SHARE EXCHANGE AGREEMENT by and between WACHOVIA CORPORATION and WELLS FARGO & COMPANY Dated as of October 3, 2008
Exhibit 2.2
SHARE EXCHANGE AGREEMENT
by and between
WACHOVIA CORPORATION
and
XXXXX FARGO & COMPANY
Dated as of October 3, 2008
SHARE EXCHANGE AGREEMENT dated as of October 3, 2008 (this “Agreement”) between Wachovia Corporation, a North Carolina corporation (“Company”) and Xxxxx Fargo & Company, a Delaware corporation (“Parent”).
BACKGROUND
Concurrently, and in connection herewith, Parent and the Company are entering into an Agreement and Plan of Merger, dated as of October 3, 2008, by and between the Company and Parent (the “Merger Agreement”). Capitalized terms used but not defined herein shall have the meaning given to such terms in the Merger Agreement.
The Company desires to issue and sell 10 shares (the “Shares”) of Series M, Class A Preferred Stock, no par value, of the Company, in exchange for (i) 1,000 shares of common stock, par value $1 2/3 per share, of Parent ( the “Exchange Shares”), on the terms and subject to the conditions set forth herein (the “Exchange”), and (ii) the entry by Parent into the Merger Agreement.
The Audit Committee of the Board of Directors of the Company has unanimously determined, that the delay in securing shareholder approval of the exchange contemplated hereby would seriously jeopardize the financial viability of the Company and has expressly approved the reliance by the Company on the exception under Para. 312.05 of the New York Stock Exchange (the “NYSE”) Listed Company Manual.
In consideration of the mutual covenants and agreements contained in this Agreement, the receipt and sufficiency of which are herby acknowledged, and intending to be legally bound, the parties herby agree as follows:
ARTICLE I
THE SHARES AND THE EXCHANGE SHARES
Section 1.1 The Shares. The Shares shall be issued to Parent, and the Exchange Shares shall be issued to the Company, pursuant to Article II hereof.
ARTICLE II
SHARE EXCHANGE
Section 2.1 Share Exchange. Upon the terms and subject to the conditions of this Agreement, the Company agrees to issue and sell to Parent, the Shares, and in exchange therefor at the Share Exchange Closing, Parent shall issue to the Company the Exchange Shares.
Section 2.2 Share Exchange Closing.
(a) The Company will deliver a certificate representing the Shares and registered in the name of Parent, and Parent will deliver a certificate representing the Exchange
Shares and registered in the name of the Company. Subject to the satisfaction of the conditions set forth in Article VI, the time and date of such deliveries shall be 10:00 a.m., New York City time, on a date and at a place to be specified by the parties (the “Share Exchange Closing”), which date shall be no later than the day after satisfaction or waiver of the latest to occur of the conditions set forth in Article VI.
(b) The documents to be delivered at the Share Exchange Closing by or on behalf of the parties hereto pursuant to this Article II and any additional documents requested by Parent pursuant to Section 8.2, will be delivered at the Share Exchange Closing at the offices of Parent at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent as of the date hereof that:
Section 3.1 Existence and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of North Carolina. The Company has the requisite corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary.
Section 3.2 Capitalization. The authorized capital stock of Company consists of 3,000,000,000 shares of Company Common Stock of which, as of September 30, 2008 (the “Company Capitalization Date”) no more than 2,160,916,999 shares were issued and outstanding, and 550,000,000 shares of preferred stock of which, as of the Company Capitalization Date, (i) 500,000,000 are designated as Dividend Equalization Preferred Shares, 97,000,000 shares of which were issued and outstanding, (ii) 10,000,000 are designated as Preferred Stock, no shares of which were issued and outstanding, and (iii) 40,000,000 are designated as Class A Preferred Stock, of which (A) 5,000,000 are designated as Series G, Class A Preferred Stock, no shares of which were issued and outstanding, (B) 5,000,000 are designated as Series H, Class A Preferred Stock, no shares of which were issued and outstanding, (C) 25,010 are designated as Series I, Class A Preferred Stock, no shares of which were issued and outstanding, (D) 2,300,000 are designated as Series J, Class A Preferred Stock, 92,000,000 shares of which were issued and outstanding, (E) 3,500,000 are designated as Series K, Class A Preferred Stock, 3,500,000 shares of which were issued and outstanding, and (F) 4,025,000 are designated as 7.50% Non-cumulative Perpetual Class A Preferred Stock, Series L, 4,025,000 shares of which were issued and outstanding (clauses (i), (ii) and (iii) collectively, “Company Preferred Stock”). As of the Company Capitalization Date, there were outstanding Company Stock Options to purchase an aggregate of 18,982,721 shares of Company Common Stock and outstanding Company Stock Awards in respect of 154,250,765 shares of Company Common Stock. As of the Company Capitalization Date, there were no more than 84,435,663 shares of Company Common Stock reserved for issuance under the Company Stock Plans, and there were
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no more than 335,416,667 shares of Company Common Stock reserved for issuance under the terms of its convertible Preferred Stock. All of the issued and outstanding shares of Company Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.
Section 3.3 Authorization. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of the Company, and this Agreement is a valid and binding obligation of the Company, enforceable against it in accordance with their terms.
Section 3.4 Board Approvals. The transactions contemplated by this Agreement, including without limitation the issuance of the Shares and the compliance with the terms of this Agreement, have been unanimously adopted, approved and declared advisable unanimously by the Board of Directors of the Company. The Audit Committee of the Board of Directors of the Company has unanimously and expressly approved, and the Board of Directors of the Company has unanimously concurred with, the Company’s reliance on the exception under Para. 312.05 of the NYSE Listed Company Manual to issue the Shares without seeking a shareholder vote.
Section 3.5 Valid Issuance of Preferred Stock. The Shares have been duly authorized by all necessary corporate action. When issued and sold against receipt of the consideration therefor, the Shares will be validly issued, fully paid and nonassessable, will not subject the holders thereof to personal liability and will not be issued in violation of preemptive rights. The voting rights provided for in the terms of the Shares are validly authorized and shall not be subject to restriction or limitation in any respect.
Section 3.6 Non-Contravention. The execution, delivery and performance of this Agreement, and the consummation by the Company of the transactions contemplated hereby, will not conflict with, violate or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both would constitute a default) under, or result in the termination of or accelerate the performance required by, or result in a right of termination or acceleration under, any provision of the Restated Articles of Incorporation or Bylaws of the Company or the articles of incorporation, charter, bylaws or other governing instrument of any Subsidiary of the Company.
Section 3.7 Purchase for Own Account. The Company is acquiring the Exchange Shares for its own account and not with a view to the distribution thereof in violation of the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission (the “SEC”) promulgated thereunder (the “Securities Act”).
Section 3.8 Private Placement. The Company understands that (i) the Exchange Shares have not been registered under the Securities Act or any state securities laws, by reason of their issuance by Parent in a transaction exempt from the registration requirements thereof and (ii) the Exchange Shares may not be sold unless such disposition is registered under the Securities Act and applicable state securities laws or is exempt from registration thereunder. The Company represents that it is an institutional “accredited investor” (as defined in Rule 501(a) of Regulation D under the Securities Act).
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Section 3.9 Legend. Each certificate representing an Exchange Share will bear a legend to the following effect unless Parent determines otherwise in compliance with applicable law:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NEITHER THIS SHARE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as of the date hereof that:
Section 4.1 Existence and Power. Parent is duly organized and validly existing under the laws of the state of its organization and has all requisite power and authority to enter into and perform its obligations under this Agreement.
Section 4.2 Authorization. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of Parent, and this Agreement is a valid and binding obligation of Parent, enforceable against it in accordance with its terms.
Section 4.3 Valid Issuance. The Exchange Shares have been duly authorized by all necessary corporate action. When issued and sold against receipt of the consideration therefor, the Exchange Shares will be validly issued, fully paid and nonassessable, will not subject the holders thereof to personal liability and will not be issued in violation of preemptive rights.
Section 4.4 Non-Contravention. The execution, delivery and performance of this Agreement will not conflict with, violate or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both would constitute a default) under, or result in the termination of or accelerate the performance required by, or result in a right of termination or acceleration under, any provision of the organizational or governing documents of Parent.
Section 4.5 Purchase for Own Account. Parent is acquiring the Shares for its own account and not with a view to the distribution thereof in violation of the Securities Act.
Section 4.6 Private Placement. Parent understands that (i) the Shares have not been registered under the Securities Act or any state securities laws, by reason of their issuance
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by the Company in a transaction exempt from the registration requirements thereof and (ii) the Shares may not be sold unless such disposition is registered under the Securities Act and applicable state securities laws or is exempt from registration thereunder. Parent represents that it is an institutional “accredited investor” (as defined in Rule 501(a) of Regulation D under the Securities Act).
Section 4.7 Legend. Each certificate representing a Share will bear a legend to the following effect unless the Company determines otherwise in compliance with applicable law:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND NEITHER THIS SHARE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.”
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 NYSE Notice to Shareholders. As soon as practicable after the date hereof, and in any event not later than one week after the date hereof, the Company shall mail the notice to the stockholders of the Company that the Company will issue Shares without obtaining stockholder approval as required by, and in compliance with, Para. 312.05 of the NYSE Listed Company Manual; unless such notice requirement is waived by the NYSE (and the parties will cooperate with one another to seek such waiver). On or before October 6, 2008, pursuant to Para. 312.05 of the NYSE Listed Company Manual, the Company will deliver to the New York Stock Exchange notice of and the requisite documents relating to its intent to issue Shares without obtaining approval of the stockholders of the Company.
ARTICLE VI
CONDITIONS TO SHARE EXCHANGE CLOSING
Section 6.1 Conditions to Each Party’s Obligation To Effect the Exchange. The respective obligations of the parties hereunder to effect the Exchange shall be subject to the following condition:
(a) No Injunctions or Restraints; Illegality. No order, injunction or decree issued by any court or agency of competent jurisdiction or other law preventing or making illegal the consummation of the Exchange shall be in effect.
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Section 6.2 Conditions to the Obligations of Parent. The obligations of Parent hereunder to effect the Exchange shall be subject to the satisfaction, or waiver by Parent, of the following condition:
(a) NYSE Notice Period. The Company shall have provided notice to the stockholders of the Company that the Company will issue Shares without obtaining stockholder approval as required by, and in compliance with, Para. 312.05 of the NYSE Listed Company Manual, and the ten (10) day notice period set forth in Para. 312.05 of the NYSE Listed Company Manual shall have passed after such notice has been provided.
(b) No Injunctions or Restraints; Illegality. No order, injunction or decree issued by any court or agency of competent jurisdiction or other law preventing or making illegal Parent’s unrestricted and unlimited right to vote the Shares shall be in effect.
ARTICLE VII
TERMINATION
Section 7.1 Injunction; Illegality. This Agreement may be terminated at any time prior to the Share Exchange Closing by Parent if (a) an order, injunction or decree shall have been issued by any court or agency of competent jurisdiction and shall be nonappealable, or other law shall have been issued preventing or making illegal either (i) the completion of the Exchange or the other transactions contemplated by this Agreement, or (ii) Parent’s unrestricted and unlimited right to vote the Shares or (b) the Merger Agreement terminates pursuant to its terms.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or by facsimile or seven days after having been sent by certified mail, return receipt requested, postage prepaid, to the parties to this Agreement at the following address or to such other address either party to this Agreement shall specify by notice to the other party:
| (a) (i) | if to Company, to: | |||
| Wachovia Corporation Xxx Xxxxxxxx Xxxxxx Xxxxxxxxx, XX 00000 Attention: General Counsel Facsimile: (000) 000-0000 | ||||
| with a copy to: | ||||
| Xxxxxxxx & Xxxxxxxx LLP | ||||
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| 000 Xxxxx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: H. Xxxxxx Xxxxx | ||||
| Xxxxxxxx X. Xxxxx | ||||
| Facsimile: (000) 000-0000 | ||||
| (b) | if to Purchaser, to: | |||
| Xxxxx Fargo & Company | ||||
| Xxxxx Fargo Center | ||||
| MAC #N9305-173 | ||||
| Sixth and Marquette | ||||
| Xxxxxxxxxxx, Xxxxxxxxx 00000 | ||||
| Attention: Corporate Secretary | ||||
| Facsimile: (000) 000-0000 | ||||
| with a copy to: | ||||
| Wachtell, Lipton, Xxxxx & Xxxx | ||||
| 00 Xxxx 00xx Xxxxxx | ||||
| Xxx Xxxx, XX 00000 | ||||
| Attention: Xxxxxx X. Xxxxxxx | ||||
| Xxxxxxxx X. Xxxxx | ||||
| Facsimile: (000) 000-0000 |
Section 8.2 Further Assurances. Each party hereto shall do and perform or cause to be done and performed all further acts and shall execute and deliver all other agreements, certificates, instruments and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 8.3 Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is duly executed and delivered by the Company and Parent. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 8.4 Fees and Expenses. Each party hereto shall pay all of its own fees and expenses (including attorneys’ fees) incurred in connection with this Agreement and the transactions contemplated hereby.
Section 8.5 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that neither party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of the other party hereto.
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Section 8.6 Governing Law. This Agreement shall be governed and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and wholly performed within such state, without regard to any applicable conflicts of law principles. The parties hereto agree that any suit, action or proceeding brought by either party to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal or state court located in the State of Delaware. Each of the parties hereto submits to the jurisdiction of any such court in any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of, or in connection with, this Agreement or the transactions contemplated hereby and hereby irrevocably waives the benefit of jurisdiction derived from present or future domicile or otherwise in such action or proceeding. Each party hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
Section 8.7 Waiver Of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.8 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties and/or their affiliates with respect to the subject matter of this Agreement.
Section 8.9 Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof.
Section 8.10 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be deemed to be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforced in accordance with its terms to the maximum extent permitted by law.
Section 8.11 Counterparts; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures were upon the same instrument. No provision of this Agreement shall confer upon any person other than the parties hereto any rights or remedies hereunder.
Section 8.12 Specific Performance. The parties 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. It is accordingly agreed that the parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
| WACHOVIA CORPORATION |
| By: /s/ Xxxxxx X. Steel |
| Name: Xxxxxx X. Steel |
| Title: President and CEO |
| XXXXX FARGO & COMPANY |
| By: /s/ Xxxxxxx Xxxxxxxxxx |
| Name: Xxxxxxx Xxxxxxxxxx |
| Title: Chairman |
[Share Exchange Agreement Signature Page]
