IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - -X
VICTORIA SHAEV, individually and
on behalf of all others similarly : Civil Action No. 14629
situated,
: CLASS ACTION
Plaintiff, COMPLAINT
:
- against -
:
FIRST INTERSTATE BANCORP, JOHN E.
BRYSON, EDWARD M. CARSON, DR. :
JEWEL PLUMMER COBB, RALPH P.
DAVIDSON, MYRON DuBAIN, DON C. :
FRISBEE, GEORGE M. KELLER, THOMAS
L. LEE, DR. WILLIAM F. MILLER, :
WILLIAM S. RANDALL, DR. STEVEN B.
SAMPLE, FORREST N. SHUMWAY, WIL- :
LIAM E.B. SIART, RICHARD J.
STEGEMEIER, and DANIEL M. TELLEP, :
Defendants. :
- - - - - - - - - - - - - - - - - - - - -X
Plaintiff alleges upon information and belief except as to
paragraph 1, which is alleged on knowledge, as follows:
THE PARTIES
1. Plaintiff Victoria Shaev is and was at all times relevant
hereto the owner of shares of the common stock of First Interstate Bancorp
("FIB" or the "Company").
2. FIB is a bank holding company organized and
existing under the laws of the State of Delaware with offices in
Los Angeles, California. FIB operates approximately 1,000
offices in 13 states. FIB has approximately 77 million shares of
common stock issued and outstanding which trade on the NASDAQ over-the-counter
quotation system.
3. (a) Defendant Edward M. Carson ("Carson") is and
was at all relevant times Chairman of the Board.
(b) Defendant William S. Randall ("Randall") is and was at
all relevant times Executive Vice President and Chief Operating Officer of
FIB.
(c) Defendant William E.B. Siart ("Siart") is and
was at all relevant times President and Chief Executive Officer
of FIB.
(d) Defendants John E. Bryson ("Bryson"), Dr.
Jewel Plummer Cobb ("Cobb"), Ralph P. Davidson ("Davidson"),
Myron DuBain ("DuBain"), Don C. Frisbee ("Frisbee"), George M.
Keller ("Keller"), Nomas L. Lee ("Lee"), Dr. William F. Miller
("Miller"), Dr. Steven S. Sample ("Sample"), Forrest N. Shumway
("Shumway"), Richard J. Stegemeier ("Stegemeier") and Daniel M.
Tellep ("Tellep").
4. The Individual Defendants set forth in paragraph 3 above are
officers and/or directors of FIB and as such, are in a fiduciary relationship
with plaintiff and the other public stockholders of FIB and owe to plaintiff
and other members of the Class the highest obligations of good faith, fair
dealing and full disclosure.
2
CLASS ACTION ALLEGATIONS
5. Plaintiff brings this case on her own behalf and
as a class action, pursuant to Rule 23 of the Rules of the Court of Chancery,
on behalf of all public stockholders of FIB, and their successors in interest,
who are or will Be threatened with injury arising from defendants, actions as
more fully described herein (the "Class"). Excluded from the Class are
defendants herein and any person, firm, trust, corporation, or other entity
related to or affiliated with any of the defendants.
6. This action is property maintainable as a class
action.
7. The class is so numerous that joinder of all members is
impracticable. There are over 25,000 stockholders of record located throughout
the United States.
8. There are questions of law and fact which are common to the
class and which predominate over questions affecting any individual class
member.
9. Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. The
claims of the plaintiff are typical of the claims of other members of the
class and plaintiff has the same interests as the other members of the class.
Accordingly, plaintiff is an adequate representative of the class and will
fairly and adequately protect the interests of the class.
3
BACKGROUND AND CLAIM FOR RELIEF
10. On or about October 18, 1995, Wells-Fargo & Co.
("Wells-Fargo") announced in a press release that it had submitted an
unsolicited merger proposal to FIB (the "proposal"). Pursuant to the terms of
the proposal, FIB shareholders would receive .625 a share of Wells-Fargo,
representing a price of $133.50 for each FIB share based on its current
trading price. The total transaction is valued at approximately $10 billion.
11. The proposal contemplates a merger of FIB and
Wells-Fargo into a new company.
12. FIB has in place a shareholder rights plan (commonly known as
a "poison pill") which makes an unwelcome takeover of the company
prohibitively more expensive. The poison pill is triggered by the acquisition
of 20% or more of FIB's common stock by a group or person.
13. FIB has previously been approached by Wells-Fargo and has been
spurned; in February, 1994, FIB rejected a tentative merger proposal from
Wells-Fargo valued at approximately $90 per share, which was rejected.
According to The New York Times, Wells-Fargo's Chairman, Paul Hazen, met with
defendant Siart in the last few weeks to discuss a possible transaction, and
which was once again rejected.
14. In response to Wells-Fargo's announcement of the
proposal, defendant Siart stated "I am deeply disappointed that
4
Wells-Fargo would take this uninvited action." From FIB's prior course of
dealing with Wells-Fargo, it is likely that FIB will rebuff Wells-Fargo yet
again.
FIRST CLAIM FOR RELIEF
15. At all times herein, defendants were and are obli-
gated to adequately consider, in a timely fashion and on an informed basis,
any reasonable proposal from any party, not to place their own self-interests
and personal considerations ahead of the interests of the stockholders, and to
make corporate decisions in good faith.
16. Defendants' fiduciary obligations require
them to:
(a) arrange for the sale of FIB to the highest bidder,
including obligating them to undertake an appropriate evaluation of any bona
fide offers, provide nonpublic information to such offerors to enable them to
make the highest possible bid for the Company and take such other appropriate
steps to solicit the highest possible bid for the Company; and
(b) act independently, including appointing a
disinterested committee so that the interests of FIB's public
stockholders would be protected; and
(c) utilize the poison pill in a manner designed
to maximize shareholder value.
5
17. By virtue of the acts and conduct alleged herein, the
Individual Defendants, who direct the actions of the Company, are carrying out
a preconceived plan and scheme to entrench themselves in office and to protect
and advance their own parochial interests at the expense of FIB. Defendants'
conduct has been a breach of their fiduciary obligation and has violated the
mandate of the Company's shareholders to maximize value.
18. As a result of the foregoing, the Individual Defendants have
breached and/or aided and abetted breaches of fiduciary duties owed to FIB and
its stockholders.
19. Unless enjoined by this Court, defendants will breach their
fiduciary duties owed to plaintiff and the other members of the class and may
benefit themselves in their corporate offices, all to the irreparable harm of
the class, as aforesaid.
20. Plaintiff and the other members of the Class have
no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(a) declaring this to be a proper class action;
(b) ordering the individual Defendants to carry
out their fiduciary duties to plaintiff and the other members of the Class by
taking all steps necessary to arrange for the sale of FIB to the highest
bidder;
6
(c) ordering defendants, jointly and severally, to account
to plaintiff and the other members of the Class for all damages suffered and
to be suffered by them as a result of the acts and transactions alleged
herein;
(d) requiring defendants to utilize the poison
pill in a manner consistent with maximizing shareholder value;
(e) awarding plaintiff the costs and disbursements of the
action, including a reasonable allowance for plaintiff's attorney's fees and
experts' fees; and
(f) granting such other and further relief as this court may
deem to be just and proper.
Dated: October 19, 1995
ROSENTHAL MONHAIT GROSS &
GODDESS, P.A.
By: _________________________________
Joseph A. Rosenthal
First Federal Plaza, Suite 214
Box 1070
Wilmington, DE 19899
(302) 656-4433
OF COUNSEL:
GOODKIND LABATON RUDOFF &
SUCHAROW LLP
100 Park Avenue
New York, New York 10017
(212) 907-0700
7