Wachovia Corporation announces the following information in a Form 8-K filed with the Securities and Exchange Commission:
As previously disclosed at pages 73-74 of the definitive proxy statement/prospectus of Wachovia, dated 21 November 2008, included in Wells Fargo’s Registration Statement on Form S-4 (File No. 333- 154879), as amended, under the heading “The Merger — Litigation Relating to the Merger,” Wachovia, the members of its board of directors, and Wells Fargo have been named as defendants in certain actions filed on behalf of Wachovia shareholders challenging the proposed merger of Wells Fargo and Wachovia. As disclosed in the proxy statement, one such action, a purported class action captioned Irving Ehrenhaus v. John D. Baker, et al., was filed in the Superior Court for the County of Mecklenburg in the State of North Carolina.
On 5 December 2008, the Court in the Ehrenhaus action denied preliminary injunctive relief with respect to, among other things, the issuance and voting of preferred shares issued by Wachovia to Wells Fargo on 20 October 2008 in connection with the merger that represent 39.9% of the voting power of Wachovia’s capital stock. The Court did enjoin enforcement of a provision of the transaction documentation providing that the preferred shares could not be redeemed by Wachovia for at least 18 months following the shareholder vote on the merger agreement, even if the merger were not approved by the shareholders (the “18-Month Tail Provision”).
On 17 December 2008, the defendants entered into a memorandum of understanding with the plaintiffs regarding the settlement of the Ehrenhaus action. In connection with the settlement contemplated by the memorandum of understanding, Wachovia and Wells Fargo agreed not to appeal from the portion of the Court’s Order dated 5 December 2008 that enjoins the 18 Month Tail Provision. Wells Fargo for its part also agreed to waive the enforceability by Wells Fargo of the 18 Month Tail Provision to the extent enjoined by the Court’s Order. The memorandum of understanding contemplates that the parties will enter into a stipulation of settlement.
The stipulation of settlement will be subject to customary conditions, including court approval following notice to Wachovia’s shareholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Court will consider the fairness, reasonableness, and adequacy of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Court will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated.
L.D.