As filed with the Securities and Exchange Commission on July 9, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3 REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HORIZON FINANCIAL CORP.
(Exact Name of Registrant as Specified in Its Charter)
Washington
(State or Other Jurisdiction of Incorporation or Organization)
91-0141935
(I.R.S. Employer Identification No.)
1500 Cornwall Avenue
Bellingham, Washington 98225
(360) 733-3050
(Address, Including Zip Code, and Telephone Number, Including
Area Code of Registrant's Principal Executive Offices)
John F. Breyer, Jr., Esq.
Paul M. Aguggia, Esq.
Breyer & Aguggia
Suite 470 East
1300 I Street, N.W.
Washington, D.C. 20005
(202) 737-7900
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of Registration Statement.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [X]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box [ ]
Calculation of Registration Fee
Proposed Proposed
Title of Maximum Maximum
Shares Amount Aggregate Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Unit(1)(2) Price(1) Fee
Common Stock,
$1.00 value
per share 250,000 shares $13.25 $3,312,500 $1,143
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
the price per share is estimated to be $13.25, based upon the
average of the high and low trading prices of the Common Stock as
reported on the Nasdaq Stock Market on July 5, 1996.
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HORIZON FINANCIAL CORP.
Cross Reference Sheet showing the location in the Prospectus
of the items of Form S-3
Prospectus
Item and Caption Headings
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus. . . . . . . Forepart of the
Registration
Statement;
Outside Front Cover
Page
2. Inside Front and Outside Back Cover Pages of
Prospectus. . . . . . . . . . . . . . . . . . . . . Inside Front Cover
Page; Outside Back
Cover Page
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges . . . . . . . . . . . *
4. Use of Proceeds . . . . . . . . . . . . . . . . . . . Use of Proceeds
5. Determination of Offering Price . . . . . . . . . . . *
6. Dilution . . . . . . . . . . . . . . . . . . . . . . Horizon Financial
Corp. Amended and
Restated Dividend
Reinvestment and
Stock Purchase Plan
-- Purchases --
Question 16
7. Selling Security-Holders. . . . . . . . . . . . . . . *
8. Plan of Distribution . . . . . . . . . . . . . . . . Horizon Financial
Corp. Amended and
Restated Dividend
Reinvestment and
Stock Purchase Plan
9. Description of Securities to be Registered. . . . . . Description of
Common Stock
10. Interests of Named Experts and Counsel . . . . . . . *
11. Material Changes . . . . . . . . . . . . . . . . . . *
12. Incorporation of Certain Information by
Reference. . . . . . . . . . . . . . . . . . . . . Information
concerning the
Business of
Horizon Financial
Corp., Its
Management,
Financial
Statements
and Other
Information From
its Annual Report
on Form 10-K
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . . . . *
_______________
* Item is omitted because answer is negative or inapplicable.
PAGE
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[Holding Corporation Letterhead]
______, 1996
Dear Shareholder:
I am pleased to send you this material describing our Amended and
Restated Dividend Reinvestment and Stock Purchase Plan ("Plan"). The Plan is
a continuation of the dividend reinvestment and stock purchase program
maintained by Horizon Bank, a savings bank ("Bank") prior to its
reorganization on October 13, 1995, as a wholly-owned subsidiary of Horizon
Financial Corp. ("Corporation"). In connection with the reorganization, the
Corporation assumed the Plan, which has been revised to reflect the
Corporation's status as Plan sponsor.
The Plan offers you several attractive features:
-- You may purchase shares of Common Stock of the Corporation with
reinvested quarterly cash dividends.
-- You pay no service charges or brokerage commissions for Common
Stock purchased under the Plan.
-- Besides reinvesting dividends, you may make optional cash
payments towards the purchase of additional shares of Common
Stock.
-- Each quarter you have an opportunity to decide whether to make
the optional cash payments; and if you decide to do so, you may
invest as little as $125 or as much as $3,000 per quarter.
-- If you wish, you may continue to receive all of your dividends
in cash and still purchase additional Common Stock with cash.
The Plan is completely voluntary. You may terminate your
participation at any time. If you wish to participate in the Plan, return
the enclosed Authorization Form. If you decide not to participate in the
Plan, you will continue to receive your dividends, if and when declared, by
check from the Corporation.
The accompanying material presents the details of the Plan in a
simple question-and-answer format. Also set forth is important information
regarding the Corporation. Please read this material carefully. It should
answer most questions you may have about the Plan. If you have additional
questions, please address them to Shareholder Relations, Horizon Financial
Corp., 1500 Cornwall Avenue, P.O. Box 580, Bellingham, Washington 98227
(telephone number (360) 733-3050) or to American Stock Transfer & Trust
Company, 40 Wall Street, New York, New York 10005, telephone (800) 278-4353,
ATTN: Dividend Reinvestment Department.
The Board of Directors of Horizon Financial Corp. wish to take this
opportunity to thank shareholders for their continued support and investment
in the Corporation.
Sincerely,
V. Lawrence Evans
President
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PROSPECTUS
HORIZON FINANCIAL CORP.
____________________
250,000 Shares of Common Stock
___________________
This Prospectus relates to 250,000 authorized but unissued shares of
common stock, $1.00 par value per share ("Common Stock") of Horizon Financial
Corp. ("Corporation"), being offered hereby to the shareholders of the
Corporation in connection with the Corporation's Amended and Restated
Dividend Reinvestment and Stock Purchase Plan ("Plan"). This Plan
supplements and amends the plan adopted by Horizon Bank, a savings bank.
This Prospectus should be retained for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is July 9, 1996.
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INFORMATION CONCERNING THE BUSINESS OF
HORIZON FINANCIAL CORP., ITS MANAGEMENT,
FINANCIAL STATEMENTS AND OTHER INFORMATION
For information regarding the business of the Corporation reference
is made to the Corporation's Annual Report on Form 10-K, which is
incorporated herein by reference. For information regarding management of
the Corporation, executive compensation and related matters, reference is
made to the Corporation's definitive proxy statement, which is incorporated
herein by reference. All documents subsequently filed by the Corporation
pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, are deemed incorporated in this material by reference from the
date of the filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this material to the extent that
a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
material. ANY SHAREHOLDER WHO DESIRES A COPY OF THE ABOVE-MENTIONED
DOCUMENTS SHOULD MAKE A WRITTEN OR ORAL REQUEST TO THE CORPORATE SECRETARY,
HORIZON FINANCIAL CORP., 1500 CORNWALL AVENUE, P.O. BOX 580, BELLINGHAM,
WASHINGTON 98227 (TELEPHONE NUMBER (360) 733-3050) AND A COPY THEREOF WILL
BE PROMPTLY FURNISHED WITHOUT CHARGE TO THE SHAREHOLDER.
OTHER AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith
files reports and other information with the Securities and Exchange
Commission ("SEC"). Information as of particular dates concerning directors
and officers, their remuneration, options granted to them, the principal
holders of securities of the Corporation and any material interest of such
persons in transactions with the Corporation is disclosed in proxy statements
distributed to shareholders of the Corporation and filed with the SEC. Such
reports, proxy statements and other information can be obtained by written
request to the Corporation addressed to the Corporate Secretary, Horizon
Financial Corp., 1500 Cornwall Avenue, P.O. Box 580, Bellingham, Washington
98227.
The Corporation has filed with the SEC a Registration Statement on
Form S-3 (File No. 333-_____) under the Securities Act of 1933, as amended,
with respect to the Common Stock offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement, periodic
securities reports and other information relating to Horizon Financial Corp.
filed with the SEC in accordance with the rules and regulations of the SEC.
Such information may be inspected at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549; Everett McKinley Dirksen Building, 219 South Dearborn Street, Room
1100, Chicago, Illinois 60604; and Jacob K. Javits Building, 26 Federal
Plaza, New York, N.Y. 10007. Copies may be obtained at prescribed rates from
the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Statements contained herein concerning the provisions
of any documents are not necessarily complete and, in each instance,
reference is made to the complete text of such document. Each such statement
is qualified in its entirety by such reference.
THE CORPORATION AND THE BANK
The Corporation, a Washington corporation, is the parent company for
its principal subsidiary, the Bank. On October 13, 1995, the Corporation
acquired all of the issued and outstanding shares of common stock of the Bank
in exchange for common stock of the Corporation as part of the Bank's
reorganization into the holding company form of ownership.
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The Bank converted from a state-chartered mutual savings bank to a
state-chartered stock savings bank through an initial public offering in
August 1986. Prior to 1979, the Bank was known as Bellingham First Federal
Savings and Loan Association, whose predecessor was originally organized in
1922.
The business of the Bank consists primarily of attracting savings
deposits from the general public and originating first mortgage loans on
residential properties. The Bank also makes first mortgage loans on
commercial and multi-family residential properties, and, to a limited extent,
loans secured by savings accounts and consumer loans. The Bank also invests
in federal government and agency obligations, corporate notes and bonds,
municipal bonds, common stock, preferred stock, money market instruments and
mortgage-backed obligations.
The Bank's savings and lending operations are conducted through
twelve full-service office facilities located in Whatcom, Skagit and
Snohomish counties in Washington State. The Corporation's and the Bank's
main office is located at 1500 Cornwall Avenue, Bellingham, Washington and
its telephone number is (360) 733-3050.
HORIZON FINANCIAL CORP.
AMENDED AND RESTATED
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
On October 27, 1992 the Board of Directors of the Bank voted to
adopt the original Plan under which shares of the Bank's authorized but
unissued common stock, par value $1.00 per share, were available for issuance
and sale to the shareholders of the Bank. The Plan also allows for the
purchase of the Corporation's Common Stock in the open market. The Plan was
assumed by the Corporation in connection with Bank's holding company
reorganization and amended and restated by the Board of Directors of the
Corporation on March 26, 1996, to reflect the Corporation's status as Plan
sponsor. As part of the amendment and restatement of the Plan, the Board of
Directors amended the Plan to limit the Plan's dividend reinvestment feature
to the Corporation's regular quarterly cash dividends. In all other
respects, the amended and restated Plan is identical to the Plan previously
sponsored by the Bank. The Plan will be in effect until amended, altered or
terminated. The Plan is set forth below as a series of questions and answers
explaining its significant aspects.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide participants with a simple and
convenient method of reinvesting cash dividends paid on shares of Common
Stock of the Corporation and investing optional cash payments in shares of
Common Stock issued by the Corporation without payment of any brokerage
commission or service charge. Shares of Common Stock purchased under the
Plan by participants may either be issued by the Corporation or, subject to
applicable regulatory requirements, purchased by the Corporation in the open
market.
The Plan offers participants the following options: (a) to have all
the cash dividends on their shares of Common Stock automatically reinvested
in Common Stock of the Corporation, or (b) to have cash dividends on some of
the participant's shares automatically reinvested, while continuing to
receive cash dividends on the other shares, or (c) to make optional cash
payments of not less than $125 nor more than $3,000 per calendar quarter,
whether or not dividends are being reinvested or (d) not to reinvest any
dividends and continue to receive cash dividends on all the shares.
As amended and restated on March 26, 1996, the Plan does not permit
the reinvestment of a cash dividend (or portion thereof) which is designated
by the Board of Directors of the Corporation as a "special" dividend at the
time the dividend is declared. The Corporation's regular quarterly cash
dividend will continue to be eligible for reinvestment in shares of the
Common Stock.
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2. What are the advantages of the Plan?
(a) The Plan provides participants with the opportunity to
reinvest cash dividends paid on all or a portion of their shares of Common
Stock in additional shares of Common Stock.
(b) The Plan provides participants with the opportunity to make
quarterly investments of optional cash deposits, subject to minimum and
maximum amounts, for the purchase of additional shares of Common Stock.
(c) No brokerage commissions or service charges are paid by
participants in connection with any purchase of shares made under the Plan.
(d) All cash dividends paid on participants' shares can be
fully invested in additional shares of Common Stock because the Plan permits
fractional shares to be credited to Plan accounts. Dividends on such
fractional shares, as well as on whole shares, will also be reinvested in
additional shares which will be credited to Plan accounts.
(e) Periodic statements reflecting all current activity,
including share purchases and latest Plan account balance, simplify
participants' record keeping.
(f) The Plan administrator provides for the safekeeping of
stock certificates for shares credited to each Plan account.
ADMINISTRATION
3. Who administers the Plan for participants?
American Stock Transfer & Trust Company ("Plan Administrator")
administers the Plan for participants by maintaining records, sending
statements of account to participants and performing other duties relating to
the Plan. Shares of Common Stock purchased under the Plan are registered in
the name of the Plan Administrator's nominee as agent, for participants in
the Plan.
PARTICIPATION
4. Who is eligible to participate?
All holders of record of Common Stock are eligible to participate in
the Plan. If the shares you hold are in your own name, you may participate
directly in the Plan. If your stock is registered in another party's name
(e.g., in a broker's "street name" or in the name of a bank nominee), you
must become a shareholder of record by having the shares transferred into
your name. Otherwise, you must arrange with the record holder to participate
on your behalf.
As a Plan participant, you may deposit your Common Stock
certificates in your Plan account, where the certificates will be fully
protected against loss, theft or damage. Simply send the certificates (via
registered mail, return receipt requested) to the Plan Administrator properly
endorsed with your signature, guaranteed by your bank or broker. Be sure to
include a written request that the shares be added to your Plan account. The
Plan Administrator will hold your certificates until you choose to withdraw
shares or terminate your participation in the Plan.
Shareholders who reside in jurisdictions in which it is unlawful for
Horizon Financial Corp. to permit their participation are not eligible to
participate in the Plan.
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5. How does an eligible shareholder participate?
To participate in the Plan, a shareholder must complete an
Authorization Form and return it to the Plan Administrator. An Authorization
Form is enclosed with this material. Additional copies of the Authorization
Form will be provided from time to time to the holders of the Corporation's
Common Stock, and may be obtained at any time by written request to American
Stock Transfer & Trust Company, 40 Wall Street, New York, New York 10005,
telephone (800) 278-4353, ATTN: Dividend Reinvestment Department.
6. When may an eligible shareholder join the Plan?
A shareholder may join the Plan at any time. If the Authorization
Form is received by the Plan Administrator on or before the record date for a
dividend payment, and the participant elects to reinvest the dividends in
shares of Common Stock, such reinvestment of dividends will begin with that
dividend payment.
See Question 11 below for information concerning the investment of
optional cash payments.
7. What does the Authorization Form provide?
The Authorization Form allows you to indicate how you wish to
participate in the Plan by checking the appropriate box. You may indicate
which of the following investment options you choose:
(a) Full Dividend Reinvestment directs the Corporation to
invest in accordance with the Plan all the cash dividends on all of the
shares of Common Stock then or subsequently owned by participants, and also
permits participants to make optional cash payments for the purchase of
additional shares of Common Stock in accordance with the Plan; or
(b) Partial Dividend Reinvestment directs the Corporation to
invest in accordance with the Plan the cash dividends on only that number of
shares of Common Stock owned by participants which are designated in the
appropriate space on the Authorization Form, and also permits participants to
make optional cash payments for the purchase of additional shares of Common
Stock in accordance with the Plan; or
(c) Additional Cash Purchase Only (Option 1) permits
participants to make optional cash payments for the purchase of additional
shares of Common Stock in accordance with the Plan, with participation in
dividend reinvestment only with respect to book-entry shares held in the
Plan; or
(d) Additional Cash Purchase Only (Option 2) permits
participants to make optional cash payments for the purchase of additional
shares of Common Stock in accordance with the Plan, without participation in
dividend reinvestment.
Participants may select any one of the four options. In each case,
dividends will be reinvested on a cumulative basis on the shares designated
on the Authorization Form and on all Plan shares held in the Plan account
(unless option (d) is selected), until the participant specifies otherwise or
withdraws from the Plan altogether, or until the Plan is terminated.
8. May a shareholder have dividends reinvested under the Plan with
respect to less than all of the shares of Common Stock registered in that
shareholder's name?
Yes. Participants may indicate on the card the number of full shares
desired to be participated in the Plan. Dividends paid on shares above and
beyond the number designated on the Authorization Form may be received in
cash.
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OPTIONAL CASH PAYMENTS
9. How do optional cash payments work?
If a shareholder participant chooses to participate by optional cash
payments, the Plan Administrator will apply any optional cash payment
received by the Plan Administrator from the participant to the purchase of
shares of Common Stock for the participant's account. Dividends payable on
shares of Common Stock purchased with optional cash payments will be
automatically reinvested in shares of Common Stock.
The intended purpose of the Plan is meant to preclude any person,
organization, or other entity from establishing a series of related accounts
for the purpose of conducting arbitrage operations and/or exceeding the
optional cash payment limit.
10. How are optional cash payments made?
An initial optional cash payment may be made by participants when
enrolling by enclosing a check for not less than $125 nor more than $3,000
with the Authorization Form. Checks should be made payable to American Stock
Transfer & Trust Company and returned along with the Authorization Form in
the envelope provided. Thereafter, optional cash payments may be made each
quarter by sending to the Plan Administrator the participant's check for not
less than $125 nor more than $3,000, together with the account identification
stub furnished by the Plan Administrator.
The election to make optional cash payments is available to each
participant at any time. Optional cash payments by participants must be at
least $125 per calendar quarter and cannot exceed a total of $3,000 in any
calendar quarter. The same amount of money need not be sent each quarter and
there is no obligation to make an optional cash payment at any time.
11. When will optional cash payments received by the Plan Administrator
be invested?
Optional cash payments will be invested on the Investment Date as
defined in Question 12 below. Optional cash payments received by the Plan
Administrator less than two business days before a given Investment Date will
be returned to the participant by the Plan Administrator. Since no interest
will be paid by the Corporation or the Plan Administrator on optional cash
payments, participants are urged to make optional cash payments shortly
before the Investment Date. However, participants should allow sufficient
time to insure that an optional cash payment will be received at least two
business days before the Investment Date. Participants may request in
writing that the Plan Administrator return all or a portion of their
uninvested optional cash payments at any time up to two business days before
the Investment Date. Any optional cash payment received more than 30 days
before an Investment Date will be returned.
PURCHASES
12. When will purchases be made?
Purchases under the Plan will be made during each calendar quarter
on each "Investment Date," which will be the close of business on the
dividend payment date or as soon as practicable thereafter. Dividends, when
declared, are generally paid on or about the 10th day of each May, August,
November and February. The corresponding record dates are generally about
the first week of the calendar month immediately preceding the month in which
the dividend is paid.
13. How many shares of Common Stock will be purchased for participants?
The number of shares purchased for participants shall be determined
by dividing the amount of dividends and/or optional cash payments in the
account of each participant available for investment on the Investment Date
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by the purchase price per share on such date. If the funds available from
participants are not sufficient to purchase an exact number of shares,
participants' plan accounts will be credited with fractional shares computed
to four decimal places, which will earn proportionate dividends as declared.
Participants may not specify the number of shares to be purchased on a given
Investment Date.
14. What will be the price of shares of Common Stock purchased under the
Plan?
The price of shares of Common Stock purchased in the open market for
participants in the Plan will be the weighted average price paid by the agent
of the Plan Administrator on the Investment Date to obtain them and the price
of shares of Common Stock acquired in original issue will be the average of
the high and low trading prices computed to three decimal places and as
published in The Wall Street Journal for the Investment Date. The
Corporation will bear all costs of administering the Plan, except as
described under Question 17 below.
15. May dividends on shares purchased through the Plan be sent directly
to the beneficial owner?
No. The purpose of the Plan is to provide participants with a
convenient method of purchasing shares of Common Stock and to have the
dividends on those shares reinvested. Accordingly, dividends paid on shares
held in the Plan will be automatically reinvested in additional shares of
Common Stock, unless the participant is enrolled in option (d) as described
in Question 7 or until the participant elects to terminate participation in
the Plan as to any or all shares in the Plan as described under Question 22
below. In the event a shareholder withdraws a portion of his shares from the
Plan, dividends will continue to be reinvested in shares of Common Stock for
the Common Stock remaining in the Plan.
16. Will the Plan have a dilutive effect on the Corporation's book value
per share?
Possibly. The issuance of Common Stock purchased with reinvested
quarterly cash dividends will have a dilutive effect on the book value per
share of the Corporation's Common Stock if such shares are issued at a price
below the then prevailing book value of the Common Stock. The exact amount
of such dilution will depend upon the number of shares issued under the Plan
and the issue price of such shares. All shareholders have the right to
participate in the Plan and reinvest cash dividends in Common Stock of the
Corporation and make limited optional cash payments under the Plan.
COSTS
17. Are there any expenses to participants in connection with purchases
of Common Stock from the Corporation under the Plan?
All costs or expenses arising out of the purchase of shares pursuant
to the Plan, including the Plan Administrator's fees, will be paid by the
Corporation. There will be no brokerage fees for shares purchased under the
Plan; however, there is a fee to sell shares through the Plan. For further
information, contact American Stock Transfer & Trust Company at
1-800-278-4353.
REPORTS TO PARTICIPANTS
18. How will participants be advised of their purchases of stock?
As soon as practicable after each purchase, participants will
receive a statement of account from the Plan Administrator. These statements
are participants' continuing record of the cost of shares purchased and the
number of shares acquired, and should be retained for tax purposes.
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CASH DIVIDENDS
19. Will participants be credited with dividends on shares held in their
account under the Plan?
Yes. Participants' accounts will be credited with dividends on
shares held in their accounts. The Plan Administrator will reinvest the
dividends in additional shares of Common Stock.
STOCK SPLITS, STOCK DIVIDENDS, AND RIGHTS OFFERINGS
20. What is the effect of a stock split, stock dividend or rights
offering by the Corporation under the Plan?
Any stock dividend or stock split declared by the Corporation on
shares held by the Plan Administrator for participants will be credited to
participants' accounts without charge. In the event that the Corporation
makes available to its shareholders the right to purchase additional shares,
debentures or other securities, such rights accruing on the shares held by
the Plan Administrator for participants will be sold and the proceeds of the
sale will be promptly applied to the purchase of additional shares of the
Corporation for participants' accounts. If, however, participants wish to
exercise such rights, they may, by written request received by the Plan
Administrator prior to the record date for such rights, obtain a certificate
for the full shares in their accounts so that such rights to purchase
additional shares accruing to those certificates will flow directly to the
participants.
STOCK CERTIFICATES
21. Will stock certificates be issued for shares of Common Stock
purchased?
Normally, certificates for Common Stock purchased under the Plan
will not be issued to participants. The number of shares credited to an
account under the Plan will be shown on the participant's statement of
account.
Participants may receive certificates for full shares accumulated in
their account under the Plan by sending a written request to the Plan
Administrator. Participants may request periodic issuance of certificates
for all full shares in the account, however, there may be fees for
withdrawals of shares. When certificates are issued to the participant,
future dividends on such shares will be treated in accordance with the
participant's instructions as indicated on the Authorization Form. Any
remaining shares will continue to be reflected in the participant's account.
Participants' rights under the Plan and shares credited to the
accounts of participants under the Plan may not be pledged. Participants who
wish to pledge such shares must request that certificates for such shares be
issued in their name.
Accounts under the Plan are maintained in the names in which the
certificates of participants were registered at the time they entered the
Plan. Consequently, certificates for whole shares will be similarly
registered when issued.
WITHDRAWAL FROM THE PLAN
22. How may participants withdraw shares previously purchased under the
Plan?
A shareholder who has previously purchased shares under the Plan may
withdraw all or a portion of such shares from their Plan account by notifying
the Plan Administrator in writing to that effect and specifying in the notice
the number of shares to be withdrawn. Certificates for whole shares so
withdrawn will be registered in the name of and issued to the participant.
Certificates representing fractional interests will not be issued.
If a notice of withdrawal is received less than 15 days before a
dividend record date, the previously purchased shares will be withdrawn from
the participant's account but dividends paid for that record date will be
reinvested and the shares credited to the participant's account. Provided
that notice of withdrawal is received no later than 15 days before a dividend
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record date, the previously purchased shares will be withdrawn from the
participant's account and all future dividends on such shares will be paid in
cash and sent directly to the participant if the participant has elected only
the option payment feature. Whether or not shares have been withdrawn,
dividends will continue to be reinvested and shares will be credited to the
participant's account if the participant has elected and not discontinued the
dividend reinvestment feature.
Upon your withdrawal from the Plan, you may also request that all or
part of the shares credited to your account in the Plan be sold. If you
request such a sale, the Plan Administrator's agent will make such sale for
you. You will receive the proceeds, less a sale fee per transaction, any
brokerage fee or commissions, and any applicable stock transfer tax. For
further information, contact American Stock Transfer & Trust Company at
1-800-278-4353.
23. What happens to any fractional interest when participants withdraw
from the Plan?
Any fractional interest withdrawn will be liquidated at the then
current market value and a cash payment made promptly from the proceeds less
brokerage commissions and transfer taxes, if any. The net sales proceeds for
any fractional interest together with certificates for whole shares will be
mailed to the withdrawing participant by the Plan Administrator.
24. What happens to participants' Plan accounts if all shares held in
the Plan by the participant are transferred or sold?
If you cease to be a record shareholder, you cease to be eligible to
participate in the Plan. Periodically, the Plan Administrator will review
nonrecord-shareholder Plan accounts and may issue a certificate for whole
shares and a cash payment for any fractional share (as described above) to
close each such account.
ADDITIONAL SERVICES
25. Safekeeping of Shares
As an additional service to the Plan participants, you may deposit
certificates for shares of Common Stock of the Corporation held by you with
the Plan Administrator for safekeeping. If you wish to use this service, you
should send to the Plan Administrator the certificate or certificates.
Delivery of certificates is at the risk of the shareholder and, for delivery
by mail, insured registered mail with return receipt requested is
recommended. The receipt of any shares delivered for safekeeping will be
shown on your account statement.
Participating shareholders may withdraw their shares from the Plan
Administrator's custody at any time by requesting in writing that a
certificate by issued for some or all of the full shares held by it.
OTHER INFORMATION
26. What happens when participants sell or transfer all of the shares
registered in their name?
If participants dispose of all shares of Common Stock registered in
their name (other than shares credited to their account under the Plan), the
Plan Administrator will continue to reinvest the dividends on the shares
credited to their account under the Plan until the participant withdraws from
the Plan; provided, however, that if following such a disposition of stock
the participant's account under the Plan contains less than five shares of
Common Stock, then at the Corporation's election, a certificate will be
issued for the full shares in the account, any fractional shares in the
account will be sold and the proceeds paid to the participant, and the
account will be terminated.
27. How will participants' shares held under the Plan be voted at
meetings of shareholders?
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<PAGE>
Shares credited to the account of participants under the Plan (other
than fractional shares) will be automatically added to the shares covered by
the proxy sent to the shareholder with respect to their other shares in the
Corporation and may be voted by such holder pursuant to such proxy.
28. What are the income tax consequences of participation in the Plan?
In general, participants in the Plan have the same federal and state
income tax obligations with respect to dividends credited to their accounts
under the Plan as other holders of shares of Common Stock who elect to
receive cash dividends directly. Participants are treated for income tax
purposes as having received, on the dividend payment date, a dividend in an
amount equal to the fair market value of the Common Stock credited to their
account under the Plan, even though that amount was not actually received by
the participant in cash but, instead, was applied to the purchase of
additional shares for their account.
The basis of each share credited to participants' accounts pursuant
to the dividend reinvestment aspect of the Plan is the fair market value of
the Common Stock, and the holding period for such shares begins on the day
following the dividend payment date. The difference between the fair market
value of the Common Stock and the cash payment therefor, will be taxable to
the shareholder as ordinary income. The basis of the shares credited to
participants' accounts pursuant to the optional cash investment aspect of the
Plan is the amount paid by the participant to acquire the shares. The
holding period for such shares begins on the day following the Investment
Date.
The receipt by participants of certificates representing whole
shares previously credited to their account under the Plan upon withdrawal
from the Plan or pursuant to the request of the participant will not result
in the recognition of taxable income. Participants will recognize a gain or
loss when fractional shares are sold on behalf of the participant upon
withdrawal from the Plan or when the participant sells shares after the
participant's withdrawal from the Plan.
Each shareholder should consult his or her own tax adviser regarding
the income tax effect of participation in the Plan as to such shareholder.
29. What are the responsibilities of the Corporation under the Plan?
The Corporation and the Plan Administrator in administering the Plan
will not be liable for any act done in good faith or for the good faith
omission to act, including, without limitation, any claim of liability
arising out of failure to terminate participants' accounts upon the
participant's death or judicially declared incompetency prior to receipt by
the Plan Administrator of notice in writing of such death or incompetency or
with respect to the prices at which shares are purchased for the
participant's account, and the times when such purchases are made, or with
respect to any loss or fluctuation in the market value after purchase of
shares.
30. Who bears the risk of market price fluctuations in the Common Stock?
Participants' investments in shares acquired under the Plan are no
different from direct investments in shares of the Corporation. The
participant bears the risk of loss and realizes the benefits of any gain from
market price changes with respect to all such shares held in the Plan, or
otherwise.
31. May the Plan be changed or discontinued?
The Plan may be amended, suspended, modified or terminated at any
time by the Board of Directors of the Corporation without the approval of the
participants. Notice of any such suspension or termination or material
amendment or modification will be sent to all participants, who shall at all
times have the right to withdraw from the Plan.
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<PAGE>
The Corporation or the Plan Administrator may terminate a
shareholder's individual participation in the Plan at any time by written
notice to the shareholder. In such event, the Plan Administrator will
request instructions from the participant for disposition of the shares in
the account. If the Plan Administrator does not receive instructions from
the participant, it will send the participant a certificate for the number of
full shares held for the participant under the Plan and a check for any
fractional share.
USE OF PROCEEDS
The net proceeds from the sale of Common Stock offered pursuant to
the Plan will become part of the Corporation's general funds for working
capital purposes and investment in the various areas of business in which it
is then engaged.
DESCRIPTION OF COMMON STOCK
The Corporation is authorized to issue 30,000,000 shares of Common
Stock, par value $1.00 per share. As of the date of this Prospectus there
were a total of 6,595,842 shares of Common Stock outstanding. In addition,
there are a total of 523,983 shares of Common Stock reserved for issuance
pursuant to stock options granted or available for grant under the
Corporation's 1986 Stock Option Plan and Incentive Plan and the Corporation's
1995 Stock Option Plan. The Corporation's Board of Directors may approve the
issuance of additional authorized shares from time to time without the
approval of the shareholders.
Each share of Common Stock is entitled to one vote at any meeting of
shareholders. Shareholders have no preemptive rights with respect to any
additional shares which may be issued. The Common Stock is not subject to
call or redemption. In the unlikely event of liquidation of the Corporation,
holders of the Common Stock will be entitled to receive any remaining assets
of the Corporation.
Each share of Common Stock has the same relative rights and is
identical in all respects. The Common Stock offered hereby will be fully
paid and nonassessable. The Common Stock cannot and will not be insured by
the FDIC.
EXPERTS
The consolidated financial statements of Horizon Financial Corp.
incorporated by reference in Horizon Financial Corp.'s Annual Report (Form
10-K) for the year ended March 31, 1996, have been audited by Moss Adams LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial statements
are incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
LEGAL OPINION
The legality of the Common Stock to be issued pursuant to the Plan
will be passed upon for Horizon Financial Corp. by Breyer & Aguggia,
Washington, D.C.
<PAGE>
<PAGE>
TERMS AND CONDITIONS OF AUTHORIZATION FOR DIVIDEND REINVESTMENT AND STOCK
PURCHASE PROGRAM:
1. As agent for the participating stockholder, American Stock
Transfer & Trust Company ("AST&T") will apply all dividends on the common
shares of Horizon Financial Corp. ("Horizon") held by the participant, all
voluntary cash payments up to $3,000 per quarter made by the participant and
dividends on any full or fractional shares acquired under the Program to the
purchase of shares of Horizon's Common Stock ("shares") for the participant's
account. The purchases may be made on any securities exchange where the
shares are traded, in the over-the-counter market or in negotiated
transactions, and may be on such terms as to price, delivery and otherwise as
AST&T may determine.
2. In making purchases for the participant's account, AST&T
may commingle the participant's funds with those of other stockholders of
Horizon participating in the Program. The price at which AST&T shall be
deemed to have acquired shares for the participant's account shall be the
average price, excluding commission and administrative costs, of all shares
purchased by it in the open market, as agent for participants in the Program
and the average of the high and low price on the date of investment. AST&T
will hold the shares of all participants together in the name of its nominee.
AST&T shall have no responsibility as to the value of the Horizon stock
acquired for the participant's account. AST&T will invest promptly dividends
received, except where temporary curtailment or suspension of purchases is
necessary to comply with applicable provisions of the Federal Securities Law.
Voluntary cash payments received in a timely manner will be invested before
the next dividend payment date if enough money is received from participants
to purchase one round lot of Horizon's shares, but the entire amount of the
funds available in the participant's account for purchase of the Horizon's
shares might not be applied to the purchase of such shares on or before the
next ensuing dividend date. Participant's funds held by AST&T uninvested
will not bear interest, and it is to be understood that, in any event, AST&T
shall have no liability in connection with such inability to purchase shares
or the timing of any purchases. Participants may withdraw their entire
voluntary cash payment by written notice received by AST&T not less than 48
hours before such payment is to be invested.
3. AST&T will confirm the purchases so made as soon as
practicable after the purchases are completed, but no certificates will be
issued to participants for such shares unless they so request or until the
participant's account is terminated. Such requests must be made in writing
after the shares have been purchased. A separate request must be made for
each withdrawal of certificates. There is no service charge for each
withdrawal of shares. No certificate for a fractional share will be issued.
4. AST&T will forward all proxy solicitation material to
participants and will vote any shares that it holds for the participants'
accounts in accordance with their direction. If participants do not direct
AST&T as to how they wish their shares voted, AST&T will not vote the shares.
5. The reinvestment of dividends does not relieve the
participant of any income tax which may be payable on such dividends or on
brokerage commissions or service charges paid on the participant's behalf by
Horizon.
6. Participants may terminate their accounts at any time prior
to any dividend record date by writing to AST&T. AST&T may terminate the
account by notice in writing mailed to the participant. As soon as
practicable following receipt of notice of termination from the participant,
AST&T will send certificates for the full shares in the account. If the
participant so requests, AST&T will sell such shares and deliver the
proceeds, less a handling charge and brokerage commission. In every case of
termination, the participant's interest in a fractional share will be paid in
cash at the then current market value of Horizon's shares. If the
participant disposes of all shares registered in his or her name on the books
of Horizon, AST&T will determine from the participant the disposition he or
she wishes to be made of shares in the account with AST&T. If AST&T should
be unable to obtain instructions in such a case, it may in its discretion
continue to reinvest the dividends until otherwise notified.
<PAGE>
<PAGE>
7. It is understood that any dividends or split shares
distributed by Horizon on shares held by AST&T for the participant will be
credited to the participant's account. In the event that Horizon makes
available to its stockholders rights to purchase additional shares,
debentures or other securities, Horizon will sell such rights accruing to
shares held by Horizon for participants and invest the resultant funds in
Horizon's Common Stock prior to or with the next regular cash dividend. Any
participant who wishes to exercise stock purchase rights must request that a
stock certificate be sent by Horizon as provided in Item 3, prior to the
record date of the rights offering.
8. AST&T and Horizon shall not be liable hereunder for any act
done in good faith or for any good faith omission to act, including, without
limitation, any claims of liability (1) arising out of failure to terminate
the participant's account upon such participant's death prior to receipt of
notice in writing of such death, and (2) with respect to the prices at which
shares are purchased for the participant's account and the times such
purchases are made.
9. The terms and conditions of this authorization shall be
governed by the laws of the State of New York.
<PAGE>
<PAGE>
No person has been authorized to give any
information or to make any representations
not contained in this Prospectus, and if
given or made, any such information or
representation must not be relied upon as
having been authorized by the Corporation.
The delivery of this Prospectus at any time
does not imply that information herein is
correct as of any time subsequent to its date.
This Prospectus does not constitute an offer
to sell, or a solicitation of an offer to buy,
any of the securities offered hereby, in any
jurisdiction to any person to whom it is
unlawful to make such offer.
Table of Contents Page
Information Concerning the
Business of Horizon Financial
Corp., Its Management, Financial
Statements and other Information. . . . . 1
Other Available Information. . . . . . . . 1
The Corporation and the Bank . . . . . . . 1
Horizon Financial Corp. Amended and
Restated Dividend Reinvestment and
Stock Purchase Plan . . . . . . . . . . . 2
Use of Proceeds. . . . . . . . . . . . . . 10
Description of Common Stock. . . . . . . . 10
Experts. . . . . . . . . . . . . . . . . . 10
Legal Opinion. . . . . . . . . . . . . . . 10
Terms and Conditions of Authorization for
Dividend Reinvestment and Stock Purchase
Program . . . . . . . . . . . . . . . . . 11
NO DEALER, SALESMAN OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR MAKE ANY REPRESENTATIONS NOT CONTAINED
IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFERING MADE HEREBY, AND, IF GIVEN OR MADE,
ANY SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE CORPORATION.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY
ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION IN WHICH, OR TO ANY PERSON TO
WHOM, SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE HEREUNDER SHALL UNDER
ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE CORPORATION SINCE ANY OF THE DATES AS OF
WHICH INFORMATION IS FURNISHED HEREIN OR SINCE
THE DATE HEREOF.
HORIZON FINANCIAL CORP.
250,000 Shares of Common Stock
PROSPECTUS FOR AMENDED AND RESTATED
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
July 9, 1996
<PAGE>
<PAGE>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Estimated expenses are expected to be minimal and will be paid by the
Corporation.
Item 15. Indemnification of Directors and Officers.
Sections 23B.08.500 through 28B.08.600 of the Washington Business
Corporation Act ("WBCA") contain specific provisions relating to
indemnification of directors and officers of Washington corporations. In
general, the statute provides that (i) a corporation must indemnify a
director or officer who is wholly successful in his defense of a proceeding
to which he is a party because of his status as such, unless limited by the
articles of incorporation, and (ii) a corporation may indemnify a director or
officer if he is not wholly successful in such defense, if it is determined
as provided in the statute that the director meets a certain standard of
conduct, provided when a director is liable to the corporation, the
corporation may not indemnify him. The statute also permits a director or
officer of a corporation who is a party to a proceeding to apply to the
courts for indemnification or advance of expenses, unless the articles of
incorporation provide otherwise, and the court may order indemnification or
advance of expenses under certain circumstances set forth in the statute.
The statute further provides that a corporation may in its articles of
incorporation or bylaws or by resolution provide indemnification in addition
to that provided by the statute, subject to certain conditions set forth in
the statute.
Pursuant to the Corporation's Articles of Incorporation, the
Corporation will indemnify its officers, directors, agents and employees to
the fullest extent permitted by Washington law, even if deemed optional under
Washington law.
The Corporations's Articles of Incorporation provide that the
directors of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for conduct as a
director, except for liability of the director for acts or omissions that
involve: (i) intentional misconduct by the director; (ii) a knowing violation
of law by the director; (iii) conduct violating Section 23B.08.310 of the
WBCA; or (iv) any transaction from which the director will personally receive
a benefit in money, property or services to which the director is not legally
entitled.
Item 16. Exhibits.
An index of exhibits appears at page II-5.
Item 17. Undertakings.
The undersigned hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bellingham, State of Washington, on
the 25th day of June, 1996.
HORIZON FINANCIAL CORP.
Date: June 25, 1996 By: /s/ George W. Gust
George W. Gust, Chairman of the Board
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of Horizon Financial
Corp., do hereby severally constitute and appoint V. Lawrence Evans true and
lawful attorney and agent to do any and all things and acts in our names in
the capacities indicated below and to execute any and all instruments for us
and in our names in the capacities indicated below which V. Lawrence Evans
may deem necessary or advisable to enable Horizon Financial Corp. to comply
with the Securities Act of 1933 in connection with the Registration Statement
on Form S-3 relating to the offering of the Corporation's Common Stock,
including specifically, but not limited to, power and authority to sign for
us or any of us in our names in the capacities indicated below the
Registration Statement and any and all amendments (including post-effective
amendments) thereto; and we hereby ratify and confirm all that said V.
Lawrence Evans shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
By:/s/ V. Lawrence Evans By:/s/ Fred R. Miller
V. Lawrence Evans Fred R. Miller
Principal Financial Officer, Director
President and Director
Date: June 25, 1996 Date: June 25, 1996
By:/s/ Karen A. LePage By:/s/ L.M. Strengholt
Karen A. LePage L. M. Strengholt
Principal Accounting Officer Director
Date: June 25, 1996 Date: June 25, 1996
By:/s/ Robert C. Diehl By:/s/ Frank G. Uhrig
Robert C. Diehl Frank G. Uhrig
Director Director
Date: June 25, 1996 Date: June 25, 1996
By:/s/ George W. Gust By:/s/ Maurice D. Fox
George W. Gust Maurice D. Fox
Chairman of the Board Director
Date: June 25, 1996 Date: June 25, 1996
By:/s/ Richard R. Haggen
Richard R. Haggen
Director
Date: June 25, 1996
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit 4.1 Horizon Financial Corp. Amended and Restated Dividend
Reinvestment and Stock Purchase Plan is set forth in full in
the Prospectus, to which reference is made.
Exhibit 4.2 Amended and Restated Dividend Reinvestment and Stock Purchase
Plan Authorization Form.
Exhibit 5 Opinion of Breyer & Aguggia with respect to the validity of
the Common Stock being registered.
Exhibit 23.1 Consent of Moss Adams LLP.
Exhibit 23.2 Consent of Breyer & Aguggia (contained in their opinion filed
as Exhibit 5 hereto).
Exhibit 24 Power of Attorney of certain directors and officers of the
Corporation (included in the signature pages to this
Registration Statement).
Exhibit 99 Letter of Repurchase Offer and Response Form
<PAGE>
<PAGE>
Exhibit 4.2
Amended and Restated Dividend Reinvestment and Stock Purchase
Plan Authorization Form
<PAGE>
<PAGE>
HORIZON FINANCIAL CORP.
AMENDED AND RESTATED DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
I hereby authorize Horizon Financial Corp. to pay American Stock
Transfer & Trust Company dividends payable to me on all or only those shares
of Common Stock designated on this Form, which are now or hereafter
registered in my name, for my account.
I hereby appoint American Stock Transfer & Trust Company as my
agent, subject to the terms and conditions of authorization of the Dividend
Reinvestment Program set forth in the accompanying brochure, and authorize
American Stock Transfer & Trust Company, as such agent, to apply designated
cash dividends and direct all cash payments received by it to the purchase of
full and fractional shares of Common Stock.
If you desire, you may make an initial optional cash purchase with
this Authorization Form. Indicate the amount on the reverse side of this
card and enclose a check or money order payable to the order of American
Stock Transfer & Trust Company. Optional cash purchases must be at least
$125 but not more than $3,000 per quarter.
TO PARTICIPATE IN THIS SERVICE, PRINT AND COMPLETE THE
REVERSE, AND RETURN IN THE ENCLOSED ENVELOPE.
You may choose only one service - mark your choice x and complete the
appropriate section of this authorization form.
___ DIVIDEND REINVESTMENT PLAN
Please indicate your participation in the Program by marking one of the boxes
below:
A. Full Dividend Reinvestment.
___ Reinvest dividends from all of my Common Stock and any subsequent
optional cash payments.
B. Partial Dividend Reinvestment.
___ Reinvest dividends from _______ shares of my Common Stock and
subsequent optional cash payments.
C. Additional Cash Purchase Only (Option 1).
___ Invest only my optional cash payments and all dividends from Plan
book-entry shares.
D. Additional Cash Purchase Only (Option 2).
___ Invest only my optional cash payments. Send all dividends to me in
cash.
AMOUNT ENCLOSED $______________________
(Check or money order only)
This authorization and appointment are given with the understanding that I
may terminate them at any time by so notifying American Stock Transfer &
Trust Company in writing.
Please enroll me in the Amended and Restated Dividend Reinvestment and Stock
Purchase Plan.
_________________________
SIGNATURE OF STOCKHOLDER
_________________________
SIGNATURE OF STOCKHOLDER
_________________________
DATE
_________________________
TAX ID NUMBER OR SOCIAL
SECURITY NUMBER
____________, 1996
<PAGE>
<PAGE>
Exhibit 5
Opinion of Breyer & Aguggia with respect to the
validity of the Common Stock being registered
<PAGE>
<PAGE>
Board of Directors
Horizon Financial Corp.
1500 Cornwall Avenue
Bellingham, Washington 98225
Re: Horizon Financial Corp.
Registration Statement on Form S-3
Gentlemen and Ladies:
We have acted as counsel to Horizon Financial Corp. ("Corporation"),
in connection with the preparation of the Registration Statement on Form S-3
("Registration Statement"), filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to the 250,000 shares
of common stock, par value $1.00 per share ("Common Stock"), of the
Corporation which may be offered under the Corporation's Amended and Restated
Dividend Reinvestment and Stock Purchase Plan ("Plan"), as more fully
described in the Registration Statement. You have requested the opinion of
this firm with respect to certain legal aspects of the proposed offering.
We have examined such documents, records and matters of law as we
have deemed necessary for purposes of this opinion, and based thereon, we are
of the opinion that the Common Stock issued pursuant to and in accordance
with the terms of the Plan will be duly and validly issued, fully paid and
nonassessable, provided such stock is issued at a price, after applicable
discounts, in excess of the par value per share.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-3 and to references to our firm included
under the caption "Legal Opinion" in the Prospectus which is part of the
Registration Statement.
Very truly yours,
/s/ Breyer & Aguggia
BREYER & AGUGGIA
Washington, D.C.
July 9, 1996
<PAGE>
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
<PAGE>
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated April 24, 1996, in the Registration Statement
(Form S-3) and related Prospectus of Horizon Financial Corp. for the
Registration of 250,000 shares of its common stock under the Amended and
Restated Dividend Reinvestment and Stock Purchase Plan.
/s/ Moss Adams LLP
MOSS ADAMS LLP
Bellingham, Washington
July 8, 1996
PAGE
<PAGE>
Exhibit 99
Letter of Repurchase and Response Form
<PAGE>
<PAGE>
__________, 1996
Dear _________,
We are writing you in connection with the shares of common stock of
Horizon Financial Corp. ("Company") that you received under the Company's
Amended and Restated Dividend Reinvestment and Stock Purchase Plan ("Plan")
through the reinvestment of cash dividends paid by the Company on October 31,
1995, February 5, 1996 and May 6, 1996.
On July 8, 1996, the Company filed a Registration Statement with the
Securities and Exchange Commission covering the shares of common stock
issuable under the Plan. However, because you received your shares described
above prior to the filing of this Registration Statement, the Company is
offering to repurchase these shares from you.
In the event that you decide to accept this offer, please do the
following:
(1) Complete the attached response form showing your desire to
accept this offer and the number of shares to be
repurchased. This offer is limited to the shares purchased
through the Plan on the above dates.
(2) Return this form to the undersigned prior to July 26,
1996. Upon receipt, we will promptly forward your cash
purchase price for the shares, plus interest at the rate
of 4.50% per annum from the date on which you acquired the
shares.
If you decide to retain your shares and reject the Company's
repurchase offer, please disregard this letter.
Please note that this offer is limited to the opportunity to
repurchase your shares on the terms outlined in this letter.
If you have any questions with regard to this matter, please contact
David Eldred in the Investor Relations Department at (360) 733-3050, ext.
286.
Very truly yours,
HORIZON FINANCIAL CORP.
V. Lawrence Evans
President
<PAGE>
<PAGE>
Response to Repurchase Offer
Instructions:
If you wish to accept this repurchase offer, please check the
space(s) provided below, sign and date this form and return it to Horizon
Financial Corp., Investor Relations Department, Horizon Financial Corp., P.O.
Box 580, Bellingham, Washington 98227, prior to July 26, 1996.
Response:
I have been informed by Horizon Financial Corp. of my right of
repurchase in connection with the shares of common stock acquired by me on
October 31, 1995, February 5, 1996 and May 6, 1996 under the Company's
Amended and Restated Dividend Reinvestment and Stock Purchase Plan ("Plan").
I hereby accept the repurchase offer as to (check all that apply):
[ ] _______ shares acquired through the Plan on October 31,
1995 at $12.875 per share.
[ ] _______ shares acquired through the Plan on February 5,
1996 at $13.375 per share.
[ ] _______ shares acquired through the Plan on May 6, 1996
at $12.625 per share.
If you wish to retain the shares purchased through the Plan on the
above dates, please disregard this notice.
Print Name of Participant ____________________________________________
Print Name of Participant ____________________________________________
Signature of Participant ____________________________________________
Signature of Participant ____________________________________________
Note: If a joint account, all account holders must sign.
Date: ____________________________
<PAGE>
