EXHIBIT 2.1
EXECUTION VERSION
===============================================================================
AGREEMENT AND PLAN OF MERGER
dated May 7, 2006
among
WACHOVIA CORPORATION,
▇▇▇▇ FINANCIAL CORPORATION
and
GOLDEN WEST FINANCIAL CORPORATION
===============================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS; INTERPRETATION
1.01. DEFINITIONS...........................................................2
1.02. INTERPRETATION........................................................9
ARTICLE II
THE MERGER
2.01. THE MERGER.......................................................... 10
2.02. CLOSING..............................................................10
2.03. EFFECTIVE TIME.......................................................10
2.04. EFFECTS OF THE MERGER................................................11
2.05. CONSTITUENT DOCUMENTS................................................11
2.06. GOLDEN WEST BOARD OF DIRECTORS.......................................11
2.07. WACHOVIA BOARD.......................................................11
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01. CONSIDERATION........................................................11
3.02. CANCELLATION OF SHARES...............................................12
3.03. RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS..............................12
3.04. EXCHANGE PROCEDURES..................................................12
3.05. FRACTIONAL SHARES....................................................14
3.06. ANTI-DILUTION ADJUSTMENTS............................................14
3.07. DISSENTING SHAREHOLDERS..............................................14
3.08. EFFECT ON MERGER SUB COMMON STOCK....................................14
3.09. EFFECT ON WACHOVIA STOCK.............................................14
3.10. STOCK OPTIONS........................................................14
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
4.01. FOREBEARANCES OF GOLDEN WEST.........................................15
4.02. FOREBEARANCES OF WACHOVIA............................................18
4.03. COORDINATION OF DIVIDENDS............................................18
-i-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. DISCLOSURE SCHEDULES.................................................19
5.02. STANDARD.............................................................19
5.03. REPRESENTATIONS AND WARRANTIES.......................................19
5.04. MERGER SUB...........................................................30
ARTICLE VI
COVENANTS
6.01. REASONABLE BEST EFFORTS..............................................30
6.02. SHAREHOLDER APPROVALS................................................31
6.03. SEC FILINGS..........................................................32
6.04. PRESS RELEASES.......................................................33
6.05. ACCESS; INFORMATION..................................................33
6.06. ACQUISITION PROPOSALS................................................34
6.07. AFFILIATE AGREEMENTS.................................................35
6.08. TAKEOVER LAWS AND PROVISIONS.........................................35
6.09. EXCHANGE LISTING.....................................................35
6.10. REGULATORY APPLICATIONS..............................................35
6.11. INDEMNIFICATION......................................................36
6.12. EMPLOYEE MATTERS.....................................................37
6.13. NOTIFICATION OF CERTAIN MATTERS......................................39
6.14. EXEMPTION FROM LIABILITY UNDER SECTION 16(B).........................39
6.15. CERTAIN MODIFICATIONS; RESTRUCTURING CHARGES.........................39
ARTICLE VII
CONDITIONS TO THE MERGER
7.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER...........39
7.02. CONDITIONS TO GOLDEN WEST'S OBLIGATION...............................41
7.03. CONDITIONS TO WACHOVIA'S AND MERGER SUB'S OBLIGATION.................41
ARTICLE VIII
TERMINATION
8.01. TERMINATION..........................................................42
8.02. EFFECT OF TERMINATION AND ABANDONMENT................................43
8.03. TERMINATION FEE......................................................43
-ii-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE IX
MISCELLANEOUS
9.01. SURVIVAL.............................................................44
9.02. WAIVER; AMENDMENT....................................................44
9.03. COUNTERPARTS.........................................................44
9.04. GOVERNING LAW........................................................45
9.05. EXPENSES.............................................................45
9.06. NOTICES..............................................................45
9.07. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES...................46
9.08. SEVERABILITY.........................................................46
9.09. ALTERNATIVE STRUCTURE................................................47
Annex 1 Form of Voting Agreement
Annex 2 Form of Golden West Affiliate Letter
-iii-
AGREEMENT AND PLAN OF MERGER, dated May 7, 2006 (this "AGREEMENT"),
among Wachovia Corporation, a North Carolina corporation ("WACHOVIA"), ▇▇▇▇
Financial Corporation, a North Carolina corporation and a wholly owned
subsidiary of Wachovia ("MERGER SUB"), and Golden West Financial Corporation, a
Delaware corporation ("GOLDEN WEST").
RECITALS
A. THE PROPOSED TRANSACTION. The parties intend to effect a strategic
business combination through the merger of Golden West with and into Merger Sub
(the "MERGER"), with Merger Sub the surviving corporation (the "SURVIVING
CORPORATION").
B. BOARD DETERMINATIONS. The respective boards of directors of
Wachovia, Merger Sub and Golden West have each determined that the Merger and
the other transactions contemplated hereby are consistent with, and will
further, their respective business strategies and goals, and are in the best
interests of their respective stockholders and, therefore, have approved the
Merger, this Agreement and the plan of merger contained in this Agreement.
C. APPROVAL OF STOCKHOLDER OF MERGER SUB. Wachovia, as the sole
stockholder of Merger Sub, has approved this Agreement, the Merger and the other
transactions contemplated hereby.
D. INTENDED TAX TREATMENT. The parties intend the Merger to be
treated as a reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended (the "CODE"), and the rules and regulations thereunder, and
intend for this Agreement to constitute a "plan of reorganization" within the
meaning of the Code.
E. VOTING AGREEMENTS. As an inducement to and condition of Wachovia's
willingness to enter into this Agreement, each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (each of whom is a member of the Golden West Board)
will enter (each in his or her capacity as a stockholder of Golden West) into
voting and support agreements (each, a "VOTING AGREEMENT"), the form of which is
attached as ANNEX 1. The Voting Agreements will be entered immediately prior to
the execution and delivery of this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the mutual
representations, warranties, covenants and agreements contained in this
Agreement, Wachovia, Merger Sub and Golden West agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
1.01. DEFINITIONS. This Agreement uses the following definitions:
"ACQUISITION PROPOSAL" means a tender or exchange offer to acquire more
than 15% of the voting power in Golden West or any of its Significant
Subsidiaries, a proposal for a merger, consolidation or other business
combination involving Golden West or any of its Significant Subsidiaries or any
other proposal or offer to acquire in any manner more than 15% of the voting
power in, or more than 15% of the business, assets or deposits of, Golden West
or any of its Significant Subsidiaries, other than the transactions contemplated
hereby and other than any sale of whole loans and securitizations in the
ordinary course; PROVIDED, HOWEVER, that for purposes of Section 8.03(a),
references in this definition to "more than 15%" shall be deemed to be
references to "25% or more".
"AGREEMENT" has the meaning assigned in the Preamble.
"ARTICLES OF MERGER" has the meaning assigned in Section 2.03.
"BCA" means the Business Corporation Act of the State of North Carolina.
"BENEFIT ARRANGEMENT" means, with respect to each of Wachovia and Golden
West, each of the following (a) under which any Employee or any of its current
or former directors has any present or future right to benefits, (b) that is
sponsored or maintained by it or its Subsidiaries, or (c) under which it or its
Subsidiaries has had or has any present or future liability to any Employee or
any of its current or former directors: each "employee benefit plan" (within the
meaning of Section 3(3) of ERISA) and each stock purchase, stock option,
severance, employment, change-in-control, fringe benefit, bonus, incentive,
deferred compensation, paid time off benefits and other employee benefit plan,
agreement, program, policy or other arrangement (with respect to any of
preceding, whether or not subject to ERISA).
"BENEFITS TRANSITION DATE" has the meaning assigned in Section 6.12(a).
"BHC ACT" means the Bank Holding Company Act of 1956.
"CASH AMOUNT" has the meaning assigned in Section 3.01.
"CASH CONSIDERATION" has the meaning assigned in Section 3.01.
"CERTIFICATE OF MERGER" has the meaning assigned in Section 2.03.
2
"CLOSING" has the meaning assigned in Section 2.02.
"CLOSING DATE" has the meaning assigned in Section 2.02.
"CODE" has the meaning assigned in the Recitals.
"CONFIDENTIALITY AGREEMENT" has the meaning assigned in Section 6.05(b).
"CONSTITUENT DOCUMENTS" means the charter or articles or certificate of
incorporation and by-laws of a corporation or banking organization, the
certificate of partnership and partnership agreement of a general or limited
partnership, the certificate of formation and limited liability company
agreement of a limited liability company, the trust agreement of a trust and the
comparable documents of other entities.
"COSTS" has the meaning assigned in Section 6.11(a).
"COVERED EMPLOYEES" has the meaning assigned in Section 6.12(a).
"DISCLOSURE SCHEDULE" has the meaning assigned in Section 5.01.
"DISSENTING SHAREHOLDER" has the meaning assigned in Section 3.07.
"DISSENTING SHARES" means shares of Golden West Common Stock the holders of
which have perfected and not withdrawn or lost their right to dissent with
respect to such shares under Section 262 of the GCL.
"EFFECTIVE TIME" has the meaning assigned in Section 2.03.
"EMPLOYEES" means current and former employees of each of Wachovia and
Golden West, as the context requires.
"ENVIRONMENTAL LAWS" means the statutes, rules, regulations, ordinances,
codes, orders, decrees, and any other laws (including common law) of any
foreign, federal, state, local, and any other governmental authority,
regulating, relating to or imposing liability or standards of conduct concerning
pollution, or protection of human health and safety or of the environment, as in
effect on or prior to the date of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA AFFILIATE" has the meaning assigned in Section 5.03(m).
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and the rules and
regulations thereunder.
"EXCHANGE AGENT" has the meaning assigned in Section 3.04(a).
3
"EXCHANGE FUND" has the meaning assigned in Section 3.04(a).
"EXCHANGE RATIO" has the meaning assigned in Section 3.01.
"GAAP" means United States generally accepted accounting principles.
"GCL" means the General Corporation Law of the State of Delaware.
"GOLDEN WEST" has the meaning assigned in the preamble to this Agreement.
"GOLDEN WEST AFFILIATE" has the meaning assigned in Section 6.07.
"GOLDEN WEST BOARD" means the Board of Directors of Golden West.
"GOLDEN WEST COMMON STOCK" means the common stock, par value $.10 per
share, of Golden West.
"GOLDEN WEST DIRECTOR APPOINTEES" has the meaning assigned in Section 2.07.
"GOLDEN WEST INSIDERS" means those officers and directors of Golden West
subject to the reporting requirements of Section 16(a) of the Exchange Act and
who are listed in the Section 16 Information.
"GOLDEN WEST MEETING" has the meaning assigned in Section 6.02(c).
"GOLDEN WEST PREFERRED STOCK" means the preferred stock, par value $1.00
per share, of Golden West.
"GOLDEN WEST STOCK OPTION" has the meaning assigned in Section 3.10(a).
"GOLDEN WEST STOCK PLANS" means (a) Golden West's 1996 Stock Option Plan,
as amended and restated as of February 2, 1996 and as further amended as of May
2, 2001 and (b) Golden West's 2005 Stock Incentive Plan.
"GOVERNMENTAL AUTHORITY" means any court, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, or any industry self-regulatory authority.
"HOLA" means the Home Owners' Loan Act.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976
and the rules and regulations thereunder.
"INDEMNIFIED PARTY" has the meaning assigned in Section 6.11(a).
4
"JOINT PROXY STATEMENT" has the meaning assigned in Section 6.03(a).
"LIEN" means any charge, mortgage, pledge, security interest, restriction,
claim, lien, or encumbrance.
"MARKET PRICE" means the average of the last reported sale prices of
Wachovia Common Stock, as reported by the NYSE Composite Transactions Reporting
System (as reported in THE WALL STREET JOURNAL or, if not reported therein, in
another authoritative source), for the last ten NYSE trading days preceding the
Closing Date.
"MATERIAL ADVERSE EFFECT" means, with respect to Wachovia or Golden West,
any effect that
(a) has a material adverse effect on the financial condition, results of
operations or business of Wachovia and its Subsidiaries, taken as a whole, or
Golden West and its Subsidiaries, taken as a whole, respectively, excluding
(with respect to each of clause (1), (3) and (5), only to the extent that the
effect of a change on it is not disproportionate to the effect of such change on
comparable U.S. banking organizations) the impact of (1) changes in banking and
other laws of general applicability or changes in the interpretation thereof by
Governmental Authorities, (2) changes in GAAP or regulatory accounting
requirements applicable to U.S. banking organizations generally, (3) changes in
prevailing interest rates or other general economic or market conditions
affecting U.S. banking organizations generally, (4) actions or omissions of a
party to this Agreement required by this Agreement or taken with the prior
written consent of the other party to this Agreement in contemplation of the
transactions contemplated hereby, (5) changes in global or national political
conditions (including the outbreak of war or acts of terrorism) or due to
natural disasters, and (6) to the extent consistent with GAAP, any modifications
or changes to valuation policies or practices, or restructuring charges, in each
case taken with the prior approval of Wachovia or Golden West, as the case may
be, in connection with the Merger; or
(b) would materially impair the ability of Wachovia or Golden West,
respectively, to perform its obligations under this Agreement or to consummate
the transactions contemplated hereby on a timely basis.
"MATERIALS OF ENVIRONMENTAL CONCERN" means any hazardous or toxic
substances, materials, wastes, pollutants, or contaminants, including without
limitation those defined or regulated as such under any Environmental Law, and
any other substance the presence of which may give rise to liability under
Environmental Law.
"MERGER" has the meaning assigned in the Recitals.
5
"MERGER CONSIDERATION" has the meaning assigned in Section 3.01.
"MERGER SUB" has the meaning assigned in the preamble to this Agreement.
"MERGER SUB COMMON STOCK" means the common stock, par value $0.01 share, of
Merger Sub.
"NEW CERTIFICATES" has the meaning assigned in Section 3.04(a).
"NEW OPTION" has the meaning assigned in Section 3.10(a).
"NYSE" means the New York Stock Exchange.
"OLD CERTIFICATES" has the meaning assigned in Section 3.04(a).
"OTHER PERSONS" has the meaning assigned in Section 6.06(a).
"OTS" means the Office of Thrift Supervision.
"PARTY" means Wachovia, Merger Sub or Golden West.
"PENSION PLAN" has the meaning assigned in Section 5.03(m).
"PERSON" is to be interpreted broadly to include any individual, savings
association, bank, trust company, corporation, limited liability company,
partnership, association, joint-stock company, business trust or unincorporated
organization.
"PREVIOUSLY DISCLOSED" means information set forth by a party in the
applicable paragraph of its Disclosure Schedule, or in another paragraph of its
Disclosure Schedule (so long as it is reasonably clear from the context that the
disclosure in such other paragraph of its Disclosure Schedule is also applicable
to the section of this Agreement in question).
"REGISTRATION STATEMENT" has the meaning assigned in Section 6.03(a).
"REGULATORY FILINGS" has the meaning assigned in Section 5.03(h).
"REPRESENTATIVES" means, with respect to any person, such person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"REQUISITE REGULATORY APPROVALS" has the meaning assigned in Section
6.10(a).
6
"RIGHTS" means, with respect to any person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any other person
any right to subscribe for or acquire, or any options, calls or commitments
relating to, or any stock appreciation right or other instrument the value of
which is determined in whole or in part by reference to the market price or
value of, shares of capital stock of such first person.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT" means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations thereunder.
"SEC" means the United States Securities and Exchange Commission.
"SECRETARY OF STATE (DEL)" means the Secretary of State of the State of
Delaware.
"SECRETARY OF STATE (NC)" means the Secretary of State of the State of
North Carolina.
"SECTION 16 INFORMATION" means information regarding the Golden West
Insiders, including the number of shares of Golden West Common Stock held or to
be held by a Golden West Insider expected to be exchanged for Wachovia Common
Stock in the Merger, and the number and description of the options to purchase
shares of Golden West Common Stock held by a Golden West Insider and expected to
be converted into options to purchase shares of Wachovia Common Stock in
connection with the Merger.
"SECURITIES ACT" means the Securities Act of 1933 and the rules and
regulations thereunder.
"STOCK CONSIDERATION" has the meaning assigned in Section 3.01.
"SUBSIDIARY" and "SIGNIFICANT SUBSIDIARY" have the meanings ascribed to
those terms in Rule 1-02 of Regulation S-X promulgated by the SEC.
"SUPERIOR PROPOSAL" means a BONA FIDE written Acquisition Proposal which
the Golden West Board concludes in good faith to be more favorable from a
financial point of view to its shareholders than the Merger and the other
transactions contemplated hereby, (1) after receiving the advice of its
financial advisors (which shall be a nationally recognized investment banking
firm), (2) after taking into account the likelihood and timing of consummation
of the proposed transaction on the terms set forth therein (as compared to, and
with due regard for, the terms herein) and (3) after taking into account all
legal (with the advice of outside counsel), financial (including the financing
terms of any such proposal), regulatory (including the advice of outside counsel
regarding the potential for regulatory approval of any such proposal) and other
aspects of such proposal and any other relevant factors permitted under
applicable law; PROVIDED
7
that for purposes of the definition of "Superior Proposal", the references to
"more than 15%" in the definition of Acquisition Proposal shall be deemed to be
references to "25% or more".
"SURVIVING CORPORATION" has the meaning assigned in the Recitals.
"TAKEOVER LAWS" has the meaning assigned in Section 5.03(p).
"TAKEOVER PROVISIONS" has the meaning assigned in Section 5.03(p).
"TAX" and "TAXES" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority.
"TAX RETURNS" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed with any taxing authority with respect to any Tax.
"VOTING AGREEMENTS" has the meaning assigned in the Recitals.
"WACHOVIA" has the meaning assigned in the preamble to this Agreement.
"WACHOVIA BOARD" means the Board of Directors of Wachovia.
"WACHOVIA COMMON STOCK" means the common stock, par value $3.33 per share,
of Wachovia.
"WACHOVIA DRIP" means the Wachovia Dividend Reinvestment and Stock Purchase
Plan.
"WACHOVIA MEETING" has the meaning assigned in Section 6.02(c).
"WACHOVIA PREFERRED STOCK" means, collectively, the Preferred Stock, no-par
value, the Class A Preferred Stock, no-par value, and the Dividend Equalization
Preferred shares, no-par value, of Wachovia.
"WACHOVIA RIGHTS" means rights to purchase shares of Wachovia Stock issued
under the Wachovia Rights Agreement.
8
"WACHOVIA RIGHTS AGREEMENT" means the Shareholder Protection Rights
Agreement, dated as of December 19, 2000, between Wachovia and Wachovia Bank,
National Association, as Rights Agent.
"WACHOVIA STOCK" means, collectively, the Wachovia Common Stock and the
Wachovia Preferred Stock.
"WACHOVIA STOCK OPTION" has the meaning assigned in Section 3.10.
"WACHOVIA STOCK PLANS" means the Wachovia 2003 Stock Incentive Plan, the
Wachovia 2001 Stock Incentive Plan, the Wachovia Employee Retention Stock Plan,
the Wachovia Stock Plan, the Wachovia 1998 Stock Incentive Plan, the Wachovia
1996 Master Stock Compensation Plan and the Wachovia 1992 Master Stock
Compensation Plan, as amended.
1.02. INTERPRETATION. (a) In this Agreement, except as context may
otherwise require, references:
(1) to the Preamble, Recitals, Sections, Annexes or Schedules are
to the Preamble to, a Recital or Section of, or Annex or Schedule to,
this Agreement;
(2) to this Agreement are to this Agreement, and the Annexes and
Schedules to it, taken as a whole;
(3) to any agreement (including this Agreement and the Voting
Agreements as executed and delivered), contract, statute or regulation
are to the agreement, contract, statute or regulation as amended,
modified, supplemented, restated or replaced from time to time (in the
case of an agreement or contract, to the extent permitted by the terms
thereof); and to any section of any statute or regulation include any
successor to the section;
(4) to the "transactions contemplated hereby" includes the
transactions provided for in this Agreement and the Annexes to it; and
(5) to any Governmental Authority include any successor to that
Governmental Authority; and
(6) to the date of this Agreement or the date hereof are to May
7, 2006.
(b) The table of contents and article and section headings are for
reference purposes only and do not limit or otherwise affect any of the
substance of this Agreement.
9
(c) The words "include," "includes" or "including" are to be deemed
followed by the words "without limitation."
(d) The words "herein", "hereof" or "hereunder", and similar terms are
to be deemed to refer to this Agreement as a whole and not to any specific
Section.
(e) This Agreement is the product of negotiation by the parties,
having the assistance of counsel and other advisers. The parties intend
that this Agreement not be construed more strictly with regard to one party
than with regard to the other.
(f) No provision of this Agreement is to be construed to require,
directly or indirectly, any person to take any action, or omit to take any
action, to the extent such action or omission would violate applicable law
(including statutory and common law), rule or regulation.
ARTICLE II
THE MERGER
2.01. THE MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, Golden West will merge with and into Merger Sub at the Effective
Time. At the Effective Time, the separate corporate existence of Golden West
will terminate. Merger Sub will be the Surviving Corporation, and will continue
its corporate existence under the laws of the State of North Carolina.
2.02. CLOSING. The closing of the Merger (the "CLOSING") will take place in
the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at
10:00 a.m. on the third business day (unless the parties agree to another time
or date) after satisfaction or waiver of the conditions set forth in Article
VII, other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions (the
"CLOSING DATE").
2.03. EFFECTIVE TIME. Subject to the provisions of this Agreement, in
connection with the Closing, Golden West and Merger Sub will duly execute and
deliver (1) articles of merger (the "ARTICLES OF MERGER") to the Secretary of
State (NC) for filing under Section 55-11-05 of the BCA and (2) a certificate of
merger (the "CERTIFICATE OF MERGER") to the Secretary of State (Del) for filing
under Section 252 of the GCL. The parties will make all other filings or
recordings required under the BCA and the GCL, and the Merger will become
effective when the Articles of Merger are filed in the office of the Secretary
of State (NC) and the Certificate of Merger is filed in the office of the
Secretary of State (Del), or at such later date or time as Wachovia and Golden
West agree and specify in the Articles of Merger and the Certificate of Merger
(the time the Merger becomes effective being THE "EFFECTIVE TIME").
10
2.04. EFFECTS OF THE MERGER. The Merger will have the effects prescribed by
the BCA, the GCL and other applicable law.
2.05. CONSTITUENT DOCUMENTS. (a) The certificate of incorporation of Merger
Sub, as in effect immediately before the Effective Time, will be the articles of
incorporation of the Surviving Corporation as of the Effective Time.
(b) The by-laws of Merger Sub, as in effect immediately before the
Effective Time, will be the by-laws of the Surviving Corporation as of the
Effective Time.
2.06. GOLDEN WEST BOARD OF DIRECTORS. The board of directors of the
Surviving Corporation shall consist of the members of the Merger Sub board of
directors immediately before the Effective Time.
2.07. WACHOVIA BOARD. Wachovia agrees to cause two current members of the
Golden West Board designated by Golden West and reasonably acceptable to
Wachovia (the "GOLDEN WEST DIRECTOR APPOINTEES") to be appointed to the Wachovia
Board immediately after the Effective Time.
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01. CONSIDERATION. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any shares of Golden West Stock
and subject to Sections 3.04(c) and 3.05, the shares of Golden West Common Stock
issued and outstanding immediately prior to the Effective Time, with respect to
each holder of record of such shares, will be converted into the right to
receive:
(1) a number of fully paid and nonassessable shares of Wachovia
Common Stock (and the requisite number of Wachovia Rights issued and
attached to such shares under the Wachovia Rights Agreement) equal to
the product of (i) 1.365 (the "EXCHANGE RATIO"), multiplied by (ii)
the number of shares of Golden West Common Stock held by such holder
of record, multiplied by (iii) 77 percent (such product, the "STOCK
CONSIDERATION"); and
(2) an amount in cash equal to the product of (i) $81.07 (the
"CASH AMOUNT"), multiplied by (ii) the number of shares of Golden West
Common Stock held by such holder of record, multiplied by (iii) 23
percent (such product, the "CASH CONSIDERATION" and, together with the
Stock Consideration, the "MERGER CONSIDERATION").
Notwithstanding anything in this Section 3.01 to the contrary, at the Effective
Time and by virtue of the Merger, each share of Golden West Common Stock
beneficially owned
11
by Wachovia (other than shares held in a trust, fiduciary, or nominee capacity
or as a result of debts previously contracted) or held in Golden West's treasury
will be canceled and no shares of Wachovia Stock and no Wachovia Rights or other
consideration will be issued or paid in exchange therefor.
3.02. CANCELLATION OF SHARES. At the Effective Time, the shares of Golden
West Common Stock will no longer be outstanding and will automatically be
canceled and will cease to exist. Certificates that represented Golden West
Common Stock before the Effective Time will be deemed for all purposes to
represent the number of shares of Wachovia Common Stock or cash into which they
were converted pursuant to Section 3.01, and, as contemplated by the Wachovia
Rights Agreement, attached Wachovia Rights.
3.03. RIGHTS AS SHAREHOLDERS; STOCK TRANSFERS. At the Effective Time,
holders of Golden West Common Stock will cease to be, and will have no rights
as, shareholders of Golden West, other than rights to (a) receive any then
unpaid dividend or other distribution with respect to such Golden West Common
Stock having a record date before the Effective Time and (b) receive the Merger
Consideration provided under this Article III. After the Effective Time, there
will be no transfers of shares of Golden West Common Stock on the stock transfer
books of Golden West or the Surviving Corporation, and shares of Golden West
Common Stock presented to the Surviving Corporation for any reason will be
canceled and exchanged in accordance with this Article III.
3.04. EXCHANGE PROCEDURES. As of the Effective Time, Wachovia will deposit
with Wachovia's transfer agent or with a depository or trust institution of
recognized standing selected by Wachovia and reasonably satisfactory to Golden
West (in such capacity, the "EXCHANGE AGENT"), for the benefit of the holders of
certificates formerly representing shares of Golden West Common Stock ("OLD
CERTIFICATES"), (1) certificates or, at Wachovia's option, evidence of shares in
book entry form, representing the number of shares of Wachovia Common Stock
("NEW CERTIFICATES") issuable to holders of Old Certificates under this Article
III, (2) the aggregate Cash Consideration payable to holders of Old Certificates
under this Article III and (3) cash payable pursuant to Section 3.05 (the
"EXCHANGE FUND").
(b) Promptly after the Effective Time, Wachovia will send or cause to
be sent to each person who was a recordholder of Golden West Common Stock
immediately before the Effective Time transmittal materials, in form
reasonably acceptable to Golden West, for exchanging Old Certificates. Upon
surrender of an Old Certificate for cancellation to the Exchange Agent
together with the transmittal materials, duly executed, and such other
documents as the Exchange Agent may reasonably require (including customary
indemnity if any of such certificates are lost, stolen, or destroyed), the
holder of such Old Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of New Certificates which
such holder has the right to receive in respect of the Old Certificates
surrendered pursuant to the provisions of this Article III (after
12
taking into account all shares of Golden West Common Stock then held by
such holder) and any check in respect of the Cash Consideration payable to
the holder of such Old Certificates, dividends or distributions or for
fractional shares that the shareholder will be entitled to receive, and the
Old Certificates so surrendered shall forthwith be cancelled. No interest
will be paid on any such cash or other consideration deliverable pursuant
to this Article III.
(c) If, on or after the date of this Agreement and prior to the
Closing Date, any holder of record (or group of related holders of record)
of shares of Golden West Common Stock (a "TRANSFEROR") transfers or
conveys, in one or more transactions, a number of shares of Golden West
Common Stock to one or more charitable organizations (as defined in Section
170(c) of the Code) (each, a "TRANSFEREE" and together, the "TRANSFEREES")
such that the aggregate number of shares of Golden West Common Stock so
transferred or conveyed by the Transferor to the Transferees represents
more than 0.1 percent of the issued and outstanding shares of Golden West
Common Stock as of the date of this Agreement, then the Transferor and the
Transferees may jointly and irrevocably elect by providing written notice
to Wachovia of such election (and proper provision shall be made on the
transmittal materials to give effect to such election) that the Transferor
and the Transferees be treated as though they were a single holder of
record for purposes of Section 3.01 and may designate in such written
notice to Wachovia and the transmittal materials the manner in which the
aggregate Stock Consideration and aggregate Cash Consideration that the
Transferor and Transferees are entitled to receive under this Article III
shall be allocated, and distributed by the Exchange Agent, among the
Transferor and Transferees.
(d) None of Wachovia, Golden West or the Exchange Agent will be liable
to any former holder of Golden West Common Stock for any shares of Wachovia
Common Stock (or dividends or distributions with respect thereto) or cash
from the Exchange Fund properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
(e) Each of Wachovia and the Surviving Corporation shall be entitled
to deduct and withhold, or cause the Exchange Agent to deduct and withhold,
from the consideration otherwise payable pursuant to this Agreement to any
holder of Golden West Common Stock such amounts as it may be required to
deduct and withhold with respect to the making of such payment under the
Code, or any provision of state, local or foreign Tax law. To the extent
that amounts are so withheld by the Wachovia, the Surviving Corporation, or
the Exchange Agent, as the case may be, the withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
holders of Golden West Common Stock in respect of which the deduction and
withholding was made by Wachovia, the Surviving Corporation or the Exchange
Agent, as the case may be.
13
3.05. FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
fractional shares of Wachovia Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Merger;
instead, Wachovia will pay to each holder of Golden West Common Stock who would
otherwise be entitled to a fractional share of Wachovia Common Stock (after
taking into account all Old Certificates delivered by such holder) an amount in
cash (without interest) determined by multiplying such fraction of a share of
Wachovia Common Stock by the Market Price.
3.06. ANTI-DILUTION ADJUSTMENTS. If Wachovia changes (or the Wachovia Board
sets a related record date that will occur before the Effective Time for a
change in) the number or kind of shares of Wachovia Common Stock outstanding by
way of a stock split, stock dividend, recapitalization, reclassification,
reorganization or similar transaction, then the Exchange Ratio and the Cash
Amount will be adjusted proportionately to account for such change.
3.07. DISSENTING SHAREHOLDERS. (a) Each Dissenting Share shall not be
converted into or represent a right to receive Merger Consideration hereunder,
and the holder thereof shall be entitled only to such rights as are granted by
Section 262 of the GCL. Golden West shall give Wachovia prompt notice upon
receipt by the Golden West of any demand for payment pursuant to Section 262 of
the GCL and of withdrawals of such notice and any other instruments provided
pursuant to applicable law (any stockholder duly making such demand being
hereinafter called a "DISSENTING SHAREHOLDER"), and Wachovia shall have the
right to participate in all negotiations and proceedings with respect to any
such demands. Any payments made in respect of Dissenting Shares shall be made by
Wachovia.
(b) If any Dissenting Shareholder shall effectively withdraw or lose
(through failure to perfect or otherwise) his or her right to dissent under
Section 262 of the GCL at or prior to the Effective Time, such holder's
shares of Golden West Common Stock shall be converted into a right to
receive the Merger Consideration in accordance with the applicable
provisions of this Agreement.
3.08. EFFECT ON MERGER SUB COMMON STOCK. Each share of Merger Sub Common
Stock outstanding immediately prior to the Effective Time will remain
outstanding.
3.09. EFFECT ON WACHOVIA STOCK. Each share of Wachovia Stock outstanding
immediately prior to the Effective Time will remain outstanding.
3.10. STOCK OPTIONS. At the Effective Time, by virtue of the Merger and
without any action on the part of any holder of any outstanding option to
purchase shares of Golden West Common Stock under the Golden West Stock Plans
and any other Benefit Arrangement, whether vested or unvested, exercisable or
unexercisable (each, a "GOLDEN WEST STOCK OPTION"), each Golden West Stock
Option that is outstanding and unexercised immediately prior thereto shall
immediately and fully vest and be deemed to constitute an option (a "NEW
OPTION") to purchase, on the same terms and conditions as
14
were applicable under the terms of the stock option plan under which the Golden
West Stock Option was granted and the applicable award agreement thereunder
(taking into account the accelerated vesting provided in this Section 3.10 and
the amendments to the Golden West Stock Options as Previously Disclosed), such
number of shares of Wachovia Common Stock and at such an exercise price per
share determined as follows:
(1) NUMBER OF SHARES. The number of shares of Wachovia Common
Stock subject to a New Option shall be equal to the product of (A) the
number of shares of Golden West Common Stock purchasable upon exercise
of the Golden West Stock Option and (B) the Exchange Ratio, the
product being rounded down to the nearest whole share; and
(2) EXERCISE PRICE. The exercise price per share of Wachovia
Common Stock purchasable upon exercise of a New Option shall be equal
to (A) the exercise price per share of Golden West Common Stock under
the Golden West Stock Option divided by (B) the Exchange Ratio, the
quotient being rounded up to the nearest cent.
For the avoidance of doubt, the foregoing adjustments shall be effected in a
manner consistent with Section 424(a) of the Code.
(b) Before the Effective Time, Golden West, or its Board of
Directors or an appropriate committee thereof, shall take all action
necessary on its part to give effect to the provisions of Section
3.10(a) and shall take such other actions reasonably requested by
Wachovia to give effect to the foregoing. Before the Effective Time,
Wachovia shall take all corporate action necessary to reserve for
future issuance a sufficient additional number of shares of Wachovia
Common Stock to provide for the satisfaction of its obligations with
respect to the New Options. As soon as practicable, but in no event
later than the Effective Time, Wachovia shall file a registration
statement on Form S-8 (or any successor or other appropriate form)
with respect to the Wachovia Common Stock issuable upon exercise of
the New Options and shall maintain the effectiveness of such
registration statement (and to maintain the current status of the
prospectus or prospectuses contained therein) for so long as such New
Options remain outstanding.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
4.01. FOREBEARANCES OF GOLDEN WEST. Golden West agrees that from the date
hereof until the Effective Time, except as expressly contemplated by this
Agreement or as Previously Disclosed, without the prior written consent of
Wachovia (which consent will not be unreasonably withheld or delayed), it will
not, and will cause each of its Subsidiaries not to:
15
(a) ORDINARY COURSE. Conduct its business and the business of its
Subsidiaries other than in the ordinary and usual course or fail to use
reasonable best efforts to preserve intact its business organizations and
assets and maintain its rights, franchises and authorizations and their
existing relations with customers, suppliers, employees and business
associates, or take any action reasonably likely to materially impair its
ability to perform its obligations under this Agreement or to consummate
the transactions contemplated hereby.
(b) OPERATIONS. Enter into any new material line of business or change
its material lending, investment, underwriting, risk and asset liability
management and other material banking and operating policies, except as
required by applicable law, regulation or policies imposed by any
Governmental Authority.
(c) CAPITAL STOCK. Other than pursuant to Rights Previously Disclosed
and outstanding on the date of this Agreement, (1) issue, sell or otherwise
permit to become outstanding, or dispose of or encumber or pledge, or
authorize or propose the creation of, any additional shares of its stock,
or (2) permit any additional shares of its stock to become subject to new
grants, except issuances of employee or director stock options or other
stock-based employee Rights in the ordinary course of business consistent
with past practice.
(d) DIVIDENDS, DISTRIBUTIONS, REPURCHASES. (1) Make, declare, pay or
set aside for payment any dividend on or in respect of, or declare or make
any distribution on any shares of its stock (OTHER THAN (A) dividends from
its wholly owned Subsidiaries to it or another of its wholly owned
Subsidiaries or (B) regular quarterly dividends on its common stock,
provided that any such dividend shall be at a rate equal to the rate paid
by it during the fiscal quarter immediately preceding the date hereof, or
required dividends on preferred stock or (2) directly or indirectly adjust,
split, combine, redeem, reclassify, purchase or otherwise acquire, any
shares of its stock.
(e) DISPOSITIONS. Sell, transfer, mortgage, encumber or otherwise
dispose of or discontinue any of its assets, deposits, business or
properties, except for sales, transfers, mortgages, encumbrances or other
dispositions or discontinuances in the ordinary course of business
consistent with past practice (which shall be deemed to include asset
sales, including sales of whole loans and securitizations, in the ordinary
course) and in a transaction that, together with other such transactions,
is not material to it and its Subsidiaries, taken as a whole.
(f) ACQUISITIONS. Acquire (other than by way of foreclosures or
acquisitions of control in a fiduciary or similar capacity or in
satisfaction of debts previously contracted in good faith or otherwise in
the ordinary and usual course of business consistent with past practice)
all or any portion of the assets, business, deposits or properties of any
other entity in an amount that is material to Golden West.
16
(g) CONSTITUENT DOCUMENTS. Amend its Constituent Documents or the
Constituent Documents (or similar governing documents) of any of its
Significant Subsidiaries.
(h) ACCOUNTING METHODS. Implement or adopt any change in its financial
or regulatory accounting principles, practices or methods or change any
actuarial or other assumptions used to calculate funding obligations with
respect to any Benefit Arrangement, other than (with prior notice to
Wachovia) as may be required by GAAP or applicable regulatory accounting
requirements.
(i) ADVERSE ACTIONS. Notwithstanding anything herein to the contrary,
(1) knowingly take, or knowingly omit to take, any action that would, or is
reasonably likely to, prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code or (2)
knowingly take, or knowingly omit to take, any action that is reasonably
likely to result in any of the conditions to the Merger set forth in
Article VII not being satisfied in a timely manner, except (with prior
notice to Wachovia) as may be required by applicable law or regulation.
(j) COMPENSATION AND BENEFITS. Grant any salary or wage increase or
increase any employee benefit, including incentive or bonus payments (or,
with respect to any of the preceding, communicate any intention to take
such action), EXCEPT (1) to make changes that are required by applicable
law, (2) to satisfy Previously Disclosed contractual obligations existing
as of the date hereof, (3) for merit-based or annual salary increases in
the ordinary course of business and in accordance with past practice, but
not to exceed in the aggregate 5% of the aggregate annual salaries of the
employees of Golden West and its Subsidiaries, taken as a whole, or (4) for
employment arrangements for, or grants of awards to, newly hired employees
in the ordinary and usual course of business consistent with past practice.
(k) BENEFIT PLANS. Enter into, establish, adopt, amend, modify
(including by way of interpretation) or renew any Benefit Arrangement, or
any trust agreement (or similar arrangement) related thereto, in respect of
any director, officer or employee, take any action to accelerate the
vesting or exercisability of Golden West Stock Options or other
compensation or benefits payable under any Benefit Arrangement, fund or in
any other way secure the payment of compensation or benefits under any
Benefit Arrangement, change the manner in which contributions to any
Benefit Arrangement are made or determined, or add any new participants to
or increase the principal sum of any non-qualified retirement plans (or,
with respect to any of the preceding, communicate any intention to take
such action), EXCEPT (1) as may be required by applicable law, (2) to
satisfy Previously Disclosed contractual obligations existing as of the
date hereof or (3) amendments that do not increase benefits or result in
increased administrative costs.
17
(l) TAXES. Make or change any material Tax elections, change or
consent to any material change in its or its Subsidiaries' method of
accounting for Tax purposes (except as required by applicable Tax law),
settle or compromise any material Tax liability, claim or assessment, or
file any material amended Tax Return.
(m) COMMITMENTS. Enter into any contract with respect to, or otherwise
agree or commit to do, any of the foregoing.
4.02. FOREBEARANCES OF WACHOVIA. Wachovia agrees that from the date hereof
until the Effective Time, except as expressly contemplated by this Agreement or
as Previously Disclosed, without the prior written consent of Golden West, it
will not, and will cause each of its Subsidiaries not to:
(a) CONSTITUENT DOCUMENTS. Amend its Constituent Documents in a manner
that would materially and adversely affect the rights and privileges of
holders of Wachovia Common Stock or prevent or materially impede or
materially delay consummation of the transactions contemplated hereby.
(b) ADVERSE ACTIONS. Notwithstanding anything herein to the contrary,
(1) knowingly take, or knowingly omit to take, any action that would, or is
reasonably likely to, prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code or (2)
knowingly take, or knowingly omit to take, any action that is reasonably
likely to result in any of the conditions to the Merger set forth in
Article VII not being satisfied in a timely manner, except (with prior
notice to Golden West) as may be required by applicable law or regulation.
(c) COMMITMENTS. Enter into any contract with respect to, or otherwise
agree or commit to do, any of the foregoing.
Notwithstanding anything in paragraphs (a), (b) or (c) of this
Section 4.02 to the contrary, Wachovia may make dispositions and acquisitions
and agree to issue capital stock in connection therewith, provided that such
actions do not present a material risk that the Closing Date will be delayed or
that the Requisite Regulatory Approvals will be materially more difficult to
obtain.
4.03. COORDINATION OF DIVIDENDS. Until the Effective Time, Golden West will
coordinate with Wachovia regarding the declaration of any dividends or other
distributions with respect to Golden West Common Stock and the related record
dates and payment dates, it being intended that Golden West shareholders will
not receive more than one dividend, or fail to receive one dividend, for any
single calendar quarter on their shares of Golden West Common Stock (including
any shares of Wachovia Common Stock received in exchange therefor in the
Merger).
18
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. DISCLOSURE SCHEDULES. Before entry into this Agreement, Wachovia
delivered to Golden West a schedule and Golden West delivered to Wachovia a
schedule (respectively, each schedule a "DISCLOSURE SCHEDULE"), setting forth,
among other things, items the disclosure of which is necessary or appropriate
either in response to an express disclosure requirement contained in a provision
hereof or as an exception to one or more representations or warranties contained
in Section 5.03 or to one or more of its covenants contained in Article IV;
PROVIDED that the inclusion of an item in a Disclosure Schedule as an exception
to a representation or warranty will not by itself be deemed an admission by a
party that such item is material or was required to be disclosed therein.
5.02. STANDARD. For all purposes of this Agreement, no representation or
warranty of Golden West or Wachovia contained in Section 5.03 or 5.04 (other
than the representations and warranties contained in Section 5.03(b) and
5.03(c), which shall be true in all material respects) will be deemed untrue,
and no party will be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 5.03 or 5.04, has had or is reasonably likely to have a
Material Adverse Effect with respect to Golden West or Wachovia, as the case may
be.
5.03. REPRESENTATIONS AND WARRANTIES. Except as Previously Disclosed or as
set forth in its Regulatory Filings filed or furnished with the SEC on or after
January 1, 2003 and prior to the date of this Agreement, Golden West represents
and warrants to Wachovia, and Wachovia hereby represents and warrants to Golden
West, to the extent applicable, as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. It is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. It is duly qualified to do business and
is in good standing in all jurisdictions where its ownership or leasing of
property or assets or its conduct of business requires it to be so
qualified.
(b) GOLDEN WEST STOCK. In the case of Golden West:
The authorized capital stock of Golden West consists of 600,000,000 shares
of Golden West Common Stock and 20,000,000 shares of Golden West Preferred
Stock. As of the date of this Agreement, no more than 309,000,000 shares of
Golden West Common Stock and no shares of Golden West Preferred Stock were
outstanding. As of the date of this Agreement, no more than 34,600,000 shares of
Golden West Common Stock were reserved for issuance under the Golden West Stock
Plans (of which no more than 9,600,000 shares were reserved for issuance in
respect of awards outstanding as of such date). The outstanding shares of Golden
West Common Stock have been duly
19
authorized and are validly issued and outstanding, fully paid and nonassessable,
and subject to no preemptive rights (and were not issued in violation of any
preemptive rights). Except for shares issuable pursuant to the Golden West Stock
Plans, as of the date of this Agreement, there are no shares of Golden West
Stock reserved for issuance, Golden West does not have any Rights outstanding
with respect to Golden West Stock, and Golden West does not have any commitment
to authorize, issue or sell any Golden West Stock or Rights, except pursuant to
this Agreement, outstanding Golden West Stock Options and the Golden West Stock
Plans. As of the date of this Agreement, Golden West has no commitment to
redeem, repurchase or otherwise acquire, or to register with the SEC, any shares
of Golden West Stock.
(c) WACHOVIA STOCK. In the case of Wachovia:
The authorized capital stock of Wachovia consists of 3,000,000,000 shares
of Wachovia Common Stock and 550,000,000 shares of Wachovia Preferred Stock. As
of the date of this Agreement, no more than 1,625,000,000 shares of Wachovia
Common Stock and 97,000,000 shares of Wachovia Dividend Equalization Preferred
Stock were outstanding. As of March 31, 2006, no more than 140,000,000 shares of
Wachovia Common Stock were subject to Wachovia Stock Options granted under the
Wachovia Stock Plans. As of March 31, 2006, there were no more than 66,000,000
shares of Wachovia Common Stock reserved for issuance under the Wachovia Stock
Plans. The outstanding shares of Wachovia Common Stock have been duly authorized
and are validly issued and outstanding, fully paid and nonassessable, and
subject to no preemptive rights (and were not issued in violation of any
preemptive rights). The shares of Wachovia Common Stock (together with the
Wachovia Rights) to be issued in the Merger have been duly authorized and, if
and when issued in the Merger, will be fully paid and nonassessable. Except as
set forth above, as of the date of this Agreement, there are no shares of
Wachovia Stock reserved for issuance, Wachovia does not have any Rights issued
or outstanding with respect to Wachovia Stock, and Wachovia does not have any
commitment to authorize, issue or sell any Wachovia Stock or Rights, except
pursuant to this Agreement, outstanding Wachovia Stock Options, the Wachovia
Stock Plans, the Wachovia Rights Agreement and the Wachovia DRIP. As of the date
of this Agreement, Wachovia has no commitment to redeem, repurchase or otherwise
acquire, or to register with the SEC, any shares of Wachovia Stock.
(d) SIGNIFICANT SUBSIDIARIES. (1) (A) It owns, directly or indirectly,
all the outstanding equity securities of each of its Significant
Subsidiaries free and clear of any Liens, (B) no equity securities of any
of its Significant Subsidiaries are or may become required to be issued
(other than to it or its wholly owned Subsidiaries) by reason of any Right
or otherwise, (C) there are no contracts, commitments, understandings or
arrangements by which any of such Significant Subsidiaries is or may be
bound to sell or otherwise transfer any equity securities of any such
Significant Subsidiaries (other than to it or its wholly-owned
Subsidiaries), (D) there are no contracts, commitments, understandings, or
arrangements relating to its rights to vote or to dispose of such
securities, (E) all
20
the equity securities of each Significant Subsidiary held by it or its
Subsidiaries have been duly authorized and are validly issued and
outstanding, fully paid and nonassessable (except as provided in 12 U.S.C.
ss. 55 or comparable OTS or state laws in the case of banking
Subsidiaries), and (F) each Significant Subsidiary that is a bank or
savings association is an "insured bank" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder.
(2) Each of its Significant Subsidiaries has been duly organized
and is validly existing in good standing under the laws of the
jurisdiction of its organization, and is duly qualified to do business
and in good standing in all jurisdictions where its ownership or
leasing of property or its conduct of business requires it to be so
qualified.
(e) POWER. It and each of its Subsidiaries has the corporate (or
comparable) power and authority to carry on its business as it is now being
conducted and to own all its properties and assets; and it has the
corporate (or comparable) power and authority to execute, deliver and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby.
(f) AUTHORITY. It has duly authorized, executed and delivered this
Agreement and has taken all corporate action necessary in order to execute
and deliver this Agreement. Subject only to receipt of the requisite
affirmative vote (1) to approve the issuance of Wachovia Common Stock
required by this Agreement, by the holders of a majority of the shares of
Wachovia Common Stock voted and (2) to approve the plan of merger contained
in this Agreement by the holders of a majority of the outstanding shares of
Golden West Common Stock, as the case may be, this Agreement and the
transactions contemplated hereby have been authorized by all corporate
action necessary on its respective part. This Agreement is its valid and
legally binding obligation, enforceable in accordance with its terms
(except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general
equity principles).
(g) REGULATORY APPROVALS; NO DEFAULTS. (1) No consents or approvals
of, or filings or registrations with, any Governmental Authority or with
any third party are required to be made or obtained by it or any of its
Subsidiaries in connection with the execution, delivery or performance by
it of this Agreement or to consummate the Merger, except for (A) filings of
applications and notices with, receipt of approvals or nonobjections from,
and expiration of related waiting periods required by foreign, federal and
state banking authorities, including applications and notices under the BHC
Act, the Bank Merger Act, HOLA and the Federal Reserve Act, (B) filing of
notices, and expiration of the related waiting period, under the HSR Act,
(C) filings of applications and notices with, and receipt of approvals or
nonobjections from, the SEC and state securities
21
authorities, the National Association of Securities Dealers, Inc.,
applicable securities exchanges and self-regulatory organizations, the
Small Business Administration and state insurance authorities, (D) filing
of the Registration Statement and Joint Proxy Statement with the SEC, and
declaration by the SEC of the Registration Statement's effectiveness under
the Securities Act, (E) receipt of the applicable shareholder approvals
described in Section 5.03(f), (F) the filing of the Articles of Merger and
Certificate of Merger, and (G) such filings with applicable securities
exchanges to obtain the authorizations for listing contemplated by this
Agreement.
(2) Subject to receipt of the consents and approvals referred to
in the preceding paragraph, and the expiration of related waiting
periods, and required filings under federal and state securities laws,
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby do not and will
not (A) constitute a breach or violation of, or a default under, or
give rise to any Lien or any acceleration of remedies, penalty,
increase in material benefit payable or right of termination under,
any law, rule or regulation or any judgment, decree, order,
governmental permit or license, or agreement, indenture or instrument
of it or of any of its Subsidiaries or to which it or any of its
Subsidiaries or properties is subject or bound, (B) constitute a
breach or violation of, or a default under, its Constituent Documents
or (C) require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license,
agreement, indenture or instrument.
(3) As of the date of this Agreement, it is not aware of any
reason why the necessary regulatory approvals and consents will not be
received in order to permit consummation of the Merger on a timely
basis.
(h) FINANCIAL REPORTS AND REGULATORY FILINGS; MATERIAL ADVERSE EFFECT.
(1) Its Annual Reports on Form 10-K for the fiscal years ended December 31,
2003, 2004 and 2005, and all other reports, registration statements,
definitive proxy statements or information statements filed by it or any of
its Subsidiaries subsequent to December 31, 2002 under the Securities Act,
or under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the form
filed (collectively, its "REGULATORY FILINGS") with the SEC as of the date
filed, (A) complied in all material respects as to form with the applicable
requirements under the Securities Act or the Exchange Act, as the case may
be, and (B) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and each of the statements of financial position
contained in or incorporated by reference into any such Regulatory Filing
(including the related notes and schedules) fairly presented in all
material respects its financial position and that of its Subsidiaries
22
as of the date of such statement, and each of the statements of income and
changes in shareholders' equity and cash flows or equivalent statements in
such Regulatory Filings (including any related notes and schedules thereto)
fairly presented in all material respects, the results of operations,
changes in shareholders' equity and changes in cash flows, as the case may
be, of it and its Subsidiaries for the periods to which those statements
relate, in each case in accordance with GAAP consistently applied during
the periods involved, except in each case as may be noted therein, and
subject to normal year-end audit adjustments and as permitted by Form 10-Q
in the case of unaudited statements.
(2) Since December 31, 2005, it and its Subsidiaries have not
incurred any liability other than in the ordinary course of business
consistent with past practice.
(3) Since December 31, 2005, (A) it and its Subsidiaries have
conducted their respective businesses in the ordinary and usual course
consistent with past practice (excluding the incurrence of expenses
related to this Agreement and the transactions contemplated hereby)
and (B) no event has occurred or circumstance arisen that,
individually or taken together with all other facts, circumstances and
events (described in any paragraph of Section 5.03 or otherwise), has
had or is reasonably likely to have a Material Adverse Effect with
respect to it.
(i) LITIGATION. Except as set forth in its Annual Report on Form 10-K
for the fiscal year ended December 31, 2005 (without giving effect to any
amendment filed after the date of this Agreement), there is no suit,
action, investigation or proceeding pending or, to its knowledge,
threatened against or affecting it or any of its Subsidiaries (and it is
not aware of any basis for any such suit, action or proceeding), nor is
there any judgment, decree, injunction, rule or order of any governmental
entity or arbitration outstanding against it or any of its Subsidiaries.
(j) REGULATORY MATTERS. Except as set forth in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2005 (without giving
effect to any amendment filed after the date of this Agreement), neither it
nor any of its Subsidiaries is subject to, or has been advised that it is
reasonably likely to become subject to, any special procedures or
restrictions related to expansion imposed by any written order, decree,
agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory
letter from, or adopted any extraordinary board resolutions at the request
of, any Governmental Authority charged with the supervision or regulation
of financial institutions or issuers of securities or engaged in the
insurance of deposits or the supervision or regulation of it or any of its
Subsidiaries. In the case of Wachovia, it is a "financial holding company",
as defined in Section 2(p) of the BHC Act, and is not subject to an
agreement
23
under Section 4(m) of such Act. In the case of Golden West, (i) it is a
savings and loan holding company duly registered under HOLA and (ii) the
activities conducted by it and its Subsidiaries are permissible for a
savings and loan company under Section 10(c)(2) of HOLA.
(k) COMPLIANCE WITH LAWS. Except as set forth in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2005 (without giving
effect to any amendment filed after the date of this Agreement), it and
each of its Subsidiaries:
(1) conducts its business in compliance with all applicable
federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees applicable thereto or
to the employees conducting such businesses;
(2) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to
permit them to own or lease their properties and to conduct their
businesses as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect and, to its knowledge, no suspension or cancellation of any of
them is threatened;
(3) has received, since December 31, 2002, no written
notification from any Governmental Authority (A) asserting that it or
any of its Subsidiaries is not in compliance with any of the statutes,
regulations or ordinances which such Governmental Authority enforces
or (B) threatening to revoke any license, franchise, permit or
governmental authorization; and
(4) is in compliance with all applicable listing standards, of
the NYSE.
(5) has no reason to believe that any facts or circumstances
exist, which would cause it or any of its Subsidiaries to be deemed
(i) to be operating in violation in any material respect of the Bank
Secrecy Act, the Patriot Act, any order issued with respect to
anti-money laundering by the U.S. Department of the Treasury's Office
of Foreign Assets Control, or any other applicable anti-money
laundering statute, rule or regulation; or (ii) not to be in
satisfactory compliance in any material respect with the applicable
privacy and customer information requirements contained in any federal
and state privacy laws and regulations, including, without limitation,
in Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1999 and the regulations
promulgated thereunder, as well as the provisions of the applicable
information security program adopted pursuant to 12 C.F.R Part 40.
24
(l) MATERIAL CONTRACTS; DEFAULTS. (1) Except for those agreements and
other documents filed as exhibits to its Annual Report on Form 10-K for the
fiscal year ended December 31, 2005, neither it nor any of its Subsidiaries
is a party to, bound by or subject to any agreement, contract, arrangement,
commitment or understanding (whether written or oral) (A) that is a
"material contract" within the meaning of Item 601(b)(10) of the SEC's
Regulation S-K, (B) that purports to restrict the conduct of any line of
business by it or any of its Subsidiaries or its or their ability to
compete in any line of business or (C) with respect to employment of an
officer, director or consultant.
(2) Neither it nor any of its Subsidiaries is in default under
any material contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party, by which
its respective assets, business, or operations may be bound or
affected, or under which it or its respective assets, business, or
operations receives benefits, and there has not occurred any event
that, with the lapse of time or the giving of notice or both, would
constitute such a default.
(m) EMPLOYEE BENEFIT PLANS. (1) All of its Benefit Arrangements are
Previously Disclosed, other than those Benefit Arrangements that are not
material. True and complete copies of all Benefit Arrangements, including,
but not limited to, any trust instruments and insurance contracts forming a
part of any Benefit Arrangements, and all amendments thereto, have been
made available to the other party.
(2) All of its Benefit Arrangements, other than "multiemployer
plans" within the meaning of Section 3(37) of ERISA, are in compliance
with ERISA, the Code and other applicable laws. Each of its Benefit
Arrangements which is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA ("PENSION PLAN"), and which is
intended to be qualified under Section 401(a) of the Code, has
received a favorable determination letter from the Internal Revenue
Service covering all tax law changes prior to the Economic Growth and
Tax Relief Reconciliation Act of 2001 or has applied to the IRS for
such letter within the applicable remedial amendment period under
Section 401(b) of the Code, and it is not aware of any circumstances
reasonably likely to result in the loss of qualification of any such
Pension Plan under Section 401(a) of the Code. Each Benefit
Arrangement which is intended to be part of a voluntary employees'
beneficiary association within the meaning of Section 501(c)(9) of the
Code has (A) received an opinion letter from the Internal Revenue
Service recognizing its exempt status under Section 501(c)(9) of the
Code and (B) filed a timely notice with the Internal Revenue Service
pursuant to Section 505(c) of the Code, and it is not aware of
circumstances likely to result in the loss of the exempt status of
such Benefit Arrangement under Section 501(c)(9) of the Code. There
25
is no pending or, to its knowledge, threatened litigation (other than
routine claims for benefits in the ordinary course of business)
relating to its Benefit Arrangements. Neither it nor any of its
Subsidiaries has engaged in a transaction with respect to any of its
Benefit Arrangements that, assuming the taxable period of such
transaction expired as of the date hereof, could subject it or any of
its Subsidiaries to a tax or penalty imposed by either Section 4975 of
the Code or Section 502(i) of ERISA. Neither it nor any of its
Subsidiaries has incurred or reasonably expects to incur a tax or
penalty imposed by Section 4980F of the Code or Section 502 of ERISA
or any liability under Section 4071 of ERISA.
(3) No liability under Subtitle C or D of Title IV of ERISA has
been or is reasonably expected to be incurred by it or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by any of them, or the
single-employer plan of any entity which is considered one employer
with it under Section 4001 of ERISA or Section 414 of the Code (an
"ERISA AFFILIATE"). None of it, any of its Subsidiaries or any of its
ERISA Affiliates has contributed to a "multiemployer plan", within the
meaning of Section 3(37) of ERISA, at any time within the last six
years. No notice of a "reportable event", within the meaning of
Section 4043 of ERISA for which the 30-day reporting requirement has
not been waived, other than pursuant to Pension Benefit Guaranty
Corporation Reg. Section 4043.66, has been required to be filed for
any of its Pension Plans or by any of its ERISA Affiliates within the
12-month period ending on the date hereof. No notices have been
required to be sent to participants and beneficiaries or the Pension
Benefit Guaranty Corporation under Section 302 or 4011 of ERISA or
Section 412 of the Code.
(4) All contributions required to be made under the terms of any
of its Benefit Arrangements have been timely made or have been
reflected on its consolidated financial statements included in its
Regulatory Filings. None of its Pension Plans or any single-employer
plan of any of its ERISA Affiliates has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412
of the Code or Section 302 of ERISA and none of its ERISA Affiliates
has an outstanding funding waiver. Neither any Pension Plan nor any
single-employer plan of any of its ERISA Affiliates has been required
to file information pursuant to Section 4010 of ERISA for the current
or most recently completed plan year. It is not reasonably anticipated
that required minimum contributions to any Pension Plan under Section
412 of the Code will be increased by application of Section 412(l) of
the Code. Neither it nor any of its Subsidiaries has provided, or is
required to provide, security to any of its Pension Plans or to any
single-employer
26
plan of any of its ERISA Affiliates pursuant to Section 401(a)(29) of
the Code.
(5) Under each Pension Plan which is a single-employer plan, as
of the last day of the most recent plan year ended prior to the date
hereof, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001(a)(16) of ERISA (as
determined on the basis of the actuarial assumptions contained in such
Pension Plan's most recent actuarial valuation), did not exceed the
then current value of the assets of such Pension Plan, and there has
been no change in the financial condition of such Pension Plan since
the last day of the most recent plan year.
(6) Neither it nor any of its Subsidiaries has any obligations
for retiree health and life benefits under any Benefit Arrangement or
collective bargaining agreement. Either it or its Subsidiaries may
amend or terminate any such plan at any time without incurring any
liability thereunder other than in respect of claims incurred prior to
such amendment or termination.
(7) There has been no amendment to, announcement by it or any of
its subsidiaries relating to, or change in employee participation or
coverage under, any Benefit Arrangement which would increase the
expense of maintaining such Benefit Arrangement above the level of the
expense incurred therefor for the most recent fiscal year. Neither its
execution of this Agreement, the performance of its obligations
hereunder, the consummation of the transactions contemplated hereby,
the termination of the employment of any of its employees within a
specified time of the Effective Time nor shareholder approval of the
transactions covered by this Agreement, will (A) limit its right, in
its sole discretion, to administer or amend in any respect or
terminate any of its Benefit Arrangements or any related trust, (B)
entitle any of its employees or any employees of its Subsidiaries to
severance pay or any increase in severance pay, or (C) accelerate the
time of payment or vesting or trigger any payment or funding (through
a grantor trust or otherwise) of compensation or benefits under,
increase the amount payable or trigger any other material obligation
pursuant to, any of its Benefit Arrangements. Without limiting the
foregoing, as a result of the consummation of the transactions
contemplated hereby (including as a result of the termination of the
employment of any of its employees within a specified time of the
Effective Time) neither it nor any of its Subsidiaries will be
obligated to make a payment to an individual that would be a
"parachute payment" to a "disqualified individual" as those terms are
defined in Section 280G of the Code, without regard to whether such
payment is reasonable compensation for personal services performed or
to be performed in the future.
27
(8) No additional Tax under Section 409A(a)(1)(B) of the Code has
been or is reasonably expected to be incurred by a participant in a
nonqualified deferred compensation plan (within the meaning of Section
409(A)(d)(1) of the Code) of it or any of its Subsidiaries.
(n) TAXES. (1) All Tax Returns that are required to be filed (taking
into account any extensions of time within which to file) by or with
respect to it and its Subsidiaries have been duly, timely and accurately
filed, (2) all Taxes shown to be due on the Tax Returns referred to in
clause (1) have been paid in full, except with respect to matters contested
in good faith and for which adequate reserves have been established in
accordance with GAAP, (3) all Taxes that it or any of its Subsidiaries is
obligated to withhold from amounts owing to any employee, creditor or third
party have been paid over to the proper Governmental Authority in a timely
manner, to the extent due and payable, and (4) no extensions or waivers of
statutes of limitation have been given by or requested in writing with
respect to any of its U.S. federal income taxes or those of its
Subsidiaries. It has made provision in accordance with GAAP, in the
financial statements included in the Regulatory Filings filed before the
date hereof, for all Taxes that accrued on or before the end of the most
recent period covered by its Regulatory Filings filed before the date
hereof. As of the date hereof, neither it nor any of its Subsidiaries has
any reason to believe that any conditions exist that could reasonably be
expected to prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code. No Liens
for Taxes exist with respect to any of its assets or properties or those of
its Subsidiaries, except for statutory Liens for Taxes not yet due and
payable or that are being contested in good faith and reserved for in
accordance with GAAP. Neither it nor any of its Subsidiaries has been a
party to any distribution occurring during the two-year period prior to the
date of this Agreement in which the parties to such distribution treated
the distribution as one to which Section 355 of the Code applied, except
for distributions occurring among members of the same group of affiliated
corporations filing a consolidated federal income tax return.
(o) BOOKS AND RECORDS. Its books and records and those of its
Subsidiaries have been fully, properly and accurately maintained in all
material respects, and there are no material inaccuracies or discrepancies
of any kind contained or reflected therein.
(p) TAKEOVER LAWS AND PROVISIONS. It has taken all action required to
be taken by it in order to exempt this Agreement and the transactions
contemplated hereby from, and this Agreement and the transactions
contemplated hereby are exempt from, the requirements of any "moratorium,"
"control share," "fair price," "affiliate transaction," "business
combination" or other antitakeover laws and regulations of any state
(collectively, "TAKEOVER LAWS"), including Section 203 of the GCL and
Articles 9 and 9A of the BCA. It has taken all action required to be taken
by it in order to make this Agreement and the transactions
28
contemplated hereby comply with, and this Agreement and the
transactions contemplated hereby do comply with, the requirements of
any Articles, Sections or provisions of its Constituent Documents
concerning "business combination," "fair price," "voting requirement,"
"constituency requirement" or other related provisions (collectively,
"TAKEOVER PROVISIONS"). In the case of Golden West, the approval of
the Merger and this Agreement by the Golden West Board exempts this
Agreement and the transactions contemplated hereby from Article Eighth
of Golden West's Restated Certificate of Incorporation.
(q) FINANCIAL ADVISORS. None of it, its Subsidiaries or any of their
officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees
in connection with the transactions contemplated herein, except that, in
connection with this Agreement, Wachovia has retained ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
as its financial advisor, and Golden West has retained ▇▇▇▇▇▇ Brothers Inc.
as its financial advisor, the arrangements with which have been disclosed
to Wachovia prior to the date hereof. As of the date of this Agreement, (1)
Golden West has received an opinion of ▇▇▇▇▇▇ Brothers Inc., issued to the
Golden West Board, to the effect that, as of the date of the opinion, the
Merger Consideration is fair from a financial point of view to holders of
Golden West Common Stock, and (2) Wachovia has received an opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., issued to the Wachovia Board, to the effect that, as
of the date of the opinion, the Merger Consideration is fair from a
financial point of view to Wachovia.
(r) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT. It is in compliance with the provisions,
including Section 404, of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, and the certifications
provided and to be provided pursuant to Sections 302 and 906 thereof are
accurate.
(s) LABOR MATTERS. Neither it nor any of its Subsidiaries is a party
to, or is bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, nor is
it or any of its subsidiaries the subject of a proceeding asserting that it
or any such subsidiary has committed an unfair labor practice (within the
meaning of the National Labor Relations Act) or seeking to compel it or
such subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor dispute
involving it or any of its subsidiaries, pending or, to the best of its
knowledge, threatened, nor it is aware, as of the date of this Agreement,
of any activity involving it or any of its subsidiaries' employees seeking
to certify a collective bargaining unit or engaging in any other
organization activity.
(t) ENVIRONMENTAL MATTERS. There are no proceedings, claims, actions,
or investigations of any kind, pending or threatened, in any court, agency,
or other governmental authority or in any arbitral body, arising under any
Environmental Law; there is no reasonable basis for any such proceeding,
claim, action or
29
investigation; there are no agreements, orders, judgments or decrees by or
with any court, regulatory agency or other governmental authority, imposing
liability or obligation under or in respect of any Environmental Law; there
are and have been no Materials of Environmental Concern or other conditions
at any property (owned, operated, or otherwise used by, or the subject of a
security interest on behalf of, it or any of its subsidiaries); and there
are no reasonably anticipated future events, conditions, circumstances,
practices, plans, or legal requirements that could give rise to obligations
or liabilities under any Environmental Law.
(u) AGGREGATE CASH CONSIDERATION. Wachovia has, or will have as of the
Effective Time, available to it sufficient funds to pay the aggregate Cash
Consideration.
5.04. MERGER SUB. Wachovia represents and warrants to Golden West as
follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. Merger Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
(b) CAPITAL STOCK. The authorized capital stock of Merger Sub consists
of 1,000 shares of common stock, par value $0.01 per share, of which 100
shares are outstanding and held of record by Wachovia.
(c) BUSINESS. Merger Sub has conducted no business other than
activities incidental to its organization and the consummation of the
transactions contemplated by this Agreement.
(d) AUTHORITY. Merger Sub has duly authorized, executed and delivered
this Agreement, and this Agreement and the transaction contemplated hereby
have been authorized by all corporate action necessary on Merger Sub's
part. This Agreement is Merger Sub's valid and legally binding obligation,
enforceable in accordance with its terms (except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to
or affecting creditors' rights or by general equity principles).
ARTICLE VI
COVENANTS
6.01. REASONABLE BEST EFFORTS. (a) Subject to the terms and conditions of
this Agreement, Wachovia and Golden West will use reasonable best efforts to
take, or cause to be taken, in good faith, all actions, and to do, or cause to
be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Merger as promptly as
practicable and otherwise to enable consummation of the
30
transactions contemplated hereby, and each will cooperate fully with, and
furnish information to, the other party to that end.
(b) Wachovia will execute and deliver, or cause to be executed and
delivered, by or on behalf of the Surviving Corporation, at or prior to the
Effective Time, one or more supplemental indentures and other instruments
required for the due assumption of Golden West's outstanding debt,
guarantees, securities, and (to the extent informed of such requirement by
Golden West) other agreements to the extent required by the terms of such
debt, guarantees, securities or other agreements.
6.02. SHAREHOLDER APPROVALS. (a) The Golden West Board approved this
Agreement and the plan of merger it contains and adopted resolutions
recommending as of the date hereof to Golden West's shareholders approval and
adoption of the plan of merger contained in this Agreement and any other matters
required to be approved or adopted in order to effect the Merger and other
transactions contemplated hereby.
(b) The Wachovia Board approved this Agreement and the transactions
contemplated hereby and adopted resolutions recommending as of the date
hereof to Wachovia's shareholders the approval of the issuance of shares of
Wachovia Common Stock necessary to effect the Merger and any other matters
required to be approved or adopted in order to effect the Merger and other
transactions contemplated hereby.
(c) The Wachovia Board and Golden West Board each will submit to its
shareholders all matters required to be approved or adopted by shareholders
in order to carry out the intentions of this Agreement. In furtherance of
that obligation, Wachovia and Golden West each will take, in accordance
with applicable law and its respective Constituent Documents, all action
necessary to convene a meeting of its shareholders (including any
adjournment or postponement, the "WACHOVIA MEETING" and the "GOLDEN WEST
MEETING", respectively), as promptly as practicable, to consider and vote
upon such matters. The Wachovia Board and Golden West Board each will use
all reasonable best efforts to obtain from their respective shareholders a
vote approving the transactions contemplated by this Agreement, including a
recommendation that its respective shareholders vote in favor of (i) in the
case of Golden West, approval and adoption of this Agreement and the plan
of merger contained herein and (2) in the case of Wachovia, approval of the
issuance of the Wachovia Common Stock required for consummation of the
Merger. However, if the Golden West Board, after consultation with outside
counsel, determines in good faith that, because of the receipt after the
date of this Agreement by Golden West of an Acquisition Proposal that the
Golden West Board concludes in good faith constitutes a Superior Proposal,
it would result in a violation of its fiduciary duties under applicable law
to continue to recommend the plan of merger set forth in this Agreement,
then in submitting the plan of merger to the Golden West Meeting,
31
the Golden West Board may submit the plan of merger to its shareholders
without recommendation (although the resolutions adopting this Agreement as
of the date hereof, described in Section 6.02(a), may not be rescinded or
amended), in which event the Golden West Board may communicate the basis
for its lack of a recommendation to the shareholders in the Joint Proxy
Statement or an appropriate amendment or supplement thereto to the extent
required by law; PROVIDED that the Golden West Board may not take any
actions under this sentence until after giving Wachovia at least 5 business
days to respond to any such Acquisition Proposal (and after giving Wachovia
notice of the latest material terms, conditions and third party in the
Acquisition Proposal) and then taking into account any amendment or
modification to this Agreement proposed by Wachovia.
6.03. SEC FILINGS. Wachovia and Golden West will cooperate in ensuring that
all filings required under SEC Rules 165, 425 and 14a-12 are timely and properly
made. Wachovia also will prepare a registration statement on Form S-4 or other
applicable form (the "REGISTRATION STATEMENT") to be filed by Wachovia with the
SEC in connection with the issuance of Wachovia Common Stock in the Merger, and
the parties will jointly prepare the joint proxy statement and prospectus and
other proxy solicitation materials of Wachovia and Golden West constituting a
part thereof (the "JOINT PROXY STATEMENT") and all related documents. Each party
will cooperate, and will cause its Subsidiaries to cooperate, with the other
party, its counsel and its accountants, in the preparation of the Registration
Statement and the Joint Proxy Statement, and, provided that both parties and
their respective Subsidiaries have cooperated as required above, Wachovia and
Golden West agree to file the Registration Statement, including the Joint Proxy
Statement in preliminary form, with the SEC as promptly as reasonably
practicable. Each of Wachovia and Golden West will use all reasonable best
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as reasonably practicable after filing thereof and to
maintain the effectiveness of such Registration Statement until the Effective
Time. Wachovia shall file the opinion of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
described in Section 7.01(f) with the SEC as an exhibit to a post-effective
amendment to the Registration Statement. Each party shall cooperate and provide
the other party with a reasonable opportunity to review and comment on any
amendment or supplement to the Joint Proxy Statement and the Registration
Statement prior to filing such with the SEC, and each party will provide the
other party with a copy of all such filings with the SEC. Wachovia also agrees
to use reasonable best efforts to obtain all necessary state securities law or
"Blue Sky" permits and approvals required to carry out the transactions
contemplated hereby. Each party agrees to furnish for inclusion in the
Registration Statement and the Proxy Statement all information concerning it,
its Subsidiaries, officers, directors and shareholders as may be required by
applicable law in connection with the foregoing.
(b) Wachovia and Golden West each agrees, as to itself and its
Subsidiaries, that none of the information supplied or to be supplied by it
for inclusion or incorporation by reference in (1) the Registration
Statement will, at
32
the time the Registration Statement and each amendment or supplement
thereto, if any, becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and (2) the Joint Proxy Statement and any amendment or
supplement thereto will, at the date of mailing to shareholders and at the
time of the Wachovia Meeting or the Golden West Meeting, as the case may
be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which such
statement was made, not misleading. Wachovia and Golden West each further
agrees that if it becomes aware that any information furnished by it would
cause any of the statements in the Joint Proxy Statement or the
Registration Statement to be false or misleading with respect to any
material fact, or to omit to state any material fact necessary to make the
statements therein not false or misleading, to promptly inform the other
party thereof and to take appropriate steps to correct the Joint Proxy
Statement or the Registration Statement.
(c) Wachovia will advise Golden West, promptly after Wachovia receives
notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the issuance of
any stop order or the suspension of the qualification of Wachovia Common
Stock for offering or sale in any jurisdiction, of the initiation or threat
of any proceeding for any such purpose, or of any request by the SEC for
the amendment or supplement of the Registration Statement or for additional
information.
6.04. PRESS RELEASES. Wachovia and Golden West will consult with each other
before issuing any press release, written and broadly disseminated employee
communication or other written shareholder communication with respect to the
Merger or this Agreement and will not issue any such communication or make any
such public statement without the prior consent of the other party, which will
not be unreasonably withheld or delayed; PROVIDED that a party may, without the
prior consent of the other party (but after prior consultation, to the extent
practicable in the circumstances), issue such communication or make such public
statement as may be required by applicable law or securities exchange rules.
Wachovia and Golden West will cooperate to develop all public communications and
make appropriate members of management available at presentations related to the
transactions contemplated hereby as reasonably requested by the other party.
6.05. ACCESS; INFORMATION. (a) Each of Wachovia and Golden West agrees that
upon reasonable notice and subject to applicable laws relating to the exchange
of information, it will (and will cause its Subsidiaries to) afford the other
party, and the other party's officers, employees, counsel, accountants and other
authorized Representatives, such access during normal business hours throughout
the period before the Effective Time to the books, records (including, without
limitation, Tax Returns and work papers of independent auditors), properties,
personnel and to such other information
33
as the other party may reasonably request and, during such period, it will
furnish promptly to the other party (1) a copy of each report, schedule and
other document filed by it pursuant to the requirements of federal or state
securities or banking laws, and (2) all other information concerning the
business, properties and personnel of it as the other may reasonably request.
Neither Wachovia nor Golden West will be required to afford access or disclose
information that would jeopardize attorney-client privilege or contravene any
binding agreement with any third party. The parties will make appropriate
substitute arrangements in circumstances where the previous sentence applies.
(b) Each party will hold any information which is nonpublic and
confidential to the extent required by, and in accordance, with the
Confidentiality Agreement between Wachovia and Golden West (the
"CONFIDENTIALITY AGREEMENT").
(c) No investigation by one party of the business and affairs of the
other, pursuant to this Section 6.05 or otherwise, will affect or be deemed
to modify or waive any representation, warranty, covenant or agreement in
this Agreement, or the conditions to such other party's obligation to
consummate the transactions contemplated hereby.
6.06. ACQUISITION PROPOSALS. Golden West will not, and will cause its
Subsidiaries and its and its Subsidiaries' officers, directors, agents, advisors
and affiliates not to, initiate, solicit, encourage or knowingly facilitate
inquiries or proposals with respect to, or engage in any negotiations
concerning, or provide any confidential or nonpublic information or data to, or
have any discussions with, any person relating to, any Acquisition Proposal;
PROVIDED that, in the event Golden West receives an unsolicited BONA FIDE
Acquisition Proposal, from a Person other than Wachovia or an Other Person (as
defined below), after the execution of this Agreement, and the Golden West Board
concludes in good faith that such Acquisition Proposal constitutes a Superior
Proposal or would reasonably be likely to result in a Superior Proposal and,
after considering the advice of outside counsel, that failure to take such
actions would result in a violation of the directors' fiduciary duties under
applicable law, Golden West may, and may permit its Subsidiaries and its and its
Subsidiaries' Representatives to, furnish or cause to be furnished nonpublic
information and participate in such negotiations or discussions; PROVIDED that
prior to providing any nonpublic information permitted to be provided pursuant
to the foregoing proviso, it shall have entered into a confidentiality agreement
with such third party on terms no less favorable to it than the Confidentiality
Agreement. Golden West will immediately cease and cause to be terminated any
activities, discussions or negotiations conducted before the date of this
Agreement with any persons other than Wachovia ("OTHER PERSONS") with respect to
any Acquisition Proposal and will use its reasonable best efforts to enforce any
confidentiality or similar agreement relating to an Acquisition Proposal. Golden
West will promptly (within one business day) advise Wachovia following receipt
of any Acquisition Proposal and the substance thereof (including the identity of
the person making such Acquisition Proposal), and will keep
34
Wachovia apprised of any related developments, discussions and negotiations
(including the material terms and conditions of the Acquisition Proposal) on a
current basis.
(b) Nothing contained in this Agreement shall prevent Golden West or
the Golden West Board from complying with Rule 14d-9 and Rule 14e-2 under
the Exchange Act with respect to an Acquisition Proposal, PROVIDED that
such Rules will in no way eliminate or modify the effect that any action
pursuant to such Rules would otherwise have under this Agreement.
6.07. AFFILIATE AGREEMENTS. Not later than the 15th day before the mailing
of the Joint Proxy Statement, Golden West will deliver to Wachovia a schedule of
each person that, to the best of its knowledge, is or is reasonably likely to
be, as of the date of the Golden West Meeting, deemed to be an "affiliate" of
Golden West (each, a "GOLDEN WEST AFFILIATE") as that term is used in Rule 145
under the Securities Act. Golden West will use its reasonable best efforts to
cause each person who may be deemed to be a Golden West Affiliate to execute and
deliver to Wachovia and Golden West on or before the date of mailing of the
Joint Proxy Statement an agreement in substantially the form attached hereto as
ANNEX 2.
6.08. TAKEOVER LAWS AND PROVISIONS. No party will take any action that
would cause the transactions contemplated hereby to be subject to requirements
imposed by any Takeover Law and each of them will take all necessary steps
within its control to exempt (or ensure the continued exemption of) those
transactions from, or if necessary challenge the validity or applicability of,
any applicable Takeover Law, as now or hereafter in effect. No party will take
any action that would cause the transactions contemplated hereby not to comply
with any Takeover Provisions and each of them will take all necessary steps
within its control to make those transactions comply with (or continue to comply
with) the Takeover Provisions.
6.09. EXCHANGE LISTING. Wachovia will use all reasonable best efforts to
cause the shares of Wachovia Common Stock to be issued in the Merger and shares
reserved for issuance pursuant to Section 3.07 hereof to be approved for listing
on the NYSE, subject to official notice of issuance, as promptly as practicable,
and in any event before the Effective Time.
6.10. REGULATORY APPLICATIONS. Wachovia and Golden West and their
respective Subsidiaries will cooperate and use all reasonable best efforts to
prepare as promptly as possible all documentation, to effect all filings and to
obtain all permits, consents, approvals and authorizations of all third parties
and Governmental Authorities necessary to consummate the transactions
contemplated hereby (the "REQUISITE REGULATORY APPROVALS"), and will make all
necessary filings in respect of those Requisite Regulatory Approvals as soon as
practicable. Each of Wachovia and Golden West will have the right to review in
advance, and to the extent practicable each will consult with the other, in each
case subject to applicable laws relating to the exchange of information, with
respect to all written information submitted to any third party or any
Governmental
35
Authority in connection with the Requisite Regulatory Approvals. In
exercising the foregoing right, each of the parties will act reasonably and as
promptly as practicable. Each party agrees that it will consult with the other
party with respect to obtaining all material permits, consents, approvals and
authorizations of all third parties and Governmental Authorities necessary or
advisable to consummate the transactions contemplated hereby and each party will
keep the other party appraised of the status of material matters relating to
completion of the transactions contemplated hereby.
(b) Wachovia and Golden West will, upon request, furnish the other
party with all information concerning itself, its Subsidiaries, directors,
officers and shareholders and such other matters as may be reasonably
necessary or advisable in connection with any filing, notice or application
made by or on behalf of such other party or any of its Subsidiaries with or
to any third party or Governmental Authority in connection with the
transactions contemplated hereby.
6.11. INDEMNIFICATION. Following the Effective Time, Wachovia will
indemnify, defend and hold harmless the present and former directors, officers
and employees of Golden West and its Subsidiaries (each, an "INDEMNIFIED PARTY")
against all costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages, liabilities and settlement amounts
(collectively, "COSTS") as incurred, in connection with any claim, action
(whether threatened, pending or contemplated), suit, proceeding or
investigation, whether arising before or after the Effective Time and whether
civil, criminal, administrative or investigative, arising out of or pertaining
to matters existing or actions or omissions occurring at or before the Effective
Time (including the transactions contemplated hereby), (and shall advance
expenses as incurred to the fullest extent permitted under applicable law
provided the Indemnified Party to whom expenses are advanced provides an
undertaking to repay such advances if it is ultimately determined that such
Indemnified Party is not entitled to indemnification) (1) without limitation of
clause (2), to the same extent as such persons are indemnified or have the right
to advancement of expenses pursuant to the Constituent Documents and
indemnification agreements, if any, in effect on the date of this Agreement with
Golden West and its Subsidiaries, and (2) to the fullest extent permitted by
law.
(b) For a period of six years following the Effective Time, Wachovia
will obtain and maintain director's and officer's liability insurance that
serves to reimburse, and covers, the present and former officers and
directors of Golden West or any of their respective Subsidiaries
(determined as of the Effective Time) (as opposed to Golden West or such
Subsidiary) with respect to claims against such directors and officers
arising from facts or events occurring before the Effective Time (including
the transactions contemplated hereby), which insurance will contain at
least the same coverage and amounts, and contain terms and conditions no
less advantageous to the Indemnified Party, as that coverage provided under
the director's and officer's liability insurance that Wachovia obtained for
directors and officers of other financial institutions that Wachovia
acquired in recent, comparable merger transactions (taking into account the
36
relative market capitalizations of Golden West as compared to such other
financial institutions); PROVIDED that officers and directors of Golden
West or any Subsidiary may be required to make application and provide
customary representations and warranties to Wachovia's insurance carrier
for the purpose of obtaining such insurance.
(c) Any Indemnified Party wishing to claim indemnification under
Section 6.11(a), upon learning of any claim, action, suit, proceeding or
investigation described above, will promptly notify Wachovia; PROVIDED that
failure so to notify will not affect the obligations of Wachovia under
Section 6.12(a) unless and only to the extent that Wachovia is actually and
materially prejudiced as a consequence.
(d) If Wachovia or any of its successors or assigns consolidates with
or merges into any other entity and is not the continuing or surviving
entity of such consolidation or merger or transfers all or substantially
all of its assets to any other entity, then and in each case, Wachovia will
cause proper provision to be made so that the successors and assigns of
Wachovia will assume the obligations set forth in this Section 6.11.
(e) The provisions of this Section 6.11 shall survive the Effective
Time and are intended to be for the benefit of, and will be enforceable by,
each Indemnified Party and his or her heirs and Representatives.
6.12. EMPLOYEE MATTERS. From the Effective Time through the date that
Wachovia determines to generally transition Golden West's benefit arrangements
(such date being referred to herein as the "BENEFITS TRANSITION DATE"), Wachovia
shall provide the employees of Golden West and its Subsidiaries as of the
Effective Time (the "COVERED EMPLOYEES") with employee benefits and compensation
plans, programs and arrangements that are substantially similar, in the
aggregate, to the employee benefits and compensation plans, programs and
arrangements provided by Golden West or its Subsidiaries, as the case may be, to
such employees immediately prior to the Effective Time. From and after the
Benefits Transition Date, Wachovia shall provide the Covered Employees with
employee benefits and compensation plans, programs and arrangements that are
substantially similar to those provided to similarly situated employees of
Wachovia and its Subsidiaries. Notwithstanding anything contained herein to the
contrary, a Covered Employee whose employment is terminated by Wachovia other
than for Cause (as defined in Schedule 4.01(j)), disability or death or who
terminates employment for Good Reason (as defined in Schedule 4.01(j)), during
the period commencing at the Effective Time and ending on the second anniversary
thereof, shall be entitled to receive the severance payments and benefits under
the Wachovia Severance Pay Plan as in effect on the date hereof and Previously
Disclosed to Golden West and as such plan may be amended from time to time (the
"WACHOVIA SEVERANCE PLAN"). The Wachovia Severance Plan will not be amended to
reduce benefits to Covered Employees until after the second anniversary of the
Effective Time unless an amendment is
37
necessary to comply with Section 409A of the Code. Following the date hereof and
prior to the Effective Time, Wachovia and Golden West shall cooperate in good
faith to agree to the appropriate job categorization of the Covered Employees
for purposes of the Wachovia Severance Plan, taking into account their
compensation, authority, seniority, duties and any other factors deemed
relevant.
(b) From and after the Benefits Transition Date, Wachovia shall (1)
provide all Covered Employees with service credit for purposes of
eligibility, participation, vesting and levels of benefits (but not for
benefit accruals under any defined benefit pension plan), under any
employee benefit or compensation plan, program or arrangement adopted,
maintained or contributed to by Wachovia or any of its Subsidiaries in
which Covered Employees are eligible to participate, for all actual periods
of employment with Golden West or any of its Subsidiaries (or their
predecessor entities) prior to the Effective Time to the extent such actual
periods of employment are credited by Golden West for purposes of a
comparable plan in which the applicable Covered Employee participated
immediately prior to the Effective Time and (2) cause any pre-existing
conditions, limitations, eligibility waiting periods or required physical
examinations under any welfare benefit plans of Wachovia or any of its
Subsidiaries to be waived with respect to the Covered Employees and their
eligible dependents, to the extent waived under the corresponding plan (for
a comparable level of coverage) in which the applicable Covered Employee
participated immediately prior to the Effective Time. If the Benefits
Transition Date with respect to Golden West's medical and/or dental benefit
plans for Covered Employees occurs in the middle of a plan year, then
Covered Employees and their dependents who are then participating in a
deductible-based medical and/or dental plan sponsored by Golden West will
be given credit for deductibles and eligible out-of-pocket expenses
incurred towards deductibles and out-of-pocket maximums during the portion
of the plan year preceding the Benefits Transition Date in a comparable
deductible-based medical and/or dental plan of Wachovia or any of its
Subsidiaries for the Wachovia benefit plan year that begins with or
includes the Benefits Transition Date.
(c) From and after the Effective Time, Wachovia will assume and honor
all accrued obligations to, and contractual rights of, current and former
employees of Golden West and its Subsidiaries under the Golden West Benefit
Arrangements (as they may be amended in accordance with Sections 4.01(j)
and 4.01(k) hereof, and including any additional arrangements permitted
thereby), and take all actions necessary to effectuate the agreements set
forth on Schedule 6.12(c) hereof. If Wachovia or any of its successors or
assigns consolidates with or merges into any other entity and is not the
continuing or surviving entity of such consolidation or merger or transfers
all or substantially all of its assets to any other entity, then and in
each case, Wachovia will cause proper provision to be made so that the
successors and assigns of Wachovia will assume the obligations set forth in
this Section 6.12.
38
6.13. NOTIFICATION OF CERTAIN MATTERS. Wachovia and Golden West will give
prompt notice to the other of any fact, event or circumstance known to it that
(a) is reasonably likely, individually or taken together with all other facts,
events and circumstances known to it, to result in any Material Adverse Effect
with respect to it or (b) would cause or constitute a material breach of any of
its representations, warranties, covenants or agreements contained herein that
reasonably could be expected to give rise, individually or in the aggregate, to
the failure of a condition in Article VII.
6.14. EXEMPTION FROM LIABILITY UNDER SECTION 16(B). Assuming that Golden
West delivers to Wachovia the Section 16 Information in a timely and accurate
manner before the Effective Time, the Wachovia Board, or a committee of
"non-employee directors" thereof (as such term is defined for purposes of Rule
16b-3(d) under the Exchange Act), will reasonably promptly thereafter and in any
event before the Effective Time adopt a resolution providing that the receipt by
the Golden West Insiders of Wachovia Common Stock in exchange for shares of
Golden West Common Stock, and of options to purchase shares of Wachovia Common
Stock upon conversion of options to purchase shares of Golden West Common Stock,
in each case pursuant to the transactions contemplated hereby and to the extent
such securities are listed in the Section 16 Information, are approved by the
Wachovia Board or by such committee thereof, and are intended to be exempt from
liability pursuant to Section 16(b) under the Exchange Act, such that any such
receipt will be so exempt.
6.15. CERTAIN MODIFICATIONS; RESTRUCTURING CHARGES. Golden West and
Wachovia shall consult with respect to their loan, litigation and real estate
valuation policies and practices (including loan classifications and levels of
reserves) and Golden West shall make such modifications or changes to its
policies and practices, if any, and at such date prior to the Effective Time, as
may be mutually agreed upon. Golden West and Wachovia shall also consult with
respect to the character, amount and timing of restructuring charges to be taken
by each of them in connection with the transactions contemplated hereby and
shall take such charges in accordance with GAAP, as may be mutually agreed upon;
PROVIDED, HOWEVER, that Golden West shall not be obligated to take any such
charges pursuant to this Section 6.15 unless and until Wachovia irrevocably
acknowledges to Golden West in writing that all conditions to Wachovia's
obligations to consummate the Merger under Article VII have been satisfied or,
where legally permitted, waived. No party's representations, warranties and
covenants contained in this Agreement shall be deemed to be untrue or breached
in any respect for any purpose as a consequence of any modifications or changes
to such policies and practices which may be undertaken on account of this
Section 6.15.
ARTICLE VII
CONDITIONS TO THE MERGER
7.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of Wachovia, Merger Sub and Golden West to consummate the
39
Merger is subject to the fulfillment or written waiver by Wachovia, Merger Sub
and Golden West before the Effective Time of each of the following conditions:
(a) SHAREHOLDER APPROVALS. The requisite votes of the shareholders of
Wachovia and Golden West shall have each been received.
(b) REGULATORY APPROVALS. All Requisite Regulatory Approvals (1) shall
have been obtained and shall remain in full force and effect and all
statutory waiting periods in respect thereof shall have expired and (2)
shall not have imposed a condition on such approval that would reasonably
be expected, after the Effective Time, to have a Material Adverse Effect on
the Surviving Corporation and its Subsidiaries, taken as a whole; PROVIDED,
HOWEVER, that no conditions that are reasonably consistent with the
regulations or published guidelines as in effect as of the date of this
Agreement (or recent practice prior to the date of this Agreement in
connection with comparable transactions) of a Governmental Authority shall
be deemed to have, or be reasonably be expected to have, such a Material
Adverse Effect.
(c) NO INJUNCTION. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and precludes
consummation of the Merger.
(d) REGISTRATION STATEMENT. The Registration Statement shall have
become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and be
in effect and no proceedings for that purpose shall have been initiated by
the SEC and not withdrawn.
(e) NYSE LISTING. The shares of Wachovia Common Stock to be issued in
the Merger and shares reserved for issuance pursuant to Section 3.07 hereof
shall have been approved for listing on the NYSE, subject to official
notice of issuance.
(f) OPINIONS OF TAX COUNSEL. Wachovia shall have received an opinion
of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, and Golden West shall have received an opinion
of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, each dated the Closing Date and based on
facts, representations and assumptions set forth or described in each such
opinion, to the effect that (1) the Merger will be treated as a
reorganization within the meaning of Section 368(a) of the Code and (2)
Wachovia, Merger Sub and Golden West will each be a party to that
reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinions, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and Wachtell, Lipton,
▇▇▇▇▇ & ▇▇▇▇ each will be entitled to receive and rely upon customary
certificates and representations of officers of Wachovia, Merger Sub and
Golden West.
40
7.02. CONDITIONS TO GOLDEN WEST'S OBLIGATION. Golden West's obligation to
consummate the Merger is also subject to the fulfillment or written waiver by
Golden West before the Effective Time of each of the following conditions:
(a) WACHOVIA'S AND MERGER SUB'S REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Wachovia and Merger Sub in this Agreement
shall be true and correct as of the date of this Agreement and (except to
the extent such representations and warranties speak as of an earlier date)
as of the Closing Date as though made on and as of the Closing Date subject
to the standard set forth in Section 5.02; and Golden West shall have
received a certificate, dated the Closing Date, signed on behalf of
Wachovia by the Chief Executive Officer or Chief Financial Officer of
Wachovia to that effect.
(b) PERFORMANCE OF WACHOVIA'S AND MERGER SUB'S OBLIGATIONS. Each of
Wachovia and Merger Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or
before the Effective Time; and Golden West shall have received a
certificate, dated the Closing Date, signed on behalf of Wachovia by the
Chief Executive Officer or Chief Financial Officer of Wachovia to that
effect.
7.03. CONDITIONS TO WACHOVIA'S AND MERGER SUB'S OBLIGATION. Each of
Wachovia's obligation and Merger Sub's obligation to consummate the Merger is
also subject to the fulfillment, or written waiver by Wachovia, before the
Effective Time of each of the following conditions:
(a) GOLDEN WEST'S REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Golden West in this Agreement shall be true and correct
as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date subject to the
standard set forth in Section 5.02; and Wachovia shall have received a
certificate, dated the Closing Date, signed on behalf of Golden West by the
Chief Executive Officer or Chief Financial Officer of Golden West to that
effect.
(b) PERFORMANCE OF GOLDEN WEST'S OBLIGATIONS. Golden West shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or before the Effective Time; and Wachovia
shall have received a certificate, dated the Closing Date, signed on behalf
of Golden West by the Chief Executive Officer or Chief Financial Officer of
Golden West to that effect.
41
ARTICLE VIII
TERMINATION
8.01. TERMINATION. This Agreement may be terminated, and the Merger may be
abandoned, at any time before the Effective Time, by Wachovia or (except as
otherwise provided below) Golden West:
(a) MUTUAL AGREEMENT. With the mutual agreement of the other party.
(b) BREACH. Upon 60 days' prior written notice of termination, if
there has occurred and is continuing: (1) a breach by the other party of
any representation or warranty contained herein, or (2) a breach by the
other party of any of the covenants or agreements in this Agreement;
PROVIDED that such breach (under either clause (1) or (2)) would entitle
the non-breaching party not to consummate the Merger under Article VII.
(c) ADVERSE ACTION. If (i) the other party's board of directors
submits this Agreement (or the plan of merger contained herein) to its
shareholders without a recommendation for approval or with special and
materially adverse conditions on or qualifications of such approval; (ii)
such board of directors otherwise withdraws or materially and adversely
modifies (or publicly discloses its intention to withdraw or materially and
adversely modify) its recommendation referred to in Section 6.02 or (iii)
in the case solely of Wachovia, the Golden West Board recommends to its
shareholders an Acquisition Proposal other than the Merger; or (iv) solely
in the case of Wachovia, if the Golden West Board negotiates or authorizes
the conduct of negotiations (and twenty business days have elapsed without
such negotiations being discontinued) with a third party (it being
understood and agreed that "negotiate" shall not be deemed to include the
request and receipt of information from, any person that submits an
Acquisition Proposal or discussions regarding such information for the sole
purpose of ascertaining the terms of such Acquisition Proposal) regarding
an Acquisition Proposal other than the Merger.
(d) DELAY. If the Effective Time has not occurred by the close of
business on March 31, 2007; PROVIDED that the right to terminate this
Agreement under this Section 8.01(d) shall not be available to any party
whose failure to comply with any provision of this Agreement has been the
cause of, or materially contributed to, the failure of the Effective Time
to occur on or before such date.
(e) DENIAL OF REGULATORY APPROVAL. If the approval of any Governmental
Authority required for consummation of the Merger and the other
transactions contemplated hereby is denied by final, nonappealable action
of such Governmental Authority; PROVIDED that the right to terminate this
Agreement under this Section 8.01(e) shall not be available to any party
whose failure to
42
comply with any provision of this Agreement has been the cause of, or
materially contributed to, such action.
8.02. EFFECT OF TERMINATION AND ABANDONMENT. If this Agreement is
terminated and the Merger is abandoned, no party will have any liability or
further obligation under this Agreement, except that termination will not
relieve a party from liability for any willful breach by it of this Agreement
and except that Section 6.05(b), this Section 8.02, Section 8.03 and Article IX
will survive termination of this Agreement.
8.03. TERMINATION FEE. Golden West shall pay to Wachovia, by wire transfer
of immediately available funds, $995,000,000 (the "TERMINATION FEE") as follows:
(1) In the event that (A) either Wachovia or Golden West shall
terminate this Agreement pursuant to Section 8.01(d) or if Wachovia
shall terminate this Agreement pursuant to Section 8.01(c)(i) or
8.01(c)(ii), and (B) the requisite vote of the Golden West
shareholders under Section 7.01(a) shall not have been obtained after
a vote of the Golden West shareholders has been taken and completed at
the Golden West Meeting, and (C) at any time after the date of this
Agreement and prior to such vote, a BONA FIDE Acquisition Proposal
with respect to Golden West shall have been made public and not
withdrawn or abandoned, and (D) within 18 months from the date of such
termination, an Acquisition Proposal with respect to Golden West is
consummated or a definitive agreement is entered into by Golden West
with respect to an Acquisition Proposal with respect to Golden West,
then Golden West shall pay to Wachovia the Termination Fee within five
business days after the date of the event described in clause (D).
(2) In the event that (A) Wachovia shall terminate this Agreement
pursuant to Section 8.01(b) or Section 8.01(c)(iv) or either of
Wachovia or Golden West shall terminate this Agreement pursuant to
Section 8.01(d), and (B) at any time after the date of this Agreement
and prior to such termination, a BONA FIDE Acquisition Proposal with
respect to Golden West shall have been made public and not withdrawn
or abandoned, and (C) following the announcement of such Acquisition
Proposal, Golden West shall have breached any of its representations,
warranties, covenants or agreements set forth in this Agreement, then
Golden West shall pay to Wachovia the Termination Fee (x) if such
breach was other than one described in the succeeding clause (y) of
this sentence, and only if an Acquisition Proposal with respect to
Golden West is consummated or a definitive agreement is entered into
by Golden West with respect to an Acquisition Proposal with respect to
Golden West within 18 months from the date of such termination, within
five business days after such Acquisition Proposal is consummated or
such agreement
-43-
is entered into by Golden West, or (y) if such breach was a willful
and material breach of Section 6.01(a), 6.02(c), 6.03(a), 6.06(a),
6.08 or 6.10(a), on the business day immediately following such
termination.
(3) In the event that Wachovia shall terminate this Agreement
pursuant to Section 8.01(c)(iii), then Golden West shall pay the
Termination Fee on the business day immediately following such
termination.
(b) Golden West acknowledges that the agreements contained in this
Section 8.03 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Wachovia would not enter
into this Agreement. In the event that Golden West fails to pay when due
any amounts payable under this Section 8.03, then (i) Golden West shall
reimburse Wachovia for all costs and expenses (including disbursements and
reasonable fees of counsel) incurred in connection with the collection of
such overdue amount, and (ii) Golden West shall pay to Wachovia interest on
such overdue amount (for the period commencing as of the date that such
overdue amount was originally required to be paid and ending on the date
that such overdue amount is actually paid in full) at a rate per annum
equal to three percent (3%) over the "prime rate" (as announced by
Citibank, N.A.) in effect on the date that such overdue amount was
originally required to be paid.
(c) In no event shall Golden West be obligated to pay more than one
Termination Fee.
ARTICLE IX
MISCELLANEOUS
9.01. SURVIVAL. The representations, warranties, agreements and covenants
contained in this Agreement will not survive the Effective Time (OTHER THAN
Section 2.07, Article III, Sections 6.05(b), 6.11 and 6.12 and this Article IX).
9.02. WAIVER; AMENDMENT. Before the Effective Time, any provision of this
Agreement may be (a) waived by the party benefited by the provision, but only in
writing, or (b) amended or modified at any time, but only by a written agreement
executed in the same manner as this Agreement, except to the extent that any
such amendment would violate North Carolina or Delaware law or require
resubmission of this Agreement or the plan of merger contained herein to the
shareholders of Wachovia or Golden West.
9.03. COUNTERPARTS. This Agreement may be executed by facsimile and in one
or more counterparts, each of which will be deemed to constitute an original.
44
9.04. GOVERNING LAW. This Agreement is governed by, and will be interpreted
in accordance with, the laws of the State of North Carolina applicable to
contracts made and to be performed entirely within that State. EACH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
9.05. EXPENSES. Except as set forth in Section 8.03, each party will bear
all expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby, except that Wachovia and Golden West will each
bear and pay one-half of the following expenses: (a) the costs (excluding the
fees and disbursements of counsel, financial advisors and accountants) incurred
in connection with the preparation (including copying and printing and
distributing) of the Registration Statement, the Joint Proxy Statement and
applications to Governmental Authorities for the approval of the Merger and (b)
all listing, filing or registration fees, including, without limitation, fees
paid for filing the Registration Statement with the SEC, filing fees for the HSR
Act notices and any other fees paid for filings with Governmental Authorities.
9.06. NOTICES. All notices, requests and other communications given or made
under this Agreement must be in writing and will be deemed given when personally
delivered, facsimile transmitted (with confirmation) or mailed by registered or
certified mail (return receipt requested) to the persons and addresses set forth
below or such other place as such party may specify by notice.
IF TO WACHOVIA, TO:
Wachovia Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Senior Executive Vice President, General
Counsel and Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: H. ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
45
IF TO GOLDEN WEST, TO:
Golden West Financial Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ Roster, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH COPIES TO:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.07. ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This Agreement
represents the entire understanding of Wachovia and Golden West regarding the
transactions contemplated hereby and supersede any and all other oral or written
agreements previously made or purported to be made, other than the
Confidentiality Agreement, which will survive the execution and delivery of this
Agreement and will not impair the rights of a party to make a response or
propose amendments or modifications as contemplated by the final proviso to
Section 6.02(c)). No representation, warranty, inducement, promise,
understanding or condition not set forth in this Agreement has been made or
relied on by any party in entering into this Agreement. Except for Section 6.11,
which is intended to benefit the Indemnified Parties to the extent stated,
nothing expressed or implied in this Agreement is intended to confer any rights,
remedies, obligations or liabilities upon any person other than Wachovia, Merger
Sub and Golden West.
9.08. SEVERABILITY. If any provision of this Agreement or the application
thereof to any person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions, or
the application of such provision to persons or circumstances other than those
as to which it has been held invalid or unenforceable, will remain in full force
and effect and will in no way be affected, impaired or invalidated thereby, so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon such
determination, the parties will negotiate in good faith in an effort to agree
upon a suitable and equitable substitute provision to effect the original intent
of the parties.
46
9.09. ALTERNATIVE STRUCTURE. Notwithstanding anything to the contrary
contained in this Agreement or the Confidentiality Agreement, before the
Effective Time, Wachovia may revise the structure of the Merger or otherwise
revise the method of effecting the Merger and related transactions, PROVIDED
that (1) such revision does not alter or change the kind or amount of
consideration to be delivered to the shareholders of Golden West and the holders
of Golden West Stock Options, (2) such revision does not adversely affect the
tax consequences to the shareholders of Golden West, (3) such revised structure
or method does not materially delay consummation of the transactions
contemplated by this Agreement in relation to the structure contemplated herein,
and (4) such revision does not, and is not reasonably likely to, otherwise cause
any of the conditions set forth in Article VII not to be capable of being
fulfilled (unless duly waived by the party entitled to the benefits thereof).
This Agreement and any related documents will be appropriately amended in order
to reflect any such revised structure or method.
[SIGNATURES APPEAR ON FOLLOWING PAGE.]
47
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
WACHOVIA CORPORATION
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chairman, President and
Chief Executive Officer
▇▇▇▇ FINANCIAL CORPORATION
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and
Chief Executive Officer
GOLDEN WEST FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and
Chief Executive Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and
Chief Executive Officer
SIGNATURE PAGE TO MERGER AGREEMENT