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EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NORWEST CORPORATION
NORWEST SUB CORPORATION
AND
VICTORIA BANKSHARES, INC.
November 12, 1995
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TABLE OF CONTENTS
ARTICLE I
THE MERGER
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1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Certain Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Conversion of Shares; Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Exchange of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF VICTORIA
2.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Victoria Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Authority Relative to the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 No Approvals or Notices Required; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Regulatory Reports and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.6 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7 Commitments and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.8 Victoria Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.9 Proxy Statement and Other Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.10 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.12 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.13 Employee Benefit Plan Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.14 Environmental Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.15 Properties and Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.16 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.17 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.18 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.20 [This Section intentionally left blank] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.21 Section 368 Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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2.22 Administration of Trust Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.23 Material Interests of Certain Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NORWEST
3.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Norwest Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.3 Authority Relative to the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.4 No Approvals or Notices Required; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 Regulatory Reports and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.6 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.8 Norwest Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.9 Registration Statement and Other Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.10 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.11 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.12 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.13 Employee Benefit Plan Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.14 Environmental Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.15 Properties and Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.16 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.17 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.18 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.19 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 00
XXXXXXX XX
XXXXXXXXX XX XXXXXXXX
4.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.2 Exchange Act Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.3 No Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.4 Affiliates' Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.5 Directors' and Officers' Liability...
4.6 Pension and Welfare Benefit Plans...
4.7 Environmental Assessments...
4.8 Title and Survey Work...
4.9 Accruals and Reserves...
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ARTICLE V
COVENANTS OF NORWEST
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5.1 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2 Exchange Act Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Reservation and Listing of Norwest Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Statutory Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Newco...
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.2 Proxy Statement and Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 Meetings of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.5 Filings; Consents; Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.6 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.7 Agreement to Defend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.9 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.10 Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.11 Indemnification; Directors' and Officers' Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.12 Shareholder Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 Conditions to the Obligations of Each Party to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Conditions to the Obligations of Norwest and Newco to Effect the Merger . . . . . . . . . . . . . . . . . . 26
7.3 Conditions to the Obligations of Victoria to Effect the Merger . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER; EXTENSION; NONSURVIVAL
8.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.3 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.4 Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.5 Nonsurvival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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ARTICLE IX
GENERAL
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9.1 Entire Agreement; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.2 Enforcement of the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.6 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.7 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.9 Incorporation by References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Schedule 1.5 Surviving Corporation Directors and Officers
Schedule 2.1 Victoria Subsidiaries
Schedule 2.4 Victoria Required Approvals or Notices and Conflicts
Schedule 2.7 Commitments and Contracts
Schedule 2.11 Litigation
Schedule 2.13 Victoria Employee Benefit Plan Matters
Schedule 2.16 Victoria Certain Fees
Schedule 2.20 Xxxxxxxx Xxxxxxxxx Payments
Schedule 2.23 Material Interests of Certain Persons
Schedule 3.1 Norwest Subsidiaries
Schedule 3.4 Norwest Required Approvals or Notices and Conflicts
Schedule 3.7 Material Contracts
Schedule 3.12 Tax Matters
Schedule 3.13 Norwest Employee Benefit Plan Matters
Schedule 6.12 Shareholder Agreements
Exhibit A Exchange Agent Agreement
Exhibit B Pooling Transfer Restrictions Agreement
Exhibit C Index Group
Exhibit D Shareholder Agreement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is dated as of
November 12, 1995 by and among Norwest Corporation, a Delaware corporation
("Norwest"), Norwest Sub Corporation, a Texas corporation to be formed after
the date hereof as a wholly-owned subsidiary of Norwest ("Newco"), and Victoria
Bankshares , Inc., a Texas corporation ("Victoria").
WHEREAS, Norwest desires to affiliate with Victoria, and Victoria
desires to affiliate with Norwest in the manner provided in this Agreement;
WHEREAS, Norwest and Victoria believe that the Merger (hereinafter
defined) of Newco with and into Victoria in the manner provided by, and subject
to the terms and conditions set forth in, this Agreement and all exhibits,
schedules and supplements hereto is desirable and in the best interests of
their respective institutions and shareholders;
WHEREAS, Norwest and Victoria intend that the Merger shall qualify for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and shall
be recorded for accounting purposes as a pooling of interests; and
WHEREAS, the respective Boards of Directors of Norwest and Victoria
have approved this Agreement and the proposed transactions substantially on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the Texas Business Corporation Act (the "TBCA"),
Newco shall be merged with and into Victoria (the "Merger") as soon as
practicable following the satisfaction or waiver, if permissible, of the
conditions set forth in Article VII hereof. Following the Merger, Victoria
shall continue as the surviving corporation (the "Surviving Corporation") and
the separate corporate existence of Newco shall cease.
1.2 Effective Time. The Merger shall be consummated by the filing
with the Texas Secretary of State of Articles of Merger, in the form required
by and executed in accordance with the relevant provisions of the TBCA, and by
the issuance of a Certificate of Merger by the Texas Secretary of State. The
date of such issuance and filing or such other time and date as may be
specified in such Articles and Certificate of Merger shall be the "Effective
Time."
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1.3 Certain Effects of the Merger. The Merger shall have the
effects set forth in the applicable provisions of the TBCA.
1.4 Articles of Incorporation and Bylaws. The Articles of
Incorporation and the Bylaws of Victoria, in each case as in effect at the
Effective Time, shall be the Articles of Incorporation and Bylaws of the
Surviving Corporation.
1.5 Directors and Officers. The directors and officers of Newco
at the Effective Time shall be the directors and officers of the Surviving
Corporation and shall hold office from the Effective Time until their
respective successors are duly elected or appointed and qualified in the manner
provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law.
1.6 Conversion of Shares; Fractional Shares. (a) Each share of
Victoria's common stock, par value $1.00 per share ("Victoria Common Stock"),
issued and outstanding immediately prior to the Effective Time shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into and represent the right to receive the consideration payable as
set forth below (the "Merger Consideration") to the holder of record thereof,
without interest thereon, upon surrender of the certificates representing such
shares of Victoria Common Stock (collectively, the "Shares"). For the purposes
of determining the number of Shares issued and outstanding, the number of
Shares issued and outstanding shall be increased by the number and class of
Shares that may be acquired upon exercise of any option entitling the holder
thereof to acquire Shares which is in effect or outstanding prior to the
Effective Time; provided, however, that the number of Shares issued and
outstanding shall in no event exceed 8,516,843.
(b) The aggregate number of shares of Norwest Common Stock payable
as Merger Consideration shall be a number equal to the Shares times the
Exchange Ratio (hereinafter defined). Each holder of Victoria Common Stock
shall receive for each share of Victoria Common Stock held immediately prior to
the Effective Time a number of shares of Norwest's common stock, par value
$1-2/3 per share ("Norwest Common Stock"), equal to the Exchange Ratio. The
"Exchange Ratio" shall equal 1.05; provided, however, that if, between the
date hereof and the Effective Time, shares of Norwest 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, stock split,
reverse stock split, 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 Exchange Ratio will be appropriately
and proportionately adjusted so that the number of shares of Norwest Common
Stock into which a share of Victoria Common Stock shall be converted will equal
the number of shares of Norwest Common Stock which holders of
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shares of Victoria Common Stock would have received pursuant to such Common
Stock Adjustment had the record date therefor been immediately following the
Effective Time. If, during such period, a dividend, other than a dividend
described in the previous sentence and other than a regular quarterly cash
dividend, shall be declared on Norwest Common Stock with a record date within
such period, or any other increase in the number of outstanding shares of
Norwest Common Stock effected for no consideration, then the Exchange Ratio
will be appropriately and proportionately adjusted to the extent necessary to
prevent dilution of the interests of the Victoria shareholders.
(c) Norwest will not issue any certificates (or scrip
certificates) for any fractional shares of Norwest Common Stock otherwise
issuable pursuant to the Merger. In lieu of issuing such fractional shares,
Norwest shall pay cash to any holder of Shares otherwise entitled to receive
such fractional share. Such cash payment shall be based on the average closing
price per share for Norwest Common Stock as reported by the consolidated tape
of the New York Stock Exchange over a five trading day period ending on the
trading day immediately preceding the date of the meeting of shareholders
required by Section 6.4 (the "Shareholder Meeting Date").
1.7 Closing. Upon the terms and subject to the conditions hereof,
as soon as practicable after the vote of the shareholders of Victoria in favor
of the approval and adoption of this Agreement and the satisfaction or waiver,
if permissible, of the conditions set forth in Article VII, the parties hereto
shall execute and deliver the Articles of Merger as described in Section 1.2,
and the parties hereto shall take all such other and further actions as may be
required by law to make the Merger effective. Prior to the filing referred to
in this Section, a closing (the "Closing") will be held at a mutually agreeable
location in Minneapolis, Minnesota (or such other place as the parties may
agree) for the purpose of confirming all of the foregoing. The date of such
Closing is referred to herein as the "Closing Date."
1.8 Exchange of Shares. (a) Norwest shall enter into an exchange
agent agreement with Norwest Bank Minnesota, National Association (the
"Exchange Agent") in substantially the form attached hereto as Exhibit A (the
"Exchange Agent Agreement") at or immediately prior to the Effective Time.
(b) Promptly after the Effective Time, the Exchange Agent shall
mail to each record holder of an outstanding certificate or certificates which
as of the Effective Time represented Shares (the "Certificates"), a form letter
of transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery of
the Certificates to the Exchange Agent) and instructions for use in effecting
the surrender of the Certificates for payment therefor. Upon surrender to the
Exchange Agent of a Certificate, together with such letter of transmittal duly
executed, the holder of such
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Certificate shall be entitled to receive in exchange therefor Norwest Common
Stock and the cash in lieu of fractional shares, if any, in the amounts
provided in Section 1.6, and such Certificate shall forthwith be canceled.
Norwest shall provide the Exchange Agent with certificates for Norwest Common
Stock and an aggregate amount of cash sufficient for the payment of cash in
lieu of fractional shares, as requested by the Exchange Agent, in the amounts
provided in Section 1.6. No dividend will be disbursed with respect to the
shares of Norwest Common Stock until the holder's Shares are surrendered in
exchange therefor. If payment or delivery of Norwest Common Stock is to be
made to a person other than the person in whose name the Certificate
surrendered is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment and delivery of
Norwest Common Stock to a person other than the registered holder of the
Certificate surrendered or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until
surrendered in accordance with the provisions of this Section, each Certificate
shall represent for all purposes the right to receive the Merger Consideration
without any interest thereon.
(c) Each share of Newco's common stock, par value $1.00 per share
("Newco Common Stock"), shall be converted into one share of the Surviving
Corporation's common stock, par value $1.00 per share ("Surviving Corporation
Common Stock"). Immediately after such conversion, no shares of Newco Common
Stock shall be outstanding and Norwest shall be the sole holder of Surviving
Corporation Common Stock.
(d) After the Effective Time, the stock transfer ledger of
Victoria shall be closed and there shall be no transfers on the stock transfer
books of Victoria of the Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation, they shall be promptly presented to the Exchange
Agent and exchanged as provided in this Article.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF VICTORIA
Victoria hereby makes the representations and warranties set forth in
this Article to Norwest and Newco.
2.1 Organization and Qualification. Victoria and each of its
subsidiaries (collectively, the "Victoria Subsidiaries") is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction in which it is chartered or organized, or is a state bank, duly
organized and in good standing under the laws of the jurisdiction in which it
is chartered or organized, and Victoria is a bank holding company under the
Bank Holding
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Company Act of 1956, as amended (the "BHCA"), and in good standing under all
laws, rules and regulations applicable to bank holding companies. Each of
Victoria and the Victoria Subsidiaries has all requisite power and authority
and all necessary governmental authorizations to conduct its business as now
conducted, to own, lease and operate its properties and assets as now owned,
leased or operated and to enter into and carry out its obligations under this
Agreement, except in the case of governmental authorizations where the failure
to have such authorizations would not have a material adverse effect on the
financial condition, results of operations or business of Victoria and the
Victoria Subsidiaries taken as a whole. Victoria and each of the Victoria
Subsidiaries is duly qualified as a foreign corporation to do business, and is
in good standing, in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary, except in such jurisdictions where the failure to be
duly qualified would not, either individually or in the aggregate, have a
material adverse effect on the financial condition, results of operations or
business of Victoria and the Victoria Subsidiaries, taken as a whole. Victoria
has heretofore delivered to Norwest true and complete copies of the Articles of
Incorporation and Bylaws of Victoria and the Victoria Subsidiaries as in
existence on the date hereof. Schedule 2.1 sets forth each of the Victoria
Subsidiaries, the respective form of entity and the respective jurisdiction of
incorporation or organization. Except as set forth on Schedule 2.1, Victoria
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 except in each case in a fiduciary
capacity in the course of its trust operations, and is not, directly or
indirectly, a partner in any partnership or party to any joint venture.
2.2 Victoria Capitalization. As of the date hereof, the
authorized capital stock of Victoria consists solely of 35,000,000 shares of
Victoria Common Stock and 1,000,000 shares of preferred stock, par value $1.00
per share (the "Victoria Preferred Stock"). As of September 30, 1995, there
were issued and outstanding 8,274,640 shares of Victoria Common Stock and no
shares of Victoria Preferred Stock. No shares of either Victoria Common Stock
or Victoria Preferred Stock were held as treasury shares as of September 30,
1995. A total of 300,000 shares of Victoria Common Stock has been reserved for
issuance pursuant to the stock option plans described in this Section. All
issued shares of Victoria Common Stock are validly issued, fully paid and
nonassessable and no holder thereof is entitled to preemptive rights. As of
the date hereof, there are outstanding options (the "Victoria Options") to
purchase an aggregate of 242,203 shares of Victoria Common Stock under
Victoria's 1991 Stock Option Plan. The maximum number of shares of Victoria
Common Stock (assuming for this purpose that phantom shares and other
share-equivalents constitute Victoria Common Stock) that would be outstanding
as of the Effective Time if all options, warrants, conversion rights and other
rights with respect thereto were exercised is 8,516,843. Victoria is not a
party to, and is not aware of, any voting agreement, voting trust or similar
agreement or arrangement relating to any class or series of its capital stock
or any arrangement providing for registration rights
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with respect to any capital stock or other securities of Victoria. All
outstanding shares of capital stock of the Victoria Subsidiaries are owned by
Victoria or a wholly-owned subsidiary of Victoria, free and clear of all liens,
charges, encumbrances, adverse claims and options of any nature. Other than as
set forth in this Section, there are not now, and at the Effective Time there
will not be, any (i) shares of capital stock or other equity securities of
Victoria outstanding (other than Victoria Common Stock issued pursuant to the
exercise of Victoria Options as described herein) or (ii) outstanding options,
warrants, scrip, rights to subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any class of capital stock of Victoria, or
contracts, understandings or arrangements to which Victoria is a party, or by
which it is or may be bound, to issue additional shares of its capital stock or
options, warrants, scrip or rights to subscribe for, or securities or rights
convertible into or exchangeable for, any additional shares of its capital
stock. Since September 30, 1995, no shares of Victoria capital stock have been
purchased, redeemed or otherwise acquired, directly or indirectly, by Victoria
or any Victoria Subsidiary and, except as permitted by Section 4.1(b) no
dividends or other distributions have been declared, set aside, made or paid to
the shareholders of Victoria.
2.3 Authority Relative to the Agreement. Victoria has full
corporate power and authority to execute and deliver this Agreement and, except
for the approval by Victoria's shareholders, no further corporate proceedings
on the part of Victoria are necessary, to consummate the transactions
contemplated hereby, which have been duly and validly authorized by its Board
of Directors. This Agreement has been duly executed and delivered by Victoria
and is a duly authorized, valid, legally binding and enforceable obligation of
Victoria in accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, or other similar laws relating to
creditors' rights generally and general equitable principles, and subject to
such shareholder approvals and such approval of regulatory agencies and other
governmental authorities having authority over Victoria or any of the Victoria
Subsidiaries as may be required by statute or regulation. On or prior to the
date hereof the Board of Directors of Victoria has determined to recommend
approval of the Merger to the shareholders of Victoria and such determination
is in effect as of the date hereof.
2.4 No Approvals or Notices Required; No Conflict. Except as set
forth on Schedule 2.4, neither the execution and delivery of this Agreement nor
the performance by Victoria of its obligations hereunder, nor the consummation
of the transactions contemplated hereby by Victoria, will (a) conflict with the
Charter or Bylaws of Victoria or any of the Victoria Subsidiaries; (b) assuming
satisfaction of the requirements set forth in clause (c) below, violate any
provision of law applicable to Victoria or any of the Victoria Subsidiaries;
(c) except for (i) requirements of Federal and state securities law, (ii)
requirements of Federal and state banking law, (iii) requirements of notice
filings in such foreign jurisdictions as may be applicable, and (iv) the filing
of Articles of Merger in accordance with the TBCA, require
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any consent or approval of, or filing with or notice to, any public body or
authority, domestic or foreign, under any provision of law applicable to
Victoria or any of the Victoria Subsidiaries; or (d) require any consent,
approval or notice under, or violate, breach, be in conflict with or constitute
a default (or an event that, with notice or lapse of time or both, would
constitute a default) under, or permit the termination of any provision of, or
result in the creation or imposition of any lien upon any properties, assets or
business of Victoria or any of the Victoria Subsidiaries under, any note, bond,
indenture, mortgage, deed of trust, lease, franchise, permit, authorization,
license, contract, instrument or other agreement or commitment or any order,
judgment or decree to which Victoria or any of the Victoria Subsidiaries is a
party or by which Victoria or any of the Victoria Subsidiaries or any of its or
their assets or properties is bound or encumbered, except those that have
already been given, obtained or filed, and except in any of the cases
enumerated in clauses (b) through (d) above, those that, in the aggregate,
would not have a material adverse effect on the financial condition, results of
operations or business of Victoria and the Victoria Subsidiaries, taken as a
whole.
2.5 Regulatory Reports and Agreements. Since December 31, 1990,
each of Victoria and the Victoria Subsidiaries has filed all applications,
reports, registrations and statements, together with any amendments required to
be made thereto, that are required to be filed with the Federal Deposit
Insurance Corporation, the Board of Governors of the Federal Reserve System,
the Office of the Comptroller of the Currency or any state banking regulatory
agency (collectively, the "Banking Regulators") or any other regulatory
authority having jurisdiction over Victoria and the Victoria Subsidiaries.
Neither Victoria nor any of the Victoria Subsidiaries is a party to any written
agreement or memorandum of understanding with, or a party to any commitment
letter or similar undertaking to, or is subject to any order or directive by,
or is a recipient of any extraordinary supervisory letter from, or has adopted
any board resolutions at the request of, any Banking Regulator which restricts
materially the conduct of its business, or in any manner relates to its capital
adequacy, its credit policies or its management, nor has Victoria or any of the
Victoria Subsidiaries been advised by any Banking Regulator that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such agreement, memorandum of understanding,
commitment letter or similar undertaking, order, directive or extraordinary
supervisory letter, or any such board resolutions.
2.6 SEC Filings. Since December 31, 1990, each of Victoria and
the Victoria Subsidiaries have filed all reports, registration statements and
other filings, together with any amendments required to be made with respect
thereto, that they have been required to file with the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1993, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All reports, registration statements and other filings
(including all notes,
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exhibits and schedules incorporated by reference therein) filed by Victoria
with the SEC since December 31, 1990 through the date of this Agreement,
together with any amendments thereto, are sometimes collectively referred to as
the "Victoria SEC Filings." Victoria has heretofore delivered to Norwest
copies of the Victoria SEC Filings.
2.7 Commitments and Contracts. Except as set forth in Schedule
2.7, neither Victoria nor any Victoria Subsidiary is a party or subject to any
of the following (whether written or oral, express or implied):
(a) 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 which are terminable at will by
Victoria or such Victoria Subsidiary) obligating Victoria to the payment of
$25,000 or more individually; provided, however, that any such contracts or
understandings not listed on Schedule 2.7 will exceed $250,000 in the
aggregate;
(b) in addition to the plans listed on Schedule 2.13(a), 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
obligating Victoria to the payment of $25,000 or more individually or $100,000
in the aggregate;
(c) any labor contract or agreement with any labor union;
(d) any contract containing covenants which limit the ability of
Victoria or any Victoria Subsidiary to compete in any line of business or which
involve any restriction of the geographical area in which Victoria or any
Victoria Subsidiary may carry on its business (other than as may be required by
law or applicable regulatory authorities);
(e) any other contract or agreement which is a "material contract"
within the meaning of Item 601(b)(10) of Regulation S-K;
(f) any lease with annual rental payments by Victoria or any
Victoria Subsidiary aggregating $75,000 or more;
(g) any agreement or commitment with respect to the Community
Reinvestment Act with any state or federal bank regulatory authority or any
other party; or
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(h) any agreement, contract or understanding with any current or
former director, officer, employee, consultant, or financial adviser providing
for any rights of indemnification in favor of such person or entity
constituting material obligations on the part of Victoria.
2.8 Victoria Financial Statements. The consolidated statements of
financial condition of Victoria and the Victoria Subsidiaries as of December
31, 1994 and 1993 and related consolidated statements of income, stockholders'
equity and cash flows for the three years ended December 31, 1994, together
with the notes thereto, certified by Xxxxxx Xxxxxxxx LLP and the unaudited
consolidated balance sheets of Victoria and the Victoria Subsidiaries as of
September 30, 1995 and the related unaudited consolidated statements of income
and cash flows for the nine months ended September 30, 1995 included in the
Victoria SEC Filings (collectively, the "Victoria Financial Statements") have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except, in the case of any financial statements
covering less than a fiscal year, for normal recurring adjustments), and
present fairly the consolidated financial position of Victoria and the Victoria
Subsidiaries at the dates stated therein and the consolidated results of
operations, changes in financial position and cash flows of Victoria and the
Victoria Subsidiaries for the periods stated therein.
2.9 Proxy Statement and Other Filings. None of the information
regarding Victoria and the Victoria Subsidiaries set forth in (a) the Proxy
Statement (hereinafter defined), (b) the Registration Statement (hereinafter
defined) and (c) any other documents to be filed with the SEC, the Banking
Regulators or any other regulatory authority in connection with the
transactions contemplated hereby will, at the respective times such documents
are filed with the SEC, the Banking Regulators or any other regulatory
authority and, in the case of the Proxy Statement, when mailed and, in the case
of the Registration Statement, when it becomes effective, be false or
misleading with respect to any material fact, or omit to state any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading 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
Section 6.4, be false or misleading with respect to any material fact, or omit
to state any material fact required to be stated therein or necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for such meeting. All documents which Victoria and
the Victoria Subsidiaries are responsible for filing with the SEC, the Banking
Regulators or any other regulatory authority in connection with the Merger will
comply as to form in all material respects with the provisions of applicable
law.
2.10 Absence of Certain Changes. Since December 31, 1994, except
as contemplated by this Agreement or disclosed in the Victoria SEC Filings
filed with the SEC since that date, Victoria and the Victoria Subsidiaries have
conducted their business only in the ordinary and usual course, and there has
not been any change in the financial condition, results
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of operations or business of Victoria or any Victoria Subsidiary which has had,
or may resonably be expected to have, a material adverse effect on the
financial condition, results of operation or business of Victoria and the
Victoria Subsidiaries, taken as a whole.
2.11 Litigation. Victoria has made available to Norwest copies of
(i) all attorney responses to the request of the independent auditors for
Victoria with respect to loss contingencies as of December 31, 1994 in
connection with the Victoria financial statements included in the Victoria SEC
Filings, and (ii) a written list of pending material legal and regulatory
proceedings filed against Victoria or any Victoria Subsidiary since said date
and before the date of this Agreement. There are no claims, actions, suits,
investigations or proceedings pending or, to the knowledge of Victoria,
threatened against or affecting Victoria or any of the Victoria Subsidiaries or
any of their respective properties at law or in equity, or any of their
respective employee benefit plans or fiduciaries of such plans, or before or by
any federal, state, municipal or other governmental agency or authority, or
before any arbitration board or panel, wherever located, that individually or
in the aggregate if adversely determined would have, or may reasonably be
expected to have, a material adverse effect on the financial condition, results
of operations or business of Victoria and the Victoria Subsidiaries, taken as a
whole.
2.12 Tax Matters. Each of Victoria and the Victoria Subsidiaries
has filed all federal and state, and all material 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 Victoria and the Victoria Subsidiaries for the fiscal year ended
December 31, 1991, 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 2.11, (i) neither Victoria nor
any Victoria Subsidiary is a party to any pending action or proceeding, nor is
any such action or proceeding threatened to the knowledge of Victoria by any
governmental authority, for the assessment or collection of taxes, interest,
penalties, assessments or deficiencies and (ii) except as previously disclosed
to Norwest, 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 Victoria or any Victoria Subsidiary which has not
been settled, resolved and fully satisfied. Each of Victoria and the Victoria
Subsidiaries has paid all taxes owed or which it is required to withhold from
amounts owing to employees, creditors or other third parties. The consolidated
balance sheet as of September 30, 1995 referred to in Section 2.8, includes
adequate provision for all accrued but unpaid federal, state, county, local and
foreign taxes, interest, penalties, assessments or deficiencies of Victoria and
the Victoria Subsidiaries with respect to all periods through the date thereof.
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2.13 Employee Benefit Plan Matters. (a) The only "employee
benefit plans" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), for which Victoria or any
Victoria Subsidiary acts as the plan sponsor as defined in ERISA Section
3(16)(B), and with respect to which any liability under ERISA or otherwise
exists or may be incurred by Victoria or any Victoria Subsidiary are those set
forth on Schedule 2.13(a) (the "Plans"). No Plan is a "multi-employer plan"
within the meaning of Section 3(37) of ERISA.
(b) Each Plan is and has been in all material respects operated
and administered in accordance with its provisions and applicable law. Except
as set forth on Schedule 2.13(b), Victoria or the Victoria subsidiaries have
received favorable determination letters from the Internal Revenue Service
under the provisions of the Tax Equity and Fiscal Responsibility Act ("TEFRA"),
the Deficit Reduction Act ("DEFRA") and the Retirement Equity Act ("REA") for
each of the Plans to which the qualification requirements of Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), apply. To the
knowledge of Victoria, each Plan which is subject to the qualification
provisions of Section 401(a) of the Code is "qualified" within the meaning of
Section 401(a) of the Code and that each related trust is not exempt from
taxation under Section 501(a) of the Code.
(c) Except as set forth on Schedule 2.13 (c), the present value of
all benefits vested and all benefits accrued under each Plan which is subject
to Title IV of ERISA did not, in each case, as determined for purposes of
reporting on Schedule B to the Annual Report on Form 5500 of each such Plan as
of the end of the most recent Plan year exceed the value of the assets of the
Plan allocable to such vested or accrued benefits.
(d) Except as disclosed in Schedule 2.13(d), and to the knowledge
of Victoria, 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 for
which an exemption under Section 408 of ERISA or Section 4975 of the Code is
inapplicable, or violated any of the fiduciary standards under Part 4 of Title
I of ERISA which could subject, to the knowledge of Victoria, such Plan or
trust, or any trustee, fiduciary or administrator thereof, or any party dealing
with any such Plan or trust, to the tax or penalty on prohibited transactions
imposed by said Section 4975 or would result in material liability to Victoria
and the Victoria Subsidiaries, taken as a whole.
(e) No Plan which is 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.
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(f) No Plan or any trust created thereunder has incurred any
"accumulated funding deficiency", as such term is defined in Section 412 of the
Code (whether or not waived), during the last five Victoria Plan years which
would result in a material liability to Victoria and the Victoria Subsidiaries
taken as a whole.
(g) Except as disclosed in Schedule 2.13(g), neither the execution
and delivery of this Agreement nor the consummation of the transactions
contemplated hereby and thereby will (i) 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 Victoria or any Victoria Subsidiary under any Plan or otherwise,
(ii) materially increase any benefits otherwise payable under any Plan or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits to any material extent.
(h) Neither Victoria nor any Victoria Subsidiary has any
obligation to provide welfare benefits to any of its former employees, except
to the extent required by Section 4980B of the Code and Sections 601 through
608 of ERISA (collectively, "COBRA").
2.14 Environmental Liability. There is no legal, administrative,
or other proceeding, claim, or action of any nature seeking the imposition, or
that could reasonably be expected to result in the imposition, on Victoria or
any of the Victoria Subsidiaries of any liability arising from the release of
hazardous substances 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,
pending or, to the knowledge of Victoria, threatened against Victoria or any of
the Victoria Subsidiaries, the result of which has had or could reasonably be
expected to have a material adverse effect on the financial condition, results
of operations or business of Victoria and the Victoria Subsidiaries, taken as a
whole; to the knowledge of Victoria, there is no reasonable basis for any such
proceeding, claim or action; and, to the knowledge of Victoria, neither
Victoria nor any of the Victoria Subsidiaries is subject to any order,
judgment, or decree by or with any court or governmental authority imposing any
such environmental liability.
2.15 Properties and Leases. Except as may be reflected in the
Victoria Financial Statements and except for any lien for current taxes not yet
delinquent, Victoria or one of the Victoria Subsidiaries 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
Victoria's most recent consolidated balance sheet included in the Victoria SEC
Filings and all real and personal property acquired since the date of such
consolidated balance sheet, except such real and personal property as has been
disposed of in the ordinary course of business. All leases of real property
and all other leases material to Victoria or any of the Victoria Subsidiaries
pursuant to which Victoria or any of the Victoria Subsidiaries, as lessee,
leases real or
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personal property, are valid and effective in accordance with their respective
terms, and there is not, under any of such leases, any material existing
default by Victoria or any of the Victoria Subsidiaries or any event which,
with notice or lapse of time or both, would constitute such a material default.
To the knowledge of Victoria, substantially all Victoria's and each Victoria
Subsidiary's buildings and equipment in regular use have been well maintained
and are in good and serviceable condition, reasonable wear and tear excepted.
2.16 Certain Fees. Except as set forth in Schedule 2.16, neither
Victoria nor any of its officers, directors or employees, on behalf of Victoria
or any of the Victoria Subsidiaries or its or their respective Boards of
Directors (or any committee thereof), has employed any financial advisor,
broker or finder or incurred any liability for any financial advisory,
brokerage or finders' fees or commissions in connection with the transactions
contemplated hereby.
2.17 Compliance with Law. Victoria and each of the Victoria
Subsidiaries is in compliance with all applicable laws, judgments, orders,
rules and regulations, domestic and foreign, except where failure to be in such
compliance would not have a material adverse effect on the financial condition,
results of operations or business of Victoria and the Victoria Subsidiaries,
taken as a whole.
2.18 No Defaults. Neither Victoria nor any of the Victoria
Subsidiaries is in default, nor has any event occurred which, with the passage
of time or the giving of notice or both, would constitute a default, in any
material respect, 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 on the financial
condition, results of operations or business of Victoria and the Victoria
Subsidiaries, taken as a whole. To Victoria's knowledge, all parties with
whom Victoria or any Victoria Subsidiary has material leases, agreements or
contracts or who owe to Victoria or any Victoria Subsidiary material
obligations other than with respect to those arising in the ordinary course of
the banking business of the Victoria Subsidiaries are in compliance therewith
in all material respects.
2.19 Insurance. Victoria and each of the Victoria Subsidiaries is
presently insured or self insured, and during each of the past five calendar
years 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.
2.20 This section intentionally left blank.
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2.21 Section 368 Representations. To the knowledge of Victoria:
(a) There is no plan or intention by any Victoria shareholder who
owns 5% or more of the total number of shares of Victoria Common Stock (a "5%
Shareholder"), and there is no plan or intention by any of the remaining
Victoria shareholders to sell or otherwise dispose of a number of shares of
Norwest Common Stock received pursuant to the Merger that would (i) reduce the
Victoria shareholders' holdings of Norwest Common Stock to a number of shares
having a total fair market value at the Effective Time of less than 50% of the
total fair market value of all of Victoria's capital stock outstanding
immediately prior to the Effective Time or (ii) reduce the 5% Shareholders'
holdings of Norwest Common Stock to a number of shares having a total fair
market value at the Effective Time of less than 50% of the total fair market
value of all Victoria's capital stock held by the 5% Shareholders immediately
prior to the Effective Time. For purposes of this Section, shares of
Victoria's capital stock sold, redeemed or otherwise disposed of prior or
subsequent to and as a part of the overall transaction contemplated by the
Merger will be considered to be capital stock of Victoria outstanding
immediately prior to the Merger;
(b) Norwest will not assume any debts or obligations of the
holders of the Shares as part of the Merger;
(c) There have not been any sales or redemptions of Victoria's
capital stock in contemplation of the Merger;
(d) The liabilities of Victoria assumed by Norwest as a part of
the Merger and the liabilities to which the transferred assets of Victoria are
subject were incurred by Victoria in the ordinary course of its business;
(e) Victoria and its shareholders will pay their own expenses
which are incurred in connection with the Merger;
(f) Victoria has not disposed of any assets (either as a dividend
or otherwise) constituting more than 10% of the fair market value of all of its
assets (ignoring any liabilities) at any time either during the past twelve
months or in contemplation of the Merger;
(g) Victoria is not an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code; and
(h) Victoria is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
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2.22 Administration of Trust Accounts. Victoria and each Victoria
Subsidiary has properly administered in all respects material and which could
reasonably be expected to be material to the financial condition of Victoria
and the Victoria Subsidiaries taken as a whole all accounts for which it acts
as a fiduciary, including but not limited to accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing documents and
applicable state and federal law and regulation and common law. Neither
Victoria, any Victoria Subsidiary, nor any director, officer or employee of
Victoria or any Victoria Subsidiary has committed breaches of trust with
respect to such fiduciary accounts which are material to or could reasonably be
expected to be material to the business, financial condition or results of
operations of Victoria and the Victoria 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.
2.23 Material Interests of Certain Persons. Except as set forth
on Schedule 2.23, to the knowledge of Victoria no officer or director of
Victoria or any Victoria Subsidiary, or any "associate" (as such term is
defined in Rule l4a-1 under the Exchange Act) of any such officer or director,
has any interest in any material contract or property (real or personal),
tangible or intangible, used in or pertaining to the business of Victoria or
any Victoria Subsidiary.
Schedule 2.23 sets forth as of September 30, 1995 a correct and
complete list of (i) any loan from Victoria to any present officer, director,
employee or any associate of Victoria or any Victoria Subsidiary, or related
interest of any such person, and (ii) any loan from any Victoria Subsidiary to
any such person which was required under Regulation O of the Federal Reserve
Board to be approved by or reported to Victoria's or such Victoria Subsidiary's
Board of Directors.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NORWEST
Norwest hereby makes the representations and warranties set forth in
this Article to Victoria.
3.1 Organization and Qualification. Norwest and each of its
Significant Subsidiaries (as defined in Regulation S-X promulgated by the SEC)
(individually a "Norwest Subsidiary" and collectively, the "Norwest
Subsidiaries") is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction in which it is chartered or
organized, or is a national bank, duly organized and in good standing under the
laws of the jurisdiction in which it is chartered or organized, and Norwest is
a bank holding company under the BHCA and in
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good standing under all laws, rules and regulations applicable to bank holding
companies. Norwest Subsidiaries has all requisite power and authority and all
necessary governmental authorizations to conduct its business as now conducted,
to own, lease and operate its properties and assets as now owned, leased or
operated and to enter into and carry out its obligations under this Agreement,
except where the failure to have such governmental authority would not have a
material adverse effect on the financial condition, results of operations or
business of Norwest and its subsidiaries taken as a whole. Norwest and each of
the Norwest Subsidiaries is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except in such jurisdictions where the
failure to be duly qualified does not and would not, either individually or in
the aggregate, have a material adverse effect on the financial condition,
results of operations or business of Norwest and its subsidiaries taken as a
whole. Norwest has heretofore delivered to Victoria true and complete copies
of Norwest's Certificate of Incorporation and Bylaws as in existence on the
date hereof. Schedule 3.1 sets forth each of the Norwest Subsidiaries, the
respective form of entity and the respective jurisdiction of incorporation or
organization.
3.2 Norwest Capitalization. The authorized capital stock of
Norwest consists of (i) 5,000,000 shares of Preferred Stock, without par value,
of which as of the close of business on September 30, 1995, 1,127,125 shares of
10.24% Cumulative Preferred Stock at $100 stated value, 980,000 shares of
Cumulative Tracking Preferred Stock, 13,311 shares of ESOP Cumulative
Convertible Preferred Stock, at $1,000 stated value, and 33,732 shares of 1995
ESOP Cumulative Convertible Preferred Stock, at $1,000 stated value, were
outstanding; (ii) 4,000,000 shares of Preference Stock, without par value, of
which as of the close of business on September 30, 1995, no shares were
outstanding; and (iii) 500,000,000 shares of Common Stock, $1-2/3 par value, of
which as of the close of business on September 30, 1995, 339,434,003 shares
were outstanding and 3,265,458 shares were held in the treasury. All of the
outstanding shares of capital stock of Norwest have been duly and validly
authorized and issued and are fully paid and nonassessable. The shares of
Norwest Common Stock to be issued by Norwest to the shareholders of Victoria
pursuant to this Agreement will, on such issuance and delivery to said
shareholders pursuant to this Agreement, be duly authorized, validly issued,
fully paid and nonassessable. The shares of Norwest Common Stock to be
delivered to the shareholders of Victoria pursuant to this Agreement are and
will be free of any preemptive rights of the shareholders of Norwest.
3.3 Authority Relative to the Agreement. Norwest has full
corporate power and authority to execute and deliver this Agreement and no
further corporate proceedings on the part of Norwest are necessary to
consummate the transactions contemplated hereby, which have been duly and
validly authorized by its Board of Directors. This Agreement has been
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duly executed and delivered by Norwest and is a duly authorized, valid, legally
binding and enforceable obligation of Norwest in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium, or
other similar laws relating to creditors' rights generally and general
equitable principles, and subject to such approval of regulatory agencies and
other governmental authorities having authority over Norwest or any of the
Norwest Subsidiaries as may be required by statute or regulation.
3.4 No Approvals or Notices Required; No Conflict. Except as set
forth on Schedule 3.4, neither the execution and delivery of this Agreement nor
the performance by Norwest of its obligations hereunder, nor the consummation
of the transactions contemplated hereby by Norwest, will (a) conflict with the
Charter or Bylaws of Norwest or any of the Norwest Subsidiaries; (b) assuming
satisfaction of the requirements set forth in clause (c) below, violate any
provision of law applicable to Norwest or any of the Norwest Subsidiaries; (c)
except for (i) requirements of Federal and state securities law, (ii)
requirements of Federal and state banking law, (iii) requirements of notice
filings in such foreign jurisdictions as may be applicable, and (iv) the filing
of Articles of Merger in accordance with the TBCA, require any consent or
approval of, or filing with or notice to, any public body or authority,
domestic or foreign, under any provision of law applicable to Norwest or any of
the Norwest Subsidiaries; or (d) require any consent, approval or notice under,
or violate, breach, be in conflict with or constitute a default (or an event
that, with notice or lapse of time or both, would constitute a default) under,
or permit the termination of any provision of, or result in the creation or
imposition of any lien upon any properties, assets or business of Norwest or
any of the Norwest Subsidiaries under, any note, bond, indenture, mortgage,
deed of trust, lease, franchise, permit, authorization, license, contract,
instrument or other agreement or commitment or any order, judgment or decree to
which Norwest or any of the Norwest Subsidiaries is a party or by which Norwest
or any of the Norwest Subsidiaries or any of its or their assets or properties
is bound or encumbered, except those that have already been given, obtained or
filed, and except in any of the cases enumerated in clauses (b) through (d)
above, those that, in the aggregate, would not have a material adverse effect
on the financial condition, results of operations or business of Norwest and
the Norwest Subsidiaries, taken as a whole.
3.5 Regulatory Reports and Agreements. Since December 31, 1990,
each of Norwest and the Norwest Subsidiaries has filed all applications,
reports, registrations and statements, together with any amendments required to
be made thereto, that are required to be filed with the Banking Regulators or
any other regulatory authority having jurisdiction over Norwest and the Norwest
Subsidiaries. Neither Norwest nor any of the Norwest Subsidiaries is a party to
any written agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter from,
or has adopted any board resolutions at
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the request of, any Banking Regulator which restricts materially the conduct of
its business, or in any manner relates to its capital adequacy, its credit
policies or its management, nor has Norwest or any of the Norwest Subsidiaries
been advised by any Banking Regulator that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such agreement, memorandum of understanding, commitment letter or similar
undertaking, order, directive or extraordinary supervisory letter, or any such
board resolutions.
3.6 SEC Filings. Since December 31, 1990, each of Norwest and the
Norwest Subsidiaries have filed all reports, registration statements and other
filings, together with any amendments required to be made with respect thereto,
that they have been required to file with the SEC under the Securities Act and
the Exchange Act. All reports, registration statements and other filings
(including all notes, exhibits and schedules thereto and documents incorporated
by reference therein) filed by Norwest with the SEC since December 31, 1990
through the date of this Agreement, together with any amendments thereto, are
sometimes collectively referred to as the "Norwest SEC Filings. "Norwest has
heretofore delivered to Victoria copies of Norwest's Form 10-K for the year
ended December 31, 1994 and all of Norwest's Forms 10-Q filed with the SEC
since December 31, 1994, through the date of this Agreement.
3.7 Material Contracts. Except as set forth in Schedule 3.7,
neither Norwest nor any Norwest Subsidiary is a party or subject to any of the
following (whether written or oral, express or implied):
(a) any labor contract or agreement with any labor union;
(b) any contract not made in the ordinary course of business
containing covenants which materially limit the ability of Norwest or any
Norwest 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, Norwest or any Norwest Subsidiary may carry on its business
(other than as may be required by law or applicable regulatory authorities);
(c) any other contract or agreement which is a "material contract"
within the meaning of Item 601(b)(10) of Regulation S-K.
As of the date hereof, none of the Norwest subsidiary banks located in the
State of Texas has an unsatisfactory rating with respect to the Community
Reinvestment Act.
3.8 Norwest Financial Statements. The consolidated statements of
financial condition of Norwest Subsidiaries as of December 31, 1994 and 1993
and
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related consolidated statements of income, stockholders' equity and cash flows
for the three years ended December 31, 1994, together with the notes thereto,
certified by KPMG Peat Marwick LLP and the unaudited consolidated balance
sheets of Norwest and the Norwest Subsidiaries as of September 30, 1995 and the
related unaudited consolidated statements of income and cash flows for the nine
months ended September 30, 1995 included in the Norwest SEC Filings
(collectively, the "Norwest Financial Statements") have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis (except, in the case of any financial statements covering less
than a fiscal year, for normal recurring adjustments), and present fairly the
consolidated financial position of Norwest and the Norwest Subsidiaries at the
dates stated therein and the consolidated results of operations, changes in
financial position and cash flows of Norwest and the Norwest Subsidiaries for
the periods stated therein.
3.9 Registration Statement and Other Filings. None of the
information regarding Norwest and the Norwest Subsidiaries supplied or to be
supplied by Norwest for inclusion in (a) the Registration Statement, (b) the
Proxy Statement, and (c) any other documents to be filed with the SEC, the
Banking Regulators or any other regulatory authority in connection with the
transactions contemplated hereby will, at the respective times such documents
are filed with the SEC, the Banking Regulators or any other regulatory
authority and, in the case of the Registration Statement, when it becomes
effective and, in the case of the Proxy Statement, when mailed, be false or
misleading with respect to any material fact, or omit to state any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading 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
Section 6.4, be false or misleading with respect to any material fact, or omit
to state any material fact required to be stated therein or necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for such meeting. All documents which Norwest and
the Norwest Subsidiaries are responsible for filing with the SEC, the Banking
Regulators or any other regulatory authority in connection with the Merger will
comply as to form in all material respects with the provisions of applicable
law.
3.10 Absence of Certain Changes. Since December 31, 1994, except
as contemplated by this Agreement or disclosed in the Norwest SEC Filings filed
with the SEC since that date, Norwest and the Norwest Subsidiaries have
conducted their business only in the ordinary and usual course, and there has
not been any change in the financial condition, results of operations or
business of Norwest or any Norwest 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 Norwest and the Norwest Subsidiaries,
taken as a whole.
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3.11 Litigation. There are no claims, actions, suits,
investigations or proceedings pending or, to the knowledge of Norwest,
threatened against or affecting Norwest or any of the Norwest Subsidiaries or
any of their respective properties at law or in equity, or any of their
respective employee benefit plans or fiduciaries of such plans, or before or by
any federal, state, municipal or other governmental agency or authority, or
before any arbitration board or panel, wherever located, that individually or
in the aggregate if adversely determined would have, or may reasonably be
expected to have, a material adverse effect on the financial condition, results
of operations or business of Norwest and the Norwest Subsidiaries, taken as a
whole.
3.12 Tax Matters. Each of Norwest and the Norwest 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 Norwest and the Norwest
Subsidiaries for the fiscal year ended December 31, 1979, 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 3.12, (i) neither Norwest nor any Norwest Subsidiary is a party to
any pending action or proceeding, nor to Norwest'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 which
could reasonably be expected to have any material adverse effect on Norwest 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 Norwest or any
Norwest Subsidiary which has not been settled, resolved and fully satisfied, or
adequately reserved for. Each of Norwest and the Norwest Subsidiaries has paid
all taxes owed or which it is required to withhold from amounts owing to
employees, creditors or other third parties.
3.13 Employee Benefit Plan Matters. (a) As of September 30, 1995,
the only "employee benefit plans" within the meaning of Section 3(3) of ERISA
for which Norwest or any Norwest Subsidiary acts as plan sponsor as defined in
ERISA Section 3(16)(B) with respect to which any liability under ERISA or
otherwise exists or may be incurred by Norwest or any Norwest Subsidiary are
those set forth on Schedule 3.13(a) (the "Norwest Plans"). No Norwest Plan is
a "multi-employer plan" within the meaning of Section 3(37) of ERISA.
(b) Each Norwest Plan is and has been in all material respects
operated and administered in accordance with its provisions and applicable law.
Except as set forth on Schedule 3.13(b), Norwest or the Norwest Subsidiaries
have received favorable determination
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letters from the Internal Revenue Service under the provisions of TEFRA, DEFRA
AND REA for each of the Norwest Plans to which the qualification requirements
of Section 401(a) of the Code apply. Norwest knows of no reason that any
Norwest Plan which is subject to the qualification provisions of Section 401(a)
of the Code is not "qualified" within the meaning of Section 401(a) of the Code
and that each related trust is not exempt from taxation under Section 501(a) of
the Code.
(c) The present value of all benefits vested and all benefits
accrued under each Norwest Plan which is subject to Title IV of ERISA did not,
in each case, as determined for purposes of reporting on Schedule B to the
Annual Report on Form 5500 of each such Norwest Plan as of the end of the most
recent Plan year, exceed the value of the assets of the Norwest Plans allocable
to such vested or accrued benefits.
(d) Except as set forth on Schedule 3.13(d), and to the best
knowledge of Norwest, no Norwest 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 fiduciary standards under Part 4 of Title I of ERISA,
which could subject, to the best knowledge of Norwest, such Norwest Plan or
trust, or any trustee, fiduciary or administrator thereof, or any party dealing
with any such Norwest Plan or trust, to the tax or penalty on prohibited
transactions imposed by said Section 4975 or would result in material liability
to Norwest and its subsidiaries taken as a whole.
(e) Except as set forth on Schedule 3.13(e), no Norwest Plan which
is 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 Norwest Plan, other than those
events which may result from the transactions contemplated by this Agreement
and the Merger Agreement.
(f) No Norwest Plan or any trust created thereunder has incurred
any "accumulated funding deficiency", as such term is defined in Section 412 of
the Code (whether or not waived), during the last five Norwest Plan years which
would result in a material liability.
(g) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby and thereby will (i)
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 Norwest under any Norwest Plan or
otherwise, (ii) materially increase any benefits otherwise payable under any
Norwest Plan or (iii) result in the acceleration of the time of payment or
vesting of any such benefits to any material extent.
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3.14 Environmental Liability. There is no legal, administrative,
or other proceeding, claim, or action of any nature seeking the imposition, or
that could reasonably be expected to result in the imposition, on Norwest or
any of the Norwest Subsidiaries of any liability arising from the release of
hazardous substances 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,
pending or, to the knowledge of Norwest, threatened against Norwest or any of
the Norwest Subsidiaries, the result of which has had or could reasonably be
expected to have a material adverse effect on the financial condition, results
of operations or business of Norwest and the Norwest Subsidiaries, taken as a
whole; to the knowledge of Norwest, there is no reasonable basis for any such
proceeding, claim or action; and, to the knowledge of Norwest, neither Norwest
nor any of the Norwest Subsidiaries is subject to any order, judgment, or
decree by or with any court or governmental authority imposing any such
environmental liability.
3.15 Properties and Leases. Except as may be reflected in the
Norwest Financial Statements and except for any lien for current taxes not yet
delinquent, Norwest or one of the Norwest Subsidiaries 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 Norwest's most
recent consolidated balance sheet included in the Norwest SEC Filings and all
real and personal property acquired since the date of such consolidated balance
sheet, except such real and personal property as has been disposed of in the
ordinary course of business. All leases of real property and all other leases
material to Norwest or any of the Norwest Subsidiaries pursuant to which
Norwest or any of the Norwest Subsidiaries, as lessee, leases real or personal
property, are valid and effective in accordance with their respective terms,
and there is not, under any such leases, any material existing default by
Norwest or any of the Norwest Subsidiaries or any event which, with notice or
lapse of time or both, would constitute such a material default. Substantially
all Norwest's and each Norwest Subsidiary's buildings and equipment in regular
use have been well maintained and are in good and serviceable condition,
reasonable wear and tear excepted.
3.16 Certain Fees. Neither Norwest nor any of its officers,
directors or employees, on behalf of Norwest or any of the Norwest Subsidiaries
or its or their respective Boards of Directors (or any committee thereof), has
employed any financial advisor, broker or finder or incurred any liability for
any financial advisory, brokerage or finders' fees or commissions in connection
with the transactions contemplated hereby.
3.17 Compliance with Law. Norwest and each of the Norwest
Subsidiaries is in compliance with all applicable laws, judgments, orders,
rules and regulations, domestic and foreign, except where failure to be in such
compliance would not have a material adverse
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effect on the financial condition, results of operations or business of Norwest
and the Norwest Subsidiaries, taken as a whole.
3.18 No Defaults. Neither Norwest nor any of the Norwest
Subsidiaries is in default, nor has any event occurred which, with the passage
of time or the giving of notice or both, would constitute a default, in any
material respect, 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 on the financial
condition, results of operations or business of Norwest and the Norwest
Subsidiaries, taken as a whole. To Norwest's knowledge, all parties with whom
Norwest or any Norwest Subsidiary has material leases, agreements or contracts
or who owe to Norwest or any Norwest Subsidiary material obligations other than
with respect to those arising in the ordinary course of the banking business of
the Norwest Subsidiaries are in compliance therewith in all material respects.
3.19 Insurance. Norwest and each of the Norwest Subsidiaries is
presently insured or self insured, and during each of the past five calendar
years 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.
ARTICLE IV
COVENANTS OF VICTORIA
4.1 Conduct of Business. Victoria covenants and agrees that, from
the date of this Agreement until the Effective Time, unless Norwest shall
otherwise agree in writing or as otherwise expressly contemplated by this
Agreement:
(a) The business of Victoria and the Victoria Subsidiaries shall
be conducted only in, and Victoria and the Victoria Subsidiaries shall not take
any action except in, the ordinary course of business and consistent with past
practice. Victoria and each Victoria Subsidiary will: (i) maintain its
corporate existence in good standing except as set in Schedule 4.1(a); (ii)
extend credit in accordance with existing lending policies, except that it
shall not, without the prior written consent of Norwest (which consent
requirement shall be deemed to be waived as to any loan approval request to
which Norwest has made no response by the end of the first business day
following the day of receipt of the request by a representative designated by
Norwest in writing), (A) make any extensions of credit aggregating in excess of
$500,000 to a person or entity that is not a borrower as of the date hereof,
(B) engage in any loan transaction or series of contemporaneous loan
transactions involving an aggregate of more than $250,000 with any
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borrower who has aggregate extensions of credit in excess of $1,000,000 as of
the date hereof, or (C) engage in any loan transaction or series of
contemporaneous loan transactions involving an aggregate of more than $250,000
with any borrower who has an extension of credit on Victoria's watch list on or
after the date hereof; (iii) maintain in all material respects business and
accounting records in accordance with the accounting principles and practices
used for the Victoria Financial Statements, except for changes in such
principles and practices required under generally accepted accounting
principles;(iv) use commercially reasonable efforts to maintain its properties
in good repair and condition, ordinary wear and tear excepted; (v) use
commercially reasonable efforts to maintain in all material respects presently
existing insurance coverage; (vi) use all commercially reasonable efforts to
preserve its business organization intact, to keep the services of its present
principal employees and to preserve its goodwill and the goodwill of its
suppliers, customers and others having business relationships with it; (vii)
use its commercially reasonable efforts to obtain any approvals or consents
required to maintain existing real property leases, material contracts and
other contracts reasonably identified by Norwest in effect following the
Merger; (viii) comply in all material respects with all laws, regulations,
ordinances, codes, orders, licenses and permits applicable to the properties
and operations of Victoria and each Victoria Subsidiary the non-compliance with
which reasonably could be expected to have a material adverse effect on
Victoria and the Victoria Subsidiaries, taken as a whole; (ix) permit Norwest
and its representatives (including KPMG Peat Marwick LLP) to examine its and
its subsidiaries books, records and properties and to interview officers,
employees and agents at all reasonable times and in a reasonable manner when it
is open for business. No such examination by Norwest 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
Victoria herein expressed.
(b) Victoria shall not directly or indirectly do any of the
following: (i) issue, sell, pledge, dispose of or encumber, or permit any
Victoria Subsidiary to issue, sell, pledge, dispose of or encumber, (A) any
capital stock of Victoria or any Victoria Subsidiary except upon the exercise
of Victoria Options outstanding as of the date of this Agreement or (B) other
than in the ordinary course of business and consistent with past practice and
not relating to the borrowing of money or any assets of Victoria or any
Victoria Subsidiary; (ii) amend or propose to amend the respective Charters or
Bylaws of Victoria or any Victoria Subsidiary, (iii) split, combine or
reclassify any outstanding capital stock, or declare, set aside or pay any
dividend payable in stock or any extraordinary dividend payable in cash or
other property with respect to its capital stock whether now or hereafter
outstanding, provided, however, that between the date hereof and the Effective
Time, Xxxxxxxx xxx (A) pay the regular cash dividend on Victoria Common Stock
in the amount of $0.16 per share in the fourth quarter of 1995, (B) declare and
pay regular cash dividends on Victoria Common Stock in amounts not to exceed
$0.16 per share in each of the first two quarters of 1996, provided, however,
that the shareholders of Victoria shall be entitled to either a dividend on
Victoria Common Stock or
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Xxxxxxx Xxxxxx Stock, but not both, in the calendar quarter in which the
Closing shall accur, (C) declare and pay a special dividend on Victoria Common
Stock in an amount not to exceed $0.09 per share in the first quarter of 1996,
and (D) if the Effective Time is after the record date for the regular cash
dividend paid on Norwest Common Stock in the third quarter of 1996, Xxxxxxxx
xxx declare and pay cash dividends on Victoria Common Stock in an aggregate
amount equal to the amount, if any, the holders of Victoria Common Stock would
have received as holders of Norwest Common Stock had the Effective Time been on
or before such record date, provided, however, that the shareholders of
Victoria shall be entitled to either a dividend on Victoria Common Stock or
Norwest Common Stock, but not both, in the calendar quarter in which the
Closing shall occur; (iv) redeem, purchase or acquire or offer to acquire, or
permit any of the Victoria Subsidiaries to redeem, purchase or acquire or offer
to acquire, any of its or their capital stock; (v) authorize or incur any
long-term debt (other than deposit liabilities); (vi) mortgage, pledge or
subject to any material lien or other material encumbrance any of its
properties, except in the ordinary course of business; (vii) enter into any
agreement, contract or commitment requiring payments by Victoria or any
Victoria Subsidiary in excess of $100,000 except banking transactions in the
ordinary course of business and in accordance with policies and procedures in
effect on the date hereof; (viii) make any investments except investments in
the ordinary course of business; (ix) enter into any arrangements relating to
derivative securities; (x) amend or terminate any Plan except as required by
law and except that (A) Victoria reserves the right to amend and/or terminate
the Supplemental Executive Retirement Plan (the "SERP"), in whole or in part,
at any time, and to make distributions therefrom in accordance with its terms
provided, however, that no such amendment shall have the effect of increasing
the benefits otherwise provided under the SERP as of the date hereof; (B) to
the extent the SERP is amended or terminated, any amounts that, but for such
amendment, would have been deferred into the SERP on account of statutory
limitations affecting the Victoria 401(k) Profit Sharing Plan, shall instead be
paid directly to affected participants, and (C) Victoria reserves the right to
amend the Victoria 401(k) Profit Sharing Plan to provide that any contributions
that are limited by statute which would otherwise have been contributed to the
SERP (but cannot be contributed due to the termination of the SERP) shall be
paid directly to affected participants; (xi) make any contributions to any Plan
except as required by the terms of such Plan in effect as of the date hereof;
(xii) increase the compensation of any officers, directors or executive
employees, except to an extent consistent with Victoria's past compensation
plans and practices; (xiii) sell or otherwise dispose of any shares of the
capital stock of any Victoria Subsidiary; (xiv) sell or otherwise dispose of
any of its assets or properties other than in the ordinary course of business;
or (xv) except in the ordinary course of business and consistent with past
practice and prudent banking practices, enter into any contract, agreement,
commitment or arrangement with respect to any of the matters set forth in this
Section 4.1(b);
(c) Neither Victoria nor any of the Victoria Subsidiaries shall
take, and Victoria will use its reasonable efforts to prevent any affiliate of
Victoria from taking, any action that
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would cause the Merger not to be treated as a "pooling of interests" for
accounting purposes; and
(d) Victoria shall, and shall cause the Victoria Subsidiaries to,
perform their respective obligations under any contracts and agreements to
which any of them is a party or to which any of their assets is subject, except
to the extent such failure to perform would not have a material adverse effect
on Victoria and the Victoria Subsidiaries, taken as a whole, and except for
such obligations as Victoria or the Victoria Subsidiaries in good faith may
dispute.
4.2 Exchange Act Filings. From the date hereof to the Closing
Date, Victoria shall deliver to Norwest, when reasonably available, Victoria's
Quarterly Reports on Form 10-Q and Victoria's Annual Reports on Form 10-K, as
filed with the SEC, and any other filings made by Victoria with the SEC under
the Exchange Act.
4.3 No Shopping. Victoria, each Victoria Subsidiary and their
respective directors, officers, representatives or agents will not directly or
indirectly, solicit, authorize the solicitation of or except to the extent that
the Board of Directors of Victoria shall conclude in good faith, after taking
into account the written advice of its outside counsel, that to fail to do so
could reasonably be determined to violate its fiduciary obligations under
applicable law, enter into any discussions with any corporation, partnership,
person or other entity or group (other than Norwest) 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 Victoria or
any Victoria 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 Victoria or any Victoria Subsidiary except in
the ordinary course of business, or (iv) to merge, consolidate or otherwise
combine with Victoria or any Victoria Subsidiary. If any corporation,
partnership, person or other entity or group makes an offer or inquiry to
Victoria or any Victoria Subsidiary concerning any of the foregoing, Victoria
or such Victoria Subsidiary will promptly disclose such offer or inquiry,
including the terms thereof, to Norwest.
4.4 Affiliates' Agreements. Victoria shall enter into, and shall
use its best efforts to cause each shareholder who, in the opinion of counsel
for Victoria, is an "affiliate" (as defined in Rule 405 of the General Rules
and Regulations under the Securities Act) of Victoria to enter into, an
agreement substantially in the form of Exhibit B attached hereto within ten
days after the date hereof.
4.5 Directors' and Officers' Liability. Immediately prior to the
Effective Time, Victoria shall notify the appropriate directors' and officers'
liability insurers of the Merger and of all pending or threatened claims,
actions, suits, proceedings or investigations asserted or claimed
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against any Indemnified Party (as defined in Section 6.11 of this Agreement)
and known to Victoria , or circumstances reasonably deemed by Norwest to be
likely to give rise thereto, in accordance with terms and conditions of the
applicable policies.
4.6 Pension and Welfare Benefit Plans. Victoria and each Victoria
Subsidiary will take all action necessary or required (i) to terminate or
amend, if requested in writing by Norwest, all welfare benefit plans and to
amend, if requested in writing by Norwest, all qualified retirement plans to
facilitate the merger of such plans with Norwest plans without gaps in coverage
for participants in the plans and without duplication of costs caused by the
continuation of such plans after coverage is available under Norwest plans, and
all non-qualified benefit plans and compensation arrangements as of the
Effective Time, (ii) to amend the Plans to comply with the provisions of the
TRA and regulations thereunder and other applicable law, (iii) to submit
application to the Internal Revenue Service for a favorable determination
letter for each of the Plans which is subject to the qualification requirements
of Section 401(a) of the Code prior to the Effective Time. Norwest agrees to
maintain and preserve all "protected benefits" described under Section
411(d)(6) of the Code of any of the Plans following the merger of any such Plan
into a Norwest Plan. Victoria retains the right prior to the Effective Time to
amend the Victoria 401(k) Profit Sharing Plan to provide for 100% vesting of
participant accounts thereunder as of the Effective Time. Victoria retains
the right to make a discretionary contribution to the Victoria 401(k) Profit
Sharing Plan, in accordance with past practices, not to exceed 10% of net
profits for the 1995 Plan year. Victoria further retains the right to amend
the Victoria 401(k) Profit Sharing Plan to provide that the last day of the
Plan year, for purposes of making a discretionary contribution may be treated
as the Effective Time, so that Xxxxxxxx xxx make a discretionary profit sharing
contribution, in accordance with past practices not to exceed 10% of net
profits (calculated without regard to the effect of Section 4.9) for that
portion of the Plan year immediately preceding the Effective Time.
4.7 Environmental Assessments. Victoria shall obtain, at Norwest's
expense, Phase I environmental assessments for each bank facility and each
non-residential OREO property. Oral reports of such environmental assessments
shall be delivered to Norwest no later than eight (8) weeks and written reports
shall be delivered to Norwest no later than sixteen (16) weeks from the date of
this Agreement. Victoria shall obtain, at Norwest's expense, Phase II
environmental assessments for properties identified by Norwest on the basis of
the results of such Phase I environmental assessments.
4.8 Title and Survey Work. Victoria shall obtain to the extent
requested by Norwest, at Norwest's expense, commitments for title insurance and
boundary surveys for each bank facility owned by Victoria or any Victoria
Subsidiary, which shall be delivered to Norwest no later than eight (8) weeks
from the date of this Agreement.
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4.9 Accruals and Reserves. Immediately prior to the Effective
Time, Victoria shall establish such additional accruals and reserves as may be
necessary to conform Victoria's accounting and credit loss reserve practices
and methods to those of Norwest and Norwest's plans with respect to the conduct
of Victoria's business following the Merger and to provide for the costs and
expenses relating to the consummation by Victoria of the Merger and the other
transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF NORWEST
5.1 Conduct of Business. Norwest covenants and agrees that, from
the date of this Agreement until the Effective Time, unless Victoria shall
otherwise agree in writing or as otherwise expressly contemplated by this
Agreement:
(a) Norwest will: (i) maintain its corporate existence in good
standing; (ii) conduct, and cause the Norwest 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 Norwest or the Norwest
Subsidiaries, their businesses or their properties; (iii) maintain in all
material respects all books and records of it and the Norwest Subsidiaries,
including all financial statements, in accordance with the accounting
principles and practices used for the Norwest Financial Statements, except for
changes in such principles and practices required under generally accepted
accounting principles
(b) Neither Norwest nor any of the Norwest's Subsidiaries shall
take, and Norwest will use its reasonable efforts to prevent any affiliate of
Norwest from taking, any action that would cause the Merger not to be treated
as a "pooling of interests" for accounting purposes; and
(c) Norwest shall, and shall cause the Norwest Subsidiaries to,
perform their respective obligations under any contracts and agreements to
which any of them is a party or to which any of their assets is subject, except
to the extent such failure to perform would not have a material adverse effect
on Norwest and the Norwest Subsidiaries, taken as a whole, and except for such
obligations as Norwest or the Norwest Subsidiaries in good faith may dispute.
5.2 Exchange Act Filings. From the date hereof to the Closing
Date, Norwest shall deliver to Victoria, when reasonably available, Norwest's
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K (together with
Current Reports on Form 8-K filed since December 31, 1994) and Annual Report on
Form 10-K, as filed with the SEC.
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5.3 Reservation and Listing of Norwest Common Stock. Norwest
shall reserve for issuance, out of its authorized but unissued capital stock,
such number of shares of Norwest Common Stock as may be issuable upon
consummation of the Merger. Norwest shall cause the shares of Norwest Common
Stock to be issued upon consummation of the Merger to be approved for listing
on the New York Stock Exchange and the Chicago Stock Exchange subject to
official notice of issuance, prior to the Closing Date.
5.4 Statutory Underwriters. From and after the Effective Time,
Norwest shall file all reports with the SEC necessary to permit the
shareholders of Victoria who may be deemed to be "underwriters" (within the
meaning of Rule 145 of the General Rules and Regulations under the Securities
Act) of the Victoria Common Stock to sell Norwest Common Stock received by them
in connection with the Merger pursuant to Rules 144 and 145(d) of the General
Rules and Regulations under the Securities Act if they would otherwise be so
entitled; provided, however, that Norwest is otherwise obligated to file such
reports with the SEC.
5.5 Newco. Norwest shall, within 5 business days after the date
hereof, incorporate Newco as a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas and shall take such
actions as may be necessary to cause Newco's board of directors to ratify and
approve the Merger in accordance with the terms of this Agreement and agree to
be bound by the terms of this Agreement.
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access to Information. For a period not exceeding thirty days
prior to the Effective Time, Norwest shall, and shall cause the Norwest
Subsidiaries and its or their officers, directors, employees and
representatives to, afford the representatives of Victoria complete access
during normal business hours to its or their officers, employees,
representatives, properties, books and records, and shall furnish Victoria all
financial, operating and other data and information as Victoria through its
representatives, reasonably may request. No such examination by Victoria or
its representatives shall in any way affect, diminish or terminate any of the
representations, warranties or covenants of Norwest herein expressed.
6.2 Proxy Statement and Registration Statement. As promptly as
practicable after the date of this Agreement, Norwest and Victoria shall
prepare and file with the SEC a combined proxy and registration statement (the
"Proxy/Registration Statement") on Form S-4 (or on such other form as shall be
appropriate), which shall constitute the proxy statement (the "Proxy
Statement") of Victoria relating to the approval and adoption of the Merger and
this Agreement by the shareholders of Victoria, and the registration statement
of Norwest with respect to the Norwest Common Stock to be issued in connection
with the Merger (the "Registration Statement"). As promptly as practicable
after comments are received from the SEC on the Proxy/Registration Statement,
Victoria and Norwest shall make all reasonable efforts to cause the
Proxy/Registration Statement to become effective.
6.3 Confidentiality. (a) Victoria agrees to hold in confidence
all, and not to disclose to others for any reason whatsoever, any nonpublic
information received by it, any Victoria Subsidiary or its or their
representatives from Norwest, any Norwest Subsidiary or its or their
representatives in connection with the transactions contemplated hereby except
(i) as required by law; (ii) for disclosure to officers, directors, employees
and representatives of Victoria and the Victoria Subsidiaries as necessary in
connection with the transactions and filings contemplated hereby; and (iii) for
information which becomes publicly available other than through Victoria. In
the event the Merger is not consummated, Victoria shall return to Norwest all
nonpublic documents and other material obtained from Norwest, the Norwest
Subsidiaries or its or their representatives in connection with the
transactions contemplated hereby, or shall certify to Norwest that such
information has been destroyed.
(b) Norwest agrees to hold in confidence all, and not to disclose
to others for any reason whatsoever, any nonpublic information received by it,
any Norwest Subsidiary or its or their representatives from Victoria, any
Victoria Subsidiary or its or their representatives in connection with the
transactions contemplated hereby except (i) as required by law; (ii) for
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disclosure to officers, directors, employees and representatives of Norwest and
the Norwest Subsidiaries as necessary in connection with the transactions and
filings contemplated hereby; and (iii) for information which becomes publicly
available other than through Norwest. In the event the Merger is not
consummated, Norwest shall return to Victoria all nonpublic documents and other
material obtained from Victoria, the Victoria Subsidiaries or its or their
representatives in connection with the transactions contemplated hereby, or
shall certify to Victoria that such information has been destroyed.
6.4 Meetings of Shareholders. Victoria shall promptly take all
action reasonably necessary in accordance with the TBCA and its Articles of
Incorporation and Bylaws to convene a meeting of its shareholders to be held
not later than thirty (30) business days following the effective date of the
Registration Statement to consider and vote upon the adoption and approval of
the Merger and this Agreement by the affirmative vote of two-thirds of the
outstanding shares of Victoria Common Stock. Subject to its fiduciary
obligations under applicable law, the Board of Directors of Victoria (a) shall
recommend at such meeting that the shareholders of Victoria vote to adopt and
approve the Merger and this Agreement; (b) shall use its reasonable efforts to
solicit from shareholders of Victoria proxies in favor of such adoption and
approval; and (c) shall take all other action reasonably necessary to secure a
vote of its shareholders in favor of the adoption and approval of the Merger
and this Agreement.
6.5 Filings; Consents; Reasonable Efforts. Subject to the terms
and conditions of this Agreement, Norwest shall, and shall cause the Norwest
Subsidiaries to, and Victoria shall, and shall cause the Victoria Subsidiaries
to, (a) make all necessary filings with respect to the Merger and this
Agreement under the Securities Act, the Exchange Act and applicable blue sky or
similar securities laws required to consummate the transactions contemplated
herein and shall use all reasonable efforts to obtain required approvals and
clearances with respect thereto; (b) make all necessary filings under the BHCA
and with the Banking Regulators required to consummate the transactions
contemplated herein; (c) obtain all consents, waivers, approvals,
authorizations and orders required in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein; and (d) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary, proper
or advisable to consummate and make effective as promptly as practicable the
transactions contemplated herein. Norwest shall provide to Victoria and
Victoria shall provide to Norwest, as soon as reasonably practicable, all
nonconfidential portions of applications filed with and correspondence to or
from the Banking Regulators related to the consummation of the transactions
contemplated herein. Victoria shall not, and shall not permit any of the
Victoria Subsidiaries to, take any action that would, or that reasonably could
be expected to, result in any of the representations and warranties set forth
in this Agreement becoming untrue or any of the conditions to the Merger set
forth in Article VII not being satisfied. Morwest shall not, and shall not
permit any of the Norwest Subsidiaries to, take any action that would, or that
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reasonably could be expected to, result in any of the representations and
warranties set forth in this Agreement becoming untrue or any of the conditions
to the Merger set forth in Article VII not being satisfied.
6.6 Notification of Certain Matters. Victoria shall give prompt
notice to Norwest, and Norwest shall give prompt notice to Victoria, orally and
in writing, of (a) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate at any time from the
date hereof to the Effective Time, (b) any material failure of Victoria, any
Victoria Subsidiary or any of their officers, directors, employees or agents,
or Norwest, any Norwest Subsidiary or any of their officers, directors,
employees or agents, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder, and (c) any fact or event that would make it necessary to amend the
Registration Statement or Proxy Statement in order to render the statements
therein not misleading or to comply with applicable law. Victoria promptly
shall advise Norwest orally and in writing of any change or event having, or
which, insofar as reasonably can be foreseen, would have, a material adverse
effect on Victoria and the Victoria Subsidiaries, taken as a whole. Norwest
promptly shall advise Victoria orally and in writing of any change or event
having, or which, insofar as reasonably can be foreseen, would have, a material
adverse effect on Norwest and the Norwest Subsidiaries, taken as a whole.
6.7 Agreement to Defend. Subject to the fiduciary obligation of
Victoria's Board of Directors under applicable law, in the event any claim,
action, suit, investigation or other proceeding by any governmental body or
other person or other legal or administrative proceeding is commenced that
questions the validity or legality of the transactions contemplated hereby or
seeks damages in connection therewith, whether before or after the Effective
Time, Norwest and Victoria hereby agree to cooperate and use their reasonable
efforts to defend against and respond thereto.
6.8 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
6.9 Employee Benefit Plans. Each person who is an employee of
Victoria or any Victoria Subsidiary as of the Effective Time ("Victoria
Employees") shall be eligible for participation in the employee welfare and
retirement plans of Norwest, as in effect from time to time, as follows:
(a) Employee Welfare Benefit Plans. Each Victoria Employee shall
be eligible for participation in the employee welfare benefit plans of Norwest
listed below subject to any eligibility requirements applicable to such plans
(with full credit for years of past service to
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Victoria and Victoria Subsidiaries, to the extent credited unde the respective
employee welfare benefit plans of Victoria and Victoria Subsidiaries, and not
subject to pre-existing condition exclusions, except with respect to the
Norwest Long Term Care 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
Time (provided, however, that the transition from the Victoria plans to the
Norwest plans shall be facilitated without gaps in coverage for participants
and covered dependents in the plans and it is Norwest's intention that such
transition be facilitated without duplication of costs caused by the
continuation of such plans after coverage is available under Norwest plans):
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
Severance Pay Plan
Vacation Program
For the purpose of determining each Victoria Employee's benefit for the year in
which the Merger occurs under the Norwest vacation program, vacation taken by a
Victoria Employee in the year in which the Merger occurs will be deducted from
the total Norwest benefit. Norwest shall credit each Victoria Employee for the
year during which coverage under the Norwest Medical Plan begins, with any
deductibles previously incurred during such year under the Victoria medical
plan. Norwest will offer all current participating retirees and their covered
dependents and those becoming eligible and choosing to participate in the
Victoria retiree medical plan prior to the Effective Time, access to Norwest's
retiree medical plan.
(b) Employee Retirement Benefit Plans.
Each Victoria Employee shall be eligible for participation in the Norwest
Savings-Investment Plan (the "SIP"), subject to any eligibility requirements
applicable to the SIP (with full credit for years of past service to Victoria
and the Victoria Subsidiaries for the purpose of satisfying any eligibility and
vesting periods applicable to the SIP, to the extent credited under the
respective employee
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retirement benefit plans of Victoria and Victoria Subsidiaries), and shall
enter the SIP not later than the first day of the calendar quarter which is at
least 32 days after the Effective Time.
The Victoria Profit Sharing 401(k) Plan shall be merged with the SIP following
the Merger and the outstanding plan loan balances under the Victoria Profit
Sharing 401(k) Plan shall be transferred over to and retained by the SIP, such
that the affected Victoria Employees who have outstanding loan balances (which
are not otherwise in default) under the Victoria Profit Sharing 401(k) Plan
immediately preceding the plan merger, shall not incur a taxable event upon the
plan merger.
Each Victoria Employee shall be eligible for participation, subject to any
applicable eligibility requirements (with full credit for years of past service
to Victoria and the Victoria Subsidiaries, to the extent credited under the
respective employee retirement benefit plans of Victoria and Victoria
Subsidiaries, for the purpose of satisfying any applicable eligibility and
vesting periods, but without credit for years of past service to Victoria and
the Victoria Subsidiaries for purposes of benefit accruals), in the Norwest
Pension Plan under the terms thereof and shall enter the Norwest Pension Plan
no later than the first day of the calendar quarter which is at least 32 days
after the Effective Time.
In addition to the Norwest pension benefit described above, Norwest agrees that
the pension benefit earned under the Victoria Pension Plan for each Victoria
Employee entitled to such a benefit shall be computed using such employee's
compensation prior to subsequent termination of employment, rather than using
such employee's compensation prior to the Effective Time; provided, however,
that if, assuming no change in the actuarial assumptions in effect on the date
hereof, the assets in the Victoria Pension Plan as of December 31, 1995 do not
exceed the accumulated pension benefit obligation computed using the Victoria
Employees' compensation as of December 31, 1995 (current service, current pay)
for such Plan by at least $3,000,000, then the parties agree reasonably to
adjust the pension benefit payable under the Victoria Pension Plan for each
Victoria Employee entitled to such a benefit using an amount which is at least
equal to such employee's compensation prior to the Effective Time but less than
such employee's compensation prior to subsequent termination of employment.
Victoria and Norwest agree to use their best efforts to determine the amount of
such assets and such accumulated pension benefit obligation and calculate any
necessary adjustments under this paragraph no later than March 15, 1996.
6.10 Public Announcement. Subject to written advice of legal
counsel with respect to legal requirements relating to public disclosure of
matters related to the subject matter of this Agreement, the timing and content
of any announcements, press releases or other public statements concerning the
proposal contained herein shall occur upon, and be determined by, the mutual
consent of Victoria and Norwest.
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6.11 Indemnification; Directors' and Officers' Insurance. (a)
Following the Effective Time Norwest shall ensure that all rights to
indemnification and all limitations of liability existing in favor of any
person who is now, or has been at any time prior to the date of this Agreement,
or who becomes prior to the Effective Time, a director, officer, employee or
agent of Victoria or any of its Subsidiaries (each an "Indemnified Party" and,
collectively, the "Indemnified Parties") pursuant to Victoria's Articles of
Incorporation or By-laws or similar governing documents of any Victoria
Subsidiary, and pursuant to the terms of the indemnification agreements between
Victoria or any Victoria Subsidiary and its directors and/or officers approved
by the Board of Directors of Victoria on January 17, 1995, and in the form
provided to Norwest, as applicable in the particular case and as in effect on
the date hereof, shall, with respect to claims arising from (A) facts or events
that occurred before the Effective Time, or (B) this Agreement or any of the
transactions contemplated by this Agreement, whether in any case asserted or
arising before or after the Effective Time, survive the Merger and shall
continue in full force and effect and be fully honored. Nothing contained in
this Section 6.11 shall be deemed to preclude the liquidation, consolidation or
merger of Victoria or any Victoria Subsidiary, in which case all of such rights
to indemnification and limitations on liability shall be deemed to survive and
continue as contractual rights notwithstanding any such liquidation or
consolidation or merger; provided, however, that in the event of liquidation or
sale of all or substantially all of the assets of Victoria, Norwest shall
guarantee, to the extent of the consolidated net asset value of Victoria as of
the Effective Time, the indemnification obligations of Victoria or any Victoria
Subsidiary to the extent of indemnification obligations of Victoria and the
Victoria Subsidiaries described above. Notwithstanding anything to the
contrary contained in this Section 6.11(a), nothing contained herein shall
require Norwest to indemnify any person who was a director or officer of
Victoria or any Victoria Subsidiary (or a director or officer of a corporation,
banking institution or other entity acquired by Victoria or any Victoria
Subsidiary with respect to claims based on, or arising out of, or pertaining
to, a matter which occurred prior to the consummation of any such acquisition)
to a greater extent than Victoria or any Victoria Subsidiary is, as of the date
of this Agreement, required to indemnify any such person.
(b) Any Indemnified Party wishing to claim indemnification under
Section 6.11, upon learning of any such claim, action, suit, proceeding or
investigation or circumstances likely to give rise thereto, shall promptly
notify Norwest thereof (the "Claim Notice"), but the failure to so notify shall
not relieve Victoria, any Victoria Subsidiary or Norwest or any Norwest
Subsidiary of any liability it may have to such Indemnified Party. In the
event of any such claim, action, suit, proceeding or investigation arising
after the Effective Time, (A) Norwest shall have the right to assume the
defense thereof and Norwest shall not be liable to any Indemnified Party for
any legal expenses of other counsel subsequently incurred by such Indemnified
Party in connection with the defense thereof, except that if Norwest elects not
to assume such defense within 15 days of receiving the related Claim Notice or
counsel for the Indemnified Party advises that there are issues which raise
conflicts of interest between Norwest and the Indemnified Party, the
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Indemnified Party may retain counsel satisfactory to him or her, and Norwest
shall pay the fees and expenses of such counsel for the Indemnified Party
promptly as statements therefor are received; provided, however, that Norwest
shall be obligated pursuant to this subparagraph (ii) to pay for only one firm
of counsel for all Indemnified Parties in any jurisdiction unless the use of
one counsel for such Indemnified Parties would present such counsel with a
conflict of interest and (B) such Indemnified Party shall cooperate in the
defense of any such matter.
(c) For a period of four years after the Effective Time, Norwest
shall use reasonable efforts to cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by Victoria
and the Victoria Subsidiaries (provided that Norwest may substitute therefor
policies of at least the same coverage and amounts containing terms and
conditions which are substantially no less advantageous) with respect to claims
arising from facts or events which occurred before the Effective Time;
provided, however, that in no event shall Norwest be obligated to expend, in
order to maintain or provide insurance coverage pursuant to this Section 6.11,
any amount per annum in excess of 200% of the amount of the annual premiums
paid as of the date hereof by Victoria for such insurance (the "Maximum
Amount"). If the amount of the annual premiums necessary to maintain or
procure such insurance coverage exceeds the Maximum Amount, Norwest shall use
reasonable efforts to maintain the most advantageous policies of directors' and
officers' insurance obtainable for an annual premium equal to the Maximum
Amount.
(d) If Norwest or any of its successors or assigns (i) shall
consolidate with or merge into any other corporation or entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) shall transfer all or substantially all of its properties and
assets to any individual, corporation or other entity, then and in each such
case, proper provision shall be made so that the successors and assigns of
Norwest shall assume the obligations set forth in this Section 6.11.
(e) The provisions of this Section 6.11 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
6.12 Shareholder Agreements. Victoria agrees to use its best
efforts to obtain from each of the persons listed on Schedule 6.12 an executed
letter agreement, in the form attached hereto as Exhibit D, within seven days
of the date hereof, pursuant to which such persons agree to vote their shares
of Victoria Common Stock in favor of the Merger.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
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7.1 Conditions to the Obligations of Each Party to Effect the
Merger. The respective obligations of Norwest, Newco and Victoria to effect
the Merger are subject to the satisfaction of the following conditions at or
prior to the Closing Date:
(a) This Agreement and the Merger shall have been approved and
adopted by the requisite vote of the shareholders of Victoria as may be
required by law, by the rules of the Nasdaq National Market, and by any
applicable provisions of its Articles of Incorporation or Bylaws;
(b) There shall have been obtained any and all approvals of the
Banking Regulators, and any applicable waiting period with respect thereto
shall have expired;
(c) No order shall have been entered and remain in effect in any
action or proceeding before any foreign, federal or state court or governmental
agency or other foreign, federal or state regulatory or administrative agency
or commission that would prevent or make illegal the consummation of the
Merger;
(d) The Registration Statement shall be effective on the Closing
Date, and all post-effective amendments filed shall have been declared
effective or shall have been withdrawn; and no stop order suspending the
effectiveness thereof shall have been issued and no proceedings for that
purpose shall have been initiated or, to the knowledge of the parties,
threatened by the SEC;
(e) There shall have been obtained any and all material permits,
approvals and consents of securities or blue sky commissions of any
jurisdiction and of any other governmental body or agency that reasonably may
be deemed necessary so that the consummation of the Merger and the transactions
contemplated thereby will be in compliance with applicable laws, the failure to
comply with which would have a material adverse effect on the business,
financial condition or results of operations of Norwest, the Surviving
Corporation and their subsidiaries, taken as a whole after consummation of the
Merger and any applicable waiting period with respect thereto shall have
expired;
(f) All approvals of private persons or corporations, (i) the
granting of which is necessary for the consummation of the Merger or the
transactions contemplated in connection therewith and (ii) the nonreceipt of
which would have a material adverse effect on the business, financial condition
or results of operations of Norwest, the Surviving Corporation and their
subsidiaries, taken as a whole after the consummation of the Merger, shall have
been obtained; and
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(g) Norwest and Victoria shall have received from Liddell, Sapp,
Zivley, Hill & XxXxxx, L.L.P., a written opinion dated as of the date that the
Proxy Statement is first mailed to the shareholders of Norwest and Victoria to
the effect that (i) the Merger will be treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code, (ii)
Norwest and Victoria will each be a party to that reorganization within the
meaning of Section 368(b) of the Code, (iii) Norwest or Victoria shall not
recognize any gain or loss as a result of the Merger, and (iv) the shareholders
of Victoria shall not recognize any gain or loss as a result of the Merger,
other than to the extent such shareholders receive cash in lieu of fractional
shares, and such opinion shall not have been withdrawn or modified in any
material respect.
7.2 Conditions to the Obligations of Norwest and Newco to Effect
the Merger. The obligations of Norwest to effect the Merger are subject to the
satisfaction of the following conditions at or prior to the Closing Date:
(a) The representations and warranties of Victoria contained in
Article II shall be accurate in all material respects as of the Closing Date as
though such representations and warranties had been made at and as of that
time; all of the terms, covenants and conditions of this Agreement to be
complied with and performed by Victoria on or before the Closing Date shall
have been duly complied with and performed in all material respects, and a
certificate to the foregoing effect dated the Closing Date and signed by the
chief executive officer of Victoria shall have been delivered to Norwest;
(b) Since the date of this Agreement, no material adverse change
in the financial condition, results of operations, business or prospects of
Victoria and the Victoria Subsidiaries, taken as a whole, shall have occurred,
and Victoria and the Victoria Subsidiaries shall not have suffered any damage,
destruction or loss (whether or not covered by insurance) materially adversely
affecting the properties or business of Victoria and the Victoria Subsidiaries,
taken as a whole, and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer of Victoria shall have been
delivered to Norwest; and
(c) Victoria shall have furnished to Norwest letters of
resignation from those current officers and directors of Victoria who are not,
as of the Effective Time, directors or officers of Newco.
(d) No approvals, licenses or consents granted by any Banking
Regulators or other governmental or regulatory authority in connection with the
transactions contemplated by this Agreement shall contain any condition or
requirement relating to Victoria or any Victoria Subsidiary that, in the
reasonable judgment of Norwest, is unreasonably burdensome to Norwest.
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(e) Victoria shall qualify to engage in a "pooling of interests"
transaction for accounting purposes and Norwest shall have received from Xxxxxx
Xxxxxxxx LLP an opinion to that effect.
(f) At any time since the date hereof the total number of shares
of Victoria Common Stock outstanding and subject to issuance upon
exercise(assuming for this purpose that phantom shares and other
share-equivalents constitute Victoria Common Stock) of all warrants, options,
conversion rights, phantom shares or other share-equivalents shall not have
exceeded 8,516,843.
7.3 Conditions to the Obligations of Victoria to Effect the
Merger. The obligations of Victoria to effect the Merger are subject to the
satisfaction of the following conditions at or prior to the Closing Date:
(a) The representations and warranties of Norwest and Newco
contained in Article III shall be accurate in all material respects as of the
Closing Date as though such representations and warranties had been made at and
as of that time; all the terms, covenants and conditions of this Agreement to
be complied with and performed by Norwest on or before the Closing Date shall
have been duly complied with and performed in all material respects, and a
certificate to the foregoing effect dated the Closing Date and signed by the
chief executive officer of Norwest shall have been delivered to Victoria;
(b) Since the date of this Agreement, no material adverse change
in the financial condition, results of operations, business or prospects of
Norwest and the Norwest Subsidiaries, taken as a whole, shall have occurred,
and Norwest and the Norwest Subsidiaries shall not have suffered any damage,
destruction or loss (whether or not covered by insurance) materially adversely
affecting the properties or business of Norwest and the Norwest Subsidiaries,
taken as a whole, and a certificate to the foregoing effect dated the Closing
Date and signed by the chief executive officer of Norwest shall have been
delivered to Victoria; and
(c) The shares of Norwest Common Stock issuable upon consummation
of the Merger shall have been approved for listing on the New York Stock
Exchange and the Chicago Stock Exchange subject to official notice of issuance.
(d) Prior to the mailing of the Proxy Statement, Victoria and the
Board of Directors of Victoria shall have received an opinion of X. X. Xxxxxx
Securities, Inc. addressed to Victoria and the Board of Directors of Victoria,
and for their exclusive benefit, for inclusion in said Proxy Statement and
dated effective as of the date of mailing of such Proxy Statement, based on
such matters as X. X. Xxxxxx Securities, Inc. deems appropriate or necessary,
to the effect that the consideration to be received by shareholders of Victoria
pursuant to the Merger is fair from a
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financial point of view. Victoria shall promptly provide a copy of such opinion
to Norwest upn receipt.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER; EXTENSION; NONSURVIVAL
8.1 Termination. This Agreement may be terminated and the Merger
and the other transactions contemplated herein may be abandoned at any time
prior to the Effective Time, whether prior to or after approval by the
shareholders of Norwest or Victoria:
(a) by mutual written consent of Norwest and Victoria;
(b) by either Norwest or Victoria upon written notice to the other
party if the Merger has not been effected on or before September 30, 1996
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;
(c) by either Norwest or Victoria upon written notice to the other
party if a Takeover Proposal constitutes a Superior Proposal; provided,
however, that Victoria shall not be permitted to terminate this Agreement
pursuant to this Section 8.1(c) unless (i) it has not breached any covenant
contained in Section 4.3 and (ii) it delivers to Norwest simultaneously with
such notice of termination the fee referred to in Section 8.2(b). As used in
this Agreement: "Takeover Proposal" means a bona fide proposal or offer by a
person to make a tender or exchange offer, or to engage in a merger,
consolidation or other business combination involving Victoria or to acquire in
any manner a substantial equity interest in, or all or substantially all of the
assets of, Victoria, and "Superior Proposal" means a Takeover Proposal which
the Board of Directors of Victoria shall determine in good faith, after taking
into account the written advice of its outside counsel, that failure to accept
such proposal or offer would or could reasonably be expected to violate its
fiduciary duties under applicable law. The term "person" for purposes of this
Agreement has the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of
the Exchange Act and the rules and regulations thereunder but shall not include
Norwest.
(d) by either Norwest or Victoria upon written notice to the other
party if a final, unappealable order to restrain, enjoin or otherwise prevent a
consummation of this Agreement or the transactions contemplated in connection
herewith shall have been entered;
(e) by either Norwest or Victoria upon thirty days written notice
if the required approval of the shareholders of Victoria for the adoption and
the approval of the Merger and this Agreement is not received at the Victoria
shareholder meeting;
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(f) by Norwest if (i) the Board of Directors of Victoria fails to
recommend, withdraws, or modifies in a manner materially adverse to Norwest,
its approval or recommendation of this Agreement, or the transactions
contemplated hereby, (ii) after an agreement to engage in or the occurrence of
an Acquisition Event (as defined below) or after a third party shall have made
a proposal to Victoria or Victoria's shareholders to engage in an Acquisition
Event, the transactions contemplated hereby are not approved at the meeting of
Victoria shareholders contemplated by Section 6.4, or (iii) the meeting of
Victoria shareholders contemplated by Section 6.4 is not held prior to
September 30, 1996 and Victoria has failed to comply with its obligations under
Section 6.4;
(g) by Victoria, within five business days after the Shareholder
Meeting Date, if both of the following conditions are satisfied:
(i) the average closing price per share of the Norwest Common
Stock as reported by the consolidated tape of the New York Stock
Exchange for the ten full trading days ending on the day immediately
preceding the Shareholder Meeting Date (the "Norwest Average Price")
is less than $28.00; and
(ii) the number obtained by dividing the Norwest Average Price
by $32.50 [the closing price of a share of Norwest Common Stock on the
trading day immediately preceding the date of this Agreement] is less
than the number obtained by dividing the Final Index Price (as defined
below) by the Initial Index Price (as defined below) and subtracting
0.15 from such latter number.
For purposes of this Section 8.1(g):
"Company Market Capitalization" shall mean (a) the price of
one share of the common stock of a given company at the close of the
trading day immediately preceding the date of this Agreement
multiplied by (b) the number of shares of common stock of such company
outstanding as of September 30, 1995 (adjusted for any stock dividend,
reclassification, recapitalization, exchange of shares or similar
transaction between September 30, 1995 and the close of the trading
day immediately preceding the date of this Agreement).
"Index Group" shall mean all of those companies listed on
Exhibit C the common stock of which is publicly traded and as to which
there is, during the period of 10 trading days ending on the day
immediately preceding the Shareholder Meeting Date (the "Index
Measurement Period"), no pending publicly announced proposal for such
company to be acquired, nor has there been any proposal by such
company publicly announced
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subsequent to the day before the date of this Agreement to acquire
another company in exchange for stock where, if the company to be
acquired were to become a subsidiary of the acquiring company, the
company to be acquired would be a "significant subsidiary" as defined
in Rule 1-02 of Regulation S-X promulgated by the SEC nor has there
been any program publicly announced subsequent to the day before the
date of this Agreement to repurchase 5% or more of the outstanding
shares of such company's common stock.
"Initial Index Price" shall mean the sum of the following,
calculated for each of the companies in the Index Group: (a) the
closing price per share of common stock of each such company on the
trading day immediately preceding the date of this Agreement
multiplied by (b) the Weighting Factor (as defined below) for each
such company.
"Final Index Price" shall mean the sum of the following,
calculated for each of the companies in the Index Group: (a) the
Final Price for each such company multiplied by (b) the Weighting
Factor (as defined below) for each such company.
"Final Price" of any company in the Index Group shall mean the
average of the daily closing prices of a share of common stock of such
company, as reported on the consolidated transaction reporting system
for the market or exchange on which such common stock is principally
traded, during the Index Measurement Period.
"Total Market Capitalization" shall mean the sum of the
Company Market Capitalization for each of the companies in the Index
Group.
"Weighting Factor" for any given company shall mean the
Company Market Capitalization for such company divided by the Total
Market Capitalization.
If a Common Stock Adjustment occurs with respect to the shares of Norwest or
any company in the Index Group between the date of this Agreement and the date
of the Victoria shareholder meeting held to approve this Agreement the closing
prices for the common stock of such company shall be appropriately and
proportionately adjusted for the purposes of the definitions above so as to be
comparable to what the price would have been if the record date of the Common
Stock Adjustment had been immediately following the Effective Time.
8.2 Effect of Termination. (a) In the event of the termination
and abandonment of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers or shareholders, other than the provisions
of Sections 6.3, 6.7 and 6.8 and this Article. Nothing contained in this
Section shall relieve any party from liability for a willful and material
breach
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48
of the representations and warranties made by it, or willful and material
breach of any of its covenants, agreements, duties or obligations under this
Agreement.
(b) If this Agreement is terminated pursuant to Sections 8.1(c) or
8.1(f), and if terminated pursuant to Section 8.1(f) and prior thereto or
within 12 months after such termination:
(i) Victoria or its bank subsidiary (the "Bank") or any
successor to either Victoria or the Bank shall have entered into an
agreement to engage in an Acquisition Event (as defined below) or an
Acquisition Event shall have occurred; or
(ii) the Board of Directors of Victoria shall have
authorized or approved an Acquisition Event or shall have publicly
announced an intention to authorize or approve or shall have
recommended that the shareholders of Victoria approve or accept any
Acquisition Event,
then Victoria shall promptly, but in no event later than five business days
after the first of such events shall have occurred, pay Norwest a fee equal to
$5.0 million.
"Acquisition Event" means any of the following: (i) a merger, consolidation or
similar transaction involving Victoria, the Bank or any successor to either,
(ii) a purchase, lease or other acquisition in one or a series of related
transactions of assets of Victoria or its Subsidiaries representing 25% or more
of the consolidated assets of Victoria and the Victoria Subsidiaries or (iii) a
purchase or other acquisition (including by way of merger, consolidation, share
exchange or any similar transaction) in one or a series of related transactions
of beneficial ownership of securities representing 25% or more of the voting
power of Victoria or any Victoria subsidiary in each case with or by a person
or entity other than Norwest or an affiliate of Norwest. An Acquisition Event
shall not include an internal reorganization transaction or series of related
transactions involving solely Victoria and the Victoria Subsidiaries.
8.3 Amendment and Waiver. This Agreement may not be amended or
supplemented at any time, except by an instrument in writing signed on behalf
of each party hereto, provided that after this Agreement has been approved and
adopted by the shareholders of Victoria, this Agreement may be amended only as
may be permitted by applicable provisions of the TBCA. Any provision of this
Agreement may be waived at any time by the party that is, or whose shareholders
are, entitled to the benefits thereof. The waiver by any party hereto of any
condition or of a breach of another provision of this Agreement shall not
operate or be construed as a waiver of any other condition or subsequent
breach. The waiver by any party hereto of any of the conditions precedent to its
obligations under this Agreement shall not
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49
preclude it from seeking redress for breach of this Agreement other than with
respect to the condition so waived.
8.4 Extension. At any time prior to the Effective Time, the
parties may extend the time for the performance of any of the obligations or
other acts of the other parties hereto. Any agreement on the part of any party
to any such extension shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
8.5 Nonsurvival. None of the representations, warranties,
covenants or agreements in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time, except for the
provisions of Article I, Sections 6.3, 6.7, 6.8, 6.9 and 6.11, and this
Article.
ARTICLE IX
GENERAL
9.1 Entire Agreement; Assignment. This Agreement (a) constitutes
the entire agreement among the parties with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties or any of them with respect to the subject
matter hereof, and (b) shall not be assigned by operation of law or otherwise,
provided that Norwest may assign its rights and obligations to any direct or
indirect, wholly-owned, subsidiary of Norwest, but no such assignment shall
relieve Norwest of its obligations hereunder if such assignee does not perform
such obligations.
9.2 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof, this being in
addition to any other remedy to which they are entitled at law or in equity.
9.3 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
9.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered, if delivered by hand delivery, courier or telecopy,
or three business days after mailing registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
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if to Norwest: Norwest Corporation
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, XX 00000-0000
Attention: Secretary
Telecopier No: (000) 000-0000
if to Victoria: Xx. Xxxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
Victoria Bankshares, Inc.
Xxx X'Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
with a copy to: Xx. Xxxxxx X. Xxxxx
Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P.
3400 Texas Commerce Tower
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
9.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
9.6 Descriptive Headings. The descriptive headings are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
9.7 No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
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9.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
9.9 Incorporation by References. Any and all schedules, exhibits,
annexes, statements, reports, certificates or other documents or instruments
referred to herein or attached hereto are incorporated herein by reference
hereto as though fully set forth at the point referred to in the Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, all as of
the day and year first above written.
NORWEST CORPORATION
By: /s/ XXXX X. XXXXX
______________________________
Name: Xxxx X. Xxxxx
Title: Sr. V. P.
Attest:
By: /s/ XXXXXX X. XXXXXXXX
_____________________________
Secretary
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VICTORIA BANKSHARES, INC.
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board
Attest:
By: /s/ XXXXXXX XXXXXXX
--------------------------
Secretary
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Agreed to this ___ day of November 1995:
NORWEST SUB CORPORATION
By: ______________________________
Name: _____________________________
Title: ____________________________
Attest:
By: ______________________
Secretary
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54
EXHIBIT A
EXCHANGE AGENT AGREEMENT
Agreement dated as of _________, 19__ by and between NORWEST
CORPORATION, a Delaware corporation ("Norwest"), and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION (the "Agent").
WHEREAS pursuant to an Agreement and Plan of Merger dated as of
November ___, 1995, by and between Norwest, Norwest Sub Corporation, a Texas
Corporation ("Newco") and Victoria Bankshares, Inc., a Texas corporation
("Victoria")(the "Agreement"), Newco was merged with and into Victoria (the
"Merger") effective __________, 19__ (the "Effective Date").
WHEREAS the Agent is the transfer agent and registrar for the common
stock, par value $1-2/3 per share, of Norwest ("Norwest Common Stock").
WHEREAS Norwest desires that the Agent act as exchange agent for the
purpose of effecting the distribution of Norwest Common Stock to the holders of
the common stock of Victoria, par value $1.00 per share ("Victoria Common
Stock").
NOW, THEREFORE, in consideration of the mutual covenants herein, the
parties agree as follows:
ARTICLE I
1. Norwest hereby irrevocably instructs the Agent, in its capacity as
transfer agent and registrar for Norwest Common Stock, to issue ___________
shares of Norwest Common Stock from authorized but heretofore unissued stock to
"Norwest Bank Minnesota, N.A., Agent for Victoria Bankshares, Inc.
Shareholders", as of the Effective Date, and, in its capacity as exchange
agent, to hold a certificate or certificates for such shares, representing the
aggregate number of shares of Norwest Common Stock into which outstanding
shares of Victoria Common Stock were converted pursuant to the provisions of
the Agreement (the "Norwest Shares"). In addition, Norwest instructs the Agent
to hold the sum of $_________ (the "Fractional Share Fund"), which sum Norwest
will transfer to the Agent by wire transfer upon request of the Agent.
2. A complete and correct list of the holders of record of Victoria
Common Stock as of the close of business on the Effective Date, identifying
each shareholder by name, address and number of shares owned, have been
previously transmitted to the Agent by electronic means. No transfers have
occurred since the Effective Date.
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ARTICLE II
1. The Agent undertakes to send Letters of Transmittal for Victoria
Common Stock, in the form attached hereto, to each holder of record ("Record
Holder") of an outstanding certificate or certificates which immediately prior
to ____ __.m. on the Effective Date (the "Effective Time") evidenced shares of
Victoria Common Stock and which after such Effective Time shall have been
converted into shares of Norwest Common Stock pursuant to the terms of the
Agreement, advising such Record Holder of the terms of such conversion and the
procedures for surrendering such certificate or certificates in exchange for a
certificate evidencing Norwest Common Stock.
2. The Agent covenants and agrees that as soon as practicable
following receipt by the Agent from a Record Holder of a certificate or
certificates representing Victoria Common Stock, accompanied by the appropriate
Letter of Transmittal duly completed and executed in accordance with the
instructions appearing therein, the Agent shall deliver to such Record Holder
(or to a transferee specified in such Letter of Transmittal) a certificate
representing full shares of Norwest Common Stock on the basis of ______ shares
of Norwest Common Stock for each share of Victoria Common Stock surrendered.
All shares (and payments made pursuant to paragraphs 4 and 8 of this Article
II) are to be mailed by first class mail, postage prepaid.
3. Certificates representing shares of Norwest Common Stock issued to
the following Record Holders or their transferees (who may reasonably be deemed
an "affiliate" of Victoria within the meaning of such term as used in Rule 145
under the Securities Act of 1933, as amended):
[List persons required to deliver Rule 145 letters]
_____________________________________________________________
| | | |
|_________________|____________________|____________________|
| | | |
|_________________|____________________|____________________|
| | | |
|_________________|____________________|____________________|
| | | |
|_________________|____________________|____________________|
shall bear the following legend on the back of each certificate:
"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 Norwest Corporation 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."
4. No certificate or scrip for a fractional share of Norwest Common
Stock shall be issued. In lieu of each fractional share, any Record Holder or
transferee who would otherwise be entitled to a fractional share of Norwest
Common Stock shall, upon surrender of his or her certificates representing
Victoria Common Stock, be paid the cash value of such fraction of a share of
Norwest Common Stock, which cash value shall be equal to the
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56
fraction multiplied by $____ which is the average of the closing prices of a
share of Norwest Common Stock as reported on the consolidated tape of the
New York Stock Exchange for each of the five (5) trading days ending on the
day immediately preceding the meeting of shareholders of Victoria held to
approve the Merger).
5. If any Record Holder shall report that his or her failure to
surrender any certificate representing shares of Victoria Common Stock is due
to the loss, misplacement or destruction of such certificate or certificates,
the Agent shall require such Record Holder to furnish a Bond of Indemnity
Agreement, in form satisfactory to the Agent and Norwest, before delivering to
such Record Holder (or his or her transferee) the certificate for the shares of
Norwest Common Stock to which he or she is entitled.
6. The Agent shall comply with all applicable Federal tax
requirements with respect to the exchange of certificates for shares of
Victoria Common Stock for Norwest Common Stock and payments for fractional
shares. The Agent shall require that each person surrendering certificates
representing shares of Victoria Common Stock properly complete and execute a
Substitute Form W-9. In addition, the Agent shall complete all required
reporting on Forms 1099-B with respect to the transaction.
7. The Agent shall cancel and return to Norwest the certificates for
shares of Victoria Common Stock exchanged after a period of one year.
8. The Agent shall receive and hold, for distribution without interest
to each Record Holder, and then distribute in accordance with the terms of the
Agreement, all dividends and other distributions paid on shares of Norwest
Common Stock to which such Record Holder is entitled. Norwest will ensure that
the Agent has sufficient funds and assets to make such dividends and
distributions.
ARTICLE III
1. The Agent:
(a) shall not be ogligated to take any legal action hereunder
which might in its judgment involve any expense or liability unless it
shall have been furnished with reasonable indemnity from Norwest;
(b) may rely on and shall be protected in acting on any
certificate, instrument, opinion, notice, letter, telegram, or other
document or security delivered to it and believed by it to be genuine
and to have been signed by the proper party or parties;
(c) may rely on and shall be protected in acting upon the
written instructions of the Secretary, Assistant Secretary or any Vice
President of Norwest; and
(d) may consult counsel satisfactory to it, who may be counsel
to Norwest, and the opinion of such counsel shall be full and complete
authorization and
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57
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion of such
counsel.
2. Norwest agrees to indemnify and hold the Agent harmless against
any loss, claim, liability or expense (including, without limitations, the
costs and expenses of defending against such loss, claim or liability) incurred
without negligence on its part arising out of or in connection with;
(a) the performance of its duties hereunder, or
(b) reliance by the Agent upon the information relating to the
Victoria Common Stock provided to the Agent by Victoria provided that,
in any case in which there is a discrepancy between such information
and the information contained in the certificate or certificates
surrendered to the Agent by a former holder of Victoria Common Stock
for exchange under the terms hereof, the Agent shalll have a duty to
inquire as to the reason for such discrepancy.
3. Norwest agrees to pay the reasonable and customary fees of the
Agent for the services of the Agent in connection with this agreement and to
reimburse the Agent for all reasonable out-of-pocket expenses incurred by it
pursuant to or in connection with its services hereunder.
4. This agreement shall be construed and enforced in accordance with
the laws of the State of Minnesota and shall inure to the benefit of, and the
obligation created hereby shall be binding upon, the successors and assigns of
the parties hereto.
5. If a certificate representing shares of Victoria Common Stock is
submitted with a Letter of Transmittal with instructions to issue any
certificaate representing Norwest Common Stock, or to make any fractional share
payment, in a name other than the name that appears on the certificate so
surrendered, the Agent shall not deliver such certificate or payment unless and
until the certificate surrendered is properly endorsed or accompanied by
appropriate stock powers (with signatures appearing on such endorsements or
stock powers and on the letter of transmittal Medallion guaranteed by an
eligible financial institution), and there has been provided to the Agent
payment on account of, or proof of payment of, any necessary stock transfer
taxes or a duly-executed exemption certificate or other evidence satisfactory
to the Agent that all such taxes have been paid or do not apply. The Agent
shall pay any transfer tax on account of which payment has been made to the
Agent. A letter of transmittal which is signed by a trustee, executor,
administrator, guardian, officer of a corporation, attorney-in-fact or other
person acting in a fiduciary or representative capacity should be accompanied
by proper evidence of the signer's authority to act (if the surrendered
certificate is not registered in the name of the fiduciary or representative).
If more than one person is the record holder of a surrendered certificate, each
such holder must sign the corresponding letter of transmittal.
6. The Agent shall maintain adquate records of all acts done by the
Agent in the performance of its duties under this Agreement. Such records shall
be available for
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58
inspection at any time during normal business hours by any person so authorized
by Norwest.
7. This Agreement shall be for the benefit of the shareholders of
Victoria and may not be amended.
IN WITNESS WHEREOF, the parties have executed and delivered this
agreement.
NORWEST CORPORATION NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: ______________________________ By: ______________________________
Its:______________________________ Its:______________________________
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EXHIBIT B
Norwest Corporation
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, XX 00000-0000
Attn: Secretary
Gentlemen:
I have been advised that I might be considered to be an "affiliate,"
as that term is defined for purposes of paragraphs (c) and (d) of Rule 145
("Rule 145") promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), of Victoria Bankshares, Inc., a Texas corporation ("Victoria").
Pursuant to an Agreement and Plan of Merger, dated as of November __,
1995 (the "Agreement"), between Victoria and Norwest Corporation, a Delaware
corporation ("Norwest"), and Norwest Sub Corporation, a Texas corporation
("Newco"), it is contemplated that Newco, awholly-owned subsidiary of Norwest,
will merge with and into Victoria (the "Merger") and as a result, I will
receive in exchange for each share of Common Stock, par value $1.00 per share,
of Victoria ("Victoria Common Stock") owned by me immediately prior to the
Effective Time (as defined in the Agreement), a number of shares of Common
Stock, par value $1 2/3 per share, of Norwest ("Norwest Common Stock"), as more
specifically set forth in the Agreement.
I hereby agree as follows:
I will not offer to sell, transfer or otherwise dispose of any of the
shares of Victoria Common Stock or Norwest Common Stock held by me during the
30 days prior to the Effective Time.
I will not offer to sell, transfer or otherwise dispose of any of the
shares of Norwest 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 will not sell, transfer or otherwise dispose of the Stock or in any
way reduce my risk relative to any shares of the Stock issued to me pursuant to
the Merger until such time as financial results covering at least 30 days of
post- Merger combined operations of Victoria and Norwest have been published.
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:
60
"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 Norwest
Corporation 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."
Norwest'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 (a) (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) any such
shares of Stock are sold at a time when I am not an affiliate of Norwest 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) and Norwest has met the requirements of
paragraph (c) of Rule 144, or (iv) I am not and have not been for at least
three months an affiliate of Norwest and have been the beneficial owner of the
Stock for at least three years (or such other period as may be prescribed by
the Securities Act, and the rules and regulations promulgated thereunder), or
(v) Norwest shall have received an opinion of counsel reasonably acceptable to
Norwest or a "no action" letter obtained by the undersigned from the staff of
the Commission to the effect that the restrictions imposed by Rule 145 under
the Securities Act no longer apply to the undersigned, and (b) financial
results covering at least 30 days of post-Merger combined operations have been
published.
I have carefully read this letter agreement and the Agreement and have
discussed their requirements and other applicable limitations upon my ability
to offer to sell, transfer or otherwise dispose of shares of the Stock, to the
extent I felt necessary, with my counsel or counsel for Victoria.
Sincerely,
---------------------------------
-2-
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EXHIBIT C
BancOne Corporation
Bank of Boston Corporation
BankAmerica Corporation
Xxxxxxx Xxxxx, Inc.
Boatmen's Bancshares
Comerica, Inc.
CoreStates Financial Corporation
First Bank System, Inc.
First Interstate
First of America Bank Corporation
First Union Corporation
Fleet Financial
KeyCorp
Mellon Bank Corporation
National City Corporation
Nations Bank
PNC Financial Corporation
Suntrust Banks, Inc.
U.S. Bancorp
Wachovia Corporation
Xxxxx Fargo
62
EXHIBIT D
November ___, 1995
Norwest Corporation
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
We understand that Norwest Corporation ("Norwest") and Victoria Bankshares,
Inc. (the "Company") intend to enter into an Agreement and Plan of Merger (the
"Agreement") providing for a business combination between the Company and a
wholly-owned subsidiary of Norwest (the "Business Combination"), in which all
of the outstanding shares of capital stock of the Company will be exchanged for
shares of common stock of Norwest.
The undersigned is a shareholder of the Company and is entering into this
letter agreement to induce Norwest to consummate the proposed transaction in
accordance with the terms of the Agreement.
The undersigned confirms its agreement with you as follows:
1. The undersigned represents and warrants that Schedule I attached
hereto sets forth the shares of the Company's capital stock of which the
undersigned is the record or beneficial owner and that the undersigned is on
the date hereof the lawful owner of the number of shares set forth therein,
free and clear of all voting agreements and commitments of any kind and free
and clear of all liens and encumbrances except as set forth in Schedule I.
Except as set forth in Schedule I, the undersigned does not own or hold any
rights to acquire any additional shares of the Company's capital stock (by
exercise of stock options, warrants or otherwise) or any interest therein or
any voting rights with respect to any additional shares.
2. The undersigned agrees that the undersigned will not contract to
sell, or otherwise transfer or dispose of any shares of the Company's capital
stock or any interest therein or securities convertible thereinto or any voting
rights with respect thereto, other than (i) pursuant to the Business
Combination, or (ii) with the prior written consent of Norwest.
3. The undersigned agrees that all shares of the Company's capital
stock beneficially owned by the undersigned at the record date for any meeting
of stockholders
63
of the Company called to consider and vote on the Business
Combination will be voted by the undersigned in favor of the Business
Combination.
This letter agreement shall terminate upon the termination of the Agreement to
be entered into with respect to the Business Combination, or by either party
upon notice to the other if the Business Combination has not been consummated
by September 30, 1996.
Please confirm that the foregoing correctly states the understanding between us
by signing and returning to us a counterpart hereof.
Very truly yours,
-----------------------------------
Confirmed: November ___, 1995
NORWEST CORPORATION
By:
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Its:
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