January 23, 1996
Xxxxx Fargo & Company
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
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 Xxxxx Fargo &
Company("Parent"). Capitalized terms used but not
defined 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 Xxxxxx's undertaking
of efforts in furtherance of the transactions
contemplated thereby, Subject Company agrees as follows:
1. Representations and Warranties. Subject Company
hereby represents 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
execution, 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
terminated 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 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 foregoing;
(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 stockholders 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
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
acquired 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 Subject 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 successor 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
stockholders which has been held for that purpose or at
any adjournment or postponement 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
recommendation 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 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 form 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.
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.
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: /s/ Xxxxxxxx X. Xxxxxx, Xx.
_________________________
Name: Xxxxxxxx X. Xxxxxx, Xx.
Title: Executive Vice President and
Treasurer
Accepted and agreed to as of
the date first above written:
XXXXX FARGO & COMPANY
By: /s/ Xxxxxx X. Xxxxxx
__________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice Chairman and
Chief Financial Officer
