<PAGE>
As filed with the Securities and Exchange Commission on August 9, 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)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 6712 41-0449260
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
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 J. Kevin Costley
Wells Fargo & Company Lindquist & Vennum P.L.L.P
1050 17th Street, Suite 120 4200 IDS Center
Denver, Colorado 80265 80 South Eighth Street
(303) 899-5802 Minneapolis, MN 55402-2205
(612) 371-3211
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: [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===========================================================================================================================
<S> <C> <C> <C> <C>
Proposed Maximum Proposed Maximum Amount Of
Amount To Be Offering Price Aggregate Registration
Title Of Securities To Be Registered Registered Per Share Offering Price(1) Fee(2)
---------------------------------------------------------------------------------------------------------------------------
Common stock, $1-2/3 par value (and
associated preferred stock purchase rights) 600,000 N/A $13,258,000 $3,500.11
===========================================================================================================================
</TABLE>
(1) Based on the book value, as of June 30, 2000, of the securities to be
received by Wells Fargo & Company in the transaction described herein.
(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>
BUFFALO NATIONAL BANCSHARES, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on September 27, 2000
To the Shareholders of Buffalo National Bancshares, Inc.:
A special meeting of shareholders of Buffalo National Bancshares, Inc.
("Buffalo National") will be held on Wednesday, September 27, 2000, at 9:00
a.m., Buffalo, Minnesota time, at the headquarters of Buffalo National
Bancshares, Inc., 101 South 1st Avenue, Buffalo, Minnesota 55313. The purposes
of the meeting are to:
1. Vote on a proposal to approve the Agreement and Plan of
Reorganization, dated as of May 24, 2000, by and between Buffalo
National and Wells Fargo & Company ("Wells Fargo"), and a related
Agreement and Plan of Merger, dated as of August 9, 2000, by and
between Buffalo National and Wells Fargo BNB Merger Co., a
wholly-owned subsidiary of Wells Fargo, included as Exhibit A to the
Agreement and Plan of Reorganization (collectively, the "Merger
Agreement"), pursuant to which, among other things, a wholly-owned
subsidiary of Wells Fargo will merge with and into Buffalo National
(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, Wells Fargo will exchange shares of its common stock for all
of the outstanding shares of Buffalo National common stock and Buffalo
National will become a wholly-owned subsidiary of Wells Fargo.
2. Act on any other matters that may properly come before the meeting.
Only shareholders of record on August 28, 2000 may vote at the special
meeting or at any adjournment thereof.
As described in the proxy statement-prospectus that follows this notice,
under Minnesota law, shareholders of Buffalo National are entitled in connection
with the Merger to assert dissenters' appraisal rights and receive in cash the
fair value of their shares of Buffalo National common stock. A copy of the
Minnesota dissenters' appraisal rights statute is attached as Appendix B to the
proxy statement-prospectus that follows this notice.
By Order of the Board of Directors
/s/ Mary Ellen Lundsten
Mary Ellen Lundsten
Corporate Secretary
August 28, 2000
--------------------------------------------------------------------------------
Please promptly complete, sign, date and return the enclosed proxy sheet 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 in person at the meeting
even if you have previously returned your proxy sheet.
--------------------------------------------------------------------------------
<PAGE>
The information in this document is not complete and may change.
[Buffalo National logo]
The board of directors of Buffalo National Bancshares, Inc. has approved
the sale of the company to Wells Fargo & Company. The sale requires the approval
of Buffalo National's shareholders and will be voted on at a special meeting.
The time and place of the meeting are set forth in the notice of special meeting
that precedes this proxy statement-prospectus.
If the sale is completed, Wells Fargo will exchange a total of 530,729
shares of its common stock for all of the outstanding common stock of Buffalo
National. Assuming 3,804 shares of Buffalo National common stock are outstanding
immediately prior to completion of the sale, Wells Fargo would exchange
approximately 139.5187 shares of its common stock for each outstanding share of
Buffalo National common stock.
Wells Fargo common stock is listed on the New York and Chicago Stock
Exchanges under the symbol "WFC." On August ___, 2000, Wells Fargo common stock
closed at $____ a share, making 139.5187 shares of its common stock equal on
that date to $_______. The price of Wells Fargo common stock will fluctuate, and
it is impossible to predict the price at which Wells Fargo common stock will
trade in the future.
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 of Wells Fargo common stock.
The merger is expected to be generally tax free to Buffalo National
shareholders 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 from documents filed by Wells Fargo
with the Securities and Exchange Commission.
Whether or not you plan to attend the meeting, please complete and mail the
enclosed proxy sheet. If you sign, date and mail your proxy sheet without
indicating how you want to vote, your proxy will be voted in favor of the sale.
If you fail to return your proxy sheet, the effect will be the same as a vote
against the sale.
Approval of the sale of Buffalo National to Wells Fargo requires the
affirmative vote of a majority of the outstanding shares of Buffalo National
common stock. No vote of Wells Fargo's stockholders is required to complete the
transaction.
/s/ John M. Lundsten
John M. Lundsten
President 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.
Shares of Wells Fargo common stock 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 August 28, 2000.
First mailed to Buffalo National shareholders on or about August 28, 2000.
<PAGE>
The information in this document is not complete and may change.
ADDITIONAL INFORMATION
This proxy statement-prospectus incorporates important business and
financial information about Wells Fargo that is not included in or delivered
with this document. See "Where You Can Find More Information" on page 66 for a
list of the documents that Wells Fargo has incorporated into this proxy
statement-prospectus. The documents are available to you without charge upon
written or oral request made as follows:
Corporate Secretary
Wells Fargo & Company
MAC N9305-173
Sixth and Marquette
Minneapolis, Minnesota 55479
(612) 667-8655
To obtain documents in time for the special meeting, your request should be
received by September 20, 2000.
i
<PAGE>
The information in this document is not complete and may change.
ABOUT THIS DOCUMENT
What is the purpose of this document?
This document serves as both a proxy statement of Buffalo National and a
prospectus of Wells Fargo. As a proxy statement, it's being provided to you by
Buffalo National because Buffalo National's board of directors is soliciting
your proxy for use at the special meeting of shareholders called to vote on the
proposed sale of Buffalo National to Wells Fargo. As a prospectus, it's being
provided to you by Wells Fargo because Wells Fargo is offering shares of its
common stock in exchange for your shares of Buffalo National 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 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
filed by Wells Fargo with the Securities and Exchange Commission (SEC). This
means that Wells Fargo may satisfy some of its disclosure obligations to you by
referring you to documents filed by it with the SEC. See "Where You Can Find
More Information" on page 66 for a list of documents that Wells Fargo has
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
documents incorporated by reference. Similarly, information in documents that
Wells Fargo 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>
The information in this document is not complete and may change.
TABLE OF CONTENTS
SUMMARY.......................................................................1
The Merger.................................................................1
The Companies .............................................................1
What You Will Receive in the Merger........................................2
Market Price of Wells Fargo Stock Will Fluctuate...........................2
Merger Generally Tax Free to Buffalo National Shareholders.................3
Buffalo National's Board Recommends Approval of the Merger.................3
Additional Merger Benefits to Buffalo National's Management................3
Dissenters' Appraisal Rights Available.....................................4
Surrender of Buffalo National Shares.......................................4
Buffalo National Special Meeting...........................................4
Record Date; Vote Required to Approve Merger...............................4
Merger Requires Regulatory Approvals.......................................5
Other Conditions to Completing the Merger..................................5
Termination of the Merger Agreement........................................5
Your Rights Will Differ as a Wells Fargo Stockholder.......................6
Wells Fargo Expects to Use Purchase Accounting.............................6
Wells Fargo Is Heavily Regulated...........................................6
Financial Modernization Will Increase Competition..........................6
Forward-Looking Statements May Prove Inaccurate............................6
Wells Fargo Selected Financial Data........................................7
BUFFALO NATIONAL SPECIAL MEETING..............................................8
Time and Place of the Meeting..............................................8
Matters to be Considered at the Meeting....................................8
Record Date................................................................8
Outstanding Shares.........................................................8
Quorum.....................................................................9
Vote Required..............................................................9
Share Ownership............................................................9
Agreement to Vote for the Merger...........................................9
Voting and Revocation of Proxies...........................................9
Solicitation of Proxies...................................................10
Postponement or Adjournment of the Meeting................................10
Other Matters Considered at the Meeting...................................10
THE MERGER...................................................................11
Effect of the Merger......................................................11
Background of and Reasons for the Merger..................................11
Additional Interests of Buffalo National Management.......................11
Dissenters' Appraisal Rights..............................................13
Exchange of Certificates..................................................16
Regulatory Approvals......................................................17
Effect of Merger on Buffalo National's Employee Benefit Plans.............18
U.S. Federal Income Tax Consequences of the Merger........................18
Support Agreement.........................................................20
Resale of Wells Fargo Common Stock Issued in the Merger...................20
Stock Exchange Listing....................................................21
Accounting Treatment......................................................21
THE MERGER AGREEMENT.........................................................22
Basic Plan of Reorganization..............................................22
Representations and Warranties............................................23
iii
<PAGE>
The information in this document is not complete and may change.
Certain Covenants.........................................................23
Conditions to the Merger..................................................27
Termination of the Merger Agreement.......................................28
Effect of Termination.....................................................28
Waiver and Amendment......................................................29
Expenses..................................................................29
INFORMATION ABOUT WELLS FARGO................................................30
General...................................................................30
Management and Additional Information.....................................30
Information on Wells Fargo's Web Site.....................................31
Competition...............................................................31
FIRST SECURITY MERGER........................................................32
The First Security Merger Transaction.....................................32
About First Security Corporation..........................................32
REGULATION AND SUPERVISION OF WELLS FARGO....................................33
Introduction..............................................................33
Regulatory Agencies.......................................................33
Bank Holding Company Activities...........................................34
Dividend Restrictions.....................................................35
Holding Company Structure.................................................35
Capital Requirements......................................................36
Deposit Insurance Assessments.............................................38
Fiscal and Monetary Policies..............................................39
Privacy Provisions of Gramm-Leach-Bliley Act..............................39
Future Legislation........................................................40
INFORMATION ABOUT BUFFALO NATIONAL...........................................41
The Bank..................................................................41
Legal Proceedings.........................................................41
Market Price and Dividends................................................41
WELLS FARGO CAPITAL STOCK....................................................43
Wells Fargo Common Stock..................................................43
Wells Fargo Preferred Stock...............................................45
Wells Fargo Rights Plan...................................................45
COMPARISON OF STOCKHOLDER RIGHTS.............................................49
Authorized Capital Stock..................................................49
Size of Board of Directors................................................49
Cumulative Voting.........................................................50
Classes of Directors......................................................50
Qualifications of Directors...............................................50
Filling Vacancies on the Board............................................50
Removal of Directors......................................................51
Nomination of Directors for Election......................................51
Anti-Takeover Provisions..................................................52
Stockholder Rights Plan...................................................53
Stockholder Action Without a Meeting......................................53
Calling Special Meetings of Stockholders..................................53
Submission of Stockholder Proposals.......................................54
Notice of Stockholder Meetings............................................54
Stockholder Vote Required for Mergers.....................................55
Dividends.................................................................56
iv
<PAGE>
The information in this document is not complete and may change.
Dissenters' Appraisal Rights..............................................56
Stockholder Preemptive Rights.............................................57
Stockholder Class Voting Rights...........................................58
Indemnification...........................................................58
Limitations on Directors' Liability.......................................60
Amendment of Certificate of Incorporation.................................61
Amendment of Bylaws.......................................................61
PRICE RANGE OF COMMON STOCK AND DIVIDENDS....................................63
Wells Fargo Share Prices and Dividends....................................63
Buffalo National Share Prices and Dividends...............................64
EXPERTS......................................................................65
OPINIONS.....................................................................65
Share Issuance............................................................65
Tax Matters...............................................................65
WHERE YOU CAN FIND MORE INFORMATION..........................................66
Registration Statement....................................................66
Other Wells Fargo SEC Filings.............................................66
Documents Incorporated by Reference.......................................66
Documents Available Without Charge........................................67
FORWARD-LOOKING STATEMENTS...................................................69
APPENDIX A Agreement and Plan of Reorganization (including as Exhibit A
the Agreement and Plan of Merger)
APPENDIX B Minnesota Dissenters' Appraisal Rights Statute
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<PAGE>
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The information in this document is not complete and may change.
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 66.
Each item in this summary includes a page reference to a more complete
description of that item.
The Merger (page 11)
In the proposed transaction, a Wells Fargo subsidiary will merge with
Buffalo National. Buffalo National 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 Buffalo National. After the merger is completed, you will
own shares of Wells Fargo common stock and Wells Fargo will own all of the
outstanding common stock of Buffalo National.
The agreement and plan of reorganization, which includes as Exhibit A the
agreement and plan of merger, is included in this document as Appendix A. When
used in this document, the term "merger agreement" refers to the agreement and
plan of reorganization and the agreement and plan of merger together. Please
read the merger agreement as it is the document that governs the merger.
The Companies (pages 30 and 41)
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
June 30, 2000, Wells Fargo had assets of $234 billion, 7th largest among U.S.
bank holding companies.
Buffalo National Bancshares, Inc.
101 South 1st Avenue
Buffalo, Minnesota 55313
(763) 682-2311
Buffalo National is a bank holding company whose sole subsidiary is The
Buffalo National Bank located in Buffalo, Minnesota. The Buffalo National Bank
is a community bank engaged in the general commercial banking business in and
around Buffalo, Minnesota. At June 30, 2000, Buffalo National had assets of
approximately $111 million and was approximately the 98th largest bank in the
state of Minnesota.
1
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<PAGE>
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The information in this document is not complete and may change.
What You Will Receive in the Merger (page 22)
Whole Shares of Wells Fargo Common Stock. If the merger is completed, Wells
Fargo will exchange shares of its common stock for shares of Buffalo National
common stock. The number of shares of Wells Fargo common stock you will receive
for each share of Buffalo National common stock that you own is referred to in
this document as the "exchange ratio."
The exchange ratio will be determined by dividing 530,729 by the number of
shares of Buffalo National common stock outstanding immediately before the
merger is completed. At August 28, 2000, there were 3,804 shares of Buffalo
National common stock outstanding. Assuming that there are 3,804 shares of
Buffalo National common stock outstanding as of immediately prior to the merger,
Wells Fargo will exchange approximately 139.5187 shares of Wells Fargo common
stock for each share of Buffalo National common stock.
Cash Instead of Fractional Shares. 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. For example, if the exchange ratio is
139.5187 and you own 1,000 shares of Buffalo National common stock, you would
receive 139,518 shares of Wells Fargo common stock and cash instead of the
fractional share of 0.7.
Market Price of Wells Fargo Stock Will Fluctuate (page 63)
Wells Fargo common stock is listed on the New York and Chicago Stock
Exchanges under the symbol "WFC." The following table shows the closing prices
of Wells Fargo common stock on May 23, 2000, the day before Wells Fargo and
Buffalo National signed the merger agreement, and on August ___, 2000. The table
also shows for those dates the implied equivalent value per share of Buffalo
National common stock based on an exchange ratio of 139.5187.
Wells Fargo Implied Value Per Share of
Closing Price Buffalo National Common Stock
------------- -----------------------------
May 23, 2000................... $43.81 $6,112.31
August __, 2000................ $ $
----- --------
No adjustments to the exchange ratio will be made to reflect fluctuations
in the price of Wells Fargo common stock.
The following table shows the cash dividends paid per share of Wells Fargo
common stock and Buffalo National common stock for the quarters indicated. In
July 2000, Buffalo National paid a cash dividend of $187.72 per share of Buffalo
National common stock.
2
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<PAGE>
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The information in this document is not complete and may change.
Wells Fargo Buffalo National
Quarter Ended Common Stock Common Stock
------------- ------------ ------------
September 30, 1999................ $0.20 $37.99
December 31, 1999................. $0.20 --
March 31, 2000.................... $0.22 $197.16
June 30, 2000..................... $0.22 --
Merger Generally Tax Free to Buffalo National Shareholders (page 18)
Buffalo National shareholders generally will not recognize gain or loss for
U.S. federal income tax purposes from the exchange of their shares of Buffalo
National common stock for shares of Wells Fargo common stock. Buffalo National
shareholders will be taxed on cash they receive instead of fractional shares.
The tax treatment described above may not apply to every Buffalo National
shareholder. 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.
Buffalo National 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
Buffalo National common stock upon receipt of Wells Fargo common stock except
for cash received instead of fractional shares.
Buffalo National's Board Recommends Approval of the Merger (page 11)
Buffalo National's board of directors believes that the merger is in the
best interests of Buffalo National shareholders and recommends that Buffalo
National shareholders approve the merger. Buffalo National's board believes that
the merger will provide Buffalo National shareholders with the potential for
greater stock value appreciation and greater investment liquidity than if
Buffalo National had remained independent.
Additional Merger Benefits to Buffalo National's Management (page 11)
Buffalo National's directors and executive officers have interests in the
merger that are different from yours. These interests include:
o John M. Lundsten, president and chief executive officer of Buffalo
National, has entered an agreement with Wells Fargo and The Buffalo
National Bank that provides for his employment by the bank after the
merger.
o A general partnership in which John M. Lundsten holds a 92% ownership
interest will enter into certain real estate transactions with The
Buffalo National Bank in connection with the merger.
The board of directors of Buffalo National was aware of these additional
interests when it approved the merger agreement.
3
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The information in this document is not complete and may change.
Dissenters' Appraisal Rights Available (page 13)
Buffalo National shareholders who dissent from the merger are entitled to
receive the fair value in cash of their shares of Buffalo National common stock.
To exercise this right, you must follow the procedures outlined in Appendix B,
including notifying Buffalo National prior to the merger of your intention to
exercise your dissenters' appraisal rights. You must also not vote for the
merger. If you sign and return your proxy without voting instructions, and do
not revoke the proxy, your proxy will be voted for the merger and you will lose
your dissenters' appraisal rights. Also, you may lose your dissenters' appraisal
rights if you fail to comply with the other required procedures.
Surrender of Buffalo National Shares (page 16)
To receive certificates for your shares of Wells Fargo common stock, you
will need to surrender your Buffalo National 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.
Buffalo National Special Meeting (page 8)
Buffalo National will hold a special meeting of shareholders at 9:00 a.m.,
Buffalo, Minnesota time, on September 27, 2000, at the headquarters of Buffalo
National, 101 South 1st Avenue, Buffalo, Minnesota 55313. The purposes of the
meeting are to:
1. Vote on the merger agreement.
2. Act on any other matters that may properly come before the meeting.
Record Date; Vote Required to Approve Merger (page 9)
The record date for the special meeting is August 28, 2000. You can vote at
the meeting if you owned Buffalo National common stock at the close of business
on that date. On the record date, there were 3,804 shares of Buffalo National
common stock outstanding and entitled to vote. You can cast one vote for each
share of Buffalo National 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 Buffalo National common stock entitled to
vote at the special meeting. Not voting will have the same effect as voting
against the merger. At the record date for the special meeting, Buffalo
National's directors and executive officers beneficially owned a total of 2,312
shares of Buffalo National common stock, representing about 61% of the shares
entitled to vote at the meeting.
Included in the 2,312 shares of Buffalo National common stock held by
directors and executive officers are 2,278 shares beneficially owned by John M.
Lundsten, president and chief executive officer of Buffalo National,
representing about 60% of the shares entitled to vote at the meeting. Mr.
Lundsten has agreed to vote the shares in favor of the merger.
4
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<PAGE>
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The information in this document is not complete and may change.
Merger Requires Regulatory Approvals (page 17)
The Board of Governors of the Federal Reserve System must approve the
merger before it can be completed. The Federal Reserve Board has not yet
approved Wells Fargo's application for approval of the merger. Although Wells
Fargo expects that the Federal Reserve Board 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 27)
In addition to the receipt of regulatory approval, there are a number of
other conditions that must be met before the merger can be completed. These
conditions include:
o approval of the merger agreement by Buffalo National shareholders;
o receipt by Buffalo National of an opinion of counsel concerning the
tax consequences of the merger;
o 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 Buffalo National shareholders;
o the sale to John M. Lundsten or a trust of two insurance policies on
the life of Mr. Lundsten;
o the effectiveness of the employment and non-compete agreement among
Mr. Lundsten, Wells Fargo and The Buffalo National Bank;
o absence of any court or governmental authority order prohibiting the
merger; and
o material compliance by each party with the terms and provisions of the
merger agreement;
Wells Fargo or Buffalo National 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 28)
Wells Fargo and Buffalo National 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:
o a court or other governmental authority prohibits the merger; or
o the merger is not completed by February 24, 2001, unless the failure
to complete the merger on or before that date 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.
5
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<PAGE>
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The information in this document is not complete and may change.
Your Rights Will Differ as a Wells Fargo Stockholder (page 49)
Your rights as a Buffalo National shareholder are currently governed by
Minnesota law and Buffalo National's articles 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 21)
Wells Fargo expects to account for the merger under the purchase method of
accounting. Wells Fargo will record, at fair value, the acquired assets and
assumed liabilities of Buffalo National. 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 Is Heavily Regulated (page 33)
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 31)
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:
o securities underwriting, dealing and market making;
o sponsoring mutual funds and investment companies;
o insurance underwriting and agency;
o merchant banking activities; and
o activities that the Federal Reserve Board has determined to be closely
related to banking.
Wells Fargo is a financial holding company. 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 69)
This proxy statement-prospectus, including information incorporated by
reference into this document, may contain forward-looking statements about Wells
Fargo. There are a number of factors that may
6
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<PAGE>
--------------------------------------------------------------------------------
The information in this document is not complete and may change.
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 69.
Wells Fargo 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 Wells
Fargo income statement and balance sheet data as of and for the six months ended
June 30, 2000 and 1999 are derived from Wells Fargo's unaudited financial
statements. The information in the table is only a summary and should be read
with the full financial statements and related notes of Wells Fargo,
incorporated by reference into this document. See "Where You Can Find More
Information." You should not rely on the information for the six months ended
June 30, 2000 as being indicative of the results expected for the entire year.
-----------------------
Wells Fargo & Company and Subsidiaries
(dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Six Months
Ended June 30, Years Ended December 31,
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income $4,910 $4,577 $9,355 $8,990 $8,648 $8,222 $5,923
Net income 2,049 1,815 3,747 1,950 2,499 2,228 1,988
Diluted earnings per share 1.25 1.08 2.23 1.17 1.48 1.36 1.62
Cash dividends per share 0.440 0.385 0.785 0.700 0.615 0.525 0.450
Book value per share 14.12 12.67 13.44 12.35 11.92 11.66 10.27
Total assets 234,159 205,421 218,102 202,475 185,685 188,633 122,200
Long-term debt 26,639 21,268 23,375 19,709 17,335 18,142 16,726
</TABLE>
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<PAGE>
The information in this document is not complete and may change.
BUFFALO NATIONAL SPECIAL MEETING
The board of directors of Buffalo National is soliciting proxies from its
shareholders for use at a special meeting of Buffalo National shareholders and
at any adjournments of the meeting. This proxy statement-prospectus, together
with the form of proxy, is expected to be mailed to Buffalo National
shareholders on or about August 28, 2000.
Time and Place of the Meeting
The time and place of the special meeting of Buffalo National shareholders
are:
Wednesday, September 27, 2000
9:00 a.m., Buffalo, Minnesota time
101 South 1st Avenue
Buffalo, Minnesota 55313
Matters to be Considered at the Meeting
The special meeting of Buffalo National shareholders will be held to:
1. Vote on a proposal to approve the agreement and plan of
reorganization, dated as of May 24, 2000, by and between Buffalo
National and Wells Fargo, and a related agreement and plan of merger,
dated as of August 9, 2000, by and between Buffalo National and Wells
Fargo BNB Merger Co., a wholly-owned subsidiary of Wells Fargo. The
agreement and plan of reorganization, which is included as Exhibit A
in the agreement and plan of reorganization, is included in this proxy
statement-prospectus as Appendix A. When used in this document, the
term "merger agreement" refers to the agreement and plan of
reorganization and the agreement and plan of merger together. See "The
Merger Agreement."
2. Act on any other matters that may properly come before the meeting.
Record Date
Buffalo National's board of directors has established August 28, 2000 as
the record date for the meeting. Only shareholders of record on that date are
entitled to attend and vote at the meeting or at any adjournment of the meeting.
Outstanding Shares
On August 28, 2000, there were 3,804 shares of Buffalo National common
stock outstanding and entitled to vote at the meeting. Each outstanding share is
entitled to one vote.
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The information in this document is not complete and may change.
Quorum
A quorum consisting of the holders of a majority of the shares of Buffalo
National common stock outstanding at the record date must be present in person
or represented by proxy for the transaction of business at the special meeting.
Shares of Buffalo National common stock present in person at the meeting that
are not voted, and shares of Buffalo National common stock for which proxies
have been received but that abstain from voting, are counted in determining
whether a quorum is present.
Vote Required
Approval of the merger agreement requires the affirmative vote of a
majority of the shares of Buffalo National common stock outstanding at the
record date.
Share Ownership
Directors And Executive Officers Of Buffalo National. At the record date
for the meeting, Buffalo National's directors and executive officers
beneficially owned a total of 2,312 shares of Buffalo National common stock,
representing approximately 60.8 % of the shares of Buffalo National common stock
entitled to vote at the special meeting.
Wells Fargo. At the record date, Wells Fargo and its subsidiaries
beneficially owned no shares of Buffalo National common stock.
Agreement to Vote for the Merger
John M. Lundsten, president and chief executive officer of Buffalo
National, has agreed to vote in favor of the merger all shares of Buffalo
National common stock beneficially owned by him at the record date for the
meeting. At the record date, Mr. Lundsten beneficially owned a total of 2,278
shares of Buffalo National common stock, constituting approximately 59.9% of the
shares of Buffalo National common stock entitled to vote at the meeting. See
"The Merger--Support Agreement."
Voting and Revocation of Proxies
All shares of Buffalo National common stock represented at the special
meeting by a properly executed proxy will be voted in accordance with the
instructions indicated on the proxy, unless the proxy is revoked before a vote
is taken. If you sign and return a proxy without voting instructions, and do not
revoke the proxy, the proxy will be voted "FOR" the proposal to approve merger
agreement.
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
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The information in this document is not complete and may change.
Buffalo National before or at the special meeting or (b) voting the shares
subject to the proxy in person at the special meeting. Attendance at the special
meeting will not by itself result in your proxy being revoked.
The proposal to approve the merger must be approved by the holders of a
majority of the shares of Buffalo National 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
Buffalo National and its subsidiaries may solicit proxies from Buffalo National
shareholders, either personally or by telephone or other form of communication.
None of the foregoing persons who solicit proxies will be specifically
compensated for such services. Buffalo National does not anticipate that anyone
will be specifically engaged to solicit proxies or that special compensation
will be paid for that purpose, but Buffalo National 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.
Buffalo National will bear its own expenses in connection with any solicitation
of proxies for the special meeting.
Postponement or Adjournment of the Meeting
If an insufficient number of votes for the merger is received before the
scheduled meeting date, Wells Fargo and Buffalo National may decide to postpone
or adjourn the special meeting. If this happens, proxies that have been received
that either have been voted for the merger or contain no instructions will be
voted for adjournment.
Other Matters Considered at the Meeting
If an insufficient number of votes for the merger is received before the
scheduled meeting, Buffalo National may decide to postpone or adjourn the
special meeting. If this happens, proxies that have been received that either
have been voted for the merger or contain no instructions will be voted for
adjournment.
Buffalo National's board of directors is not aware of any business to be
brought before the special meeting other than the proposal to approve the
merger. If other matters are properly brought before the special meeting or any
adjournments or postponements of the meeting, the persons appointed as proxies
will have authority to vote the shares represented by properly executed proxies
in accordance with their discretion and judgment as to the best interests of
Buffalo National.
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The information in this document is not complete and may change.
THE MERGER
Effect of the Merger
As a result of the merger:
o Wells Fargo will exchange shares of its common stock for shares of
Buffalo National common stock.
o Wells Fargo will acquire all of the outstanding common stock of
Buffalo National, resulting in Buffalo National becoming a
wholly-owned subsidiary of Wells Fargo.
o Buffalo National shareholders 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
Buffalo National has agreed to be acquired by Wells Fargo because Buffalo
National's board of directors believes that of all publicly traded holding
companies, Wells Fargo's style of operations and method of handling customers
most closely reflects Buffalo National's style of operations. Consequently, the
board of directors concluded that the communities served by Buffalo National
will be better served by Wells Fargo than any other publicly traded holding
company. Finally, the board of directors believes that Buffalo National
shareholders will benefit by becoming shareholders of Wells Fargo which is a
company that has more resources to compete in the rapidly changing financial
services industry, has more ability to diversify the risk associated with the
financial services industry and has increased liquidity due to the fact that
Wells Fargo's common stock is publicly traded.
Additional Interests of Buffalo National Management
Buffalo National's directors and executive officers have interests in the
merger that are in addition to their interests as shareholders of Buffalo
National generally. Buffalo National's board of directors was aware of these
interests and considered them, among other things, when it approved the merger
agreement.
Lundsten Employment Agreement. In connection with the merger agreement,
John Lundsten, president and chief executive officer of Buffalo National and its
subsidiary bank, The Buffalo National Bank, entered into an employment and
non-compete agreement with the bank and Wells Fargo. Under the agreement, Mr.
Lundsten will be employed by the bank and will receive an annual salary of
$85,000, less taxes and withholding. The term of his employment will begin on
the day following the closing date of the merger and end one year later unless
terminated earlier as a result of:
o Mr. Lundsten's death;
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The information in this document is not complete and may change.
o the receipt by Mr. Lundsten of notice of termination from the bank,
Wells Fargo or any of Wells Fargo's affiliates arising from:
o the commission of a fraudulent or dishonest act by Mr. Lundsten;
or
o Mr. Lundsten's violation of the polices of the bank, Wells Fargo
or any of Wells Fargo's affiliates or of the Wells Fargo Code of
Ethics and Business Conduct;
o Mr. Lundsten's voluntary resignation.
Upon expiration of his employment term or termination of his employment
other than because of his voluntary resignation or because of a notice of
termination under the two circumstances described above, Mr. Lundsten, or his
surviving spouse in the event of his death, will be eligible for a monthly
payment for 156 months pursuant to the following schedule:
Age Attained Amount of Payment
------------ -----------------
65 or older $3,000
64 $2,700
63 $2,400
62 $2,100
61 $1,800
Mr. Lundsten has agreed that, beginning on May 24, 2000 and ending three
years after the closing date of the merger, he will not, by himself or through
associates, agents, employees or others, directly or indirectly, do any of the
following within the state of Minnesota:
o engage in the commercial banking or thrift business except on behalf
of the bank or any corporation, bank or other entity that controls, is
controlled by, or is under common control with the bank, which after
completion of the merger will include Wells Fargo and its affiliates;
o aid or assist anyone in engaging in or entering into the commercial
banking or thrift business except on behalf of the bank, Wells Fargo
or any of Wells Fargo's affiliates;
o attempt to divert any business of the bank, Wells Fargo or any of
Wells Fargo's affiliates or any business that the bank, Wells Fargo or
any of Wells Fargo's affiliates have a reasonable expectation of
obtaining by soliciting or contacting for the purpose of establishing
a business relationship any customers and/or potential customers of
the bank, Wells Fargo or any of Wells Fargo's affiliates;
o communicate to or use for the benefit of any person, any of the
confidential information, trade or business secrets used by the bank,
Wells Fargo or any of Wells Fargo's affiliates nor disclose the
proprietary methods of conducting the business of the bank, Wells
Fargo or any of Wells Fargo's affiliates;
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The information in this document is not complete and may change.
o establish, open, reestablish or reopen any business substantially the
same as all or any part of the business of the bank, Wells Fargo or
any of Wells Fargo's affiliates;
o in any manner become interested directly or indirectly, as employee,
owner, partner, stockholder, director, officer or otherwise, in a
commercial banking or thrift business except the bank, Wells Fargo or
any of Wells Fargo's affiliates, provided, however, that for purposes
of this provision, the term "shareholder" does not include any
investment in an organization where Mr. Lundsten owns less than 5 % of
the stock issued and outstanding;
o solicit, directly or indirectly, an employee of the bank, Wells Fargo
or any of Wells Fargo's affiliates for the purpose of encouraging that
employee to leave said employment.
Sale of Bank Building. BANATCO, a Minnesota general partnership, owns the
building used by Buffalo National Bank. One of the conditions of the merger is
that BANATCO will sell the bank building to Buffalo National and Buffalo
National will sell two unwanted parcels of property to BANATCO immediately after
the completion of the merger. The purchase price of these properties will be
their fair market value as determined by an appraiser mutually agreed upon by
Wells Fargo and Buffalo National. John Lundsten is the general partner of
BANATCO, and holds an approximately 92% ownership interest in the partnership.
Dissenters' Appraisal Rights
Under Sections 302A.471 and 302A.473 of the Minnesota Business Corporation
Act (MBCA), shareholders of Buffalo National have the right to dissent from the
merger and receive the fair value of their shares of Buffalo National common
stock. "Fair value," for this purpose, means the value of the shares immediately
before the effective date of the merger. Buffalo National is required by law to
notify its shareholders of their dissenters' appraisal rights and to provide
them with a copy of Sections 302A.471 and 302A.473. This document and the notice
of special meeting that precedes this document constitute such notice. A copy of
Sections 302A.471 and 302A.473 is included in this document as Appendix B.
The following discussion is not a complete statement of the laws pertaining
to dissenters' rights under Minnesota law and is qualified in its entirety by
the full text of Sections 302A.471 and 302A.473. Any shareholder who wishes to
exercise the right to dissent and demand the fair value of such shareholder's
shares, or who wishes to preserve the right to do so, should review the
following discussion and Appendix B carefully. You will lose your dissenters'
rights of appraisal if you do not comply with procedural requirements for
exercising these rights.
A holder of Buffalo National common stock wishing to exercise the right to
demand the fair value of such shareholder's shares must first file, before the
vote of shareholders is taken at the special meeting, a written notice of intent
to demand the fair value of such shareholder's shares and must, in addition, not
vote in favor of the merger agreement. A vote against the merger agreement,
whether in person or by proxy, will not in and of itself satisfy the requirement
of a written notice of intent to demand the fair value of a shareholder's common
stock.
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<PAGE>
The information in this document is not complete and may change.
A demand for fair value must be executed by or for the shareholder of
record, fully and correctly, as such shareholder's name appears on the
certificate or certificates representing such shareholder's shares. If the
common stock is owned of record in a fiduciary capacity, such as by a trustee,
guardian, or custodian, such demand must be executed by the fiduciary. If the
common stock is owned of record by more than one person, as in a joint tenancy
or tenancy in common, such demand must be executed by all joint owners. An
authorized agent, including an agent for two or more joint owners, may execute
the demand for a shareholder of record; however, the agent must identify the
record owner and expressly disclose the fact that, in making the demand, the
agent is acting as agent for the record owner.
A record owner who holds shares as a nominee for others, such as a broker,
may demand fair value of the shares held for all, or fewer than all, of the
beneficial owners of such shares. In such a case, the written demand should set
forth the number of shares to which it relates. When no number of shares is
expressly mentioned, the demand will be presumed to cover all shares standing in
the name of the record owner. A beneficial owner of common stock who is not the
record owner may assert dissenters' rights with respect to shares held on behalf
of the beneficial owner if the beneficial owner submits to Buffalo National at
the time of or before the assertion of dissenters' rights a written consent of
the record owner of the shares. From that point forward, Buffalo National will
treat the beneficial owner in the same fashion as a record shareholder.
Buffalo National shareholders who elect to exercise dissenters' rights and
demand fair value should mail (by certified or registered mail) or deliver their
written demand to Buffalo National Bancshares, Inc., 1804 Hillside Lane,
Buffalo, Minnesota 55313. Such written demand should specify the shareholder's
name and mailing address, the number of shares owned, and that the shareholder
is thereby demanding the fair value of such shareholder's shares.
After the effective date of the merger, Buffalo National will cause to be
mailed to each shareholder of Buffalo National who has properly asserted
dissenters' rights a notice that contains the following:
o the address to which a demand for payment and stock certificates must
be sent in order to receive payment and the date by which they must be
received;
o a form to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired
the shares or an interest in them, and to demand payment; and
o another copy of Sections 302A.471 and 302A.473, together with a brief
description of these sections.
To receive the fair value of common stock a dissenting shareholder must
demand payment and deposit the certificates representing such shares within 30
days after the notice is given.
After Buffalo National receives a valid demand for payment, it will cause
to be remitted to each dissenting shareholder who has properly asserted
dissenters' appraisal rights the fair value of the shares of Buffalo National
common stock with interest at the judgment rate computed from the effective date
of the merger. Such payment will be accompanied by:
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The information in this document is not complete and may change.
o Buffalo National's closing balance sheet and statement of income for a
fiscal year ending not more than 16 months before the effective date
of the merger, together with the latest available interim financial
statements;
o an estimate of the fair value of the shares and a brief description of
the method used to reach the estimate; and
o additional copies of Sections 302A.471 and 302A.473 along with a brief
description of the procedure to be followed to demand the supplemental
payment discussed below.
If Buffalo National fails to remit payment within 60 days after receiving
shares from a dissenting shareholder, it will be obligated to return any
certificates for such shares to the dissenting shareholder.
If a dissenting shareholder believes that the amount remitted by Buffalo
National is less than the fair value of the shares plus interest, such
dissenting shareholder may give written notice to Buffalo National of such
shareholder's own estimate of the fair value for the shares plus interest and
demand a supplemental payment for the difference. Any written demand for
supplemental payment must be made within 30 days after Buffalo National has
mailed its original remittance. Otherwise, the dissenting shareholder is
entitled only to the amount remitted by Buffalo National.
Within 60 days after receiving a demand for supplemental payment, Buffalo
National must either pay the amount of the supplemental payment demanded (or
agreed to between the dissenting shareholder and Buffalo National) or file a
petition in the state courts of Minnesota requesting that the court determine
the fair value of the shares plus interest. Any petition so filed must name as
parties all dissenting shareholders who have demanded supplemental payments and
who have been unable to reach an agreement with Buffalo National concerning the
fair value of their shares. Buffalo National must, after filing the petition,
serve all parties with the summons and a copy of the petition under the rules of
civil procedure. Non-resident parties may be served by registered or certified
mail, or by publication as provided by law. Unless otherwise provided, the rules
of civil procedure apply to the proceeding. The court may appoint appraisers,
with such power and authority as the court deems proper, to receive evidence on
and recommend the amount of fair value of the shares. The jurisdiction of the
court is plenary and exclusive, and the fair value as determined by the court is
binding on all shareholders, wherever located. A dissenting shareholder, if
successful, is entitled to a judgment in cash for the amount by which the fair
value of such shareholder's shares as determined by the court exceeds the amount
originally remitted by Buffalo National, but will not be liable to Buffalo
National for the amount, if any, by which the amount, if any, remitted to the
dissenter exceeds the fair value of the shares as determined by the court, plus
interest.
Generally, the costs and expenses associated with a court proceeding to
determine the fair value of the shares will be borne by Buffalo National, unless
the court finds that a dissenting shareholder has demanded supplemental payment
in a manner which is arbitrary, vexatious, or not in good faith. Similar costs
and expenses may also be assessed in instances where Buffalo National has failed
to comply with the procedures in Section 302A.473 pertaining to dissenters'
rights discussed above. The court may, in its discretion, award attorneys' fees
to an attorney representing dissenting shareholders out of any amount awarded to
such dissenters.
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The information in this document is not complete and may change.
Failure to follow the steps required by Section 302A.473 for asserting
dissenters' rights may result in the loss of a shareholder's rights to demand
the fair value of such shareholder's shares of common stock. Shareholders
considering seeking appraisal should realize that the fair value of their
shares, as determined under Section 302A.473 in the manner outlined above, could
be more than, the same as, or less than the value of the Wells Fargo common
stock they would be entitled to as a result of the merger if they did not seek
appraisal of their shares.
Exchange of Certificates
After completion of the merger, Wells Fargo Bank Minnesota, National
Association, acting as exchange agent for Wells Fargo, will mail to each holder
of record of shares of Buffalo National common stock a form of letter of
transmittal, together with instructions for the exchange of the holder's Buffalo
National stock certificates for a certificate representing Wells Fargo common
stock.
Buffalo National shareholders should not send in their certificates until
they receive the letter of transmittal form and instructions.
No dividend or other distribution declared on Wells Fargo common stock
after completion of the merger will be paid to the holder of any certificates
for shares of Buffalo National common stock until after the certificates have
been surrendered for exchange.
When the exchange agent receives a surrendered certificate or certificates
from a shareholder, together with a properly completed letter of transmittal, it
will issue and mail to the shareholder a certificate representing the number of
whole shares of Wells Fargo common stock to which the shareholder 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 Buffalo
National 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 Buffalo National. If, after completion of the merger, certificates for
Buffalo National common stock are presented for transfer to the exchange agent,
they will be canceled and exchanged for certificates representing Wells Fargo
common stock.
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The information in this document is not complete and may change.
None of Wells Fargo, Buffalo National, the exchange agent or any other
person will be liable to any former holder of Buffalo National 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 that is proposing to acquire another bank holding company.
Wells Fargo will file an application with the Federal Reserve Board requesting
approval of the merger. Copies of the application will be provided to the U.S.
Department of Justice and other governmental agencies. The application will
describe 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 and Wells Fargo'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
its subsidiaries banks, under the Community Reinvestment Act of 1977.
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.
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 Buffalo
National shareholders is fair. Regulatory approval does not constitute an
endorsement or recommendation of the merger.
Wells Fargo and Buffalo National are not aware of any governmental
approvals or compliance with banking laws and regulations that are required for
the merger to become effective other than those described above. Wells Fargo and
Buffalo National intend to seek any other approval and to take any other action
that may be required to effect the merger. There can be no assurance that any
required approval or action can be obtained or taken prior to the special
meeting.
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The information in this document is not complete and may change.
The merger cannot be completed unless all necessary regulatory approvals
are granted. In addition, Wells Fargo may elect not to complete the merger if
any condition under which any regulatory approval is granted is unreasonably
burdensome to Wells Fargo. See "The Merger Agreement--Conditions to the Merger"
and "--Termination of the Merger Agreement."
Effect of Merger on Buffalo National's Employee Benefit Plans
Persons who are regular or part time (but not flexible) employees of
Buffalo National or any Buffalo National subsidiary ("eligible employees") may
participate in the employee welfare plans of Wells Fargo specified in the merger
agreement, subject to any eligibility requirements applicable to such plans.
Eligible employees will enter each of such plans no later than the first day of
the calendar quarter which begins at least 32 days after completion of the
merger.
Eligible employees may participate in the Wells Fargo 401(k) plan, subject
to any eligibility requirements applicable to the plan. Eligible employees will
participate in the Wells Fargo cash balance plan, subject to any eligibility
requirements applicable to the plan. Wells Fargo will not recognize past service
with Buffalo National or any of its subsidiaries for any purpose under the cash
balance plan. As a result, eligible employees will begin participation in the
cash balance plan as new employees.
U.S. Federal Income Tax Consequences of the Merger
The following is a summary of the anticipated material U.S. federal income
tax consequences of the merger to Buffalo National shareholders who hold Buffalo
National common stock as a capital asset. The summary is based on the U.S tax
code, regulations under the U.S. tax code, administrative rulings and court
decisions, as in effect as of the date of this document, all of which are
subject to change at any time, possibly with retroactive effect. This summary is
not a complete description of all of the tax consequences of the merger. In
particular, this summary may not address U.S. federal income tax considerations
applicable to you if you are a Buffalo National shareholder subject to special
treatment under U.S. federal income tax law, including, for example:
o foreign persons;
o financial institutions;
o securities dealers;
o securities traders who elect to apply a mark-to-market method of
accounting;
o insurance companies;
o tax-exempt entities;
o holders who acquired their shares of Buffalo National common stock
through exercise of an employee stock option or right, or otherwise as
compensation; and
18
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The information in this document is not complete and may change.
o holders who hold Buffalo National common stock as part of a hedge,
straddle, conversion or constructive sale transaction.
Also, this document does not provide information about the tax consequences
of the merger under applicable foreign, state or local laws or under any federal
laws other than those relating to the income tax.
You are urged to consult your tax advisors about the particular
consequences of the merger to you, including the effects of U.S. federal, state
or local, or foreign and other tax laws.
In connection with the filing with the SEC of the registration statement
containing this document, the law firm of Lindquist & Vennum P.L.L.P. has
delivered to Wells Fargo and Buffalo National an opinion addressing the material
U.S. federal income tax consequences of the merger. This opinion has been
rendered on the basis of facts, representations and assumptions set forth or
referred to in the opinion. In rendering this opinion, Lindquist & Vennum
P.L.L.P required and relied upon factual representations contained in
certificates of officers of Wells Fargo and Buffalo National. The opinion is to
the effect that, for U.S. federal income tax purposes:
o the merger will constitute a reorganization within the meaning of
Section 368(a) of the U.S. tax code;
o no gain or loss will be recognized by the holders of Buffalo National
common stock upon receipt of Wells Fargo common stock, except with
respect to cash received instead of fractional shares of Wells Fargo
common stock;
o the basis of Wells Fargo common stock received, including fractional
shares deemed received and redeemed as described below, by the
shareholders of Buffalo National will be the same as the basis of the
Buffalo National common stock exchanged therefor; and
o the holding period of shares of Wells Fargo common stock received,
including fractional shares deemed received and redeemed as described
below, by the shareholders of Buffalo National will include the
holding period of the Buffalo National common stock, provided that the
shares of Buffalo National common stock were held as a capital asset
as of the effective time of the merger.
Buffalo National will not be required to complete the merger unless it
receives an additional opinion of Lindquist and Vennum P.L.L.P., dated the
closing date of the merger, based on the facts and assumptions stated in that
opinion, substantially to the same effect as the opinion described above.
None of the tax opinions delivered or to be delivered to the parties in
connection with the merger as described in this document are binding on the
Internal Revenue Service or the courts, and Buffalo National does not intend to
request a ruling from the Internal Revenue Service with respect to the merger.
If you receive cash instead of a fractional share interest in Wells Fargo
common stock, you will be treated as having received that fractional share
interest and then as having received the cash in redemption of the fractional
share interest. In most cases, you should recognize capital gain or loss for
U.S. federal
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income tax purposes measured by the difference between the amount of cash
received and the portion of the tax basis of the shares of Buffalo National
common stock allocable to the fractional share interest. This capital gain or
loss would be a long-term capital gain or loss if the holding period for the
fractional share interest in Wells Fargo common stock (determined as described
above) is greater than one year at the effective time of the merger.
Payments related to Buffalo National common stock may be subject to
information reporting to the Internal Revenue Service and to a 31% backup
withholding tax. Backup withholding will not apply, however, to a payment to
you, or another payee, if you or the payee completes and signs the substitute
Form W-9 that will be included as part of the transmittal letter, or otherwise
proves to Wells Fargo and the exchange agent that you or the payee is exempt
from backup withholding.
Support Agreement
At the same time that the merger agreement was signed, John M. Lundsten,
president and chief executive officer of Buffalo National, entered into an
individual support agreement with Wells Fargo. Under the support agreement, Mr.
Lundsten agreed, among other things:
o to vote in favor of the merger all shares of Buffalo National common
stock owned by him at the record date for any meeting of shareholders
of Buffalo National called to consider and vote on the merger;
o not to sell or transfer any shares of Buffalo National common stock
held by him except (a) pursuant to the merger, or (b) with Wells
Fargo's prior written consent;
o not to solicit any inquiries or proposals or enter into any
discussions, negotiations or agreements relating to a business
combination, merger or consolidation of Buffalo National with any
person other than Wells Fargo; and
o not to vote in favor of any business combination, merger or
consolidation of Buffalo National with any person other than Wells
Fargo.
At the record date for the special meeting, Mr. Lundsten beneficially owned
a total of 2,278 shares of Buffalo National common stock, representing
approximately 59.9% of the shares of Buffalo National common stock entitled to
vote at the special meeting.
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
Buffalo National shareholders who are considered to be "affiliates" of Buffalo
National 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% shareholders and other persons with the power to direct
the management and policies of the company in question.
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Affiliates of Buffalo National may not sell the shares of Wells Fargo
common stock received in the merger except (a) pursuant to an effective
registration statement under the Securities Act, (b) in compliance with an
exemption from the registration requirements of the Securities Act or (c) in
compliance with Rule 144 and Rule 145 under the Securities Act. Generally, those
rules permit resales of stock received by affiliates so long as Wells Fargo has
complied with certain reporting requirements and the selling shareholder
complies with certain volume and manner of sale restrictions.
Buffalo National 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 Buffalo National 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 Buffalo National.
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 Buffalo National'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 Buffalo
National. 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 Buffalo
National's operations after the merger.
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THE MERGER AGREEMENT
The following is a summary of certain provisions of the merger agreement. A
copy of the merger agreement is attached to this proxy statement-prospectus as
Appendix A and is incorporated by reference into this proxy
statement-prospectus. This summary is qualified in its entirety by reference to
the full text of the merger agreement. Buffalo National shareholders 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 Buffalo National, with
Buffalo National as the surviving corporation. (paragraph 1(a))
Exchange of Wells Fargo Shares for Buffalo National Shares. Under the
merger agreement, each share of Buffalo National common stock outstanding
immediately before the merger, other than shares as to which statutory
dissenters' appraisal rights have been exercised, is to be converted into the
right to receive the number of shares of Wells Fargo common stock determined by
dividing 530,729 by the number of shares of Buffalo National common stock then
outstanding. (paragraph 1(a))
No adjustment will be made to the number of shares of Wells Fargo common
stock you will receive for your shares of Buffalo National common stock to
reflect fluctuations in the price of Wells Fargo common stock.
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 Instead 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 closing prices of a share of Wells Fargo
common stock on the New York Stock Exchange as reported by Bloomberg for each of
the five consecutive trading days ending on the day immediately preceding the
special meeting of Buffalo National shareholders at which the shareholders will
vote on the merger agreement. (paragraph 1(c))
Effective Date and Time of the Merger. The effective date of the merger
will be the day on which articles of merger are filed with and accepted by the
Minnesota Secretary of State. The merger agreement provides that articles of
merger will be filed within 10 business days after the satisfaction or waiver of
all conditions to the merger or on such other date as Wells Fargo and Buffalo
National may agree. See
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"Conditions To The Merger." The effective time of the merger will be 11:59 p.m.,
central daylight time, on the effective date of the merger. (paragraph 1(d))
Representations and Warranties
The merger agreement contains various representations and warranties by
Wells Fargo and/or Buffalo National concerning, among other things (paragraphs 2
and 3):
o corporate organization, standing and authority;
o subsidiaries;
o capitalization;
o corporate authority and action;
o compliance of the merger agreement with, and the need for consent or
approval under applicable law and contracts and organizational
documents;
o governmental and third party consents and approvals;
o financial statements and filings with the SEC and other governmental
agencies;
o filing of tax returns, payment of taxes and absence of certain tax
proceedings;
o absence of material changes in business since December 31, 1999;
o contracts and commitments;
o absence of pending or threatened litigation;
o insurance;
o compliance with laws;
o labor matters;
o employee benefit plans;
o information provided for inclusion in this document;
o absence of any obligation to register securities;
o absence of brokerage or finder's fees;
o proper administration of fiduciary accounts;
o absence of default on material agreements; and
o absence of certain environmental liabilities.
Certain Covenants
The merger agreement has a number of covenants and agreements that govern
the actions of Buffalo National and Wells Fargo pending completion of the
merger. Some of the covenants and agreements are summarized below.
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Conduct of Business
Buffalo National
Except as otherwise permitted or required by the merger agreement, or
as otherwise agreed to in writing by Wells Fargo, Buffalo National and each
Buffalo National subsidiary will:
o maintain its corporate existence in good standing;
o maintain the general character of its business;
o conduct its business in the ordinary and usual manner;
o 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, would exceed $250,000;
o maintain proper business and accounting records in accordance
with generally accepted principles;
o maintain its properties in good repair and condition, with the
exception of ordinary wear and tear;
o maintain in all material respects presently existing insurance
coverage;
o use its best efforts to preserve its business organization in
tact, 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;
o use its best efforts to obtain any approvals or consents required
to maintain existing leases and other contracts in effect
following the merger;
o comply in all material respects with all laws, regulations,
ordinances, codes, orders, licenses and permits applicable to the
properties and operations of Buffalo National and each Buffalo
National subsidiary the non-compliance with which reasonably
could be expected to have a material adverse effect on Buffalo
National and its subsidiaries taken as a whole; and
o 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 (paragraph 4(a))
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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, Buffalo National and each Buffalo National subsidiary will
not:
o amend or otherwise change its articles of incorporation or
association or bylaws;
o issue or sell or authorize for issuance or sale, or grant any
options or make other agreements with respect to the issuance or
sale or conversion of, any shares of its capital stock, phantom
shares or other share equivalents, or any other of its
securities, except that Buffalo National may issue shares of
Buffalo National common stock upon exercise of stock options;
o authorize or incur any long-term debt (other than deposit
liabilities);
o mortgage, pledge or subject to a lien or other encumbrance any of
its properties, except in the ordinary course of business;
o enter into any material agreement, contract or commitment in
excess of $10,000 except banking transactions in the ordinary
course of business and in accordance with policies and procedures
in effect as of the date of the merger agreement;
o make any investments except investments made by bank subsidiaries
in the ordinary course of business for terms of up to one year
and in amounts of $100,000 or less;
o amend or terminate any specified employee benefit plans except as
required by law or the terms of the merger agreement;
o 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;
o declare, set aside, make or pay any dividend or other
distribution with respect to its capital stock except any
dividend declared by a Buffalo National subsidiary's board of
directors in accordance with applicable law and regulation,
provided that Buffalo National may make distributions in an
amount equal to the sum of $734,105 plus Buffalo National's "2000
Pre-Close Net Income" (as defined in the merger agreement), but
excluding from such 2000 Pre-Close Net Income certain items
specified in the merger agreement;
o redeem, purchase or otherwise acquire any capital stock of
Buffalo National;
o increase the compensation of any officers, directors or executive
employees, except pursuant to existing compensation plans,
agreements and practices and except as permitted under the merger
agreement;
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o sell or otherwise dispose of any shares of capital stock of any
Buffalo National subsidiary; or
o sell or otherwise dispose of any of its assets or properties
other than in the ordinary course of business. (paragraph 4(b))
Wells Fargo
Wells Fargo has agreed to conduct its business and to cause its
significant subsidiaries to conduct their respective businesses in
compliance with all material obligations and duties imposed by laws,
regulations, rules and ordinances or by judicial orders, judgments and
decrees applicable to them or to their businesses or properties.
Competing Transactions. Neither Buffalo National or any Buffalo National
subsidiary nor any director, officer, representative or agent of Buffalo
National or any Buffalo National subsidiary may, directly or indirectly,
solicit, authorize the solicitation of or enter into any discussions with any
entity or group (other than Wells Fargo) concerning any offer or possible offer
to:
o purchase its common stock, any security convertible into its common
stock, or any other equity security of Buffalo National or any of its
subsidiaries;
o make a tender or exchange offer for any shares of its common stock or
other equity security of Buffalo National or any of its subsidiaries;
o purchase, lease or otherwise acquire the assets of Buffalo National or
any of its subsidiaries except in the ordinary course of business; or
o merge, consolidate or otherwise combine with Buffalo National or any
of its subsidiaries.
Buffalo National 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))
Other Covenants. The merger agreement contains various other covenants,
including covenants relating to the preparation and distribution of this
document, 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, Buffalo National has agreed to
o 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 Buffalo National's business after the merger; and
o use its best efforts to deliver to Wells Fargo prior to completion of
the merger signed representations substantially in the form attached
as Exhibit B to the merger agreement from each executive officer,
director or shareholder of Buffalo National who may reasonably be
deemed an "affiliate" of Buffalo National within the meaning of such
term as used in Rule 145 of the
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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 Wells Fargo or Buffalo National is obligated to complete the merger.
These conditions are customary and include such items as:
o the continued accuracy of the other party's representations and
warranties;
o the performance by the other party of its obligations under the merger
agreement;
o the receipt of shareholder and regulatory approval, and expiration of
all applicable waiting and appeal periods;
o the absence of any order restraining or enjoining the merger; and
o subject to certain exceptions, the absence of any changes that have
had or might be reasonably expected to have a material adverse effect
on the other party.
Various additional conditions must be met before Buffalo National is
obligated to complete the merger, including:
o the listing on the New York and Chicago Stock Exchanges of the Wells
Fargo common stock to be delivered to Buffalo National shareholders;
o the receipt by Wells Fargo of all securities law or blue sky
authorizations necessary to complete the merger; and
o the receipt by Buffalo National of a favorable tax opinion.
Also, various additional conditions must be met before Wells Fargo is
obligated to complete the merger, including:
o the receipt by Buffalo National and each Buffalo National subsidiary
of all material consents or waivers from third parties to loan
agreements, leases or other contracts required to complete the merger;
o the total number of shares of Buffalo National common stock
outstanding and subject to issuance upon exercise, assuming for this
purpose that phantom shares and other share-equivalents constitute
Buffalo National common stock, of all warrants, options, conversion
rights, phantom shares or other share-equivalents shall not exceed
3,804;
o the resignation of each member of Buffalo National's board of
directors;
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o the absence of any revocation by Buffalo National or its shareholders
of Buffalo National's S Corporation election, and the absence of any
action that would result in termination of such S Corporation
election;
o the sale by Buffalo National Bank to John M. Lundsten (or a trust) of
two life insurance policies on Mr. Lundsten for an amount equal to the
aggregate cash value of the policies on the date of sale;
o the effectiveness of the employment and non-competition agreement
among Buffalo National Bank, Wells Fargo and John M. Lundsten; and
o the amendment of Buffalo National's articles of incorporation to
eliminate any preemptive rights with respect to the merger, and the
amendment of Buffalo National's bylaws to provide that Article 11 of
the bylaws will not apply to the merger.
Some of the conditions to the merger are subject to exceptions and/or a
"materiality" standard. Certain conditions to the merger may be waived by the
party seeking to assert the condition. (paragraphs 6 and 7)
Termination of the Merger Agreement
Wells Fargo and Buffalo National can mutually agree to terminate the merger
agreement at any time before completion of the merger. (paragraph 9(a)(i) Also,
either Wells Fargo or Buffalo National can terminate the merger agreement
without the consent of the other if any of the following occurs:
o The merger has not been completed by February 24, 2001, 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 observed or performed by the party;
or
o A court or governmental authority of competent jurisdiction has issued
a final order restraining, enjoining or otherwise prohibiting the
transactions contemplated by the merger agreement. (paragraph 9(a)(ii)
and (iii))
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 of representations or warranties, or willful and material failure in
performance of covenants, agreements, duties or obligations arising under the
merger agreement. 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))
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Waiver and Amendment
Either Wells Fargo or Buffalo National 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 Buffalo National 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 Buffalo National shareholders approve
the merger if the amendment would change in a manner adverse to Buffalo National
shareholders the consideration to be received by Buffalo National shareholders
in the merger. (paragraph 17)
Expenses
Wells Fargo and Buffalo National 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 June 30, 2000, Wells Fargo had consolidated total assets of $234.2
billion, consolidated total deposits of $146.4 billion and stockholders' equity
of $23.1 billion. Based on assets at June 30, 2000, Wells Fargo was the 7th
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. Buffalo National shareholders who want a copy of this
annual report or any document incorporated by reference into the report may
contact Wells Fargo at the address or phone number indicated below under "Where
You Can Find More Information."
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The information in this document is not complete and may change.
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.
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.
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. 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.
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FIRST SECURITY MERGER
The following information describes the pending merger transaction between
Wells Fargo & Company and First Security Corporation. Wells Fargo will acquire
First Security as a result of the transaction. The description is not complete
and is qualified in its entirety by reference to the more detailed information
contained in Wells Fargo's Current Report on Form 8-K, dated as of April 9, 2000
and filed on April 12, 2000, and to the First Security merger agreement and
option agreement filed as exhibits to Wells Fargo's Schedule 13D, dated and
filed as of April 19, 2000. The Form 8-K and the First Security merger agreement
and option agreement are incorporated herein by reference.
The First Security Merger Transaction
On April 9, 2000, Wells Fargo and First Security entered into a merger
agreement that provides for the merger of a wholly-owned subsidiary of Wells
Fargo into First Security, with First Security surviving as a wholly-owned
subsidiary of Wells Fargo. If the First Security merger is completed, each
outstanding share of First Security common stock will be converted into 0.355 of
a share of Wells Fargo common stock. Wells Fargo expects to issue approximately
71.6 million shares of its common stock in the First Security merger,
representing approximately 4.4% of Wells Fargo common stock outstanding as of
March 31, 2000. First Security has granted Wells Fargo an option exercisable, in
whole or in part, upon the occurrence of specified conditions, to purchase up to
19.9% of the outstanding shares of First Security common stock.
The First Security merger is subject to a number of conditions, including
approvals by First Security stockholders and regulatory agencies. No vote of
Wells Fargo stockholders is required to complete the First Security merger.
Wells Fargo expects to complete the First Security merger by the end of 2000 and
to account for the transaction as a pooling of interests. Wells Fargo cannot
guarantee when or if the merger with First Security will be completed.
About First Security Corporation
First Security is the nation's oldest multistate bank holding company and
is the parent corporation for First Security Bank, N.A. and several other
banking subsidiaries and subsidiaries that engage in banking-related services.
First Security is headquartered in Salt Lake City, Utah. Through its
subsidiaries, First Security operated over 300 banking stores in the state of
California, Idaho, Nevada, New Mexico, Oregon, Utah and Wyoming as of June 30,
2000. At that date, First Security had assets of $22.5 billion, deposits of
$13.2 billion and stockholders' equity of $1.7 billion. Spencer F. Eccles,
chairman and chief executive officer of First Security, is expected to be
elected as a director of Wells Fargo upon completion of the First Security
merger.
You may find more information about First Security from its reports filed
with the SEC under SEC file number 001-06906.
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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 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 (the Bank
Holding Company Act) 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 under the Bank Holding Company Act.
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
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securities regulators. Wells Fargo's insurance subsidiaries are subject to
regulation by applicable state insurance regulatory agencies. Other nonbank
subsidiaries of Wells Fargo are subject to the laws and regulations of both the
federal government and the various states in which they conduct business.
Bank Holding Company Activities
"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 determines from time to time 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 were permitted for a period of time
to 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
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The information in this document is not complete and may change.
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.
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
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The information in this document is not complete and may change.
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 Federal Deposit Insurance Act (FDI Act) provides
that, in the event of the "liquidation or other resolution" of an insured
depository institution, the claims of depositors of the institution, including
the claims of the FDIC as subrogee of insured depositors, and certain claims for
administrative expenses of the FDIC as a receiver will have priority over other
general unsecured claims against the institution. If an insured depository
institution fails, insured and uninsured depositors, along with the FDIC, will
have priority in payment ahead of unsecured, nondeposit creditors, including
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:
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The information in this document is not complete and may change.
<TABLE>
<CAPTION>
Core ("Tier 1") Supplementary ("Tier 2") Market Risk ("Tier 3")
Capital Capital Capital
------- ------- -------
<S> <C> <C>
o Common equity among other items: o qualifying unsecured
subordinated debt
o Retained earnings o perpetual preferred stock
not meeting the Tier 1
o Qualifying noncumulative definition
perpetual preferred stock
o qualifying mandatory
o a limited amount of qualifying convertible securities
cumulative perpetual preferred
stock at the holding company o qualifying subordinated debt
level
o allowances for loan and
o minority interests in equity lease losses, subject to
accounts of consolidated limitations
subsidiaries
o 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 June 30, 2000, Wells Fargo met both
requirements, with Tier 1 and total capital equal to 7.0% and 10.9% of its
respective total risk-weighted assets.
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 June 30, 2000 was 6.3%.
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
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The information in this document is not complete and may change.
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 June 30, 2000, Wells Fargo 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 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.
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The information in this document is not complete and may change.
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's insurance funds and do not vary depending on 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.
Privacy Provisions of Gramm-Leach-Bliley Act
Under the Gramm-Leach-Bliley Act ("GLB Act"), federal banking regulators
are required to adopt rules that will limit the ability of banks and other
financial institutions to disclose non-public information about consumers to
nonaffiliated third parties. These limitations will require disclosure of
privacy policies to consumers and, in some circumstances, will allow consumers
to prevent disclosure of certain personal information to a nonaffiliated third
party. Federal banking regulators issued final rules May 10, 2000. The rules are
effective November 13, 2000, but compliance is optional until July 1, 2001. The
39
<PAGE>
The information in this document is not complete and may change.
privacy provisions of the GLB Act will affect how consumer information is
transmitted through diversified financial companies and conveyed to outside
vendors. It is not possible at this time to assess the impact of the privacy
provisions on Wells Fargo's financial condition or results of operations.
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.
40
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The information in this document is not complete and may change.
INFORMATION ABOUT BUFFALO NATIONAL
Buffalo National Bancshares, Inc. is a Minnesota corporation with its
corporate headquarters in Buffalo, Minnesota. Buffalo National is a registered
bank holding company that holds 100% of the outstanding stock of The Buffalo
National Bank, Buffalo, Minnesota. At June 30, 2000, Buffalo National had
consolidated total assets of approximately $111,000,000, consolidated deposits
of approximately $92,228,000, and shareholders equity of approximately
$13,258,000.
Buffalo National derives its revenues from cash dividends paid by The
Buffalo National Bank. Dividend payments by the bank are determined after
consideration of the bank's earnings, deposit growth and capital requirements.
The Bank
The Buffalo National Bank is a national banking association with its main
office located at 101 South First Avenue, Buffalo, Minnesota, a branch office
located at the Cub Foods store located on Highway 55 in Buffalo, an auto bank
located on First Street South, and an operation center located on First Street
South, all in Buffalo, Minnesota. The bank serves a wide range of commercial and
consumer borrowing needs within its market, including retail, commercial,
corporate and mortgage banking services. The bank competes primarily in the
Buffalo market area. The bank competes with numerous financial institutions in
its market area, including commercial banks, savings and loan associations,
savings banks, mortgage companies, commercial bank loan production offices,
insurance companies, consumer finance companies and credit unions.
Legal Proceedings
In the normal course of its business, the bank is from time to time
involved in legal proceedings. The bank's management is not aware of any pending
or threatened legal proceeding which, upon resolution, would have a material
adverse affect on its financial condition or results of operations.
Market Price and Dividends
There is no active trading market for Buffalo National common stock. As of
the record date for the special meeting, there were a total of 3,804 shares of
Buffalo National common stock outstanding held by 13 persons. Buffalo National
paid dividends in July 1999 of $144,552.00; in February 2000, dividends of
$749,996.64; and, in July 2000, dividends of $714,086.88. The following table
shows as of the record date for the special meeting the number of shares of
Buffalo National common stock beneficially owned by each director and officer of
Buffalo National and by each person known by Buffalo National to be the
beneficial owner of more than 5% of the outstanding shares of Buffalo National
common stock.
41
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The information in this document is not complete and may change.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Number of Shares of Stock Percent of Total
Address of Executive Officer Beneficially Owned Outstanding Shares
Name of Director and Shareholder
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John M. Lundsten 1804 Hillside Lane 2,278 58.92%
Buffalo, MN 55313
---------------------------------------------------------------------------------------------------------------------
Mary Ellen Lundsten 1804 Hillside Lane 34 .88%
Buffalo, MN 55313
---------------------------------------------------------------------------------------------------------------------
Kay A. Strand 20001 Highway 71 NE 1,232 31.87%
New London, MN
---------------------------------------------------------------------------------------------------------------------
</TABLE>
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The information in this document is not complete and may change.
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 June 30, 2000, there were 1,619,141,306 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 plurality of votes cast with
respect to a matter will be sufficient to authorize action upon routine matters.
However:
o 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.
o Wells Fargo's stockholders may amend its bylaws by the affirmative
vote of a majority of the outstanding stock entitled to vote thereon.
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The information in this document is not complete and may change.
o 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, 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
may elect all of the directors standing for election. The Wells Fargo board is
not classified.
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 includes a Series C Junior Participating Preferred Stock purchase right.
See "--Wells Fargo Rights Plan" below.
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The information in this document is not complete and may change.
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 June 30, 2000, there
were 5,666,090 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. 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 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.
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
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The information in this document is not complete and may change.
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 distribution date, the rights
can only be transferred with the shares of Wells Fargo common stock to which
they are attached. Until the 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 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 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 distribution date and these separate rights
certificates alone will evidence the rights.
The rights are not exercisable until the 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:
o in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Wells Fargo Series C Junior Participating
Preferred Stock;
o 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
o 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).
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 distribution date.
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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.
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The information in this document is not complete and may change.
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 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:
o 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
o 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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The information in this document is not complete and may change.
COMPARISON OF STOCKHOLDER RIGHTS
The rights of Buffalo National shareholders are currently governed by the
Minnesota Business Corporation Act (MBCA), Buffalo National's articles of
incorporation and Buffalo National's bylaws. The rights of Wells Fargo
stockholders are currently governed by the Delaware General Corporation Law
(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
Buffalo National shareholders and the rights of Wells Fargo stockholders. It is
not a complete statement of the provisions affecting, and the differences
between, the rights of Buffalo National shareholders and Wells Fargo
stockholders. The summary is qualified in its entirety by reference to the MBCA,
the DGCL, Buffalo National's articles of incorporation and bylaws, and Wells
Fargo's restated certificate of incorporation and bylaws.
Authorized Capital Stock
Buffalo National
Authorized:
o 1,000,000 shares of common stock.
Outstanding as of June 30, 2000:
o 3,804 shares of common stock
Wells Fargo
Authorized:
o 4,000,000,000 shares of common stock.
o 20,000,000 shares of preferred stock.
o 4,000,000 shares of preference stock.
Outstanding as of June 30, 2000:
o 1,619,141,306 shares of common stock.
o 5,666,090 shares of preferred stock.
o No shares of preference stock.
Size of Board of Directors
Buffalo National
The MBCA provides that the board of directors of a Minnesota corporation shall
consist of one or more directors as fixed by or in the manner provided in the
articles of incorporation or bylaws. Buffalo National's bylaws provide that the
number of directors shall be fixed by the shareholders at their regular meetings
or special meetings called for that purpose. The current number of directors of
Buffalo National has been fixed at 2.
Wells Fargo
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. Under Wells Fargo's restated certificate of
incorporation, the number of directors shall be as specified in the bylaws but
in no event less than 3. Wells Fargo's bylaws provide for a board of directors
consisting of not less than 10 nor more than 28 persons, each serving a term of
one year or until his or her earlier death, resignation or removal. The number
of directors of Wells Fargo is currently fixed at 18.
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The information in this document is not complete and may change.
Cumulative Voting
Cumulative voting entitles 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.
Buffalo National
Under the MBCA, stockholders have the right to cumulate their votes unless the
articles of incorporation provide that there shall be no cumulative voting. The
articles of incorporation of Buffalo National expressly state that cumulative
voting is not permitted.
Wells Fargo
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. Wells Fargo's restated certificate of incorporation does not
provide for cumulative voting.
Classes of Directors
Buffalo National
The MBCA provides that directors of a Minnesota corporation may be divided into
classes as provided in the articles of incorporation or bylaws. Buffalo
National's board is not classified.
Wells Fargo
The DGCL permits classification of a Delaware corporation's board of directors,
and for staggered terms. Wells Fargo's board is not classified.
Qualifications of Directors
Buffalo National
Under the MBCA, a director shall be a natural person and need not be a resident
of the state of Minnesota. The method of election and any additional
qualification may be imposed by or in the manner provided in the articles of
incorporation or bylaws. Buffalo National's bylaws state a director need not be
a stockholder or resident of the state of Minnesota.
Wells Fargo
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. Wells Fargo's restated certificate of incorporation
requires directors to be stockholders.
Filling Vacancies on the Board
Buffalo National
The MBCA provides that, unless different rules for filling vacancies are
provided in the articles of incorporation or bylaws: (1) vacancies on the board
resulting from the death, resignation, removal or disqualification of a director
may be filled by the affirmative vote of a majority of the remaining directors;
and (2) vacancies on the board resulting from newly created directorships may be
filled by the affirmative vote of a majority of the directors serving at the
time of the increase. Under Buffalo National's bylaws, vacancies on Buffalo
National's board of directors may be filled by majority vote of the remaining
directors, even though less than a quorum.
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The information in this document is not complete and may change.
Wells Fargo
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. Under Wells Fargo's restated
certificate of incorporation and bylaws, vacancies on Wells Fargo's board of
directors may be filled by majority vote of the remaining directors or, in the
event a vacancy is not so filled or if no director remains, by the stockholders.
Removal of Directors
Buffalo National
The MBCA provides that unless modified by the articles of incorporation, bylaws
or an agreement of the shareholders that any one or all of the directors may be
removed at any time, with or without cause, by the affirmative vote of the
holders of a proportion or number of the voting power of the shares of the
classes or series the director represents sufficient to elect them. Buffalo
National's bylaws provide that at any duly called meeting of the stockholders,
the affirmative vote of a number of shares sufficient to elect a director may
remove any or all of the directors, with or without cause and may elect
replacements.
Wells Fargo
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. Wells Fargo's
board is not classified.
Nomination of Directors for Election
Buffalo National
No procedure is set forth under Buffalo National's articles of incorporation or
bylaws for the nomination of directors for election. Any stockholder may at or
prior to a meeting held for the purpose of electing directors nominate one or
more candidates for the board. The board itself may nominate candidates for the
board.
Wells Fargo
Under Wells Fargo's bylaws, nominations for Wells Fargo's board may be made by
the board or by any stockholder who complies with the notice procedures in Wells
Fargo's bylaws. These procedures require the notice to be received by Wells
Fargo not less than described 30 nor more than 60 days prior to the meeting.
However, if less than 40 days' prior public disclosure of the date of the
meeting is given to stockholders, then the notice must be received no later than
10 days after the first public announcement of the meeting date.
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The information in this document is not complete and may change.
Anti-Takeover Provisions
Buffalo National
Chapter 80B of the Minnesota Statutes contains corporate takeover statutes
designed to protect domestic corporations from hostile takeovers, but this
Chapter relates only to publicly traded companies and not to Buffalo National.
Wells Fargo
The DGCL contains a business combination statute that protects domestic
corporations from hostile takeovers, and from actions following such a takeover,
by gained a significant holding in the prohibiting some transactions once an
acquiror has 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:
o 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,
o 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
o 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.
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The information in this document is not complete and may change.
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. Wells Fargo has not made such an election.
Stockholder Rights Plan
Buffalo National
Buffalo National does not have a shareholder rights plan.
Wells Fargo
Wells Fargo has implemented a 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
Buffalo National
In accordance with Section 302A.441 of the MBCA, Buffalo National's bylaws
provide that any action required or permitted to be taken at a stockholders'
meeting may be taken without a meeting by written action signed by all of the
stockholders entitled to vote on that action.
Wells Fargo
In accordance with Section 228 of the DGCL, Wells Fargo's bylaws provide that
any action required or permitted to be taken at a stockholders' meeting may be
taken without a meeting pursuant to the written consent of the holders of the
number of shares that would have been required to effect the action at an actual
meeting of the stockholders, and provide certain procedures to be followed in
such cases.
Calling Special Meetings of Stockholders
Buffalo National
Under the MBCA, a special meeting of the stockholders may be called by the chief
executive officer, the chief financial officer, two or more directors, a person
authorized in the articles of incorporation or bylaws to call special meetings
or a stockholder or stockholders holding ten percent or more of the voting power
of all shares entitled to vote, except that a special meeting called for the
purpose of considering any action to indirectly or directly facilitate a
business combination must be called by twenty-five percent or more of the voting
power of all shares entitled to vote. The bylaws of Buffalo National provide
that a special meeting may be called by the president, treasurer, such officer
as may be designated by the board of directors, by two or more directors or upon
written request of shareholders holding ten percent or more of the shares
entitled to vote.
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The information in this document is not complete and may change.
Wells Fargo
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. Wells Fargo's bylaws provide that a special meeting
of stockholders may be called only by the chairman of the board, a vice
chairman, the president or a majority of Wells Fargo's board of directors.
Holders of Wells Fargo common stock do not have the ability to call a special
meeting of stockholders.
Submission of Stockholder Proposals
Buffalo National
The Buffalo National bylaws do not set forth a procedure to be followed by a
stockholder who wishes to bring business before the annual meeting.
Wells Fargo
The Wells Fargo bylaws provide that in order for a stockholder to bring business
before the annual meeting, the stockholder must give timely 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 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
Buffalo National
The MBCA requires notice of stockholders' meetings to be sent to all
stockholders of record entitled to vote thereon at least 10 days before the date
of the meeting, or a shorter time provided in the articles of incorporation or
bylaws, and not more than 60 days prior to the date of the meeting. Buffalo
National's bylaws provide for written notice to stockholders of record at least
five days prior to an annual or special meeting.
Wells Fargo
The DGCL requires notice of stockholders' meetings to be sent to all
stockholders of record entitled to vote thereon not less than 10 nor more than
60 days prior to the date of the meeting. Wells Fargo's bylaws provide for
written notice to stockholders of record at least 10 days prior to an annual or
special meeting.
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The information in this document is not complete and may change.
Stockholder Vote Required for Mergers
Buffalo National
Under the MBCA, a plan of merger must be approved by the board of directors of
each constituent corporation and by a majority of the outstanding stock of the
each constituent corporation entitled to vote thereon. A plan of exchange must
be approved by the board of directors of each constituent corporation and by a
majority of the outstanding stock of the corporation whose shares will be
acquired in the exchange. However, under MBCA 302A.613, subd. 3, no vote of
stockholders of a constituent corporation surviving a merger is required, unless
the corporation provides otherwise in its certificate of incorporation, if
o the merger agreement does not amend the articles of incorporation of the
surviving corporation,
o each holder of shares of the corporation that were outstanding prior to the
merger will hold the same number of shares with identical rights
immediately thereafter,
o the voting power of the outstanding shares of the corporation entitled to
vote immediately after the merger, plus the voting power of the shares of
the corporation entitled to vote issuable on conversion of, or on exercise
of rights to purchase, securities issued in the transaction, will not
exceed by more than 20%, the voting power of shares of the corporation
entitled to vote immediately before the transaction; and
o the number of participating shares of the corporation immediately after the
merger, plus the number of participating shares of the corporation issuable
on conversion of, or on the exercise of rights to purchase, securities
issued in the transaction, will not exceed by more than 20%, the number of
participating shares of the corporation immediately before the transaction.
Wells Fargo
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
o the merger agreement does not amend the certificate of incorporation of the
surviving corporation,
o each share of stock of the surviving corporation outstanding before the
merger is an identical outstanding or treasury share after the merger, and
o 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%.
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The information in this document is not complete and may change.
Dividends
Buffalo National
Minnesota corporations may make distributions to their shareholders only if the
board of directors determines that the corporation will be able to pay its debts
in the ordinary course of business after the distribution. Certain other
limitations exist if preferential classes or series of stock have been issued by
the corporation. In addition, Buffalo National is subject to Federal Reserve
Board policies regarding payment of dividends, which generally limit dividends
to operating earnings.
Wells Fargo
Delaware corporations may pay dividends out of surplus or, if there is no
surplus, out of net profits for the fiscal year in which declared and for the
preceding fiscal year. Section 170 of the DGCL also provides that dividends may
not be paid out of net profits if, after the payment of the dividend, capital is
less than the capital represented by the outstanding stock of all classes having
a preference upon the distribution of assets. Wells Fargo is also subject to
Federal Reserve Board policies regarding payment of dividends, which generally
limit dividends to operating earnings. See "Regulation and Supervision of Wells
Fargo."
Wells Fargo's bylaws provide that the stockholders have the right to 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
Buffalo National
The MBCA provides shareholders of a corporation involved in a merger, share
exchange, or the sale, lease or exchange or other disposition of all or
substantially all of the property of the corporation, the right to demand and
receive payment of the fair value of their stock. However, unless the articles
of incorporation, the bylaws, or a resolution approved by the board of directors
otherwise provide, dissenters' rights do not apply to a shareholder of the
surviving corporation in the merger if the shares of the shareholder are not
entitled to be voted on the merger. Because Buffalo National shareholders are
entitled to vote on the merger, dissenters' appraisal rights are available in
connection with the merger. See "The Merger--Dissenters' Appraisal Rights."
Wells Fargo
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:
o listed on a national securities exchange,
o designated as a national market system security on an interdealer quotation
system operated by the National Association of Securities Dealers, Inc., or
o held of record by more than 2,000 stockholders
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The information in this document is not complete and may change.
unless holders of stock are required to accept in the merger anything other than
any combination of:
o shares of stock or depository receipts of the surviving corporation in the
merger
o shares of stock or depository receipts of another corporation that, at the
effective date of the merger, will be
o listed on a national securities exchange,
o designated as a national market system security on an interdealer
quotation system operated by the National Association of Securities
Dealers, Inc., or
o held of record by more than 2,000 holders
o cash instead of fractional shares of the stock or depository receipts
received.
Dissenters' rights are not available to the Wells Fargo stockholders with
respect to the merger because the DGCL does not require that Wells Fargo
stockholders vote to approve the merger agreement. Moreover, Wells Fargo common
stock is listed on the New York and Chicago Stock Exchanges and currently held
by more than 2,000 stockholders. As a result, assuming that the other conditions
described above are satisfied, holders of Wells Fargo common stock will not have
appraisal rights in connection with consolidations and mergers involving Wells
Fargo.
Stockholder Preemptive Rights
Buffalo National
The MBCA provides that unless denied or limited in the articles of
incorporation, a stockholder has preemptive rights to purchase additional
securities of the corporation. The articles of incorporation of Buffalo National
provide that unless granted by the board of directors shareholders of Buffalo
National shall not have preemptive rights.
Wells Fargo
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. Wells Fargo's restated certificate
of incorporation does not provide for preemptive rights.
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The information in this document is not complete and may change.
Stockholder Class Voting Rights
Buffalo National
The MBCA provides that in any case where a class or series of shares is entitled
by the MBCA, the articles of incorporation or the terms of the shares to vote as
a class or series, the matter being voted upon must also receive the affirmative
vote of the holders of a the same proportion of the shares present of that class
or series, or the total outstanding shares of that class or series, as required
for approval by all of the voting shareholders of the corporation.
Wells Fargo
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
Buffalo National
The MBCA provides that unless the articles of incorporation or bylaws of a
corporation limit indemnification that a corporation shall indemnify a person
made or threatened to be made a party to a proceeding by reason of the former or
present official capacity of the person as a director, officer or employee for
any judgments, penalties or fines, settlements and reasonable expenses
(including attorneys' fees) if the person:
o has not been indemnified by another organization or employee benefit plan
for the same judgments, penalties or fines, settlements and reasonable
expenses (including attorneys' fees);
o acted in good faith;
o received no improper personal benefit;
o in the case of a criminal proceeding had no reasonable cause to believe the
conduct was unlawful; and
o in the case of acts or omissions occurring in an official capacity,
reasonably believed that the conduct was in the best interest of
corporation or was not opposed to the best interest of the corporation.
Buffalo National's bylaws state that directors, officers and other persons shall
have the rights to indemnification provided by the MBCA and law amendatory or
supplementary thereto.
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Wells Fargo
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:
o 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
o in a criminal proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
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.
Wells Fargo's restated certificate of incorporation provides that Wells Fargo
must indemnify, to the fullest extent authorized by the DGCL, each person who
was or is made a party to, is threatened to be made a party to or is involved in
any action, suit or proceeding because he or she is or was a director or officer
of Wells Fargo (or was serving at the request of Wells Fargo as a director,
trustee, officer, employee, or agent of another entity) while serving in such
capacity against all expenses, liabilities, or loss incurred by such person in
connection therewith, provided that indemnification in connection with a
proceeding brought by such person will be permitted only if the proceeding was
authorized by Wells Fargo's board of directors.
Wells Fargo's restated certificate of incorporation also provides that Wells
Fargo must pay expenses incurred in defending the proceedings specified above in
advance of their final disposition, provided that, if so required by the DGCL,
such advance payments for expenses incurred by a director or officer may be made
only if he 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.
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The information in this document is not complete and may change.
The right to indemnification is not exclusive of any other right which any
person may have or acquire under any statute, provision of Wells Fargo's
restated certificate of incorporation or bylaws, agreement, vote of stockholders
or disinterested directors or otherwise.
Limitations on Directors' Liability
Buffalo National
Neither Buffalo National's articles of incorporation nor bylaws limits in any
way the liability of its directors.
Wells Fargo
Wells Fargo's restated certificate of incorporation provides that a director
(including an officer who is also a director) of Wells Fargo shall not be liable
personally to Wells Fargo or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability arising out of:
o any breach of the director's duty of loyalty to Wells Fargo or its
stockholders,
o acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law,
o payment of a dividend or approval of a stock repurchase in violation of
Section 174 of the DGCL, or
o any transaction from which the director derived an improper personal
benefit.
This provision protects Wells Fargo's directors against personal liability for
monetary damages from breaches of their duty of care. It does not eliminate the
director's duty of care and has no effect on the availability of equitable
remedies, such as an injunction or rescission, based upon a director's breach of
his or her duty of care.
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The information in this document is not complete and may change.
Amendment of Certificate of Incorporation
Buffalo National
Under the MBCA, amendment of a corporation's articles of incorporation requires
the approval of a resolution that sets forth the proposed amendment by a
majority of the board of directors present or shareholders holding three percent
or more of the shares entitled to vote and the affirmative vote of a majority of
the shareholders present and entitled to vote at the next regular or special
meeting of which notice has not been but still can be timely given.
The certificate of incorporation of Buffalo National requires the affirmative
vote of a majority of the voting power of the shares present and entitled to
vote at the shareholder's meeting.
Wells Fargo
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.
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 a entitled to vote
thereon and by a majority of 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
Buffalo National
The MBCA provides that a corporation may, but need not, have bylaws and that the
bylaws may contain any provision relating to the management of the business or
regulation of the affairs of the corporation not inconsistent with law or the
articles of incorporation. Unless reserved by the articles of incorporation to
the shareholders, the power to adopt, amend or repeal the bylaws is vested with
the board, subject to the power of the shareholders at a regular or special
meeting to adopt, amend or repeal bylaws.
Wells Fargo
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.
Wells Fargo's bylaws generally provide for amendment by a majority of Wells
Fargo's board of directors or by a majority of the outstanding stock entitled to
vote thereon. However, Wells Fargo's bylaws require the affirmative vote or
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.
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The information in this document is not complete and may change.
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.
Price Range
-----------
Dividends
High Low Paid
---- --- ----
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 43.75 31.00 0.220
Second Quarter 47.75 37.31 0.220
Third Quarter *
(through August __)
-----------
*Wells Fargo's board of directors has declared a cash dividend of $0.22 a
share of Wells Fargo common stock, payable September 1, 2000 to
stockholders of record August 2, 2000.
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.
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The information in this document is not complete and may change.
Buffalo National Share Prices and Dividends
There is no public market for Buffalo National common stock. Buffalo
National paid total cash dividends in July 1999 of $144,552.00; in February
2000, dividends of $749,996.64; and, in July 2000, dividends of $714,086.88.
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The information in this document is not complete and may change.
EXPERTS
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.
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
Lindquist & Vennum P.L.L.P. 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."
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The information in this document is not complete and may change.
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 Buffalo National
shareholders 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 Wells Fargo SEC Filings
Wells Fargo files annual, quarterly and current reports, proxy statements
and other information with the SEC. Wells Fargo'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 Buffalo National
with the SEC at the following SEC locations:
<TABLE>
<CAPTION>
<S> <C> <C>
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
</TABLE>
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.
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 with the SEC.
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.
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The information in this document is not complete and may change.
o 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;
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000
and June 30, 2000;
o Current Reports on Form 8-K filed January 18, 2000, January 26, 2000,
April 12, 2000, April 18, 2000 and July 18, 2000;
o 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;
o 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
o 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 Buffalo National common
stock.
Documents Available Without Charge
Wells Fargo will provide, without charge, copies of any report incorporated
by reference into this proxy statement-prospectus, excluding exhibits other than
those that are specifically incorporated by reference in this proxy
statement-prospectus. You may obtain a copy of any document incorporated by
reference by writing or calling Wells Fargo:
Corporate Secretary
Wells Fargo & Company
MAC N9305-173
Sixth and Marquette
Minneapolis, MN 55479
(612) 667-8655
To ensure delivery of the copies in time for the special meeting, your
request should be received by September 20, 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 Buffalo National 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-
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The information in this document is not complete and may change.
prospectus is dated August 28, 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.
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The information in this document is not complete and may change.
FORWARD-LOOKING STATEMENTS
This proxy statement-prospectus, including information incorporated by
reference into this document, may contain forward-looking statements about Wells
Fargo, including one or more of the following:
o projections of revenues, income, earnings per share, capital
expenditures, dividends, capital structure or other financial items;
o descriptions of plans or objectives of management for future
operations, products or services;
o forecasts of future economic performance;
o 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--that could cause actual conditions, events or results to differ
significantly from those described in the forward-looking statements.
Wells Fargo's reports filed with the SEC, including Wells Fargo's Form 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.
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APPENDIX A
--------------------
AGREEMENT AND PLAN OF REORGANIZATION
by and between
BUFFALO NATIONAL BANCSHARES, INC.
and
WELLS FARGO & COMPANY
dated as of May 4, 2000
<PAGE>
AGREEMENT
AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") entered into as
of the 24th day of May, 2000, by and between BUFFALO NATIONAL BANCSHARES, INC.
("BNB"), a Minnesota 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 BNB (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 BNB of the par
value of $50.00 per share ("BNB 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
(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 BNB pursuant to the Merger Agreement, with BNB as
the surviving corporation, in which merger each share of BNB 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, and exchanged for the number of shares of Wells Fargo Common Stock
determined by dividing 530,729 by the number of shares of BNB Common Stock then
outstanding.
(b) Wells Fargo Common Stock Adjustments. If, between the date hereof
and the Effective Time of the Merger as defined below, 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 issuable
pursuant to subparagraph (a), above, will be appropriately and
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<PAGE>
proportionately adjusted so that the number of such shares of Wells Fargo Common
Stock issuable in the Merger will equal the number of shares of Wells Fargo
Common Stock which holders of shares of BNB 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 on the New York Stock Exchange as reported by
Bloomberg for each of the five (5) consecutive trading days ending on the day
immediately preceding the meeting of shareholders required by paragraph 4(c) of
this Agreement.
(d) Mechanics of Closing Merger. Subject to the terms and conditions
set forth herein, the Merger Agreement shall be executed and it or Articles of
Merger or a Certificate of Merger shall be filed with the Secretary of State of
the State of Minnesota within ten (10) business days following the satisfaction
or waiver of all conditions precedent set forth in Sections 6 and 7 of this
Agreement or on such other date as may be agreed to by the parties (the "Closing
Date"), provided that the Closing Date 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.
Central Daylight 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 BNB 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) BNB 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 BNB, or (3) BNB 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 BNB's shareholders in the Merger or under
such alternative structure (the "Merger Consideration"), (B) adversely affect
the tax treatment of BNB's shareholders as a result of receiving the Merger
Consideration or prevent the parties from obtaining the opinion referred to in
Paragraph
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<PAGE>
6(h), or (C) materially 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 BNB. BNB represents and warrants
to Wells Fargo as follows:
(a) Organization and Authority. BNB is a corporation duly organized,
validly existing and in good standing under the laws of the State of Minnesota,
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 BNB and the BNB 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.
BNB 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"). BNB has
furnished Wells Fargo true and correct copies of its articles of incorporation
and by-laws, as amended.
(b) BNB's Subsidiaries. Schedule 2(b) sets forth a complete and correct
list of all of BNB's subsidiaries as of the date hereof (individually a "BNB
Subsidiary" and collectively the "BNB 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 BNB. No equity security of any BNB
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 BNB 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. ss. 55 (1982) and the Minnesota Business Corporation Act, all of such
shares so owned by BNB 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 BNB Subsidiary is a corporation or national banking
association duly organized, validly existing, duly qualified to do business and
in good standing under the laws of its jurisdiction of incorporation, and has
corporate power and authority to own or lease its properties and assets and to
carry on its business as it is now being conducted. Except as set forth on
Schedule 2(b), BNB 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 BNB consists of
1,000,000 shares of common stock, $50.00 par value, of which, as of the close of
business on March 31, 2000, 3,804 shares were outstanding and 62 shares were
held in the treasury. The maximum number of shares of BNB Common Stock (assuming
for this purpose that
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<PAGE>
phantom shares and other share-equivalents constitute BNB 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 3,804. All of the outstanding shares of capital stock of BNB have been duly
and validly authorized and issued and are fully paid and nonassessable. Except
as set forth in Schedule 2(c), there are no outstanding subscriptions,
contracts, conversion privileges, options, warrants, calls, preemptive rights or
other rights obligating BNB or any BNB Subsidiary to issue, sell or otherwise
dispose of, or to purchase, redeem or otherwise acquire, any shares of capital
stock of BNB or any BNB Subsidiary. Except as set forth on Schedule 2(c), since
December 31, 1999 no shares of BNB capital stock have been purchased, redeemed
or otherwise acquired, directly or indirectly, by BNB or any BNB Subsidiary and,
except as permitted by paragraph 4(b), no dividends or other distributions have
been declared, set aside, made or paid to the shareholders of BNB.
(d) Authorization. BNB has the corporate power and authority to enter
into this Agreement and the Merger Agreement and, subject to any required
approvals of its shareholders, to carry out its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and the
Merger Agreement by BNB and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of BNB.
Subject to such approvals of shareholders and of government agencies and other
governing boards having regulatory authority over BNB as may be required by
statute or regulation, this Agreement and the Merger Agreement are valid and
binding obligations of BNB enforceable against BNB in accordance with their
respective terms.
Except as set forth on Schedule 2(d), neither the execution, delivery
and performance by BNB of this Agreement or the Merger Agreement, nor the
consummation of the transactions contemplated hereby and thereby, nor compliance
by BNB 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 BNB or any BNB Subsidiary under any of the terms,
conditions or provisions of (x) its articles of incorporation or by-laws or (y)
any material note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which BNB or any BNB Subsidiary
is a party or by which it may be bound, or to which BNB or any BNB Subsidiary or
any of the properties or assets of BNB or any BNB 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 BNB, violate any judgment, ruling, order, writ, injunction or
decree applicable to BNB or any BNB Subsidiary or any of their respective
properties or assets.
A-4
<PAGE>
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 Minnesota
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 BNB of the transactions contemplated by this Agreement and the
Merger Agreement.
(e) BNB Financial Statements. The consolidated balance sheets of BNB
and BNB's Subsidiaries as of December 31, 1999 and 1998 and related consolidated
statements of income, shareholders' equity and cash flows for the three years
ended December 31, 1999 (collectively, the "BNB Financial Statements"), have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis and present fairly (except as set forth in
Schedule 2(e) and subject, in the case of financial statements for interim
periods, to normal recurring adjustments) the consolidated financial position of
BNB and BNB's Subsidiaries at the dates and the consolidated results of
operations and cash flows of BNB and BNB's Subsidiaries for the periods stated
therein.
(f) Reports. Since December 31, 1994, BNB and each BNB Subsidiary has
filed all reports, registrations and statements, together with any required
amendments thereto, that it was required to file, if any, with (i) the SEC,
including, but not limited to, Forms 10-K, Forms 10-Q and proxy statements, (ii)
the Federal Reserve Board, (iii) the Federal Deposit Insurance Corporation (the
"FDIC"), (iv) the United States Comptroller of the Currency (the "Comptroller")
and (v) any applicable state securities or banking authorities. All such reports
and statements filed with any such regulatory body or authority are collectively
referred to herein as the "BNB Reports." As of their respective dates, the BNB
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 BNB Reports have been made available to Wells
Fargo by BNB.
(g) Properties and Leases. Except as may be reflected in the BNB
Financial Statements and except for any lien for current taxes not yet
delinquent, BNB and each BNB 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 BNB's consolidated balance
sheet as of December 31, 1999, 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
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<PAGE>
other leases material to BNB or any BNB Subsidiary pursuant to which BNB or such
BNB 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 BNB or such BNB Subsidiary or any
event which, with notice or lapse of time or both, would constitute such a
material default. Substantially all BNB's and each BNB 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 BNB and the BNB 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 BNB and the BNB Subsidiaries for
the fiscal year ended December 31, 1996, 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), (i)
neither BNB nor any BNB Subsidiary is a party to any pending action or
proceeding, nor is any such action or proceeding threatened by any governmental
authority, for the assessment or collection of taxes, interest, penalties,
assessments or deficiencies and (ii) no issue has been raised by any federal,
state, local or foreign taxing authority in connection with an audit or
examination of the tax returns, business or properties of BNB or any BNB
Subsidiary which has not been settled, resolved and fully satisfied. Each of BNB
and the BNB Subsidiaries has paid all taxes owed or which it is required to
withhold from amounts owing to employees, creditors or other third parties.
Except as set forth on Schedule 2(h)(ii), the consolidated balance sheet as of
December 31, 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 BNB and the BNB
Subsidiaries with respect to all periods through the date thereof.
BNB is an S corporation (`S Corporation") within the meaning of Section
1361 of the Internal Revenue Code of 1986, as amended (the "Code"), and has made
a valid S corporation election ("S Corporation Election") within the meaning of
Section 1362 of the Code. BNB will qualify as an S Corporation and the S
Corporation Election will be effective for all tax periods beginning after
December 31, 1996 up to and including the Closing Date. Each BNB Subsidiary is a
"qualified subchapter S subsidiary" within the meaning of Section 1361(b)(3)(B)
of the Code. Each BNB Subsidiary has been a "qualified subchapter S subsidiary"
at all times since January 1, 1997 and up to and including the Closing Date.
(i) Absence of Certain Changes. Since December 31, 1999 there has been
no change in the business, financial condition or results of operations of BNB
or any BNB Subsidiary, which has had, or may reasonably be expected to have, a
material adverse
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effect on the business, financial condition or results of operations of BNB and
the BNB Subsidiaries taken as a whole.
(j) Commitments and Contracts. Except as set forth on Schedule 2(j),
neither BNB nor any BNB 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 BNB or such BNB 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 BNB or any BNB 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, BNB or any BNB Subsidiary may carry on its
business (other than as may be required by law or applicable regulatory
authorities);
(v) any other contract or agreement which is a "material
contract" within the meaning of Item 601(b)(10) of Regulation S-K; or
(vi) any real property lease and any other lease with annual
rental payments aggregating $25,000 or more; or
(vii) any agreement or commitment with respect to the
Community Reinvestment Act with any state or federal bank regulatory
authority or any other party; or
(viii) any current or past agreement, contract or
understanding with any current or former director, officer, employee,
consultant, financial adviser, broker, dealer, or agent providing for
any rights of indemnification in favor of such person or entity.
(k) Litigation and Other Proceedings. BNB has furnished Wells Fargo
copies of (i) all attorney responses to the request of the independent auditors
for BNB with respect to loss contingencies as of December 31, 1999 in connection
with the BNB Financial Statements, and (ii) a written list of legal and
regulatory proceedings filed against BNB or
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any BNB Subsidiary since said date. There is no pending or, to the best
knowledge of BNB, threatened, claim, action, suit, investigation or proceeding,
against BNB or any BNB Subsidiary, nor is BNB or any BNB 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 BNB and the BNB
Subsidiaries taken as a whole.
(l) Insurance. BNB and each BNB Subsidiary are presently insured, and
during each of the past five calendar years (or during such lesser period of
time as BNB has owned such BNB 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. BNB and each BNB Subsidiary have 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 BNB or such BNB Subsidiary;
all such permits, licenses, certificates of authority, orders and approvals are
in full force and effect and, to the best knowledge of BNB, no suspension or
cancellation of any of them is threatened; and all such filings, applications
and registrations are current. The conduct by BNB and each BNB 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 BNB nor any BNB 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 BNB or any BNB Subsidiary which reasonably could be
expected to have a material adverse effect on the business or properties of BNB
and the BNB Subsidiaries taken as a whole.
(n) Labor. No work stoppage involving BNB or any BNB Subsidiary is
pending or, to the best knowledge of BNB, threatened. Neither BNB nor any BNB
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 BNB or such BNB Subsidiary. Employees of BNB
and the BNB 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 BNB, no officer or director of BNB or
any BNB Subsidiary, or any "associate" (as such term is defined in Rule l4a-1
under the Exchange Act) of any such
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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
BNB or any BNB Subsidiary.
Schedule 2(o) sets forth a correct and complete list of any loan from
BNB or any BNB 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 BNB's
or such BNB Subsidiary's Board of Directors.
(p) BNB Benefit Plans.
-----------------
(i) Schedule 2(p)(i) sets forth each employee benefit plan
with respect to which BNB or any BNB 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,
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 BNB knows of no reason
that any such Plan is not
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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 BNB 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 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, BNB is not liable for
any accumulated funding deficiency as that term 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 BNB, 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 BNB and the BNB 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 BNB
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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(ix) Except as disclosed in Schedule 2(p)(ix), BNB has not
made any payments or transfers of property, is not obligated to make
any payments or transfers of property, nor is it a party to any
agreement that under certain circumstances could obligate it to make
any payments or transfers of property that will not be deductible under
section 280G of the Code.
(q) Proxy Statement, etc. None of the information regarding BNB and the
BNB Subsidiaries supplied or to be supplied by BNB 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 BNB 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 BNB's
shareholders in connection with the meeting to be called to consider the Merger
(the "Proxy Statement") and (iii) any other documents to be filed with the SEC
or any regulatory authority in connection with the transactions contemplated
hereby or by the Merger Agreement will, at the respective times such
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 shareholders 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
BNB and the BNB 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 BNB nor any BNB 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. Neither BNB nor any BNB 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 BNB or any BNB Subsidiary, in connection with this Agreement
and the Merger Agreement or the transactions contemplated hereby and thereby.
(t) Fiduciary Activities. BNB and each BNB Subsidiary has properly
administered in all respects material and which could reasonably be expected to
be material, to the financial condition of BNB and the BNB 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
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applicable state and federal law and regulation and common law. Neither BNB, any
BNB Subsidiary, nor any director, officer or employee of BNB or any BNB
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 BNB and the BNB 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 BNB nor any BNB 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 BNB and the BNB Subsidiaries, taken as a whole. To the best of BNB's
knowledge, all parties with whom BNB or any BNB Subsidiary has material leases,
agreements or contracts or who owe to BNB or any BNB Subsidiary material
obligations other than those arising in the ordinary course of the banking
business of the BNB 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 BNB or any BNB Subsidiary, any liability
relating to the release of hazardous substances as defined under any local,
state or federal environmental statute, regulation or ordinance including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), pending or to the best of BNB's
knowledge, threatened against BNB or any BNB Subsidiary the result of which has
had or could reasonably be expected to have a material adverse effect upon BNB
and BNB's Subsidiaries taken as a whole; to the best of BNB's knowledge, there
is no reasonable basis for any such proceeding, claim or action; and to the best
of BNB's knowledge neither BNB nor any BNB 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. BNB 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), BNB is in full 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"). BNB has made its Year
2000 project assessment, remediation plan and testing results available to Wells
Fargo for review.
3. Representations and Warranties of Wells Fargo. Wells Fargo
represents and warrants to BNB as follows:
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(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 financial 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, 1999, of Wells Fargo's Significant Subsidiaries
(as defined in Regulation S-X promulgated by the SEC), but excluding Norwest
Venture Partners VI, LP (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. ss. 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 December 31, 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 December 31,
1999, 3,732 shares of ESOP Cumulative Convertible Preferred Stock, at $1,000
stated value, 11,990 shares of 1995 ESOP Cumulative Convertible Preferred Stock,
at $1,000 stated value, 12,011 shares of 1996 ESOP Cumulative Convertible
Preferred Stock, at $1,000 stated value, 10,839 shares of 1997 ESOP Cumulative
Convertible Preferred Stock, at $1,000 stated value, 8,386 shares of 1998 ESOP
Cumulative Convertible Preferred Stock, $1,000 stated value, 22,263 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 shares of 6.59% Adjustable Rate Noncumulative Preferred
Stock, Series H, $50 stated value, were outstanding;
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<PAGE>
(ii) 4,000,000 shares of Preference Stock, without par value, of which as of the
close of business on December 31, 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 December 31, 1999, 1,626,849,541 shares were outstanding and
39,245,724 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 Minnesota 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.
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(e) Wells Fargo Financial Statements. The consolidated balance sheets
of Wells Fargo and Wells Fargo's subsidiaries as of December 31, 1999 and 1998
and related consolidated statements of income, changes in stockholders' equity
and comprehensive income, and cash flows for the three years ended December 31,
1999, 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, 1999
(the "Wells Fargo 10-K") 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.
(f) Reports. Since December 31, 1994, 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 December 31, 1999 included in Wells Fargo's
Annual Report on Form 10-K for the period then ended, 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.
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(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, 1999, 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.
(j) Commitments and Contracts. Except as set forth on Schedule 3(j), as
of December 31, 1999 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.
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(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.
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(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.
(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) Except as set forth on Schedule 3(o), 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
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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 shareholders 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. 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 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
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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 shareholders, 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 BNB. BNB covenants and agrees with Wells Fargo as
follows:
(a) Affirmative Covenants. Except as otherwise permitted or required by
this Agreement, from the date hereof until the Effective Time of the Merger,
BNB, and each BNB Subsidiary will: maintain its corporate existence in good
standing; maintain the general character of its business and conduct its
business in its ordinary and usual manner; extend credit in accordance with
existing lending policies, except that it shall not, without the prior written
consent of Wells Fargo (which consent requirement shall be deemed to be waived
as to any loan approval request to which Wells Fargo has made no response by the
end of the second complete business day following receipt by a Wells Fargo
representative designated in writing of the request and accompanying information
such as that ordinarily presented to the Directors' Loan Committee), make any
new loan or modify, restructure or renew any existing loan (except pursuant to
commitments made prior to the date of this Agreement) to any borrower if the
amount of the resulting loan, when aggregated with all other loans or extensions
of credit to such person, would be in excess of $250,000; maintain proper
business and accounting records in accordance with generally accepted
principles; maintain its properties in good repair and condition, ordinary wear
and tear excepted; maintain in all material respects presently existing
insurance coverage; use its best efforts to preserve its business organization
intact, to keep the services of its present principal employees and to preserve
its good will and the good will of its suppliers, customers and others having
business relationships with it; use its best efforts to obtain 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 BNB and each BNB Subsidiary the non-compliance with
which reasonably could be expected to have a material adverse effect on BNB and
the BNB 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 BNB herein expressed.
(b) Negative Covenants. Except as otherwise contemplated or required by
this Agreement, from the date hereof until the Effective Time of the Merger, BNB
and each BNB Subsidiary will not (without the prior written consent of Wells
Fargo): amend or otherwise change its articles of incorporation or association
or by-laws; issue or sell or authorize for issuance or sale, or grant any
options or make other agreements with respect to the issuance or sale or
conversion of, any shares of its capital stock, phantom
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shares or other share-equivalents, or any other of its securities; authorize or
incur any long-term debt (other than deposit liabilities); mortgage, pledge or
subject to lien or other encumbrance any of its properties, except in the
ordinary course of business; enter into any material agreement, contract or
commitment in excess of $10,000 except banking transactions in the ordinary
course of business and in accordance with policies and procedures in effect on
the date hereof; make any investments except investments made by bank
subsidiaries in the ordinary course of business for terms of up to one year and
in amounts of $100,000 or less and except for fed funds transactions by bank
subsidiaries made in the ordinary course of business; amend or terminate any
Plan except as required by law or by paragraph 4(j) hereof; make any
contributions to any Plan except as required by the terms of such Plan in effect
as of the date hereof; declare, set aside, make or pay any dividend or other
distribution with respect to its capital stock except any dividend declared by a
BNB Subsidiary's Board of Directors in accordance with applicable law and
regulation and except that BNB may make distributions in an amount equal to the
sum of $734,105 and BNB's 2000 Pre-Close Net Income (as defined below), but
excluding from BNB's 2000 Pre-Close Net Income (x) gain from the sale of real
estate or securities, (y) the accruals and reserves established under Paragraph
4(l), and (z) 50% of the legal and accounting fees incurred in connection with
this agreement (other than tax preparation fees); for purposes of this paragraph
4(b), "BNB's 2000 Pre-Close Net Income" means the sum of (i) BNB's 2000 net
income as of the end of the month immediately preceding the month which includes
the Closing Date (as determined in accordance with generally accepted accounting
principles and consistent with past practice) and (ii) a mutually agreed to
estimate of the net income or net loss for the pre-closing period of the month
which includes the Closing Date (a net loss will be treated as a reduction to
the amount allowed as a distribution); redeem, purchase or otherwise acquire,
directly or indirectly, any of the capital stock of BNB; 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 BNB Subsidiary; or sell or otherwise dispose
of any of its assets or properties other than in the ordinary course of
business.
(c) Shareholder Meeting; Delivery of Proxy Statement and Prospectus.
The Board of Directors of BNB will duly call, and will cause to be held not
later than twenty-five (25) business days following the effective date of the
Registration Statement, a meeting of its shareholders and will direct that this
Agreement and the Merger Agreement be submitted to a vote at such meeting. The
Board of Directors of BNB will (i) cause proper notice of such meeting to be
given to its shareholders in compliance with the Minnesota Business Corporation
Act and other applicable law and regulation, (ii) recommend by the affirmative
vote of the Board of Directors a vote in favor of approval of this Agreement and
the Merger Agreement, and (iii) use its best efforts to solicit from its
shareholders proxies in favor thereof.
(d) Information Furnished by BNB. BNB will furnish or cause to be
furnished to Wells Fargo all the information concerning BNB and the BNB
Subsidiaries required for
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inclusion in the Registration Statement as requested by Wells Fargo, or any
statement or application made by Wells Fargo to any governmental body in
connection with the transactions contemplated by this Agreement.
(e) Approvals. BNB will take all necessary corporate and other action
and use its best efforts to obtain all approvals of regulatory authorities,
consents and other approvals required of BNB 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. BNB 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. BNB will hold in confidence all documents
and information concerning Wells Fargo and its subsidiaries furnished to BNB 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 BNB'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 was previously known to BNB, in the public domain, or later acquired
by BNB from other sources not known to BNB to be subject to a confidentiality
obligation to Wells Fargo) and, upon request, all such documents and any copies
thereof and all documents prepared by BNB that include such confidential
information shall be destroyed, excluding documents such as minutes of meetings
and regulatory filings that BNB is required to retain.
(h) Competing Transactions. Neither BNB, nor any BNB Subsidiary, nor
any director, officer, representative or agent thereof, will, directly or
indirectly, solicit, authorize the solicitation of or enter into any discussions
with any corporation, partnership, person or other entity or group (other than
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 BNB or any BNB 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 BNB or any BNB Subsidiary
except in the ordinary course of business, or (iv) to merge, consolidate or
otherwise combine with BNB or any BNB Subsidiary. If any corporation,
partnership, person or other entity or group makes an offer or inquiry to BNB or
any BNB Subsidiary concerning any of the foregoing, BNB or such BNB Subsidiary
will promptly disclose such offer or inquiry to Wells Fargo.
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(i) Public Disclosure. BNB 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. BNB and each BNB Subsidiary will take all action
necessary or required (i) to terminate or amend, if requested by Wells Fargo,
all qualified retirement and welfare benefit plans and all non-qualified benefit
plans and compensation arrangements as of the Effective Date of the Merger, 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.
(k) Affiliate Letters. BNB shall use its best 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 shareholder of BNB who may reasonably be deemed
an "affiliate" of BNB within the meaning of such term as used in Rule 145 under
the Securities Act.
(l) Accruals and Reserves. BNB shall establish such additional accruals
and reserves as may be necessary (i) to conform BNB'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 BNB'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 BNB of the
Merger and the other transactions contemplated by this Agreement.
(m) Environmental Assessments. BNB shall obtain, at its sole expense,
Phase I environmental assessments for each owned bank facility and each
non-residential OREO property. 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. BNB 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. BNB 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.
(n) Title Commitments and Boundary Surveys. BNB 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.
(o) Year 2000. BNB 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. BNB will provide Wells Fargo with complete
access to its
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Year 2000 project and remediation plan documentation and permit Wells Fargo to
review and investigate BNB's continuing Year 2000 compliance efforts and the
results thereof.
(p) S Corporation Election. BNB will not revoke its S Corporation
Election nor will BNB take any action (or fail to take any action) that would
result in the termination of its S Corporation Election.
(q) Tax Returns. The tax returns for all periods ending on or before
the Closing Date shall be prepared by, and at the expense of (except to the
extent that such expenses and fees are accrued as of the day preceding the
Closing Date), the holders of record of BNB Common Stock as of the Closing Date
and Wells Fargo shall have the right to review and approve such tax returns.
5. Covenants of Wells Fargo. Wells Fargo covenants and agrees with BNB
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
BNB all the information concerning Wells Fargo required for inclusion in a proxy
statement or statements to be sent to the shareholders of BNB, or in any
statement or application made by BNB to any governmental body in connection with
the transactions contemplated by this Agreement.
(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 shareholders of BNB 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 BNB shareholders, at the time of the BNB shareholders' meeting referred
to in paragraph 4(c)
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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 BNB or any
BNB 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 shareholders of BNB pursuant to this Agreement and
the Merger Agreement will, upon such issuance and delivery to said shareholders
pursuant to the Merger Agreement, be duly authorized, validly issued, fully paid
and nonassessable. The shares of Wells Fargo Common Stock to be delivered to the
shareholders of BNB 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. 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 BNB to obtain all such approvals and consents required by
BNB.
(h) Confidential Information. Wells Fargo will hold in confidence all
documents and information concerning BNB and BNB'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 BNB (except to the extent that such information was
previously known to Wells Fargo, in the public domain, or later acquired by
Wells Fargo from other sources not known to Wells Fargo to be subject to a
confidentiality obligation to BNB) and, upon request, all such documents
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and any copies thereof and all documents prepared by Wells Fargo that include
such confidential information shall be destroyed, excluding documents such as
minutes of meetings and regulatory filings that Wells Fargo is required to
retain.
(i) Merger Filings. Wells Fargo will file any documents or agreements
required to be filed in connection with the Merger under the Minnesota Business
Corporation Act.
(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 BNB 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 BNB notice
of receipt of the regulatory approvals referred to in paragraph 7(e).
6. Conditions Precedent to Obligation of BNB. The obligation of BNB 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
BNB:
(a) Representations and Warranties. Except as they may be affected by
transactions contemplated hereby and except to the extent such representations
and warranties are by their express provisions made as of a specified date and
except for activities or transactions after the date of this Agreement made in
the ordinary course of business and not expressly prohibited by this Agreement,
the representations and warranties contained in paragraph 3 hereof shall be true
and correct in all respects material to Wells Fargo and its subsidiaries taken
as a whole as if made at the Time of Filing.
(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. BNB 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) Shareholder 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 BNB required for approval of a plan of
merger in accordance with
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the provisions of BNB's Articles of Incorporation and the Minnesota Business
Corporation Act.
(e) Governmental Approvals. Wells Fargo shall have received approval by
the Federal Reserve Board and by such other governmental agencies as may be
required by law of the transactions contemplated by this Agreement and the
Merger Agreement and all waiting and appeal periods prescribed by applicable law
or regulation shall have expired.
(f) No Restraining Order, Etc. No court or governmental authority of
competent jurisdiction shall have issued an order restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement.
(g) Shares Authorized for Listing. The shares of Wells Fargo Common
Stock to be delivered to the stockholders of BNB 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. BNB shall have received an opinion, dated the Closing
Date, of counsel to BNB, substantially to the effect that, for federal income
tax purposes: (i) the Merger will constitute a reorganization within the meaning
of Section 368(a) of the Code; (ii) no gain or loss will be recognized by the
holders of BNB 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 shareholders of BNB will be the same as the basis
of BNB Common Stock exchanged therefor; and (iv) the holding period of the
shares of Wells Fargo Common Stock received by the shareholders of BNB will
include the holding period of the BNB Common Stock, provided such shares of BNB
Common Stock were held as a capital asset as of the Effective Time of the
Merger.
(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.
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 and except to the extent such representations
and warranties are by their express provisions made as of a specified date and
except for
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activities or transactions or events occurring after the date of this Agreement
made in the ordinary course of business and not expressly prohibited by this
Agreement, the representations and warranties contained in paragraph 2 hereof
shall be true and correct in all respects material to BNB and the BNB
Subsidiaries taken as a whole as if made at the Time of Filing.
(b) Performance of BNB Obligations. BNB 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) Shareholder 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 BNB required for approval of a plan of
merger in accordance with the provisions of BNB's Articles of Incorporation and
the Minnesota Business Corporation Act.
(d) BNB'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 BNB, 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 BNB or any BNB Subsidiary that,
in the good faith judgment of Wells Fargo, is unreasonably burdensome to Wells
Fargo.
(f) Consents, Authorizations, Etc. Obtained. BNB and each BNB
Subsidiary shall have obtained any and all material consents or waivers from
other parties to loan agreements, leases or other contracts material to BNB's or
such BNB Subsidiary's business required for the consummation of the Merger, and
BNB and each BNB 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 restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement.
(h) Number of Outstanding Shares. At any time since the date hereof the
total number of shares of BNB Common Stock outstanding and subject to issuance
upon exercise (assuming for this purpose that phantom shares and other
share-equivalents constitute BNB Common Stock) of all warrants, options,
conversion rights, phantom
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shares or other share-equivalents, other than any option held by Wells Fargo,
shall not have exceeded 3,804.
(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 or 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) No Casualty Losses, Etc. BNB and the BNB Subsidiaries considered as
a whole shall not have sustained since December 31, 1999 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.
(k) No Environmental Liability. 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 BNB or any BNB 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 BNB and its subsidiaries taken as a whole.
(l) No Material Adverse Change. Since December 31, 1999, no change
shall have occurred and no circumstances shall exist which has had or might
reasonably be expected to have a material adverse effect on the financial
condition, results of operations, business or prospects of BNB and the BNB
Subsidiaries taken as a whole (other than changes in banking laws or
regulations, or interpretations thereof, that affect the banking industry
generally or changes in the general level of interest rates).
(m) Year 2000. BNB shall be in full compliance with current FFIEC
Requirements. There shall be no feature of BNB's 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 is completed. BNB'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.
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(n) Resignations. BNB shall have delivered the resignations of each
member of its Board of Directors as of the Effective Time, and such resignations
shall not have been withdrawn.
(o) S Corporation Election. BNB's S Corporation Election shall not have
been revoked by itself or its shareholders nor shall BNB or its shareholders
have taken any action (or have failed to take any action) that would result in
termination of BNB's S Corporation Election.
(p) Real Estate Purchase and Sales. Immediately after the Closing , (i)
BANATCO, Inc. shall have purchased and The Buffalo National Bank (the "Bank")
shall have sold at fair market value, as determined by an appraiser mutually
agreed upon by Wells Fargo and BNB, the properties located at 102 South First
Street, Buffalo, Minnesota and 130 Lake Boulevard, Buffalo, Minnesota pursuant
to an agreement substantially in the form of Exhibit C attached hereto, and (ii)
the Bank shall have purchased and BANATCO, Inc. shall have sold at fair market
value, as determined by an appraiser mutually agreed upon by Wells Fargo and
BNB, the property located at 101 South First Avenue, Buffalo, Minnesota,
pursuant to an agreement substantially in the form of Exhibit C attached hereto.
(q) Sale of Life Insurance Policy. Effective on or before the day
preceding the Closing Date, the Bank shall sell to John M. Lundsten or a trust,
Policy No. 0003221475 issued May 27, 1985 by Alexander Hamilton Life Insurance
Company and Policy No. 2275332 issued June 21, 1984 by Kansas City Life
Insurance Company for an amount equal to the aggregate cash value of such
policies on the date of transfer.
(r) Employment Agreement. The Employment and Non-Competition Agreement
among the Bank, Wells Fargo and John M. Lundsten, dated the date hereof, shall
be in full force and effect.
(s) Amendments to Articles. The Articles of Incorporation and Bylaws of
BNB shall have been amended to provide that no shareholders of BNB shall have
any preemptive rights with respect to, and that Article 11 of the Bylaws shall
not apply to, the transactions contemplated by this Agreement or the Merger
Agreement.
8. Employee Benefit Plans. Each person who is a regular or part time
(but not flexible) employee of BNB or any BNB Subsidiary as of the Effective
Date of the Merger ("BNB 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:
(a) Employee Welfare Benefit Plans. Each BNB 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
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Wells Fargo Long Term Disability Plan) and shall enter each plan not later than
the first day of the calendar quarter which begins at least 32 days after the
Effective Date of the Merger (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 BNB's Plans to the Wells Fargo Plans
will be facilitated without gaps in coverage to the participants and without
duplication of costs to Wells Fargo. BNB Employees shall receive credit for
years of service to BNB, the BNB Subsidiaries and any predecessors of BNB or the
BNB Subsidiaries (to the extent credited under the vacation and short-term
disability programs of BNB) for the purpose of determining benefits under the
Wells Fargo Paid Time Off Program, Salary Continuation Pay Plan and Short Term
Disability Plan. BNB 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 BNB Employee who is a participant in any BNB
severance or salary continuation plan that would provide such BNB Employee with
benefits after the Effective Time of the Merger or who has an employment
agreement with BNB or any BNB Subsidiary at the Effective Time of the Merger
shall be eligible to participate in the Wells Fargo Salary Continuation Pay
Plan. Flexible employees shall be eligible only for the Business Travel Accident
Plan.
(b) Employee Retirement Benefit Plans. Each BNB 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 BNB and the BNB Subsidiaries, or to any
predecessor-in-interest of BNB or the BNB Subsidiaries to the extent such
service is currently given credit under the existing BNB 401(k) plan) for the
purpose of satisfying any eligibility and vesting periods applicable to the
401(k) Plan, and shall enter the 401(k) Plan no later than the Benefits
Conversion Date.
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Each BNB Employee shall be eligible to participate in the Wells Fargo
Cash Balance Plan (the "Cash Balance Plan") subject to any eligibility
requirements applicable to the Cash Balance Plan. Wells Fargo shall not
recognize a BNB Employee's past service with BNB or any BNB Subsidiary for any
purpose under the Cash Balance Plan. Therefore, each BNB Employee shall be
eligible for participation, as a new employee, in the Cash Balance Plan pursuant
to the terms thereof.
Each BNB 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 BNB and the BNB
Subsidiaries for the purpose of eligibility to access Wells Fargo's retiree
medical benefit.
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 within
nine months of the date thereof 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 BNB or Wells Fargo upon written notice to the other
party if any court or governmental authority of competent jurisdiction shall
have issued a final order restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
(b) Termination of this Agreement under this paragraph 9 shall not
release, or be construed as so releasing, either party hereto from any liability
or damage to the other party hereto arising out of the breaching party's wilful
and material breach of the warranties and representations made by it, or wilful
and material failure in performance of any of its covenants, agreements, duties
or obligations arising hereunder, and the obligations under paragraphs 4(g),
5(h) and 10 shall survive such termination.
10. Expenses. All expenses in connection with this Agreement and the
transactions contemplated hereby, including without limitation legal and
accounting fees, incurred by BNB and BNB Subsidiaries shall be borne by BNB, and
all such expenses incurred by Wells Fargo shall be borne by Wells Fargo.
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.
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12. Third Party Beneficiaries. Each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto.
13. Notices. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be in writing and shall be (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
Norwest Center
MAC N9305-173
Sixth and Marquette
Minneapolis, Minnesota 55479
Attention: Corporate Secretary
If to BNB:
John M. Lundsten, President
Buffalo National Bancshares, Inc.
1804 Hillside Lane
Buffalo, Minnesota 55313
With a copy to:
Kevin J. Costley, Esq.
Lindquist and Vennum
4200 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402-2205
or to such other address with respect to a party as such party shall notify the
other in writing as above provided. Notice shall be effective upon receipt.
14. Complete Agreement. This Agreement, including the Exhibits and
Schedules hereto, and the Merger Agreement contain the complete agreement
between the parties hereto with respect to the Merger and other transactions
contemplated hereby and supersede all prior agreements and understandings
between the parties hereto with respect thereto.
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<PAGE>
15. Captions. The captions contained in this Agreement 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
shareholders of BNB shall be made which changes in a manner adverse to such
shareholders the consideration to be provided to said shareholders pursuant to
this Agreement and the Merger Agreement.
18. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of 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. Paragraph 10 shall survive the Merger.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one instrument.
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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 BUFFALO NATIONAL BANCSHARES,
INC.
By: /s/ John E. Ganoe By: /s/ John M. Lundsten
Name: John E. Ganoe Name: John M. Lundsten
Title: Executive Vice President Title: President
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<PAGE>
EXHIBIT A
TO AGREEMENT AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF MERGER
Between
BUFFALO NATIONAL BANCSHARES, INC.
a Minnesota corporation
(the surviving corporation)
and
WELLS FARGO BNB MERGER CO.
a Minnesota corporation
(the merged corporation)
This Agreement and Plan of Merger dated as of August 9, 2000, between
BUFFALO NATIONAL BANCSHARES, INC., a Minnesota corporation (hereinafter
sometimes called "BNB" and sometimes called the "surviving corporation") and
WELLS FARGO BNB MERGER CO., a Minnesota 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 Articles of Incorporation filed in the
office of the Secretary of State of the State of Minnesota on August 3, 2000,
and said corporation is now a corporation subject to and governed by the
provisions of the Minnesota Business Corporation Act. Merger Co. has authorized
capital stock of 10,000 shares of common stock having a par value of $50.00 per
share ("Merger Co. Common Stock"), of which 20 shares were outstanding and no
shares were held in the treasury as of the date hereof; and
WHEREAS, BNB was incorporated by Articles of Incorporation filed in the
office of the Secretary of State of the State of Minnesota on October 10, 1979
and said corporation is now a corporation subject to and governed by the
provisions of the Minnesota Business Corporation Act. BNB has authorized capital
stock of 1,000,000 shares of Common Stock, par value $50.00 per share ("BNB
Common Stock") of which 3,804 shares were outstanding and 62 shares were held in
the treasury as of the date hereof; and
WHEREAS, Wells Fargo & Company and BNB are parties to an Agreement and
Plan of Reorganization dated as of May 24, 2000 (the "Reorganization
Agreement"), setting forth certain representations, warranties and covenants in
connection with the merger provided for herein; and
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WHEREAS, the directors, or a majority of them, of each of the
constituent corporations respectively deem it advisable for the welfare and
advantage of said corporations and for the best interests of the respective
shareholders of said corporations that said corporations merge and that Merger
Co. be merged with and into BNB, with BNB continuing as the surviving
corporation, on the terms and conditions hereinafter set forth in accordance
with the provisions of the Minnesota Business Corporation Act, which statute
permits such merger; and
WHEREAS, it is the intent of the parties to effect a merger which
qualifies as a tax-free reorganization pursuant to Sections 368(a)(1)(A) and
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, the parties hereto, subject to the approval of the
shareholders of Merger Co., in consideration of the premises and of the mutual
covenants and agreements contained herein and of the benefits to accrue to the
parties hereto, have agreed and do hereby agree that Merger Co. shall be merged
with and into BNB pursuant to the laws of the State of Minnesota, and do hereby
agree upon, prescribe and set forth the terms and conditions of the merger of
Merger Co. with and into BNB, the mode of carrying said merger into effect, the
manner and basis of converting the shares of BNB Common Stock into the right to
receive shares of common stock of Wells Fargo of the par value of $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
BNB, 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 Buffalo National Bancshares, Inc.
SECOND: The Articles of Incorporation of BNB shall be amended,
immediately upon consummation of the merger, as set forth below and, as so
amended, shall be the Articles of Incorporation of the surviving corporation
until further amended according to law:
REGISTERED OFFICE
-----------------
The address of the registered office of the Corporation is
Wells Fargo Center, 17th Floor, MAC# N9305-173, Sixth and Marquette,
Minneapolis, Minnesota 55479.
THIRD: The By-Laws of BNB shall be amended, immediately upon
consummation of the merger, to delete Article 11 in its entirety and, as so
amended, shall be and remain the By-Laws of the surviving corporation until
amended according to the provisions of the Articles of Incorporation of the
surviving corporation or of said By-Laws.
FOURTH: The number of directors of the surviving corporation shall be
three and the persons named below shall become directors of the surviving
corporation and shall hold office from the time of merger until their respective
successors are elected and qualify:
James R. Campbell
Ross J. Kari
Stanley S. Stroup
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FIFTH: The persons named below 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:
James R. Campbell President
Laurel A. Holschuh Executive Vice President
Ross J. Kari Executive Vice President & Treasurer
Heidi M. Dzieweczynski Vice President
Robert F. Goodsell Vice President
George W. Fehlhaber Vice President
Ginny Wahman Betzer Vice President
Les L. Quock Vice President
Andres Diaz De Rivera Vice President
James E. Hanson Vice President
Roger J. Saucerman Vice President
James A. Horton Vice President
Michael E. Newburg Vice President
Robert S. Singley Vice President & Assistant Secretary
Diana Lea-Kahle Secretary
Rachelle M. Graham Assistant Secretary
Margaret M. Weber Assistant Secretary
SIXTH: The manner and basis of converting the shares of BNB Common
Stock into the right to receive cash or shares of Wells Fargo Common Stock shall
be as follows:
1. Each of the shares of BNB 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 530,729 by
the number of shares of BNB Common Stock then outstanding.
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 BNB 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 Wells
Fargo 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 BNB 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 BNB 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, if any, 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,
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recapitalization, split-up, combination, exchange of shares or
readjustment, or if a stock dividend thereon shall be declared with a
record date within such period (a "Common Stock Adjustment"), then the
number of shares of Wells Fargo Common Stock issuable pursuant to
paragraph 1 above will be appropriately and proportionately adjusted so
that the number of such shares of Wells Fargo Common Stock issuable in
the Merger will equal the number of shares of Wells Fargo Common Stock
which the holders of shares of BNB Common Stock would have received
pursuant to such Common Stock Adjustment 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 on
the New York Stock Exchange as reported by Bloomberg for each of the
five (5) consecutive trading days ending on the day immediately
preceding the meeting of shareholders held to vote on the merger.
5. Each share of Merger Co. Common Stock issued and outstanding at the
time of merger shall be converted into and exchanged for shares of the
surviving corporation after the time of merger.
SEVENTH: The merger provided for by this Agreement shall be effective
as follows:
1. The effective date of merger shall be the date on which Articles of
Merger (as described in subparagraph 1(b) of this Article Seventh)
shall be delivered to and filed by the Secretary of State of the State
of Minnesota; 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 BNB in accordance with the Minnesota Business
Corporation Act; and
b. Articles of merger (with this Agreement attached as part
thereof) with respect to the merger, setting forth the
information required by the Minnesota Business Corporation
Act, shall be executed by the President or a Vice President of
Merger Co., and by the President or a Vice President of BNB,
and shall be filed in the office of the Secretary of State of
the State of Minnesota in accordance with the Minnesota
Business Corporation Act.
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2. The merger shall become effective as of 11:59 p.m. (the "time of
merger") on the effective date of merger.
EIGHTH: At the time of merger:
1. The separate existence of Merger Co. shall cease, and the corporate
existence and identity of BNB shall continue as the surviving
corporation.
2. The merger shall have the other effects prescribed by Section
302A.641 of the Minnesota Business Corporation Act.
NINTH: The following provisions shall apply with respect to the merger
provided for by this Agreement:
1. The registered office of the surviving corporation in the State of
Minnesota shall be Wells Fargo Center, 17th Floor, MAC# N9305-173,
Sixth and Marquette, Minneapolis, Minnesota 55479.
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 BNB and Merger Co. may execute and
deliver such deeds, assignments and assurances in law and take such
other action as may be necessary or proper to vest, perfect or confirm
title to such property or right in the surviving corporation and
otherwise carry out the purposes of this Agreement.
3. For the convenience of the parties and to facilitate the filing of
this Agreement, any number of counterparts hereof may be executed and
each such counterpart shall be deemed to be an original instrument.
4. This Agreement and the legal relations among the parties hereto
shall be governed by and construed in accordance with the laws of the
State of Minnesota.
5. This Agreement cannot be altered or amended except pursuant to an
instrument in writing signed by both of the parties hereto.
6. At any time prior to the filing of Articles of Merger with the
Secretary of State of the State of Minnesota, subject to the provisions
of the Reorganization Agreement this Agreement may be terminated upon
approval by the Boards of Directors of either of the constituent
corporations notwithstanding the approval of the shareholders of either
constituent corporation.
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<PAGE>
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 pursuant to authority duly given by their respective Boards
of Directors, all as of the day and year first above written.
BUFFALO NATIONAL BANCSHARES, INC.
By: /s/ John Lundsten
-------------------------------
Its: President
-------------------------------
WELLS FARGO BNB MERGER CO.
By: /s/ Laurel A. Holschuh
-------------------------------
Its: Vice President
-------------------------------
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<PAGE>
EXHIBIT B
TO AGREEMENT AND
PLAN OF REORGANIZATION
Wells Fargo & Company
Norwest Center
MAC N9305-173
Sixth and Marquette
Minneapolis, MN 55479
Attn: Corporate Secretary
Ladies and 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 Buffalo
National Bancshares, Inc., a Minnesota corporation ("BNB").
Pursuant to an Agreement and Plan of Reorganization, dated as of May
24, 2000, (the "Reorganization Agreement"), between BNB 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 BNB (the
"Merger") and as a result, I will receive in exchange for each share of Common
Stock, par value $50.00 per share, of BNB ("BNB 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 Stock issued to me pursuant to the
Merger with a restrictive legend which will read substantially as follows:
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"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 restrictions shall be lifted forthwith, if (i) any
such shares of Stock shall have been registered under the Securities Act for
sale, transfer or other disposition by me or on my behalf and are sold,
transferred or otherwise disposed of, or (ii) any such shares of Stock are sold
in accordance with the provisions of paragraphs (c), (e), (f) and (g) of Rule
144 promulgated under the Securities Act, or (iii) I am not at the time of such
disposition an affiliate of Wells Fargo and have been the beneficial owner of
the Stock for at least one year (or such other period as may be prescribed
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 (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 BNB
Common Stock, Wells Fargo Common Stock or the Stock, to the extent I felt
necessary, with my counsel or counsel for BNB.
Sincerely,
---------------------------------------
Print Name:
----------------------------
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<PAGE>
APPENDIX B
--------------------
MINNESOTA DISSENTERS' APPRAISAL RIGHTS STATUTE
<PAGE>
MINNESOTA STATUTES ANNOTATED 1997
CHAPTER 302A. Business Corporations; Shares; Shareholders
302A.471. Rights of dissenting shareholders
Subdivision 1. Actions creating rights. A shareholder of a corporation may
dissent from, and obtain payment for the value of the shareholder's shares in
the event of, any of the following corporate actions:
(a) An amendment of the articles that materially and adversely affects
the rights or preferences of the shares of the dissenting shareholder in that
it:
(1) alters or abolishes a preferential right of the shares;
(2) created, alters, or abolishes a right in respect of the
redemption of the shares, including a provision respecting a sinking
fund for the redemption or repurchase of the shares;
(3) alters or abolishes a preemptive right of the holder of
the shares to acquire shares, securities other than shares, or rights
to purchase shares or securities other than shares;
(4) excludes or limits the right of a shareholder to vote on a
matter, or to cumulate votes, except as the right may be excluded or
limited through the authorization or issuance of securities of an
existing or new class or series with similar or different voting
rights; except that an amendment to the articles of an issuing public
corporation that provides that section 302A.671 does not apply to a
control share acquisition does not give rise to the right to obtain
payment under this section;
(b) A sale, lease, transfer, or other disposition of all or
substantially all of the property and assets of the corporation, but not
including a transaction permitted without shareholder approval in section
302A.661, subdivision 1, or a disposition in dissolution described in section
302A.725, subdivision 2, or a disposition pursuant to an order of a court, or a
disposition for cash on terms requiring that all or substantially all of the net
proceeds of disposition be distributed to the shareholders in accordance with
their respective interests within one year after the date of disposition;
(c) A plan of merger, whether under this chapter or under chapter 322B,
to which the corporation is a constituent organization, except as provided in
subdivision 3;
(d) A plan of exchange, whether under this chapter or under chapter
322B, to which the corporation is a party as the corporation whose shares will
be acquired by the acquiring corporation, if the shares of the shareholder are
entitled to be voted on the plan; or
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(e) Any other corporate action taken pursuant to a shareholder vote
with respect to which the articles, the bylaws, or a resolution approved by the
board directs that dissenting shareholders may obtain payment for their shares.
Subd. 2. Beneficial owners.
(a) A shareholder shall not assert dissenters' rights as to less than
all of the shares registered in the name of the shareholder, unless the
shareholder dissents with respect to all the shares that are beneficially owned
by another person but registered in the name of the shareholder and discloses
the name and address of each beneficial owner on whose behalf the shareholder
dissents. In that event, the rights of the dissenter shall be determined as if
the shares as to which the shareholder has dissented and the other shares were
registered in the names of different shareholders.
(b) The beneficial owner of shares who is not the shareholder may
assert dissenters' rights with respect to shares held on behalf of the
beneficial owner, and shall be treated as a dissenting shareholder under the
terms of this section and section 302A.473, if the beneficial owner submits to
the corporation at the time of or before the assertion of the rights a written
consent of the shareholder.
Subd. 3. Rights not to apply.
(a) Unless the articles, the bylaws, or a resolution approved by the
board otherwise provide, the right to obtain payment under this section does not
apply to a shareholder of the surviving corporation in a merger, if the shares
of the shareholder are not entitled to be voted on the merger.
(b) If a date is fixed according to section 302A.445, subdivision 1,
for the determination of shareholders entitled to receive notice of and to vote
on an action described in subdivision 1, only shareholders as of the date fixed,
and beneficial owners as of the date fixed who hold through shareholders, as
provided in subdivision 2, may exercise dissenters' rights.
Subd. 4. Other rights.
The shareholders of a corporation who have a right under this section
to obtain payment for their shares do not have a right at law or in equity to
have a corporate action described in subdivision 1 set aside or rescinded,
except when the corporate action is fraudulent with regard to the complaining
shareholder or the corporation.
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<PAGE>
MINNESOTA STATUTES ANNOTATED 1997
CHAPTER 302A. Business Corporations; Shares; Shareholders
302A.473. Procedures for asserting dissenters' rights.
Subdivision 1. Definitions.
(a) For purposes of this section, the terms defined in this subdivision
have the meanings given them.
(b) "Corporation" means the issuer of the shares held by a dissenter
before the corporate action referred to in section 302A.471, subdivision 1 or
the successor by merger of that issuer.
(c) "Fair value of the shares" means the value of the shares of a
corporation immediately before the effective date of the corporate action
referred to in section 302A.471, subdivision 1.
(d) "Interest" means interest commencing five days after the effective
date of the corporate action referred to in section 302A.471, subdivision 1, up
to and including the date of payment, calculated at the rate provided in section
549.09 for interest on verdicts and judgments.
Subd. 3. Notice of dissent.
If the proposed action must be approved by the shareholders, a
shareholder who is entitled to dissent under section 302A.471 and who wishes to
exercise dissenters' rights must file with the corporation before the vote on
the proposed action a written notice of intent to demand the fair value of the
shares owned by the shareholder and must not vote the shares in favor of the
proposed action.
Subd. 4. Notice of procedure; deposit of shares.
(a) After the proposed action has been approved by the board and, if
necessary, the shareholders, the corporation shall send to all shareholders who
have complied with subdivision 3 and to all shareholders entitled to dissent if
no shareholder vote was required, a notice that contains:
(1) The address to which a demand for payment and certificates
of certificated shares must be sent in order to obtain payment and the
date by which they must be received;
(2) Any restrictions on transfer of uncertificated shares that
will apply after the demand for payment is received;
B-3
<PAGE>
(3) A form to be used to certify the date on which the
shareholder, or the beneficial owner on whose behalf the shareholder
dissents, acquired the shares or an interest in them and to demand
payment; and
(4) A copy of section 302A.471 and this section and a brief
description of the procedures to be followed under these sections.
(b) In order to receive the fair value of the shares, a dissenting
shareholder must demand payment and deposit certificated shares or comply with
any restrictions on transfer of uncertificated shares within 30 days after the
notice required by paragraph (a) was given, but the dissenter retains all other
rights of a shareholder until the proposed action takes effect.
Subd. 5. Payment; return of shares.
(a) After the corporate action takes effect, or after the corporation
receives a valid demand for payment, whichever is later, the corporation shall
remit to each dissenting shareholder who has complied with subdivisions 3 and 4
the amount the corporation estimates to be the fair value of the shares, plus
interest, accompanied by:
(1) The corporation's closing balance sheet and statement of
income for a fiscal year ending not more than 16 months before the
effective date of the corporate action, together with the latest
available interim financial statements;
(2) An estimate by the corporation of the fair value of the
shares and a brief description of the method used to reach the
estimate; and
(3) A copy of section 302A.471 and this section, and a brief
description of the procedure to be followed in demanding supplemental
payment.
(b) The corporation may withhold the remittance described in paragraph
(a) from a person who was not a shareholder on the date the action dissented
from was first announced to the public or who is dissenting on behalf of a
person who was not a beneficial owner on that date. If the dissenter has
complied with subdivision 3 and 4, the corporation shall forward to the
dissenter the materials described in paragraph (a), a statement of the reason
for withholding the remittance, and an offer to pay to the dissenter the amount
listed in the materials if the dissenter agrees to accept that amount in full
satisfaction. The dissenter may decline the offer and demand payment under
subdivision 6. Failure to do so entitles the dissenter only to the amount
offered. If the dissenter makes demand, subdivisions 7 and 8 apply.
(c) If the corporation fails to remit payment within 60 days of the
deposit of certificates or the imposition of transfer restrictions on
uncertificated shares, it shall return all deposited certificates and cancel all
transfer restrictions. However, the corporation may again give notice under
subdivision 4 and require deposit or restrict transfer at a later time.
B-4
<PAGE>
Subd. 6. Supplemental payment; demand.
If a dissenter believes that the amount remitted under subdivision 5 is
less than the fair value of the shares plus interest, the dissenter may give
written notice to the corporation of the dissenter's owner estimate of the fair
value of the shares, plus interest, within 30 days after the corporation mails
the remittance under subdivision 5, and demand payment of the difference.
Otherwise, a dissenter is entitled only to the amount remitted by the
corporation.
Subd. 7. Petition; determination.
If the corporation receives a demand under subdivision 6, it shall,
within 60 days after receiving the demand, either pay to the dissenter the
amount demanded or agreed to by the dissenter after discussion with the
corporation or file in court a petition requesting that the court determine the
fair value of the shares, plus interest. The petition shall be filed in the
county in which the registered office of the corporation is located, except that
a surviving foreign corporation that receives a demand relating to the shares of
a constituent domestic corporation shall file the petition in the county in this
state in which the last registered office of the constituent corporation was
located. The petition shall name as parties all dissenters who have demanded
payment under subdivision 6 and who have not reached agreement with the
corporation. The corporation shall, after filing the petition, serve all parties
with a summons and copy of the petition under the rules of civil procedure.
Nonresidents of this state may be served by registered or certified mail or by
publication as provided by law. Except as otherwise provided, the rules of civil
procedure apply to this proceeding. The jurisdiction of the court is plenary and
exclusive. The court may appoint appraisers, with powers and authorities the
court deems proper, to receive evidence on and recommend the amount of the fair
value of the shares. The court shall determine whether the shareholder or
shareholders in question have fully complied with the requirements of this
section, and shall determine the fair value of the shares, taking into account
any and all factors the court finds relevant, computed by any method or
combination of methods that the court, in its discretion, sees fit to use,
whether or not used by the corporation or by a dissenter. The fair value of the
shares as determined by the court is binding on all shareholders, wherever
located. A dissenter is entitled to judgment in cash for the amount by which the
fair value of the shares as determined by the court, plus interest, exceeds the
amount, if any, remitted under subdivision 5, but shall not be liable to the
corporation for the amount, if any, by which the amount, if any, remitted to the
dissenter under subdivision 5 exceeds the fair value of the shares as determined
by the court, plus interest.
Subd. 8. Costs; fees; expenses.
(a) The Court shall determine the costs and expenses of a proceeding
under subdivision 7, including the reasonable expenses and compensation of any
appraisers appointed by the court, and shall assess those costs and expenses
against the corporation, except that the court may assess part or all of those
costs and expenses against a dissenter
B-5
<PAGE>
whose action in demanding payment under subdivision 6 is found to be arbitrary,
vexatious, or not in good faith.
(b) If the court finds that the corporation has failed to comply
substantially with this section, the court may assess all fees and expenses of
any experts or attorneys as the court deems equitable. These fees and expenses
may also be assessed against a person who has acted arbitrarily , vexatiously,
or not in good faith in bringing the proceeding, and may be awarded to a party
injured by those actions.
(c) The court may award, in its discretion, fees and expenses to an
attorney for the dissenters out of the amount awarded to the dissenters, if any.
B-6
<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
posteffective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent 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) (ss.230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such posteffective amendment shall be deemed to be a new
registration statement relating to the
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<PAGE>
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a posteffective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(d) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(e) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by 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,
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<PAGE>
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.
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<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 August 9, 2000.
WELLS FARGO & COMPANY
By: /s/ Richard M. Kovacevich
-------------------------------------
Richard M. Kovacevich
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on August 9, 2000 by the following
persons in the capacities indicated:
/s/ Richard M. Kovacevich President and Chief Executive Officer
-------------------------------
Richard M. Kovacevich (Principal Executive Officer)
/s/ Ross J. Kari ___________ Executive Vice President and Chief
-------------------------------
Ross J. Kari Financial Officer
(Principal Financial Officer)
/s/ Les L. Quock Senior Vice President and Controller
-------------------------------
Les L. Quock (Principal Accounting Officer)
LES S. BILLER ) RICHARD D. McCORMICK )
J.A. BLANCHARD III ) CYNTHIA H. MILLIGAN )
MICHAEL R. BOWLIN ) BENJAMIN F. MONTOYA )
DAVID A. CHRISTENSEN ) PHILIP J. QUIGLEY )
SUSAN E. ENGEL ) DONALD B. RICE )
PAUL HAZEN ) JUDITH M. RUNSTAD ) A majority of
ROBERT L. JOSS ) SUSAN G. SWENSON ) the Board of
REATHA CLARK KING ) CHANG-LIN TIEN ) Directors*
RICHARD M. KOVACEVICH ) MICHAEL W. WRIGHT )
-----------------
* Richard M. Kovacevich, by signing his name hereto, does hereby sign this
document on behalf of each of the directors named above pursuant to powers
of attorney duly executed by such persons.
/s/ Richard M. Kovacevich
-------------------------------------
Richard M. Kovacevich
Attorney-in-Fact
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<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
------ -----------
2.1 Agreement and Plan of Reorganization, dated as of May 24,
2000, by and between Buffalo National Bancshares, Inc. and
Wells Fargo & Company, and a related Agreement and Plan of
Merger, 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.
<PAGE>
Exhibit
Number Description
------ -----------
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.
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 Certificate of Designations for the Registrant's 2000 ESOP
Cumulative Convertible Preferred Stock, incorporated by
reference to Exhibit 3(o) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2000.
3.16 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 3.16.
<PAGE>
Exhibit
Number Description
------ -----------
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 Lindquist & Vennum P.L.L.P. regarding certain tax
matters (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 Lindquist & Vennum P.L.L.P. (included in Exhibit
8.1).
24.1 Powers of Attorney.
99.1 Form of proxy for special meeting of shareholders of Buffalo
National Bancshares, Inc.
-------------
*To be filed by amendment.
