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 ("Subect Company"), First Bank System, Inc. ("Parent")
and Eleven Acquisition Corp. ("Merer 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 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 Triger 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 Proosal" 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: (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.
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.
7. 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
