any Riverton Subsidiary; or sell or otherwise dispose of any of its assets or
properties other than in the ordinary course of business.
(c) The Board of Directors of Riverton will duly call, and will cause to
be held not later than twenty-five (25) business days following the effective
date of the Registration Statement referred to in paragraph 5(c) hereof, a
meeting of its shareholders and will direct that this Agreement and the Merger
Agreement be submitted to a vote at such meeting. The Board of Directors of
Riverton will (i) cause proper notice of such
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<PAGE>
meeting to be given to its shareholders in compliance with the Wyoming Business
Corporation Act and other applicable law and regulation, (ii) recommend by the
affirmative vote of the Board of Directors a vote in favor of approval of this
Agreement and the Merger Agreement, and (iii) use its best efforts to solicit
from its shareholders proxies in favor thereof.
(d) Riverton will furnish or cause to be furnished to Norwest all the
information concerning Riverton and its subsidiaries required for inclusion in
the Registration Statement referred to in paragraph 5(c) hereof (including the
audited Riverton Financial Statements for the year-ended December 31, 1997,
which Riverton agrees to have prepared by Fortner, Bayens, Levkulich & Co. and
delivered to Norwest within 90 days of the date of this Agreement), or any
statement or application made by Norwest to any governmental body in connection
with the transactions contemplated by this Agreement. Any financial statement
for any fiscal year provided under this paragraph must include the audit opinion
and the consent of Fortner, Bayens, Levkulich & Co. to use such opinion in such
Registration Statement.
(e) Riverton will take all necessary corporate and other action and use
its best efforts to obtain all approvals of regulatory authorities, consents and
other approvals required of Riverton to carry out the transactions contemplated
by this Agreement and will cooperate with Norwest to obtain all such approvals
and consents required of Norwest.
(f) Riverton will use its best efforts to deliver to the Closing all
opinions, certificates and other documents required to be delivered by it at the
Closing.
(g) Riverton will hold in confidence all documents and information
concerning Norwest and its subsidiaries furnished to Riverton and its
representatives in connection with the transactions contemplated by this
Agreement and will not release or disclose such information to any other person,
except as required by law and except to Riverton's outside professional advisers
in connection with this Agreement, with the same undertaking from such
professional advisers. If the transactions contemplated by this Agreement shall
not be consummated, such confidence shall be maintained and such information
shall not be used in competition with Norwest (except to the extent that such
information can be shown to be previously known to Riverton, in the public
domain, or later acquired by Riverton from other legitimate sources) and, upon
request, all such documents, any copies thereof and extracts therefrom shall
immediately thereafter be returned to Norwest.
(h) Neither Riverton, nor any Riverton Subsidiary, nor any director,
officer, representative or agent thereof, will, directly or indirectly, solicit,
authorize the solicitation of or enter into any discussions with any
corporation, partnership, person or other entity or group (other than Norwest)
concerning any offer or possible offer (i) to purchase any shares of common
stock, any option or warrant to purchase any shares of common stock, any
securities convertible into any shares of such common stock, or any other equity
security of Riverton or any Riverton Subsidiary, (ii) to make a tender or
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<PAGE>
exchange offer for any shares of such common stock or other equity security,
(iii) to purchase, lease or otherwise acquire the assets of Riverton or any
Riverton Subsidiary except in the ordinary course of business, or (iv) to merge,
consolidate or otherwise combine with Riverton or any Riverton Subsidiary. If
any corporation, partnership, person or other entity or group makes an offer or
inquiry to Riverton or any Riverton Subsidiary concerning any of the foregoing,
Riverton or such Riverton Subsidiary will promptly disclose such offer or
inquiry, including the terms thereof, to Norwest.
(i) Riverton shall consult with Norwest as to the form and substance of
any proposed press release or other proposed public disclosure of matters
related to this Agreement or any of the transactions contemplated hereby.
(j) Riverton and each Riverton Subsidiary will take all action necessary
or required (i) to terminate or amend, if requested by Norwest, all qualified
pension and welfare benefit plans and all non-qualified benefit plans and
compensation arrangements as of the Effective Date of the Merger to facilitate
the merger of such plans with Norwest plans without gaps in coverage for
participants in the plans and without duplication of costs caused by the
continuation of such plans after coverage is available under Norwest plans, and
(ii) to submit application to the Internal Revenue Service for a favorable
determination letter for each of the Plans which is subject to the qualification
requirements of Section 401(a) of the Code prior to the Effective Date of the
Merger.
(k) [Intentionally left blank]
(l) Riverton shall use its best efforts to obtain and deliver at least 32
days prior to the Effective Date of the Merger signed representations
substantially in the form attached hereto as Exhibit B to Norwest by each
executive officer, director or shareholder of Riverton who may reasonably be
deemed an "affiliate" of Riverton within the meaning of such term as used in
Rule 145 under the Securities Act.
(m) Riverton shall establish such additional accruals and reserves as may
be necessary to conform Riverton's accounting and credit loss reserve practices
and methods to those of Norwest and Norwest's plans with respect to the conduct
of Riverton's business following the Merger and to provide for the costs and
expenses relating to the consummation by Riverton of the Merger and the other
transactions contemplated by this Agreement.
(n) Riverton shall obtain, at its sole expense, Phase I environmental
assessments for each bank facility and each non-residential OREO property. Oral
reports of such environmental assessments shall be delivered to Norwest no later
than four (4) weeks and written reports shall be delivered to Norwest no later
than eight (8) weeks from the date of this Agreement. Riverton shall obtain, at
its sole expense, Phase II environmental assessments for properties identified
by Norwest on the basis of the results of such Phase I environmental
assessments. Riverton shall obtain a survey and assessment of all potential
asbestos containing material in owned or leased properties (other than OREO
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<PAGE>
property) and a written report of the results shall be delivered to Norwest
within four weeks of execution of the definitive agreement.
(o) Riverton shall obtain, at its sole expense, commitments for title
insurance and boundary surveys for each bank facility which shall be delivered
to Norwest no later than four (4) weeks from the date of this Agreement.
(p) Riverton and Norwest will work together to assess the impact of the
transactions contemplated by this Agreement on Riverton's continued compliance
with the FFIEC Year 2000 requirements and Riverton will take such action, in
consultation with Norwest, as may be necessary to amend Riverton's Year 2000
project assessment and remediation plan. Riverton will prepare a contingency
plan to be used in the event the transactions contemplated by this Agreement are
not consummated.
5. COVENANTS OF NORWEST. Norwest covenants and agrees with Riverton as
follows:
(a) From the date hereof until the Effective Time of the Merger, Norwest
will maintain its corporate existence in good standing; conduct, and cause the
Norwest Subsidiaries to conduct, their respective businesses in compliance with
all material obligations and duties imposed on them by all laws, governmental
regulations, rules and ordinances, and judicial orders, judgments and decrees
applicable to Norwest or the Norwest Subsidiaries, their businesses or their
properties; maintain all books and records of it and the Norwest Subsidiaries,
including all financial statements, in accordance with the accounting principles
and practices consistent with those used for the Norwest Financial Statements,
except for changes in such principles and practices required under generally
accepted accounting principles.
(b) Norwest will furnish to Riverton all the information concerning
Norwest required for inclusion in a proxy statement or statements to be sent to
the shareholders of Riverton, or in any statement or application made by
Riverton to any governmental body in connection with the transactions
contemplated by this Agreement.
(c) As promptly as practicable after the execution of this Agreement,
Norwest will file with the SEC a registration statement on Form S-4 (the
"Registration Statement") under the Securities Act and any other applicable
documents, relating to the shares of Norwest Common Stock to be delivered to the
shareholders of Riverton pursuant to the Merger Agreement, and will use its best
efforts to cause the Registration Statement to become effective. At the time
the Registration Statement becomes effective, the Registration Statement will
comply in all material respects with the provisions of the Securities Act and
the published rules and regulations thereunder, and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not false or
misleading, and at the time of mailing thereof to the Riverton shareholders, at
the time of the Riverton shareholders' meeting referred to in paragraph 4(c)
hereof and at the Effective Time of the Merger the prospectus included as part
of the Registration Statement, as amended or
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<PAGE>
supplemented by any amendment or supplement filed by Norwest (hereinafter the
"Prospectus"), will not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not false or
misleading; provided, however, that none of the provisions of this subparagraph
--------
shall apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished by
Riverton or any Riverton subsidiary for use in the Registration Statement or the
Prospectus.
(d) Norwest will file all documents required to be filed to list the
Norwest Common Stock to be issued pursuant to the Merger Agreement on the New
York Stock Exchange and the Chicago Stock Exchange and use its best efforts to
effect said listings.
(e) The shares of Norwest Common Stock to be issued by Norwest to the
shareholders of Riverton pursuant to this Agreement and the Merger Agreement
will, upon such issuance and delivery to said shareholders pursuant to the
Merger Agreement, be duly authorized, validly issued, fully paid and
nonassessable. The shares of Norwest Common Stock to be delivered to the
shareholders of Riverton pursuant to the Merger Agreement are and will be free
of any preemptive rights of the stockholders of Norwest.
(f) Norwest will file all documents required to obtain, prior to the
Effective Time of the Merger, all necessary Blue Sky permits and approvals, if
any, required to carry out the transactions contemplated by this Agreement, will
pay all expenses incident thereto and will use its best efforts to obtain such
permits and approvals.
(g) Norwest will take all necessary corporate and other action and file
all documents required to obtain and will use its best efforts to obtain all
approvals of regulatory authorities, consents and approvals required of it to
carry out the transactions contemplated by this Agreement and will cooperate
with Riverton to obtain all such approvals and consents required by Riverton.
(h) Norwest will hold in confidence all documents and information
concerning Riverton and Riverton's Subsidiaries furnished to it and its
representatives in connection with the transactions contemplated by this
Agreement and will not release or disclose such information to any other person,
except as required by law and except to its outside professional advisers in
connection with this Agreement, with the same undertaking from such professional
advisers. If the transactions contemplated by this Agreement shall not be
consummated, such confidence shall be maintained and such information shall not
be used in competition with Riverton (except to the extent that such information
can be shown to be previously known to Norwest, in the public domain, or later
acquired by Norwest from other legitimate sources) and, upon request, all such
documents, copies thereof or extracts therefrom shall immediately thereafter be
returned to Riverton.
(i) Norwest will file any documents or agreements required to be filed in
connection with the Merger under the Wyoming Business Corporation Act.
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<PAGE>
(j) Norwest will use its best efforts to deliver to the Closing all
opinions, certificates and other documents required to be delivered by it at the
Closing.
(k) Norwest shall consult with Riverton as to the form and substance of
any proposed press release or other proposed public disclosure of matters
related to this Agreement or any of the transactions contemplated hereby.
(l) Norwest shall give Riverton notice of receipt of the regulatory
approvals referred to in paragraph 7(e).
(m) [Intentionally left blank].
(n) For a period not exceeding fifteen days prior to the Closing Date,
Norwest will permit Riverton and its representatives to examine its books,
records and properties and interview officers, employees and agents of Norwest
at all reasonable times when it is open for business. No such examination by
Riverton or its representatives shall in any way affect, diminish or terminate
any of the representations, warranties or covenants of Norwest herein expressed.
6. CONDITIONS PRECEDENT TO OBLIGATION OF RIVERTON. The obligation of
Riverton to effect the Merger shall be subject to the satisfaction at or before
the Time of Filing of the following further conditions, which may be waived in
writing by Riverton:
(a) Except as they may be affected by transactions contemplated hereby and
except to the extent such representations and warranties are by their express
provisions made as of a specified date and except for activities or transactions
after the date of this Agreement made in the ordinary course of business and not
expressly prohibited by this Agreement, the representations and warranties
contained in paragraph 3 hereof shall be true and correct in all respects
material to Norwest and its subsidiaries taken as a whole as if made at the Time
of Filing.
(b) Norwest shall have, or shall have caused to be, performed and observed
in all material respects all covenants, agreements and conditions hereof to be
performed or observed by it and Merger Co. at or before the Time of Filing.
(c) Riverton shall have received a favorable certificate, dated as of the
Effective Date of the Merger, signed by the Chairman, the President or any
Executive Vice President or Senior Vice President and by the Secretary or
Assistant Secretary of Norwest, as to the matters set forth in subparagraphs (a)
and (b) of this paragraph 6.
(d) This Agreement and the Merger Agreement shall have been approved by
the affirmative vote of the holders of the percentage of the outstanding shares
of Riverton required for approval of a plan of merger in accordance with the
provisions of Riverton's Articles of Incorporation and the Wyoming Business
Corporation Act.
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(e) Norwest shall have received approval by the Federal Reserve Board and
by such other governmental agencies as may be required by law of the
transactions contemplated by this Agreement and the Merger Agreement and all
waiting and appeal periods prescribed by applicable law or regulation shall have
expired.
(f) No court or governmental authority of competent jurisdiction shall
have issued an order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
(g) The shares of Norwest Common Stock to be delivered to the stockholders
of Riverton pursuant to this Agreement and the Merger Agreement shall have been
authorized for listing on the New York Stock Exchange and the Chicago Stock
Exchange.
(h) Riverton shall have received an opinion, dated the Closing Date, of
counsel to Riverton, substantially to the effect that, for federal income tax
purposes: (i) the Merger will constitute a reorganization within the meaning of
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code; (ii) no gain or loss will be
recognized by the holders of Riverton Common Stock upon receipt of Norwest
Common Stock except for cash received in lieu of fractional shares; (iii) the
basis of the Norwest Common Stock received by the shareholders of Riverton will
be the same as the basis of Riverton Common Stock exchanged therefor; and (iv)
the holding period of the shares of Norwest Common Stock received by the
shareholders of Riverton will include the holding period of the Riverton Common
Stock, provided such shares of Riverton Common Stock were held as a capital
asset as of the Effective Time of the Merger.
(i) The Registration Statement (as amended or supplemented) shall have
become effective under the Securities Act and shall not be subject to any stop
order, and no action, suit, proceeding or investigation by the SEC to suspend
the effectiveness of the Registration Statement shall have been initiated and be
continuing, or have been threatened and be unresolved. Norwest shall have
received all state securities law or blue sky authorizations necessary to carry
out the transactions contemplated by this Agreement.
7. CONDITIONS PRECEDENT TO OBLIGATION OF NORWEST. The obligation of
Norwest to effect the Merger shall be subject to the satisfaction at or before
the Time of Filing of the following conditions, which may be waived in writing
by Norwest:
(a) Except as they may be affected by transactions contemplated hereby and
except to the extent such representations and warranties are by their express
provisions made as of a specified date and except for activities or transactions
or events occurring after the date of this Agreement made in the ordinary course
of business and not expressly prohibited by this Agreement, the representations
and warranties contained in paragraph 2 hereof shall be true and correct in all
respects material to Riverton and the Riverton Subsidiaries taken as a whole as
if made at the Time of Filing.
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(b) Riverton shall have, or shall have caused to be, performed and
observed in all material respects all covenants, agreements and conditions
hereof to be performed or observed by it at or before the Time of Filing.
(c) This Agreement and the Merger Agreement shall have been approved by
the affirmative vote of the holders of the percentage of the outstanding shares
of Riverton required for approval of a plan of merger in accordance with the
provisions of Riverton's Articles of Incorporation and the Wyoming Business
Corporation Act.
(d) Norwest shall have received a favorable certificate dated as of the
Effective Date of the Merger signed by the Chairman or President and by the
Secretary or Assistant Secretary of Riverton, as to the matters set forth in
subparagraphs (a) through (c) of this paragraph 7.
(e) Norwest shall have received approval by all governmental agencies as
may be required by law of the transactions contemplated by this Agreement and
the Merger Agreement and all waiting and appeal periods prescribed by applicable
law or regulation shall have expired. No approvals, licenses or consents
granted by any regulatory authority shall contain any condition or requirement
relating to Riverton or any Riverton Subsidiary that, in the good faith judgment
of Norwest, is unreasonably burdensome to Norwest.
(f) Riverton and each Riverton Subsidiary shall have obtained any and all
material consents or waivers from other parties to loan agreements, leases or
other contracts material to Riverton's or such subsidiary's business required
for the consummation of the Merger, and Riverton and each Riverton Subsidiary
shall have obtained any and all material permits, authorizations, consents,
waivers and approvals required for the lawful consummation by it of the Merger.
(g) No court or governmental authority of competent jurisdiction shall
have issued an order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
(h) [Intentionally left blank]
(i) At any time since the date hereof the total number of shares of
Riverton Common Stock outstanding and subject to issuance upon exercise
(assuming for this purpose that phantom shares and other share-equivalents
constitute Riverton Common Stock) of all warrants, options, conversion rights,
phantom shares or other share-equivalents, other than any option held by
Norwest, shall not have exceeded 20,893.5.
(j) The Registration Statement (as amended or supplemented) shall have
become effective under the Securities Act and shall not be subject to any stop
order, and no action, suit, proceeding or investigation by the SEC to suspend
the effectiveness of the Registration Statement shall have been initiated and be
continuing, or have been threatened or be unresolved. Norwest shall have
received all state securities law or blue
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sky authorizations necessary to carry out the transactions contemplated by this
Agreement.
(k) Norwest shall have received from the Chief Executive Officer and Chief
Financial Officer of Riverton a letter, dated as of the effective date of the
Registration Statement and updated through the date of Closing, in form and
substance satisfactory to Norwest, to the effect that:
(i) the interim quarterly financial statements of Riverton included or
incorporated by reference in the Registration Statement are prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with the audited financial statements of Riverton;
(ii) the amounts reported in the interim quarterly financial statements
of Riverton agree with the general ledger of Riverton;
(iii) the annual and quarterly financial statements of Riverton and the
Riverton Subsidiaries included in, or incorporated by reference in, the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the published
rules and regulations thereunder;
(iv) from the date of the most recent unaudited consolidated financial
statements of Riverton and the Riverton Subsidiaries as may be included in
the Registration Statement to a date 5 days prior to the effective date of
the Registration Statement or 5 days prior to the Closing, there are no
increases in long-term debt, changes in the capital stock or decreases in
stockholders' equity of Riverton and the Riverton Subsidiaries, except in
each case for changes, increases or decreases which the Registration
Statement discloses have occurred or may occur or which are described in
such letters. For the same period, there have been no decreases in
consolidated net interest income, consolidated net interest income after
provision for credit losses, consolidated income before income taxes,
consolidated net income and net income per share amounts of Riverton and
the Riverton Subsidiaries, or in income before equity in undistributed
income of subsidiaries, in each case as compared with the comparable period
of the preceding year, except in each case for changes, increases or
decreases which the Registration Statement discloses have occurred or may
occur or which are described in such letters;
(v) they have reviewed certain amounts, percentages, numbers of shares
and financial information which are derived from the general accounting
records of Riverton and the Riverton Subsidiaries, which appear in the
Registration Statement under the certain captions to be specified by
Norwest, and have compared certain of such amounts, percentages, numbers
and financial information with the accounting records of Riverton and the
Riverton Subsidiaries and have found them to be in agreement with financial
records and analyses
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prepared by Riverton included in the annual and quarterly financial
statements, except as disclosed in such letters.
(l) Riverton and the Riverton Subsidiaries considered as a whole shall not
have sustained since December 31, 1997 any material loss or interference with
their business from any civil disturbance or any fire, explosion, flood or other
calamity, whether or not covered by insurance.
(m) There shall be no reasonable basis for any proceeding, claim or action
of any nature seeking to impose, or that could result in the imposition on
Riverton or any Riverton Subsidiary of, any liability relating to the release of
hazardous substances as defined under any local, state or federal environmental
statute, regulation or ordinance including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
amended, which has had or could reasonably be expected to have a material
adverse effect upon Riverton and its subsidiaries taken as a whole.
(n) Since December 31, 1997, no change shall have occurred and no
circumstances shall exist which has had or might reasonably be expected to have
a material adverse effect on the financial condition, results of operations,
business or prospects of Riverton and the Riverton Subsidiaries taken as a whole
(other than changes in banking laws or regulations, or interpretations thereof,
that affect the banking industry generally or changes in the general level of
interest rates).
(o) Riverton shall be in full compliance with current FFIEC Year 2000
requirements. There shall be no feature of Riverton's data processing, operating
or platform systems that would prevent those systems from being successfully
converted to Norwest systems.
8. EMPLOYEE BENEFIT PLANS. Each person who is an employee of Riverton or
any Riverton Subsidiary as of the Effective Date of the Merger ("Riverton
Employees") shall be eligible for participation in the employee welfare and
retirement plans of Norwest, as in effect from time to time, as follows
(provided, however, that it is Norwest's intent that the transition from the
Riverton plans to the Norwest plans be facilitated 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):
(a) Employee Welfare Benefit Plans. Each Riverton employee shall be
-------------------------------
eligible for participation in the employee welfare benefit plans of Norwest
listed below subject to any eligibility requirements applicable to such plans
and shall enter each plan not later than the first day of the calendar quarter
which begins at least 32 days after the Effective Date of the Merger:
Medical Plan
Dental Plan
Vision Plan
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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 Riverton Employee's benefit for the year in
which the Merger occurs under the Norwest vacation program, vacation taken by an
Riverton Employee in the year in which the Merger occurs will be deducted from
the total Norwest benefit. Riverton Employees shall receive credit for years of
service to Riverton, the Riverton Subsidiaries and any predecessors of the
Riverton Subsidiaries (to the extent credited under the vacation programs of
Riverton and the Riverton Subsidiaries) for the purpose of determining benefits
under the Norwest vacation program and short term disability plan.
Riverton Employees shall receive credit for years of service to Riverton, the
Riverton Subsidiaries and any predecessors of the Riverton Subsidiaries (to the
extent credited under the severance programs of Riverton and the Riverton
Subsidiaries) for the purpose of determining benefits under the Norwest
Severance Pay Plan.
(b) Employee Retirement Benefit Plans.
----------------------------------
Each Riverton Employee shall be eligible for participation in the Norwest
Savings-Investment Plan (the "SIP"), subject to any eligibility requirements
applicable to the SIP (without credit for years of past service to Riverton and
the Riverton Subsidiaries), and shall enter the SIP not later than the first day
of the calendar quarter which begins at least 32 days after the Effective Date
of the Merger.
Each Riverton Employee shall be eligible for participation, as a new employee,
in the Norwest Pension Plan under the terms thereof.
9. TERMINATION OF AGREEMENT.
(a) This Agreement may be terminated at any time prior to the Time of
Filing:
(i) by mutual written consent of the parties hereto;
(ii) by either of the parties hereto upon written notice to the other
party if the Merger shall not have been consummated by March 31, 1999
unless such failure of consummation shall be due to the failure of the
party seeking to
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terminate to perform or observe in all material respects the covenants and
agreements hereof to be performed or observed by such party; or
(iii) by Riverton or Norwest upon written notice to the other party if
any court or governmental authority of competent jurisdiction shall have
issued a final order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
(b) Termination of this Agreement under this paragraph 9 shall not
release, or be construed as so releasing, either party hereto from any liability
or damage to the other party hereto arising out of the breaching party's willful
and material breach of the warranties and representations made by it, or willful
and material failure in performance of any of its covenants, agreements, duties
or obligations arising hereunder, and the obligations under paragraphs 4(g),
5(h) and 10 shall survive such termination.
10. Expenses. All expenses in connection with this Agreement and the
transactions contemplated hereby, including without limitation legal and
accounting fees, incurred by Riverton and Riverton Subsidiaries shall be borne
by Riverton, and all such expenses incurred by Norwest shall be borne by
Norwest.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, but shall not be assignable by either party hereto without the prior
written consent of the other party hereto.
12. THIRD PARTY BENEFICIARIES. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto.
13. NOTICES. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be in writing and shall be delivered in
person or shall be mailed by first class registered or certified mail, postage
prepaid, addressed as follows:
If to Norwest:
Norwest Corporation
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Secretary
If to Riverton:
Riverton State Bank Holding Company
616 N. Federal
P.O. Box BE
Riverton, Wyoming 82501
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<PAGE>
Attention: Alvin O. Olson, Chairman and President
With a copy to:
David B. Hooper, Esq.
P.O. Box 753
Riverton, Wyoming 82501
or to such other address with respect to a party as such party shall notify the
other in writing as above provided.
14. COMPLETE AGREEMENT. This Agreement and the Merger Agreement contain
the complete agreement between the parties hereto with respect to the Merger and
other transactions contemplated hereby and supersede all prior agreements and
understandings between the parties hereto with respect thereto.
15. CAPTIONS. The captions contained in this Agreement are for
convenience of reference only and do not form a part of this Agreement.
16. WAIVER AND OTHER ACTION. Either party hereto may, by a signed
writing, give any consent, take any action pursuant to paragraph 9 hereof or
otherwise, or waive any inaccuracies in the representations and warranties by
the other party and compliance by the other party with any of the covenants and
conditions herein.
17. AMENDMENT. At any time before the Time of Filing, the parties hereto,
by action taken by their respective Boards of Directors or pursuant to authority
delegated by their respective Boards of Directors, may amend this Agreement;
provided, however, that no amendment after approval by the shareholders of
Riverton shall be made which changes in a manner adverse to such shareholders
the consideration to be provided to said shareholders pursuant to this Agreement
and the Merger Agreement.
18. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Wyoming.
19. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. No representation or
warranty contained in the Agreement or the Merger Agreement shall survive the
Merger or except as set forth in paragraph 9(b), the termination of this
Agreement. Paragraph 10 shall survive the Merger.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
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NORWEST CORPORATION RIVERTON STATE BANK HOLDING
COMPANY
By: /s/ John E. Ganoe By: /s/ Alvin L. Olson
Its: Executive Vice President Its: Chairman and President
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<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BETWEEN
[MERGER CO.]
a Wyoming corporation
(the merged corporation)
AND
RIVERTON STATE BANK HOLDING COMPANY
a Wyoming corporation
(the surviving corporation)
This Agreement and Plan of Merger dated as of __________, 1998, between
RIVERTON STATE BANK HOLDING COMPANY, a Wyoming corporation (hereinafter
sometimes called "Riverton" and sometimes called the "surviving corporation")
and MERGER CO., a Wyoming corporation ("Merger Co.")(said corporations being
hereinafter sometimes referred to as the "constituent corporations"),
WHEREAS, Merger Co., a wholly-owned subsidiary of Norwest Corporation, was
incorporated by Articles of Incorporation filed in the office of the Secretary
of State of the State of Wyoming on _______, 19__, and said corporation is now a
corporation subject to and governed by the provisions of the Wyoming Business
Corporation Act. Merger Co. has authorized capital stock of ________ shares of
common stock having a par value of $_____ per share ("Merger Co. Common Stock"),
of which _________ shares were outstanding as of the date hereof; and
WHEREAS, Riverton was incorporated by Articles of Incorporation filed in
the office of the Secretary of State of the State of Wyoming on ________, 19__
and said corporation is now a corporation subject to and governed by the
provisions of the Wyoming Business Corporation Act. Riverton has authorized
capital stock of ________ shares of Common Stock, par value $_____ per share
("Riverton Common Stock") of which _______ shares were outstanding and no shares
were held in the treasury as of ___________ , 19__; and
WHEREAS, Norwest Corporation and Riverton are parties to an Agreement and
Plan of Reorganization dated as of __________, 1998 (the "Reorganization
Agreement"), setting forth certain representations, warranties and covenants in
connection with the merger provided for herein; and
WHEREAS, the directors, or a majority of them, of each of the constituent
corporations respectively deem it advisable for the welfare and advantage of
said corporations and for the best interests of the respective shareholders of
said corporations that said corporations merge and that Merger Co. be merged
with and into Riverton, with Riverton continuing as the surviving corporation,
on the terms and conditions hereinafter set forth in accordance with the
provisions of the Wyoming Business Corporation Act, which statute permits such
merger; and
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WHEREAS, it is the intent of the parties to effect a merger which qualifies
as a tax-free reorganization pursuant to Sections 368(a)(1)(A) and 368(a)(2)(E)
of the Internal Revenue Code;
NOW, THEREFORE, the parties hereto, subject to the approval of the
shareholders of Merger Co., in consideration of the premises and of the mutual
covenants and agreements contained herein and of the benefits to accrue to the
parties hereto, have agreed and do hereby agree that Merger Co. shall be merged
with and into Riverton pursuant to the laws of the State of Wyoming, and do
hereby agree upon, prescribe and set forth the terms and conditions of the
merger of Merger Co. with and into Riverton, the mode of carrying said merger
into effect, the manner and basis of converting the shares of Riverton Common
Stock into shares of common stock of Norwest of the par value of $1-2/3 per
share ("Norwest Common Stock"), and such other provisions with respect to said
merger as are deemed necessary or desirable, as follows:
FIRST: At the time of merger Merger Co. shall be merged with and into
Riverton, one of the constituent corporations, which shall be the surviving
corporation, and the separate existence of Merger Co. shall cease and the name
of the surviving corporation shall be ________________.
SECOND: The Articles of Incorporation of Riverton at the time of merger
shall be amended as set forth below and, as so amended, shall be the Articles of
Incorporation of the surviving corporation until further amended according to
law:
[Amend to change name, number of directors, etc.]
THIRD: The By-Laws of Riverton at the time of merger shall be and remain
the By-Laws of the surviving corporation until amended according to the
provisions of the Articles of Incorporation of the surviving corporation or of
said By-Laws.
FOURTH: The directors of Merger Co. at the time of merger shall be and
remain the directors of the surviving corporation and shall hold office from the
time of merger until their respective successors are elected and qualify.
FIFTH: The officers of Merger Co. at the time of merger shall be and
remain the officers of the surviving corporation and shall hold office from the
time of merger until their respective successors are elected or appointed and
qualify.
SIXTH: The manner and basis of converting the shares of Riverton Common
Stock into cash or shares of shares of Norwest Common Stock shall be as follows:
1. Each of the shares of Riverton Common Stock outstanding immediately
prior to the time of merger (other than shares as to which statutory
dissenters' rights have been exercised) shall at the time of merger, by
virtue of the merger and without any action on the part of the holder or
holders thereof, be converted
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into and exchanged the number of shares of Norwest Common Stock determined
by dividing the Adjusted Norwest Shares by the number of shares of Riverton
Common Stock then outstanding. The "Adjusted Norwest Shares" shall be a
number equal to $18,600,000 divided by the Norwest Measurement Price. The
"Norwest Measurement Price" is defined as the average of the closing prices
of a share of Norwest Common Stock as reported on the consolidated tape of
the New York Stock Exchange during the period of 20 trading days ending on
the day immediately preceding the meeting of shareholders held to vote on
the merger.
2. As soon as practicable after the merger becomes effective, each holder
of a certificate for shares of Riverton Common Stock outstanding
immediately prior to the time of merger shall be entitled, upon surrender
of such certificate for cancellation to the surviving corporation or to
Norwest Bank Minnesota, National Association, as the designated agent of
the surviving corporation (the "Agent"), to receive a new certificate for
the number of whole shares of Norwest Common Stock to which such holder
shall be entitled on the basis set forth in paragraph 1 above. Until so
surrendered each certificate which, immediately prior to the time of
merger, represented shares of Riverton Common Stock shall not be
transferable on the books of the surviving corporation but shall be deemed
to evidence the right to receive (except for the payment of dividends as
provided below) ownership of the number of whole shares of Norwest Common
Stock into which such shares of Riverton Common Stock have been converted
on the basis above set forth; provided, however, until the holder of such
certificate for Riverton Common Stock shall have surrendered the same for
exchange as above set forth, no dividend payable to holders of record of
Norwest Common Stock as of any date subsequent to the effective date of
merger shall be paid to such holder with respect to the Norwest Common
Stock, if any, represented by such certificate, but, upon surrender and
exchange thereof as herein provided, there shall be paid by the surviving
corporation or the Agent to the record holder of such certificate for
Norwest Common Stock issued in exchange therefor an amount with respect to
such shares of Norwest Common Stock equal to all dividends that shall have
been paid or become payable to holders of record of Norwest Common Stock
between the effective date of merger and the date of such exchange.
3. If between the date of the Reorganization Agreement and the time of
merger, shares of Norwest Common Stock shall be changed into a different
number of shares or a different class of shares by reason of any
reclassification, recapitalization, split-up, combination, exchange of
shares or readjustment, or if a stock dividend thereon shall be declared
with a record date within such period, then the number of shares of Norwest
Common Stock, if any, into which a share of Riverton Common Stock shall be
converted on the basis above set forth, will be appropriately and
proportionately adjusted so that the number of such shares of Norwest
Common Stock into which a share of Riverton Common Stock shall be converted
will equal the number of shares of Norwest Common Stock which the holders
of shares of Riverton Common Stock would have received pursuant to such
reclassification, recapitalization, split-up, combination, exchange of
shares
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<PAGE>
or readjustment, or stock dividend had the record date therefor been
immediately following the time of merger.
4. No fractional shares of Norwest Common Stock and no certificates or
scrip certificates therefor shall be issued to represent any such
fractional interest, and any holder of a fractional interest shall be paid
an amount of cash equal to the product obtained by multiplying the
fractional share interest to which such holder is entitled by the average
of the closing prices of a share of Norwest Common Stock as reported by the
consolidated tape of the New York Stock Exchange for each of the five (5)
trading days immediately preceding the meeting of shareholders held to vote
on the merger.
5. Each share of Merger Co. Common Stock issued and outstanding at the
time of merger shall be converted into and exchanged for shares of the
surviving corporation after the time of merger.
SEVENTH: The merger provided for by this Agreement shall be effective as
follows:
1. The effective date of merger shall be the date on which Articles of
Merger (as described in subparagraph 1(b) of this Article Seventh) shall be
delivered to and filed by the Secretary of State of the State of Wyoming;
provided, however, that all of the following actions shall have been taken
in the following order:
a. This Agreement shall be approved and adopted on behalf of Merger
Co. and Riverton in accordance with the Wyoming Business Corporation
Act; and
b. Articles of merger (with this Agreement attached as part thereof)
with respect to the merger, setting forth the information required by
the Wyoming Business Corporation Act, shall be executed by the
President or a Vice President of Merger Co. and by the Secretary or an
Assistant Secretary of Merger Co., and by the President or a Vice
President of Riverton and by the Secretary or an Assistant Secretary
of Riverton, and shall be filed in the office of the Secretary of
State of the State of Wyoming in accordance with the Wyoming Business
Corporation Act.
2. The merger shall become effective as of 11:59 p.m. (the "time of
merger") on the effective date of merger.
EIGHTH: At the time of merger:
1. The separate existence of Merger Co. shall cease, and the corporate
existence and identity of Riverton shall continue as the surviving
corporation.
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2. The merger shall have the other effects prescribed by Section 17-16-
1113 of the Wyoming Business Corporation Act.
NINTH: The following provisions shall apply with respect to the merger
provided for by this Agreement:
1. The registered office of the surviving corporation in the State of
Wyoming shall be _____________________________, and the name of the
registered agent of Riverton at such address is The Corporation Trust
Company.
2. If at any time the surviving corporation shall consider or be advised
that any further assignment or assurance in law or other action is
necessary or desirable to vest, perfect or confirm in the surviving
corporation the title to any property or rights of Merger Co. acquired or
to be acquired as a result of the merger provided for herein, the proper
officers and directors of Riverton and Merger Co. may execute and deliver
such deeds, assignments and assurances in law and take such other action as
may be necessary or proper to vest, perfect or confirm title to such
property or right in the surviving corporation and otherwise carry out the
purposes of this Agreement.
3. For the convenience of the parties and to facilitate the filing of this
Agreement, any number of counterparts hereof may be executed and each such
counterpart shall be deemed to be an original instrument.
4. This Agreement and the legal relations among the parties hereto shall
be governed by and construed in accordance with the laws of the State of
Wyoming.
5. This Agreement cannot be altered or amended except pursuant to an
instrument in writing signed by both of the parties hereto.
6. At any time prior to the filing of Articles of Merger with the
Secretary of State of the State of Wyoming, subject to the provisions of
the Reorganization Agreement this Agreement may be terminated upon approval
by the Boards of Directors of either of the constituent corporations
notwithstanding the approval of the shareholders of either constituent
corporation.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement and Plan
of Merger to be signed in their respective corporate names by the undersigned
officers and their respective corporate seals to be affixed hereto, pursuant to
authority duly given by their respective Boards of Directors, all as of the day
and year first above written.
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RIVERTON STATE BANK HOLDING COMPANY
By: _______________________________
Its: _______________________________
(Corporate Seal)
Attest:
__________________________
Secretary
[MERGER CO.]
By: _______________________________
Its: _______________________________
(Corporate Seal)
Attest:
___________________________
Secretary
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EXHIBIT B
Norwest Corporation
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
Attention: 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 RIVERTON
STATE BANK HOLDING COMPANY, a Wyoming corporation ("Riverton").
Pursuant to an Agreement and Plan of Reorganization, dated as of September
__, 1998, (the "Reorganization Agreement"), between Riverton and Norwest
Corporation, a Delaware corporation ("Norwest"), it is contemplated that a
wholly-owned subsidiary of Norwest will consolidate with Riverton (the
"Consolidation") and as a result, I will receive in exchange for each share of
Common Stock, no par value, of Riverton ("Riverton Common Stock") owned by me
immediately prior to the Effective Time of the Consolidation (as defined in the
Reorganization Agreement), a number of shares of Common Stock, par value $1 2/3
per share, of Norwest ("Norwest Common Stock"), as more specifically set forth
in the Reorganization Agreement.
I hereby agree as follows:
I will not offer to sell, transfer or otherwise dispose of any of the
shares of Norwest Common Stock issued to me pursuant to the Consolidation (the
"Stock") except (a) in compliance with the applicable provisions of Rule 145,
(b) in a transaction that is otherwise exempt from the registration requirements
of the Securities Act, or (c) in an offering registered under the Securities
Act.
I consent to the endorsement of the Stock issued to me pursuant to the
Consolidation with a restrictive legend which will read substantially as
follows:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of 1933,
as amended (the "Act"), applies, and may be sold or otherwise transferred
only in compliance with the limitations of such 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."
-41-
<PAGE>
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 (i) any
such shares of Stock shall have been registered under the Securities Act for
sale, transfer or other disposition by me or on my behalf and are sold,
transferred or otherwise disposed of, or (ii) any such shares of Stock are sold
in accordance with the provisions of paragraphs (c), (e), (f) and (g) of Rule
144 promulgated under the Securities Act, or (iii) I am not at the time of such
disposition an affiliate of Norwest and have been the beneficial owner of the
Stock for at least one year (or such other period as may be prescribed
thereunder) and Norwest has filed with the Commission all of the reports it is
required to file under the Securities Exchange Act of 1934, as amended, during
the preceding twelve months, or (iv) I am not and have not been for at least
three months an affiliate of Norwest and have been the beneficial owner of the
Stock for at least two years (or such other period as may be prescribed by the
Securities Act, and the rules and regulations promulgated thereunder), or (v)
Norwest shall have received an opinion of counsel acceptable to Norwest to the
effect that the stock transfer restrictions and the legend are not required.
I have carefully read this letter agreement and the Reorganization
Agreement and have discussed their requirements and other applicable limitations
upon my ability to offer to sell, transfer or otherwise dispose of shares of
Riverton Common Stock, Norwest Common Stock, or the Stock, to the extent I felt
necessary, with my counsel or counsel for Riverton.
Sincerely,
_________________________
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<PAGE>
APPENDIX B
WYOMING BUSINESS CORPORATION ACT
ARTICLE 13 DISSENTERS' RIGHTS
<PAGE>
SUBARTICLE A.
RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
(S) 17-16-1301. Definitions
(a) As used in this article:
(i) "Beneficial shareholder" means the person who is a beneficial owner
of shares held in a voting trust or by a nominee as the record
shareholder;
(ii) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action, or the surviving, new, or acquiring
corporation, by merger, consolidation, or share exchange of that
issuer;
(iii) "Dissenter" means a shareholder who is entitled to dissent from
corporate action under W.S. 17-16-1302 and who exercises that right
when and in the manner required by W.S. 17-16-1320 through 17-16-
1328;
(iv) "Fair value", with respect to a dissenter's shares, means the value
of the shares immediately before the effectuation of the corporate
action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action unless
exclusion would be inequitable;
(v) "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid
by the corporation on its principal bank loans or, if none, at a
rate that is fair and equitable under all the circumstances;
(vi) "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner
of shares to the extent of the rights granted by a nominee
certificate on file with a corporation;
(vii) "Shareholder" means the record shareholder or the beneficial
shareholder.
(S) 17-16-1302. Right to dissent
(a) A shareholder is entitled to dissent from, and to obtain payment of the
fair value of his shares in the event of, any of the following corporate
actions:
(i) Consummation of a plan of merger or consolidation to which the
corporation is a party if:
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<PAGE>
(A) Shareholder approval is required for the merger or the consolidation
by W.S. 17-16-11103 or 17-16-1111 or the articles of incorporation
and the shareholder is entitled to vote on the merger or
consolidation; or
(B) The corporation is a subsidiary that is merged with its parent under
W.S. 17-16-1104.
(ii) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
(iii) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one
(1) year after the date of sale;
(iv) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of the shares;
(B) Creates, alters or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption
or repurchase, of the shares;
(C) Alters or abolishes a preemptive right of the holder of the shares
to acquire shares or other securities;
(D) Excludes or limits the right of the shares to vote on any matter, or
to cumulate votes, other than a limitation by dilution through
issuance of shares or other securities with similar voting rights;
or
(E) Reduces the number of shares owned by the shareholder to a fraction
of a share if the fractional share so created is to be acquired for
cash under W.S. 17-16-604.
(v) Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of
directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
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<PAGE>
(b) A shareholder entitled to dissent and obtain payment for his shares under
this article may not challenge the corporate action creating his
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
(S) 17-16-1303. Dissent by nominees and beneficial owners
(a) A record shareholder may assert dissenters' rights as to fewer than all the
shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one (1) person and notifies the
corporation in writing of the name and address of each person on whose
behalf he asserts dissenters' rights. The rights of a partial dissenter
under this subsection are determined as if the shares as to which he
dissents and his other shares were registered in the names of different
shareholders.
(b) A beneficial shareholder may assert dissenters' rights as to the shares
held on his behalf only if:
(i) submits to the corporation the record shareholder's written consent to
the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and
(ii) He does so with respect to all shares of which he is the beneficial
shareholder or over which he has the power to direct the vote.
B-3
<PAGE>
SUBARTICLE B.
PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS
(S) 17-16-1320. Notice of dissenters' rights
(a) If a proposed corporate action creating dissenters' rights under W.S. 17-
16-1302 is submitted to a vote at a shareholders' meeting, the meeting
notice shall state that shareholders are or may be entitled to assert
dissenters' rights under this article and be accompanied by a copy of this
article.
(b) If corporate action creating dissenters' rights under W.S. 17-16-1302 is
taken without a vote of shareholders, the corporation shall notify in
writing all shareholders entitled to assert dissenters' rights that the
action was taken and send them the dissenters' notice described in W.S. 17-
16-1322.
(S) 17-16-1321. Notice of intent to demand payment
(a) If a proposed corporate action creating dissenters' rights under W.S. 17-
16-1302 is submitted to a vote at a shareholders' meeting, a shareholder
who wishes to assert dissenters' rights shall deliver to the corporation
before the vote is taken written notice of his intent to demand payment for
his shares if the proposed action is effectuated and shall not vote his
shares in favor of the proposed action.
(b) A shareholder who does not satisfy the requirements of subsection (a) of
this section is not entitled to payment for his shares under this article.
(S) 17-16-1322. Dissenters' notice
(a) If a proposed corporate action creating dissenters' rights under W.S. 17-
16-1302 is authorized at a shareholders' meeting, the corporation shall
deliver a written dissenters' notice to all shareholders who satisfied the
requirements of W.S. 17-16-1321.
(b) The dissenters' notice shall be sent no later than ten days (10) after the
corporate action was taken, and shall:
(i) State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited;
(ii) Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;
B-4
<PAGE>
(iii) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of
the proposed corporate action and requires that the person asserting
dissenters' rights certify whether or not he acquired beneficial
ownership of the shares before that date;
(iv) Set a date by which the corporation shall receive the payment
demand, which date may not be fewer than thirty (30) days nor more
than sixty (60) days after the date the notice required by
subsection (a) of this section is deliverd; and
(v) Be accompanied by a copy of this article.
(S) 17-16-1323. Duty to demand payment
(a) A shareholder sent a dissenters' notice described in W.S. 17-16-1322 shall
demand payment, certify whether he acquired beneficial ownership of the
shares before the date required to be set forth in the dissenters' notice
pursuant to W.S. 17-16-1322(b)(iii), and deposit his certificates in
accordance with the terms of the notice.
(b) A shareholder who demands payment and deposits his share certificates under
subsection (a) of this section retains all other rights of a shareholder
until these rights are cancelled or modified by the taking of the proposed
corporate action.
(c) A shareholder who does not demand payment or deposit his share certificates
where required, each by the date set in the dissenters' notice, is not
entitled to payment for his shares under this article.
(S) 17-16-1324. Share restrictions.
(a) The corporation may restrict the transfer of uncerificated shares from the
date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under W.S. 17-16-1326.
(b) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
(S) 17-16-1325. Payment
(a) Except as provided in W.S. 17-16-1327, as soon as the proposed corporate
action is taken, or upon receipt of a payment demand, the corporation shall
pay each
B-5
<PAGE>
dissenter who complied with W.S. 17-16-1323 the amount the corporation
estimates to be the fair value of his shares, plus accrued interest.
(b) The payment shall be accompanied by:
(i) The corporation's balance sheet as of the end of a fiscal year
ending not more than sixteen (16) months before the date of payment,
an income statement for that year, a statement of changes in
shareholders' equity for that year, and the latest available interim
financial statements, if any;
(ii) A statement of the corporation's estimate of the fair value of the
shares;
(iii) An explanation of how the interest was calculated;
(iv) A statement of the dissenter's right to demand payment under W.S.
17-16-1328; and
(v) A copy of this article.
(S) 17-16-1326. Failure to take action
(a) If the corporation does not take the proposed action within sixty (60) days
after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the
transfer restrictions imposed on uncertificated shares.
(1) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it shall send a
new dissenters' notice under W.S. 17-16-1322 and repeat the payment demand
procedures.
(S) 17-16-1327 After-acquired shares.
(a) A corporation may elect to withhold payment required by W.S. 17-16-1325
from a dissenter unless he was the beneficial owner of the shares before
the date set forth in the dissenters' notice as the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action.
(b) To the extent the corporation elects to withhold payment under subsection
(a) of this section, after taking the proposed corporate action, it shall
estimate the fair value of the shares, plus accrued interest, and shall pay
this amount to each dissenter who agrees to accept it in full satisfaction
of his demand. The corporation shall send with its offer a statement of
its estimate of the fair value of
B-6
<PAGE>
the shares, an explanation of how the interest was calculated, and a
statement of the dissenter's right to demand payment under W.S. 17-16-1328.
(S) 17-16-1328. Procedure if dissenter is dissatisfied with payment or offer
(a) A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment
of his estimate, less any payment under W.S. 17-16-1325, or reject the
corporation's offer under W.S. 17-16-1327 and demand payment of the fair
value of the shares and interest due, if:
(i) The dissenter believes that the amount paid under W.S. 17-16-1325 or
offered under W.S. 17-16-1327 is less than the fair value of his
shares or that the interest due was incorrectly calculated;
(ii) The corporation fails to make payment under W.S. 17-16-1325 within
sixty (60) days after the date set for demanding payment; or
(iii) The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within sixty (60) days
after the date set for demanding payment.
(b) A dissenter waives his right to demand payment under this section unless he
notifies the corporation of his demand in writing under subsection (a) of
this section within thirty (30) days after the corporation made or offered
payment for his shares.
B-7
<PAGE>
SUBARTICLE C.
JUDICIAL APPRAISAL OF SHARES
(S) 17-16-1330. Court action
(a) If a demand for payment under W.S. 17-16-1328 remains unsettled, the
corporation shall commence a proceeding within sixty (60) days after
receiviing the payment demand and petition the court to determine the fair
value of the shares and accrued interest. If the corporation does not
commence the proceeding within the sixty (60) day period, it shall pay to
each dissenter whose demand remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding in the district court of the
county where a corporation's principal office, or if none in this state,
its registered office, is located. If the corporation is a foreign
corporation without a registered office in this state, it shall commence
the proceeding in the county in this state where the registered office of
the domestic corporation merged with or whose shares were acquired by the
foreign corporation was located.
(c) The corporation shall make all dissenters, whether or not residents of this
state, whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties shall be served with a copy of
the petition. Nonresidents may be served by registered or cerified mail or
by publication as provided by law.
(d) The jurisdiction of the court in which the proceeding is commenced under
subsection (b) of this section is plenary and exclusive. The court may
appoint one (1) or more persons as appraisers to receive evidence and
recommend decision on the question of fair value. The appraisers have the
powers described in the order appointing them, or in the amendment to it.
The dissenters are entitled to the same discovery rights as parties in
other civil proceedings.
(e) Each dissenter made a party to the proceeding is entitled to judgment for:
(i) The amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation; or
(ii) The fair value, plus accrued interest, of his after-acquires hares for
which the corporation elected to withhold payment under W.S. 17-16-
1327.
(S) 17-16-1331. Court costs and counsel fees
(a) The court in an appraisal proceeding commenced under W.S. 17-16-1330 shall
determine all costs of the proceeding, including the reasonable
compensation and
B-8
<PAGE>
expenses of appraisers appointed by the court. The court shall assess the
costs against the corporation; except that the court may assess costs
against all or some of the dissenters, in amounts the court finds
equitable, to the extent the court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith demanding payment under W.S. 17-16-1328.
(b) The court may also assess the fees and expenses of counsel and experts for
the respective parties, in amounts the court finds equitable:
(i) Against the corporation and in favor of any and all dissenters if the
court finds the corporation did not substantially comply with the
requirements of W.S. 17-16-1320 through 17-16-1328; or
(ii) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously, or not in good
faith with respect to the rights provided by this article.
(c) If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of amounts
awarded the dissenters who were benefited.
B-9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes indemnification
of directors and officers of a Delaware corporation under certain circumstances
against expenses, judgments and the like in connection with an action, suit or
proceeding. Article Fourteenth of Wells Fargo & Company's Restated Certificate
of Incorporation provides for broad indemnification of directors and officers.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits. See Exhibit Index.
(b) Financial Statement Schedules. Not Applicable.
(c) Report, Opinion or Appraisal. See Exhibits 5 and 8.
ITEM 22. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a posteffective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent posteffective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) ((S)230.424(b) of this chapter) if, in the
aggregate, the changes in volume and price represent no more
than 20% change in the maximum offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
(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.
<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(d) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(f) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(g) The undersigned registrant hereby undertakes to supply by means of a
post-effecctive 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-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Minneapolis, State of
Minnesota, on January 25, 1999.
WELLS FARGO & COMPANY
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 January 25, 1999 by the following persons in the
capacities indicated:
/s/ Richard M. Kovacevich President and Chief Executive Officer
- -------------------------
Richard M. Kovacevich (Principal Executive Officer)
/s/ Rodney L. Jacobs Vice Chairman and Chief Financial Officer
- -------------------------
Rodney L. Jacobs (Principal Financial Officer)
/s/ Les L. Quock Senior Vice President and Controller
- -------------------------
Les L. Quock (Principal Accounting Officer)
LES S. BILLER )
J.A. BLANCHARD III )
DAVID A. CHRISTENSEN )
SUSAN E. ENGEL )
RODNEY L. JACOBS )
WILLIAM A. HODDER )
REATHA CLARK KING ) A majority of the
RICHARD M. KOVACEVICH ) Board of Directors*
RICHARD D. McCORMICK )
CYNTHIA H. MILLIGAN )
BENJAMIN F. MONTOYA )
IAN M. ROLLAND )
MICHAEL W. WRIGHT )
- --------------------
*Richard M. Kovacevich, by signing his name hereto, does hereby sign this
document on behalf of each of the directors named above pursuant to powers of
attorney duly executed by such persons.
/s/ Richard M. Kovacevich
-------------------------
Richard M. Kovacevich
Attorney-in-Fact
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Form of
Number Description Filing
- ------- ----------- ---------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization dated September 17, 1998 between
Riverton State Bank Holding Company and Norwest Corporation (now named
Wells Fargo & Company) (included in Proxy Statement-Prospectus as
Appendix A).
3.1 Restated Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3(b) to Wells Fargo's Current Report on Form 8-K
dated June 28, 1993, Exhibit 3 to Wells Fargo's Current Report on Form 8-
K dated September 3, 1995, Exhibit 3 to Wells Fargo's Current Report on
Form 8-K dated June 3, 1997, Exhibit 3 to Wells Fargo's Current Report on
Form 8-K dated June 8, 1998 and Exhibits 3(b) and 3(c) to Wells Fargo's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
3.1.1 Certificate of Designations of Powers, Preferences, and Rights of ESOP
Cumulative Convertible Preferred Stock (incorporated by reference to
Exhibit 4 to Wells Fargo'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
Cumulative Tracking Preferred Stock (incorporated by reference to Exhibit
3 to Wells Fargo's Current Report on Form 8-K dated January 9, 1995).
3.1.3 Certificate of Designations of Powers, Preferences, and Rights of 1995
ESOP Cumulative Convertible Preferred Stock (incorporated by reference to
Exhibit 4 to Wells Fargo's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995).
3.1.4 Certificate of Designations with respect to the 1996 ESOP Cumulative
Convertible Preferred Stock (incorporated by reference to Exhibit 3 to
Wells Fargo's Current Report on Form 8-K dated November 26, 1996).
3.1.5 Certificate of Designations with respect to the 1997 ESOP Cumulative
Convertible Preferred Stock (incorporated by reference to Exhibit 3 to Wells
Fargo's Current Report on Form 8-K dated April 14, 1997).
3.1.6 Certificate of Designations with respect to the 1998 ESOP Cumulative
Convertible Preferred Stock (incorporated by reference to Exhibit 3 to Wells
Fargo's Current Report on Form 8-K dated April 20, 1998).
3.1.7 Certificate of Designations for Adjustable Cumulative Preferred
Stock, Series B (incorporated by reference to Exhibit 3(j) to Wells Fargo's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998).
3.1.8 Certificate of Designations for Fixed/Adjustable Rate Noncumulative
Preferred Stock, Series H (incorporated by reference to Exhibit 3(k) to Wells
Fargo's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
3.2 By-Laws (incorporated by reference to Exhibit 3(l) to Wells Fargo's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit Form of
Number Description Filing
- ------- ----------- --------
<S> <C> <C>
4.1 Rights Agreement, dated as of October 21, 1998, between Norwest Corporation
(now Wells Fargo & Company) and ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent (incorporated by reference to Exhibit 4.1 to Wells Fargo's
Form 8-A dated October 21, 1998).
5 Opinion of Stanley S. Stroup. Electronic
Transmission
8 Opinion of Brown, Drew & Massey, LLP. Electronic
Transmission
23.1 Consent of Stanley S. Stroup (included as part of Exhibit 5).
23.2 Consent of KPMG LLP. Electronic
Transmission
23.3 Consent of Fortner, Bayens, Levkulich and Co., P.C. Electronic
Transmission
23.4 Consent of Brown, Drew & Massey, LLP
(included as part of Exhibit 8).
24 Powers of Attorney.
99 Form of proxy for Special Meeting of Shareholders Electronic
of Riverton State Bank Holding Company. Transmission
</TABLE>
<PAGE>
EXHIBIT 5
[LETTERHEAD OF WELLS FARGO & COMPANY]
January 25, 1999
Board of Directors
Wells Fargo & Company
633 Folsom Street
7th Floor
San Francisco, California 94107-3600
Ladies and Gentlemen:
In connection with the proposed registration under the Securities Act of
1933, as amended, of a maximum of 675,000 shares of common stock, par value $1-
2/3 per share, of Wells Fargo & Company, a Delaware corporation formerly named
Norwest Corporation (the "Company"), and associated preferred stock purchase
rights (such shares and rights collectively the "Shares"), which are proposed to
be issued by the Company in connection with the merger (the "Merger") of a
wholly-owned subsidiary of the Company with Riverton State Bank Holding Company,
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 Company 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 Company has been
taken to authorize the issuance of the Shares in connection with the Merger,
and, when issued as described in the Registration Statement, the Shares will be
legally and validly issued, fully paid and nonassessable.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Stanley S. Stroup
<PAGE>
EXHIBIT 8
[LETTERHEAD OF BROWN, DREW & MASSEY, LLP]
January 25, 1999
Riverton State Bank Holding Company
616 N. Federal
Riverton, Wyoming 82501
Re: Agreement and Plan of Reorganization by and Among
Riverton State Bank Holding Company and Norwest Corporation,
now known as Wells Fargo & Company.
Gentlemen:
We have acted as special counsel to Riverton State Bank Holding Company, a
Wyoming Corporation ("Target"), in connection with the proposed merger
("Merger") of a wholly owned subsidiary of Norwest Corporation ("Sub"), now
known as Wells Fargo & Company with and into Riverton State Bank Holding
Company, pursuant to the terms of the Agreement and Plan of Reorganization,
dated September 17, 1998 (the "Reorganization Agreement") by and among Norwest
Corporation ("Parent"), now known as Wells Fargo & Company, and Target, and the
Agreement of Merger (the "Merger Agreement") by and among Sub and Target.
In connection with our opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction,
of (a) the Reorganization Agreement, (b) the Merger Agreement and (c) such other
documents as we have deemed necessary or appropriate in order to enable us to
render the opinion below. In our examination, we have assumed the genuineness of
all signatures, the legal capacity of all natural persons, the authenticity of
all documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as certified, conformed or photostatic copies,
and the authenticity of the originals of such copies. We have assumed the
unexecuted Merger Agreement submitted to us will be executed in the form
submitted. In rendering the opinion set forth below, we have relied upon the
written representations and covenants of Parent and Target in the Reorganization
Agreement.
In rendering our opinion, we have also considered the applicable provision
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations,
<PAGE>
Law Offices of
Riverton State Bank Holding Company BROWN, DREW & MASSEY, LLP
January 25, 1999
pertinent judicial authorities, interpretive rulings of the Internal Revenue
Service and such other authorities as we have considered relevant.
Based on and subject to the forgoing, we are of the opinion that the Merger
will, under current law, constitute a tax-free reorganization under Section
368 (a)(1)(A) and 368 (a)(2)(E) of the Code.
As a tax-free reorganization, the Merger will have the following Federal
income tax consequences for Target shareholders:
1. No gain or loss will be recognized by holders of common stock, no
par value of Target ("Target Common Stock") as a result of the
exchange of such shares for shares of Parent Common Stock of the
per value of $1 2/3rd per share ("Parent Common Stock") pursuant
to the Merger, except that gain or loss will be recognized on the
receipt of cash. if any, received in lieu of fractional shares.
Any cash received by a shareholder of Target in lieu of a
fractional share will be treated as received in exchange for such
fractional and not as a dividend, and any gain or loss
recognized as a result of the receipt of such cash will be
capital gain or loss equal to the difference between the cash
received and the portion of the shareholder's basis in Target
Common Stock allocable to such fractional share interest.
2. The tax basis of the Parent Common Stock received by each
shareholder of Target will be the same as the basis of the
Riverton State Bank Holding Company Common Stock exchanged
(reduced by any amount allocable to fractional share interests for
which cash is received).
3. The holding period for the shares of Parent Common Stock
received by each shareholder of Target will include the holding
period for the shares of Target Common Stock of such shareholder
exchange in the Merger.
4. Except as set forth above we express no opinion as to the tax
consequences, whether federal, state, local or foreign, to any
party of the Merger or of any transactions related to the Merger
or contemplated by the Reorganization Agreement.
This opinion assumes that Target shareholders hold their Target Common
Stock as capital assets within the meaning of Section 1221 of the Code. This
opinion may not be applicable to shareholders of Target who are not citizens or
residents of the United States, or who will acquire their Common Stock pursuant
to the exercise or termination
2
<PAGE>
Law Offices of
Riverton State Bank Holding Company BROWN, DREW & MASSEY, LLP
January 25, 1999
of employee stock options or otherwise as compensation, nor does the opinion
address the effect of any applicable foreign, state, local or other tax laws.
EACH SHAREHOLDER OF TARGET SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE MERGER, INCLUDING THE
APPLICABILITY AND THE EFFECT OF FOREIGN, STATE, LOCAL AND OTHER TAX LAWS.
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.
We consent to the filing with the Securities and Exchange Commission of
this opinion as an exhibit to Wells Fargo & Company's Registration Statement on
Form S-4 relating to the Merger.
Very truly yours,
BROWN, DREW & MASSEY, LLP
/s/ Morris R. Massey
Morris R. Massey
3
<PAGE>
EXHIBIT 23.2
[LETTERHEAD OF KPMG LLP]
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
Wells Fargo & Company
We consent to the incorporation by reference in the Proxy Statement-Prospectus
included in this Registration Statement on Form S-4 of Wells Fargo & Company of
our report dated January 19, 1999 with respect to the supplemental consolidated
balance sheet of Wells Fargo & Company and Subsidiaries as of December 31, 1997
and 1996, and the related supplemental consolidated statements of income,
changes in stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1997, which report appears in the Form 8-K
of Wells Fargo & Company dated January 19, 1999, and to the reference to our
firm under the heading "Experts" in the Proxy Statement-Prospectus. Our report
contains an explanatory paragraph that states that the supplemental consolidated
financial statements give retroactive effect to the merger of Wells Fargo &
Company and Norwest Corporation on November 2, 1998, which has been accounted
for as a pooling-of-interests as described in Note 1 to the supplemental
consolidated financial statements.
/s/ KPMG LLP
San Francisco, California
January 25, 1999
<PAGE>
EXHIBIT 23.3
[LETTERHEAD OF FORTNER, BAYENS, LEVKULICH AND CO., P.C.]
Independent Auditors' Consent
-----------------------------
Board of Directors
Riverton State Bank Holding Company
Riverton, Wyoming
We consent to the use of our report dated October 1, 1998 included herein and to
the reference to our firm under the heading "EXPERTS" in the prospectus.
/s/ Fortner, Bayens, Levkulich and Co., P.C.
Denver, Colorado
January 25, 1999
<PAGE>
EXHIBIT 24
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Les S. Biller
----------------------------------
Les S. Biller
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/J.A. Blanchard
----------------------------
J.A. Blanchard III
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1997.
/s/ David A. Christensen
-----------------------------
David A. Christensen
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Susan E. Engel
-------------------------------
Susan E. Engel
<PAGE>
WELLS FARGO & COMPANY
(FORMERLY KNOWN AS NORWEST CORPORATION)
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of WELLS FARGO & COMPANY (formerly known as NORWEST CORPORATION), a Delaware
corporation, does hereby make, constitute and appoint RICHARD M. KOVACEVICH, LES
BILLER, STANLEY S. STROUP, 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 Company 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
Company 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 675,000 shares of Common Stock of the Company, adjusted for any change
in the number of outstanding shares of Common Stock resulting from stock splits,
reverse stock splits or stock dividends occurring after the date hereof, which
may be issued in connection with the acquisition by the Company of Riverton
State Bank Holding Company, located in Riverton, Wyoming, 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
11th day of January, 1999.
/s/ Rodney L. Jacobs
------------------------------
Rodney L. Jacobs
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ William A. Hodder
--------------------------------------
William A. Hodder
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Reatha Clark King
------------------------------
Reatha Clark King
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Richard M. Kovacevich
----------------------------------
Richard M. Kovacevich
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Richard D. McCormick
----------------------------------
Richard D. McCormick
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Cynthia H. Milligan
----------------------------------
Cynthia H. Milligan
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Benjamin F. Montoya
-------------------------------
Benjamin F. Montoya
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Ian M. Rolland
----------------------------
Ian M. Rolland
<PAGE>
NORWEST CORPORATION
POWER OF ATTORNEY
OF DIRECTOR AND/OR OFFICER
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director and/or officer
of NORWEST CORPORATION, a Delaware corporation, does hereby make, constitute and
appoint RICHARD M. KOVACEVICH, LES BILLER, 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 675,000
shares of Common Stock of the Corporation, adjusted for any change in the number
of outstanding shares of Common Stock resulting from stock splits, reverse stock
splits or stock dividends occurring after the date hereof, which may be issued
in connection with the acquisition by the Corporation of Riverton State Bank
Holding Company, located in Riverton, Wyoming, 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
22nd day of September, 1998.
/s/ Michael W. Wright
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Michael W. Wright
<PAGE>
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS OF RIVERTON STATE BANK HOLDING COMPANY
The undersigned hereby appoints ____________________ and
___________________, or either of them, as proxies to vote all shares of Common
Stock the undersigned is entitled to vote at the Special Meeting of Shareholders
of Riverton State Bank Holding Company ("Riverton") to be held on February __,
1999 at _____________, Wyoming, or at any adjournment or postponement thereof,
as follows, hereby revoking any proxy previously given:
1. To approve the Agreement and Plan of Reorganization dated as of
September 17, 1998 (the "Reorganization Agreement") between Riverton and Norwest
Corporation (now named Wells Fargo & Company ("Wells Fargo") pursuant to which a
wholly-owned subsidiary of Wells Fargo will merge with Riverton and Riverton
will become a wholly-owned subsidiary of Wells Fargo (the "Merger"), all upon
the terms and subject to the conditions set forth in the Reorganization
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 Riverton as may be necessary or appropriate to carry
out the intent and purposes of the Merger.
FOR [_] AGAINST [_] ABSTAIN [_]
2. In the discretion of the persons appointed proxies hereby on such
other matters as may properly come before the Special Meeting.
Shares represented by this proxy will be voted as directed by the
shareholder. The Board of Directors recommends a vote "FOR" proposal 1. If no
direction is supplied, the proxy will be voted "FOR" proposal 1.
Dated: ,199 .
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(Please sign exactly as name appears at left.)
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(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 OF RIVERTON STATE BANK HOLDING COMPANY
