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January 23, 1996
Wells Fargo & Company
420 Montgomery Street
San Francisco, CA 94163
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger (the "Merger Agreement")
of even date herewith between First Interstate Bancorp ("Subject Company")
and Wells Fargo & Company ("Parent"). Capitalized terms used but not de-
fined herein shall have the meanings ascribed to them in the Merger
Agreement.
In order to induce Parent to enter into the Merger Agreement, and in
consideration of Parent's undertaking of efforts in furtherance of the
transactions contemplated thereby, Subject Company agrees as follows:
1. Representations and Warranties. Subject Company hereby repre-
sents and warrants to Parent that Subject Company has all requisite
corporate power and authority to enter into this letter agreement (this
"Agreement") and to perform its obligations set forth herein. The execu-
tion, delivery and performance of this Agreement have been duly and validly
authorized by all necessary corporate action on the part of Parent. This
Agreement has been duly executed and delivered by Subject Company.
2. Termination Fee. (a) Unless a Nullifying Event (as such term is
defined below) shall have occurred and be continuing at the time the Merger
Agreement is terminated, in the event that the Merger Agreement is termi-
nated pursuant to Article VIII thereof (regardless of whether such
termination is by Parent or Subject Company) and prior to or concurrently
with such termination a First Trigger Event (as such term is defined below)
shall have occurred, Subject Company shall pay to Parent a cash
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fee of $50 million. Such fee shall be payable in immediately available
funds on or before the second business day following such termination of
the Merger Agreement.
(b) In addition, unless a Nullifying Event shall have occurred and
be continuing at the time the Merger Agreement is terminated, in the event
that (i) the Merger Agreement shall have been terminated pursuant to
Article VIII thereof, (ii) prior to or concurrently with such termination a
First Trigger Event shall have occurred, and (iii) prior to, concurrently
with or within 18 months after such termination an Acquisition Event (as
such term is defined below) shall have occurred, Subject Company shall pay
to Parent an additional cash fee of (i) $150 million, less (ii) any amount
paid by Subject Company pursuant to Paragraph 2(a) hereof. Such fee shall
be payable in immediately available funds on or before the second business
day following the occurrence of such Acquisition Event.
(c) As used herein, a "First Trigger Event" shall mean the
occurrence of any of the following events:
(i) Subject Company's Board of Directors shall have failed to
approve or recommend the Merger Agreement or the Merger or shall have
withdrawn or modified in a manner adverse to Parent its approval or
recommendation of the Merger Agreement or the Merger, or shall have
resolved or publicly announced an intention to do either of the fore-
going;
(ii) Subject Company or any Significant Subsidiary (as such
term is defined below), or the Board of Directors of Subject Company
or a Significant Subsidiary, shall have recommended that the stock-
holders of Subject Company approve any Acquisition Proposal (as such
term is defined below) or shall have entered into an agreement with
respect to, or authorized, approved, proposed or publicly announced
its intention to enter into, any Acquisition Proposal;
(iii) the Merger Agreement or the Merger shall not have been
approved at a meeting of Subject Company stockholders which has been
held for that purpose prior to termination of the Merger Agreement
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in accordance with its terms, if prior thereto it shall have been publicly
announced that any person (other than Parent or any of its Subsidiaries)
shall have made, or disclosed an intention to make, an Acquisition
Proposal;
(iv) any person (together with its affiliates and associates)
or group (as such terms are used for purposes of Section 13(d) of the
Exchange Act)(other than Parent and its Subsidiaries) shall have ac-
quired beneficial ownership (as such term is used for purposes of
Section 13(d) of the Exchange Act) or the right to acquire beneficial
ownership of 50% or more of the then outstanding shares of the stock
then entitled to vote generally in the election of directors of
Subject Company or any Significant Subsidiary; or
(v) following the making of an Acquisition Proposal, Subject
Company shall have breached any covenant or agreement contained in
the Merger Agreement such that Parent would be entitled to terminate
the Merger Agreement under Section 8.1(d) thereof (without regard to
any grace period provided for therein) unless such breach is promptly
cured without jeopardizing consummation of the Merger pursuant to the
terms of the Merger Agreement.
(d) As used herein, "Acquisition Event" shall mean the consummation
of any event described in the definition of "Acquisition Proposal," except
that the percentage reference contained in clause (C) of such definition
shall be 50% instead of 20%.
(e) As used herein, "Acquisition Proposal" shall mean any (i)
publicly announced proposal, (ii) regulatory application or notice (whether
in draft or final form), (iii) agreement or understanding, (iv) disclosure
of an intention to make a proposal, or (v) amendment to any of the
foregoing, made or filed on or after the date hereof, in each case with
respect to any of the following transactions with a counterparty other than
Parent or any of its Subsidiaries: (A) a merger or consolidation, or any
similar transaction, involving Subject Company or any Significant
Subsidiary (other than mergers, consolidations, or any similar transactions
involving solely Sub-
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ject Company and/or one or more wholly owned Subsidiaries of Subject
Company and other than a merger or consolidation as to which the common
shareholders of Subject Company immediately prior thereto in the aggregate
own at least 70% of the common stock of the publicly held surviving or suc-
cessor corporation (or any publicly held ultimate parent company thereof)
immediately following consummation thereof); (B) a purchase, lease or other
acquisition of all or substantially all of the assets or deposits of
Subject Company or any Significant Subsidiary; or (C) a purchase or other
acquisition (including by way of merger, consolidation, share exchange or
otherwise) of securities representing 20% or more of the voting power of
Subject Company or any Significant Subsidiary.
(f) As used herein, "Nullifying Event" shall mean (I) any of the
following events occurring and continuing at a time when Subject Company is
not in material breach of any of its covenants or agreements contained in
the Merger Agreement: (i) Parent shall be in breach of any of its covenants
or agreements contained in the Merger Agreement such that Subject Company
shall be entitled to terminate the Merger Agreement pursuant to Section
8.1(d) thereof (without regard to any grace period provided for therein),
(ii) the stockholders of Parent shall have voted and failed to approve the
adoption of the agreement of merger (within the meaning of Section 251 of
the DGCL) contained in the Merger Agreement at a meeting of such stockhold-
ers which has been held for that purpose or at any adjournment or postpone-
ment thereof (unless the Merger Agreement shall not have been approved at a
meeting of Subject Company stockholders which was held on or prior to such
date for the purpose of voting with respect to the Merger Agreement) or
(iii) the Board of Directors of Parent shall have failed to approve or
recommend that the stockholders of Parent approve the adoption of the
agreement of merger (within the meaning of Section 251 of the DGCL)
contained in the Merger Agreement or shall have withdrawn, modified or
changed in any manner adverse to Subject Company its approval or recom-
mendation that the stockholders of Parent approve the adoption of the
agreement of merger (within the meaning of Section 251 of the DGCL)
contained in the Merger Agreement or shall have resolved or publicly
announced its intention to do any of
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the foregoing or (II) the termination of the Merger Agreement pursuant to
Section 8.1(g) thereof.
(g) As used herein, "Significant Subsidiary" shall mean a
"significant subsidiary," as defined in Rule 1-02 of Regulation S-X
promulgated by the Securities and Exchange Commission, of Subject Company.
(h) Notwithstanding anything to the contrary contained herein, in no
event shall any action taken by North prior to, on or after the date hereof
with respect to a merger or similar business combination involving Subject
Company and North in which the holders of Subject Company Common Stock
would receive, for each such share, solely 2.60 or less shares of the
common stock of North (together with cash in lieu of any fractional shares)
be deemed to constitute an Acquisition Proposal.
3. To the extent that Subject Company is prohibited by applicable
law or regulation, or by administrative actions or policy of a Federal or
state financial institution supervisory agency having jurisdiction over it,
from making the payments required to be paid by Subject Company herein in
full, it shall immediately so notify Parent and thereafter deliver or cause
to be delivered, from time to time, to Parent, the portion of the payments
required to be paid by it herein that is no longer prohibited from paying,
within five business days after the date on which Subject Company is no
longer so prohibited; provided, however, that if Subject Company at any
time is prohibited by applicable law or regulation, or by administrative
actions or policy of a Federal or state financial institution supervisory
agency having jurisdiction over it, from making the payments required
hereunder in full, it shall (i) use its reasonable best efforts to obtain
all required regulatory and legal approvals and to file any required
notices as promptly as practicable in order to make such payments, (ii)
within five days of the submission or receipt of any documents relating to
any such regulatory and legal approvals, provide Parent with copies of the
same and (iii) keep Parent advised of both the status of any such request
for regulatory and legal approvals, as well as any discussions with any
relevant regulatory or other third party reasonably related to the same.
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4. Except where federal law specifically applies, this Agreement
shall be construed and interpreted according to the laws of the State of
Delaware without regard to conflicts of laws principles thereof.
5. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
6. Nothing contained herein shall be deemed to authorize Subject
Company or Parent to breach any provision of the Merger Agreement.
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Please confirm your agreement with the understandings set forth
herein by signing and returning to us the enclosed copy of this Agreement.
Very truly yours,
FIRST INTERSTATE BANCORP
By:_____________________
Name:
Title:
Accepted and agreed to as of
the date first above written:
WELLS FARGO & COMPANY
By:__________________
Name:
Title: