<PAGE>
As filed with the Securities and Exchange Commission on April 7, 2000
Registration No. 333-
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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 charter)
Delaware 6712 41-0449260
(State or other (Primary Standard Industrial (IRS Employer
jurisdiction of Classification Code Number) Identification
incorporation or Number)
organization)
Wells Fargo & Company
420 Montgomery Street
San Francisco, California 94163
(800) 411-4932
(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 Brian D. Alprin
Wells Fargo & Company Duane, Morris & Heckscher LLP
1050 17th Street, Suite 120 1667 K Street, N.W., Suite 700
Denver, Colorado 80265 Washington, D.C. 20006-1608
(303) 899-5802 (202) 776-7820
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this registration statement becomes
effective.
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: [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed
Proposed Maximum
Maximum Aggregate Amount Of
Title Of Securities To Amount To Be Offering Price Offering Registration
Be Registered Registered Per Share Price(1) Fee(2)
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<S> <C> <C> <C> <C>
Common stock, $1 2/3 par
value (and associated
preferred stock
purchase rights)....... 31,000,000 N/A $1,095,656,250 $289,253.25
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</TABLE>
(1) Based on the maximum number of shares of common stock of National Bancorp
of Alaska, Inc. expected to be canceled in connection with the merger
described herein and calculated by multiplying (a) the average of the high
and low prices for National Bancorp of Alaska, Inc. common stock as
reported on the Nasdaq National Market System for March 31, 2000 ($36.25)
by (b) 30,225,000, representing the approximate maximum number of shares of
National Bancorp of Alaska, Inc. common stock expected to be received by
the registrant in the merger.
(2) Based on .000264 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.
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<PAGE>
NATIONAL BANCORP OF ALASKA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 8, 2000
To the Stockholders of National Bancorp of Alaska, Inc.:
The annual meeting of stockholders of National Bancorp of Alaska, Inc.
("National Bancorp") will be held on Thursday, June 8, 2000, at 10:00 a.m.,
Anchorage, Alaska time, in the Main Office of the National Bank of Alaska,
located at Northern Lights Boulevard and C Street, Anchorage, Alaska. The
purposes of the meeting are to:
1. Vote on a proposal to approve the Agreement and Plan of Reorganization,
dated as of January 12, 2000, and as amended as of February 15, 2000 (as
amended, the "Merger Agreement"), between National Bancorp and Wells
Fargo & Company ("Wells Fargo"), pursuant to which, among other things,
a wholly-owned subsidiary of Wells Fargo will merge with and into
National Bancorp (the "Merger") upon the terms and subject to the
conditions set forth in the Merger Agreement, as more fully described in
the proxy statement-prospectus that follows this notice. As a result of
the Merger, National Bancorp will become a wholly-owned subsidiary of
Wells Fargo.
2. Fix at 25 the number of National Bancorp directors to be elected and
elect 25 directors, each to hold office until the Merger is completed
or, if the Merger is not completed, until the next annual meeting of
stockholders and a successor has been elected and has qualified.
3. Vote on a proposal to ratify the appointment by the board of directors
of National Bancorp of Deloitte & Touche LLP, if the merger is not
completed, as National Bancorp's independent public accountants for the
year ending December 31, 2000.
4. Act on any other matters that may properly come before the meeting.
Only stockholders of record on April , 2000 may vote at the annual meeting
or at any adjournment thereof. A list of stockholders of record who may vote at
the meeting will be available during business hours for any National Bancorp
stockholder to examine for any purpose relevant to the meeting. The list will
be available for at least ten days before the meeting at the offices of
National Bancorp, Northern Lights Boulevard and C Street, Anchorage, Alaska.
By Order of the Board of Directors
/s/ Terry S. Kipp
Terry S. Kipp
Corporate Secretary
May 8, 2000
Please promptly complete, sign, date and return the enclosed proxy card
whether or not you plan to attend the meeting. Failure to return a properly
executed proxy or to vote at the meeting will have the same effect as a vote
against the Merger Agreement and the merger. You may still vote at the
meeting even if you have previously returned your proxy card.
<PAGE>
[NBAK logo]
The board of directors of National Bancorp of Alaska, Inc. has approved the
sale of National Bancorp to Wells Fargo & Company. The sale requires the
approval of National Bancorp's stockholders and will be voted on at the annual
meeting. The time and place of the meeting are set forth in the notice of
annual meeting that precedes this proxy statement-prospectus.
If the sale is completed, Wells Fargo will exchange 0.896303 of a share of
its common stock for each share of National Bancorp common stock. If the total
number of shares of Wells Fargo common stock you will receive in the merger
does not equal a whole number, you will receive cash instead of the fractional
share.
On May , 2000, Wells Fargo common stock closed at $ , making 0.896303 of a
share of Wells Fargo common stock equal on that date to $ . No adjustment
will be made to the exchange ratio to reflect fluctuations in the price of
Wells Fargo common stock.
The merger is expected to be generally tax free to National Bancorp
stockholders except for cash received instead of fractional shares.
This proxy statement-prospectus provides detailed information about the
proposed sale. Please read this entire document carefully. You can find
additional information about Wells Fargo and National Bancorp from documents
filed with the Securities and Exchange Commission.
Whether or not you plan to attend the meeting, please complete and mail the
enclosed proxy card. If you sign, date and mail your proxy card without
indicating how you want to vote, your proxy will be voted in favor of the sale.
If you fail to return your proxy card, or if you fail to instruct your broker
how to vote shares held for you in the broker's name, the effect will be the
same as a vote against the sale.
Approval of the sale of National Bancorp to Wells Fargo will require the
affirmative vote of a majority of the outstanding shares of National Bancorp
common stock. No vote of Wells Fargo's stockholders is required to approve the
transaction.
At the annual meeting, you will also vote to elect National Bancorp's
directors and to appoint Deloitte & Touche LLP as National Bancorp's
independent public accountants for the year ending December 31, 2000. If
National Bancorp's stockholders approve the sale of National Bancorp to Wells
Fargo, these items, if approved, will be effective only until the sale is
completed.
/s/ Edward B. Rasmuson
Edward B. Rasmuson
Chairman of the Board and Chief Executive Officer
-------------------------------------
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 to be issued in the merger are not
savings or deposit accounts or other obligations of any bank or non-bank
subsidiary of Wells Fargo, and they are not insured by the Federal Deposit
Insurance Corporation, the Bank Insurance Fund or any other governmental
agency.
-------------------------------------
Proxy Statement-Prospectus dated May 8, 2000.
First mailed to National Bancorp stockholders on or about May 8, 2000.
<PAGE>
ADDITIONAL INFORMATION
This proxy statement-prospectus incorporates important business and financial
information about Wells Fargo and National Bancorp that is not included in or
delivered with this document. See "Where You Can Find More Information" on page
for a list of the documents that Wells Fargo and National Bancorp have
incorporated into this proxy statement-prospectus. The documents are available
to you without charge upon written or oral request made as follows:
Wells Fargo Documents: National Bancorp Documents:
Wells Fargo & Company Corporate Secretary
MAC N9305-173 National Bancorp of Alaska, Inc.
Sixth and Marquette Northern Lights & C Street
Minneapolis, Minnesota 55479 Anchorage, Alaska 99503
(612) 667-8655 (907) 522-8888
To obtain documents in time for the annual meeting, your request should be
received by June 1, 2000.
i
<PAGE>
ABOUT THIS DOCUMENT
What is the purpose of this document?
This document serves as both a proxy statement of National Bancorp and a
prospectus of Wells Fargo. As a proxy statement, it's being provided to you by
National Bancorp because National Bancorp's board of directors is soliciting
your proxy for use at the annual meeting of stockholders called, among other
purposes, to vote on the proposed sale of National Bancorp to Wells Fargo. As a
prospectus, it's being provided to you by Wells Fargo because Wells Fargo is
offering you shares of its common stock in exchange for your shares of National
Bancorp common stock if the sale is completed.
Do I need to read the entire document?
Absolutely. Parts of this proxy statement-prospectus summarize information
that is presented in greater detail elsewhere in this document or in the
appendices to this document. Each summary discussion is qualified by reference
to the full text. For example, the summary of the terms of the merger agreement
is qualified by the actual terms of the merger agreement, a copy of which is
included as Appendix A.
Is there other information I should consider?
Yes. Much of the business and financial information about Wells Fargo and
National Bancorp that may be important to you is not physically included in
this document. Instead, this information is incorporated into this document by
reference to documents separately filed by Wells Fargo and National Bancorp
with the Securities and Exchange Commission (SEC). This means that Wells Fargo
and National Bancorp may satisfy their disclosure obligations to you by
referring you to one or more documents separately filed by them with the SEC.
See "Where You Can Find More Information" on page for a list of documents
that Wells Fargo and National Bancorp have incorporated by reference into this
proxy statement-prospectus and for instructions on how to obtain copies of
these documents. The documents are available to you without charge.
What if there is a conflict between documents?
You should rely on the most recently filed document. Information in this
proxy statement-prospectus may update information contained in the Wells Fargo
or National Bancorp documents incorporated by reference. Similarly, information
in documents that Wells Fargo or National Bancorp may file after the date of
this proxy statement-prospectus may update information contained in this proxy
statement-prospectus or information contained in previously filed documents.
What if I choose not to read the incorporated documents?
Information contained in a document that is incorporated by reference is part
of this proxy statement-prospectus, unless it is superseded by information
contained directly in this proxy statement-prospectus or in documents filed
with the SEC after the date of this proxy statement-prospectus. Information
that is incorporated from another document is considered to have been disclosed
to you whether or not you choose to read the document.
ii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY.................................................................... 1
The Merger............................................................... 1
The Companies............................................................ 1
What You Will Receive In The Merger...................................... 1
Market Price Of Wells Fargo Stock Will Fluctuate......................... 1
Merger Generally Tax Free To National Bancorp Stockholders............... 2
National Bancorp's Board Recommends Approval Of The Merger............... 2
National Bancorp's Financial Advisor Believes Merger Is Fair To National
Bancorp Stockholders.................................................... 2
Additional Merger Benefits To National Bancorp's Management.............. 2
Dissenters' Rights Not Available......................................... 3
Surrender Of National Bancorp Shares..................................... 3
National Bancorp Annual Meeting.......................................... 3
Record Date; Vote Required To Approve Merger............................. 3
Agreements To Vote For The Merger........................................ 3
Merger Requires Regulatory Approval...................................... 4
Other Conditions To Completing The Merger................................ 4
Termination Of The Merger Agreement...................................... 4
Your Rights Will Differ As A Wells Fargo Stockholder..................... 4
Wells Fargo Expects To Use Purchase Accounting........................... 4
Wells Fargo Is Heavily Regulated......................................... 5
Financial Modernization Will Increase Competition........................ 5
Forward-Looking Statements May Prove Inaccurate.......................... 5
Selected Financial Data.................................................. 6
Comparative Per Common Share Data........................................ 6
NATIONAL BANCORP ANNUAL MEETING............................................ 8
Time And Place Of The Meeting............................................ 8
Matters To Be Considered At The Meeting.................................. 8
Record Date.............................................................. 8
Outstanding Shares....................................................... 8
Quorum................................................................... 8
Vote Required............................................................ 9
Share Ownership.......................................................... 9
Agreements To Vote For The Merger........................................ 9
Voting And Revocation Of Proxies......................................... 10
Solicitation Of Proxies.................................................. 10
Other Matters Considered At The Meeting.................................. 10
ITEM 1. THE MERGER......................................................... 11
Effect Of The Merger..................................................... 11
Background Of And Reasons For The Merger................................. 11
Opinion Of National Bancorp's Financial Advisor.......................... 15
Additional Interests Of National Bancorp Management...................... 21
Dissenters' Rights....................................................... 23
Exchange Of Certificates................................................. 23
Regulatory Approvals..................................................... 23
Effect Of Merger On National Bancorp's Employee Benefit Plans............ 25
U.S. Federal Income Tax Consequences Of The Merger....................... 25
Support Agreements....................................................... 26
Resale Of Wells Fargo Common Stock Issued In The Merger.................. 26
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
Stock Exchange Listing.................................................... 27
Accounting Treatment...................................................... 27
</TABLE>
<TABLE>
<S> <C>
THE MERGER AGREEMENT........................................................ 28
Basic Plan Of Reorganization.............................................. 28
Representations And Warranties............................................ 29
Certain Covenants......................................................... 29
Conditions To The Merger.................................................. 32
Termination Of The Merger Agreement....................................... 33
Effect Of Termination..................................................... 34
Waiver And Amendment...................................................... 34
Expenses.................................................................. 34
INFORMATION ABOUT WELLS FARGO............................................... 35
General................................................................... 35
Management And Additional Information..................................... 35
Competition............................................................... 35
Information On Wells Fargo's Web Site..................................... 36
REGULATION AND SUPERVISION OF WELLS FARGO................................... 37
Introduction.............................................................. 37
Regulatory Agencies....................................................... 37
Bank Holding Company Activities........................................... 38
Dividend Restrictions..................................................... 39
Holding Company Structure................................................. 39
Capital Requirements...................................................... 40
Deposit Insurance Assessments............................................. 41
Fiscal And Monetary Policies.............................................. 42
Future Legislation........................................................ 42
INFORMATION ABOUT NATIONAL BANCORP.......................................... 43
National Bank of Alaska................................................... 43
General Banking Services.................................................. 43
Trust Services............................................................ 43
International Banking..................................................... 43
Competition............................................................... 43
Employment................................................................ 44
WELLS FARGO CAPITAL STOCK................................................... 45
Wells Fargo Common Stock.................................................. 45
Wells Fargo Preferred Stock............................................... 46
Wells Fargo Rights Plan................................................... 47
COMPARISON OF STOCKHOLDER RIGHTS............................................ 50
Authorized And Outstanding Capital Stock.................................. 50
Size of Board of Directors................................................ 50
Cumulative Voting......................................................... 50
Classes of Directors...................................................... 51
Qualifications of Directors............................................... 51
Filling Vacancies on the Board............................................ 51
Removal of Directors...................................................... 51
Nomination of Directors for Election...................................... 52
Anti-Takeover Provisions.................................................. 52
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
Stockholder Rights Plan................................................... 53
Stockholder Action Without a Meeting...................................... 53
Calling Special Meetings of Stockholders.................................. 53
Submission of Stockholder Proposals....................................... 53
Notice of Stockholder Meetings............................................ 54
Stockholder Vote Required for Mergers..................................... 54
Dividends................................................................. 54
Dissenters' Appraisal Rights.............................................. 55
Stockholder Preemptive Rights............................................. 55
Stockholder Class Voting Rights........................................... 56
Indemnification........................................................... 56
Limitations on Directors' Liability....................................... 58
Amendment of Certificate of Incorporation................................. 59
Amendment of Bylaws....................................................... 59
PRICE RANGE OF COMMON STOCK AND DIVIDENDS................................... 60
Wells Fargo Share Prices And Dividends.................................... 60
National Bancorp Share Prices And Dividends............................... 60
ITEM 2. ELECTION OF DIRECTORS............................................... 61
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE..................... 64
DIRECTORS MEETINGS AND COMMITTEES........................................... 64
COMPENSATION OF EXECUTIVE OFFICERS.......................................... 64
COMPENSATION OF DIRECTORS................................................... 66
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS................................. 66
SECURITY OWNERSHIP OF MANAGEMENT AS OF JANUARY 31, 2000..................... 68
CHANGES IN CONTROL.......................................................... 68
TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS, AND ASSOCIATES............. 68
ITEM 3. APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS....................... 70
EXPERTS..................................................................... 70
Wells Fargo's Independent Accountants..................................... 70
National Bancorp's Independent Accountants................................ 70
OPINIONS.................................................................... 70
Share Issuance............................................................ 70
Tax Matters............................................................... 70
DEADLINES FOR SUBMITTING STOCKHOLDER PROPOSALS.............................. 71
WHERE YOU CAN FIND MORE INFORMATION......................................... 71
Registration Statement.................................................... 71
Other SEC Filings......................................................... 71
</TABLE>
v
<PAGE>
<TABLE>
<S> <C>
Documents Incorporated By Reference....................................... 71
Documents Available Without Charge From The Companies..................... 72
FORWARD-LOOKING STATEMENTS.................................................. 72
</TABLE>
<TABLE>
<S> <C>
APPENDIX A Agreement and Plan of Reorganization
Amendment to Agreement and Plan of Reorganization
APPENDIX B Opinion of CIBC World Markets Corp.
</TABLE>
vi
<PAGE>
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 documents to
which this document refers you. See "Where You Can Find More Information" on
page . Each item in this summary includes a page reference to a more complete
description of that item.
The Merger (page )
In the proposed transaction, a Wells Fargo subsidiary will merge with
National Bancorp. National Bancorp will survive the merger as a subsidiary of
Wells Fargo. Wells Fargo will exchange shares of its common stock for all of
the outstanding stock of National Bancorp. After the merger is completed, you
will own shares of Wells Fargo common stock and Wells Fargo will own all of the
outstanding stock of National Bancorp.
The merger agreement, as amended, is included in this proxy statement-
prospectus as Appendix A. When used in this proxy statement-prospectus, the
term "merger agreement" refers to the merger agreement, as so amended. Please
read the merger agreement as it is the document that governs the merger.
The Companies (pages and )
Wells Fargo & Company
420 Montgomery Street
San Francisco, California 94163
(800) 411-4932
Wells Fargo & Company is a diversified financial services company whose
subsidiaries and affiliates provide banking, insurance, investments, and
mortgage and consumer finance through stores located across North America. At
March 31, 2000, Wells Fargo had assets of $ billion, th largest among U.S.
bank holding companies.
National Bancorp of Alaska, Inc.
Northern Lights & C Street
Anchorage, Alaska 99503
(907) 522-8888
National Bancorp of Alaska, Inc. is a bank holding company whose primary
subsidiary is National Bank of Alaska, which has 55 banking stores throughout
Alaska and one full-service branch in Seattle, Washington. National Bancorp
also has insurance, mortgage, finance and leasing subsidiaries. At March 31,
2000, National Bancorp had assets of $ billion.
What You Will Receive In The Merger (page )
If the merger is completed, Wells Fargo will issue 0.896303 of a share of its
common stock for each outstanding share of National Bancorp common stock that
you own. That fraction is referred to as the "exchange ratio." Wells Fargo will
not issue fractional shares in the merger. If the total number of shares of
Wells Fargo common stock you will receive in the merger does not equal a whole
number, you will receive cash instead of the fractional share.
Market Price Of Wells Fargo Stock Will Fluctuate (page )
Wells Fargo common stock is listed on the New York and Chicago Stock
Exchanges under the symbol "WFC." National Bancorp common stock is listed on
the Nasdaq National Market under the symbol "NBAK."
1
<PAGE>
The following table shows the closing prices of Wells Fargo and National
Bancorp common stock on December 20, 1999, the day before the merger was
announced, and on May , 2000. The table also shows the equivalent per share
value as of each of these dates of National Bancorp common stock based on the
exchange ratio of 0.896303.
<TABLE>
<CAPTION>
Equivalent Value of
Wells Fargo National Bancorp 0.896303 of a Share of Wells
Common Stock Common Stock Fargo Common Stock
------------ ---------------- ----------------------------
<S> <C> <C> <C>
December 20, 1999... $40.66 $32.88 $36.44
May , 2000.........
</TABLE>
Under the merger agreement, the exchange ratio was determined as of March 15,
2000. No adjustments to the exchange ratio will be made to reflect fluctuations
in the price of Wells Fargo common stock occurring after that date.
Merger Generally Tax Free To National Bancorp Stockholders (page )
National Bancorp stockholders generally will not recognize gain or loss for
U.S. federal income tax purposes from the exchange of their shares of National
Bancorp common stock for shares of Wells Fargo common stock. National Bancorp
stockholders will be taxed on cash they receive instead of fractional shares.
The tax treatment described above may not apply to every National Bancorp
stockholder. Determining the tax consequences of the merger to you may be
complicated. You should consult your own advisor for a full understanding of
the merger's tax consequences.
National Bancorp is not obligated to complete the merger unless it receives
an opinion of counsel that no gain or loss will be recognized by the holders of
National Bancorp common stock upon receipt of Wells Fargo common stock except
for cash received instead of fractional shares.
National Bancorp's Board Recommends Approval Of The Merger (page )
National Bancorp's board of directors believes that the merger is in the best
interests of National Bancorp stockholders and unanimously recommends that
National Bancorp stockholders approve the merger. National Bancorp's board
believes that the merger will provide National Bancorp stockholders with the
potential for greater stock value appreciation than if National Bancorp had
remained independent.
National Bancorp's Financial Advisor Believes Merger Is Fair To National
Bancorp Stockholders (page )
CIBC World Markets has given its opinion to National Bancorp's board of
directors that the consideration to be paid by Wells Fargo to the holders of
National Bancorp common stock is fair from a financial point of view to the
holders of National Bancorp common stock. CIBC World Markets' opinion is
included in this proxy statement-prospectus as Appendix B.
Additional Merger Benefits To National Bancorp's Management (page )
National Bancorp's directors and executive officers have interests in the
merger that are different from yours.
. Edward B. Rasmuson, chairman and chief executive officer of National
Bancorp, has entered into an employment and non-compete agreement with
Wells Fargo that provides for his employment after the merger as
chairman of National Bank of Alaska.
. The merger agreement provides for specified rights to indemnification in
favor of directors and officers of National Bancorp.
2
<PAGE>
The board of directors of National Bancorp was aware of these additional
interests when it approved the merger agreement.
Dissenters' Rights Not Available (page )
National Bancorp stockholders do not have dissenters' appraisal rights under
Delaware law or any other statute in connection with the merger.
Surrender Of National Bancorp Shares (page )
To receive certificates for your shares of Wells Fargo common stock, you will
need to surrender your National Bancorp share certificates. After the merger is
completed, Wells Fargo's stock transfer agent will send you written
instructions for exchanging your stock certificates. Please do not send in your
certificates until you receive these instructions.
National Bancorp Annual Meeting (page )
National Bancorp will hold its annual meeting of stockholders at 10:00 a.m.,
Anchorage, Alaska time, on Thursday, June 8, 2000, in the Main Office of the
National Bank of Alaska, located at Northern Lights Boulevard and C Street,
Anchorage, Alaska. The purposes of the meeting are to:
1. Vote on the merger agreement.
2. Fix at 25 the number of directors of National Bancorp to be elected and
elect 25 directors.
3. Ratify the appointment of Deloitte & Touche LLP as National Bancorp's
independent public accountants for the year ending December 31, 2000.
4. Act on any other matters that may properly come before the meeting.
If the merger agreement is approved and the merger is completed, proposals 2
and 3, if approved, will be effective only until the merger is completed.
Record Date; Vote Required To Approve Merger (page )
The record date for the annual meeting is April , 2000. You can vote at the
meeting if you owned National Bancorp common stock at the close of business on
that date. On the record date, there were 30,224,177 shares of National Bancorp
common stock outstanding and entitled to vote. You can cast one vote for each
share of National Bancorp common stock that you owned on the record date.
Approval of the merger agreement requires the affirmative vote of a majority
of the outstanding shares of National Bancorp common stock entitled to vote at
the annual meeting. Not voting, or failing to instruct your broker how to vote
shares held for you in the broker's name, will have the same effect as voting
against the merger.
Agreements To Vote For The Merger (page )
At the same time that the merger agreement was signed, Elmer E. Rasmuson and
Edward B. Rasmuson entered into individual support agreements with Wells Fargo.
Under their support agreements, Elmer Rasmuson and Edward Rasmuson have agreed,
among other things, to vote in favor of the merger all shares of National
Bancorp common stock beneficially owned by them at the record date for the
meeting.
At the record date for the meeting, Elmer Rasmuson and Edward Rasmuson
beneficially owned a total of 16,921,262 shares of National Bancorp common
stock, representing approximately 56.0% of the shares of National Bancorp
common stock entitled to vote at the meeting and enough to approve the merger
without the concurrence of any other National Bancorp stockholders.
3
<PAGE>
Merger Requires Regulatory Approval (page )
The Board of Governors of the Federal Reserve System and the Alaska
Department of Commerce and Economic Development must approve the merger before
it can be completed. Wells Fargo has filed applications with the Federal
Reserve Board and the Alaska Department of Commerce and Economic Development.
As of the date of this proxy statement-prospectus, neither agency had acted on
Wells Fargo's application for approval of the merger. Although Wells Fargo
expects that both agencies will approve the merger, it cannot be certain when
or if, or on what terms and conditions, the required approvals will be given.
Other Conditions To Completing The Merger (page )
In addition to the receipt of regulatory approvals, there are a number of
other conditions that must be met before the merger can be completed. These
conditions include:
. approval of the merger agreement by National Bancorp stockholders;
. receipt by National Bancorp of an opinion of counsel concerning the tax
consequences of the merger;
. authorization for listing on the New York and Chicago Stock Exchanges of
the shares of Wells Fargo common stock to be issued in the merger to
National Bancorp stockholders;
. absence of any court or governmental authority order prohibiting the
merger; and
. material compliance by each party with the terms and provisions of the
merger agreement.
Wells Fargo or National Bancorp may waive a condition it is entitled to
assert so long as the law does not require the condition to be met.
Termination Of The Merger Agreement (page )
Wells Fargo and National Bancorp can agree to terminate the merger agreement
at any time without completing the merger. Also, either company can terminate
the merger agreement without the consent of the other under the following
circumstances:
. a court or other governmental authority prohibits the merger;
. the merger is not completed by September 30, 2000, unless the failure to
complete the merger on or before that date is the fault of the company
seeking to terminate; or
. a third party makes a competing bid for National Bancorp that National
Bancorp's board of directors determines under specified conditions to be
superior to the Wells Fargo merger transaction.
Your Rights Will Differ As A Wells Fargo Stockholder (page )
Your rights as a National Bancorp stockholder are currently governed by
Delaware law and National Bancorp's certificate of incorporation and bylaws.
Upon completion of the merger, you will become a Wells Fargo stockholder, and
your rights will be governed by Delaware law and Wells Fargo's restated
certificate of incorporation and bylaws.
Wells Fargo Expects To Use Purchase Accounting (page )
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 National Bancorp. To the extent the total purchase price
exceeds the fair value of the assets acquired and liabilities assumed, Wells
Fargo will record goodwill.
4
<PAGE>
Wells Fargo Is Heavily Regulated (page )
Wells Fargo, its banking subsidiaries and many of its nonbanking subsidiaries
are subject to extensive regulation by a number of federal and state agencies.
This regulation, among other things, may restrict Wells Fargo's ability to
diversify into other areas of financial services, acquire depository
institutions in certain states and pay dividends on its stock. It may also
require Wells Fargo to provide financial support to one or more of its
subsidiary banks, maintain capital balances in excess of those desired by
management and pay higher deposit premiums as a result of the deterioration in
the financial condition of depository institutions in general.
Financial Modernization Will Increase Competition (page )
Bank holding companies that elect to become financial holding companies may
affiliate with securities firms and insurance companies and engage in other
activities that are financial in nature. "Financial in nature" includes:
. securities underwriting, dealing and market making;
. sponsoring mutual funds and investment companies;
. insurance underwriting and agency;
. merchant banking activities; and
. activities that the Federal Reserve Board has determined to be closely
related to banking.
Securities firms and insurance companies that elect to become financial
holding companies may acquire banks and other financial institutions. This may
significantly change the competitive environment in which Wells Fargo and its
subsidiaries conduct business.
Forward-Looking Statements May Prove Inaccurate (page )
This proxy statement-prospectus, including information incorporated by
reference into this document, may contain forward-looking statements about
Wells Fargo and National Bancorp. There are a number of factors that may cause
actual conditions, events or results to differ significantly from those
described in the forward-looking statements. Some of these factors are
described or referenced in "Forward-Looking Statements" on page .
5
<PAGE>
Selected Financial Data
The following financial information is to aid you in your analysis of the
financial aspects of the merger. The Wells Fargo balance sheet data for 1995
through 1999 is derived from Wells Fargo's audited consolidated balance sheets
as of December 31, 1999, 1998, 1997 and 1996 and its unaudited financial
information for 1995. The Wells Fargo income statement data for 1995 through
1999 is derived from Wells Fargo's audited consolidated statement of income for
each of the years in the five-year period ended December 31, 1999. The National
Bancorp data is derived from its audited consolidated financial statements for
1995 through 1999. The information in the table is only a summary and should be
read with the full financial statements and related notes of Wells Fargo and
National Bancorp incorporated by reference into this document. See "Where You
Can Find More Information" on page .
Wells Fargo & Company and Subsidiaries
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31 Years Ended December 31
------------------- --------------------------------------------
2000 1999 1999 1998 1997 1996 1995
------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income..... $ $ 2,266 $ 9,355 $ 8,990 $ 8,648 $ 8,222 $ 5,923
Net income.............. 884 3,747 1,950 2,499 2,228 1,988
Diluted earnings per
share.................. 0.53 2.23 1.17 1.48 1.36 1.62
Cash dividends per
share.................. 0.185 0.785 0.700 0.615 0.525 0.450
Book value per share.... 12.60 13.44 12.35 11.92 11.66 10.27
Total assets............ 201,430 218,102 202,475 185,685 188,633 122,200
Long-term debt.......... 20,363 23,375 19,709 17,335 18,142 16,726
National Bancorp of Alaska, Inc. and Subsidiaries
(dollars in millions, except per share amounts)
<CAPTION>
Three Months Ended
March 31 Years Ended December 31
------------------- --------------------------------------------
2000 1999 1999 1998 1997 1996 1995
------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income..... $ $ 35 $ 145 $ 143 $ 136 $ 130 $ 121
Net income.............. 13 62 55 51 47 41
Diluted earnings per
share.................. 0.42 2.05 1.79 1.63 1.46 1.30
Cash dividends per
share.................. 0.15 0.600 0.575 0.500 0.500 0.430
Book value per share.... 13.89 14.93 13.86 12.85 11.89 10.99
Total assets............ 2,891 3,054 2,976 2,777 2,648 2,451
Long-term debt.......... -- -- -- -- -- --
</TABLE>
Comparative Per Common Share Data
The following table shows comparative per share data for Wells Fargo common
stock on a historical and pro forma combined basis and for National Bancorp
common stock on a historical and pro forma equivalent basis. The information in
the table assumes that Wells Fargo will account for the merger as a purchase.
The pro forma equivalent information for National Bancorp is calculated by
multiplying the pro forma basic and diluted earnings per share, the historical
cash dividends declared per share of Wells Fargo common stock and the pro forma
stockholders' equity per share by the exchange ratio of 0.896303.
6
<PAGE>
You should read the data with the historical financial statements and related
notes of Wells Fargo and National Bancorp. Wells Fargo's and National Bancorp's
historical financial statements are included in documents filed with the SEC.
See "Where You Can Find More Information" on page . Amounts are in U.S.
dollars.
<TABLE>
<CAPTION>
Wells Fargo National Bancorp
-------------------- ---------------------
Pro Forma Pro Forma
Historical Combined Historical Equivalent
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Earnings Per Share
Basic
Three Months Ended March 31,
2000........................... $ $ $ $
Year Ended December 31, 1999.... 2.26 2.26 2.05 2.03
Diluted
Three Months Ended March 31,
2000...........................
Year Ended December 31, 1999.... 2.23 2.23 2.05 2.00
Cash Dividends Declared Per Share
Three Months Ended March 31,
2000...........................
Year Ended December 31, 1999.... 0.785 0.785 0.600 0.704
Book Value Per Share
Three Months Ended March 31,
2000...........................
Year Ended December 31, 1999.... 13.44 13.49 14.93 12.09
</TABLE>
7
<PAGE>
NATIONAL BANCORP ANNUAL MEETING
The board of directors of National Bancorp is soliciting proxies from its
stockholders for use at the annual meeting of National Bancorp stockholders and
at any adjournments of the meeting. This proxy statement-prospectus, together
with the form of proxy, is expected to be mailed to National Bancorp
stockholders on or about May 8, 2000.
Time And Place Of The Meeting
The time and place of the annual meeting of National Bancorp stockholders
are:
Thursday, June 8, 2000
10:00 a.m., Anchorage, Alaska time
Main Office, National Bank of Alaska
Northern Lights and C Street
Anchorage, Alaska 99503
Matters To Be Considered At The Meeting
The annual meeting of National Bancorp stockholders will be held to:
1. Vote on a proposal to approve the Agreement and Plan of Reorganization,
dated as of January 12, 2000, and as amended as of February 15, 2000, by
and between National Bancorp and Wells Fargo. The Agreement and Plan of
Reorganization, as amended, is included in this proxy statement-
prospectus as Appendix A and is referred to in this document as the
"merger agreement." The merger agreement provides for the merger of a
wholly-owned subsidiary of Wells Fargo with National Bancorp upon the
terms and subject to the conditions set forth in the merger agreement.
See "The Merger Agreement."
2. Fix at 25 the number of directors of National Bancorp to be elected and
elect 25 directors.
3. Vote on a proposal to ratify the appointment by National Bancorp's board
of directors of Deloitte & Touche LLP as National Bancorp's independent
public accountants for the year ending December 31, 2000.
4. Act on any other matters that may properly come before the meeting.
If the merger agreement is approved and the merger is completed, proposals 2
and 3, if approved, will be effective only until the merger is completed.
Record Date
National Bancorp's board of directors has established April , 2000 as the
record date for the meeting. Only stockholders of record on that date are
entitled to attend and vote at the meeting or at any adjournment of the
meeting.
Outstanding Shares
On April , 2000, there were 30,224,177 shares of National Bancorp common
stock outstanding and entitled to vote at the meeting. Each outstanding share
is entitled to one vote on each matter presented. Cumulative voting is not
permitted in the election of directors.
Quorum
A quorum consisting of the holders of a majority of the shares of National
Bancorp common stock outstanding at the record date must be present in person
or represented by proxy for the transaction of business at the annual meeting.
Shares of National Bancorp common stock present in person at the meeting that
are not
8
<PAGE>
voted, and shares of National Bancorp common stock for which proxies have been
received but that abstain from voting, are counted in determining whether a
quorum is present. Shares held in street name that have been designated by
brokers on proxy cards as not voted will be counted for purposes of determining
whether a quorum exists.
Vote Required
Proposal 1--Approval of the Merger Agreement. Approval of the merger
agreement requires the affirmative vote of a majority of the shares of National
Bancorp common stock outstanding at the record date.
Proposal 2--Election of Directors. Directors are elected by a plurality of
the shares voted.
Proposal 3--Appointment of Independent Public Accountants. Ratification of
the appointment of Deloitte & Touche LLP requires the affirmative vote of a
majority of the shares present in person or represented by proxy at the
meeting.
Share Ownership
Five Percent Holders. National Bancorp knows of only one person who
beneficially owned more than 5% of its common stock as of the record date for
the annual meeting. The following table sets forth information about this
person and his beneficial ownership of National Bancorp common stock as of the
record date.
<TABLE>
<CAPTION>
Amount and Nature
Address Of Beneficial Ownership Percent of Class
------- ----------------------- ----------------
<S> <C> <C>
Elmer E. Rasmuson................... 15,764,564 52.2%
P.O. Box 100600
Anchorage, Alaska 99510-0600
</TABLE>
Under SEC rules, Mr. Rasmuson is deemed to be the beneficial owner of any
shares as to which he has or shares voting power or investment power or has the
right to obtain beneficial ownership within 60 days after April , 2000.
Included among the shares of National Bancorp common stock reported as
beneficially owned by Mr. Rasmuson are 3,116,640 shares (10.3% of the
outstanding shares) over which Mr. Rasmuson has sole voting and investment
power as trustee of three trusts established for the benefit of his children.
Mr. Rasmuson expressly disclaims beneficial ownership of these shares.
Directors And Executive Officers. At the record date for the meeting,
National Bancorp's directors and executive officers beneficially owned a total
of 2,689,276 shares of National Bancorp common stock, representing
approximately 8.9% of the shares of National Bancorp common stock entitled to
vote at the annual meeting. National Bancorp expects these individuals to vote
in favor of the merger.
Wells Fargo. At the record date, Wells Fargo and its subsidiaries
beneficially owned a total of approximately shares of National Bancorp
common stock, representing approximately % of the shares of National Bancorp
common stock entitled to vote at the annual meeting.
Agreements To Vote For The Merger
Elmer E. Rasmuson and Edward B. Rasmuson, chairman of the board and chief
executive officer of National Bancorp have agreed to vote in favor of the
merger all shares of National Bancorp common stock beneficially owned by them
at the record date for the meeting. At the record date, these individuals
beneficially owned a total of 16,921,262 shares of National Bancorp common
stock, representing approximately 56.0% of the shares of National Bancorp
common stock entitled to vote at the meeting and enough to approve the merger
without the concurrence of any other National Bancorp stockholder. See "The
Merger--Support Agreements."
9
<PAGE>
Voting And Revocation Of Proxies
All shares of National Bancorp common stock represented at the annual 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 as follows:
. ""FOR'' the proposal to approve the merger agreement.
. ""FOR'' each of the director nominees named in this proxy statement-
prospectus.
. ""FOR'' the proposal to ratify the appointment of Deloitte & Touche LLP
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, in either case
bearing a later date, with the corporate secretary of National Bancorp before
or at the annual meeting or (b) voting the shares subject to the proxy in
person at the annual meeting. Attendance at the annual 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 a
majority of the shares of National Bancorp common stock outstanding at the
record date. Because approval of the merger requires the affirmative vote of a
specified percentage of outstanding shares, not voting on the proposal, or
failing to instruct your broker how to vote shares held for you by the broker,
will have the same effect as voting against the proposal.
Solicitation Of Proxies
In addition to solicitation by mail, directors, officers and employees of
National Bancorp and its subsidiaries may solicit proxies from National Bancorp
stockholders, 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. National Bancorp does not anticipate that anyone
will be specifically engaged to solicit proxies or that special compensation
will be paid for that purpose, but National Bancorp reserves the right to do so
should it conclude that such efforts are necessary or advisable.
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.
National Bancorp will bear its own expenses in connection with any solicitation
of proxies for the annual meeting.
Other Matters Considered At The Meeting
If an insufficient number of votes for the merger is received before the
scheduled meeting date, Wells Fargo and National Bancorp may decide to postpone
or adjourn the annual 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.
National Bancorp's board of directors is not aware of any business to be
brought before the annual meeting other than the proposals to approve the
merger, to fix at 25 the number of directors of National Bancorp to be elected
and elect as the directors the nominees named in this proxy statement-
prospectus, and to ratify the appointment of the independent public
accountants. If other matters are properly brought before the annual 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 National Bancorp.
10
<PAGE>
ITEM 1. THE MERGER
Effect Of The Merger
As a result of the merger:
. Wells Fargo will exchange shares of its common stock for shares of
National Bancorp common stock.
. Wells Fargo will acquire all of the outstanding common stock of National
Bancorp, resulting in National Bancorp becoming a wholly-owned
subsidiary of Wells Fargo.
. National Bancorp stockholders will become Wells Fargo stockholders, with
their rights governed by Delaware law and Wells Fargo's restated
certificate of incorporation and bylaws. See "Comparison Of Stockholder
Rights."
Background Of And Reasons For The Merger
Background of the Merger
From time to time over the past several years, management and the board of
directors of National Bancorp have reviewed potential strategic alternatives
for enhancing stockholder value and strengthening the ability of National
Bancorp to provide high-quality financial services to Alaska markets. In
general, these alternatives have centered on programs for achieving growth and
attaining greater diversification of National Bancorp's revenue sources. In
connection with these strategies, the possibility of National Bancorp
affiliating with a larger bank holding company with a similar, community-based
strategic focus has frequently been considered. As a consequence, as part of
National Bancorp's regular and ongoing assessments of its strategic
alternatives, both Elmer E. Rasmuson, the principal stockholder of National
Bancorp, and Edward B. Rasmuson, the chairman and chief executive officer of
National Bancorp, from time to time have engaged in exploratory discussions
with senior executives at various other large regional and superregional bank
holding companies concerning the strategic directions of National Bancorp and
such other companies, and the extent to which any compatibility of such
strategic directions might present opportunities for strategic partnerships or
other business combinations in light of the rapid pace of consolidation and
change in the financial services industry.
In connection with this process, management and the board of directors of
National Bancorp have, on a regular basis, considered a range of possible
alternative strategies for enhancing the interests of National Bancorp and
benefiting its markets and increasing stockholder value. These alternatives
have included remaining independent at roughly the current size of National
Bancorp, seeking to grow through acquisitions of smaller in-market banking
institutions or banking institutions in markets similar to or linked to those
in Alaska, pursuing a merger transaction with similarly sized or similarly
oriented institutions facing similar growth limits in their own markets, or
seeking a strategic partnership with a larger institution. In addition,
recognizing that the market for the stock of National Bancorp was relatively
illiquid for an organization of the size of National Bancorp, due primarily to
the existence of one stockholder (Elmer Rasmuson) who controlled approximately
half of the outstanding shares, one of the strategic goals of the board of
directors was to enhance stockholder liquidity by creating a broader trading
market for the stock held by stockholders of National Bancorp.
Edward Rasmuson was well acquainted with Mr. Richard M. Kovacevich, the
president and chief executive officer of Wells Fargo, each having played a
significant role in national financial-services trade organizations for
numerous years. From time to time during the past several years, Mr. Rasmuson
and Mr. Kovacevich met to discuss national developments in the financial
services industry as well as the effect of these developments on the state of
Alaska. These discussions, which occasionally involved exploratory discussions
concerning the wisdom of a possible merger of National Bancorp and Norwest
Corporation, of which Mr. Kovacevich was chief executive officer, afforded Mr.
Rasmuson increasing familiarity with Norwest Corporation and its businesses and
operating philosophy. When Norwest Corporation merged in late 1998 with the
former Wells Fargo & Company, which was oriented primarily towards the western
United States, including the Pacific Northwest, the attractiveness of a
possible transaction between National Bancorp and Wells Fargo became clearer to
Edward Rasmuson and to Elmer Rasmuson.
11
<PAGE>
In early April 1999, at the initiative of management of National Bancorp,
Edward Rasmuson approached Mr. Kovacevich concerning the concept of merging
National Bancorp and Wells Fargo. They agreed that the concept merited further
consideration from other senior officers of both companies. On May 20, 1999,
Gary Dalton, the chief financial officer of National Bancorp, contacted John
Ganoe, an executive vice president of Wells Fargo, to further the discussions
with regard to the potential interest Wells Fargo had in acquiring National
Bancorp and to discuss in general terms the present acquisition program of
Wells Fargo, the processes by which Wells Fargo made acquisition decisions and
engaged in implementing activities, the information Wells Fargo would need to
consider an acquisition possibility, and a general schedule for the mutual
exchange of information. On June 2, 1999, National Bancorp and Wells Fargo
entered into a confidentiality agreement, and during the ensuing six months
senior officials of National Bancorp and Wells Fargo exchanged various business
information and discussed the respective operations, financial position, and
operating results of the two companies. National Bancorp engaged CIBC World
Markets Corp. in July 1999 to act as its financial advisor in connection with
any transaction with Wells Fargo.
In August 1999, at the request of management of National Bancorp, CIBC World
Markets conducted a review of National Bancorp to assess the various strategic
options then available to National Bancorp. This analysis included a review of
the ownership and market standing of National Bancorp, as well as its strengths
and weaknesses from financial and operating viewpoints as a stand-alone company
and relative to its peer companies. In mid-September 1999, CIBC World Markets
presented to senior management of National Bancorp its conclusions, including
various possible initiatives to enhance the future revenue growth and
competitiveness of National Bancorp.
During October and November 1999, CIBC World Markets continued to review with
management of National Bancorp its assessment of National Bancorp, including
its various assumptions concerning the operations and earnings of National
Bancorp, as well as analyze the financial effects of a merger with Wells Fargo.
CIBC World Markets presented its refined analysis of a possible transaction
with Wells Fargo to senior management of National Bancorp in late November
1999.
Edward Rasmuson and Gary Dalton met with Mr. Kovacevich on December 3, 1999,
and they discussed pricing considerations and general terms of a merger of the
companies. These discussions continued between the two companies for several
days. On December 6, 1999, Wells Fargo proposed a purchase price of $30 for
each share of National Bancorp stock, payable in stock of Wells Fargo.
During the next several days, the National Bancorp management team, with the
assistance of CIBC World Markets, considered further the benefits of a merger
with Wells Fargo and discussed with members of Wells Fargo management the
possible terms of such a merger, the commitment of Wells Fargo to Alaska and
its markets after any merger, and the value of such a merger to the
stockholders and other constituencies of National Bancorp. A due diligence team
from Wells Fargo conducted an on-site review of the books and records of
National Bancorp between December 13, 1999 and December 17, 1999. Also, certain
details of the proposed pricing of a transaction, including the mechanism by
which Wells Fargo stock would be valued for purposes of computing an exchange
ratio, were discussed between senior management of National Bancorp and senior
executives of Wells Fargo. Based upon these discussions, and after consulting
with senior management of National Bancorp and with CIBC World Markets, Elmer
Rasmuson and Edward Rasmuson determined that the proposal merited their
favorable recommendation to the board of directors of National Bancorp.
The board of directors of National Bancorp met on December 21, 1999 in a
special meeting to consider the Wells Fargo proposal. Also present throughout
the special meeting were CIBC World Markets and Duane, Morris & Heckscher LLP,
legal counsel to National Bancorp. At this meeting, Edward Rasmuson and CIBC
World Markets and Duane, Morris and Heckscher provided the board with
presentations which covered strategic alternatives, an overview of the
competitive environment in the financial services industry, financial and legal
analyses of the proposed transaction, an analysis of the fiduciary duties of
the directors under applicable law and consideration of the text of a proposed
nonbinding letter of intent. In addition, CIBC World Markets orally provided
its opinion that, as of such date and based upon and subject to the procedures
12
<PAGE>
followed, assumptions made, matters considered and limitations on the review
undertaken, the proposed consideration to be paid by Wells Fargo to the holders
of National Bancorp common stock was fair from a financial point of view to the
holders of National Bancorp common stock. After extensive discussion on the
part of members of the board, the board of directors unanimously (with one
director not present) approved execution and delivery of a nonbinding letter of
intent calling for the merger of the two companies in exchange for $30 per
share of Wells Fargo stock.
At the conclusion of the board meeting, the letter of intent was executed and
announced by the parties. Thereafter, officers of Wells Fargo continued their
due-diligence review of National Bancorp, officers and representatives of
National Bancorp completed their due-diligence review of Wells Fargo, and legal
counsel negotiated the terms of a definitive merger agreement. Between December
21, 1999 and January 12, 2000, National Bancorp received no expressions of
interest from any other potential acquirors concerning alternative acquisition
proposals. The definitive agreement was presented to the board of directors of
National Bancorp at a special meeting on January 12, 2000, with CIBC World
Markets and Duane, Morris and Heckscher present and addressing financial and
legal considerations, respectively. CIBC World Markets reiterated its opinion
that, as of such date and based upon and subject to the procedures followed,
assumptions made, matters considered and limitations on the review undertaken,
the proposed consideration to be paid by Wells Fargo to the holders of National
Bancorp common stock was fair from a financial point of view to the holders of
National Bancorp common stock. The proposed definitive agreement was then
unanimously approved. The agreement was executed after the meeting.
National Bancorp's Board of Directors' Reasons for the Merger
In reaching its determination to approve and adopt the merger agreement, the
National Bancorp board considered a number of factors, including, without
limitation, the following:
. The National Bancorp board's familiarity with and review of the
business, operations, financial condition and earnings of National
Bancorp on both a historical and a prospective basis.
. The National Bancorp board's knowledge and review, based in part on
presentations by its senior management and financial advisor, of (a) the
business, operations, financial condition and earnings of Wells Fargo on
both a historical and a prospective stand-alone basis and its long-term
business strategies and direction, (b) the historical stock price of
Wells Fargo, and (c) the pro forma financial condition, earnings, and
prospects of Wells Fargo following the acquisition of National Bancorp.
. The respective financial presentations of CIBC World Markets to the
directors of National Bancorp on December 21, 1999 and January 12, 2000,
including the opinions of CIBC World Markets rendered to the board of
directors of National Bancorp on December 21, 1999 and January 12, 2000
to the effect that, as of each of such dates and based upon and subject
to the procedures followed, assumptions made, matters considered and
limitations on the review undertaken, the proposed consideration to be
paid by Wells Fargo to the holders of National Bancorp common stock was
fair from a financial point of view to the holders of National Bancorp
common stock.
. The terms of the merger agreement.
. The general impact that the merger is expected to have on various
constituencies of National Bancorp, including its customers, employees,
and communities.
. The fact that Wells Fargo would be expected to offer to existing
customers of National Bancorp a significantly more extensive range of
financial products and services than National Bancorp currently offered.
. The National Bancorp board's assessment of the current and prospective
economic and competitive environment facing the financial services
industry generally, and National Bancorp in particular, including the
continued rapid consolidation in the industry, the increasing importance
of operational scale in remaining competitive and supporting the
necessary investments in technology, and the
13
<PAGE>
benefits of geographic and product diversification. In this regard, the
board of directors of National Bancorp noted that Wells Fargo was the
seventh largest bank holding company in the United States based on total
assets and would likely possess the financial resources and economies of
scale necessary to compete more effectively in the financial services
industry in the future. The board of directors of National Bancorp also
noted that the franchise of Wells Fargo was geographically diversified,
with over 2,922 banking stores located in twenty-one states. Finally,
the board of directors of National Bancorp noted that Wells Fargo was
considered to be an industry leader in the development and
implementation of technology and that this expertise would be extremely
useful in the operations of National Bancorp.
. Review by the board of directors of National Bancorp of the strategic
alternatives available to National Bancorp for enhancing stockholder
value.
. The scarcity of attractive bank and thrift acquisition candidates in the
existing markets of National Bancorp.
. The high cost of investment in technology which could improve the
efficiency and, accordingly, the competitive posture of National
Bancorp.
. The current and prospective economic, regulatory and competitive
environment facing financial institutions, including National Bancorp.
. The expectation that the merger will be tax-free for federal income tax
purposes to National Bancorp and its stockholders.
. The much greater liquidity in trading markets for stock of Wells Fargo
as compared with the limited liquidity of National Bancorp stock, and
the belief of the National Bancorp board that the terms of the merger
agreement are attractive in that the agreement allows stockholders of
National Bancorp to become stockholders of the seventh largest bank
holding company in the United States on the basis of assets as of
December 31, 1999.
. The anticipated operating synergies and opportunities for revenue
enhancements expected to be available to National Bancorp following the
merger (in which the stockholders of National Bancorp will participate
as a result of becoming stockholders of Wells Fargo), and the
significant experience of the senior management of Wells Fargo in the
consummation of significant acquisition transactions, both of banks and
of other financial services companies. In particular, the board of
directors of National Bancorp noted that Norwest and, following its
merger with the former Wells Fargo, the new Wells Fargo had successfully
acquired and integrated a large number of other banks during the 1990s
and, in the board's judgment, had a reputation for being a careful and
selective acquirer of other institutions in non-dilutive transactions
and for treating fairly the employees of institutions that Wells Fargo
has acquired.
. The fact that Wells Fargo and National Bancorp share many cultural
traits, including a history of community service, dedication to smaller
and lower-growth markets along with larger, more vibrant markets,
loyalty to their historical markets during periods of fluctuations in
economic fortunes, and concern for employee welfare.
. The high regard that Mr. Edward Rasmuson has for the ability and
personal integrity of Mr. Kovacevich and the other senior executives of
Wells Fargo he met during the negotiations.
. The stated desire of Wells Fargo that National Bancorp be operated
following the merger with the bulk of its existing management in place,
thus providing continuity to the customers and the communities that
National Bancorp serves.
. The extensive job positions available throughout the existing service
area of Wells Fargo on a present and prospective basis that could be
open to qualified employees of National Bancorp, and the stated
intention of Wells Fargo to work in good faith with management of
National Bank of Alaska to provide jobs elsewhere in the Wells Fargo
system for those that might not have them available in Alaska after the
merger.
14
<PAGE>
. The stated intention of Wells Fargo to employ the same charitable and
civic involvement policies and practices in Alaska that are currently in
place in all of Wells Fargo's other banking regions. This would
generally maintain the current level of charitable and civic involvement
of National Bank of Alaska and its employees within Alaska, and preserve
in the management of National Bancorp substantial discretion over
charitable and community welfare initiatives by National Bank of Alaska
within Alaska, including the disposition of excess bank property, and
the future of valuable and culturally significant artwork, artifacts and
collectibles owned by National Bank of Alaska which historically have
benefited the people of Alaska and their cultural heritages.
In view of the wide variety of material factors considered in connection with
its evaluation of the merger, the board of directors of National Bancorp did
not find it practicable to, and did not, quantify or otherwise attempt to
assign any relative weight to the various factors considered. In addition,
individual directors may have given differing weights to different factors.
Throughout its deliberations, the board of directors of National Bancorp
received the advice of special counsel and its financial advisor.
For the reasons described above, the board of directors of National Bancorp
approved the merger agreement and believes the merger is fair to, and is in the
best interest of, its stockholders. Accordingly, the board of directors of
National Bancorp unanimously recommends that holders of National Bancorp common
stock vote "for" adoption of the merger agreement.
Opinion Of National Bancorp's Financial Advisor
CIBC World Markets was retained by National Bancorp as its financial advisor
in connection with the merger. CIBC World Markets is an internationally
recognized investment banking firm and was selected by National Bancorp based
on CIBC World Markets' qualifications, experience, expertise and reputation and
because of its familiarity with National Bancorp. As part of its investment
banking business, CIBC World Markets is regularly engaged in the valuation of
businesses and securities in connection with mergers and acquisitions,
negotiated underwritings, competitive biddings, secondary distributions of
listed and unlisted securities, private placements and valuations for corporate
purposes.
In connection with CIBC World Markets' engagement, National Bancorp's board
of directors requested that CIBC World Markets evaluate the fairness, from a
financial point of view, to the holders of shares of National Bancorp common
stock of the consideration to be paid by Wells Fargo pursuant to the merger
agreement. On January 12, 2000, CIBC World Markets rendered to National
Bancorp's board of directors its oral opinion to the effect that, as of such
date and subject to certain assumptions, limitations and other matters stated
therein, the consideration to be paid by Wells Fargo was fair, from a financial
point of view, to the holders of shares of National Bancorp common stock. CIBC
World Markets subsequently confirmed its oral opinion, by delivery of a written
opinion dated January 12, 2000. CIBC World Markets has reconfirmed its January
12, 2000 opinion by delivering to National Bancorp a written opinion dated the
date of this proxy statement-prospectus. In preparing its opinion dated as of
the date of this proxy statement-prospectus, CIBC World Markets updated
selected analyses that it had performed in connection with its January 12, 2000
opinion and reviewed the assumptions on which those analyses were based and the
factors considered in connection with those analyses.
A copy of CIBC World Markets' opinion dated the date of this proxy statement-
prospectus, which sets forth, among other things, assumptions made, procedures
followed, matters considered and limitations on the review undertaken, is
attached to this proxy statement-prospectus as Appendix B and is incorporated
herein by reference. National Bancorp stockholders are urged to read this
opinion in its entirety. The CIBC World Markets opinion is directed to National
Bancorp's board of directors and addresses only the fairness, from a financial
point of view, of the consideration paid to the holders of shares of common
stock of National Bancorp, does not address any other aspect of the merger or
any related transaction and does not constitute an opinion or a recommendation
as to how any National Bancorp stockholder should vote at the National Bancorp
meeting. The summary of the CIBC World Markets opinion set forth herein is
qualified in its entirety by reference to the full text of such opinion.
15
<PAGE>
In arriving at its opinion, CIBC World Markets has reviewed, among other
things:
. the merger agreement;
. the agreement and plan of merger set forth in Exhibit A to the merger
agreement;
. audited consolidated financial statements and management's discussion
and analysis of the financial condition and results of operation for
each of Wells Fargo and National Bancorp for the three fiscal years
ended December 31, 1998;
. unaudited consolidated financial statements and management's analysis
and discussion of the financial condition and results of operations for
each of Wells Fargo and National Bancorp for the nine months ended
September 30, 1999;
. certain internal financial analyses, budgets, projections and forecasts
for National Bancorp;
. certain other publicly available business and financial information
relating to Wells Fargo and National Bancorp;
. the views of senior management of Wells Fargo and National Bancorp of
the past and current business operations, results thereof, financial
condition and future prospects of their respective companies;
. a comparison of certain financial information for Wells Fargo and
National Bancorp with similar information for certain other companies
considered comparable to these respective companies;
. the financial terms of certain recent business combinations in the
banking industry;
. the pro forma effect of the merger on Wells Fargo based on certain
assumptions and analyses provided by Wells Fargo and National Bancorp;
. the current market environment generally and the banking environment in
particular; and
. such other information, financial studies, analyses and investigations
and financial, economic and market criteria as CIBC World Markets
considered appropriate in the circumstances.
In preparing its opinion, CIBC World Markets relied, without independent
verification, upon the accuracy and completeness of the financial information,
analyses and other information furnished to CIBC World Markets for the purposes
of its opinion, including information relating to assets and liabilities,
contingent or otherwise. CIBC World Markets has also relied upon the management
of National Bancorp as to the reasonableness and achievability of the financial
and operating forecasts and projections provided to CIBC World Markets. In that
regard, CIBC World Markets has assumed, with National Bancorp's consent, that
such forecasts, projections and estimates have been reasonably prepared and
reflect the best currently available estimates and judgments of the management
of National Bancorp. CIBC World Markets has not made an independent evaluation
or appraisal of the assets and liabilities of Wells Fargo or any of its
respective subsidiaries and CIBC World Markets has not been furnished with any
such evaluation or appraisal. Furthermore, the opinion does not constitute any
such evaluation or appraisal. CIBC World Markets is not an expert in the
evaluation of allowances for loan losses or liabilities (contingent or
otherwise) and CIBC World Markets has neither made an independent evaluation of
the adequacy of the allowances for loan losses of Wells Fargo or National
Bancorp nor reviewed any individual loan credit files.
In addition, CIBC World Markets assumed, based on the advice of National
Bancorp, that the merger will be accounted for as a purchase under generally
accepted accounting principles.
The preparation of a fairness opinion is a complex process involving various
determinations as to the most appropriate and relevant methods of financial
analysis and the applications of these methods to the particular circumstances
being evaluated, and therefore is not readily susceptible to summary
description. In arriving at its opinion, CIBC World Markets made qualitative
judgments as to the significance and relevance of each analysis and the factors
considered by it. Accordingly, CIBC World Markets believes that its analyses
must be considered as a whole and that selecting a portion of its analyses
without considering all factors and analyses would create an incomplete view of
the analyses and processes underlying its opinion. In its analyses, CIBC
16
<PAGE>
World Markets relied upon numerous assumptions made by National Bancorp with
respect to industry performance, general business and economic conditions, and
other matters, many of which are beyond the control of National Bancorp. No
company or transaction used as a comparison in the analyses is identical to
National Bancorp or Wells Fargo or the merger, nor is an evaluation of the
results of such analyses entirely mathematical; rather, such analyses involve
complex considerations and judgments concerning financial and operating
characteristics and other factors that could affect the acquisition, public
trading or other values of the companies' business segments or transactions
being analyzed. Additionally, estimates of the value of businesses or
securities do not purport to be appraisals or necessarily reflective of the
prices at which such businesses or securities actually may be sold. Because
such estimates are inherently subject to uncertainty, being based upon numerous
factors or events beyond the control of National Bancorp and Wells Fargo, none
of National Bancorp, Wells Fargo, CIBC World Markets or any other person
assumes responsibility if future results or actual values are materially
different from these forecasts or assumptions.
CIBC World Markets' opinions were necessarily based upon financial, economic,
market and other conditions as they existed and could be evaluated on the dates
of the opinions. CIBC World Markets did not express any opinion as to the
actual value of the Wells Fargo common stock when issued to the stockholders of
National Bancorp or the prices at which the Wells Fargo common stock will trade
after the merger.
The CIBC World Markets opinion and the information provided by CIBC World
Markets to National Bancorp's board of directors were among a number of factors
taken into consideration by National Bancorp's board of directors in making its
determination to enter into the merger agreement. Consequently, the CIBC World
Markets opinion and the analyses summarized below should not be regarded as
determinative of the views of the entire National Bancorp board or the
management of National Bancorp.
The following is a summary of the material analyses performed by CIBC World
Markets, which CIBC World Markets presented and reviewed with National
Bancorp's board of directors on January 12, 2000, in connection with its oral
opinion as of such date. It does not purport to be a complete description of
the analyses performed by CIBC World Markets. Certain of these summaries
include information presented in tabular format. In order to fully understand
these financial analyses, the tables must be read together with the
accompanying narrative. The tables alone do not constitute a complete
description of the applicable financial analyses.
Unless otherwise noted, all multiples and ratios in the following analyses
were calculated using stock market data as of January 6, 2000 and financial
data as of or for the twelve months ended September 30, 1999. All estimates of
future earnings for companies other than National Bancorp were based on
consensus earnings per share estimates published by the Institutional Brokers
Estimate Service, or IBES, a data service that monitors and publishes a
compilation of earnings estimates produced by selected research analysts on
publicly traded companies.
Transaction Overview. CIBC World Markets reviewed the terms of the merger and
related transactions. CIBC World Markets noted that based on the transaction
price of $30.00 per share of National Bancorp common stock, the implied value
of the transaction will be $906.5 million. CIBC World Markets further noted
that National Bancorp stockholders would receive approximately 23.6 million
shares of Wells Fargo common stock based on the January 6, 2000 closing price
of Wells Fargo's common stock. CIBC World Markets also analyzed the range of
possible exchange ratios noting that it ranged from 0.611x to 0.916x based on
the 52 week high and low trading prices of Wells Fargo's common stock, with a
median of 0.742x and an average of 0.737x based on trading prices during that
period.
In addition, CIBC World Markets reviewed the trading history of National
Bancorp common stock over the prior 52-week period and noted that the shares
had traded in a price range of $24.13 to $39.75, with approximately 78% of the
trading volume during this period at prices of $30 or less. CIBC World Markets
also noted that the closing price of National Bancorp's common stock on January
6, 2000 was $27.50 per share.
17
<PAGE>
Comparable Companies Analysis: CIBC World Markets compared certain financial
information for National Bancorp with corresponding financial information for a
group of bank holding companies with assets between $1 billion and $7 billion
and based in the western region of the United States (the "Western Bank Peer
Group"). For this purpose, the western region is comprised of Arkansas, Alaska,
Arizona, California, Colorado, Hawaii, Iowa, Idaho, Montana, North Dakota,
South Dakota, New Mexico, Nevada, Oregon, Utah, Washington, and Wyoming. The
Western Bank Peer Group consisted of:
. Cathay Bancorp, Inc. . Greater Bay Bancorp
. City National Corporation . Imperial Bancorp
. Community First Bankshares, Inc. . Mid-State Bancshares
. CPB Inc. . Pacific Capital Bancorp
. CVB Financial Corp. . West Coast Bancorp
. Frontier Financial Corporation . Westamerica Bancorporation
. GBC Bancorp
The results of this analysis are summarized in the following table:
<TABLE>
<CAPTION>
Western Banks
National --------------------
Bancorp Median High Low
-------- ------ ----- -----
<S> <C> <C> <C> <C>
Price/Last Twelve Months EPS................... 13.5x 14.2x 21.4x 8.7x
Price/1999 Estimated EPS....................... 12.9x 13.9x 17.3x 8.3x
Price/2000 Estimated EPS....................... 13.0x 12.3x 15.2x 7.3x
Price/Book Value Per Share..................... 1.9x 2.3x 3.6x 1.6x
Price/Tangible Book Value Per Share............ 1.9x 2.6x 3.6x 1.6x
Dividend Yield................................. 2.18% 1.99% 3.83% 0.00%
Equity/Assets.................................. 14.54% 8.08% 11.35% 5.26%
Tier 1 Leverage Ratio.......................... 14.76% 8.12% 11.82% 6.95%
Last Twelve Months Return on Average Assets.... 2.12% 1.53% 2.13% 1.01%
Last Twelve Months Return on Average Equity.... 14.50% 17.77% 21.81% 10.44%
Net Interest Margin............................ 5.74% 5.25% 5.86% 4.27%
Efficiency Ratio............................... 54.18% 53.76% 64.12% 37.18%
Nonperforming Assets/(Loans & Other Real Estate
Owned)........................................ 1.08% 1.52% 14.04% 0.58%
Reserves/Nonperforming Assets.................. 140.8% 101.8% 345.0% 15.0%
</TABLE>
18
<PAGE>
CIBC World Markets then applied the median multiples derived from the
analysis of the Western Bank Peer Group to corresponding financial data for
National Bancorp. The results of this analysis are summarized in the following
table:
<TABLE>
<CAPTION>
Western Imputed
Banks Valuation
Median Per Share
------- ---------
<S> <C> <C>
Price/Last Twelve Months EPS.................................. 14.2x $29.00
Price/1999 Estimated EPS...................................... 13.9x $29.84
Price/2000 Estimated EPS...................................... 12.3x $25.88
Price/Book Value Per Share.................................... 2.3x $34.48
Price/Tangible Book Value Per Share........................... 2.6x $37.24
Price/Total Deposits.......................................... 23.22% $16.05
</TABLE>
CIBC World Markets observed that this analysis indicated a reference range of
$16.05 to $37.24 per share of National Bancorp common stock. CIBC World Markets
noted that the implied per share value of the merger of $30.00 was within this
reference range.
CIBC World Markets also derived a reference range for National Bancorp common
stock by applying a takeover premium of 9.28% to the range of imputed values
calculated as described above using median multiples for the Western Bank Peer
Group. The 9.28% premium represented the premium over the trading price five
days prior to announcement of the only Western bank transaction described below
under "Precedent Transactions Analysis" which involved a publicly-traded
acquired company.
The results of this analysis are shown in the table below:
<TABLE>
<CAPTION>
Imputed Valuation
Per Share
-----------------
<S> <C>
Price/Last Twelve Months EPS.................................. $37.24
Price/1999 Estimated EPS...................................... $38.32
Price/2000 Estimated EPS...................................... $33.23
Price/Book Value Per Share.................................... $44.27
Price/Tangible Book Value Per Share........................... $47.82
Price/Total Deposits.......................................... $20.61
</TABLE>
CIBC World Markets observed that this analysis indicated a reference range of
$20.61 to $47.82 per share of National Bancorp common stock. CIBC World Markets
noted that the implied per share value of the merger of $30.00 was within this
reference range.
CIBC World Markets also compared certain financial information for Wells
Fargo with corresponding financial information for a group of bank holding
companies consisting of the 15 largest bank holding companies in the United
States (the "Wells Fargo Bank Peer Group"). The Wells Fargo Bank Peer Group
consisted of:
. Citigroup, Inc. . U.S. Bancorp
. SunTrust Banks, Inc. . J.P. Morgan & Company,
Incorporated
. Bank of America Corporation
. First Union Corporation
. National City Corporation
. FleetBoston Financial
. The Chase Manhattan Corporation
. PNC Bank Corp.
. KeyCorp
. Firstar Corporation
. Bank One Corporation
. Wachovia Corporation
19
<PAGE>
The results of this analysis are summarized in the following table:
<TABLE>
<CAPTION>
Wells Fargo Bank
Peer Group
---------------------
Wells Fargo Median High Low
----------- ------ ------ -----
<S> <C> <C> <C> <C>
Price/Last Twelve Months EPS............ 25.1x 11.8x 35.4x 8.6x
Price/1999 Estimated EPS................ 17.2x 11.0x 19.4x 8.9x
Price/Book Value Per Share.............. 2.9x 2.3x 4.1x 1.5x
Price/Tangible Book Value Per Share..... 5.0x 2.8x 4.7x 1.9x
Dividend Yield.......................... 2.08% 3.62% 5.69% 1.03%
Equity/Assets........................... 10.71% 7.67% 9.02% 4.71%
Tier 1 Leverage Ratio................... 7.22% 7.18% 8.93% 4.80%
Last Twelve Months Return on Average
Assets................................. 1.29% 1.36% 1.96% 0.61%
Last Twelve Months Return on Average
Equity................................. 12.28% 18.66% 23.92% 9.68%
Net Interest Margin..................... 5.63% 3.99% 4.82% 0.82%
Efficiency Ratio........................ 57.05% 55.67% 68.49% 46.66%
Nonperforming Assets/(Loans & Other Real
Estate Owned).......................... 1.64% 1.48% 4.87% 0.95%
Reserves/Nonperforming Assets........... 134.42% 94.96% 148.70% 56.41%
</TABLE>
Precedent Transactions Analysis: CIBC World Markets compared the terms of the
merger to the financial terms, to the extent publicly available, of selected
mergers and acquisitions in the banking industry. For this purpose, CIBC World
Markets analyzed two groups of transactions, each involving acquisitions
announced since January 1, 1998 of banks with assets between $1 billion and $7
billion. The first group consisted of five acquisitions of banks in the western
United States; the second group consisted of 20 acquisitions throughout the
United States (including the five western acquisitions). For each of these
transactions CIBC World Markets calculated, among other things, the deal price
as a multiple of the acquired company's book value, tangible book value and
last twelve months earnings and as a premium to deposits and to core deposits.
Due to the recent significant decline in bank stocks generally, CIBC World
Markets adjusted the applicable transaction value by a percentage based on the
decline in the relative stock price performance of the Western Bank Peer Group
since the respective announcement dates of each transaction.
The results of this analysis are summarized in the following table:
<TABLE>
<CAPTION>
Western Transactions
-------------------------------------
Median Implied Median
Multiple High Low Value
-------- ----- ----- --------------
<S> <C> <C> <C> <C>
Deal Price/Book Value................. 1.8x 5.1x 1.3x $26.41
Deal Price/Tangible Book Value........ 1.6x 5.1x 1.3x $22.77
Deal Price/Last Twelve Months EPS..... 17.4x 44.0x 13.3x $35.54
Deal Price/Deposits................... 15.87% 42.42% 12.53% $10.96
Franchise Premium/Core Deposits....... 8.10% 36.61% 3.65% $19.31
<CAPTION>
United States Transactions
-------------------------------------
Median Implied Median
Multiple High Low Value
-------- ----- ----- --------------
<S> <C> <C> <C> <C>
Deal Price/Book Value................. 2.4x 4.8x 1.9x $35.40
Deal Price/Tangible Book Value........ 2.5x 4.8x 2.1x $36.40
Deal Price/Last Twelve Months EPS..... 21.9x 44.0x 11.6x $44.69
Deal Price/Deposits................... 27.27% 44.34% 19.64% $18.85
Franchise Premium/Core Deposits....... 26.37% 46.66% 14.31% $30.07
</TABLE>
CIBC World Markets observed that these analyses indicated a reference range
for the National Bancorp common stock of $10.96 to $35.54 per share, based on
the western region precedent transactions, and $18.85 to
20
<PAGE>
$44.69 per share based on the United States precedent transactions. CIBC World
Markets noted that the implied per share value of the merger of $30.00 was
within these reference ranges.
Discounted Cash Flow Analysis: CIBC World Markets also performed a discounted
cash flow ("DCF") analysis, to calculate the value of National Bancorp common
stock implied by the projected dividend stream over a five year period and the
theoretical value of a share of National Bancorp common stock at the end of the
five year period. Projected net income and dividends paid over this period were
based on management projections furnished to CIBC World Markets. For this
analysis CIBC World Markets used discount rates of 10.0%, 11.73% (representing
National Bancorp's estimated weighted average cost of capital) and 12.0%, and
terminal multiples of 14x, 16x and 18x, which CIBC World Markets viewed as
appropriate for a company with National Bancorp's risk profile.
The results of this analysis are summarized in the following table:
Terminal Value as a Multiple of 2004 Projected Earnings
<TABLE>
<CAPTION>
Discount Rate 14.00x 16.00x 18.00x
------------- ------ ------ ------
<S> <C> <C> <C>
10.00% $29.47 $33.16 $36.85
11.73% $26.97 $30.32 $33.68
12.00% $26.60 $29.91 $33.22
</TABLE>
CIBC World Markets observed that this analysis indicated a reference range
for the National Bancorp common stock of $26.97 to $33.68 per share, based on
the 11.73% discount rate. CIBC World Markets noted that the implied per share
value of the merger of $30.00 was within this reference range.
For the services of CIBC World Markets as financial advisor to National
Bancorp in connection with the merger, pursuant to an engagement letter dated
December 6, 1999, National Bancorp has agreed to pay CIBC World Markets an
engagement fee of $50,000 and a fairness opinion fee equal to $1.0 million.
National Bancorp has also agreed to reimburse CIBC World Markets for its
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of its counsel, and to indemnify CIBC World Markets against
certain liabilities, including certain liabilities arising under the federal
securities laws. CIBC World Markets has provided certain investment banking and
advisory services to National Bancorp from time to time, for which it has
received, and will receive, customary compensation.
CIBC World Markets has advised National Bancorp that, in the ordinary course
of its business as a full-service securities firm, CIBC World Markets may from
time to time effect transactions, for its own account or for the account of
customers, and hold positions in securities or options on securities of
National Bancorp and Wells Fargo.
Additional Interests Of National Bancorp Management
National Bancorp's directors and executive officers have interests in the
merger that are in addition to their interests as stockholders of National
Bancorp generally. National Bancorp's board of directors was aware of these
interests and considered them, among other things, when it approved the merger
agreement.
Employment And Non-Compete Agreement
In connection with the merger, National Bancorp, National Bank of Alaska and
Wells Fargo entered into an employment and non-compete agreement with Edward B.
Rasmuson, chairman of the board and chief executive officer of National
Bancorp, relating to the employment of and non-competition and non-solicitation
by Mr. Rasmuson following the merger.
Employment Provisions. Under the employment provisions of the agreement,
National Bancorp will employ Mr. Rasmuson in the position of chairman of the
board of National Bank of Alaska. In consideration of
21
<PAGE>
his employment services, Mr. Rasmuson will receive an annual salary of $460,000
and may be eligible for specified incentive compensation. The term of Mr.
Rasmuson's employment will commence on the day immediately following the
closing date of the merger and will expire 18 months later unless earlier
terminated as a result of:
. Mr. Rasmuson's death;
. receipt by Mr. Rasmuson of notice of termination from National Bancorp,
National Bank of Alaska or Wells Fargo arising from:
. the failure by Mr. Rasmuson to substantially perform his duties,
after demand for substantial performance is delivered by National
Bank of Alaska;
. the commission of a fraudulent or dishonest act by Mr. Rasmuson; or
. upon Mr. Rasmuson's violation of National Bank of Alaska's or Wells
Fargo's policies or the Wells Fargo Code of Ethics and Business
Conduct; or
. Mr. Rasmuson's voluntary resignation.
Non-Compete And Non-Solicitation Provisions. Mr. Rasmuson has agreed that he
will not, by himself or through associates, agents, employees or others,
directly or indirectly, do any of the following within the state of Alaska:
. engage in the commercial banking or thrift business;
. aid or assist anyone in engaging in or entering into the commercial
banking or thrift business;
. attempt to divert any business of National Bancorp, National Bank of
Alaska or Wells Fargo that National Bancorp, National Bank of Alaska or
Wells Fargo has a reasonable expectation of obtaining by soliciting,
contacting or communicating with any customers or potential customers of
National Bancorp, National Bank of Alaska or Wells Fargo;
. communicate to or use for the benefit of any person, any of the
confidential information, trade or business secrets used by National
Bancorp, National Bank of Alaska or Wells Fargo nor disclose the
proprietary methods of conducting the business of National Bancorp,
National Bank of Alaska or Wells Fargo;
. reestablish or reopen any business substantially the same as all or any
part of the business of National Bancorp, National Bank of Alaska or
Wells Fargo;
. in any manner become interested directly or indirectly, as employee,
owner, partner, stockholder, director, officer or otherwise, in a
commercial banking or thrift business, provided, however, that for
purposes of this provision, the term "stockholder" does not include any
investment in an organization where Mr. Rasmuson owns less than 5% of
the stock issued and outstanding;
. solicit, directly or indirectly, an employee of National Bancorp,
National Bank of Alaska or Wells Fargo for the purpose of encouraging
that employee to leave said employment.
The foregoing restrictions will be in effect for one of the following
periods:
. if Mr. Rasmuson's employment terminates prior to the expiration of his
employment term, the restrictions will begin on the date of such
termination and will continue for a period ending on the third
anniversary of the effective date of his employment term; or
. if Mr. Rasmuson's employment terminates at or after expiration of his
employment term, the restrictions will begin on the date of termination
and will continue for 18 months thereafter.
22
<PAGE>
Indemnification
Wells Fargo has agreed to ensure that all rights to indemnification and all
limitations of liability existing in National Bancorp's certificate of
incorporation or bylaws in favor of the present and former directors and
officers of National Bancorp with respect to claims arising from (a) facts or
events that occurred before the effective time of the merger or (b) the merger
agreement or any of the transactions contemplated thereby will survive the
merger and continue in full force and effect.
Dissenters' Rights
National Bancorp stockholders are not entitled to dissenters' appraisal
rights under Delaware law or any other statute in connection with the merger.
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 National Bancorp common stock a form of letter of transmittal,
together with instructions for the exchange of the holder's National Bancorp
stock certificates for a certificate representing Wells Fargo common stock.
National Bancorp stockholders 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 National Bancorp common stock until after the certificates have been
surrendered for exchange.
When the exchange agent receives a surrendered certificate or certificates
from a stockholder, together with a properly completed letter of transmittal,
it will issue and mail to the stockholder a certificate representing the number
of whole shares of Wells Fargo common stock to which the stockholder is
entitled, plus cash for the amount 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 National Bancorp
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 National Bancorp. If, after completion of the merger, certificates for
National Bancorp 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, National Bancorp, the exchange agent or any other person
will be liable to any former holder of National Bancorp 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 Board of Governors of the
Federal Reserve System. The approval of the Federal Reserve Board is required
because Wells Fargo is a bank holding company registered under the Bank Holding
Company Act.
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Wells Fargo has filed an application with the Federal Reserve Board
requesting approval of the merger. Wells Fargo has provided copies of the
application to the U.S. Department of Justice and other governmental agencies.
The application describes the terms of the merger, the parties involved, the
activities to be conducted by Wells Fargo as a result of the merger, the source
of funds for the merger and provides other financial and managerial
information. In evaluating the application, the Federal Reserve Board will
consider the financial and managerial resources and prospects of the existing
and combined institutions and the benefits that may be expected from the
merger. Among other things, the Federal Reserve Board will evaluate the capital
adequacy of Wells Fargo before and after completion of the merger.
The Federal Reserve Board may deny an application if it determines that the
transaction would result in a monopoly or be in furtherance of any combination
or conspiracy to monopolize or attempt to monopolize a given business activity
in any part of the United States. The Federal Reserve Board may also deny an
application if it determines that the transaction would substantially lessen
competition or would tend to create a monopoly in any section of the country,
or would in any other manner result in a restraint of trade, unless the Federal
Reserve Board finds that the anti-competitive effects of the transaction are
clearly outweighed by the probable effects of the transaction in providing
benefits to the public.
Applicable federal law provides for the publication of notice and public
comment on the application filed by Wells Fargo with the Federal Reserve Board.
Under current law, the merger may not be completed until the Federal Reserve
Board has approved the merger and a period of 30 days, or fewer if prescribed
by the Federal Reserve Board with the concurrence of the Attorney General of
the United States, following the date of approval of the merger by the Federal
Reserve Board, has expired. As of the date of this proxy statement-prospectus,
the Federal Reserve Board had not acted on Wells Fargo's application.
The Alaska Department of Commerce and Economic Development must also approve
the merger before the merger can be completed. The approval of the Department
of Commerce and Economic Development is required because, as a result of the
merger, Wells Fargo, a bank holding company whose principal office and place of
business are outside the state of Alaska and whose operations are principally
conducted outside the state of Alaska, will acquire National Bancorp, a bank
holding company whose principal office and place of business are in the state
of Alaska. In deciding whether to approve the merger, the Department will
consider the benefits to the public, the preservation of a competitive banking
industry, and the maintenance of a safe and sound banking industry. Wells Fargo
has filed an application with the Department requesting approval of the merger.
As of the date of this proxy statement-prospectus, the Department had not acted
on the application.
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 National
Bancorp stockholders is fair. Regulatory approval does not constitute an
endorsement or recommendation of the merger.
Wells Fargo and National Bancorp are not aware of any governmental approvals
or requirements under banking laws and regulations whose receipt or
satisfaction are necessary for the merger to become effective other than those
described above. Wells Fargo and National Bancorp 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 annual meeting.
The merger cannot be completed unless all necessary regulatory approvals are
granted and all statutory waiting periods thereafter have expired. In addition,
Wells Fargo may elect not to complete the merger if any condition relating to
National Bancorp under which any regulatory approval is granted is unreasonably
burdensome to Wells Fargo. See "The Merger Agreement--Conditions To The Merger"
and "--Termination Of The Merger Agreement."
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Effect Of Merger On National Bancorp's Employee Benefit Plans
Each person who is an employee of National Bancorp or a National Bancorp
subsidiary (other than a person who accepts, prior to the effective date of the
merger, employment with Norwest Financial, Inc.) as of the effective date of
the merger will be eligible for the employee welfare and retirement plans of
Wells Fargo specified in the merger agreement, subject to any eligibility
requirements applicable to such plans. Eligible employees will enter the
specified plans not later than the later of (a) July 1, 2000 or (b) the first
day of the calendar month that begins after the month in which the effective
date of the merger occurs.
Each person who is an employee of National Bancorp or a National Bancorp
subsidiary as of the effective date of the merger and who accepts employment
with Norwest Financial, Inc. prior to the effective date of the merger will be
eligible for participation in the payroll practices, employee welfare benefit
plans and employee retirement benefit plans of Norwest Financial specified in
the merger agreement, subject to any eligibility requirements applicable to
such plans. Eligible employees will enter the specified plans on the effective
date of the merger or as soon thereafter as administratively feasible.
U.S. Federal Income Tax Consequences Of The Merger
The following discussion is a summary of the material U.S. federal income tax
consequences of the merger to the existing holders of National Bancorp common
stock. National Bancorp's obligation to complete the merger is subject to the
receipt by it of an opinion from its counsel, Duane, Morris & Heckscher LLP,
that, among other things, the merger will qualify as a reorganization under
section 368 of the Internal Revenue Code of 1986, as amended.
The discussion below and the opinion of Duane, Morris & Heckscher LLP are
based upon the Internal Revenue Code, Treasury Regulations thereunder and
administrative rulings and court decisions as of the date of this proxy
statement-prospectus. The opinion of Duane, Morris & Heckscher LLP is based on
the facts, representations and assumptions set forth or referred to in the
opinion, including representations contained in certificates executed by
officers of National Bancorp and Wells Fargo. The opinion is included as an
exhibit in the registration statement of which this proxy statement-prospectus
is a part. No rulings have been, or will be, requested from the Internal
Revenue Service as to the federal income tax consequences of the merger. In
addition, the opinion of counsel is not binding on the Internal Revenue
Service, and there can be no assurance that the Internal Revenue Service will
not take a position contrary to one or more positions reflected in the opinion
or that the positions reflected in the opinion will be upheld by the courts if
challenged by the Internal Revenue Service. Future legislative, judicial or
administrative changes or interpretations could alter or modify the statements
and conclusions set forth below, and any such changes or interpretations could
be retroactive and could affect the tax consequences to the holders of National
Bancorp common stock.
The anticipated material U.S. federal income tax consequences of the merger
to National Bancorp stockholders are:
. the merger will qualify as a "reorganization" under Section 368(a)(1) of
the Internal Revenue Code of 1986, as amended;
. no gain or loss will be recognized by a holder of National Bancorp
common stock upon the exchange of National Bancorp common stock solely
for Wells Fargo common stock;
. the basis of the Wells Fargo common stock received by a holder of
National Bancorp common stock pursuant to the merger, including any
fractional share of Wells Fargo Stock to which that stockholder may be
entitled, will be the same as the basis of the National Bancorp common
stock exchanged therefor;
. the holding period of the Wells Fargo common stock received by a holder
of National Bancorp common stock pursuant to the merger, including any
fractional share of Wells Fargo common stock to which that stockholder
may be entitled, will include the holding period of the National Bancorp
common stock exchanged therefor, provided the National Bancorp common
stock is held as a capital asset by the stockholder at the effective
time of the merger; and
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. a holder of National Bancorp common stock who receives cash instead of a
fractional share of Wells Fargo common stock will recognize gain or loss
equal to the difference between the cash received and the stockholder's
basis in that fractional share, and that gain or loss will be capital
gain or loss if the fractional share would have been a capital asset in
the hands of the stockholder.
The discussion above, and the opinion of Duane, Morris & Heckscher LLP, do
not purport to deal with all tax aspects of federal income taxation that may
affect particular holders of National Bancorp common stock in light of their
individual circumstances, and are not intended for holders subject to special
treatment under the tax law (including dealers in securities, financial
institutions, insurance companies, tax-exempt organizations, non-United States
persons, holders who hold their stock as part of a hedge, appreciated financial
position, straddle or conversion transaction, holders who do not hold their
stock as capital assets and holders who acquired their stock pursuant to the
exercise of options or otherwise as compensation). In addition, the discussion
and the opinion do not consider the effect of any applicable state, local or
foreign tax laws.
Each holder of National Bancorp common stock is urged to consult its tax
advisor as to the particular tax consequences to the stockholder of the merger,
including the applicability and effect of any state, local or foreign tax laws,
and of changes in applicable tax laws.
Support Agreements
At the same time that the merger agreement was signed, Elmer E. Rasmuson and
Edward B. Rasmuson entered into individual support agreements with Wells Fargo.
Under the support agreements, these individuals agreed, among other things:
. to vote in favor of the merger all shares of National Bancorp common
stock owned by them at the record date for any meeting of stockholders
of National Bancorp called to consider and vote on the merger;
. not to sell or transfer any shares of National Bancorp common stock held
by them except (a) pursuant to the merger, (b) with Wells Fargo's prior
written consent or (c) by operation of law;
. not to solicit any inquiries or proposals or enter into any discussions,
negotiations or agreements relating to a business combination, merger or
consolidation of National Bancorp with any person other than Wells
Fargo; and
. not to vote in favor of any business combination, merger or
consolidation of National Bancorp with any person other than Wells
Fargo.
Nothing in their support agreements, however, will limit or otherwise
interfere with their actions as directors or officers of National Bancorp.
At the record date for the annual meeting, Elmer E. Rasmuson and Edward B.
Rasmuson beneficially owned a total of 16,921,262 shares of National Bancorp
common stock, representing approximately 56.0% of the shares of National
Bancorp common stock entitled to vote at the annual meeting and enough to
approve the merger without the concurrence of any other National Bancorp
stockholder.
Resale Of Wells Fargo Common Stock Issued In The Merger
The Wells Fargo common stock issued in the merger will be freely transferable
under the Securities Act of 1933, except for shares issued to National Bancorp
stockholders who are considered to be "affiliates" of National Bancorp 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 National Bancorp 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
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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.
National Bancorp 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
National Bancorp 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 National Bancorp.
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. The
listing of the Wells Fargo common stock to be issued in the merger is a
condition to National Bancorp's obligation to complete the merger.
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 National
Bancorp. 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 National
Bancorp'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 MERGER AGREEMENT
The following is a summary of certain provisions of the merger agreement, as
amended. A copy of the merger agreement, as amended, is attached to this proxy
statement-prospectus as Appendix A and is incorporated by reference into this
proxy statement-prospectus. When used in this proxy statement-prospectus, the
term "merger agreement" refers to the merger agreement, as amended. This
summary is qualified in its entirety by reference to the full text of the
merger agreement. National Bancorp stockholders are encouraged to read the
merger agreement carefully and in its entirety. Parenthetical references are to
the relevant paragraph or paragraphs of the merger agreement.
Basic Plan Of Reorganization
The merger agreement provides that a wholly-owned subsidiary of Wells Fargo
will merge by statutory merger with and into National Bancorp, with National
Bancorp as the surviving corporation. (paragraph 1(a))
Exchange Of Wells Fargo Shares For National Bancorp Shares
Under the merger agreement, each share of National Bancorp common stock
outstanding immediately before the merger is to be converted into the right to
receive the number of shares of Wells Fargo common stock determined by dividing
$30 by the "Wells Fargo Measurement Price." The Wells Fargo Measurement Price
is defined as the average of the closing prices of a share of Wells Fargo
common stock as reported on the consolidated tape of the New York Stock
Exchange during the period of 15 trading days ending on March 15, 2000.
(paragraph 1(a))
Under this formula, the Wells Fargo Measurement Price is equal to $33.470833.
As a result, each share of National Bancorp common stock outstanding
immediately before the merger will be converted into 0.896303 of a share of
Wells Fargo common stock. That fraction of a share is referred to as the
"exchange ratio."
No Adjustments For Price Fluctuations
No adjustment will be made to the number of shares of Wells Fargo common
stock you will receive for your shares of National Bancorp common stock to
reflect fluctuations in the price of Wells Fargo common stock occurring after
March 15, 2000.
Adjustments For Changes In Capitalization
If before the merger is completed the outstanding shares of Wells Fargo are
increased or decreased in number or changed into or exchanged for a different
number or kind of shares or securities as a result of a reorganization,
reclassification, recapitalization, stock dividend, stock split or other
similar change in capitalization, then an appropriate and proportionate
adjustment will be made to the exchange ratio. (paragraph 1(b))
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
instead 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 consolidated tape of the New York Stock Exchange for each of
the five trading days ending on the date immediately preceding the annual
meeting. (paragraph 1(c)) For example, if you own 100 shares of National
Bancorp common stock, you will receive 89 whole shares of Wells Fargo common
stock and cash for the fractional share of 0.6303.
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Effective Date And Time Of The Merger
The effective date of the merger will be the day on which a certificate of
merger is filed with and accepted by the Delaware Secretary of State. The
merger agreement provides that a certificate of merger will be filed within 5
business days after the satisfaction or waiver of all conditions to the merger
or on such other date as Wells Fargo and National Bancorp may agree. See
"Conditions To The Merger." The effective time of the merger will be 11:59
p.m., Wilmington, Delaware time, on the effective date of the merger.
(paragraph 1(d))
Revised Merger Structure
Subject to the conditions described below, Wells Fargo has the right under
the merger agreement to revise the structure of the proposed transaction so
that:
. National Bancorp is merged into a subsidiary of Wells Fargo; or
. National Bancorp is merged directly into Wells Fargo.
Wells Fargo may revise the structure of the transaction only if the revised
structure does not (a) change the amount or kind of consideration to be
received by National Bancorp stockholders in the merger, (b) adversely affect
the tax treatment of the merger to National Bancorp stockholders, or (c) impede
or delay the completion of the merger. Assuming these conditions are met, Wells
Fargo may revise the structure of the transaction without notice to you.
Representations And Warranties
The merger agreement contains various representations and warranties by Wells
Fargo and National Bancorp concerning, among other things:
. corporate organization, standing and authority
. subsidiaries
. capitalization
. corporate authority and action
. compliance of the merger agreement with, and the need for consent or
approval under:
. applicable law and contracts
. organizational documents
. governmental and third party consents and approvals
. financial statements and filings with the SEC and other governmental
agencies
. absence of material changes in business since December 31, 1998
. contracts and commitments
. absence of undisclosed litigation
. employee benefit plans
. absence of undisclosed environmental liabilities
. absence of undisclosed broker's fees (paragraphs 2 and 3)
Certain Covenants
The merger agreement has a number of covenants and agreements that govern the
actions of National Bancorp and Wells Fargo pending completion of the merger.
Some of the covenants and agreements are summarized below.
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Conduct Of Business
National Bancorp
Except as otherwise permitted or required by the merger agreement, or as
otherwise agreed to in writing by Wells Fargo, National Bancorp and each
National Bancorp subsidiary will:
. maintain its corporate existence in good standing;
. maintain the general character of its business;
. conduct its business in the ordinary and usual manner;
. extend credit in accordance with existing lending policies and provide
Wells Fargo access to its loan files, except that it will not, without
the prior written consent of Wells Fargo, which consent will be deemed
waived under certain specified circumstances:
. make any new loan or modify, restructure or renew any existing loan
(except pursuant to commitments made prior the merger agreement) to
any borrower if the amount of the resulting loan, when aggregated
with all other loans or extensions of credit to such person (other
than consumer-purpose loans and loans that are for less than
$100,000), would exceed $2,500,000; or
. make any extensions of credit aggregating in excess of $1,000,000 to
a person or entity that was not a borrower as of the date of the
merger agreement or that has not been a borrower within 12 months
prior to the date of the merger agreement. (paragraph 4(a))
Except as otherwise permitted or required by the merger agreement, or as
otherwise agreed to in writing by Wells Fargo, until the effective date of the
merger, National Bancorp and each National Bancorp subsidiary will not:
. amend or otherwise change its certificate of incorporation or
association or bylaws;
. 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 a lien or other encumbrance any of its
properties, except in the ordinary course of business;
. subject to specified exceptions, enter into any material agreement,
contract or commitment that
. is for a term of one year or more and is in excess of $100,000,
. contains any covenant that limits the ability of National Bancorp or
any of its subsidiaries to compete in any line of business or with
any person or that involves any restriction of the geographical area
in which, or method by which, National Bancorp or any of its
subsidiaries may carry on its business,
. is related to data processing, ATMs or related technology and is in
excess of $100,000, or
. is in excess of $250,000;
. make any investments except U.S. Treasury and federal agency securities
made by National Bancorp's bank subsidiaries in the ordinary course of
business for terms of up to three years and in amounts of $1,000,000 or
less, provided that such bank subsidiaries may make investments in U.S.
Treasury and federal agency securities for terms of up to one year and
in amounts of $50,000,000 or less to accommodate the collateral
requirements of secured depositors;
. amend or terminate any employee benefit plans except as required by law
or the terms of the merger agreement;
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. make any contributions to any specified employee benefit plan except as
required by the terms of the plan in effect as of the date of the merger
agreement, provided that
. National Bancorp's 401(k) profit sharing plan may be amended to
permit, and National Bancorp may make, a profit sharing contribution
for the year 1999 not to exceed $7,600,000 and a profit sharing
contribution for the year 2000 not to exceed an aggregate annualized
sum of $7,600,000, which year 2000 sum will be prorated for the
period between January 1, 2000 and the effective date of the merger,
and
. such profit sharing contribution may be calculated in accordance
with past practice and without regard to the effect of the accruals
and reserves required to be taken by National Bancorp under the
merger agreement;
. declare, set aside, make or pay any dividend or other distribution with
respect to its capital stock except any dividend declared by a National
Bancorp subsidiary's board of directors in accordance with applicable
law and regulation, provided that
. National Bancorp's board of directors may declare and pay cash
dividends out of the net earnings of National Bancorp between the
date of the merger agreement and the effective date of the merger in
accordance with applicable law and regulation and in accordance with
past practice in the an amount not to exceed an annualized rate of
$0.60 per share,
. National Bancorp stockholders will be entitled to have a cash
dividend declared on National Bancorp common stock in the event the
merger does not close prior to the record date for the cash
dividend, if any, payable on Wells Fargo common stock in the
calendar quarter in which the merger closes but not in the event the
merger closes before such record date (the intention being that the
holders of National Bancorp common stock not receive more than one
dividend or fail to receive one dividend for any single calendar
quarter on their shares of National Bancorp common stock or shares
of Wells Fargo common stock received in the merger, as the case may
be), and
. If Wells Fargo's board of directors declares a dividend (other than
its regular cash dividend) on Wells Fargo common stock with an ex-
dividend date after the date on which the Federal Reserve Board
approves the merger but before the effective date of the merger,
National Bancorp's board of directors may declare and pay cash
dividends on National Bancorp common stock in any amount per share
equal to the fair market value per share of Wells Fargo common stock
of such dividend multiplied by the number of shares of Wells Fargo
common stock each share of National Bancorp common stock is
exchanged for in the merger;
. redeem, purchase or otherwise acquire any capital stock of National
Bancorp;
. increase the compensation of any officers, directors or executive
employees, except pursuant to existing compensation plans, agreements
and practices;
. sell or otherwise dispose of any shares of capital stock of any National
Bancorp subsidiary; or
. sell or otherwise dispose of any of its assets or properties other than
in the ordinary course of business. (paragraphs 4(a) and (b))
Wells Fargo
Wells Fargo has agreed to maintain its corporate existence in good standing
and 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 National Bancorp or any National Bancorp subsidiary nor any director,
officer, representative or agent of National Bancorp or any National Bancorp
subsidiary may, directly or indirectly, solicit, authorize the
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solicitation of or except to the extent National Bancorp's board of directors
concludes in good faith, after taking into account the written advice of its
outside counsel, that to fail to do so could reasonably be determined to
violate its fiduciary obligations under applicable law, enter into any
discussions with any entity or group (other than Wells Fargo) concerning any
offer or possible offer to
. purchase its common stock, any security convertible into its common
stock, or any other equity security of National Bancorp or any of its
subsidiaries;
. make a tender or exchange offer for any shares of its common stock or
other equity security of National Bancorp or any of its subsidiaries;
. purchase, lease or otherwise acquire the assets of National Bancorp or
any of its subsidiaries except in the ordinary course of business; or
. merge, consolidate or otherwise combine with National Bancorp or any of
its subsidiaries.
National Bancorp and each of its subsidiaries, as applicable, has also agreed
to promptly inform Wells Fargo if any such entity or group makes an offer or
inquiry concerning any of the foregoing. (paragraph 4(h))
Year 2000 Compliance
National Bancorp will comply with the Year 2000 project management process as
set forth in the May 5, 1997 Federal Financial Institutions Examination Council
(FFIEC) Interagency Statement on the Year 2000 and subsequent guidance
documents. National Bancorp will not rely on the completion of the merger to
satisfy its FFIEC requirements. (paragraph 4(p))
Other Covenants
The merger 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 and Chicago
Stock Exchanges of the shares of Wells Fargo common stock to be issued in the
merger. In addition, National Bancorp 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 National Bancorp's business after
the merger and (b) use its commercially reasonable efforts to deliver to Wells
Fargo prior to completion of the merger signed representations substantially in
the form attached as Exhibit B to the merger agreement from each executive
officer, director or stockholder of National Bancorp who may reasonably be
deemed an "affiliate" of National Bancorp within the meaning of such term as
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 Issued In The Merger."
Conditions To The Merger
Under the merger 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 stockholder, regulatory and
listing approval, and the receipt by National Bancorp of a favorable tax
opinion and a fairness opinion from CIBC World Markets. (paragraphs 6 and 7)
See "The Merger--Opinion Of National Bancorp's Financial Advisor" and "--U.S.
Federal Income Tax Consequences Of The Merger."
The obligations of the parties are also subject to the continued material
accuracy of the other party's representations and warranties, the material
performance by the other party of its obligations under the merger agreement,
and, subject to certain exceptions, the absence of any changes that have had or
might be reasonably expected to have a material adverse effect on National
Bancorp or Wells Fargo. Certain conditions to the merger may be waived by the
party seeking to assert the condition. (paragraphs 6 and 7)
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Termination Of The Merger Agreement
Termination by Mutual Consent
Wells Fargo and National Bancorp can agree to terminate the merger agreement
at any time before completion of the merger. (paragraph 9(a)(i))
Termination by Either Wells Fargo or National Bancorp
Either Wells Fargo or National Bancorp can terminate the merger agreement
without the consent of the other if any of the following occurs:
. The merger has not been completed by September 30, 2000, unless the
failure to complete the merger is due to the failure of the party
seeking to terminate to perform or observe in all material respects the
covenants and agreements to be performed or observed by the party.
(paragraph 9(a)(ii))
. A court or governmental authority of competent jurisdiction has issued a
final order permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by the merger agreement. (paragraph
9(a)(iii))
Either Wells Fargo or National Bancorp also may terminate the merger
agreement if the board of directors of National Bancorp in good faith
determines that a Takeover Proposal (defined below) constitutes a Superior
Proposal (defined below), provided that National Bancorp may not terminate the
merger agreement in such event unless National Bancorp has not breached its
non-solicitation covenant in the merger agreement. (paragraphs 9(a)(iv))
For purposes of this provision:
. ""Takeover Proposal" means a bona fide proposal or offer by a person to
make a tender or exchange offer, or to engage in a merger, consolidation
or other business combination involving National Bancorp or to acquire
in any manner a substantial equity interest in, or all or substantially
all of the assets of, National Bancorp.
. ""Superior Proposal" means a Takeover Proposal with terms that National
Bancorp's board of directors determines in good faith, after taking into
account the advice of its financial advisor, to be more favorable to
National Bancorp and its stockholders than the transactions contemplated
by the merger agreement. (paragraph 9(a)(v))
Termination by Wells Fargo
Wells Fargo may terminate the merger agreement if (a) National Bancorp's
board of directors fails to recommend approval of the merger agreement or
withdraws or modifies in a manner materially adverse to Wells Fargo its
approval or recommendation of approval of the merger agreement; (b) after an
agreement to engage in or the occurrence of an Acquisition Event (defined
below) or after a third party shall have made a proposal to National Bancorp or
its stockholders to engage in an Acquisition Event, the merger agreement is not
approved by National Bancorp stockholders at the meeting required to be called
under the merger agreement; or (c) a meeting of National Bancorp stockholders
to approve the merger agreement is not held prior to May 15, 2000 and National
Bancorp has failed to comply with its obligations to call and cause to be held
such meeting in the manner provided in the merger agreement. (paragraph
9(a)(v))
For purposes of this provision, an "Acquisition Event" means any of the
following: (a) a merger, consolidation or similar transaction involving
National Bancorp or its bank subsidiary or any successor to National Bancorp or
National Bank of Alaska, (b) a purchase, lease or other acquisition in one or a
series of related transactions of assets of National Bancorp or any of its
subsidiaries representing 25% or more of the consolidated assets of National
Bancorp and its subsidiaries or (c) a purchase or other acquisition (including
by way of merger, consolidation, share exchange or any similar transaction) in
one or a series of related
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transactions of beneficial ownership of securities representing 25% or more of
the voting power of National Bancorp or National Bank of Alaska in each case
with or by a person or entity other than Wells Fargo or an affiliate of Wells
Fargo. (paragraph 9(a)(v))
Effect Of Termination
Generally, if either party terminates the merger 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 merger
agreement governing confidential information and expenses incurred in
connection with the merger continue in effect after termination of the merger
agreement. (paragraph 9(b))
Waiver And Amendment
Either Wells Fargo or National Bancorp 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 merger
agreement. (paragraph 16)
Wells Fargo and National Bancorp can amend the merger agreement at any time
before the merger is completed; however, the merger agreement prohibits them
from amending the merger agreement after National Bancorp stockholders approve
the merger if the amendment would change in a manner adverse to National
Bancorp stockholders the consideration to be received by National Bancorp
stockholders in the merger. (paragraph 17)
Expenses
Wells Fargo and National Bancorp 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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INFORMATION ABOUT WELLS FARGO
General
Wells Fargo is a diversified financial services company. Through its
subsidiaries and affiliates, Wells Fargo provides retail, commercial, real
estate 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 March 31, 2000, Wells Fargo had consolidated total assets of $
billion, consolidated total deposits of $ billion and stockholders' equity
of $ billion. Based on assets at March 31, 2000, Wells Fargo was the th
largest commercial banking organization in the United States.
Wells Fargo expands its business in part by acquiring banking institutions
and other companies engaged in activities closely related to banking. Wells
Fargo continues to explore opportunities to acquire banking institutions and
other companies permitted by the Bank Holding Company Act of 1956. Discussions
are continually being carried on related to such acquisitions. It is not
presently known whether, or on what terms, such discussions will result in
further acquisitions. It is the policy of Wells Fargo not to comment on such
discussions or possible acquisitions until a definitive agreement with respect
thereto has been signed.
Wells Fargo is a legal entity separate and distinct from its banking and
nonbanking subsidiaries. As a result, the right of Wells Fargo--and thus the
right of Wells Fargo's creditors--to participate in any distribution of assets
or earnings of any subsidiary, other than in its capacity as a creditor of such
subsidiary, is subject to the prior payment of claims of creditors of such
subsidiary. The principal sources of Wells Fargo's revenues are dividends and
fees from its subsidiaries. See "Regulation And Supervision Of Wells Fargo--
Dividend Restrictions" for a discussion of the restrictions on the subsidiary
banks' ability to pay dividends to Wells Fargo.
Wells Fargo's executive offices are located at 420 Montgomery Street, San
Francisco, California 94163, and its telephone number is (800) 411-4932.
Management And Additional Information
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 for the year ended December 31, 1999. Wells
Fargo's annual report on Form 10-K is incorporated by reference into this proxy
statement-prospectus. National Bancorp stockholders 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 below under "Where
You Can Find More Information."
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
securities firms 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.
Effective March 13, 2000, securities firms and insurance companies that elect
to become financial holding companies may acquire banks and other financial
institutions. This may significantly change the competitive
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environment in which Wells Fargo and its subsidiaries conduct business. See
"Financial Modernization" below. The financial services industry is also likely
to become 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.
Information On Wells Fargo's Web Site
Information on the Internet web site of Wells Fargo or any subsidiary of
Wells Fargo is not part of this proxy statement-prospectus, and you should not
rely on that information in deciding whether to approve the merger unless that
information is also in this document or in a document that is incorporated by
reference into this proxy statement-prospectus.
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REGULATION AND SUPERVISION OF WELLS FARGO
To the extent that the following information describes statutory and
regulatory provisions, it is qualified in its entirety by reference to the full
text of those provisions. Also, such statutes, regulations and policies are
continually under review by Congress and state legislatures and federal and
state regulatory agencies. A change in statutes, regulations or regulatory
policies applicable to Wells Fargo could have a material effect on the business
of Wells Fargo.
Introduction
Wells Fargo, its banking subsidiaries and many of its nonbanking 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 not for the protection of security holders.
As discussed in more detail below, this regulatory environment, among other
things, may restrict Wells Fargo's ability to diversify into certain areas of
financial services, acquire depository institutions in certain states and pay
dividends on its capital stock. It may also require Wells Fargo to provide
financial support to one or more of its banking subsidiaries, maintain capital
balances in excess of those desired by management and pay higher deposit
insurance premiums as a result of the deterioration in the financial condition
of depository institutions in general.
Additional information about the regulation and supervision of Wells Fargo is
contained in Wells Fargo's annual and quarterly reports filed with the
Securities and Exchange Commission (SEC). See "Where You Can Find More
Information."
Regulatory Agencies
Bank Holding Company
Wells Fargo & Company, as a bank holding company, is subject to regulation
under the Bank Holding Company Act of 1956 and to inspection, examination and
supervision by the Board of Governors of the Federal Reserve System (Federal
Reserve Board) under the Bank Holding Company Act. As of March 13, 2000, Wells
Fargo became a financial holding company pursuant to the Bank Holding Company.
Subsidiary Banks
Wells Fargo's national banking subsidiaries are subject to regulation and
examination primarily by the Office of the Comptroller of the Currency (OCC)
and secondarily by the Federal Reserve Board and the Federal Deposit Insurance
Corporation (FDIC). Wells Fargo's state-chartered banking subsidiaries are
subject to primary federal regulation and examination by the FDIC or the
Federal Reserve Board and, in addition, are regulated and examined by banking
departments of the states where they are chartered.
Nonbank Subsidiaries
Many of Wells Fargo's nonbank subsidiaries also are subject to regulation by
the Federal Reserve Board and other applicable federal and state agencies.
Wells Fargo's brokerage subsidiaries are regulated 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.
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Bank Holding Company Activities
"Financial in Nature" Requirement
As a bank holding company that has elected also to become a financial holding
company pursuant to the Bank Holding Company Act, Wells Fargo may affiliate
with securities firms and insurance companies and engage in other activities
that are financial in nature or are incidental or complementary to activities
that are financial in nature. "Financial in nature" activities include
securities underwriting, dealing and market making, sponsoring mutual funds and
investment companies, insurance underwriting and agency, merchant banking, and
activities that the Federal Reserve Board has determined to be so closely
related to banking or managing or controlling banks as to be a proper incident
thereto. A bank holding company that is not also a financial holding company is
limited to engaging in banking and such other activities as determined by the
Federal Reserve Board to be so closely related to banking or managing or
controlling banks as to be a proper incident thereto.
No Federal Reserve Board approval is required for Wells Fargo to acquire a
company (other than a bank holding company, bank or savings association)
engaged in activities that are financial in nature or incidental to activities
that are financial in nature, as determined by the Federal Reserve Board. Prior
Federal Reserve Board approval is required before Wells Fargo may acquire the
beneficial ownership or control of more than 5% of the voting shares or
substantially all of the assets of a bank holding company, bank or savings
association.
If any subsidiary bank of Wells Fargo ceases to be "well capitalized" or
"well managed" under applicable regulatory standards, the Federal Reserve Board
may, among other actions, order Wells Fargo to divest the subsidiary bank.
Alternatively, Wells Fargo may elect to conform its activities to those
permissible for a bank holding company that is not also a financial holding
company. If any subsidiary bank of Wells Fargo receives a rating under the
Community Reinvestment Act of 1977 of less than satisfactory, Wells Fargo will
be prohibited from engaging in new activities or acquiring companies other than
bank holding companies, banks or savings associations.
Interstate Banking
Under the Riegle-Neal Interstate Banking and Branching Act (Riegle-Neal Act),
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 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 Riegle-Neal Act also authorizes banks to merge across state lines,
thereby creating interstate branches. States may opt out of the interstate
merger authority provided by the Riegle-Neal Act and, by doing so, prohibit
interstate mergers in the state. 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 Riegle-Neal Act. Banks are also permitted to
acquire and to establish de novo branches in other states where authorized
under the laws of those states.
Regulatory Approval
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 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.
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Dividend Restrictions
Wells Fargo & Company is a legal entity separate and distinct from its
subsidiary banks 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 statutory provisions
and regulations limit the amount of dividends that Wells Fargo's bank
subsidiaries may pay without regulatory approval. Dividends payable by a
national bank are limited to the lesser of the bank's undivided profits and the
bank's retained net income for the current year plus its retained net income
for the preceding two years (less any required transfers to capital surplus) up
to the date of any dividend declaration in the current calendar year. Wells
Fargo's state-chartered subsidiary banks also are subject to state regulations
that limit dividends.
Before Wells Fargo Bank, National Association can declare dividends in 2000
without the prior approval of the OCC, it must have net income of approximately
$500 million plus an amount equal to or greater than the dividends declared in
2000. Because it is not expected to meet this requirement, Wells Fargo Bank,
National Association will likely be required to obtain the prior approval of
the OCC before it declares any dividends in 2000.
Federal bank regulatory agencies have the authority to prohibit Wells Fargo's
subsidiary banks from engaging in unsafe or unsound practices in conducting
their businesses. The payment of dividends, depending on the financial
condition of the bank in question, could be deemed an unsafe or unsound
practice. The ability of Wells Fargo's subsidiary banks to pay dividends in the
future is currently influenced, and could be further influenced, by bank
regulatory policies and capital guidelines.
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 these
subsidiaries to Wells Fargo and its nonbanking subsidiaries, including
affiliates, whether in the form of loans and other extensions of credit,
investments and asset purchases, or as other transactions involving the
transfer of value from a subsidiary to an affiliate or for the benefit of an
affiliate. Unless an exemption applies, these transactions by a banking
subsidiary with a single affiliate are limited to 10% of the subsidiary bank's
capital and surplus and, with respect to all covered transactions with
affiliates in the aggregate, to 20% of the subsidiary bank's capital and
surplus. Moreover, loans and extensions of credit to affiliates generally are
required to be secured in specified amounts. A bank's transactions with its
nonbank affiliates are also generally required to be on arm's length terms.
Source of Strength Doctrine
Under current Federal Reserve Board policy, Wells Fargo 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 could be required at times when Wells Fargo might
not have the resources to provide it. In addition, the OCC may order the pro
rata assessment of Wells Fargo if the capital of one of its national bank
subsidiaries were to become impaired. If Wells Fargo failed to pay the
assessment within three months, the OCC could order the sale of its stock in
the national bank subsidiary to cover the deficiency.
Capital loans from Wells Fargo to any of its subsidiary banks are subordinate
in right of payment to deposits and certain other indebtedness of the
subsidiary bank. In the event of Wells Fargo's bankruptcy, any commitment by
Wells Fargo 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
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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 Wells Fargo, with respect to any
extensions of credit they have made to such insured depository institution.
Liability of Commonly Controlled Institutions
All of Wells Fargo's banks are insured by the FDIC. FDIC-insured depository
institutions can be held liable for any loss incurred, or reasonably expected
to be incurred, by the FDIC due to the default of an FDIC-insured depository
institution controlled by the same bank holding company, or for any assistance
provided by the FDIC to an FDIC-insured depository institution controlled by
the same bank holding company that is in danger of default. "Default" means
generally the appointment of a conservator or receiver. "In danger of default"
means generally the existence of certain conditions indicating that a default
is likely to occur in the absence of regulatory assistance.
Capital Requirements
General
Wells Fargo is subject to risk-based capital requirements and guidelines
imposed by the Federal Reserve Board. These are substantially similar to the
capital requirements and guidelines imposed by the OCC and the FDIC on the
depository institutions under their jurisdictions. For this purpose, a
depository institution's or holding company's assets, and some of its specified
off-balance sheet commitments and obligations, are assigned to various risk
categories. A depository institution's or holding company's capital, in turn,
is classified in one of three tiers, depending on type:
<TABLE>
<CAPTION>
Supplementary ("Tier 2") Market Risk ("Tier 3")
Core ("Tier 1") Capital Capital Capital
----------------------- ------------------------ ----------------------
<S> <C> <C>
. common equity among other items: . qualifying unsecured
subordinated debt
. retained earnings . perpetual preferred stock
not meeting the Tier 1
definition
. qualifying noncumulative . qualifying mandatory
perpetual preferred stock convertible securities
. a limited amount of . qualifying subordinated
qualifying cumulative debt
perpetual preferred stock
at the holding company
level
. minority interests in . allowances for loan and
equity accounts of lease losses, subject to
consolidated subsidiaries limitations
. less goodwill, most
intangible assets and
certain other assets
</TABLE>
Wells Fargo, like other bank holding companies, currently is required to
maintain Tier 1 capital and "total capital" (the sum of Tier 1, Tier 2 and Tier
3 capital) equal to at least 4% and 8%, respectively, of its total risk-
weighted assets (including various off-balance-sheet items, such as standby
letters of credit). For a holding company to be considered "well capitalized"
for regulatory purposes, its Tier 1 and total capital ratios must be 6% and 10%
on a risk-adjusted basis, respectively. At March 31, 2000, Wells Fargo met both
requirements, with Tier 1 and total capital equal to % and % of its
respective total risk-weighted assets.
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Federal Reserve Board, FDIC and OCC rules require Wells Fargo to incorporate
market and interest rate risk components into its risk-based capital standards.
Under these market risk requirements, capital is allocated to support the
amount of market risk related to a financial institution's ongoing trading
activities.
The Federal Reserve Board also requires bank holding companies to maintain a
minimum "leverage ratio" (Tier 1 capital to adjusted total assets) of 3% if the
holding company has the highest regulatory rating and meets other requirements,
or of 3% plus an additional "cushion" of at least 100 to 200 basis points (one
to two percentage points) if the holding company does not meet these
requirements. Wells Fargo's leverage ratio at March 31, 2000 was %.
The Federal Reserve Board may set capital requirements higher than the
minimums described above for holding companies whose circumstances warrant it.
For example, holding companies experiencing or anticipating significant growth
may be expected to maintain capital positions substantially above the minimum
supervisory levels without significant reliance on intangible assets. The
Federal Reserve Board has also indicated that it will consider a "tangible Tier
1 capital leverage ratio" (deducting all intangibles) and other indications of
capital strength in evaluating proposals for expansion or new activities.
Wells Fargo's banking subsidiaries are subject to similar risk-based and
leverage capital requirements adopted by its applicable federal banking agency.
Wells Fargo's management believes that each of Wells Fargo's subsidiary banks
meet all capital requirements to which they are subject.
Failure to meet capital requirements could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to restrictions on its business, which are described under "--Federal
Deposit Insurance Corporation Improvement Act of 1991."
Federal Deposit Insurance Corporation Improvement Act of 1991
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the
FDICIA), among other things, identifies five capital categories for insured
depository institutions: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized. It requires U.S. federal bank regulatory agencies to
implement systems for "prompt corrective action" for insured depository
institutions that do not meet minimum capital requirements based on these
categories. The FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions, depending on the category in
which an institution is classified. Unless a bank or thrift is well
capitalized, it is subject to restrictions on its ability to offer brokered
deposits and on other aspects of its operations. The FDICIA generally prohibits
a bank from paying any dividend or making any capital distribution or paying
any management fee to its holding company if the bank would thereafter be
undercapitalized. An undercapitalized bank or thrift must develop a capital
restoration plan, and its parent holding company must guarantee the bank's or
thrift's compliance with the plan up to the lesser of 5% of the bank's or
thrift's assets at the time it became undercapitalized and the amount needed to
comply with the plan.
As of March 31, 2000, Wells Fargo's management believes that each of its
significant bank subsidiaries was well capitalized, based on the prompt
corrective action ratios and guidelines described above. A bank's capital
category is determined solely for the purpose of applying the OCC's (or the
FDIC's) prompt corrective action regulations, and the capital category may not
constitute an accurate representation of the bank's overall financial condition
or prospects for other purposes.
Deposit Insurance Assessments
Through the Bank Insurance Fund (BIF), the FDIC insures the deposits of Wells
Fargo's depository institution subsidiaries up to prescribed limits for each
depositor. 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
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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.
The BIF assessment rate currently ranges from zero to 27 cents per $100 of
domestic deposits. The FDIC may increase or decrease the assessment rate
schedule on a semi-annual 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 for 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. The
FDIC established the FICO assessment rates effective for the second quarter of
2000 at approximately $.021 per $100 annually for BIF-assessable deposits. The
FICO assessments are adjusted quarterly to reflect changes in the assessment
bases of the FDIC insurance funds and do not vary depending upon a depository
institution's capitalization or supervisory evaluations.
FDIC-insured depository institutions pay an assessment rate equal to the rate
assessed on deposits insured by the Savings Association Insurance Fund.
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.
Future Legislation
Various legislation, including proposals to substantially change the
financial institution regulatory system and to expand or contract the powers of
banking institutions and bank holding companies, is from time to time
introduced in the Congress. This legislation may change banking statutes and
the operating environment of Wells Fargo and its subsidiaries in substantial
and unpredictable ways. If enacted, such legislation could increase or decrease
the cost of doing business, limit or expand permissible activities or affect
the competitive balance among banks, savings associations, credit unions, and
other financial institutions. Wells Fargo cannot predict whether any of this
potential legislation will be enacted, and if enacted, the effect that it, or
any implementing regulations, would have on the financial condition or results
of operations of Wells Fargo or any of its subsidiaries.
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INFORMATION ABOUT NATIONAL BANCORP
National Bancorp of Alaska, Inc. is a Delaware corporation organized on June
21, 1982, and registered as a bank holding company under the Bank Holding
Company Act of 1956. National Bancorp's principal asset is its investment in
National Bank of Alaska, a wholly-owned subsidiary. Through National Bank of
Alaska, National Bancorp engages in commercial banking and trust activities.
National Bank of Alaska
National Bank of Alaska was established as a state-chartered bank in 1916 and
converted to a national banking association in 1950.
General Banking Services
National Bank of Alaska engages in general banking business offering checking
accounts, savings accounts, money market accounts, time certificates of
deposit, securities sold under agreements to repurchase, Individual Retirement
Accounts, commercial loans, home equity loans, unsecured lines of credit,
consumer loans, construction and mortgage loans, lease financing, safe deposit
services, night depositories, Visa credit cards (Classic and Gold), walk-up and
drive-in banking with an international automated teller machine network,
various telephone and electronic services, and other services incidental to
serving the banking needs of individuals, corporations, government and quasi-
government bodies.
As of March 31, 2000, National Bank of Alaska's banking operations were
conducted from 55 banking offices, 3 loan offices and 71 electronic branches
located throughout the state of Alaska and in Seattle, Washington, including 16
banking offices and 30 electronic branches in Anchorage. National Bank of
Alaska's subsidiaries operations are conducted from 11 locations throughout the
state of Alaska, including 4 offices in Anchorage.
Trust Services
National Bank of Alaska's Trust Department offers services to individuals and
corporations throughout Alaska, including estate planning, settlement of
estates, administration of living and testamentary trusts, management of
investment agency accounts, custodianships, and administration of employee
benefit trusts. National Bank of Alaska had trust assets of approximately $
billion under its supervision as of March 31, 2000.
International Banking
National Bank of Alaska's International Department offers customer services
in connection with international business. The department maintains
correspondent relationships with banks located in certain world trade centers,
including Tokyo and New York. Transactions handled by this department include
cable, wire, and mail transfers of funds, negotiating and advancing funds under
export letters of credit, buying and selling foreign currencies, handling
collection from foreign banks, and financing imports and exports.
National Bank of Alaska also operates an Edge Act subsidiary, National Bank
of Alaska International Banking Corp.
Competition
National Bank of Alaska competes actively with national and state banks and
other financial institutions, including savings and loan associations, savings
banks, brokerage houses, money market funds, and credit unions located both in
Alaska and other states. National Bank of Alaska maintains a competitive
position by
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providing convenient service in the branch network located throughout the state
and by competitive pricing of the products mentioned above.
Alaska allows out-of-state bank holding companies to acquire banks and
domestic bank holding companies located in Alaska. Management is of the opinion
that to the extent that out-of-state bank holding companies enter the Alaskan
market, National Bancorp may encounter intensified competition.
Employment
National Bank of Alaska has approximately 1,117 full time equivalent
employees, and bank subsidiaries have 101 full time equivalent employees.
Management considers employment relations to be good. None of the National Bank
of Alaska's employees are covered by a collective bargaining agreement.
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WELLS FARGO CAPITAL STOCK
As a result of the merger, you will become a Wells Fargo stockholder. Your
rights as a Wells Fargo stockholder will be governed by Delaware law, Wells
Fargo's restated certificate of incorporation and Wells Fargo's bylaws. This
description of Wells Fargo's capital stock, including the Wells Fargo common
stock to be issued in the merger, reflects the anticipated state of affairs at
the effective time of the merger.
The following summarizes the material terms of Wells Fargo's capital stock
but does not purport to be complete, and is qualified in its entirety by
reference to the applicable provisions of federal law governing bank holding
companies, Delaware law and Wells Fargo's restated certificate of incorporation
and bylaws and the rights agreement, dated as of October 21, 1998, between
Wells Fargo and ChaseMellon Shareholder Services, L.L.C., as rights agent,
relating to rights to purchase shares of Wells Fargo Series C Junior
Participating Preferred Stock.
A copy of Wells Fargo's restated certificate of incorporation as in effect as
of the date of this document is attached as an exhibit to Wells Fargo's current
report on Form 8-K dated June 28, 1993, and amendments to its certificate of
incorporation are attached as exhibits to its current report on Form 8-K dated
July 3, 1995 and quarterly report on Form 10-Q for the quarter ended September
30, 1998. A copy of Wells Fargo's bylaws as in effect as of the date of this
document is attached as an exhibit to Wells Fargo's annual report on Form 10-K
for the year ended December 31, 1999. A copy of the rights agreement is
attached as an exhibit to Wells Fargo's registration statement on Form 8-A
dated as of October 21, 1998. Wells Fargo's restated certificate of
incorporation and bylaws and the rights agreement are incorporated by reference
into this document.
Wells Fargo Common Stock
Wells Fargo is authorized to issue 4,000,000,000 shares of common stock, par
value $1 2/3 per share. At March 31, 2000, there were shares of Wells
Fargo common stock outstanding. All of the issued and outstanding shares of
Wells Fargo common stock are, and upon the issuance of Wells Fargo common stock
in connection with the merger will be, validly issued, fully paid and
nonassessable. Holders of Wells Fargo common stock are not entitled to any
preemptive rights.
Voting and Other Rights. The holders of Wells Fargo common stock are entitled
to one vote per share, and, in general, a majority of votes cast with respect
to a matter will be sufficient to authorize action upon routine matters.
However:
. 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 on the amendment and by a majority of the outstanding
stock of each class entitled to vote on the amendment as a class.
. Wells Fargo's stockholders may amend its bylaws by the affirmative vote
of a majority of the outstanding stock entitled to vote thereon.
. With some exceptions, under Delaware law the affirmative vote of a
majority of the outstanding shares of Wells Fargo common stock entitled
to vote is required to approve a merger or consolidation involving Wells
Fargo or the sale, lease or exchange of all or substantially all of
Wells Fargo's corporate assets. See "Comparison of Stockholder Rights--
Stockholder Vote Required for Mergers" for a description of the
exceptions to this rule.
Directors are to be elected by a plurality of the votes cast assuming a
quorum is present, and Wells Fargo stockholders do not have the right to
cumulate their votes in the election of directors. For that reason, holders of
a majority of the shares of Wells Fargo common stock entitled to vote in any
election of directors of Wells Fargo have the ability to elect all of the
directors standing for election. The Wells Fargo board is not classified.
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Assets Upon Dissolution. In the event of liquidation, holders of Wells Fargo
common stock would be entitled to receive proportionately any assets legally
available for distribution to stockholders of Wells Fargo with respect to
shares held by them, subject to any prior rights of any Wells Fargo preferred
stock then outstanding.
Distributions. As a Delaware corporation, Wells Fargo 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.
As a bank holding company, the ability of Wells Fargo to pay distributions
will be affected by the ability of its banking subsidiaries to pay dividends.
The ability of these banking subsidiaries, as well as of Wells Fargo, to pay
dividends in the future currently is, and could be further, influenced by bank
regulatory requirements and capital guidelines. See "Regulation and Supervision
of Wells Fargo--Dividend Restrictions" for a more detailed description.
Restrictions on Ownership. The Bank Holding Company Act requires any "bank
holding company" (as defined in the Bank Holding Company Act) to obtain the
approval of the Federal Reserve Board prior to acquiring 5% or more of Wells
Fargo's outstanding common stock. Any person other than a bank holding company
is required to obtain prior approval of the Federal Reserve Board to acquire
10% or more of Wells Fargo's outstanding common stock under the Change in Bank
Control Act. Any holder of 25% or more of Wells Fargo's outstanding common
stock (or a holder of 5% or more if that holder otherwise exercises a
"controlling influence" over Wells Fargo), other than an individual, is subject
to regulation as a bank holding company under the Bank Holding Company Act.
Preferred Share Purchase Rights. Each issued share of Wells Fargo common
stock, including each share to be issued in the merger, includes a Series C
Junior Participating Preferred Stock purchase right. See "--Wells Fargo Rights
Plan" below.
Wells Fargo Preferred Stock
Wells Fargo's restated certificate of incorporation currently authorizes the
issuance of 20,000,000 shares of preferred stock without par value and
4,000,000 shares of preference stock without par value. At March 31, 2000,
1999, there were shares of Wells Fargo preferred stock outstanding and no
shares of Wells Fargo preference stock outstanding.
The Wells Fargo board is authorized to issue preferred stock and preference
stock in one or more series, to fix the number of shares in each such series,
and to determine the designations and voting powers, preferences, and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions of each series, all without any vote or other
action on the part of Wells Fargo common stockholders. The preferred stock and
preference stock may be issued at any time in any amount, provided that not
more than 20,000,000 shares of preferred stock and 4,000,000 shares of
preference stock are outstanding at any one time.
The Wells Fargo board may determine the designation and number of shares
constituting a series, dividend rates, whether the series is redeemable and the
terms of redemption, liquidation preferences, sinking fund requirements,
conversion privileges, voting rights, as well as other preferences and
relative, participating, optional or other special rights and qualifications,
limitations and restrictions of these special rights, all without any vote or
other action on the part of Wells Fargo common stockholders.
The Wells Fargo board has designated 4,000,000 shares of Wells Fargo
preferred stock for issuance as Series C Junior Participating Preferred Stock
under the rights agreement. No shares of Wells Fargo Series C Junior
Participating Preferred Stock are outstanding as of the date of this document.
See "--Wells Fargo Rights Plan" below.
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Wells Fargo Rights Plan
On October 21, 1998, Wells Fargo's board of directors declared a dividend of
one Series C Junior Participating Preferred Stock purchase right for each
outstanding share of Wells Fargo common stock. The dividend was paid on
November 23, 1998 to Wells Fargo stockholders of record on that date. Each
right entitles the registered holder to purchase from Wells Fargo one one-
thousandth of a share of Wells Fargo Series C Junior Participating Preferred
Stock, subject to adjustment, at a price of $160 per one one-thousandth of a
share of Wells Fargo Series C Junior Participating Preferred Stock. The
description and terms of the rights are set forth in the rights agreement.
Until the earlier to occur of (1) ten days following a public announcement
that a person or group of affiliated or associated persons (an "acquiring
person") have acquired beneficial ownership of 15% or more of the outstanding
shares of Wells Fargo common stock or (2) ten business days (or a later date as
may be determined by action of Wells Fargo's board of directors prior to the
time that any person becomes an acquiring person) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a person
or group of 15% or more of the outstanding shares of Wells Fargo common stock
(the earlier of these dates being called the "rights distribution date"), the
rights will be evidenced, with respect to any of the Wells Fargo common stock
certificates outstanding as of November 23, 1998, by a Wells Fargo common stock
certificate with a copy of the summary of rights, attached to the rights
agreement as Exhibit C, attached to the certificate.
The rights agreement provides that, until the rights distribution date, the
rights can only be transferred with the shares of Wells Fargo common stock to
which they are attached. Until the rights distribution date (or earlier
redemption or expiration of the rights), new Wells Fargo common stock
certificates issued after November 23, 1998, upon transfer or new issuance of
Wells Fargo common stock, will contain a notation incorporating the rights
agreement by reference. Until the rights distribution date (or earlier
redemption or expiration of the rights), the surrender for transfer of any
certificates for shares of Wells Fargo common stock, outstanding as of
November 23, 1998, even without this notation or a copy of the summary of
rights being attached to the certificates, will also constitute the transfer of
the rights associated with the shares of Wells Fargo common stock represented
by the certificate. As soon as practicable following the rights distribution
date, separate certificates evidencing the rights will be mailed to holders of
record of the shares of Wells Fargo common stock as of the close of business on
the rights distribution date and these separate rights certificates alone will
evidence the rights.
The rights are not exercisable until the rights distribution date. The rights
will expire on November 23, 2008, unless that date is extended or unless the
rights are earlier redeemed by Wells Fargo, in each case, as described below.
The purchase price payable, and the number of shares of Wells Fargo Series C
Junior Participating Preferred Stock or other securities or property issuable,
upon exercise of the rights are subject to adjustment from time to time to
prevent dilution:
. in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Wells Fargo Series C Junior Participating
Preferred Stock;
. upon the grant to holders of the Wells Fargo Series C Junior
Participating Preferred Stock of certain rights or warrants to subscribe
for or purchase Wells Fargo Series C Junior Participating Preferred
Stock at a price, or securities convertible into Wells Fargo Series C
Junior Participating Preferred Stock with a conversion price, less than
the then-current market price of the Wells Fargo Series C Junior
Participating Preferred Stock; or
. upon the distribution to holders of the Wells Fargo Series C Junior
Participating Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends or dividends payable in
Wells Fargo Series C Junior Participating Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
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The number of outstanding rights and the number of one one-thousandths of a
share of Wells Fargo Series C Junior Participating Preferred Stock issuable
upon exercise of each right are also subject to adjustment in the event of a
stock split of the shares of Wells Fargo common stock or a stock dividend on
the shares of Wells Fargo common stock payable in shares of Wells Fargo common
stock or subdivisions, consolidations or combinations of the shares of Wells
Fargo common stock occurring, in any such case, prior to the rights
distribution date.
Wells Fargo Series C Junior Participating Preferred Stock purchasable upon
exercise of the rights will not be redeemable. Each share of Wells Fargo Series
C Junior Participating Preferred Stock will be entitled to a minimum
preferential quarterly dividend payment of $10 per share but will be entitled
to an aggregate dividend of 1000 times the dividend declared per share of Wells
Fargo common stock. In the event of liquidation, the holders of the Wells Fargo
Series C Junior Participating Preferred Stock will be entitled to a minimum
preferential liquidation payment of $1000 per share but will be entitled to an
aggregate payment of 1000 times the payment made per share of Wells Fargo
common stock. Each share of Wells Fargo Series C Junior Participating Preferred
Stock will have 1000 votes, voting together with the shares of Wells Fargo
common stock. Finally, in the event of any merger, consolidation or other
transaction in which shares of Wells Fargo common stock are exchanged, each
share of Wells Fargo Series C Junior Participating Preferred Stock will be
entitled to receive 1000 times the amount received per share of Wells Fargo
common stock. These rights are protected by customary antidilution provisions.
Because of the nature of the Wells Fargo Series C Junior Participating
Preferred Stock's dividend, liquidation and voting rights, the value of the one
one-thousandth interest in a share of Wells Fargo Series C Junior Participating
Preferred Stock purchasable upon exercise of each right should approximate the
value of one share of Wells Fargo common stock.
In the event that Wells Fargo is acquired in a merger or other business
combination transaction, or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a right
will then have the right to receive, upon the exercise of the right at its
then-current exercise price, that number of shares of common stock of the
acquiring company that at the time of such transaction will have a market value
of two times the exercise price of the right. In the event that any person or
group of affiliated or associated persons becomes the beneficial owner of 15%
or more of the outstanding shares of Wells Fargo common stock, proper provision
will be made so that each holder of a right, other than rights beneficially
owned by the acquiring person (which will be void after that time), will then
have the right to receive upon exercise that number of shares of Wells Fargo
common stock having a market value of two times the exercise price of the
right.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
shares of Wells Fargo common stock, and prior to their acquisition of 50% or
more of the outstanding shares of Wells Fargo common stock, the Wells Fargo
board may exchange the rights (other than rights owned by such person or group
which have become void), in whole or in part, at an exchange ratio of one share
of Wells Fargo common stock, or one one-thousandth of a share of Wells Fargo
Series C Junior Participating Preferred Stock (or of a share of a class or
series of Wells Fargo preferred stock having equivalent rights, preferences and
privileges), per right (subject to adjustment).
With some exceptions, no adjustment in the purchase price will be required
until cumulative adjustments require an adjustment of at least 1% in the
purchase price. No fractional shares of Wells Fargo Series C Junior
Participating Preferred Stock will be issued (other than fractions which are
integral multiples of one one-thousandth of a share of Wells Fargo Series C
Junior Participating Preferred Stock, which may, at the election of Wells
Fargo, be evidenced by scrip or depositary receipts), and, in lieu of
fractional shares, an adjustment in cash will be made based on the market price
of the Wells Fargo Series C Junior Participating Preferred Stock on the last
trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
shares of Wells Fargo common stock, the Wells Fargo board may
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redeem the rights in whole, but not in part, at a price of $.01 per right. The
redemption of the rights may be made effective at the time, on the basis, and
with the conditions that the Wells Fargo board, in its sole discretion, may
establish. Immediately upon any redemption of the rights, the right to exercise
the rights will terminate and the only right of the holders of the rights will
be to receive the redemption price.
The terms of the rights may be amended by the Wells Fargo board without the
consent of the holders, including an amendment to lower the 15% triggering
thresholds described above to not less than the greater of:
. 0.001% greater than the largest percentage of the outstanding shares of
Wells Fargo common stock then known to Wells Fargo to be beneficially
owned by any person or group of affiliated or associated persons, and
. 10%.
However, from and after the time that any person becomes an Acquiring Person,
no amendment may adversely affect the interests of the holders of the rights.
Until a right is exercised, the holder, as such, will have no rights as a
stockholder of Wells Fargo, including, without limitation, the right to vote or
to receive dividends.
The Rights Have Anti-Takeover Effects. The stockholder rights will cause
substantial dilution to a person or group that attempts to acquire Wells Fargo
on terms not approved by the Wells Fargo board, except by means of an offer
conditioned on a substantial number of rights being acquired. The rights should
not interfere with any merger or other business combination approved by the
Wells Fargo board, as the rights may be redeemed by Wells Fargo at the required
redemption price prior to the time that a person or group has acquired
beneficial ownership of 15% or more of the shares of Wells Fargo common stock.
The rights agreement, specifying the terms of the rights and including, as an
exhibit, the form of the certificate of designation setting forth the terms of
the Wells Fargo Series C Junior Participating Preferred Stock, is attached as
an exhibit to Wells Fargo's registration statement on Form 8-A, dated October
21, 1998, and is incorporated in this document by reference. The foregoing
description of the Wells Fargo Series C Junior Participating Preferred Stock
purchase rights is qualified in its entirety by reference to this exhibit. See
"Where You Can Find More Information" for information on how to obtain this
document.
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COMPARISON OF STOCKHOLDER RIGHTS
The rights of National Bancorp stockholders are currently governed by the
Delaware General Corporation Law, or DGCL, National Bancorp's certificate of
incorporation and National Bancorp's bylaws. The rights of Wells Fargo
stockholders are currently governed by the DGCL, Wells Fargo's restated
certificate of incorporation and Wells Fargo's bylaws. The following is a
summary of material differences between the rights of National Bancorp
stockholders and the rights of Wells Fargo stockholders. It is not a complete
statement of the provisions affecting, and the differences between, the rights
of National Bancorp stockholders and Wells Fargo stockholders. The summary is
qualified in its entirety by reference to the DGCL, National Bancorp's
certificate of incorporation and bylaws, and Wells Fargo's restated certificate
of incorporation and bylaws.
Authorized And Outstanding Capital Stock
National Bancorp Wells Fargo
Authorized: Authorized:
. 40,000,000 shares of common stock . 4,000,000,000 shares of common
stock
Outstanding as of March 31, 2000:
. 20,000,000 shares of preferred
stock
. shares of common stock
. 4,000,000 shares of preference
stock
Outstanding as of March 31, 2000:
. shares of common stock
. shares of preferred stock
. No shares of preference stock
Size of Board of Directors
The DGCL provides that the board of directors of a Delaware corporation shall
consist of one or more directors as fixed by the corporation's certificate of
incorporation or bylaws.
National Bancorp Wells Fargo
National Bancorp's bylaws provide Under Wells Fargo's restated
for a board of directors to be fixed certificate of incorporation, the
by resolution of the board of number of directors shall be as
directors. Each director will serve specified in the bylaws but in no
a term of one year or until his or event less than 3. Wells Fargo's
her earlier death, resignation or bylaws provide for a board of
removal. The number of directors of directors consisting of not less
National Bancorp is currently fixed than 10 nor more than 28 persons,
at 25. 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 18.
Cumulative Voting
Cumulative voting allows each stockholder to cast an aggregate number of
votes equal to the number of voting shares held, multiplied by the number of
directors to be elected. Each stockholder may cast all of his or her votes for
one nominee or distribute them among two or more nominees. The candidates (up
to the number of directors to be elected) receiving the highest number of votes
are elected. Under the DGCL, stockholders do not have the right to cumulate
their votes in the election of directors unless such right is granted in the
certificate of incorporation.
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National Bancorp Wells Fargo
National Bancorp's certificate of Wells Fargo's restated certificate
incorporation does not provide for of incorporation does not provide
cumulative voting in the election of for cumulative voting.
directors.
Classes of Directors
The DGCL permits classification of a Delaware corporation's board of
directors, and for staggered terms.
National Bancorp Wells Fargo
National Bancorp's board of Wells Fargo's board of directors is
directors is not classified. The not classified. The entire board is
entire board is elected each year. elected each year.
Qualifications of Directors
Under the DGCL, a director need not be a resident of the state of Delaware
unless the certificate of incorporation or bylaws so prescribe. Otherwise,
qualifications for directors may be set forth in the certification of
incorporation or bylaws.
National Bancorp Wells Fargo
National Bancorp's bylaws require Wells Fargo's restated certificate
directors to be stockholders of of incorporation requires directors
National Bancorp. to be stockholders of Wells Fargo.
Filling Vacancies on the Board
The DGCL provides that, unless the governing documents of a corporation
provide otherwise, vacancies and newly created directorships resulting from a
resignation or any increase in the authorized number of directors elected by
all of the stockholders having the right to vote as a single class may be
filled by a majority of the directors then in office.
National Bancorp Wells Fargo
Vacancies on National Bancorp's Vacancies on Wells Fargo's board of
board of directors may be filled by directors may be filled by majority
majority vote of the remaining vote of the remaining directors or,
directors or, in the event a vacancy in the event a vacancy is not so
is not so filled or if no director filled or if no director remains, by
remains, by the stockholders. the stockholders.
Removal of Directors
The DGCL provides that a director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors. However, in the case of a
corporation whose board is classified, the directors may be removed only for
cause unless the certificate of incorporation provides otherwise.
National Bancorp Wells Fargo
National Bancorp's board is not Wells Fargo's board is not
classified, so directors may be classified, so directors may be
removed with or without cause by the removed with or without cause by the
holders of a majority of the shares holders of a majority of the shares
then entitled to vote at an election then entitled to vote at an election
of directors. of directors.
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Nomination of Directors for Election
National Bancorp Wells Fargo
National Bancorp's bylaws provide Under Wells Fargo's bylaws,
that nominations to the National nominations for Wells Fargo's board
Bancorp board may be made by the may be made by the board or by any
board or by any stockholder who stockholder who complies with the
complies with the notice procedures notice procedures described in Wells
set forth in the bylaws. Notice must Fargo's bylaws. These procedures
be in writing and delivered or require the notice to be received by
mailed to National Bancorp's Wells Fargo not less than 30 nor
president not less than 14 days nor more than 60 days prior to the
more than 50 days prior to the meeting. However, if less than 40
meeting; provided, however, that if days' prior public disclosure of the
less than 21 days notice of the date of the meeting is given to
meeting is given to the National stockholders, then the notice must
Bancorp stockholders, then notice be received no later than 10 days
must be mailed or delivered to the after the first public announcement
president not later than the close of the meeting date.
of business on the seventh day
following the day on which National
Bancorp's notice of the
stockholders' meeting was mailed.
Anti-Takeover Provisions
The DGCL contains a business combination statute that protects domestic
corporations from hostile takeovers, and from actions following such a
takeover, by prohibiting some transactions once an acquiror has gained a
significant holding in the corporation.
Section 203 of the DGCL prohibits "business combinations," including mergers,
sales and leases of assets, issuances of securities and similar transactions by
a corporation or a subsidiary with an "interested stockholder" who beneficially
owns 15 percent or more of a corporation's voting stock, within three years
after the person or entity becomes an interested stockholder, unless:
. the transaction that will cause the person to become an interested
stockholder is approved by the board of directors of the target prior to
the transaction,
. after the completion of the transaction in which the person becomes an
interested stockholder, the interested stockholder holds at least 85% of
the voting stock of the corporation not including (a) shares held by
officers and directors of interested stockholders and (b) shares held by
specified employee benefit plans, or
. after the person becomes an interested stockholder, the business
combination is approved by the board of directors and holders of at
least 66 2/3% of the outstanding voting stock, excluding shares held by
the interested stockholder.
A Delaware corporation may elect not to be governed by Section 203 by a
provision contained in its original certificate of incorporation or an
amendment thereto or to the bylaws, which amendment must be approved by a
majority of the shares entitled to vote and may not be further amended by the
board of directors. Such an amendment is not effective until 12 months
following its adoption. Neither National Bancorp nor Wells Fargo has made such
an election.
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Stockholder Rights Plan
National Bancorp Wells Fargo
National Bancorp has not implemented Wells Fargo has implemented a
a stockholder rights plan. stockholder rights plan, under which
a group of persons becomes an
acquiring person upon a public
announcement that they have acquired
or intend to acquire 15% of Wells
Fargo's voting stock. This threshold
can be reduced by amendment. Each
share of Wells Fargo common stock
issued in the merger will be issued
with an attached right. See "Wells
Fargo Capital Stock--Wells Fargo
Rights Plan."
Stockholder Action Without a Meeting
National Bancorp Wells Fargo
As permitted by Section 228 of the In accordance with Section 228 of
DGCL and as provided in National the DGCL, Wells Fargo's bylaws
Bancorp's certificate of provide that any action required or
incorporation, the requisite permitted to be taken at a
stockholders' meeting and vote may stockholders' meeting may be taken
be dispensed with and any action without a meeting pursuant to the
required or permitted to be taken at written consent of the holders of
a stockholders' meeting may be taken the number of shares that would have
without a meeting pursuant to the been required to effect the action
unanimous written consent of the at an actual meeting of the
holders of National Bancorp common stockholders, and provide certain
stock. procedures to be followed in such
cases.
Calling Special Meetings of Stockholders
Under the DGCL, a special meeting of stockholders may be called by the board
of directors or by any other person authorized to do so in the certificate of
incorporation or the bylaws.
National Bancorp Wells Fargo
National Bancorp's bylaws provide Wells Fargo's bylaws provide that a
that a special meeting of special meeting of stockholders may
stockholders may be called by the be called only by the chairman of
chairman of the board, a majority of the board, a vice chairman, the
National Bancorp's board of president or a majority of Wells
directors, or by holders of not less Fargo's board of directors. Holders
than one-third of all shares of Wells Fargo common stock do not
entitled to vote at the meeting. have the ability to call a special
meeting of stockholders.
Submission of Stockholder Proposals
National Bancorp Wells Fargo
Neither National Bancorp's The Wells Fargo bylaws provide that
certificate of incorporation nor its in order for a stockholder to bring
bylaws make express provision as to business before the annual meeting,
submission by National Bancorp the stockholder must give timely
stockholders of proposals. notice of the proposal to Wells
Fargo. To be timely, the notice must
be received not later than the 90th
day nor earlier than the 120th day
prior to the first anniversary of
the preceding year's annual meeting.
However, if the annual meeting is
more than 30 days
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before or more than 60 days after
the anniversary of the prior year's
annual meeting, to be timely the
notice must be delivered no earlier
than 120 days prior to the annual
meeting and no later than the later
of 90 days prior to the annual
meeting or 10 days after the first
public announcement of the meeting
date.
Notice of Stockholder Meetings
The DGCL requires notice of stockholders' meetings to be sent to all
stockholders of record entitled to vote thereon generally not less than 10 nor
more than 60 days prior to the date of the meeting. The DGCL requires more than
10 days' notice for meetings called to vote on mergers and certain other
specified actions.
National Bancorp Wells Fargo
National Bancorp's bylaws provide Wells Fargo's bylaws provide for
that written notice of annual or written notice to stockholders of
special meetings be given at least record at least 10 days prior to an
10 days before the meeting, except annual or special meeting.
that if the purpose of the meeting
is to act on amendment of National
Bancorp's certificate of
incorporation or on a reduction of
stated capital or on a plan of
merger or consolidation, then notice
must be mailed not fewer than 15
days nor more than 50 days before
the meeting to each stockholder of
record entitled to vote at the
meeting.
Stockholder Vote Required for Mergers
Under the DGCL, a merger, consolidation or sale of all or substantially all
of a corporation's assets must be approved by the board of directors and by a
majority of the outstanding stock of the corporation entitled to vote thereon.
However, under DGCL 251(f), no vote of stockholders of a constituent
corporation surviving a merger is required, unless the corporation provides
otherwise in its certificate of incorporation, if
. the merger agreement does not amend the certificate of incorporation of
the surviving corporation,
. each share of stock of the surviving corporation outstanding before the
merger is an identical outstanding or treasury share after the merger,
and
. either no shares of common stock of the surviving corporation are to be
issued or delivered pursuant to the merger or, if such common stock will
be issued or delivered, it will not increase the number of shares of
common stock outstanding immediately prior to the merger by more than
20%.
Dividends
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. National Bancorp and Wells
Fargo are also subject to Federal Reserve Board policies regarding payment of
dividends, which generally limit dividends to operating earnings. See
"Regulation and Supervision of Wells Fargo."
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National Bancorp Wells Fargo
National Bancorp's bylaws are silent Wells Fargo's bylaws provide that
with regard to the payment of the stockholders have the right to
dividends. receive dividends if and when
declared by Wells Fargo's board.
Dividends may be paid in cash,
property or shares of capital stock.
Dissenters' Appraisal Rights
Section 262 of the DGCL provides stockholders of a corporation involved in a
merger the right to demand and receive payment of the fair value of their stock
in certain mergers. However, appraisal rights are not available to holders of
shares:
. listed on a national securities exchange,
. designated as a national market system security on an interdealer
quotation system operated by the National Association of Securities
Dealers, Inc., or
. held of record by more than 2,000 stockholders
unless holders of stock are required to accept in the merger anything other
than any combination of:
. shares of stock or depository receipts of the surviving corporation in
the merger
. shares of stock or depository receipts of another corporation that, at
the effective date of the merger, will be
. listed on a national securities exchange,
. designated as a national market system security on an interdealer
quotation system operated by the National Association of Securities
Dealers, Inc., or
. held of record by more than 2,000 holders
. cash instead of fractional shares of the stock or depository receipts
received.
National Bancorp Wells Fargo
National Bancorp common stock is Dissenters' appraisal rights are not
designated as a national market available to the Wells Fargo
system security on an interdealer stockholders with respect to the
quotation system by the National merger because the DGCL does not
Association of Securities Dealers, require that Wells Fargo
Inc. (the Nasdaq National Market). stockholders vote to approve the
As a result, assuming that the other merger agreement. Moreover, Wells
conditions described above are Fargo common stock is listed on the
satisfied, holders of National New York and Chicago Stock Exchanges
Bancorp common stock will not have and currently held by more than
dissenters' appraisal rights in 2,000 stockholders. As a result,
connection with consolidations and assuming that the other conditions
mergers involving National Bancorp. described above are satisfied,
holders of Wells Fargo common stock
will not have appraisal rights in
connection with consolidations and
mergers involving Wells Fargo.
Stockholder Preemptive Rights
The DGCL provides that no stockholder shall have any preemptive rights to
purchase additional securities of the corporation unless the certificate of
incorporation expressly grants these rights.
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National Bancorp Wells Fargo
National Bancorp's certificate of Wells Fargo's restated certificate
incorporation grants preemptive of incorporation does not provide
rights to its stockholders as for preemptive rights.
follows: Article FOURTH (C) provides
that the registered holders of the
shares of National Bancorp common
stock shall have only a preemptive
right as set forth in Article FOURTH
to purchase at such respective
equitable prices, terms and
conditions as shall be fixed by
National Bancorp's board of
directors, such of the shares of
National Bancorp common stock or
securities convertible into or
carrying options or warrants to
purchase such shares of common stock
as may be issued for money from time
to time; that unless eliminated,
restricted or modified in accordance
with Article FOURTH, such preemptive
right shall apply to all shares
issued after the first 3,000,000
shares, whether the additional
shares constitute a part of the
shares presently or subsequently
authorized but shall not apply to
shares held in the treasury of
National Bancorp, except that the
holders of common stock shall have
no preemptive right to purchase or
subscribe for all or any part of
793,452 shares of presently
authorized but unissued common
stock; and that the preemptive right
of the holders of common stock to
purchase or subscribe for additional
shares of common stock may be
eliminated, restricted or modified
by the amendment of National
Bancorp's certificate of
incorporation in accordance with the
applicable provisions of the DGCL.
Stockholder Class Voting Rights
The DGCL requires voting by separate classes of shares only with respect to
amendments to a corporation's certificate of incorporation that adversely
affect the holders of those classes or that increase or decrease the aggregate
number of authorized shares or the par value of the shares of any of those
classes.
Indemnification
The DGCL provides that, subject to certain limitations in the case of
"derivative" suits brought by a corporation's stockholders in its name, a
corporation may indemnify any person who is made a party to any third-party
suit or proceeding on account of being a director, officer, employee or agent
of the corporation against expenses, including attorney's fees, judgments,
fines and amounts paid in settlement reasonably incurred by him or her in
connection with the action, through, among other things, a majority vote of a
quorum consisting of directors who were not parties to the suit or proceeding,
if the person:
. acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation or, in some
circumstances, at least not opposed to its best interests; and
. in a criminal proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
56
<PAGE>
To the extent a director, officer, employee or agent is successful in the
defense of such an action, suit or proceeding, the corporation is required by
the DGCL to indemnify such person for reasonable expenses incurred thereby.
National Bancorp Wells Fargo
National Bancorp's certificate of Wells Fargo's restated certificate
incorporation provides that National of incorporation provides that Wells
Bancorp must indemnify, to the Fargo must indemnify, to the fullest
fullest extent authorized by the extent authorized by the DGCL, each
DGCL, all persons whom National person who was or is made a party
Bancorp shall have the power to to, is threatened to be made a party
indemnify under the DGCL from and to or is involved in any action,
against all expenses, liabilities suit or proceeding because he or she
and other matters referred to in or is or was a director or officer of
covered by Section 145 of the DGCL. 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 authorized by Wells
Fargo's board of directors.
National Bancorp's bylaws provide
for indemnification for each person
who was or is made a party to or is
threatened to be made a party to,
any action, suit, or proceeding,
whether civil, criminal,
administrative or investigative
(other than an action by or in the
name of National Bancorp) because he
or she is or was a director,
officer, employee or agent of
National Bancorp (or was serving at
the request of National Bancorp as a
director, officer, employee, or
agent of another entity) while
serving in such capacity against all
expenses, liabilities, fines and
amounts paid in settlement incurred
by such person in connection
therewith, provided that
indemnification in connection with a
proceeding brought by such person
will be permitted only if he or she
acted in good faith and in a manner
he or she reasonably believed to be
in, or not opposed to, the best
interests of National Bancorp, and
in the case of a criminal action or
proceeding, had no reasonable cause
to believe his or her conduct was
unlawful. National Bancorp's bylaws
also provide that National Bancorp
must pay expenses incurred in
defending the proceedings specified
above in advance of their final
disposition, provided that, as
authorized by National Bancorp's
board, such advance payments for
expenses incurred by a director or
officer may be made only if he or
she undertakes to repay all amounts
so advanced unless it is ultimately
determined that the person receiving
such payments is entitled to be
indemnified.
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 or
she 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
Pursuant to National Bancorp's exclusive of any other right which
bylaws, National Bancorp may any person may have or acquire under
purchase and maintain insurance on any statute, provision of Wells
behalf of any director, officer, Fargo's restated certificate of
employee or agent of National incorporation or bylaws, agreement,
Bancorp or another entity at the vote of stockholders or
request of National Bancorp against disinterested directors or
any liability, regardless of whether otherwise.
National Bancorp has the power to
indemnify that person against such
liability under the DGCL.
57
<PAGE>
The right to indemnification is not
exclusive of any other right which
any person may be entitled to under
any statute, provision of National
Bancorp's certificate of
incorporation or bylaws, agreement,
vote of stockholders or
disinterested directors or
otherwise, both as to action in his
or her official capacity and as to
action in another capacity while
holding such office.
Limitations on Directors' Liability
National Bancorp Wells Fargo
National Bancorp's certificate of Wells Fargo's restated certificate
incorporation provides that a of incorporation provides that a
director of National Bancorp shall director (including an officer who
not be liable personally to National is also a director) of Wells Fargo
Bancorp or its stockholders for shall not be liable personally to
monetary damages for breach of Wells Fargo or its stockholders for
fiduciary duty as a director, except monetary damages for breach of
for liability arising out of fiduciary duty as a director, except
for liability arising out of:
. any breach of the director's duty
of loyalty to National Bancorp or . any breach of the director's duty
its stockholders, of loyalty to Wells Fargo or its
stockholders,
. acts or omissions not in good
faith or which involve intentional . acts or omissions not in good
misconduct or a knowing violation faith or which involve intentional
of law, misconduct or a knowing violation
of law,
. payment of a dividend or approval
of a stock repurchase in violation . payment of a dividend or approval
of Section 174 of the DGCL, or of a stock repurchase in violation
of Section 174 of the DGCL, or
. any transaction from which the
director derived an improper . any transaction from which the
personal benefit. director derived an improper
personal benefit.
This provision protects National
Bancorp's directors against personal This provision protects Wells
liability for monetary damages from Fargo's directors against personal
breaches of their duty of care. It liability for monetary damages from
does not eliminate the director's breaches of their duty of care. It
duty of care and has no effect on does not eliminate the director's
the availability of equitable duty of care and has no effect on
remedies, such as an injunction or the availability of equitable
rescission, based upon a director's remedies, such as an injunction or
breach of his or her duty of care. rescission, based upon a director's
breach of his or her duty of care.
58
<PAGE>
Amendment of Certificate of Incorporation
Under the DGCL, amendments to a corporation's certificate of incorporation
require the approval of the board of directors and stockholders holding a
majority of the outstanding stock of such class entitled to vote on such
amendment as a class, unless a different proportion is specified in the
certificate of incorporation or by other provisions of the DGCL.
National Bancorp Wells Fargo
National Bancorp's certificate of Wells Fargo's restated certificate
incorporation may be amended only if of incorporation may be amended only
the proposed amendment is approved if the proposed amendment is
by National Bancorp's board of approved by Wells Fargo's board of
directors and thereafter approved by directors and thereafter approved by
a majority of the outstanding stock a majority of the outstanding stock
entitled to vote thereon. entitled to vote thereon and by a
majority of the outstanding stock of
each class entitled to vote thereon
as a class.
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.
Amendment of Bylaws
Under the DGCL, holders of a majority of the voting power of a corporation,
and, when provided in the certificate of incorporation, the directors of the
corporation, have the power to adopt, amend and repeal the bylaws of a
corporation.
National Bancorp Wells Fargo
National Bancorp's bylaws may be Wells Fargo's bylaws generally
amended by a majority of National provide for amendment by a majority
Bancorp's board of directors or by a of Wells Fargo's board of directors
majority of the shares of common or by a majority of the outstanding
stock present in person or stock entitled to vote thereon.
represented by proxy at the meeting However, Wells Fargo's bylaws
and entitled to vote on the subject require the affirmative vote or
matter. consent of 80% of the common stock
outstanding to amend a bylaw
provision related to maintaining
local directorships at subsidiaries
with which Wells Fargo has an
agreement to so maintain local
directorships.
59
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Wells Fargo Share Prices And Dividends
Wells Fargo common stock is listed on the New York Stock Exchange (NYSE) and
the Chicago Stock Exchange under the symbol "WFC." Before November 3, 1998, the
common stock traded under the symbol "NOB." The following table shows, for the
periods indicated, the high and low sales prices of Wells Fargo common stock on
the NYSE composite transactions reporting system and the cash dividends paid
per share.
<TABLE>
<CAPTION>
Price Range
----------- Dividends
High Low Paid
----- ----- ---------
<S> <C> <C> <C>
1998
First Quarter.......................................... 43.88 34.75 0.165
Second Quarter......................................... 43.75 34.00 0.165
Third Quarter.......................................... 39.75 27.50 0.185
Fourth Quarter......................................... 40.88 30.19 0.185
1999
First Quarter.......................................... 40.44 32.13 0.185
Second Quarter......................................... 44.88 34.38 0.200
Third Quarter.......................................... 45.31 36.44 0.200
Fourth Quarter......................................... 49.94 38.38 0.200
2000
First Quarter Second Quarter (through May )........... 41.69 31.88 0.220
</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 in its discretion. As described in "Regulation And
Supervision Of Wells Fargo--Dividend Restrictions," various federal and state
laws limit the ability of affiliate banks to pay dividends to Wells Fargo.
National Bancorp Share Prices And Dividends
National Bancorp common stock trades on the Nasdaq National Market under the
symbol "NBAK." The following table shows, for the periods indicated, the high
and low bid quotations for National Bancorp common stock as reported on the
Nasdaq National Market System and the cash dividends paid per share.
Information is adjusted for the 1998 four-for-one stock split.
<TABLE>
<CAPTION>
Price
Range
-------- Dividends
High Low Paid
---- --- ---------
<S> <C> <C> <C>
1998
First Quarter............................................. 38 27 .125
Second Quarter............................................ 39 30 .125
Third Quarter............................................. 32 28 .150
Fourth Quarter............................................ 39 30 .150
1999
First Quarter............................................. 34 28 .150
Second Quarter............................................ 30 23 .150
Third Quarter............................................. 29 25 .150
Fourth Quarter............................................ 40 25 .150
2000
First Quarter Second Quarter (through May ).............. 38 27 .150
</TABLE>
60
<PAGE>
ITEM 2. ELECTION OF DIRECTORS
The numbers of directors to be elected at the National Bancorp annual meeting
will be determined by vote of the stockholders. The National Bancorp board will
offer a resolution at the meeting establishing the number of directors at 25.
The persons named below, all of whom are members of the present board of
directors, will be nominated by management for election to the National Bancorp
board, and, if elected, each will serve until the merger is completed or, if
the merger is not completed, until the next annual meeting of stockholders and
until their successor is elected and qualified. It is the intention of the
persons named in the proxy to vote for the resolution establishing the number
of directors at 25 and for the election of the nominees listed below, unless
otherwise directed or otherwise instructed.
National Bancorp's board of directors has no reason to believe that any of
the nominees named in this proxy statement-prospectus will be unavailable or
unable to stand for election, but in the event that vacancies in the slate of
nominees should occur unexpectedly, the shares represented by proxies will be
voted for substitutes chosen by the National Bancorp board or the number of
directors to be elected will be reduced by the number of persons unavailable or
unable to stand for election and the shares will be voted for the remaining
nominees.
Other nominations may be made by stockholders entitled to vote for election
of directors in accordance with the following procedures as set forth in
National Bancorp's bylaws. National Bancorp nominations other than those made
by or on behalf of the existing management of National Bancorp must be made in
writing and must be delivered or mailed to the president of National Bancorp
not less than 14 days nor more than 50 days prior to any meeting of
stockholders called for the election of directors, provided, however, that if
less than 21 days' notice of the meeting is given to stockholders, such
nomination shall be mailed or delivered to the president of National Bancorp
not later than the close of business on the seventh day following the day on
which the notice of the meeting was mailed. Such notifications shall contain
the following information to the extent known to the notifying stockholder: (a)
the name and address of each proposed nominee; (b) the principal occupation of
each proposed nominee; (c) the total number of shares of National Bancorp
common stock that will be voted for each proposed nominee; (d) the name and
residence address of the notifying stockholder; and (e) the number of shares of
National Bancorp common stock owned by the stockholder. Nominations not made in
accordance herewith may be disregarded at the discretion of the chairman of the
meeting, and upon chairman's instructions, the vote tellers may disregard all
votes cast for each such nominee.
<TABLE>
<CAPTION>
Shares of Common
Stock Beneficially
Owned as of
Age and Year January 31,
first became a 2000(2)
Director of the ------------------
Company or a Principal Occupation Shares Percent
Name Predecessor or Employment(6) Held of Class(5)
- ---- --------------- ------------------------ ------ -----------
<S> <C> <C> <C> <C>
Donald B. Abel, Jr. .... 63 President, Don Abel 7,720
1976 Building Supplies, Inc.
(retail building
supplies)
Gary M. Baugh........... 61 President, Baugh 14,000
1983 Construction and
Engineering Company
(construction)
Carl F. Brady Jr. ...... 56 Chairman and CEO, 33,890
1989 Brady & Co. Ins.
(insurance brokerage)
Alec W. Brindle......... 61 President, Wards Cove 70,704
1977 Packing Company, Inc.
(salmon cannery)
</TABLE>
61
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Stock Beneficially
Owned as of
Age and Year January 31,
first became a 2000(2)
Director of the ------------------
Company or a Principal Occupation Shares Percent
Name Predecessor or Employment(6) Held of Class(5)
- ---- --------------- ------------------------ ------ -----------
<S> <C> <C> <C> <C>
James O. Campbell....... 67 Campbell & Campbell 17,088
1972 since 1997 (apartment
rentals); from 1994 to
1997 Commissioner,
Arctic Research
Commission (national
research needs and
objectives in the
Arctic)
Jeffry J. Cook.......... 56 Vice President 2,684
1984 Administration, MAPCO
Alaska, Inc. (oil
refining and product
sales)
Patrick S. Cowan........ 60 Owner, Birch Ridge Golf 3,882
1994 Course (golf)
Sharon D. Gagnon........ 59 Civic Leader 3,030
1998
Roy Huhndorf............ 59 Management Consultant 400
1987 since 1998; Chairman of
the Board, Cook Inlet
Region, Inc., from 1996
to 1998 (Alaska Native
Regional Corporation);
Chairman and CEO, Cook
Inlet Region, Inc., from
1992 to 1996
James H. Jansen......... 53 President & CEO of 40,400
1990 Lynden Incorporated
(trucking and
transportation)
Donald L. Mellish....... 72 Chairman of the 23,500
1964 Executive Committee of
National Bank of Alaska
Emil Notti.............. 66 Consultant 2,264
1973
Howard R. Nugent........ 55 President, Howdie Homes, 1,000
1996 Inc., (residential and
commercial construction)
Tennys B. Owens......... 59 President, Artique Lt. 7,765
1991 Gallery (art retail
sales, marketing, and
publishing)
Eugene A. Parrish, 54 Vice President, Holland 3,460
Jr. ................... 1982 America Cruise Lines
since 1996 (travel);
President Westmark
Hotels, Inc. (hotel and
restaurant management)
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Stock Beneficially
Age and Year Owned as of
first became a January 31, 2000(2)
Director of the ------------------------
Company or a Principal Occupation Shares Percent
Name Predecessor or Employment(6) Held of Class(5)
- ---- --------------- ------------------------ --------- -----------
<S> <C> <C> <C> <C>
J. Michael Pate......... 52 President, Pate 4,720
1991 Insurance Agency, Inc.
(insurance)
Martin R. Pihl.......... 65 Retired. 8,096
1972
Edward F. Randolph...... 40 President, Edward F. 400
1995 Randolph Ins. Agency,
Inc. (insurance)
Edward B. Rasmuson...... 59 Chairman of the Board of 1,364,150(1) 4.4
1974 National Bancorp and
National Bank of Alaska
Major General John 60 Consulting, Arctic Slope 533
Schaeffer (Ret.)....... 1988 Regional Corporation
(Alaska Native Regional
Corporation)
Michael K. Snowden...... 54 President, Service 18,842(3)
1995 Transfer, Inc. (fuel
distribution and
transport services)
Richard Strutz.......... 49 President of National 6,214
1992 Bancorp and National
Bank of Alaska
George S. Suddock....... 60 Chairman, Alaska 1,107,411(4) 3.6
1969 National Corporation
(insurance)
Richard A. Wien(7)...... 64 Chairman & CEO, 3,764
1974 Florcraft (floor
coverings)
Sharon Wikan............ 51 Secretary-Treasurer 647
1994 Hammer & Wikan since
1995 (retail grocery and
general merchandise)
</TABLE>
- --------
1. The reported holdings exclude 1,038,880 shares held in trust for Edward B.
Rasmuson, over which Mr. Rasmuson has no power to vote or dispose.
2. The reported holdings include securities with respect to which the director
has or shares the power to vote or dispose. Not included in the securities
reported are the following shares over which the indicated directors had no
power to vote or dispose: 49,692 shares held by the wife of Edward B.
Rasmuson. Director Rasmuson disclaims any beneficial ownership of these
shares held by his spouse.
3. The reported holdings include 8,448 shares held in a family trust of which
Mr. Snowden is a trustee. Mr. Snowden disclaims any beneficial interest of
those shares.
4. The reported holdings include 1,096,267 shares held by a corporation of
which Mr. Suddock is an officer, director, and stockholder. Mr. Suddock
disclaims beneficial ownership of those shares.
5. If no percent is shown, the percent of the nominee's beneficial ownership is
less than one percent.
6. Each nominee has been engaged in the indicated occupation or employment, or
has held the indicated position or one of equivalent responsibility with his
present employer during the past five years, unless otherwise indicated.
7. None of the nominees serve on the boards of directors of other companies
filing reports with the Securities and Exchange Commission, except that Mr.
Wien is a director of Alaska Air Group, Inc.
63
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires National
Bancorp's officers and directors, and persons who own more than ten percent of
National Bancorp's common stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors, and
greater than ten percent stockholders are required by SEC regulation to furnish
National Bancorp with copies of all Section 16(a) reports they file. Based
solely on review of the copies of such forms furnished to National Bancorp, or
written representations that no Form 5s were required, National Bancorp
believes that during 1999 all Section 16(a) filing requirements applicable to
its officers, directors, and greater than ten percent beneficial owners were in
compliance.
DIRECTORS MEETINGS AND COMMITTEES
The board of directors of National Bank of Alaska met ten times during 1999
and the board of directors of National Bancorp met ten times. All directors
attended at least 75 percent of the aggregate of the total number of meetings
held by both boards, plus meetings held by all committees on which such
directors served during 1999. Neither National Bancorp nor National Bank of
Alaska has a standing nominating committee and National Bancorp does not have a
standing audit committee. National Bank of Alaska formed a compensation
committee in November 1992.
The board of directors of National Bank of Alaska annually appoints a
Directors Examining Committee which performs many functions of an audit
committee. Members of the committee, none of whom are officers of National Bank
of Alaska, are: George S. Suddock, Chairman, Donald B. Abel, Jr., and Carl
Brady, Jr. The functions of the Examining Committee include recommending to the
board of directors the appointment of independent auditors, the review of
regulatory reports and the responses to those reports and review of the scope
of the internal audit programs and the adequacy of internal accounting systems
and controls. The Examining Committee has been delegated the responsibility for
both review and communication to the board of directors of the results of
examinations performed by the regulatory examiners, other external auditors and
the internal auditors. The Examining Committee held four meetings in 1999.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows all compensation paid for the calendar years ended
December 31, 1997, 1998, 1999, to the chief executive officer (CEO) and the
four most highly compensated executive officers (other than the CEO) of
National Bancorp and National Bank of Alaska, and who were serving as executive
officers as of December 31, 1999.
64
<PAGE>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
Other Annual All Other
Name and Principal Position Year Salary Compensation Compensation
- --------------------------- ---- -------- ------------ ------------
<S> <C> <C> <C> <C>
Edward B. Rasmuson.................... 1999 $440,000 $35,787 $93,408
CEO, Chairman of the Board of 1998 425,000 42,708 83,890
Directors, and Director of National 1997 375,000 49,147 76,518
Bancorp and National Bank of Alaska
Richard Strutz........................ 1999 400,000 9,925 85,497
President and Director of National 1998 375,000 18,105 74,585
Bancorp and National Bank of Alaska 1997 325,000 11,898 66,316
Kathleen Soderberg.................... 1999 305,000 2,399 66,369
Executive Vice President of National 1998 290,000 2,725 58,768
Bank of Alaska 1997 260,000 2,168 53,053
Gary Dalton........................... 1999 250,000 700 55,353
Executive Vice President of National 1998 235,000 3,659 48,533
Bank of Alaska 1997 205,000 1,943 41,830
James L. Cloud........................ 1999 200,000 187 45,338
Executive Vice President of National 1998 180,000 244 38,297
Bank of Alaska 1997 130,000 0 27,641
</TABLE>
"Other annual compensation" is the amount reimbursed during the fiscal year
for the payment of federal income taxes arising from non-tax deductible
business use of a corporate aircraft.
"All other compensation" is cash compensation earned under a Profit Sharing
Plan and Trust available to all employees meeting certain age and service
requirements.
The above named officers receive no compensation other than as shown in the
foregoing table, and National Bancorp and National Bank of Alaska have no other
existing plans or arrangements other than as follows:
In 1994, the board of directors of National Bank of Alaska approved a plan
whereby any officer holding a title of Senior Vice President or above (which
includes the named officers) can elect to defer receipt of up to a total of 15%
of his/her annual compensation. This 15% includes any amounts deferred under
the 401(k) portion of the existing profit sharing program. Amounts deferred are
not additional compensation, only deferral of receipt of a portion of regular
annual compensation. Amounts deferred in excess on the 401(k) portion become an
unsecured obligation of National Bank of Alaska and become payable at
termination of employment. Amounts in excess of the 401(k) portion are annually
credited with interest at a percentage equivalent to National Bank of Alaska's
overall return on average earning assets. In 1996, the board increased the
maximum allowable percentage of deferral from 15% to 20%. In 1997, the board
increased the maximum allowable percentage of deferral to 100%.
65
<PAGE>
COMPENSATION OF DIRECTORS
The directors of National Bancorp are also directors of the National Bank of
Alaska. Directors of National Bancorp receive no compensation for attendance at
meetings of the National Bancorp board, or for committee meetings.
Bank directors who are not officers of National Bank of Alaska receive $1,000
for each bank board of directors meeting attended. Bank directors who are
officers of National Bank of Alaska receive no compensation other than that
received as an officer. Each bank director (who is not otherwise an employee of
National Bank of Alaska) also receives $1,000 for attendance at each committee
meeting of National Bank of Alaska.
No director received compensation for services as a director during 1999 in
addition to or in lieu of the standard arrangement that is described above.
EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS
There are no employment contracts between National Bancorp or National Bank
of Alaska and the named executive officers. There are no plans or arrangements
for compensation of named executive officers resulting from a change in control
of National Bancorp or National Bank of Alaska.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1992, National Bank of Alaska formed a standing Compensation Committee
composed of Directors Campbell, Jansen, and Pihl. None of the Compensation
Committee members: a) has ever been an officer or employee of either National
Bank of Alaska or National Bancorp; or b) has any relationship with National
Bancorp or National Bank of Alaska that requires disclosure other than as
discussed under "Transactions with Directors, Executive Officers, and
Associates" in this proxy statement-prospectus.
During the fiscal year ending December 31, 1999 no executive officer of
National Bank of Alaska or National Bancorp: (a) served as a member of the
Compensation Committee of another entity, one of whose executive officers
served on the Compensation Committee of National Bank of Alaska; or (b) served
as a director of another entity, one of whose executive officers served on the
Compensation Committee of National Bank of Alaska; or c) served as a member of
the Compensation Committee of another entity, one of whose executive officers
served as a director of National Bancorp.
EXECUTIVE COMPENSATION
In October 1992, the Securities and Exchange Commission adopted new rules
regarding the disclosure of compensation of named executive officers. The goal
of these rules is to clarify disclosure and the rationale and basis for such
compensation. In response to the new rules, a Compensation Committee of three
"outside" directors was formed. The Compensation Committee did not meet in
1999.
66
<PAGE>
COMPENSATION COMMITTEE REPORT
National Bank of Alaska's compensation of executive officers is based on
evaluation of many factors, including financial performance, information on
industry compensation practices and levels, the ability to retain senior
management, and an objective to have salaries at levels that can be maintained
in the future.
Compensation of all employees, including executive officers, is based on
direct salary and participation in National Bank of Alaska's Profit Sharing
Plan. National Bancorp and National Bank of Alaska do not grant executive
employees stock options, stock appreciation rights, or other forms of long-term
incentive compensation which are a significant portion of most peer bank
compensation programs.
Independent consultants are periodically engaged to report on comparisons of
National Bank of Alaska's performance and the compensation of National Bank of
Alaska's highest paid executive officers with similar size banks. In recent
years, National Bank of Alaska has experienced substantial growth in assets and
National Bank of Alaska's earnings as a return on assets has been outstanding.
The chairman of the board's recommendations of salaries for the five highest
paid officers of National Bank of Alaska for 1999, which are approved by the
Compensation Committee on behalf of the board of directors, are as follows:
<TABLE>
<S> <C> <C>
Chairman of the Board and
CEO Edward B. Rasmuson $440,000
President Richard Strutz $400,000
Executive Vice President Kathleen Soderberg $305,000
Executive Vice President Gary Dalton $250,000
Executive Vice President James L. Cloud $200,000
</TABLE>
The Compensation Committee has consistently found that salaries of executive
officers are well within comparisons with other banks of similar size and
consistent with the compensation plan objectives of National Bancorp and
National Bank of Alaska.
Compensation Committee
James O. Campbell
James H. Jansen
Martin R. Pihl
67
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AS OF JANUARY 31, 2000
<TABLE>
<CAPTION>
Amount and
Nature of
Name of Beneficial Percent of
Title of Class Beneficial Owner Ownership Class(2)
-------------- ------------------ ---------- ----------
<S> <C> <C> <C>
Common Stock Edward B. Rasmuson 1,364,150(1) 4.4
Par Value $2.50
Common Stock Richard Strutz 6,214
Par Value $2.50
Common Stock Kathleen Soderberg 7,215
Par Value $2.50
Common Stock Gary Dalton 3,536
Par Value $2.50
Common Stock James L. Cloud 2,961
Par Value $2.50
</TABLE>
- --------
1. Reported holdings exclude 1,038,880 shares held in trust for Edward B.
Rasmuson on which Mr. Rasmuson has no power to vote or dispose. Also
excluded are 49,692 shares held by the wife of Edward B. Rasmuson. Mr.
Rasmuson has no power to vote or dispose of these share and disclaims any
beneficial ownership.
2. If no percent is shown, the percent of the nominee's beneficial ownership is
less than one percent.
CHANGES IN CONTROL
On January 12, 2000, National Bancorp executed the merger agreement which
calls for the merger of National Bancorp into a wholly-owned subsidiary of
Wells Fargo, in which all of the outstanding shares of capital stock of
National Bancorp will be exchanged for shares of common stock of Wells Fargo.
To induce Wells Fargo to enter into the merger agreement, Elmer E. Rasmuson and
Edward B. Rasmuson each signed a support agreement that, in part, requires them
to vote their shares of stock in favor of the merger at the stockholders
meeting that will be held to vote on the merger. See "The Merger--Support
Agreements."
TRANSACTIONS WITH DIRECTORS, EXECUTIVE OFFICERS, AND ASSOCIATES
Certain directors and officers of National Bancorp and National Bank of
Alaska and persons associated with them are customers of and have had
transactions, including credit transactions, with National Bank of Alaska from
time to time in the ordinary course of business. Additional transactions may be
expected to take place in the ordinary course of business in the future. All
loans and commitments included in transactions with such persons were made in
the ordinary course of business, and were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions which National Bank of Alaska had with other persons,
and did not involve more than the normal risk of collectibility or present
other unfavorable features.
68
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG NATIONAL BANCORP, KBW 50 BANK INDEX, S&P 500 INDEX
(SEE FOOTNOTE A)
[GRAPH]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
KBW 50 Index.................... $100.00 $160.16 $226.56 $331.21 $358.62 $346.17
S&P Index....................... $100.00 $134.11 $166.30 $225.49 $289.93 $350.93
National Bancorp................ $100.00 $130.27 $142.77 $269.48 $292.59 $248.72
</TABLE>
A. Total return with dividend reinvestment is calculated based on share price
appreciation or depreciation and total dividends paid. Dividend reinvestment
assumes the reinvestment of dividends into additional shares of the same class
of equity securities at the frequency with which dividends are paid on such
securities during the applicable fiscal year. Dollar figures in the table are
as of December 31 of the respective year.
The KBW 50 Index is made up of 50 of the nation's most important banking
companies, including all money centers and most major regional banks, and is
meant to be representative of the price performance of the nation's large
banks. The KBW 50 is calculated in the same manner as the S&P 500. Both are
market-capitalization-weighted indices, so companies judged by the market to be
more important (i.e., more valuable) count for more in both indices. It should
be kept in mind that, by design, the KBW 50 does not reflect the price or total
return performance of smaller banking companies. Further information on the KBW
50 Bank Index may be obtained by writing Keefe, Bruyette & Woods, Inc., Two
World Trade Center, 85th Floor, New York, New York 10048.
69
<PAGE>
ITEM 3. APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
You will vote at the annual meeting to appoint independent public accountants
to audit and report on the financial statements of National Bancorp and
subsidiaries for the year ending December 31, 2000. National Bancorp's board of
directors has recommended the appointment of Deloitte & Touche LLP as such
independent accountants. Deloitte and Touche LLP acted in this capacity for the
year ended December 31, 1999. Representatives of Deloitte & Touche LLP are
expected to be present at the meeting to answer appropriate questions and to
make a statement if they wish.
National Bancorp's board of directors recommends that you vote for the
appointment of Deloitte & Touche LLP as National Bancorp's independent public
accountants for the year ending December 31, 2000. Proxies solicited by
National Bancorp's management will be so voted unless you specify a contrary
choice on your proxy. To be approved, the proposal requires the affirmative
vote of a majority of the shares present in person or represented by proxy and
entitled to vote at the annual meeting.
EXPERTS
Wells Fargo's Independent Accountants
The consolidated financial statements of Wells Fargo and subsidiaries as of
December 31, 1999 and 1998, and for each of the years in the three-year period
ended December 31, 1999, 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.
National Bancorp's Independent Accountants
The consolidated financial statements of National Bancorp of Alaska, Inc.,
incorporated in this proxy statement-prospectus by reference from National
Bancorp's Annual Report on Form 10-K for the year ended December 31, 1999, have
been audited by Deloitte & Touche LLP, independent auditors, as stated in its
report, which is incorporated herein by reference and has been so incorporated
in reliance upon the report of such firm given upon its authority as experts in
accounting and auditing.
OPINIONS
Share Issuance
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 merger 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 total number of shares Mr. Stroup owns or has the right to acquire upon
exercise of his options is less than 0.1% of the outstanding shares of Wells
Fargo common stock.
Tax Matters
Duane, Morris & Heckscher LLP, Washington, D.C., has given an opinion
regarding the material U.S. federal income tax consequences of the merger. See
"The Merger--U.S. Federal Income Tax Consequences Of The Merger."
70
<PAGE>
DEADLINES FOR SUBMITTING STOCKHOLDER PROPOSALS
National Bancorp will hold a 2001 annual meeting of stockholders only if the
merger is not completed before the time of the meeting. If a 2001 annual
meeting is held, any proposal to be presented at the meeting from a stockholder
who wishes to have the proposal included in National Bancorp's proxy materials
sent to stockholders for the meeting using the processes contained in Rule 14a-
8 of the Securities Exchange Act of 1934 must be received by the Corporate
Secretary of National Bancorp at Northern Lights Boulevard and C Street,
Anchorage, Alaska 99503, not later than November 11, 2000.
WHERE YOU CAN FIND MORE INFORMATION
Registration Statement
Wells Fargo has filed a registration statement on Form S-4 to register with
the SEC the Wells Fargo common stock to be issued to National Bancorp
stockholders in the merger. This proxy statement-prospectus is part of that
registration statement. The registration statement, including the exhibits to
the registration statement, contains additional relevant information about
Wells Fargo and Wells Fargo common stock. 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.
Other SEC Filings
Wells Fargo and National Bancorp file annual, quarterly and current reports,
proxy statements and other information with the SEC. Wells Fargo's and National
Bancorp's SEC filings are available to the public over the Internet at the
SEC's web site at http://www.sec.gov. You can also read and copy any document
filed by Wells Fargo or National Bancorp with the SEC at the following SEC
locations:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-
2511
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330.
Wells Fargo's SEC filings are also available from commercial document
retrieval services and from the New York and Chicago Stock Exchanges. For
information on obtaining copies of Wells Fargo's SEC filings at the New York
Stock Exchange, call (212) 656-5060, and at the Chicago Stock Exchange, call
(312) 663-2423. National Bancorp's SEC filings are also available from
commercial document retrieval services.
Documents Incorporated By Reference
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 that have
been filed by Wells Fargo or National Bancorp with the SEC.
Wells Fargo Documents
This proxy statement-prospectus incorporates by reference the Wells Fargo SEC
documents set forth below. All of the documents were filed under SEC File No.
001-2979. Documents filed before November 3, 1998 were filed under the name
Norwest Corporation.
71
<PAGE>
. Annual Report on Form 10-K for the year ended December 31, 1999,
including information specifically incorporated by reference into the
Form 10-K from Wells Fargo's 1999 Annual Report to Stockholders and
Wells Fargo's definitive Notice and Proxy Statement for Wells Fargo's
2000 Annual Meeting of Stockholders;
. [Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;]
. Current Reports on Form 8-K filed January 18, 2000 and January 26, 2000;
. The description of Wells Fargo common stock contained in the Current
Report on Form 8-K filed October 14, 1997, including any amendment or
report filed to update such description;
. The description of preferred stock purchase rights contained in the
Registration Statement on Form 8-A dated October 21, 1998, including any
amendment or report filed to update such description; and
. All reports and definitive proxy or information statements filed by
Wells Fargo pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this proxy statement-
prospectus and before completion of the merger and the exchange of Wells
Fargo common stock for National Bancorp common stock.
National Bancorp Documents
This proxy statement-prospectus incorporates by reference the National
Bancorp SEC documents set forth below. All of the documents were filed under
SEC File No. 000-10769.
. Annual Report on Form 10-K for the year ended December 31, 1999;
. [Quarterly Report on Form 10-Q for the quarter ended March 31, 2000;]
. Current Reports on Form 8-K filed January 14, 2000, February 16, 2000
and March 31, 2000.
. All reports and definitive proxy or information statements filed by
National Bancorp pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 after the date of this proxy statement-
prospectus and before completion of the merger and the exchange of Wells
Fargo common stock for National Bancorp common stock.
Documents Available Without Charge From The Companies
Wells Fargo and National Bancorp 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 in this proxy statement-prospectus. You may obtain a copy of any
document incorporated by reference by writing or calling Wells Fargo or
National Bancorp as follows:
Wells Fargo: National Bancorp:
Corporate Secretary Corporate Secretary
Wells Fargo & Company National Bancorp of Alaska,
MAC N9305-173 Inc.
Sixth and Marquette Northern Lights & C Streets
Minneapolis, MN 55479 Anchorage, Alaska 99503
(612) 667-8655 (907) 522-8888
To ensure delivery of the copies in time for the annual meeting, your request
should be received by June 1, 2000.
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 National Bancorp 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 May
8, 2000. 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.
72
<PAGE>
FORWARD-LOOKING STATEMENTS
This proxy statement-prospectus, including information incorporated by
reference into this document, may contain forward-looking statements about
Wells Fargo and National Bancorp, including one or more of the following:
. projections of revenues, income, earnings per share, capital
expenditures, dividends, capital structure or other financial items;
. descriptions of plans or objectives of management for future operations,
products or services;
. forecasts of future economic performance;
. descriptions of assumptions underlying or relating to any of the
foregoing.
Forward-looking statements can be identified by the fact that they do not
relate strictly to historical or current facts. They often include words such
as "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of
similar meaning, or future or conditional verbs such as "will," "would,"
"should," "could" or "may."
Forward-looking statements consist of expectations or predictions of future
conditions, events or results. They are not guarantees of future performance.
By their nature, forward-looking statements are subject to risks and
uncertainties. There are a number of factors--many of which are beyond the
control of Wells Fargo and National Bancorp--that could cause actual
conditions, events or results to differ significantly from those described in
the forward-looking statements.
Wells Fargo's and National Bancorp's reports filed with the SEC, including
Wells Fargo's and National Bancorp's Forms 10-K for the year ended December 31,
1999, describe some of these factors. For example, Wells Fargo's Form 10-K
describes certain credit, market, operational, liquidity, and interest rate
risks associated with Wells Fargo's business and operations. Other factors
described in Wells Fargo's Form 10-K include changes in business and economic
conditions, competition, fiscal and monetary policies, disintermediation,
legislation (including financial modernization legislation), the combination of
the former Norwest Corporation and the former Wells Fargo & Company, and other
mergers and acquisitions.
There are other factors besides these that could cause actual conditions,
events or results to differ significantly from those described in the forward-
looking statements or otherwise affect in the future Wells Fargo's and/or
National Bancorp's business, results of operations and financial condition.
73
<PAGE>
APPENDIX A
----------------
AGREEMENT AND PLAN OF REORGANIZATION
by and between
NATIONAL BANCORP OF ALASKA, INC.
and
WELLS FARGO & COMPANY
dated as of January 12, 2000
----------------
AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
by and between
NATIONAL BANCORP OF ALASKA, INC.
and
WELLS FARGO & COMPANY
dated as of February 15, 2000
----------------
<PAGE>
AMENDMENT TO AGREEMENT
AND
PLAN OF REORGANIZATION
This AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION (the "Amendment")
entered into as of the 15th day of February, 2000, by and between NATIONAL
BANCORP OF ALASKA, INC. ("Company"), a Delaware corporation, and WELLS FARGO &
COMPANY ("Wells Fargo"), a Delaware corporation.
WHEREAS, Company and Wells Fargo are parties to that certain agreement and
plan of reorganization dated as of the 12th day of January, 2000 (the
"Agreement"), pursuant to the terms of which a wholly-owned subsidiary of Wells
Fargo will merge with the Company,
WHEREAS, the parties have determined that paragraph 1(a) of the Agreement
should be amended to redefine the "Wells Fargo Measurement Price."
NOW, THEREFORE, 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. Paragraph 1(a) of the Agreement is amended and restated in its entirety to
read as follows:
(a) Merger. Subject to the terms and conditions contained herein, a
wholly-owned subsidiary of Wells Fargo (the "Merger Co.") will be merged by
statutory merger with and into Company pursuant to the Merger Agreement,
with Company as the surviving corporation, in which merger each share of
Company Common Stock outstanding immediately prior to the Effective Time of
the Merger (as defined in paragraph 1 (d) below) (other than shares as to
which statutory dissenters' appraisal rights have been exercised) will be
converted into the right to receive the number of shares of Wells Fargo
Common Stock determined by dividing $30 by the Wells Fargo Measurement
Price. The "Wells Fargo Measurement Price" is defined as the average of the
closing prices of a share of Wells Fargo Common Stock as reported on the
consolidated tape of the New York Stock Exchange during the period of 15
trading days ending on March 15, 2000.
2. Except as specifically amended herein, the Agreement remains in full force
and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the day
and year first above written.
Wells Fargo & Company National Bancorp of Alaska, Inc.
/s/ Greg E. Cook /s/ Edward B. Rasmuson
By:__________________________________ By:__________________________________
Its: Senior Vice President Its: Chairman of the Board of
Directors
A-1
<PAGE>
AGREEMENT
AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") entered into as of the
12th day of January, 2000, by and between NATIONAL BANCORP OF ALASKA, INC.
("Company"), a Delaware corporation, and WELLS FARGO & COMPANY ("Wells Fargo"),
a Delaware corporation.
WHEREAS, the parties hereto desire to effect a reorganization whereby a
wholly-owned subsidiary of Wells Fargo will merge with and into Company (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 of the shares of Common Stock of Company of
the par value of $2.50 per share ("Company Common Stock") outstanding
immediately prior to the time the Merger becomes effective in accordance with
the provisions of the Merger Agreement into the right to receive shares of
voting Common Stock of Wells Fargo of the par value of $1-2/3 per share ("Wells
Fargo 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
[This paragraph 1(a) has been amended and restated in its entirety pursuant
to the Amendment to Agreement and Plan of Reorganization, a copy of which
document appears at the beginning of this Appendix A.]
(a) Merger. Subject to the terms and conditions contained herein, a wholly-
owned subsidiary of Wells Fargo (the "Merger Co.") will be merged by statutory
merger with and into Company pursuant to the Merger Agreement, with Company as
the surviving corporation, in which merger each share of Company Common Stock
outstanding immediately prior to the Effective Time of the Merger (as defined
in paragraph 1 (d) below) (other than shares as to which statutory dissenters'
appraisal rights have been exercised) will be converted into the right to
receive the number of shares of Wells Fargo Common Stock determined by dividing
$30 by the Wells Fargo Measurement Price. The "Wells Fargo Measurement Price"
is defined as the average of the closing prices of a share of Wells Fargo
Common Stock as reported on the consolidated tape of the New York Stock
Exchange during the period of 15 trading days ending on the day immediately
preceding the date on which the Board of Governors of the Federal Reserve
System approves the Merger.
(b) Wells Fargo Common Stock Adjustments. If, between the date hereof and the
Effective Time of the Merger, shares of Wells Fargo 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 Wells Fargo Common Stock for which a share of
Company Common Stock shall be exchanged pursuant to subparagraph (a), above,
will be appropriately and proportionately adjusted so that the number of such
shares of Wells Fargo Common Stock for which a share of Company Common Stock
shall be exchanged will equal the number of shares of Wells Fargo Common Stock
which holders of shares of Company 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 Wells Fargo 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 Wells Fargo 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
second day immediately preceding the Effective Date of the Merger (as defined
in paragraph 1(d) of this Agreement).
A-2
<PAGE>
(d) Mechanics of Closing Merger. Subject to the terms and conditions set
forth herein, the Merger Agreement shall be executed and it or a Certificate of
Merger shall be filed with the Secretary of State of the State of Delaware
within five (5) 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"), provided
that the Closing Date shall not occur prior to March 16, 2000 and shall not
occur on the last business day of a calendar month. 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. Wilmington, Delaware 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 Company 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 Wells Fargo, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota.
(e) Reservation of Right to Revise Structure. At Wells Fargo's election, the
Merger may alternatively be structured so that (1) Company is merged with and
into any other direct or indirect wholly owned subsidiary of Wells Fargo, (2)
any direct or indirect wholly owned subsidiary of Wells Fargo is merged with
and into Company, or (3) Company is merged with and into Wells Fargo; provided,
however, that no such change shall (A) alter or change the amount or kind of
consideration to be issued to the Company's stockholders in the Merger or under
such alternative structure (the "Merger Consideration"), (B) adversely affect
the tax treatment of Company's stockholders as a result of receiving the Merger
Consideration or prevent the parties from obtaining the opinion referred to in
Paragraph 6(h), or (C) impede or delay consummation of the Merger. In the event
of such election, the parties agree to execute an appropriate amendment to this
Agreement in order to reflect such election.
2. Representations and Warranties of Company. Company represents and warrants
to Wells Fargo as follows:
(a) Organization and Authority. Company is a corporation duly incorporated,
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 Company and the Company Subsidiaries (as defined in
paragraph 2(b)) 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. Company is registered as a bank holding company with the Federal
Reserve Board under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). Company has furnished Wells Fargo true and correct copies of its
certificate of incorporation and by-laws, as amended.
(b) Company's Subsidiaries. Schedule 2(b) sets forth a complete and correct
list of all of Company's subsidiaries as of the date hereof (individually a
"Company Subsidiary" and collectively the "Company 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 Company. No equity security
of any Company 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 Company
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 Delaware General
Corporation Law, all of such shares so owned by Company 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 Company Subsidiary
is a corporation or national banking association duly organized, validly
A-3
<PAGE>
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), Company 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 Company consists of
40,000,000 shares of common stock, $2.50 par value, of which, as of the close
of business on September 30, 1999, 30,218,199 shares were outstanding and
1,781,801 shares were held in the treasury. The maximum number of shares of
Company Common Stock (assuming for this purpose that phantom shares and other
share-equivalents constitute Company 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 30,224,180. All of the
outstanding shares of capital stock of Company have been duly and validly
authorized and issued and are fully paid and nonassessable. Except for the
preemptive rights afforded to Company stockholders under subsection (C) of
Article Fourth of the certificate of incorporation of Company, as amended, and
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 Company or any Company Subsidiary to issue, sell or
otherwise dispose of, or to purchase, redeem or otherwise acquire, any shares
of capital stock of Company or any Company Subsidiary. Except as set forth in
Schedule 2(c), since September 30, 1999 no shares of Company capital stock have
been purchased, redeemed or otherwise acquired, directly or indirectly, by
Company or any Company Subsidiary and no dividends or other distributions have
been declared, set aside, made or paid to the stockholders of Company.
(d) Authorization. Company has the corporate power and authority to enter
into this Agreement and the Merger Agreement and, subject to any required
approvals of its stockholders, to carry out its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Merger Agreement by Company and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the Board of
Directors of Company. Subject to such approvals of stockholders and of
government agencies and other governing boards having regulatory authority over
Company as may be required by statute or regulation, this Agreement and the
Merger Agreement are valid and binding obligations of Company enforceable
against Company in accordance with their respective terms.
Except as set forth on Schedule 2(d), neither the execution, delivery and
performance by Company of this Agreement or the Merger Agreement, nor the
consummation of the transactions contemplated hereby and thereby, nor
compliance by Company 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 Company or any
Company 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 Company or any Company Subsidiary is a party
or by which it may be bound, or to which Company or any Company Subsidiary or
any of the properties or assets of Company or any Company Subsidiary may be
subject, or (ii) subject to compliance with the statutes and regulations
referred to in the next paragraph, violate any statute, rule or regulation or,
to the best knowledge of Company, violate any judgment, ruling, order, writ,
injunction or decree applicable to Company or any Company 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 Delaware 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 Company of the transactions contemplated by
this Agreement and the Merger Agreement.
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(e) Company Financial Statements. The consolidated balance sheets of Company
as of December 31, 1998 and 1997 and related consolidated statements of income,
stockholders' equity and cash flows for the three years ended December 31,
1998, together with the notes thereto, certified by Deloitte & Touche LLP and
included in Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (the "Company 10-K") as filed with the Securities and
Exchange Commission (the "SEC"), and the unaudited consolidated balance sheets
of Company as of September 30, 1999 and the related unaudited consolidated
statements of income, stockholders' equity and cash flows for the nine (9)
months then ended included in Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1999 as filed with the SEC (collectively,
the "Company Financial Statements"), have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as may be indicated in the notes thereto) and present fairly (subject, in the
case of financial statements for interim periods, to normal recurring
adjustments) the consolidated financial position of Company and Company's
Subsidiaries at the dates and the consolidated results of operations and cash
flows of Company and Company's Subsidiaries for the periods stated therein.
(f) Reports. Since December 31, 1995, Company and each Company 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 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 "Company Reports." As of their
respective dates, the Company 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
Company Reports have been made available to Wells Fargo by Company.
(g) Properties and Leases. Except as may be reflected in the Company
Financial Statements and except for any lien for current taxes not yet
delinquent, Company and each Company 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 Company's
consolidated balance sheet as of September 30, 1999 included in Company's
Quarterly Report on Form 10-Q, and all real and personal property acquired
since such date, except such real and personal property as has been disposed of
in the ordinary course of business. All leases of real property and all other
leases material to Company or any Company Subsidiary pursuant to which Company
or such Company Subsidiary, as lessee, leases real or personal property are
valid and effective in accordance with their respective terms, and there is
not, under any such lease, any material existing default by Company or such
Company Subsidiary or any event which, with notice or lapse of time or both,
would constitute such a material default. Substantially all Company's and each
Company 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. Except as set forth in Schedule 2(h), each of Company and the
Company Subsidiaries has filed all federal, state, county, local and foreign
tax returns, including information returns, required to be filed by it, and
paid all taxes owed by it, including those with respect to income, withholding,
social security, unemployment, workers compensation, franchise, ad valorem,
premium, excise and sales taxes, and no taxes shown on such returns to be owed
by it or assessments received by it are delinquent. The federal income tax
returns of Company and the Company Subsidiaries for the fiscal year ended
December 31, 1995, 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 Company nor any
Company Subsidiary is a party to any pending action
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or proceeding, nor to the knowledge of Company 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 Company or any Company Subsidiary which has not been settled,
resolved and fully satisfied. Each of Company and the Company Subsidiaries has
paid all taxes owed or which it is required to withhold from amounts owing to
employees, creditors or other third parties. The consolidated balance sheet as
of September 30, 1999, 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 Company and the
Company Subsidiaries with respect to all periods through the date thereof.
(i) Absence of Certain Changes. Since December 31, 1998 there has been no
change in the business, financial condition or results of operations of Company
or any Company 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 Company and the Company 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 generally accepted
accounting principles or regulatory accounting requirements applicable to banks
or their holding companies generally or changes to the general level of
interest rates or other economic changes affecting banks generally).
(j) Commitments and Contracts. Except as set forth on Schedule 2(j), neither
Company nor any Company 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 that are terminable at
will by Company or such Company 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 containing covenants that limit the ability of Company
or any Company Subsidiary to compete in any line of business or with any
person or which involve any restriction of the geographical area in which,
or method by which, Company or any Company Subsidiary may carry on its
business (other than as may be required by law or applicable regulatory
authorities);
(v) any other contract or agreement which is a "material contract" within
the meaning of Item 601(b)(10) of Regulation S-K;
(vi) any real property lease and any other lease with annual rental
payments aggregating $25,000 or more;
(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 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. Company has furnished Wells Fargo
copies of (i) all attorney responses to the request of the independent auditors
for Company with respect to loss contingencies as of December 31, 1998 in
connection with the Company Financial Statements, and (ii) a written list of
legal and regulatory proceedings filed against Company or any Company
Subsidiary since said date. There is no pending or, to the best knowledge of
Company, threatened, claim, action, suit, investigation or proceeding, against
Company or any Company Subsidiary, nor is Company or any Company Subsidiary
subject to any order, judgment or decree, except for matters which, in the
aggregate, will not have, or cannot reasonably be expected
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to have, a material adverse effect on the business, financial condition or
results of operations of Company and the Company Subsidiaries taken as a
whole.
(l) Insurance. Company and each Company Subsidiary are presently insured,
and during each of the past five calendar years (or during such lesser period
of time as Company has owned such Company Subsidiary) have 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. Each of Company and each Company Subsidiary (other
than any Company Subsidiary which is not actively engaged in an aviation,
banking, insurance, mortgage, finance company, leasing or international
banking business) 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 Company or such Company Subsidiary; all such permits, licenses,
certificates of authority, orders and approvals are in full force and effect
and, to the best knowledge of Company, no suspension or cancellation of any of
them is threatened; and all such filings, applications and registrations are
current. The conduct by Company and each such Company Subsidiary of its
business and the condition and use of its properties do 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 Company nor any such Company 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 Company or any Company Subsidiary
which reasonably could be expected to have a material adverse effect on the
business or properties of Company and the Company Subsidiaries taken as a
whole.
(n) Labor. No work stoppage involving Company or any Company Subsidiary is
pending or, to the best knowledge of Company, threatened. Neither Company nor
any Company Subsidiary is involved in, or threatened with or affected by, any
labor dispute, arbitration, lawsuit or administrative proceeding that could
materially and adversely affect the business of Company or such Company
Subsidiary. Employees of Company and the Company 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 Company, no officer or director of Company or
any Company Subsidiary, or any "associate" (as such term is defined in Rule
14a-1 under the Exchange Act) of any such officer or director, has any
interest in any material contract or property (real or personal), tangible or
intangible, used in or pertaining to the business of Company or any Company
Subsidiary.
Schedule 2(o) sets forth a correct and complete list of any loan from
Company or any Company 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 Company's or such Company Subsidiary's Board of Directors.
(p) Company Benefit Plans.
(i) Schedule 2(p)(i) sets forth each employee benefit plan with respect
to which Company or any Company Subsidiary contributes, sponsors or
otherwise has any obligation (the "Plans"). For purposes of this Section
2(p) and Schedule 2(p)(i), "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended, and the term "Plan" or "Plans" means all
employee benefit plans as defined in Section 3(3) of ERISA, and all other
benefit arrangements including, without limitation, any plan, program,
agreement, policy or commitment providing for insurance coverage of
employees, workers' compensation,
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disability benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits, severance or termination of employment benefits, life,
health, death, disability or accidental benefits.
(ii) Except as disclosed on Schedule 2(p)(ii), no Plan is a
"multiemployer plan" within the meaning of Section 3(37) of ERISA.
(iii) Except as disclosed on Schedule 2(p)(iii), no Plan promises or
provides health or life benefits to retirees or former employees except as
required by federal continuation of coverage laws or similar state laws.
(iv) Except as disclosed on Schedule 2(p)(iv), (a) each Plan is and has
been in all material respects operated and administered in accordance with
its provisions and applicable law including, if applicable, ERISA and the
Code; (b) all reports and filings with governmental agencies (including but
not limited to the Department of Labor, Internal Revenue Service, Pension
Benefit Guaranty Corporation and the Securities and Exchange Commission)
required in connection with each Plan have been timely made; (c) all
disclosures and notices required by law or Plan provisions to be given to
participants and beneficiaries in connection with each Plan have been
properly and timely made; (d) there are no actions, suits or claims
pending, other than routine uncontested claims for benefits with respect to
each Plan; and (e) each Plan intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the Internal
Revenue Service stating that the Plan (including all amendments) is tax
qualified under Section 401(a) of the Code and Company knows of no reason
that any such Plan is not qualified within the meaning of Section 401(a) of
the Code and knows of no reason that each related Plan trust is not exempt
from taxation under Section 501(a) of the Code.
(v) Except as disclosed on Schedule 2(p)(v), (a) all contributions,
premium payments and other payments required to be made in connection with
the Plans as of the date of this Agreement have been made; (b) a proper
accrual has been made on the books of Company for all contributions,
premium payments and other payments due in the current fiscal year but not
made as of the date of this Agreement; (c) no contribution, premium payment
or other payment has been made in support of any Plan that is in excess of
the allowable deduction for federal income tax purposes for the year with
respect to which the contribution was made (whether under Sections 162,
280G, 404, 419, 419A of the Code or otherwise); and (d) with respect to
each Plan that is subject to Section 301 of ERISA or Section 412 of the
Code, Company is not liable for any accumulated funding deficiency as that
them is defined in Section 412 of the Code and the projected benefit
obligations determined as of the date of this Agreement do not exceed the
assets of the Plan.
(vi) Except as disclosed in Schedule 2(p)(vi) and to best knowledge of
Company, 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 1 of ERISA which could subject such Plan or trust, or any
trustee, fiduciary or administrator thereof, or any party dealing with any
such Plan or trust, to a tax penalty or prohibited transactions imposed by
Section 4975 of the Code or would result in material liability to Company
and the Company Subsidiaries as a whole.
(vii) No Plan 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.
(viii) Except as disclosed in Schedule 2(p)(viii), neither the execution
and delivery of this Agreement and the Merger Agreement nor the
consummation of the transactions contemplated hereby and thereby will (a)
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 Company under any Plan or
otherwise, (b) materially increase any benefits otherwise payable under any
Plan, or (c) result in the acceleration of the time of payment or vesting
of any such benefits to any material extent.
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<PAGE>
(q) Proxy Statement, etc. None of the information regarding Company and the
Company Subsidiaries supplied or to be supplied by Company for inclusion in (i)
a Registration Statement on Form S-4 and the prospectus included therein to be
filed with the SEC by Wells Fargo for the purpose of registering the shares of
Wells Fargo Common Stock to be exchanged for shares of Company Common Stock
pursuant to the provisions of the Merger Agreement (the "Registration
Statement"), (ii) the proxy statement included in the Registration Statement to
be mailed to Company's stockholders 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 Registration Statement, Proxy Statement and other
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, and, in the case of the Proxy Statement or
any amendment thereof or supplement thereto, at the time of the meeting of
stockholders referred to in paragraph 4(c), and at the Effective Time of the
Merger, 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
contained therein, in light of the circumstances under which they were made, no
misleading. All documents which Company and the Company 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
Company nor any Company Subsidiary is under any obligation, contingent or
otherwise, by reason of any agreement to register any of its securities under
the Securities Act.
(s) Brokers and Finders. Except for CIBC World Markets Corp. which has
retained to prepare a fairness opinion, neither Company nor any Company
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 Company or any Company Subsidiary,
in connection with this Agreement and the Merger Agreement or the transactions
contemplated hereby and thereby.
(t) Fiduciary Activities. Company and each Company Subsidiary has properly
administered in all respects material and which could reasonably be expected to
be material, to the financial condition of Company and the Company 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 Company, any Company
Subsidiary, nor any director, officer or employee of Company or any Company
Subsidiary has committed any breach of trust with respect to any such fiduciary
account which is material to, or could reasonably be expected to be material
to, the financial condition of Company and the Company 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 Company nor any Company Subsidiary is in default,
nor has any event occurred that, 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 Company and the Company Subsidiaries, taken as a
whole. To the best of Company's knowledge, all parties with whom Company or any
Company Subsidiary has material leases, agreements or contracts or who owe to
Company or any Company Subsidiary material obligations other than those arising
in the ordinary course of the banking business of the Company 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 Company or any Company Subsidiary, any
liability relating to the release of hazardous substances as defined under any
local, state or
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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
Company's knowledge, threatened against Company or any Company Subsidiary the
result of which has had or could reasonably be expected to have a material
adverse effect upon Company and Company's Subsidiaries taken as a whole; except
as set forth in Schedule 2(v), to the best of Company's knowledge, there is no
reasonable basis for any such proceeding, claim or action; and to the best of
Company's knowledge neither Company nor any Company 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. Company has
provided Wells Fargo 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. Except as set forth in Schedule
2(w), Company is in compliance with its Year 2000 project management process as
set forth in the May 5, 1997 Federal Financial Institutions Examination Council
("FFIEC") Interagency Statement on the Year 2000 and subsequent guidance
documents (the "FFIEC Requirements"). Company has made its Year 2000 project
assessment and remediation plan available to Wells Fargo for review.
3. Representations and Warranties of Wells Fargo. Wells Fargo represents and
warrants to Company as follows:
(a) Organization and Authority. Wells Fargo 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 Wells Fargo 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. Wells Fargo is registered
as a bank holding company with the Federal Reserve Board under the BHC Act.
(b) Wells Fargo Subsidiaries. Schedule 3(b) sets forth a complete and correct
list as of December 31, 1998, of Wells Fargo's Significant Subsidiaries (as
defined in Regulation S-X promulgated by the SEC) (individually a "Wells Fargo
Subsidiary" and collectively the "Wells Fargo 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 Wells Fargo. No equity security of
any Wells Fargo Subsidiary is or may be required to be issued to any person or
entity other than Wells Fargo 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 Wells Fargo 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 Wells Fargo 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 Wells Fargo
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) Wells Fargo Capitalization. As of September 30, 1999, the authorized
capital stock of Wells Fargo consists of (i) 20,000,000 shares of Preferred
Stock, without par value, of which as of the close of business on September 30,
1999, 980,000 shares of Cumulative Tracking Preferred Stock, at $200 stated
value, 9,532 shares of ESOP Cumulative Convertible Preferred Stock, at $1,000
stated value, 19,790 shares of 1995 ESOP Cumulative Convertible Preferred
Stock, at $1,000 stated value, 21,111 shares of 1996 ESOP Cumulative
Convertible Preferred Stock, at $1,000 stated value, 13,639 shares of 1997 ESOP
Cumulative Convertible Preferred Stock, at $1,000 stated value, 8,472 shares of
1998 ESOP Cumulative Convertible Preferred Stock, $1,000 stated value, 22,653
shares of 1999 ESOP Cumulative Convertible Preferred Stock, $1,000 stated
value, 1,500,000 shares of Adjustable-Rate Cumulative Preferred Stock, Series
B, $50 stated value, and 4,000,000
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shares of 6.59% Adjustable Rate Noncumulative Preferred Stock, Series H, $50
stated value, were outstanding; (ii) 4,000,000 shares of Preference Stock,
without par value, of which as of the close of business on September 30, 1999,
no shares were outstanding; and (iii) 4,000,000,000 shares of Common Stock, $1
2/3 par value, of which as of the close of business on September 30, 1999,
1,649,763,637 shares were outstanding and 16,331,628 shares were held in the
treasury. All of the outstanding shares of capital stock of Wells Fargo have
been duly and validly authorized and issued and are fully paid and
nonassessable.
(d) Authorization. Wells Fargo 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 Wells Fargo and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors of Wells Fargo. No approval or consent by the
stockholders of Wells Fargo 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 Wells Fargo as may be required by statute or regulation, this Agreement
is a valid and binding obligation of Wells Fargo enforceable against Wells
Fargo in accordance with its terms.
Neither the execution, delivery and performance by Wells Fargo of this
Agreement or the Merger Agreement, nor the consummation of the transactions
contemplated hereby and thereby, nor compliance by Wells Fargo 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 Wells Fargo or any Wells Fargo 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 Wells Fargo or any
Wells Fargo Subsidiary is a party or by which it may be bound, or to which
Wells Fargo or any Wells Fargo Subsidiary or any of the properties or assets
of Wells Fargo or any Wells Fargo Subsidiary may be subject, or (ii) subject
to compliance with the statutes and regulations referred to in the next
paragraph, violate any statute, rule or regulation or, to the best knowledge
of Wells Fargo, violate any judgment, ruling, order, writ, injunction or
decree applicable to Wells Fargo or any Wells Fargo 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 Delaware 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 Wells Fargo of the transactions
contemplated by this Agreement and the Merger Agreement.
(e) Wells Fargo Financial Statements. The consolidated balance sheets of
Wells Fargo and Wells Fargo's subsidiaries as of December 31, 1998 and 1997
and related consolidated statements of income, changes in stockholders' equity
and comprehensive income, and cash flows for the three years ended December
31, 1998, together with the notes thereto, audited by KPMG LLP and included in
Wells Fargo's Annual Report on Form 10-K for the fiscal year ended December
31, 1998 (the "Wells Fargo 10-K") as filed with the SEC, and the unaudited
consolidated balance sheets of Wells Fargo and its subsidiaries as of
September 30, 1999 and the related unaudited consolidated statements of
income, changes in stockholders' equity and comprehensive income, and cash
flows for the nine (9) months then ended included in Wells Fargo's Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 1999, as filed
with the SEC (collectively, the "Wells Fargo 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 Wells Fargo and its subsidiaries at the
dates and the consolidated results of operations, changes in financial
position and cash flows of Wells Fargo and its subsidiaries for the periods
stated therein. The Year 2000 disclosure contained in Wells Fargo's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1999, as filed with
the SEC and
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designated as the Year 2000 Readiness Disclosures related to the Year 2000
Information and Readiness Disclosure Act, is true and correct in all material
respects as of the date hereof.
(f) Reports. Since December 31, 1995, Wells Fargo and each Wells Fargo
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 "Wells Fargo Reports." As of their respective dates,
the Wells Fargo 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 Wells Fargo
Financial Statements and except for any lien for current taxes not yet
delinquent, Wells Fargo and each Wells Fargo 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 Wells Fargo's
consolidated balance sheet as of September 30, 1999 included in Wells Fargo's
Quarterly Report on Form 10-Q, and all real and personal property acquired
since such date, except such real and personal property that has been disposed
of in the ordinary course of business. All leases of real property and all
other leases material to Wells Fargo or any Wells Fargo Subsidiary pursuant to
which Wells Fargo or such Wells Fargo Subsidiary, as lessee, leases real or
personal property, are valid and effective in accordance with their respective
terms, and there is not, under any such lease, any material existing default by
Wells Fargo or such Wells Fargo Subsidiary or any event which, with notice or
lapse of time or both, would constitute such a material default. Substantially
all Wells Fargo's and each Wells Fargo 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 Wells Fargo and the Wells Fargo 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 Wells Fargo and the Wells Fargo 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 Wells Fargo nor any Wells Fargo Subsidiary is a party to any
pending action or proceeding, nor to Wells Fargo'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 that
could reasonably be expected to have any material adverse effect on Wells Fargo
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 Wells Fargo or any
Wells Fargo Subsidiary that has not been settled, resolved and fully satisfied,
or adequately reserved for. Each of Wells Fargo and the Wells Fargo
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, 1998, there has been no
change in the business, financial condition or results of operations of Wells
Fargo or any Wells Fargo 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 Wells Fargo and its 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 generally
accepted accounting principles or regulatory account requirements applicable to
banks or their holding companies generally or changes to the general level of
interest rates or other economic changes affecting banks generally).
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(j) Commitments and Contracts. Except as set forth on Schedule 3(j), as of
December 31, 1998 neither Wells Fargo nor any Wells Fargo 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 Wells Fargo or any Wells
Fargo 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, Wells Fargo or any Wells Fargo Subsidiary may carry on
its business (other than as may be required by law or applicable regulatory
authorities);
(iii) any other contract or agreement which is a "material contract"
within the meaning of Item 601(b)(10) of Regulation S-K.
(k) Litigation and Other Proceedings. There is no pending or, to the best
knowledge of Wells Fargo, threatened, claim, action, suit, investigation or
proceeding, against Wells Fargo or any Wells Fargo Subsidiary nor is Wells
Fargo or any Wells Fargo Subsidiary 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 Wells Fargo and its subsidiaries taken as
a whole.
(l) Insurance. Wells Fargo and each Wells Fargo Subsidiary is presently
insured or self insured, and during each of the past five calendar years (or
during such lesser period of time as Wells Fargo has owned such Wells Fargo
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. Wells Fargo and each Wells Fargo 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 Wells Fargo or such Wells
Fargo Subsidiary; all such permits, licenses, certificates of authority, orders
and approvals are in full force and effect, and to the best knowledge of Wells
Fargo, no suspension or cancellation of any of them is threatened; and all such
filings, applications and registrations are current. The conduct by Wells Fargo
and each Wells Fargo 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 Wells Fargo nor any
Wells Fargo 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 Wells Fargo or any Wells Fargo Subsidiary which
reasonably could be expected to have a material adverse effect on the business
or properties of Wells Fargo and its subsidiaries taken as a whole.
(n) Labor. No work stoppage involving Wells Fargo or any Wells Fargo
Subsidiary is pending or, to the best knowledge of Wells Fargo, threatened.
Neither Wells Fargo nor any Wells Fargo Subsidiary is involved in, or
threatened with or affected by, any labor dispute, arbitration, lawsuit or
administrative proceeding that could materially and adversely affect the
business of Wells Fargo or such Wells Fargo Subsidiary. Except as set forth on
Schedule 3(j), employees of Wells Fargo and the Wells Fargo Subsidiaries are
not represented by any labor union nor are any collective bargaining agreements
otherwise in effect with respect to such employees.
(o) Wells Fargo Benefit Plans.
(i) For purposes of this Section 3(o), the term "Wells Fargo Plan" or
"Wells Fargo Plans" means all employee benefit plans as defined in Section
3(3) of ERISA, to which Wells Fargo contributes, sponsors, or otherwise has
any obligations.
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(ii) No Wells Fargo Plan is a "multiemployer plan" within the meaning of
Section 3(37) of ERISA.
(iii) Each Wells Fargo Plan is and has been in all material respects
operated and administered in accordance with its provisions and applicable
law, including, if applicable, ERISA and the Code.
(iv) Each Wells Fargo Plan intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the Internal
Revenue Service stating that the Wells Fargo Plan (including all
amendments) is tax qualified under Section 401(a) of the Code and Wells
Fargo knows of no reason that any such Wells Fargo Plan is not qualified
within the meaning of Section 401(a) of the Code and knows of no reason
that each related Wells Fargo Plan trust is not exempt from taxation under
Section 501(a) of the Code.
(v) All contributions, premium payments, and other payments required to
be made in connection with the Wells Fargo Plans as of the date of this
Agreement have been made.
(vi) With respect to each Wells Fargo Plan that is subject to Section 301
of ERISA or Section 412 of the Code, neither Wells Fargo nor any Wells
Fargo Subsidiary is liable for any accumulated funding deficiency as that
term is defined in Section 412 of the Code.
(vii) The present value of all benefits vested and all benefits accrued
under each Wells Fargo Plan that is subject to Title IV of ERISA does not,
in each case, exceed the value of the assets of the Wells Fargo Plans
allocable to such vested or accrued benefits as of the end of the most
recent Plan Year.
(p) Registration Statement, etc. None of the information regarding Wells
Fargo and its subsidiaries supplied or to be supplied by Wells Fargo 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 Registration Statement, Proxy Statement and
other 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, and, in the case of the Proxy Statement or
any amendment thereof or supplement thereto, at the time of the meeting of
stockholders referred to in paragraph 4(c), and at the Effective Time of the
Merger 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
contained therein, in light of the circumstances under which they were made,
not misleading. All documents which Wells Fargo and the Wells Fargo
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 Wells Fargo nor any Wells Fargo 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 Wells Fargo or any Wells Fargo Subsidiary in
connection with this Agreement and the Merger Agreement or the transactions
contemplated hereby and thereby.
(r) No Defaults. Neither Wells Fargo nor any Wells Fargo Subsidiary is in
default, nor has any event occurred that, 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 Wells Fargo and its subsidiaries taken as a whole.
To the best of Wells Fargo's knowledge, all parties with whom Wells Fargo or
any Wells Fargo Subsidiary has material leases, agreements or contracts or who
owe to Wells Fargo or any Wells Fargo Subsidiary material obligations, other
than those arising in the ordinary course of the banking business of the Wells
Fargo 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 Wells Fargo or any Wells Fargo Subsidiary of any
liability relating to the release of hazardous substances as defined under any
local, state or
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federal environmental statute, regulation or ordinance including, without
limitation, CERCLA, pending or to the best of Wells Fargo's knowledge,
threatened against Wells Fargo or any Wells Fargo Subsidiary, the result of
which has had or could reasonably be expected to have a material adverse effect
upon Wells Fargo and its subsidiaries taken as a whole; to the best of Wells
Fargo's knowledge, there is no reasonable basis for any such proceeding, claim
or action; and to the best of Wells Fargo's knowledge, neither Wells Fargo nor
any Wells Fargo 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. As of the Closing Date, the execution, delivery and performance
by Merger Co. of the Merger Agreement will have been duly authorized by Merger
Co.'s Board of Directors and stockholders, and the Merger Agreement will be a
valid and binding obligation of Merger Co., enforceable against Merger Co. in
accordance with its terms.
4. Covenants of Company. Company covenants and agrees with Wells Fargo as
follows:
(a) Affirmative Covenants. Except as (i) otherwise permitted or required by
this Agreement, (ii) Wells Fargo shall otherwise agree in writing, which
agreement shall not be unreasonably withheld or delayed, or (iii) as set forth
in Schedule 4(a), from the date hereof until the Effective Time of the Merger,
Company, and each Company 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 and provide Wells Fargo access to its loan files
(including credits extended after the date hereof), except that it shall not,
without the prior written consent of Wells Fargo (which shall be deemed to be
waived if Wells Fargo has made no response by the end of the second complete
business day following the receipt, as evidenced by confirmed facsimile, of the
request by John Nelson or the Wells Fargo representative designated by John
Nelson in writing), (A) 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 (other than
consumer-purpose loans and loans which are for less than $100,000), would be in
excess of $2,500,000, or (B) make any extensions of credit aggregating in
excess of $1,000,000 to a person or entity that is not a borrower as of the
date hereof or that has not been a borrower within twelve months prior to the
date hereof; 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 or its commercial equivalent; use its
commercially reasonable 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 commercially reasonable efforts to
obtain any approvals or consents required to maintain existing leases and other
contracts in effect following the Merger; comply in all material respects with
all laws, regulations, ordinances, codes, orders, licenses and permits
applicable to the properties and operations of Company and each Company
Subsidiary the non-compliance with which reasonably could be expected to have a
material adverse effect on Company and the Company Subsidiaries taken as a
whole; and permit Wells Fargo and its representatives (including KPMG 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 Wells Fargo 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 Company herein
expressed.
(b) Negative Covenants. Except as (i) otherwise contemplated or required by
this Agreement, (ii) Wells Fargo shall otherwise agree in writing, which
agreement shall not be unreasonably withheld or delayed, or (iii) as set forth
in Schedule 4(b), from the date hereof until the Effective Time of the Merger,
Company and each Company Subsidiary will not (without the prior written consent
of Wells Fargo): amend or otherwise change its certificate of incorporation or
association or by-laws; issue or sell or authorize for issuance or sale, or
grant
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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 which (i)
is for a term of one (1) year or more and is in excess of $100,000, (ii)
contains any covenant that limits the ability of Company or any Company
Subsidiary to compete in any line of business or with any person or which
involves any restriction of the geographical area in which, or method by which,
Company or any Company Subsidiary may carry on its business, (iii) is related
to data processing, ATMs or related technology and is in excess of $100,000, or
(iv) is in excess of $250,000 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 U.S. Treasury and federal agency
securities made by the Company's bank subsidiary in the ordinary course of
business for terms of up to three (3) years and in amounts of $1,000,000 or
less provided, however, that to accommodate the collateral requirements of
secured depositors such bank subsidiary may make investments in U.S. Treasury
and federal agency securities for terms of up to one (1) year and in amounts of
$50,000,000 or less; amend or terminate any Plan except as required by law or
by paragraph 4(j) hereof or by the proviso in the following clause; make any
contributions to any Plan except as required by the terms of such Plan in
effect as of the date hereof, provided, however, that the Company 401(k) Profit
Sharing Plan may be amended to permit, and the Company may make, a profit
sharing contribution for the year 1999 not to exceed $7,600,000 and a profit
sharing contribution for the year 2000 not to exceed an aggregate annualized
sum of $7,600,000, which sum shall be prorated for the period between January
1, 2000 and the Effective Time of the Merger, and provided, further, that such
profit sharing contribution may be calculated in accordance with past practice
and without regard to the effect of the accruals and reserves to be taken by
the Company pursuant to paragraph 4(m) hereof; declare, set aside, make or pay
any dividend or other distribution with respect to its capital stock except any
dividend declared by a Company Subsidiary's Board of Directors in accordance
with applicable law and regulation, provided, however, that the Board of
Directors of Company may declare and pay cash dividends to the Company
stockholders out of the net earnings of the Company between the date of this
Agreement and the Effective Time of the Merger in accordance with applicable
law and regulation and in accordance with past practice in an amount not to
exceed an annualized rate of $0.60 per share and provided, further, that
Company stockholders shall be entitled to have a cash dividend declared on
Company Common Stock in the event the Closing Date does not occur prior to the
record date for the cash dividend, if any, payable on Wells Fargo Common Stock
in the calendar quarter in which the Closing shall occur but not in the event
that the Closing Date occurs prior to such record date (it being the intention
of the parties that holders of shares of Company Common Stock shall not receive
more than one dividend or fail to receive one dividend, for any single calendar
quarter on their shares of Company Common Stock or shares of Wells Fargo Common
Stock received in the Merger, as the case may be), and provided, further, that
if Wells Fargo declares a dividend (other than its regular cash dividend) on
Wells Fargo Common Stock with an ex-dividend date after the date on which the
Board of Governors of the Federal Reserve System approves the Merger but prior
to the Effective Date, the Board of Directors of the Company may also declare
and pay cash dividends to the Company stockholders in an amount per share of
Company Common Stock equal to the fair market value per share of Wells Fargo
Common Stock of such dividend multiplied by the number of shares of Wells Fargo
Common stock each share of Company Common Stock is exchanged for in the Merger;
redeem, purchase or otherwise acquire, directly or indirectly, any of the
capital stock of Company; 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
Company Subsidiary; or sell or otherwise dispose of any of its assets or
properties other than in the ordinary course of business.
(c) Stockholder Meeting. The Board of Directors of Company will duly call,
and will cause to be held not later than thirty (30) business days following
the effective date of the Registration Statement (or on such other date as may
be agreed to by the parties), a meeting of its stockholders and will direct
that this Agreement and the Merger Agreement be submitted to a vote at such
meeting. The Board of Directors of Company will (i) cause proper notice of such
meeting to be given to its stockholders in compliance with the Delaware General
Corporation Law and other applicable law and regulation, and (ii) except to the
extent that the Board of Directors of Company shall conclude in good faith,
after taking into account the advice of its outside counsel,
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that to do so would violate its fiduciary obligations under applicable law, (A)
recommend by the affirmative vote of the Board of Directors a vote in favor of
approval of this Agreement and the Merger Agreement, and (B) use its best
efforts to obtain stockholder approval thereof. Nothing contained in this
Agreement shall prevent the Board of Directors of the Company from complying
with Rules 14e-2 and 14d-9 under the Exchange Act with respect to a Takeover
Proposal (as defined in Section 9(a)(iv)) or making any disclosure required by
applicable law.
(d) Information Furnished by Company. Company will furnish or cause to be
furnished to Wells Fargo all the information concerning Company and the Company
Subsidiaries required for inclusion in the Registration Statement, or any
statement or application made by Wells Fargo 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 Deloitte & Touche LLP to use such opinion in
such Registration Statement.
(e) Approvals. Company will take all necessary corporate and other action and
use its commercially reasonable efforts to obtain all approvals of regulatory
authorities, consents and other approvals required of Company to carry out the
transactions contemplated by this Agreement and will cooperate with Wells Fargo
to obtain all such approvals and consents required of Wells Fargo.
(f) Delivery of Closing Documents. Company 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) Confidential Information. Company will hold in confidence all documents
and information concerning Wells Fargo and its subsidiaries furnished to
Company 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
Company'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 Wells
Fargo (except to the extent that such information can be shown to be previously
known to Company, in the public domain, or later acquired by Company from other
legitimate sources) and, upon request, all such documents, any copies thereof
and extracts therefrom shall immediately thereafter be returned to Wells Fargo.
(h) Competing Transactions. Neither Company, nor any Company Subsidiary, nor
any director, officer, representative or agent thereof, will, directly or
indirectly, solicit, authorize the solicitation of or except to the extent that
the Board of Directors of Company shall conclude in good faith, after taking
into account the written advice of its outside counsel, that to fail to do so
could reasonably be determined to violate its fiduciary obligations under
applicable law, enter into any discussions with any corporation, partnership,
person or other entity or group (other than Wells Fargo) 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 Company or any
Company Subsidiary, (ii) to make a tender or exchange offer for any shares of
such common stock or other equity security, (iii) to purchase, lease or
otherwise acquire the assets of Company or any Company Subsidiary except in the
ordinary course of business, or (iv) to merge, consolidate or otherwise combine
with Company or any Company Subsidiary. If any corporation, partnership, person
or other entity or group makes an offer or inquiry to Company or any Company
Subsidiary concerning any of the foregoing, Company or such Company Subsidiary
will promptly disclose such offer or inquiry, including the terms thereof, to
Wells Fargo.
(i) Public Disclosure. Company shall consult with Wells Fargo 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) Benefit Plans. Company and each Company Subsidiary will take all action
necessary or required (i) to terminate or amend as of the Effective Date of the
Merger, if requested by Wells Fargo, all qualified retirement and welfare
benefit plans and all non-qualified benefit plans and compensation arrangements
to
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facilitate the merger of such plans with Wells Fargo 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 Wells Fargo
plans, and (ii) to submit application to the Internal Revenue Service for a
favorable determination letter for each of the Plans that is subject to the
qualification requirements of Section 401(a) of the Code prior to the Effective
Date of the Merger if a new determination letter is required for any Plan which
is to be amended pursuant to paragraph 4(b) or terminated or amended pursuant
to subparagraph 4(j)(i).
(k) [Intentionally left blank].
(l) Affiliate Letters. Company shall use its commercially reasonable efforts
to obtain and deliver prior to the Effective Date of the Merger signed
representations substantially in the form attached hereto as Exhibit B to Wells
Fargo by each executive officer, director or stockholder of Company who may
reasonably be deemed an "affiliate" of Company within the meaning of such term
as used in Rule 145 under the Securities Act.
(m) Accruals and Reserves. Company shall establish, immediately prior to the
Effective Time of the Merger, such additional accruals and reserves as may be
necessary (i) to conform Company's accounting and credit loss reserve practices
and methods to those of Wells Fargo, consistent with Wells Fargo's plans with
respect to the conduct of Company's business following the Merger and (ii) to
the extent permitted by generally accepted accounting principles, to provide
for the costs and expenses relating to the consummation by Company of the
Merger and the other transactions contemplated by this Agreement.
(n) Environmental Assessments. Company shall obtain, at its sole expense,
Phase I environmental assessments for each owned bank facility and each non-
residential OREO property (other than those listed in Schedule 4(n)). Oral
reports of such environmental assessments shall be delivered to Wells Fargo no
later than four (4) weeks and written reports shall be delivered to Wells Fargo
no later than eight (8) weeks from the date of this Agreement. Company shall
obtain, at its sole expense, Phase II environmental assessments for properties
identified by Wells Fargo on the basis of the results of such Phase I
environmental assessments. Company shall obtain a survey and assessment of all
potential asbestos containing material in owned or leased real properties
(other than OREO property) and a written report of the results shall be
delivered to Wells Fargo within four (4) weeks of execution of this Agreement.
(o) Title Commitments and Boundary Surveys. Company shall obtain, at its sole
expense, commitments for title insurance and boundary surveys for each owned
bank facility which shall be delivered to Wells Fargo no later than four (4)
weeks from the date of this Agreement.
(p) Year 2000. Company will comply with the FFIEC Requirements and will not
rely on the consummation of the transactions contemplated by this Agreement to
satisfy its FFIEC requirements. Company will provide Wells Fargo with access to
its Year 2000 project and remediation plan documentation and permit Wells Fargo
to review and investigate Company's continuing Year 2000 compliance efforts and
the results thereof.
5. Covenants of Wells Fargo. Wells Fargo covenants and agrees with Company as
follows:
(a) Affirmative Covenants. From the date hereof until the Effective Time of
the Merger, Wells Fargo will maintain its corporate existence in good standing;
conduct, and cause the Wells Fargo 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 Wells Fargo or the Wells Fargo
Subsidiaries, their businesses or their properties; maintain all books and
records of it and the Wells Fargo Subsidiaries, including all financial
statements, in accordance with the accounting principles and practices
consistent with those used for the Wells Fargo Financial Statements, except for
changes in such principles and practices required under generally accepted
accounting principles.
(b) Information Provided by Wells Fargo. Wells Fargo will furnish to Company
all the information concerning Wells Fargo required for inclusion in a proxy
statement or statements to be sent to the stockholders
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of Company, or in any statement or application made by Company 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 KPMG LLP to use
such opinion in the proxy statement.
(c) Registration Statement. As promptly as practicable after the execution
of this Agreement, Wells Fargo will file with the SEC the Registration
Statement and any other applicable documents, relating to the shares of Wells
Fargo Common Stock to be delivered to the stockholders of Company 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 Company stockholders, at the time of the
Company stockholders' meeting referred to in paragraph 4(c) hereof and at the
Effective Time of the Merger the prospectus included as part of the
Registration Statement, as amended or supplemented by any amendment or
supplement filed by Wells Fargo (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 Company or any Company Subsidiary for use in the Registration Statement or
the Prospectus.
(d) Stock Exchange Listings. Wells Fargo will file all documents required to
be filed to list the Wells Fargo 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) Wells Fargo Shares. The shares of Wells Fargo Common Stock to be issued
by Wells Fargo to the stockholders of Company pursuant to this Agreement and
the Merger Agreement will, upon such issuance and delivery to said
stockholders pursuant to the Merger Agreement, be duly authorized, validly
issued, fully paid and nonassessable. The shares of Wells Fargo Common Stock
to be delivered to the stockholders of Company pursuant to the Merger
Agreement are and will be free of any preemptive rights of the stockholders of
Wells Fargo.
(f) Blue Sky Approvals. Wells Fargo 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) Approvals. As promptly as practicable after the execution of this
Agreement, Wells Fargo 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 Company to obtain all such approvals and consents required by
Company.
(h) Confidential Information. Wells Fargo will hold in confidence all
documents and information concerning Company and Company'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 Company
(except to the extent that such information can be shown to be previously
known to Wells Fargo, in the public domain, or later acquired by Wells Fargo
from other legitimate sources) and, upon request, all such documents, copies
thereof or extracts therefrom shall immediately thereafter be returned to
Company.
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(i) Merger Filings. Wells Fargo will file any documents or agreements
required to be filed in connection with the Merger under the Delaware General
Corporation Law.
(j) Delivery of Closing Documents. Wells Fargo 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) Public Disclosure. Wells Fargo shall consult with Company 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) Notice of Regulatory Approvals. Wells Fargo shall give Company notice of
receipt of the regulatory approvals referred to in paragraph 7(e).
(m) Indemnification of Directors and Officers. With respect to the
indemnification of directors and officers, Wells Fargo agrees as follows:
(i) Wells Fargo shall ensure that all rights to indemnification and all
limitations of liability existing in favor of any person who is now, or has
been at any time prior to the date hereof, or who becomes prior to the
Effective Time of the Merger, a director or officer of Company or any
Company Subsidiary, (an "Indemnified Party" and, collectively, the
"Indemnified Parties") in Company's Certificate of Incorporation or By-laws
or similar governing documents of any Company Subsidiary, as applicable in
the particular case and as in effect on the date hereof, shall, with
respect to claims arising from (A) facts or events that occurred before the
Effective Time of the Merger, or (B) this Agreement or any of the
transactions contemplated by this Agreement, whether in any case asserted
or arising before or after the Effective Time of the Merger, survive the
Merger and shall continue in full force and effect. Nothing contained in
this paragraph 5(m)(i) shall be deemed to preclude the liquidation,
consolidation or merger of Company or any Company Subsidiary, in which case
all of such rights to indemnification and limitations on liability shall be
deemed to survive and continue as contractual rights notwithstanding any
such liquidation or consolidation or merger; provided, however, that in the
event of liquidation or sale of substantially all of the assets of Company,
Wells Fargo shall guarantee, to the extent of the greater of the net asset
value of Company as of the Effective Date of the Merger or as of the date
of such liquidation or sale, the indemnification obligations of Company or
any Company Subsidiary to the extent of indemnification obligations of
Company and the Company Subsidiaries described above. Each Indemnified
Party shall have the right to assert claims for indemnification directly
against Wells Fargo without first having to assert such claim against
Company or any Company Subsidiary. Notwithstanding anything to the contrary
contained in this paragraph 5(m)(i), nothing contained herein shall require
Wells Fargo to indemnify any person who was a director or officer of
Company or any Company Subsidiary to a greater extent than Company or any
Company Subsidiary is, as of the date of this Agreement, required to
indemnify any such person;
(ii) any Indemnified Party wishing to claim indemnification under
paragraph 5(m)(i), upon learning of any such claim, action, suit,
proceeding or investigation, shall promptly notify Wells Fargo thereof, but
the failure to so notify shall not relieve Wells Fargo of any liability it
may have to such Indemnified Party. In the event of any such claim, action,
suit, proceeding or investigation (whether arising before or after the
Effective Time of the Merger), (A) Wells Fargo shall have the right to
assume the defense thereof and Wells Fargo shall not be liable to any
Indemnified Party for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Party in connection with
the defense thereof, except that if Wells Fargo elects not to assume such
defense or counsel for the Indemnified Party advises that there are issues
which raise conflicts of interest between Wells Fargo and the Indemnified
Party, the Indemnified Party may retain counsel satisfactory to them, and
Wells Fargo shall pay the reasonable fees and expenses of such counsel for
the Indemnified Party promptly as statements therefor are received;
provided, however, that Wells Fargo shall be obligated pursuant to this
subparagraph (ii) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction unless the use of one counsel for such
Indemnified Parties would present such counsel with a conflict of interest
and (B) such Indemnified Party shall cooperate in the defense of any such
matter;
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(iii) if Wells Fargo or any of its successors or assigns (A) shall
consolidate with or merge into any other corporation or entity and shall
not be the continuing or surviving corporation or entity of such
consolidation or merger or (B) shall transfer all or substantially all of
its properties and assets to any individual, corporation or other entity,
then and in each such case, proper provision shall be made so that the
successors and assigns of Wells Fargo shall assume the obligations set
forth in this paragraph 5(m); and
(iv) the provisions of this paragraph 5(m) are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or
her heirs and representatives.
6. Conditions Precedent to Obligation of Company. The obligation of Company
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 Company:
(a) Representations and Warranties. Except as they may be affected by
transactions contemplated hereby 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 as of
the Time of Filing as if made as of the Time of Filing (except to the extent
such representations and warranties are by their express provisions made as of
an earlier date, in which case as of such date), except where the failure to be
so true and correct would not have, individually or in the aggregate, a
material adverse effect on the business, financial condition or results of
operations of Wells Fargo and its subsidiaries taken as a whole.
(b) Performance of Wells Fargo Obligations. Wells Fargo 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) Wells Fargo Compliance Certificate. Company 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 Wells Fargo, as to the
matters set forth in subparagraphs (a) and (b) of this paragraph 6.
(d) Stockholder Approvals. 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 Company required for approval of a plan of merger in
accordance with the provisions of Company's Certificate of Incorporation and
the Delaware General Corporation Law.
(e) Governmental Approvals. Wells Fargo shall have received approval by the
Federal Reserve Board and by such state banking, insurance and finance company
authorities 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 Restraining Order, Etc. No court or governmental authority of
competent jurisdiction shall have issued an order which is then in effect
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement.
(g) Shares Authorized for Listing. The shares of Wells Fargo Common Stock to
be delivered to the stockholders of Company 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) Tax Opinion. Company shall have received an opinion, dated the Closing
Date, of counsel to Company, substantially to the effect that, for federal
income tax purposes: (i) the Merger will constitute a reorganization within the
meaning of Sections 368 of the Code; (ii) no gain or loss will be recognized by
the holders of Company Common Stock upon receipt of Wells Fargo Common Stock
except for cash received in lieu of fractional shares; (iii) the basis of the
Wells Fargo Common Stock received by the stockholders of
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Company will be the same as the basis of Company Common Stock exchanged
therefor; and (iv) the holding period of the shares of Wells Fargo Common Stock
received by the stockholders of Company will include the holding period of the
Company Common Stock, provided such shares of Company Common Stock were held as
a capital asset as of the Effective Time of the Merger. In rendering such
opinion, counsel to Company may require and rely upon representations contained
in certificates of officers of Wells Fargo, Company or others. Wells Fargo
shall provide such certificates, in form and substance reasonably acceptable to
Wells Fargo, as counsel may reasonably require.
(i) Registration Statement Effective; No Stop Order, Etc.; Blue Sky
Authorizations Received. 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. Wells Fargo shall have received all state securities law or
blue sky authorizations necessary to carry out the transactions contemplated by
this Agreement.
(j) Fairness Opinion. Prior to the mailing of the Proxy Statement referred to
in paragraph 4(c), the Board of Directors of Company shall have received an
opinion of CIBC World Markets Corp. addressed to the Board of Directors of
Company, and for its exclusive benefit, for inclusion in said Proxy Statement
and dated effective as of the date of mailing of such Proxy Statement, based on
such matters as CIBC World Markets Corp. deems appropriate or necessary, to the
effect that the consideration to be received by stockholders of Company
pursuant to the Merger is fair from a financial point of view. Company shall
promptly provide a copy of such opinion to Wells Fargo upon receipt.
(k) No Material Adverse Change. Since September 30, 1999, no change shall
have occurred and no circumstances shall exist which has had or could
reasonably be expected to have a material adverse effect on the financial
condition, results of operations, business or prospects of Wells Fargo and the
Wells Fargo 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 generally accepted accounting principles or regulatory
accounting requirements applicable to banks or their holding companies
generally or changes in the general level of interest rates or other economic
changes affecting banks generally).
7. Conditions Precedent to Obligation of Wells Fargo. The obligation of Wells
Fargo 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 Wells Fargo:
(a) Representations and Warranties. Except as they may be affected by
transactions contemplated hereby 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 2 hereof shall be true and correct in all respects as of the Time of
Filing as if made as of the Time of Filing (except to the extent such
representations and warranties are by their express provisions made as of an
earlier date, in which case as of such date), except where the failure to be so
true and correct would not have, individually or in the aggregate, a material
adverse effect on the business, financial condition or results of operations of
Company and the Company Subsidiaries taken as a whole.
(b) Performance of Company Obligations. Company 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) Stockholder Approvals. 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 Company required for approval of a plan of merger in
accordance with the provisions of Company's Certificate of Incorporation and
the Delaware General Corporation Law.
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<PAGE>
(d) Company's Compliance Certificate. Wells Fargo 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
Company, as to the matters set forth in subparagraphs (a) through (c) of this
paragraph 7.
(e) Governmental Approvals. Wells Fargo 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 Company or any Company
Subsidiary that, in the good faith judgment of Wells Fargo, is unreasonably
burdensome to Wells Fargo.
(f) Consents, Authorizations, Etc. Obtained. Company and each Company
Subsidiary (other than any Company Subsidiary which is not actively engaged in
an aviation, banking, insurance, mortgage, finance company, leasing or
international banking business) shall have obtained any and all material
consents or waivers from other parties to loan agreements, leases or other
contracts material to Company's or such Company Subsidiary's business required
for the consummation of the Merger, and Company and each such Company
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 Restraining Order, etc. No court or governmental authority of
competent jurisdiction shall have issued an order which is then in effect
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement.
(h) [Intentionally left blank].
(i) Number of Outstanding Shares. At any time since the date hereof the total
number of shares of Company Common Stock outstanding and subject to issuance
upon exercise (assuming for this purpose that phantom shares and other share-
equivalents constitute Company Common Stock) of all warrants, options,
conversion rights, phantom shares or other share-equivalents shall not have
exceeded 30,224,180.
(j) Registration Statement Effective; No Stop Order, etc.; Blue Sky
Authorizations Received. 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 be pending or threatened.
(k) Comfort Certificate. Wells Fargo shall have received from the Chief
Executive Officer and Chief Financial Officer of Company a letter, dated as of
the effective date of the Registration Statement and updated through the
Closing Date, in form and substance reasonably satisfactory to Wells Fargo, to
the effect that:
(i) the interim quarterly consolidated financial statements of Company
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 consolidated financial
statements of Company (except as may be indicated in the notes thereto);
(ii) the amounts reported in the interim quarterly consolidated financial
statements of Company agree in all material respects with the general
ledger of Company;
(iii) the annual and quarterly consolidated financial statements of
Company and the Company 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 Company and the Company Subsidiaries as may be included in
the Registration Statement to a date 5 days prior to the effective date of
the Registration Statement and to a date 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 Company
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<PAGE>
and the Company 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 Company and the Company 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; and
(v) they have compared certain amounts, percentages, numbers of shares
and financial information which are derived from the general accounting
records of Company and the Company Subsidiaries and which appear in the
Registration Statement under the certain captions to be specified by Wells
Fargo, with such general accounting records of Company and the Company
Subsidiaries, and have found them to be in agreement in all material
respects, except as disclosed in such letters.
(l) No Casualty Losses, Etc. Company and the Company Subsidiaries considered
as a whole shall not have sustained since December 31, 1998 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, except
for such loss or interference that would not have, individually or in the
aggregate, a material adverse effect on the business, financial condition or
results of operations of Company and the Company Subsidiaries taken as a whole.
(m) No Environmental Liability. Except with respect to matters listed on
Schedule 2(v), 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 Company or any Company 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 Company and its subsidiaries taken as a whole.
(n) No Material Adverse Change. Since September 30, 1999, no change shall
have occurred and no circumstances shall exist which has had or could
reasonably be expected to have a material adverse effect on the financial
condition, results of operations, business or prospects of Company and the
Company 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 generally accepted accounting principles or regulatory
accounting requirements applicable to banks or their holding companies
generally or changes in the general level of interest rates or other economic
changes affecting banks generally).
(o) Year 2000. Company shall be in full compliance with current FFIEC
Requirements. There shall be no feature of Company data processing, operating
or platform systems that would prevent those systems from continuing to run
independently after December 31, 1999 until such time as a subsequent
conversion to Wells Fargo systems can be completed. Company's computer hardware
and software used in the receipt, transmission, processing, manipulation,
storage, retrieval, retransmission, or other utilization of data or in the
operation of mechanical or electrical systems of any kind will function at
least as effectively in all material respects after December 31, 1999 as in the
case of dates or time periods occurring prior to January 1, 2000; except for
such failure to be in compliance, feature, or failure to so function that would
not have, individually or in the aggregate, a material adverse effect on the
business, financial condition or results of operations of Company and the
Company Subsidiaries taken as a whole.
8. Employee Benefit Plans: Company Employees. Each person who is an employee
of Company or any Company Subsidiary (except any person who is an employee of
the Company or any Company Subsidiary and who is offered and accepts employment
with Norwest Financial, Inc. prior to the Effective Date of the Merger) as of
the Effective Date of the Merger ("Company Employees") shall be eligible for
participation in the employee welfare and retirement plans of Wells Fargo, as
in effect from time to time, as follows:
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(a) Employee Welfare Benefit Plans. Each Company Employee shall be eligible
for participation in the employee welfare benefit plans of Wells Fargo listed
below subject to any eligibility requirements applicable to such plans (and not
subject to pre-existing condition exclusions, except with respect to the Wells
Fargo Long Term Care Plan and Wells Fargo Long Term Disability Plan) and shall
enter each plan not later than the later of: (i) July 1, 2000, and (ii) the
first day of the calendar month which begins after the month in which Effective
Date of the Merger occurs (the "Benefits Conversion Date"):
Medical Plan
Dental Plan
Vision Plan
Short Term Disability Plan
Long Term Disability Plan
Long Term Care Plan
Flexible Benefits Plan
Basic Group Life Insurance Plan
Group Universal Life Insurance Plan
Dependent Group Life Insurance Plan
Business Travel Accident Insurance Plan
Accidental Death and Dismemberment Plan
Salary Continuation Pay Plan
Paid Time Off Program
It is intended that the transition from Company's Plans to the Wells Fargo
Plans will be facilitated without gaps in coverage to the participants without
duplication of costs to Wells Fargo. Company Employees shall receive credit for
years of service to Company, the Company Subsidiaries and any predecessors of
Company or the Company Subsidiaries (to the extent credited under the vacation
and short-term disability programs of Company) for the purpose of determining
benefits under the Wells Fargo Paid Time Off Program, Salary Continuation Pay
Plan and Short Term Disability Plan. Company Employees shall be eligible for
participation in the Wells Fargo Salary Continuation Pay Plan subject to any
eligibility requirements applicable to such plans immediately following the
Effective Time of the Merger; provided, however, that no Company Employee who
is a participant in any Company severance or salary continuation plan or who
has an employment agreement with Company or any Company Subsidiary at the
Effective Time of the Merger shall be eligible to participate in the Wells
Fargo Salary Continuation Pay Plan until such Company Employee is no longer
covered by such Company severance or salary continuation plan or employment
agreement.
Although participation in the Wells Fargo Long Term Disability Plan by
Company Employees is subject to pre-existing condition exclusions, Wells Fargo
will offer a long-term disability benefit for Company Employees who have pre-
existing conditions on terms substantially similar to those available under the
Wells Fargo Long Term Disability Plan.
(b) Employee Retirement Benefit Plans. Each Company Employee shall be
eligible to participate in the Wells Fargo 401(k) Plan (the "401(k) Plan"),
subject to any eligibility requirements applicable to the 401(k) Plan (with
full credit for years of past service to Company and the Company Subsidiaries,
to the extent credited under the Company's defined contribution Plan, for the
purpose of satisfying any eligibility and vesting periods applicable to the
401(k) Plan), and shall enter the 401(k) Plan as of the Benefits Conversion
Date.
Each Company Employee shall be eligible to participate in the Wells Fargo
Cash Balance Plan ("Cash Balance Plan") under, subject to any eligibility
requirements applicable to the Cash Balance Plan (with full credit for years of
past service to Company and the Company Subsidiaries, to the extent credited
under the Company's defined contribution plan, for the purpose of satisfying
any eligibility and vesting periods applicable to the Cash Balance Plan and
with respect to calculating compensation credits under the Cash Balance Plan),
and shall enter the Cash Balance Plan as of the Benefits Conversion Date.
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Each Company Employee shall be eligible for access to Wells Fargo's retiree
medical benefit, subject to any eligibility requirements applicable to such
benefit. Wells Fargo shall recognize years of past service with Company and the
Company Subsidiaries for the purpose of eligibility to access Wells Fargo's
retiree medical benefit.
8.1 Employee Benefit Plans: NFI Company Employees. Each person who is an
employee of the Company or any Company Subsidiary as of the Effective Date of
the Merger and who is offered and accepts employment with Norwest Financial,
Inc. prior to the Effective Date of the Merger ("NFI Company Employee") will be
eligible for participation in the payroll practices, employee welfare benefit
plans and employee retirement benefit plans of Norwest Financial, as in effect
from time to time, as follows:
(a) NFI Payroll Practices and Employee Welfare Benefit Plans. Each NFI
Company Employee shall be given credit for service with the Company and the
Company Subsidiaries for purposes of meeting the service eligibility
requirements applicable to Norwest Financial's payroll practices and employee
welfare benefit plans and, subject to any eligibility requirements (but not
subject to pre-existing condition exclusions, except to the extent such
exclusions were in effect under the Company Benefit Plans), shall be entitled
to enter the following plans or programs on the Effective Date of the Merger or
as soon thereafter as administratively feasible:
Medical and Dental Plan (including Vision)
Excusable Absence Plan
Basic, Additional, Spouse and Dependent Life Insurance Plan
Accidental Death and Dismemberment Plan
Business Travel Accident Plan
Holiday
Vacation
Long Term Disability Plan
(b) NFI Employee Retirement Benefit Plans. Each NFI Company Employee shall be
eligible to participate in the Norwest Financial Pension Plan (the "Pension
Plan"), subject to any eligibility requirements applicable to the Pension Plan.
Service with the Company and the Company Subsidiaries, to the extent credited
under the Company's defined contribution Plan, will be recognized for
participation and vesting purposes under the Pension Plan. Benefit accrual will
begin under the Pension Plan as of the first day of Norwest Financial
employment.
Each NFI Company Employee shall be eligible to participate in the Norwest
Financial Thrift and Profit Sharing Plan (the "Profit Sharing Plan"), subject
to any eligibility requirements applicable to the Profit Sharing Plan. Service
with the Company and the Company Subsidiaries, to the extent credited under the
Company's defined contribution Plan, will be recognized for participation and
vesting purposes under the Profit Sharing Plan. Each such employee may enroll
in the Profit Sharing Plan, if eligible, during the first enrollment period
following the Effective Date of the Merger.
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 September 30, 2000
unless such failure of consummation shall be due to the failure of the
party seeking to terminate to perform or observe in all material respects
the covenants and agreements hereof to be performed or observed by such
party; or
(iii) by Company or Wells Fargo upon written notice to the other party if
any court or governmental authority of competent jurisdiction shall have
issued a final and nonappealable order permanently restraining, enjoining
or otherwise prohibiting the consummation of the transactions contemplated
by this Agreement; or
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(iv) by either Wells Fargo or Company upon written notice to the other
party if the Board of Directors of Company shall in good faith determine
that a Takeover Proposal constitutes a Superior Proposal; provided,
however, that Company shall not be permitted to terminate this Agreement
pursuant to this paragraph (a)(iv) unless it has not breached any covenant
contained in paragraph 4(h). As used in this Agreement: (i) "Takeover
Proposal" means a bona fide proposal or offer by a person to make a tender
or exchange offer, or to engage in a merger, consolidation or other
business combination involving Company or to acquire in any manner a
substantial equity interest in, or all or substantially all of the assets
of, Company, and (ii) "Superior Proposal" means a Takeover Proposal with
terms which the Board of Directors of Company shall determine in good
faith, after taking into account the advice of its financial advisor, to be
more favorable to Company and its stockholders than the transactions
contemplated hereby; or
(v) by Wells Fargo upon written notice to Company if (A) the Board of
Directors of Company fails to recommend, withdraws, or modifies in a manner
materially adverse to Wells Fargo, its approval or recommendation of this
Agreement, or the transactions contemplated hereby, (B) after an agreement
to engage in or the occurrence of an Acquisition Event (as defined below)
or after a third party shall have made a proposal to Company or Company's
stockholders to engage in an Acquisition Event, the transactions
contemplated hereby are not approved at the meeting of Company stockholders
contemplated by paragraph 4(c), or (C) the meeting of Company stockholders
contemplated by paragraph 4(c) is not held prior to May 15, 2000, and
Company has failed to comply with its obligations under paragraph 4(c).
"Acquisition Event" means any of the following: (i) a merger, consolidation
or similar transaction involving Company, its bank subsidiary (the "Bank")
or any successor to Company or the Bank, (ii) a purchase, lease or other
acquisition in one or a series of related transactions of assets of Company
or any of the Company Subsidiaries representing 25% or more of the
consolidated assets of Company and the Company Subsidiaries or (iii) a
purchase or other acquisition (including by way of merger, consolidation,
share exchange or any similar transaction) in one or a series of related
transactions of beneficial ownership of securities representing 25% or more
of the voting power of Company or the Bank in each case with or by a person
or entity other than Wells Fargo or an affiliate of Wells Fargo.
(b) In the event of termination of this Agreement pursuant to paragraph 9(a),
this Agreement shall forthwith become null and void, there shall be no
liability under this Agreement on the part of Wells Fargo or Company or any of
their respective officers or directors, and all rights and obligations of each
party hereto shall cease; provided, however, that paragraphs 4(g), 5(h) and 10
shall survive such termination, and (ii) nothing herein shall 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.
10. Expenses. All expenses in connection with this Agreement and the
transactions contemplated hereby, including without limitation legal and
accounting fees, incurred by Company and Company Subsidiaries shall be borne by
Company, and all such expenses incurred by Wells Fargo shall be borne by Wells
Fargo; provided, however, that if Wells Fargo exercises its right to revise the
structure of the Merger pursuant to paragraph 1(e) hereof, Wells Fargo agrees
to reimburse Company for its actual expenses in connection with such
restructuring, and provided, further, that if this Agreement is terminated by
Wells Fargo, Wells Fargo agrees to reimburse Company for its actual expenses in
connection with obtaining the environmental assessments required by paragraph
4(n) hereof.
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 except that the Indemnified Parties shall
have the right to enforce their rights under Section 5(m).
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<PAGE>
13. Notices. Any notice or other communication provided for herein or given
hereunder to a party hereto shall be in writing and shall be (i) delivered in
person, or (ii) shall be mailed by first class registered or certified mail,
postage prepaid, or (iii) shall be sent by facsimile, or (iv) shall be sent by
reputable overnight courier service addressed as follows:
If to Wells Fargo:
Wells Fargo & Company
MAC N9305-173
Sixth and Marquette
Minneapolis, Minnesota 55479
Attention: Corporate Secretary
If to Company:
National Bancorp of Alaska, Inc.
301 East Northern Lights Boulevard
Anchorage, AK 99503
Attention: Edward B. Rasmuson
with a copy to:
Duane, Morris & Heckscher LLP
1667 K Street N. W., Suite 700
Washington, DC 20006-1608
Attention: Brian D. Alprin, Esq.
or to such other address with respect to a party as such party shall notify the
other in writing as above provided.
14. Complete Agreement. This Agreement, including the Exhibits and Schedules
hereto, the Merger Agreement and any other agreements or documents executed and
delivered with this 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 and the Exhibits and
Schedules hereto are for convenience of reference only and do not form a part
of this Agreement or the Exhibits or Schedules.
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 stockholders of
Company shall be made which changes in a manner adverse to such stockholders
the consideration to be provided to said stockholders 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 Delaware without regard to the
conflict of laws provisions thereof.
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.
20. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but both which shall constitute but one
instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
Wells Fargo & Company National Bancorp of Alaska, Inc.
/s/ John E. Ganoe /s/ Edward B. Rasmuson
By:__________________________________ By:__________________________________
Its: Executive Vice President Its: Chairman of the Board of
Directors
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<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
Between
NATIONAL BANCORP OF ALASKA, INC.
a Delaware corporation
(the surviving corporation)
and
[MERGER CO.]
a Delaware corporation
(the merged corporation)
This Agreement and Plan of Merger dated as of , 2000, between NATIONAL
BANCORP OF ALASKA, INC., a Delaware corporation (hereinafter sometimes called
"Company" and sometimes called the "surviving corporation") and [MERGER CO.], a
Delaware corporation ("Merger Co.")(said corporations being hereinafter
sometimes referred to as the "constituent corporations").
WHEREAS, Merger Co., a wholly-owned subsidiary of Wells Fargo & Company
("Wells Fargo"), was incorporated by a Certificate of Incorporation filed in
the office of the Secretary of State of the State of Delaware on , 2000,
and said corporation is now a corporation subject to and governed by the
provisions of the Delaware General Corporation Law. 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, Company was incorporated by a Certificate of Incorporation filed in
the office of the Secretary of State of the State of Delaware on , 19 and
said corporation is now a corporation subject to and governed by the provisions
of the Delaware General Corporation Law. Company has authorized capital stock
of shares of Common Stock, par value $ per share ("Company Common
Stock") of which shares were outstanding and shares were held in the
treasury as of , 19 ; and
WHEREAS, Wells Fargo and the Company are parties to an Agreement and Plan of
Reorganization dated as of , 19 (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 stockholders of
said corporations that said corporations merge and that Merger Co. be merged
with and into Company, with Company continuing as the surviving corporation, on
the terms and conditions hereinafter set forth in accordance with the
provisions of the Delaware General Corporation Law, which statute permits such
merger; and
NOW, THEREFORE, the parties hereto 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 Company pursuant to the laws of the State of
Delaware, and do hereby agree upon, prescribe and set forth the terms and
conditions of the merger of Merger Co. with and into Company, the mode of
carrying said merger into effect, the manner and basis of exchanging the shares
of Company Common Stock for shares of common stock of Wells Fargo, par value $1
2/3 per share ("Wells Fargo 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
Company, 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 National Bancorp of Alaska, Inc.
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<PAGE>
SECOND: The Certificate of Incorporation of Company at the time of merger
shall be amended as set forth below and, as so amended, shall be the
Certificate of Incorporation of the surviving corporation until further amended
according to law:
[Amend to change registered agent]
THIRD: The By-Laws of Company at the time of merger shall be and remain the
By-Laws of the surviving corporation until amended according to the provisions
of the Certificate of Incorporation of the surviving corporation or of said By-
Laws.
FOURTH: The directors of Merger Co. at the time of merger shall become the
directors of the surviving corporation and shall hold office from the time of
merger until their respective successors are elected and qualify.
FIFTH: The officers of Merger Co. at the time of merger shall become 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 Company Common Stock
into shares of Wells Fargo Common Stock shall be as follows:
1. Each share of Company Common Stock outstanding immediately prior to
the time of merger (other than shares as to which statutory dissenters'
rights have been exercised) shall at the time of merger, by virtue of the
merger and without any action on the part of the holder or holders thereof,
be converted into the right to receive the number of shares of Wells Fargo
Common Stock determined by dividing $30 by the Wells Fargo Measurement
Price. The "Wells Fargo Measurement Price" is defined as the average of the
closing prices of a share of Wells Fargo Common Stock as reported on the
consolidated tape of the New York Stock Exchange during the period of 15
trading days ending on the day immediately preceding the date on which the
Board of Governors of the Federal Reserve System approves the Merger.
2. As soon as practicable after the merger becomes effective, each holder
of a certificate which, prior to the effective time of the merger,
represented shares of Company 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 representing the number of
whole shares of Wells Fargo 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 Company Common Stock shall not be transferable on the
books of the surviving corporation but shall be deemed to evidence only the
right to receive (except for the payment of dividends as provided below)
the number of whole shares of Wells Fargo Common Stock issuable on the
basis above set forth; provided, however, until the holder of such
certificate for Company Common Stock shall have surrendered the same as
above set forth, no dividend payable to holders of record of Wells Fargo
Common Stock as of any date subsequent to the effective date of merger
shall be paid to such holder with respect to the shares of Wells Fargo
Common Stock issuable in connection with the merger, 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
representing Wells Fargo Common Stock issued in exchange therefor an amount
with respect to such shares of Wells Fargo Common Stock equal to all
dividends that shall have been paid or become payable to holders of record
of Wells Fargo 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 Wells Fargo 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 Wells
Fargo Common Stock, if any, into which a share of Company Common Stock
shall be converted on the basis above set forth, will be appropriately and
proportionately adjusted so that the
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<PAGE>
number of such shares of Wells Fargo Common Stock into which a share of
Company Common Stock shall be converted will equal the number of shares of
Wells Fargo Common Stock which the holders of shares of Company Common
Stock would have received pursuant to such reclassification,
recapitalization, split-up, combination, exchange of shares or
readjustment, or stock dividend had the record date therefor been
immediately following the time of merger.
4. No fractional shares of Wells Fargo 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 Wells Fargo 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 second day immediately preceding the
effective date of the merger.
5. Each share of Merger Co. Common Stock issued and outstanding at the
time of merger shall be converted into and exchanged for one (1) share of
common stock 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 a Certificate
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
Delaware; 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 Company in accordance with the Delaware General Corporation
Law; and
b. A Certificate of Merger with respect to the merger, setting forth
the information required by the Delaware General Corporation Law, shall
be executed by the President or a Vice President of Company and, if
required, by the Secretary or an Assistant Secretary of Company, (and,
if required, by the President or a Vice President of Merger Co. and, if
required, by the Secretary or an Assistant Secretary of Merger Co.),
and shall be filed in the office of the Secretary of State of the State
of Delaware in accordance with the Delaware General Corporation Law.
2. The merger shall become effective as of 11:59 p.m. Anchorage, Alaska
(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 Company shall continue as the surviving
corporation.
2. The merger shall have the other effects prescribed by Section 259 of
the Delaware General Corporation Law.
NINTH: The following provisions shall apply with respect to the merger
provided for by this Agreement:
1. [Reserved].
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 Company and Merger Co. may to the extent
permitted by applicable law 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.
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<PAGE>
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
Delaware.
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 Certificate of Merger with the
Secretary of State of the State of Delaware, 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 stockholders 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.
National Bancorp of Alaska, Inc.
By: _________________________________
Its: ________________________________
(Corporate Seal)
The undersigned is the Secretary of National Bancorp of Alaska, Inc. and
hereby certifies, in accordance with Section 251(c) of the Delaware General
Corporation Law, that a majority of the outstanding stock of National Bancorp
of Alaska, Inc. entitled to vote on the foregoing Agreement and Plan of Merger
has been voted for adoption of such agreement.
_____________________________________
Name: _______________________________
[Merger Co.]
By: _________________________________
Its: ________________________________
(Corporate Seal)
The undersigned is the Secretary of [Merger Co.] and hereby certifies, in
accordance with Section 251(c) of the Delaware General Corporation Law, that a
majority of the outstanding stock of [Merger Co.] entitled to vote on the
foregoing Agreement and Plan of Merger has been voted for adoption of such
agreement.
_____________________________________
Name: _______________________________
A-33
<PAGE>
EXHIBIT B
Wells Fargo & Company
Norwest Center
Sixth and Marquette
Minneapolis, MN 55479-1026
Attn: Secretary
Gentlemen:
I have been advised that I might be considered to be an "affiliate," as that
term is defined for purposes of paragraphs (c) and (d) of Rule 145 ("Rule 145")
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), of National
Bancorp of Alaska, Inc., a Delaware corporation ("Company").
Pursuant to an Agreement and Plan of Reorganization, dated as of ,
2000, (the "Reorganization Agreement"), between Company and Wells Fargo &
Company, a Delaware corporation ("Wells Fargo"), it is contemplated that a
wholly-owned subsidiary of Wells Fargo will merge with and into Company (the
"Merger") and, as a result of such Merger, I will receive in exchange for each
share of Common Stock, par value $2.50 per share, of Company ("Company Common
Stock") owned by me immediately prior to the Effective Time of the Merger (as
defined in the Reorganization Agreement) a number of shares of Common Stock,
par value $1 2/3 per share, of Wells Fargo ("Wells Fargo 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 Wells Fargo Common Stock issued to me pursuant to the Merger (the "Stock")
except (a) in compliance with the applicable provisions of Rule 145, (b) in a
transaction that is otherwise exempt from the registration requirements of the
Securities Act, or (c) in an offering registered under the Securities Act.
I consent to the endorsement of the certificates representing the Stock
issued to me pursuant to the Merger with a restrictive legend which will read
substantially as follows:
"The shares represented by this certificate were issued in a transaction
to which Rule 145 promulgated under the Securities Act of 1933, as amended
(the "Act"), applies, and may be sold or otherwise transferred only in
compliance with the limitations of such Rule 145, or upon receipt by Wells
Fargo & Company 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."
Wells Fargo'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 order 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 the disposition of
the Stock an affiliate of Wells Fargo and have been the beneficial owner of the
Stock for at least one year (or such other period as may be prescribed by the
Securities Act, and the rules and regulations promulgated thereunder) and Wells
Fargo 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
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<PAGE>
(iv) I am not and have not been for at least three months an affiliate of Wells
Fargo 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) Wells Fargo shall have received
an opinion of counsel acceptable to Wells Fargo 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 Company
Common Stock, Wells Fargo Common Stock or the Stock, to the extent I felt
necessary, with my counsel or counsel for Company.
Sincerely,
_____________________________________
A-35
<PAGE>
APPENDIX B
FAIRNESS OPINION OF CIBC WORLD MARKETS CORP.
<PAGE>
, 2000
The Board of Directors
National Bancorp of Alaska, Inc.
301 West Northern Lights Boulevard
Anchorage, AK 99510
Members of the Board:
You have requested our opinion as to the fairness, from a financial point of
view, to the holders of shares of common stock, par value $2.50 (the "Common
Stock") of National Bancorp of Alaska, Inc. (the "Company") of the
consideration to be paid by Wells Fargo & Company ("Wells Fargo") pursuant to
the Agreement and Plan of Reorganization, dated as of January 12, 2000, by and
between the Company and Wells Fargo (the "Agreement"). Pursuant to the
Agreement, a wholly-owned subsidiary of Wells Fargo (the "Merger Co.") will be
merged by statutory merger with and into the Company, with the Company as the
surviving corporation (the "Merger") and each outstanding share of Common Stock
of the Company will be exchanged for the number of shares of Wells Fargo common
stock, par value $1.667 (the "Wells Fargo Common Stock) determined by dividing
$30.00 by the Wells Fargo Measurement Price (as defined below). The Wells Fargo
Measurement Price is defined as the average closing prices of a share of the
Wells Fargo Common Stock as reported on the consolidated tape of the New York
Stock Exchange during the period of 15 trading days ending on March 15, 2000.
In connection with this opinion we have reviewed, among other things: (a) the
Agreement; (b) the Agreement and Plan of Merger set forth in Exhibit A to the
Agreement; (c) audited consolidated financial statements and management's
discussion and analysis of the financial condition and results of operation for
each of Wells Fargo and the Company for the three fiscal years ended December
31, 1998; (d) unaudited consolidated financial statements and management's
analysis and discussion of the financial condition and results of operations
for each of Wells Fargo and the Company for the nine months ended September 30,
1999; (e) certain other publicly available business and financial information
relating to the Company and Wells Fargo; (f) certain internal financial
analyses, budgets, projections and forecasts for the Company; (g) the views of
senior management of Wells Fargo and the Company of the past and current
business operations, results thereof, financial condition and future prospects
of their respective companies; (h) a comparison of certain financial
information for Wells Fargo and the Company with similar information for
certain other companies considered comparable to these respective companies;
(i) the financial terms of certain recent business combinations in the banking
industry; (j) the pro forma effect of the Merger on Wells Fargo based on
certain assumptions and analyses provided by the Company and Wells Fargo; (k)
the current market environment generally and the banking environment in
particular; and (l) such other information, financial studies, analyses and
investigations and financial, economic and market criteria as we considered
appropriate in the circumstances.
We have relied, without independent verification or investigation, on all of
the financial information, analyses and other information furnished to us for
purposes of this opinion, including information relating to assets and
liabilities, contingent or otherwise, as being complete and accurate. We have
also relied upon the management of the Company as to the reasonableness and
achievability of the financial and operating forecasts and projections (and the
assumptions and bases therefore) provided to us. In that regard, we have
assumed, with your consent, that such forecasts, projections and estimates have
been reasonably prepared and reflect the best currently available estimates and
judgements of the management of the Company. We have not made an independent
evaluation or appraisal of the assets and liabilities of Wells Fargo or the
Company and we have not been furnished with any such evaluation or appraisal.
Furthermore, this opinion shall not constitute any such evaluation or
appraisal. We are not experts in the evaluation of allowances for loan losses
or liabilities (contingent or otherwise) and we have neither made an
independent evaluation of the adequacy of the allowances for loan losses of
Wells Fargo or the Company nor reviewed any individual loan credit files.
You have informed us and we have assumed that the Merger will be accounted
for as a purchase under generally accepted accounting principles.
B-1
<PAGE>
As part of our investment banking business, we are regularly engaged in
valuations of businesses and securities in connection with acquisitions and
mergers, underwritings, secondary distributions of securities, private
placements and valuations for other purposes.
We have acted as financial advisor to the Company in connection with the
Merger and will receive a fee for our services. In the ordinary course of our
business, we may actively trade the equity securities of the Company and Wells
Fargo for our own account and for the accounts of customers, and may at any
time hold a long or short position in such securities.
It is understood that this opinion is for the information of the Board of
Directors in connection with its consideration of the Merger and may not be
quoted or referred to, in whole or in part, in any registration statement,
prospectus, or proxy statement, or in any other document filed by the Company
with the US Securities and Exchange Commission, without our prior written
consent, except that this opinion may be quoted in, referred to and filed as an
exhibit to the Proxy Statement-Prospectus to be used in connection with the
approval of the Merger by the stockholders of the Company which we have had a
prior opportunity to review.
Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, it is our opinion that, as of the date hereof, the
consideration to be paid by Wells Fargo to the holders of the Company's Common
Stock pursuant to the Merger is fair, from a financial point of view, to the
holders of such Common Stock.
Very truly yours,
_____________________________________
CIBC World Markets Corp.
B-2
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE 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 the Registrant'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 5.1 and 8.1
Item 22. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective 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 post-
effective 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 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-1
<PAGE>
(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-effective 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 this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of San Francisco, state of
California, on April 7, 2000.
Wells Fargo & Company
/s/ Richard M. Kovacevich
By: _________________________________
Richard M. Kovacevich President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed on April 7, 2000 by the following persons in the
capacities indicated:
<TABLE>
<S> <C>
/s/ Richard M. Kovacevich President and Chief Executive
______________________________________ Officer (Principal Executive
Richard M. Kovacevich Officer)
/s/ Ross J. Kari Executive Vice President and
______________________________________ Chief Financial Officer
Ross J. Kari (Principal Financial Officer)
/s/ Les L. Quock Senior Vice President and
______________________________________ Controller (Principal Accounting
Les L. Quock Officer)
</TABLE>
LES S. BILLER RICHARD D. McCORMICK
BENJAMIN F. MONTOYA
J.A. BLANCHARD III
CYNTHIA H. MILLIGAN
MICHAEL R. BOWLIN
PHILIP J. QUIGLEY
EDWARD M. CARSON
DONALD B. RICE
DAVID A. CHRISTENSEN
IAN M. ROLLAND
WILLIAM S. DAVILA A majority of
JUDITH M. RUNSTAD the Board of
SUSAN E. ENGEL Directors*
SUSAN G. SWENSON
PAUL HAZEN
DANIEL M. TELLEP
WILLIAM A. HODDER
CHANG-LIN TIEN
REATHA CLARK KING
MICHAEL W. WRIGHT
RICHARD M. KOVACEVICH
JOHN A. YOUNG
- --------
* 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
Number Description
------- -----------
<C> <S>
2.1 Agreement and Plan of Reorganization, dated as of January 12, 2000,
and as amended as of February 15, 2000, by and between National
Bancorp of Alaska, Inc. and Wells Fargo & Company, included as
Appendix A to the accompanying proxy statement-prospectus.
3.1 Restated Certificate of Incorporation, incorporated by reference to
Exhibit 3(b) to the Registrant's Current Report on Form 8-K dated June
28, 1993. Certificates of Amendment of Certificate of Incorporation,
incorporated by reference to Exhibit 3 to the Registrant's Current
Report on Form 8-K dated July 3, 1995 (authorizing preference stock),
and Exhibits 3(b) and 3(c) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1998 (changing the
Registrant's name and increasing authorized common and preferred
stock, respectively).
3.2 Certificate of Change of Location of Registered Office and Change of
Registered Agent, incorporated by reference to Exhibit 3(b) to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June
30, 1999.
3.3 Certificate of Designations for the Registrant's ESOP Cumulative
Convertible Preferred Stock, incorporated by reference to Exhibit 4 to
the Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994.
3.4 Certificate of Designations for the Registrant's 1995 ESOP Cumulative
Convertible Preferred Stock, incorporated by reference to Exhibit 4 to
the Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995.
3.5 Certificate Eliminating the Certificate of Designations for the
Registrant's Cumulative Convertible Preferred Stock, Series B,
incorporated by reference to Exhibit 3(a) to the Registrant's Current
Report on Form 8-K dated November 1, 1995.
3.6 Certificate Eliminating the Certificate of Designations for the
Registrant's 10.24% Cumulative Preferred Stock, incorporated by
reference to Exhibit 3 to the Registrant's Current Report on Form 8-K
dated February 20, 1996.
3.7 Certificate of Designations for the Registrant's 1996 ESOP Cumulative
Convertible Preferred Stock, incorporated by reference to Exhibit 3 to
the Registrant's Current Report on Form 8-K dated February 26, 1996.
3.8 Certificate of Designations for the Registrant's 1997 ESOP Cumulative
Convertible Preferred Stock, incorporated by reference to Exhibit 3 to
the Registrant's Current Report on Form 8-K dated April 14, 1997.
3.9 Certificate of Designations for the Registrant's 1998 ESOP Cumulative
Convertible Preferred Stock, incorporated by reference to Exhibit 3 to
the Registrant's Current Report on Form 8-K dated April 20, 1998.
3.10 Certificate of Designations for the Registrant's Adjustable Cumulative
Preferred Stock, Series B, incorporated by reference to Exhibit 3(j)
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998.
3.11 Certificate of Designations for the Registrant's Fixed/Adjustable Rate
Noncumulative Preferred Stock, Series H, incorporated by reference to
Exhibit 3(k) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998.
3.12 Certificate of Designations for the Registrant's Series C Junior
Participating Preferred Stock, incorporated by reference to Exhibit
3(l) to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
3.13 Certificate Eliminating the Certificate of Designations for the
Registrant's Series A Junior Participating Preferred Stock,
incorporated by reference to Exhibit 3(a) to the Registrant's Current
Report on Form 8-K dated April 21, 1999.
3.14 Certificate of Designations for the Registrant's 1999 ESOP Cumulative
Convertible Preferred Stock, incorporated by reference to Exhibit 3(b)
to the Registrant's Current Report on Form 8-K dated April 21, 1999.
3.15 By-Laws, incorporated by reference to Exhibit 3(m) to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1998.
4.1 See Exhibits 3.1 through 3.15.
4.2 Rights Agreement, dated as of October 21, 1998, between the Registrant
and ChaseMellon Shareholder Services, L.L.C., as Rights Agent,
incorporated by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form 8-A dated October 21, 1998.
5.1 Opinion of Stanley S. Stroup as to the legality of the shares to be
issued (including consent).
8.1 Opinion of Duane, Morris & Heckscher LLP regarding the U.S. federal
income tax consequences of the merger (including consent).*
23.1 Consent of Stanley S. Stroup (included in Exhibit 5.1).
23.2 Consent of KPMG LLP relating to the audited financial statements of
Wells Fargo & Company.
23.3 Consent of Deloitte & Touche LLP relating to the audited financial
statements of National Bancorp of Alaska, Inc.
23.4 Consent of Duane, Morris & Heckscher LLP regarding its tax opinion
(included in Exhibit 8.1).
24.1 Powers of Attorney.
99.1 Form of proxy for annual meeting of shareholders of National Bancorp
of Alaska, Inc.
99.2 Consent of CIBC World Markets Corp. relating to National Bancorp of
Alaska, Inc.
</TABLE>
- --------
*To be filed by amendment.
2
<PAGE>
Exhibit 5.1
[LETTERHEAD OF STANLEY S. STROUP
EXECUTIVE VICE PRESIDENT AND GENERAL
COUNSEL OF WELLS FARGO & COMPANY]
April 7, 2000
Board of Directors
Wells Fargo & Company
420 Montgomery Street
San Francisco, California 94163
Ladies and Gentlemen:
In connection with the proposed registration under the Securities Act of 1933,
as amended, of a maximum of 31,000,000 shares of common stock, par value $1-2/3
per share, of Wells Fargo & Company, a Delaware corporation (the "Company"), and
associated preferred stock purchase rights (such shares and rights collectively
referred to as 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 National Bancorp of Alaska, Inc., 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.
Sincerely,
/s/ Stanley S. Stroup
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
of 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 18, 2000, with respect to the consolidated balance
sheet of Wells Fargo & Company and Subsidiaries as of December 31, 1999 and
1998, and the related consolidated statements of income, changes in
stockholders' equity and comprehensive income, and cash flows for each of the
years in the three-year period ended December 31, 1999, and to the reference to
our firm under the heading "Experts" in the proxy statement-prospectus.
/s/ KPMG LLP
San Francisco, California
April 7, 2000
<PAGE>
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors of
National Bancorp of Alaska, Inc.
We consent to the incorporation by reference in this Registration Statement on
Form S-4 of Wells Fargo & Company of our report dated January 21, 2000,
appearing in (and incorporated by reference in) the Annual Report on Form 10-K
of National Bancorp of Alaska, Inc. for the year ended December 31, 1999, and to
the reference to us under the heading "Experts" in this Registration Statement.
/s/ Deloitte & Touche LLP
Anchorage, Alaska
April 7, 2000
<PAGE>
Exhibit 24.1
WELLS FARGO & COMPANY
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, a Delaware corporation, does hereby make,
constitute and appoint RICHARD M. KOVACEVICH, LES BILLER, ROSS J. KARI, 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 31,000,000 shares of Common Stock of the Company and any preferred
stock purchase rights associated with such shares, 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 National
Bancorp of Alaska, Inc. and its subsidiaries, and to file the same, with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and each of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 22nd day of February, 2000.
/s/ LES S. BILLER /s/ RICHARD D. McCORMICK
/s/ J.A. BLANCHARD III /s/ CYNTHIA H. MILLIGAN
/s/ MICHAEL R. BOWLIN /s/ BENJAMIN F. MONTOYA
/s/ EDWARD M. CARSON /s/ PHILIP J. QUIGLEY
/s/ DAVID A. CHRISTENSEN /s/ DONALD B. RICE
/s/ WILLIAM S. DAVILA /s/ IAN M. ROLLAND
/s/ SUSAN E. ENGEL /s/ JUDITH M. RUNSTAD
/s/ PAUL HAZEN /s/ SUSAN G. SWENSON
/s/ WILLIAM A. HODDER /s/ DANIEL M. TELLEP
/s/ REATHA CLARK KING /s/ CHANG-LIN TIEN
/s/ RICHARD M. KOVACEVICH /s/ MICHAEL W. WRIGHT
/s/ JOHN A. YOUNG
<PAGE>
Exhibit 99.1
NATIONAL BANCORP OF ALASKA, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING
The undersigned stockholder of National Bancorp of Alaska, Inc. ("National
Bancorp") does hereby nominate, constitute and appoint John A. Treptow and Susan
Wright Mason or either one of them (with full power to act alone) my true and
lawful attorney(s) and proxy(ies), with full power of substitution, for me and
in my name, and place and stead to vote all the shares of Common Stock of said
National Bancorp standing in my name on its books, as of April ___, 2000, at the
Annual Meeting of Stockholders to be held at the Main Office of National Bank of
Alaska located at Northern Lights Boulevard and C Street, Anchorage, Alaska, on
June 8, 2000 at 10:00 a.m., or at any adjournments thereof, with all the powers
the undersigned would possess if personally present on the following proposals
more fully described in the accompanying Proxy Statement-Prospectus in the
manner specified and in their discretion on any other business that may properly
come before the meeting.
1. Approve the Agreement and Plan of Reorganization, dated as of January 12,
2000, and as amended as of February 15, 2000 (as amended, the "Merger
Agreement"), by and between National Bancorp and Wells Fargo & Company
("Wells Fargo") pursuant to which, among other things, a wholly-owned
subsidiary of Wells Fargo will merge with and into National Bancorp (the
"Merger") upon the terms and subject to the conditions set forth in the
Merger Agreement, a copy of which is included as Appendix A in the
accompanying Proxy Statement-Prospectus; and to authorize such further
action by the Board of Directors and officers of National Bancorp as may be
necessary or appropriate to carry out the intent and purposes of the
Merger.
Vote For
Vote Against
Abstain
2. Fix the number of directors at 25 and elect the following directors: Donald
B. Abel, Jr., Gary M. Baugh, Carl F. Brady, Jr., Alec W. Brindle, James O.
Campbell, Jeffrey J. Cook, Patrick S. Cowan, Sharon D. Gagnon, Roy
Huhndorf, James H. Jansen, Donald L. Mellish, Emil R. Notti, Howard R.
Nugent, Tennys B. Owens, Eugene A. Parrish, Jr., J. Michael Pate, Martin R.
Pihl, Edward F. Randolph, Edward B. Rasmuson, Major General John Schaeffer
(Ret.), Michael K. Snowden, Richard Strutz, George S. Suddock, Richard A.
Wien, Sharon Wikan.
Vote For all nominees listed above; except vote is withheld
from nominees whose names are written below (if any).
Vote Withheld from all nominees
<PAGE>
3. Ratify the appointment by the Board of Directors of Deloitte & Touche LLP
as National Bancorp's independent public accountants for the year ending
December 31, 2000.
Vote For
Vote Against
Abstain
4. In the discretion of the persons appointed proxies hereby to vote on such
other matters as may properly come before the special meeting.
This proxy will be voted as directed by the stockholder. If no direction is
supplied, this proxy will be voted "For" proposals 1 and 3 and "For" the
election of all nominees listed in proposal 2. The undersigned hereby revokes
any proxy heretofore given with respect to the same shares of stock for this
meeting.
Dated: _______________________________, 2000.
______________________________________________
______________________________________________
(Please sign exactly as name appears at left.)
(If stock is owned by more than one person,
all owners should sign. Persons signing as
executors administrators, trustees, or in
similar capacities should so indicate.)
Please date, sign and mail proxy in enclosed envelope
<PAGE>
Exhibit 99.2
CONSENT OF CIBC WORLD MARKETS CORP.
April 7, 2000
National Bancorp of Alaska, Inc.
301 West. Northern Lights Boulevard
Anchorage, Alaska 99510
Dear Madams and Messieurs:
We hereby consent to (i) the use of our opinion letter to the Board of Directors
of National Bancorp of Alaska, Inc. (the "Company") to be included as Appendix B
to the Proxy Statement/Prospectus which forms a part of the Registration
Statement on Form S-4 relating to the proposed merger of the Company and Wells
Fargo & Company and (ii) the references to such opinion in such Proxy
Statement/Prospectus. In giving such consent, we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder, nor do we hereby admit that we
are experts with respect to any part of such Registration Statement within the
meaning of the term "experts" as used in the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very Truly Yours,
CIBC WORLD MARKETS CORPS.
/s/ Richard J. Kelly
Richard J. Kelly
Executive Director
<PAGE>
April 7, 2000
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: Acquisition of National Bancorp of Alaska, Inc.
Registration Statement on Form S-4
Ladies and Gentlemen:
There is hereby transmitted for filing, pursuant to the Electronic Data
Gathering, Analysis, and Retrieval System, the Registration Statement referenced
above.
The registration fee in the amount of $289,253.25 has been wired to the SEC's
account at Mellon Bank.
Questions concerning this filing may be directed to me at 303-899-5802.
Sincerely,
/s/ Robert J. Kaukol
Robert J. Kaukol
Senior Counsel
