First Bank System, Inc.
First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
November 5, 1995
First Interstate Bancorp
000 Xxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X.X. Xxxxx
Chairman, President and Chief Executive Officer
Ladies and Gentlemen:
We refer to the Agreement and Plan of Merger (the "Merger Agreement")
of even date herewith among First Interstate Bancorp ("Subject Company"), First
Bank System, Inc. ("Parent") and Eleven Acquisition Corp. ("Merger Sub").
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Merger Agreement.
In order to induce Subject Company to enter into the Merger Agreement,
and in consideration of Subject Company's undertaking of efforts in furtherance
of the transactions contemplated thereby, Parent agrees as follows:
1. Representations and Warranties. Parent hereby represents and
warrants to Subject Company that Parent has all requisite corporate power and
authority to enter into this letter agreement (this "Agreement") and to perform
its obligations set forth herein. The execution, delivery and performance of
this Agreement have been duly and validly authorized by all necessary corporate
action on the part of Parent. This Agreement has been duly executed and
delivered by Parent.
2. Termination Fee. (a) Unless a Nullifying Event (as such term is
defined below) shall have occurred and be continuing at the time the Merger
Agreement is terminated, in the event that the Merger Agreement is terminated
pursuant to Article VIII thereof (regardless of whether such termination is by
Parent or Subject Company) and prior to or concurrently with such termination a
First Trigger Event (as such term is defined below) shall have occurred, Parent
shall pay to Subject Company a cash fee of $25 million. Such fee shall be
payable in immediately available funds on or before the second business day
following such termination of the Merger Agreement.
(b) In addition, unless a Nullifying Event shall have occurred and be
continuing at the time the Merger Agreement is terminated, in the event that (i)
the Merger Agreement shall have been terminated pursuant to Article VIII
thereof, (ii) prior to or concurrently with such termination
(..continued)
a First Trigger Event shall have occurred, and (iii) prior to, concurrently with
or within 18 months after such termination an Acquisition Event (as such term is
defined below) shall have occurred, Parent shall pay to Subject Company an
additional cash fee of (i) $100 million, less (ii) any amount paid by Parent
pursuant to Paragraph 2(a) hereof. Such fee shall be payable in immediately
available funds on or before the second business day following the occurrence of
such Acquisition Event.
(c) As used herein, a "First Trigger Event" shall mean the occurrence
of any of the following events:
(i) Parent's Board of Directors shall have failed to approve or
recommend the Parent Vote Matters, or shall have withdrawn or modified in a
manner adverse to Subject Company its approval or recommendation of the
Parent Vote Matters, or shall have resolved or publicly announced an
intention to do either of the foregoing;
(ii) Parent or any Significant Subsidiary (as such term is defined
below), or the Board of Directors of Parent or a Significant Subsidiary, shall
have recommended that the stockholders of Parent approve any Acquisition
Proposal (as such term is defined below) or shall have entered into an agreement
with respect to, authorized, approved, proposed or publicly announced its
intention to enter into, any Acquisition Proposal;
(iii) the Parent Vote Matters shall not have been approved at a
meeting of Parent stockholders which has been held for that purpose prior to
termination of the Merger Agreement in accordance with its terms, if prior
thereto it shall have been publicly announced that any person (other than
Subject Company or any of its Subsidiaries) shall have made, or disclosed an
intention to make, an Acquisition Proposal;
(iv) any person (together with its affiliates and associates) or
group (as such terms are used for purposes of Section 13(d) of the Exchange Act)
(other than Subject Company and its Subsidiaries) shall have acquired beneficial
ownership (as such term is used for purposes of Section 13(d) of the Exchange
Act) or the right to acquire beneficial ownership of 50% or more of the then
outstanding shares of the stock then entitled to vote generally in the election
of directors of Parent or a Significant Subsidiary; or
(v) following the making of an Acquisition Proposal, Parent shall
have breached any covenant or agreement contained in the Merger Agreement such
that Subject Company would be entitled to terminate the Merger Agreement under
Section 8.1(d) thereof (without regard to any grace period provided for therein)
unless such breach is promptly cured without jeopardizing consummation of the
Merger pursuant to the terms of the Merger Agreement.
(d) As used herein, "Acquisition Event" shall mean the consummation
of any event described in the definition of "Acquisition Proposal," except that
the percentage reference contained in clause (C) of such definition shall be 50%
instead of 20%.
(e) As used herein, "Acquisition Proposal" shall mean any (i)
publicly announced proposal, (ii) regulatory application or notice (whether in
draft or final form), (iii) agreement or understanding, (iv) disclosure of an
intention to make a proposal, or (v) amendment to any of the foregoing, made or
filed on or after the date hereof, in each case with respect to any of the
following transactions with a counterparty other than Subject Company or any of
its Subsidiaries:
(..continued)
(A) a merger or consolidation, or any similar transaction, involving Parent or
any Significant Subsidiary (other than mergers, consolidations or similar
transactions involving solely Parent and/or one or more wholly owned
Subsidiaries of Parent and other than a merger or consolidation as to which the
common shareholders of Parent immediately prior thereto in the aggregate own at
least 70% of the common stock of the publicly held surviving or successor
corporation (or any publicly held ultimate parent company thereof) immediately
following consummation thereof); (B) a purchase, lease or other acquisition of
all or substantially all of the assets or deposits of Parent or any Significant
Subsidiary; or (C) a purchase or other acquisition (including by way of merger,
consolidation, share exchange or otherwise) of securities representing 20% or
more of the voting power of Parent or any Significant Subsidiary.
(f) As used herein, "Nullifying Event" shall mean any of the
following events occurring and continuing at a time when Parent is not in
material breach of any of its covenants or agreements contained in the Merger
Agreement: (i) Subject Company shall be in breach of any of its covenants or
agreements contained in the Merger Agreement such that Parent shall be entitled
to terminate the Merger Agreement pursuant to Section 8.1(d) thereof (without
regard to any grace period provided for therein), (ii) the stockholders of
Subject Company shall have voted and failed to approve the adoption of the
agreement of merger (within the meaning of section 251 of the DGCL) contained in
the Merger Agreement at a meeting of such stockholders which has been held for
that purpose or at any adjournment or postponement thereof (unless the Parent
Vote Matters shall not have been approved at a meeting of Parent stockholders
which was held on or prior to such date for the purpose of voting with respect
to the Parent Vote Matters) or (iii) the Board of Directors of Subject Company
shall have failed to approve or recommend that the stockholders of Subject
Company approve the adoption of the agreement of merger (within the meaning of
section 251 of the DGCL) contained in the Merger Agreement or shall have
withdrawn, modified or changed in any manner adverse to Parent its approval or
recommendation that the stockholders of Subject Company approve the adoption of
the agreement of merger (within the meaning of section 251 of the DGCL)
contained in the Merger Agreement or shall have resolved or publicly announced
its intention to do any of the foregoing.
(g) As used herein, "Significant Subsidiary" shall mean a
"significant subsidiary," as defined in Rule 1-02 of Regulation S-X promulgated
by the Securities and Exchange Commission, of Parent.
3. To the extent that Parent is prohibited by applicable law or
regulation, or by administrative actions or policy of a Federal or state
financial institution supervisory agency having jurisdiction over it, from
making the payments required to be paid by Parent herein in full, it shall
immediately so notify Subject Company and thereafter deliver or cause to be
delivered, from time to time, to Subject Company, the portion of the payments
required to be paid by it herein that it is no longer prohibited from paying,
within five business days after the date on which Parent is no longer so
prohibited; provided, however, that if Parent at any time is prohibited by
applicable law or regulation, or by administrative actions or policy of a
Federal or state financial institution supervisory agency having jurisdiction
over it, from making the payments required hereunder in full, it shall (i) use
its reasonable best efforts to obtain all required regulatory and legal
approvals and to file any required notices as promptly as practicable in order
to make such payments, (ii) within five days of the submission or receipt of any
documents relating to any such regulatory and legal approvals, provide Subject
Company with copies of the same, and (iii) keep Subject Company advised of both
the status of any such request for regulatory and legal approvals, as well as
any discussions with any relevant regulatory or other third party reasonably
related to the same.
(..continued)
4. Except where federal law specifically applies, this Agreement
shall be construed and interpreted according to the laws of the State of
Delaware without regard to conflicts of laws principles thereof.
5. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
6. Nothing contained herein shall be deemed to authorize Subject
Company or Parent to breach any provision of the Merger Agreement.
(..continued)
* * *
Please confirm your agreement with the understandings set forth herein
by signing and returning to us the enclosed copy of this Agreement.
Very truly yours,
FIRST BANK SYSTEM, INC.
By /s/ Xxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Chairman, President and Chief
Executive Officer
Accepted and agreed to as of
the date first above written:
FIRST INTERSTATE BANCORP
By /s/ Xxxxxxx X. X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. X. Xxxxx
Title: Chairman and Chief Executive Officer
