<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 4, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
GOLDEN STATE BANCORP INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
<TABLE>
<S> <C>
DELAWARE 95-4642135
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
</TABLE>
414 NORTH CENTRAL AVENUE, GLENDALE CALIFORNIA 91203; (818) 500-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
RICHARD A. FINK
VICE CHAIRMAN
GOLDEN STATE BANCORP INC.
414 NORTH CENTRAL AVENUE
GLENDALE, CALIFORNIA 91203
(818) 500-2000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
WITH COPIES TO:
JAMES R. WALTHER
MAYER, BROWN & PLATT
350 SOUTH GRAND AVENUE
LOS ANGELES, CALIFORNIA 90071-1503
(213) 229-9597
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: Upon
exercisability of the Litigation Tracking Warrants described herein.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
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. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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- ---------------------------------------------------------------------------------------------
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT OFFERING PRICE FEE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 par value... 14,636,000 $1.00 $14,636,000 $4,317
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
(1) The number of shares of Common Stock, par value $1.00 per share ("Golden
State Common Stock"), of the Registrant to be registered hereby is based
upon the number of shares of Golden State Common Stock reserved for
issuance by the Registrant upon the exercise of the Litigation Tracking
Warrants described herein, which in turn is based upon an estimate of the
"Adjusted Litigation Recovery" described herein.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
BECOMES EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BECOME EFFECTIVE. THESE +
+SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE +
+TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT +
+CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL +
+THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, +
+SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION +
+UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 4, 1998
PROSPECTUS
14,636,000 SHARES
GOLDEN STATE BANCORP INC.
COMMON STOCK
This Prospectus relates to shares of the common stock, par value $1.00 per
share ("Common Stock"), of Golden State Bancorp Inc. (the "Company") that may
be issued from time to time upon exercise of the Litigation Tracking
Warrants(TM) described herein (the "LTWs"). On , 1998, the Company
distributed (the "Distribution") one LTW for each share of Common Stock
outstanding on , 1998 (the "Distribution Record Date"). At the time
of the Distribution, the Company also reserved additional LTWs for future
issuance to holders of outstanding Convertible Securities (as defined herein)
of the Company.
The LTWs distributed to the holders of Common Stock will, if the Triggering
Event described herein occurs, entitle the holders thereof (the "LTW Holders")
to purchase shares of Common Stock having, in the aggregate, an Adjusted Market
Value (as defined herein) equal to the Adjusted Litigation Recovery (as defined
herein), if any. Each LTW will be exercisable for the number of shares of
Common Stock having an Adjusted Market Value equal to the Adjusted Litigation
Recovery divided by the number of LTWs issued or reserved for issuance as of
the Distribution Record Date (approximately 85,700,000) at an exercise price
per LTW equal to the number of shares of Common Stock for which the LTW is then
exercisable multiplied by $1.00 (the "Exercise Price"). The Adjusted Litigation
Recovery represents a portion of the proceeds that may be received by the
Company from the United States Government (the "Government") as a result of the
civil action (the "Litigation") filed by the Company's subsidiary, Glendale
Federal Bank, Federal Savings Bank (the "Bank" or "Glendale Federal"), against
the Government in 1990 in the United States Court of Federal Claims (the
"Claims Court"). In the Litigation, the Claims Court has determined that the
Government has breached its contract with the Bank, as a result of certain
changes, mandated by the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and certain regulations promulgated thereunder
(collectively, "FIRREA"), with respect to the rules of computing the Bank's
regulatory capital and such determination has been upheld on appeal. A trial is
presently underway in the Claims Court to determine the amount of damages, if
any, due to Glendale Federal as a result of the Government's breach of
contract.
The Common Stock is listed on the New York Stock Exchange and the Pacific
Exchange under the trading symbol "GSB".
This Prospectus does not cover any resales of Common Stock received upon
exercise of the LTWs. No person is authorized to make any use of this
Prospectus in connection with any such resale or in connection with any other
transaction or the offer or sale of any other securities.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-----------
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR
OTHER OBLIGATIONS OF ANY SAVINGS BANK OR NON-BANK
SUBSIDIARY OF THE COMPANY AND ARE NOT INSURED BY THE SAVINGS ASSOCIATION
INSURANCE FUND OR THE BANK INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
-----------
The date of this Prospectus is March , 1998
<PAGE>
AVAILABLE INFORMATION
The Company and Glendale Federal are subject to the informational
requirements of the Exchange Act, and in accordance therewith file reports and
other information with the Securities and Exchange Commission (the "SEC") and
the Office of Thrift Supervision (the "OTS"), respectively. Such reports and
other information filed by the Company may be inspected and copied at
prescribed rates at the public reference facilities maintained by the SEC at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the SEC's regional offices at The Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Thirteen
Floor, New York, New York 10048. Copies of such material can be obtained by
mail from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The SEC also maintains a site
accessible to the public by computer on the World Wide Web, at
http://www.sec.gov, which contains registration statements, reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC, including the Company. Such reports and other
information filed by the Bank may be inspected and copied at the public
reference facilities maintained by the OTS at 1700 G Street, N.W., Washington,
D.C. 20552, or at the OTS Western Region Office, One Montgomery Street, San
Francisco, California 94120.
The Common Stock is listed on the New York Stock Exchange (the "NYSE") and
the Pacific Exchange, Inc. (the "Pacific Exchange"). Reports and other
information concerning the Company may also be inspected at the NYSE located
at 11 Wall Street, New York, New York 10006 and at the Pacific Exchange
located at 301 Pine Street, San Francisco, California 94104.
The Company has filed a Registration Statement with the SEC on Form S-3
(including the exhibits and any amendments thereto, the "Registration
Statement") covering the shares of Common Stock issuable upon exercise of the
LTWs referred to herein. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted from this Prospectus as permitted by the rules and regulations of
the SEC. For further information with respect to the Company and the
securities offered hereby, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed or
incorporated by reference as an exhibit to the Registration Statement, each
such statement being qualified in all respects by such reference. The
Registration Statement may be inspected and copied at prescribed rates at the
above described offices of the SEC, or obtained by mail as described above or
through the SEC World Wide Web site described above. In addition, the Company
will promptly provide copies of these documents without charge upon receipt of
a written or oral request made to the Company at 700 North Brand Boulevard,
Glendale, California 91203, Attention: Corporate Relations, telephone (818)
500-2723, facsimile (818) 409-3296.
-------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR GLENDALE FEDERAL. NEITHER THE DELIVERY HEREOF NOR
ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE
COMPANY OR GLENDALE FEDERAL SINCE THE DATE HEREOF OR THAT THE INFORMATION IN
THIS PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
1
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed (except as otherwise indicated
below) with the OTS under OTS Docket No. 3088 by Glendale Federal of which the
Company became the parent holding company in connection with a reorganization
consummated on July 24, 1997 (the "Reorganization"), are hereby incorporated
by reference in this Prospectus: (i) the Annual Report on Form 10-K for the
year ended June 30, 1997; (ii) the Quarterly Reports on Form 10-Q of the
Company for the quarterly periods ended September 30, 1997, and December 31,
1997; (iii) the Proxy Statement on Schedule 14A, dated June 24, 1997, sent to
Glendale Federal stockholders in connection with the special meeting thereof
held on July 23, 1997; (iv) the Proxy Statement on Schedule 14A (the "LTW
Proxy"), dated March , 1998, sent to the holders of the Common Stock in
connection with the special meeting thereof to be held April 8, 1998; (v) the
description of the Common Stock contained in the Registration Statement on
Form S-3, File No. 333-28037, of the Company filed with the SEC on May 29,
1997, including any amendment or report filed for the purpose of updating such
description; and (vi) the Company's Current Reports on Form 8-K filed with the
SEC dated July 24, 1997, August 17, 1997, September 26, 1997, October 28, 1997
(as amended by Amendment No. 1 thereto, filed with the SEC on February 3,
1998), November 30, 1997 and February 4, 1998 (the "CalFed Merger 8-K").
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the effectiveness of the Registration Statement shall be
deemed to be incorporated herein by this reference and to be a part hereof
from the respective dates of filing thereof. Any statement contained in an
incorporated document shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other such subsequently filed incorporated document modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
This Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. These documents are available upon request made
to the Company by mail at 700 North Brand Boulevard, Glendale, California
91203, Attention: Corporate Relations, by telephone at (818) 500-2723 or by
facsimile at (818) 409-3296. In addition, the documents incorporated herein by
reference that are filed by Glendale Federal may be inspected without charge
at the public reference facilities of the OTS referred to under "Available
Information" above and copies of such documents may be obtained from the OTS
at prescribed rates. The documents incorporated herein by reference that are
filed by the Company may be inspected and copied or obtained by mail from the
public reference facilities and the World Wide Web site maintained by the SEC
referred to under "Available Information" above.
FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. When
used in this Prospectus, the words "intend," "estimate" and "expect" and
similar expressions are intended to identify forward-looking statements. These
forward-looking statements speak only as of the date hereof. The Company
undertakes no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise. Although management believes, based on the information currently
available to it, that the expectations reflected in such forward-looking
statements are reasonable, there can be no assurance that such expectations
will prove to be correct. Important factors that could cause actual matters to
differ materially from management's expectations ("Cautionary Statements") are
disclosed in this Prospectus, including, without limitation, in conjunction
with the forward-looking statements included in this Prospectus. All
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by such Cautionary Statements.
2
<PAGE>
THE COMPANY
Golden State Bancorp Inc. (the "Company") was incorporated under Delaware
law on June 9, 1997 by Glendale Federal Bank, Federal Savings Bank ("Glendale
Federal") for the purpose of becoming the holding company for Glendale
Federal. The Company conducted no business, and had no significant assets or
liabilities, prior to the completion of the holding company formation
transaction in July 1997. At December 31, 1997, Golden State had total
consolidated assets of $16.0 billion, deposits of $9.5 billion and
stockholders' equity of $1.1 billion. The principal executive offices of the
Company are located at 414 North Central Avenue, Glendale, California 91203
and the telephone number of such offices is (818) 500-2000.
Glendale Federal is a federally chartered savings bank and is one of the
largest savings institutions in the United States. Glendale Federal's business
consists primarily of attracting deposits from the general public and using
such deposits, together with the proceeds of borrowings and its stockholders'
equity, to originate and purchase loans, including residential real estate
loans as well as business and consumer banking loans and other products. As of
December 31, 1997, Glendale Federal operated 181 banking offices and 26 loan
offices located throughout the State of California.
RECENT DEVELOPMENTS
CALIFORNIA FEDERAL MERGER
On February 5, 1998, the Company and First Nationwide (Parent) Holdings Inc.
("First Nationwide"), the principal holding company for California Federal
Bank FSB, announced that they had entered into an agreement to merge in a tax-
free exchange of shares (the "Cal Fed Merger"). After giving effect to the Cal
Fed Merger, the resulting company, which will be named California Federal Bank
FSB at the operating level and Golden State Bancorp Inc. at the holding
company level, will be California's largest statewide community bank and
fifth-largest depository institution, with a 6.4% statewide deposit market
share, as well as a leading in-state provider of consumer, business and
mortgage banking services. In addition, the combined entity will be the third-
largest thrift institution in the country, with assets in excess of $51
billion and deposits of $28 billion.
The transaction will take the form of a merger of First Nationwide into the
Company, with the Company being the surviving entity (the "Combined Entity").
The Company's stockholders will own 55% to 58% of the Combined Entity. The
terms and conditions of the Cal Fed Merger call for the Company's stockholders
to own 58% of the Combined Entity if the adjusted volume-weighted average
trading price (the "Adjusted Average Price") of the Common Stock during a
period preceding the close of the Cal Fed Merger, but after the Distribution
(the "Pricing Period"), is $32 per share or less, and to own 55% of the
Combined Entity if the Adjusted Average Price is $33 per share or more. For
purposes of determining the Adjusted Average Price, the average trading price
of the Common Stock over the Pricing Period will be adjusted downward by the
implied market value per share of Common Stock of the Company's retained
interest in the Litigation, as determined by the volume-weighted average
trading price of the LTWs during the Pricing Period. The remainder of the
Combined Entity will be owned by affiliates of the two principal shareholders
of First Nationwide, who will own between 42% and 45% of the Combined Entity,
before giving effect to provisions in the merger agreement for the contingent
issuance of additional shares that could substantially increase such ownership
percentage. In addition, the merger agreement provides that two-thirds of the
directors of the Combined Entity will be designated by such affiliates.
Because the Company will survive the Cal Fed Merger, LTWs outstanding
immediately prior to the Cal Fed Merger will remain outstanding and will
continue to be exercisable into shares of Common Stock should the Triggering
Event described herein occur after the Cal Fed Merger.
3
<PAGE>
The Cal Fed Merger requires regulatory approval and the approval of the
stockholders of the Company. A proxy statement with respect to the approval of
the Cal Federal Merger by the Company's stockholders is expected to be mailed
to the holders of the Company's Common Stock during the June 1998 quarter. The
consummation of the Cal Fed Merger is also subject to other closing
conditions. The Cal Fed Merger is expected to be completed late in the
September 1998 quarter.
ACQUISITION OF CENFED
Golden State acquired CENFED Financial Corporation ("CENFED") on
, 1998 pursuant to an Agreement and Plan of Merger entered into
between Golden State and CENFED as of August 17, 1997 (the "CENFED Merger").
CENFED was the holding company for CenFed Bank, a federally chartered savings
bank that had 18 branches in Pasadena and in other locations in Los Angeles,
Orange, Riverside and San Bernardino Counties in southern California. CenFed
Bank was merged into Glendale Federal. The acquisition of CENFED was accounted
for as a purchase. At December 31, 1997, CENFED had total assets of $2.2
billion, deposits of $1.6 billion and stockholders' equity of $136 million.
REDFED MERGER
On November 30, 1997, Golden State entered into an Agreement and Plan of
Merger (the "RedFed Merger Agreement") providing for the acquisition of RedFed
Bancorp Inc. ("RedFed") through the merger of RedFed with and into a wholly-
owned subsidiary of Golden State (the "RedFed Merger"). Concurrently with or
shortly after completion of the RedFed Merger, RedFed's wholly-owned banking
subsidiary, Redlands Federal Bank, will be merged into Glendale Federal.
Golden State Common Stock will be issued to the stockholders of RedFed in the
RedFed Merger in exchange for their shares of RedFed Common Stock at an
exchange ratio to be derived by dividing $20.75 by the average daily closing
price of Golden State Common Stock, as reported on the New York Stock Exchange
Composite Tape, for the ten trading days on which Golden State Common Stock is
traded immediately preceding the date that is two business days prior to the
effective date of the RedFed Merger. Cash will be paid in lieu of the issuance
of fractional shares. RedFed operates 14 banking offices in Southern
California's Riverside and San Bernardino Counties. At December 31, 1997,
RedFed had total assets of $1.0 billion, deposits of $845 million and
stockholders' equity of $84 million. The transaction, which is subject to
regulatory approval, approval by the RedFed stockholders and satisfaction or
waiver of other conditions, will be accounted for as a purchase business
combination under generally accepted accounting principles. RedFed
stockholders will not be entitled to receive LTWs in respect of the Golden
State Common Stock they receive in the RedFed Merger.
USE OF PROCEEDS
The net proceeds received by the Company from sales of Common Stock to
holders of the LTWs upon exercise thereof will be used by the Company for its
general corporate purposes.
MARKET FOR THE COMMON STOCK AND THE LTWS
The Common Stock is listed on the NYSE and the Pacific Exchange under the
trading symbol of "GSB". The LTWs are listed on [identify securities exchange
or an automated quotation system] under the trading symbol of "[ ]".
DISTRIBUTION OF LTWS
The Company has distributed one LTW for each share of Common Stock
outstanding on the Distribution Record Date. Prior to the Distribution, the
Company took appropriate steps to provide that (i) upon exercise or
conversion, prior to the occurrence of the Triggering Event for the LTWs, of
the Company's Preferred Stock, its common stock purchase warrants (the "Five-
Year Warrants") issued under the Warrant Agreement, dated
4
<PAGE>
February 23, 1993, by and between the Company and ChaseMellon Shareholder
Services L.L.C. (as successor to Chemical Trust Company of California), as
Warrant Agent, its common stock purchase warrants (the "Seven-Year Warrants")
issued under the Warrant Agreement, dated August 15, 1993, by and between the
Company and ChaseMellon Shareholder Services L.L.C. (as successor to Chemical
Trust Company of California), as Warrant Agent, and its stock options issued
by the Company (the "Stock Options", and together with the Preferred Stock,
the Five-Year Warrants and the Seven-Year Warrants, the "Convertible
Securities") the holders of such Convertible Securities would receive the
shares of Common Stock underlying the Convertible Securities, plus a number of
LTWs equal to the number of LTWs such holders would have received had such
holders exercised or converted such Convertible Securities immediately prior
to the Distribution Record Date and received LTWs in the Distribution and (ii)
upon the exercise or conversion of Convertible Securities on or after the
Triggering Event, the holders of such Convertible Securities would receive the
number of shares of Common Stock equal to the number of shares of Common Stock
such holders would have received had such holders (a) exercised or converted
such Convertible Securities into LTWs and the shares of Common Stock
underlying the Convertible Securities immediately prior to the Triggering
Event and then (b) exercised such LTWs for the additional shares of Common
Stock underlying such LTWs immediately after the Triggering Event. In
addition, upon the occurrence of the Triggering Event, the conversion or
exercise price of the Convertible Securities would increase by an amount equal
to the aggregate Exercise Price of the number of LTWs underlying the
Convertible Securities immediately prior to the Triggering Event. As a
consequence of the anti-dilution provision described in clause (ii) above, the
Convertible Securities holders would not be required to exercise or convert
their Convertible Securities during the period that the LTWs are exercisable
in order to obtain the benefit of the LTWs underlying their Convertible
Securities.
Based on the number of shares of Common Stock, Preferred Stock, Five-Year
Warrants, Seven-Year Warrants, and Stock Options outstanding on the
Distribution Record Date (taking into account the Common Stock and Stock
Options issued in connection with the CENFED Merger), the number of LTWs that
have been issued or reserved for issuance in respect of the Company's security
holders on a fully distributed basis is approximately 85,700,000. Of this
total, the holders of the Company's Common Stock have received approximately
58,200,000 LTWs and the number of LTWs reserved for issuance to holders of the
Company's Preferred Stock, Five-Year Warrants, Seven-Year Warrants and Stock
Options is approximately 11,100,000, 1,500, 10,800,000, and 5,500,000,
respectively.
THE LITIGATION
The "Litigation" referred to herein is the case against the Government in
the Claims Court captioned Glendale Federal Bank, F.S.B. v. United States, No.
90-772C, filed on August 15, 1990, in which the Bank contends that the
Government is in breach of its contract with the Bank regarding the
calculation of regulatory capital and, separately, that the Government
unlawfully took the Bank's property without just compensation or due process
in violation of the U.S. Constitution. The Bank's claims arose from changes,
mandated by FIRREA, with respect to the rules for computing the Bank's
regulatory capital.
In July 1992, the Claims Court found in favor of the Bank's breach of
contract claim, ruling that the Government had breached its express
contractual commitment to permit the Bank to include supervisory goodwill in
its regulatory capital and that the Bank is entitled to seek financial
compensation. On appeal, the U.S. Supreme Court (the "Supreme Court"), by a
vote of 7 to 2, ruled that the Government had breached its contract with the
Bank and remanded the case to the Claims Court for a determination of damages.
The trial to determine damages commenced on February 24, 1997 and a decision
is anticipated during the June or September 1998 quarter. The Bank has
presented evidence on three alternative damages theories in amounts ranging
from $900 million to $1.9 billion. The Government denies that the Bank has
suffered any compensable damages.
5
<PAGE>
Following the Claims Court's entry of judgment, the unsuccessful party in
the case, or both parties, may appeal some or all of the decision to the U.S.
Court of Appeals for the Federal Circuit (the "Federal Circuit"). Following
receipt of the decision of the Federal Circuit, the unsuccessful party may
petition for a rehearing en banc by such Court of Appeals. If such a request
for rehearing is denied, the proceedings in the Federal Circuit are expected
to take approximately one year from the date of the Claims Court's decision on
damages, and could take longer. Appeal from the final decision of the Federal
Circuit would be to the Supreme Court, although the Supreme Court could
determine in its sole discretion not to hear the case.
There can be no assurance as to the amount or the timing of receipt of any
damage award should such an award be obtained.
Further information concerning the Litigation is contained in the documents
filed with the SEC that are incorporated herein by reference and the Company
anticipates that additional such information will, to the extent feasible, be
included in future filings with the SEC that will also be incorporated by
reference herein. The Company's ability to disclose details of the Litigation
on a regular basis may be limited, however, by the inherent nature and rules
of judicial proceedings, including, among other things, proceedings and
filings that are sealed by the court, matters involving attorney-client
privilege and proceedings that are conducted on a confidential basis by
agreement of the parties, such as settlement negotiations.
DESCRIPTION OF LTWS
GENERAL
The LTWs are issued pursuant to a warrant agreement (the "Warrant
Agreement") between the Company and ChaseMellon Shareholder Services, L.L.C.,
as warrant agent (the "Warrant Agent"). The following summary of certain
provisions of the Warrant Agreement and the LTWs does not purport to be
complete and is qualified in its entirety by reference to the Warrant
Agreement and the LTWs, including the definitions therein of certain terms.
The LTWs, in the aggregate, will, upon exercise, entitle the LTW Holders to
purchase shares of Common Stock (the "Warrant Shares") with an Adjusted Market
Value (as defined herein) equal to the Adjusted Litigation Recovery, if any.
Each LTW will be exercisable for the number of shares of Common Stock having
an Adjusted Market Value equal to the Adjusted Litigation Recovery divided by
the number of LTWs issued or reserved for issuance as of the Distribution
Record Date, currently estimated to be approximately 85,700,000, at an
exercise price per LTW equal to the number of whole shares of Common Stock
into which the LTW is then exercisable times $1.00 (the "Exercise Price").
Unless exercised, the LTWs will automatically expire on the date, which is not
subject to extension by the Company, that is the earlier of (a) 60 days after
the date on which the Exercise Notice is first sent to LTW Holders or (b) the
giving of notice by the Company to the Warrant Agent that the Litigation has
been disposed of in a manner such that no shares of Common Stock will be
issuable under the terms of the LTWs (the "Expiration Date").
To determine the number of Warrant Shares for which an LTW would be
exercisable and the value of such LTW, an LTW holder can apply the following
formula:
ALR = Adjusted Litigation Recovery
AMV = the Adjusted Market Value of a share of Common Stock
ALTWs = the number of LTWs issued or reserved for issuance on the
Distribution Record Date
WS = the number of Warrant Shares
Number of Warrant Shares per LTW = ALR x 1
----- --------
AMV ALTWs
The value of one LTW = (WS x (AMV + $1.00)) - (WS x $1.00)
For example, if the Adjusted Market Value of the Common Stock on the
occurrence of the Triggering Event were $30.00, the number of LTWs issued or
reserved for issuance on the Distribution Record Date were
6
<PAGE>
85,700,000 and the Adjusted Litigation Recovery were $250 million, then the
number of Warrant Shares issuable upon exercise of each LTW would be 0.0972
and the value per LTW would be $2.9171. If, in the same example, the Adjusted
Litigation Recover were $500 million, then the number of Warrant Shares
issuable upon exercise of each LTW would be 0.1945 and the value per LTW would
be $5.8343, and if the Adjusted Litigation Recovery were $1.0 billion, then
the number of Warrant Shares issuable upon exercise of each LTW would be
0.3890 and the value per LTW would $11.6685. However, if the Adjusted
Litigation Recovery were zero, the LTWs would be worthless.
The holders of the LTWs have no right to vote on matters submitted to the
stockholders of the Company and have no right to receive dividends or other
distributions on the Common Stock prior to the exercise of the LTWs. The
holders of the LTWs would not be entitled to share in the assets of the
Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
ADJUSTED LITIGATION RECOVERY
The "Adjusted Litigation Recovery" will equal 85% of the amount obtained
from the following equation: (a) the aggregate amount (the "Payment") of any
cash payment and the Fair Market Value of any property actually received by
the Bank pursuant to a final, nonappealable judgment in or final settlement of
the Litigation (including any post-judgment interest actually received by the
Bank on any payment), minus (b) the sum of the following: (i) the aggregate
expenses incurred previously and hereafter by the Bank in prosecuting the
Litigation and obtaining the Payment, (ii) the aggregate expenses incurred by
the Company in connection with the creation, issuance and trading of the LTWs,
including, without limitation, legal, financial advisory and accounting fees
and the fees and expenses of the Warrant Agent and (iii) an amount equal to
the net Payment (the Payment less the expenses described in the preceding
clauses (i) and (ii)) multiplied by the highest, combined statutory rate of
federal, state and local income taxes applicable to the Company during the tax
year in which the full Payment is received (currently approximately 42%). The
expenses contemplated by clauses (i) and (ii) of the immediately preceding
sentence will include, without limitation, the costs and expenses contemplated
by the Litigation Management Agreement (as defined herein). The Company's
determination of the amounts to be deducted from the Payment and the amount of
the Adjusted Litigation Recovery will be final, conclusive and binding on the
LTW Holders.
DETERMINATION OF THE NUMBER OF WARRANT SHARES
At such time, if any, as the Company receives the Payment, the Company shall
determine the Adjusted Market Value of a share of Common Stock on the 30th
calendar day prior to the date on which the Bank receives the total amount of
the Payment (the "Determination Date"). The "Adjusted Market Value" of a share
of Common Stock on the Determination Date will equal the average of the daily
Closing Prices (as defined below) for the thirty consecutive Trading Days
ending on and including the Determination Date, minus $1.00; provided that if
the context in which this defined term is used is with respect to securities
other than shares of Common Stock, then "Adjusted Market Value" means the
average daily Closing Prices of a unit of such securities for the thirty
consecutive Trading Days ending on and including the Determination Date, minus
$1.00; and provided further that if the context in which this defined term is
used is with respect to property other than securities, then "Adjusted Market
Value" means the Fair Market Value of the amount of such property
distributable in respect of one share of Common Stock. The term "Closing
Price" on any day shall mean the closing sale price regular way (with any
relevant due bills attached) on such day, or in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way (with any relevant due bills attached), in each case on the NYSE
Consolidated Tape (or any successor composite tape reporting transactions on
national securities exchanges), or, if the Common Stock is not listed or
admitted to trading on the NYSE, on the principal national securities exchange
on which the Common Stock is listed or admitted to trading (which shall be the
national securities exchange on which the greatest number of shares of Common
Stock has been traded during the five consecutive Trading Days ending on and
including the Determination Date), or, if not listed or admitted to trading on
any national securities exchange, the average of the closing bid and asked
prices regular way (with any relevant due bills attached) of the Common Stock
on the over-the-counter market on the day in question as reported by Nasdaq,
or a similar generally accepted reporting service, or if not so available as
determined in
7
<PAGE>
good faith by the Board of Directors, on the basis of such relevant factors as
it in good faith considers appropriate. The term "Trading Day" shall mean a
day on which the NYSE or Nasdaq (or any of their successors) is open for the
transaction of business. The aggregate number of Warrant Shares will equal the
Adjusted Litigation Recovery divided by the Adjusted Market Value of the a
share of Common Stock on the Determination Date. Each LTW will be exercisable
for the number of shares of Common Stock (or other securities or property as
described above) having an Adjusted Market Value equal to the Adjusted
Litigation Recovery divided by the number of LTWs issued or reserved for
issuance on the Distribution Record Date, currently estimated to be
approximately 85,700,000.
EXERCISE OF THE LTWS
Subject to the procedures established by the Company and described herein,
the LTW Holders will be entitled to exercise their LTWs only upon the
occurrence of all of the following: (a) receipt by the Company of the full
Payment, (b) calculation by the Company of the full amount of the Adjusted
Litigation Recovery and (c) receipt by the Company of all regulatory approvals
necessary to issue the Warrant Shares, including the effectiveness of a
registration statement relating to the issuance of such shares under the
Securities Act. The occurrence of the events described in clauses (a) through
(c) is referred to herein as the "Triggering Event." If the Payment is payable
by the Government in installments, the Triggering Event will not occur until
the Bank receives the last installment of the Payment.
Holders of LTWs will not be entitled to any interest or additional shares of
Common Stock from the Company for the period of time between the date on which
the Bank receives any Payment in connection with the Litigation and the date
on which the LTWs become exercisable.
If the Triggering Event occurs, the Company will publicly announce (not more
than 15 calendar days after the occurrence thereof) by means of a press
release and by written notice mailed to each record holder of LTWs (i) that
the Triggering Event has occurred, (ii) the aggregate number of shares for
which the LTWs are exercisable, (iii) the number of shares of Common Stock for
which one LTW is exercisable, (iv) the Exercise Price per LTW, (v) the manner
in which the LTWs are exercisable and (vi) the date on which the LTWs will no
longer be exercisable. The LTWs may be exercised prior to the Expiration Date
by surrendering to the Company the certificates representing the LTWs (the
"LTW Certificates"), with the accompanying form of election to purchase,
properly completed and executed, together with payment of the Exercise Price.
Payment of the Exercise Price may be made in the form of a certified or
official bank check or personal check payable to the order of the Company or
by wire transfer of funds to an account designated by the Company for such
purpose. Upon surrender of the LTW Certificate and payment of the Exercise
Price, the Warrant Agent will deliver or cause to be delivered, to or upon the
written order of such holder, stock certificates representing the number of
whole Warrant Share or other securities or property to which such holder is
entitled under the LTWs and Warrant Agreement, including, without limitation,
any cash payable to adjust for fractional interests in Warrant Shares issuable
upon such exercise. If less than all of the LTWs evidenced by an LTW
Certificate are exercised, a new LTW Certificate will be issued for the
remaining number of LTWs.
No fractional Warrant Share will be issued upon exercise of the LTWs. If
more than one Warrant shall be exercised in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of Warrant
Shares purchasable pursuant thereto. If any fraction of a Warrant Share would,
except for the foregoing provision, be issuable upon the exercise of any LTWs
(or specified portion thereof), the LTW Holder will receive an amount in cash
equal to the sum of the Adjusted Market Value per Warrant Share and $1.00
multiplied by such fraction, computed to the nearest whole cent.
LTW Certificates will be issued in global form or registered form as
definitive certificates and no service charge will be made for registration of
transfer or exchange upon surrender of any LTW Certificate at the office of
the Warrant Agent maintained for that purpose. The Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of LTW
Certificates.
8
<PAGE>
ADJUSTMENTS
In case of certain reclassifications, redesignations, reorganizations or
changes in the outstanding shares of Common Stock or consolidations or mergers
of the Company or the sale of all or substantially all of the assets of the
Company, each LTW shall thereafter be exercisable of the right to receive the
kind of shares of stock or other securities or property into which the Common
Stock was converted or for which the Common Stock was exchanged or which was
distributed to the holders of the Common Stock in such transaction or event,
such that each LTW may be exercised for a number of shares of such stock or
either securities or an amount of property equal to the Adjusted Litigation
Recovery divided by the number of LTWs issued or reserved for issuance on the
Distribution Record Date (currently estimated to be approximately 85,700,000)
divided by the Adjusted Market Value of the shares of capital stock or other
securities or property for or into which one share of Common Stock was
exchanged or converted into as a result of such event. For example, if the
Company were to be acquired for securities and, upon the occurrence of the
Triggering Event, the Adjusted Market Value of the number of securities that
one share of Common Stock was converted into was $30, the number of LTWs
issued or reserved for issuance on the Distribution Record Date was 85,700,000
and the Adjusted Litigation Recovery was $500 million, then, upon exercise of
an LTW and the payment of the Exercise Price of $0.1945, the holder of such
LTW would receive $6.0288 in such securities.
RIGHTS OF LTW HOLDERS
The Bank will retain sole and exclusive control of the Litigation and will
retain 100% of the proceeds of any recovery from the litigation. The
Litigation will remain an asset of the Bank and the Bank intends to pursue the
Litigation with the same vigor as it has in the past. The Bank reserves the
right, however, to terminate the Litigation in any manner it deems appropriate
to serve the Bank's best interest. The LTW Holders will not have any rights
against the Company or the Bank for any decision regarding the conduct of the
Litigation or disposition of the Litigation for an amount less than the amount
it has claimed in damages in the ongoing trial in the Claims Courts,
regardless of the effect on the value of the LTWs. Although the Bank currently
intends to continue prosecuting the Litigation and to seek a cash recovery in
the amount claimed, there can be no assurance that the Bank will not make a
different determination in the future. In connection with consummation of the
Cal Fed Merger, it is expected that the Litigation will be pursued as
contemplated by the Litigation Management Agreement, which is included in the
LTW Proxy and is an exhibit to the Cal Fed Merger 8-K (the "Litigation
Management Agreement").
All rights of action in respect of the LTWs will be vested in the respective
registered LTW Holders; provided, however, that no registered LTW Holder will
have the right to enforce, institute or maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, the
LTWs, unless (a) such registered LTW Holder has previously given written
notice to the Company of the substance of such dispute, and registered LTW
Holders of at least 25% in interest of the issued and outstanding LTWs have
given written notice to the Company of their support for the institution of
such proceedings to resolve such dispute, (b) written notice of the substance
of such dispute and of the support for the institution of such proceeding by
such holders has been provided by the Company to the Warrant Agent, and (c)
the Warrant Agent has not instituted appropriate proceedings with respect to
such dispute within 30 days following the date of such written notice to the
Warrant Agent, it being understood and intended that no one or more registered
LTW Holders will have the right in any manner whatsoever to affect, disturb or
prejudice the rights of any other registered LTW Holders, or to obtain or to
seek to obtain priority or preference over any other LTW Holders or to enforce
any rights of the LTW Holders, except in the manner described above for the
equal and ratable benefit of all registered LTW Holders. Except as described
above, no LTW Holder will have the right to enforce, institute or maintain any
suit, action or proceedings to enforce, or otherwise act in respect of, the
LTWs.
RESERVATION OF SHARES
In the Warrant Agreement, the Company has covenanted and agreed that it will
use its best efforts to cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock or any shares of
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<PAGE>
Common Stock held in its treasury, such number of shares of Common Stock as
will be sufficient to permit the exercise in full of all outstanding LTWs. The
Company's Certificate of Incorporation was recently amended to increase the
number of shares of Common Stock that the Company is authorized to issue to
250,000,000, which the Company estimates (based on various assumptions) will
be sufficient to permit the exercise in full of all LTWs expected to be
outstanding. There can be no assurance, however, that this will be the case.
If, upon the occurrence of the Triggering Event, the number of shares of
Common Stock authorized but unissued plus the number of shares of Common Stock
held in the Company's treasury is less than the number of shares of Common
Stock necessary to permit the exercise of the LTWs in full (the number of
shares of Common Stock comprising such deficiency being the "Number of
Shortfall Shares"), then the Company will be required by the terms of the
Warrant Agreement either (i) to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party, commence a
tender offer for an aggregate number of shares of Common Stock at least equal
to the Number of Shortfall Shares or (ii) call a special meeting of Common
Stockholders for the purpose of increasing the number of authorized shares of
Common Stock in an amount at least equal to the Number of Shortfall Shares. In
such an event, the Expiration Date of the LTWs will be automatically extended
to 60 days after (a) the date on which the tender offer referred to in clause
(i) is successfully completed or (b) the effective date of the increase in the
number of authorized shares of Common Stock referred to in clause (ii) above.
The Warrant Agreement provides that shares of Common Stock issued upon
exercise of the LTWs will, upon such issuance, be fully paid and non-
assessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issue thereof.
AMENDMENT
From time to time, the Company and the Warrant Agent, without the consent of
the holders of the LTWs, may amend or supplement the Warrant Agreement for
certain purposes, including, without limitation, curing defects or
inconsistencies or making any change that does not adversely affect the rights
of any holder. Any amendment or supplement to the Warrant Agreement that has
an adverse effect on the interests of the holders of the LTWs will require the
written consent of the holders of a majority of the then outstanding LTWs. The
consent of each holder of the LTWs affected will be required for any amendment
pursuant to which the Exercise Price would be increased or the number of
Warrant Shares (or other securities or property) purchasable upon exercise of
LTWs would be decreased (other than pursuant to adjustments provided for in
the Warrant Agreement).
REPORTS
So long as any of the LTWs remain outstanding, the Company shall cause
copies of its annual report to stockholders and all other documents which are
provided to holders of its Common Stock generally to be filed with the Warrant
Agent and mailed to the holder at their addresses appearing in the register of
LTWs maintained by the Warrant Agent.
THE WARRANT AGENT
ChaseMellon Shareholder Services, L.L.C. acts as warrant agent for the LTWs
(the "Warrant Agent"). The Warrant Agent maintains books for registration and
transfer of the LTWs. The Company and its affiliates may maintain banking
relationships and obtain other services from the Warrant Agent and its
affiliates in the ordinary course of their respective businesses.
RISK FACTORS REGARDING THE LTWS
The LTWs involve a high degree of risk. Such risks include, among others,
the risk of either no recovery in the Litigation or a recovery that is less
than the expenses of the Litigation and the LTW issuance, in either of which
cases the LTWs will expire without ever becoming exercisable; the possible
lack of an active trading market for the LTWs; the possibility that even if an
active trading market does develop, the prices at which the
10
<PAGE>
LTWs trade may be highly volatile; possible limitations, due to the litigation
process, on the Company's ability to make public disclosures regarding
potentially material developments in the Litigation; the fact that the LTW
Holders will have no right to control the Litigation; and the fact that the
number of shares of Common Stock for which the LTWs may become exercisable, if
any, will depend upon both the amount of the Adjusted Litigation Recovery as
well as the Adjusted Market Value of the Company's Common Stock on the
Determination Date (as defined herein), neither of which can be predicted
prior to the occurrence of the Triggering Event.
DESCRIPTION OF THE COMMON STOCK
Shares of Common Stock are entitled to share equally in the assets available
for distribution upon liquidation, subject to any prior rights of the holders
of any series of preferred stock then outstanding. Holders of Common Stock are
entitled to receive dividends when, as and if declared by the Board of
Directors of the Company out of assets of the Company legally available for
payment, subject to the superior rights of the holders of any series of
preferred stock that may be issued. Because the Company is a holding company,
the right of the Company to participate in any distribution of the assets of
Glendale Federal or its other subsidiaries is subject to the prior claims of
creditors of Glendale Federal and such other subsidiaries. There are various
legal limitations on the extent to which the Bank may extend credit, pay
dividends or otherwise supply funds to, or engage in transactions with, the
Company. Each share of Common Stock is entitled to one vote, except as to the
cumulation of votes in the election of directors. There are no preemptive or
other rights to subscribe for any shares.
LEGAL OPINIONS
The legality of the Common Stock issuable upon exercise of the LTWs has been
passed upon for the Company by Mayer, Brown & Platt, Los Angeles, California.
EXPERTS
The consolidated financial statements of Golden State Bancorp Inc. and
subsidiaries (formerly Glendale Federal Bank, Federal Savings Bank) as of June
30, 1997 and 1996, and for each of the years in the three year period ended
June 30, 1997, have been incorporated by reference herein in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of such firm as
experts in accounting and auditing.
11
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated amounts of the expenses of and related to the offerings are as
follows:
<TABLE>
<S> <C>
Registration Fee-Securities and Exchange Commission................. $ 4,317
Printing and engraving expenses..................................... *
Auditing and accounting fees and expenses........................... *
Legal fees and expenses............................................. 20,000
Blue Sky fees and expenses.......................................... *
Stock exchange listing fees and expenses............................ *
Transfer agent fees and expenses.................................... *
Miscellaneous....................................................... *
-------
Total............................................................. $ *
=======
</TABLE>
- --------
* To be supplied by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article FOURTEENTH of the Golden State Certificate of Incorporation and
Article XII of the Golden State Bylaws provide for indemnification of the
officers and directors of Golden State to the fullest extent permitted by
applicable law. Section 145 of the Delaware General Corporation Law provides,
in relevant part, that a corporation shall have the power to indemnify any
person who was or is a party or is threatened to be made a party to any suit
or proceeding because such person is or was a director, officer, employee or
agent of the corporation or is or was serving, at the request of the
corporation, as a director, officer, employee or agent of another corporation,
against all costs actually and reasonably incurred by him in connection with
such suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation. Similar indemnity is permitted to be provided to such persons in
connection with an action or suit by or in right of the corporation, provided
such person acted in good faith and in a manner he believed to be in or not
opposed to the best interests of the corporation, and provided further (unless
a court of competent jurisdiction otherwise determines) that such person shall
not have been adjudged liable to the corporation.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT INDEX
<TABLE>
<C> <S>
2.1 Agreement and Plan of Reorganization, dated as of February 4, 1998, by
and among Golden State Bancorp Inc., Golden State Financial Corporation,
First Nationwide (Parent) Holdings Inc., First Nationwide Holdings Inc.,
First Gibraltar Holdings Inc. and Hunter's Glen/Ford, Ltd. (incorporated
by reference to the Current Report on Form 8-K of the Registrant dated
February 4, 1998).
2.2 Agreement and Plan of Reorganization, dated May 28, 1997, by and among
Golden State Bancorp Inc., Glendale Federal Bank, Federal Savings Bank
and Glendale Interim Federal Savings Bank, a federal savings bank
(incorporated by reference to Exhibit 2.1 to the Registration Statement
on Form S-3 of the Registrant, Commission File No. 333-28037).
2.3 Agreement and Plan of Merger, dated as of November 30, 1997, by and
between Golden State Bancorp Inc. and RedFed Bancorp Inc. (incorporated
by reference to the Current Report on Form 8-K of the Registrant dated
November 30, 1997).
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
4.1 Certificate of Designations of the Registrant's Noncumulative
Convertible Preferred Stock, Series A (to be filed by amendment).
4.2 Warrant Agreement, dated as of February 23, 1993, between the Glendale
Federal Bank, Federal Savings Bank and Chemical Trust Company of
California (to be filed by amendment).
4.3 Amendment No. 1 to Warrant Agreement, dated as of July 24, 1997, by and
among Glendale Federal Bank, Federal Savings Bank, ChaseMellon
Shareholder Services, L.L.C. and Golden State Bancorp Inc. (to be filed
by amendment).
4.4 Warrant Agreement, dated as of August 15, 1993, between Glendale
Federal Bank, Federal Savings Bank, and Chemical Trust Company of
California (to be filed by amendment).
4.5 Amendment No. 1 to Warrant Agreement, dated as of July 24, 1997, by and
among Glendale Federal Bank, Federal Savings Bank, ChaseMellon
Shareholder Services, L.L.C. and Golden State Bancorp. Inc. (to be
filed by amendment).
4.6 Form of Warrant Agreement, dated as of , 1998, between the
Registrant and ChaseMellon Shareholder Services, L.L.C., pertaining to
the Litigation Tracking Warrants.
5.1 Opinion of Mayer, Brown & Platt (re legality of securities being
registered).
10.1 Stock Option Agreement, dated as of February 4, 1998, between Golden
State Bancorp Inc. and First Nationwide (Parent) Holdings Inc.
(incorporated by reference to the Current Report on Form 8-K of the
Registrant dated February 4, 1998).
10.2 Litigation Management Agreement, dated as of February 4, 1998, by and
among Golden State Bancorp Inc., Glendale Federal Bank, Federal Savings
Bank, California Federal Bank, A Federal Savings Bank, Stephen J.
Trafton and Richard A. Fink (incorporated by reference to the Current
Report on Form 8-K of the Registrant dated February 4, 1998).
23.2 Consent of Mayer, Brown & Platt (included in Exhibit 5.1).
23.3 Consent of KPMG Peat Marwick LLP.
24.1 Powers of Attorney (included on the signature pages hereto).
99.1 Annual Report on Form 10-K for the year ended June 30, 1997 of Glendale
Federal Bank, Federal Savings Bank (incorporated by reference to
Exhibit 99B to the Current Report on Form 8-K of the Registrant dated
September 26, 1997).
99.2 Proxy Statement on Schedule 14A, dated June 24, 1997, of Glendale
Federal Bank, Federal Savings Bank (incorporated by reference to
Exhibit 99.6 to the Registration Statement on Form S-3 of the
Registrant. Commission File No. 333-28037).
</TABLE>
ITEM 17. UNDERTAKINGS
(a)The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
post-effective amendment to this Registration Statement;
(i) To include any Prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of Prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
II-2
<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if information
required to be included in the post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions
(See Item 15), or otherwise, the Registrant has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it
is against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes that, for purposes 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Glendale, State of California on
February 27, 1998.
GOLDEN STATE BANCORP INC.
By: /s/ Stephen J. Trafton
------------------------------
Name: Stephen J. Trafton
Title: Chairman of the Board,
Chief Executive Officer,
President and Director
POWER OF ATTORNEY
We, the undersigned officers and directors of Golden State Bancorp Inc.,
hereby severally constitute and appoint Stephen J. Trafton, Richard A. Fink,
James R. Eller, Jr., and each of them, our true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for us and in
our stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and all
documents relating thereto, and any subsequent registration statement filed by
Golden State Bancorp Inc. pursuant to Rule 462(b) of the Securities Act of
1933, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing necessary or
advisable to be done in and about the premises, as fully to all intents and
purposes as we might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or their
substitute or substitutes, may lawfully 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 BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Stephen J. Trafton Chairman of the Board, February 27, 1998
- ----------------------- Chief Executive Officer,
STEPHEN J. TRAFTON President and Director
[principal executive officer]
/s/ John E. Haynes Chief Financial Officer February 27, 1998
- ----------------------- [principal financial
JOHN E. HAYNES and accounting officer]
/s/ Diane C. Creel Director February 27, 1998
- -----------------------
DIANE C. CREEL
/s/ Brian P. Dempsey Director February 27, 1998
- -----------------------
BRIAN P. DEMPSEY
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Richard A. Fink Vice Chairman and Director February 27, 1998
- -----------------------
RICHARD A. FINK
/s/ John F. King Director February 27, 1998
- -----------------------
JOHN F. KING
/s/ John F. Kooken Director February 27, 1998
- -----------------------
JOHN F. KOOKEN
/s/ Paul J. Orfalea Director February 27, 1998
- -----------------------
PAUL J. ORFALEA
/s/ Thomas S. Sayles Director February 27, 1998
- -----------------------
THOMAS S. SAYLES
/s/ Cora M. Tellez Director February 27, 1998
- -----------------------
CORA M. TELLEZ
/s/ Gilbert R. Vasquez Director February 27, 1998
- -----------------------
GILBERT R. VASQUEZ
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
------- --------------------
<C> <S>
2.1 Agreement and Plan of Reorganization, dated as of February 4, 1998, by
and among Golden State Bancorp Inc., Golden State Financial
Corporation, First Nationwide (Parent) Holdings Inc., First Nationwide
Holdings, Inc., First Gibraltar Holdings Inc. and Hunter's Glen/Ford,
Ltd. (incorporated by reference to the Current Report on Form 8-K of
the Registrant dated February 4, 1998).
2.2 Agreement and Plan of Reorganization, dated May 28, 1997, by and among
Golden State Bancorp Inc., Glendale Federal Bank, Federal Savings Bank
and Glendale Interim Federal Savings Bank, a federal savings bank
(incorporated by reference to Exhibit 2.1 to the Registration
Statement on Form S-3 of the Registrant, Commission File No. 333-
28037).
2.3 Agreement and Plan of Merger, dated as of November 30, 1997, by and
between Golden State Bancorp Inc. and RedFed Bancorp Inc.
(incorporated by reference to the Current Report on Form 8-K of the
Registrant dated November 30, 1997).
4.1 Certificate of Designations of the Registrant's Noncumulative
Convertible Preferred Stock, Series A (to be filed by amendment).
4.2 Warrant Agreement, dated as of February 23, 1993, between the Glendale
Federal Bank, Federal Savings Bank and Chemical Trust Company of
California (to be filed by amendment).
4.3 Amendment No. 1 to Warrant Agreement, dated as of July 24, 1997, by
and among Glendale Federal Bank, Federal Savings Bank, ChaseMellon
Shareholder Services, L.L.C. and Golden State Bancorp Inc. (to be
filed by amendment).
4.4 Warrant Agreement, dated as of August 15, 1993, between Glendale
Federal Bank, Federal Savings Bank, and Chemical Trust Company of
California (to be filed by amendment).
4.5 Amendment No. 1 to Warrant Agreement, dated as of July 24, 1997, by
and among Glendale Federal Bank, Federal Savings Bank, ChaseMellon
Shareholder Services, L.L.C. and Golden State Bancorp Inc. (to be
filed by amendment).
4.6 Form of Warrant Agreement, dated as of , 1998, between the
Registrant and ChaseMellon Shareholder Services, L.L.C., pertaining to
the Litigation Tracking Warrants.
5.1 Opinion and consent of Mayer, Brown & Platt (re legality of the
securities being registered).
10.1 Stock Option Agreement, dated as of February 4, 1998, between Golden
State Bancorp Inc. and First Nationwide (Parent) Holdings Inc.
(incorporated by reference to the Current Report on Form 8-K of the
Registrant dated February 4, 1998).
10.2 Litigation Management Agreement, dated as of February 4, 1998, by and
among Golden State Bancorp Inc., Glendale Federal Bank, Federal
Savings Bank, California Federal Bank, A Federal Savings Bank, Stephen
J. Trafton and Richard A. Fink (incorporated by reference to the
Current Report on Form 8-K of the Registrant dated February 4, 1998).
23.2 Consent of Mayer, Brown & Platt (included in Exhibit 5.1).
23.3 Consent of KPMG Peat Marwick LLP.
24.1 Powers of Attorney (included on the signature pages hereto).
99.1 Annual Report on Form 10-K for the year ended June 30, 1997 of
Glendale Federal Bank, Federal Savings Bank (incorporated by reference
to Exhibit 99B to the Current Report on Form 8-K of the Registrant
dated September 26, 1997).
99.2 Proxy Statement on Schedule 14A, dated June 24, 1997, of Glendale
Federal Bank, Federal Savings Bank (incorporated by reference to
Exhibit 99.6 to the Registration Statement on Form S-3 of the
Registrant, Commission File No. 333-28037).
</TABLE>
<PAGE>
EXHIBIT 4.6
-----------------------------------------------------------------------------
WARRANT AGREEMENT
Dated as of
________ __, 1998
between
GOLDEN STATE BANCORP INC.
and
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
---------------------------------------
as the Warrant Agent
Warrants for
Common Stock of
Golden State Bancorp Inc.
---------------------------------------
-----------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE 1.
<S> <C> <C>
Defined Terms
SECTION 1.1 Definitions................................... 1
SECTION 1.2 Other Definitions............................. 4
ARTICLE 2.
Warrant Certificates
SECTION 2.1 Issuance of Warrant Certificates.............. 5
SECTION 2.2 Form and Dating............................... 6
SECTION 2.3 Execution and Countersignature................ 6
SECTION 2.4 Certificate Register.......................... 7
SECTION 2.5 Transfer and Exchange......................... 7
SECTION 2.6 Replacement Certificates...................... 9
SECTION 2.7 Temporary Certificates........................ 9
SECTION 2.8 Cancellation..................................10
ARTICLE 3.
Exercise Terms
SECTION 3.1 Number of Warrant Shares; Exercise Price......10
SECTION 3.2 Exercise Period...............................10
SECTION 3.3 Expiration....................................11
SECTION 3.4 Manner of Exercise............................11
SECTION 3.5 Issuance of Warrant Shares....................12
SECTION 3.6 Fractional Warrant Shares.....................12
SECTION 3.7 Reservation of Warrant Shares.................12
SECTION 3.8 Compliance with Law...........................13
SECTION 3.9 Cancellation of Warrants......................13
ARTICLE 4.
Adjustments
SECTION 4.1 Reclassifications, Redesignations or
Reorganizations of Common Stock.............14
SECTION 4.2 Combination...................................14
SECTION 4.3 Exercise Price Adjustment.....................15
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 4.4 Examples......................................... 15
SECTION 4.5 Other Events..................................... 16
SECTION 4.6 Notice of Certain Transactions................... 16
SECTION 4.7 Adjustment to Warrant Certificate................ 16
ARTICLE 5.
Warrant Agent
Section 5.1 Nature of Duties and Responsibilities Assumed.... 17
Section 5.2 Right to Consult Counsel......................... 18
Section 5.3 Compensation and Reimbursement................... 19
Section 5.4 Warrant Agent May Hold Company Securities........ 19
Section 5.5 Change of Warrant Agent.......................... 19
ARTICLE 6.
Miscellaneous
SECTION 6.1 Information...................................... 20
SECTION 6.2 Persons Benefitting.............................. 20
SECTION 6.3 Rights of Holders................................ 20
SECTION 6.4 Purchase of Warrants by the Company.............. 20
SECTION 6.5 Amendment........................................ 20
SECTION 6.6 Notices.......................................... 21
SECTION 6.7 Governing Law.................................... 21
SECTION 6.8 Successors....................................... 22
SECTION 6.9 Counterparts..................................... 22
SECTION 6.10 Table of Contents............................... 22
SECTION 6.11 Severability.................................... 22
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B - Form of Election to Purchase
EXHIBIT C - Information Memorandum
</TABLE>
-ii-
<PAGE>
WARRANT AGREEMENT, dated as of ________ __, 1998 (this "Agreement"),
between GOLDEN STATE BANCORP INC., a Delaware corporation (the "Company"), and
CHASEMELLON SHAREHOLDER SERVICES L.L.C., a New York limited liability Company,
as Warrant Agent (in such capacity, the "Warrant Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company has authorized a
distribution (the "Distribution") of one warrant (a "Warrant") for each share of
the Company's common stock, par value $1.00 per share ("Common Stock"),
outstanding as of the Close of Business (as defined below) on _____ __ , 1998
(the "Record Date"), each Warrant representing the right to purchase shares or a
portion of a share of Common Stock (subject to adjustment as provided herein),
upon the terms and subject to the conditions herein set forth; and
WHEREAS, in order to issue Warrants in the Distribution and to issue
Warrants to holders of outstanding Convertible Securities (as defined herein)
who exercise or convert such Convertible Securities at any time and from time to
time prior to the occurrence of the Triggering Event (as defined herein), the
Company has determined to enter into this Agreement with the Warrant Agent.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
ARTICLE 1.
Defined Terms
-------------
SECTION 1.1 Definitions. As used in this Agreement, the following terms
-----------
shall have the following meanings:
"Adjusted Litigation Recovery" means an amount equal to 85% of the amount
obtained from the following equation: (a) the Payment, minus (b) the sum of the
following: (i) the aggregate of all expenses incurred by or on behalf of the
Bank in prosecuting the Litigation and obtaining the Payment (whether incurred
prior to or after the date hereof), (ii) the aggregate of all expenses incurred
by the Company in connection with the creation, issuance and trading of the
Warrants, including, without limitation, legal and accounting fees and the fees
and expenses of the Warrant Agent (whether incurred prior to or after the date
hereof) and (iii) an amount equal to the Payment (less the expenses described in
the preceding clauses (i) and (ii)) multiplied by the highest, combined
statutory rate of federal, state and local income taxes applicable to the
Company during the tax year in which the full Payment is received.
<PAGE>
2
"Adjusted Market Value" means the average daily Closing Prices of a share
of Common Stock for the thirty consecutive Trading Days ending on and including
the Determination Date, minus $1.00; provided that if the context in which this
--------
defined term is used is with respect to securities other than Common Stock, then
"Adjusted Market Value" means the average daily Closing Prices of a unit of such
securities for the thirty consecutive Trading Days ending on and including the
Determination Date, minus $1.00 and provided further that if the context in
-------- -------
which this defined term is used is with respect to property other than
securities, then "Adjusted Market Value" means the Fair Market Value of such
property, minus $1.00.
"Bank" means Glendale Federal Bank, Federal Savings Bank, a federally
chartered stock savings bank.
"Board" means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of such Board of Directors.
"Business Day" a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.
"Close of Business" on any given date shall mean 5:00 P.M., New York City
time, on such date; provided, however, that if such date is not a Business Day
-------- -------
it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
"Closing Price" on any day shall mean the closing sale price regular way
(with any relevant due bills attached) of a share of Common Stock on such day,
or in case no such sale takes place on such day, the average of the reported
closing bid and asked prices regular way (with any relevant due bills attached)
of a share of Common Stock, in each case on the New York Stock Exchange
Consolidated Tape (or any successor composite tape reporting transactions on
national securities exchanges), or, if the Common Stock is not listed or
admitted to trading on the NYSE, on the principal national securities exchange
on which the Common Stock is listed or admitted to trading (which shall be the
national securities exchange on which the greatest number of shares of Common
Stock has been traded during the five consecutive Trading Dates ending on and
including the Determination Date), or, if not listed or admitted to trading on
any national securities exchange, the average of the closing bid and asked
prices regular way (with any relevant due bills attached) of a share of Common
Stock on the over-the-counter market on the day in question as reported by
Nasdaq, or a similar generally accepted reporting service, or if not so
available as determined in good faith by the Board of Directors of the Company,
on the basis of such relevant factors as it in good faith considers appropriate.
"Combination" means an event in which the Company consolidates with, merges
with or into, or sells all or substantially all its property and assets to
another Person.
"Determination Date" means the 30th calendar day prior to the date on which
the Bank receives the total amount of the Payment. If the Payment is payable by
the United
<PAGE>
3
States Government in installments, the Determination Date will be the 30th
calendar day prior to the date on which the Bank receives the last installment
of the Payment.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means the fair market value of the relevant property on
the Determination Date as determined in good faith by the Board of Directors of
the Company, on the basis of such factors as it in good faith considers
appropriate.
"Holder" means the duly registered holder of a Warrant under the terms of
this Agreement.
"Litigation" means the Bank's case against the United States Government in
the United States Court of Federal Claims entitled Glendale Federal Bank, F.S.B.
v. United States, No. 90-772C, filed on August 15, 1990.
"Nasdaq" shall mean the stock market operated by the National Association
of Securities Dealers, Inc.
"NYSE" shall mean the stock exchange operated by New York Stock Exchange,
Inc.
"Officer" means the Chairman, the Vice Chairman, the Chief Executive
Officer, the President, the Chief Financial Officer, the Secretary or any Vice
President of the Company.
"Payment" means the aggregate amount of any cash payment and the Fair
Market Value of any property or assets actually received by the Bank pursuant to
a final, nonappealable judgment in or final settlement of the Litigation
(including any post-judgment interest actually received by the Bank on any
payment).
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933.
"Trading Date" means a date on which the NYSE or Nasdaq (or any successor
thereto) is open for the transaction of business.
"Triggering Event" means, the occurrence of all of the following events:
(a) receipt by the Bank of the Payment, (b) determination by the Bank of the
amount of the Adjusted Litigation Recovery and (c) receipt of all regulatory
approvals necessary to issue the shares of Common Stock to be issued upon the
exercise of the Warrants, including without
<PAGE>
4
limitation, the effectiveness of a registration statement relating to the
issuance of the Warrant Shares under the Securities Act.
"Warrant Shares" means the shares of Common Stock of the Company received,
or issued and received, as the case may be, upon exercise of the Warrants.
SECTION 1.2 Other Definitions.
-----------------
<TABLE>
<CAPTION>
Defined in
Term Section
---- -----------
<S> <C>
"Agent Members".................... 2.2(c)
"Certificate Register.............. 2.4
"Certificated Warrants"............ 2.2(a)
"Convertible Securities"........... 2.1(c)
"Common Stock"..................... Recitals
"Company".......................... Recitals
"Distribution"..................... Recitals
"DTC".............................. 2.2(b)
"Exercise Notice:.................. 3.2
"Exercise Price"................... 3.1
"Five-Year Warrants"............... 2.1(c)
"Global Warrants".................. 2.2(b)
"Number of Shortfall Shares"....... 3.7(b)
"Preferred Stock".................. 2.1(c)
"Record Date"...................... Recitals
"Registrar"........................ 3.7(a)
"Seven-Year Warrants".............. 2.1(c)
"Stock Options".................... 2.1(c)
"Successor Company"................ 4.2(d)
"Termination Date"................. 3.3(a)
"Termination Notice"............... 3.3(a)
"Transfer Agent"................... 3.5
"Warrant".......................... Recitals
"Warrant Agent".................... Recitals
"Warrant Certificate".............. 2.1
"Warrant Exercise Period".......... 3.2(b)
</TABLE>
SECTION 1.3 Rules of Construction. Unless the text otherwise requires
---------------------
(i) a term has the meaning assigned to it herein;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with U.S. generally accepted accounting
principles as in effect from time to time;
<PAGE>
5
(iii) "or" is not exclusive;
(iv) "including" means including, without limitation; and
(v) words in the singular include the plural and words in the
plural include the singular.
ARTICLE 2.
Warrant Certificates
--------------------
SECTION 2.1 Issuance of Warrant Certificates. (a) As soon as
--------------------------------
practicable after the Record Date, the Company will prepare and execute, the
Warrant Agent will countersign, and the Company will send or cause to be sent
(and the Warrant Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company, one or more Warrant Certificates, in substantially the form of
Exhibit A hereto (a "Warrant Certificate"), evidencing one Warrant (subject to
adjustment as provided herein) for each share of Common Stock so held.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of an Information Memorandum, in substantially the form
of Exhibit C hereto, by first-class, postage-prepaid mail, to each record holder
of Common Stock as of the Close of Business on the Record Date, at the address
of such holder shown on the records of the Company.
(c) At any time and from time to time prior to the occurrence of the
Triggering Event, the Company may cause the Warrant Agent to issue, in
accordance with the provisions of this Article 2, Warrants to holders of (i)
shares of the Company's Noncumulative Convertible Preferred Stock, Series A (the
"Preferred Stock"); (ii) common stock purchase warrants (the "Five-Year
Warrants") issued under the Warrant Agreement, dated February 23, 1993, by and
between the Company and ChaseMellon Shareholder Services L.L.C. (as successor to
Chemical Trust Company of California), as Warrant Agent; (iii) common stock
purchase warrants (the "Seven-Year Warrants") issued under the Warrant
Agreement, dated August 15, 1993, by and between the Company and ChaseMellon
Shareholder Services L.L.C. (as successor to Chemical Trust Company of
California), as Warrant Agent; and (iv) stock options of the Company and its
subsidiaries (the "Stock Options", and together with the Preferred Stock, the
Five-Year Warrants, the Seven-Year Warrants and the Stock Options, the
"Convertible Securities") that were outstanding on the Record Date, who in any
such case exercise or convert such Convertible Securities into shares of Common
Stock and Warrants in accordance with the terms and conditions of such
Convertible Securities.
(d) The maximum number of Warrants that may be issued hereunder is
_________, of which ___________ are available for issuance under Section 2.1(a)
hereof and _________ are available for issuance under Section 2.1(c) hereof.
The Company will not
<PAGE>
6
issue any Warrants or securities substantially similar to the Warrants other
than in accordance with this Section 2.1.
SECTION 2.2 Form and Dating. The Warrant Certificates shall be
---------------
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Agreement. The Warrants may have such notations,
legends or endorsements as the Company may deem appropriate and as are not
inconsistent with the provisions hereof, or as may be required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Warrant shall be dated the date of its countersignature.
(a) Certificated Warrants. The Warrants may be issued in definitive
---------------------
form represented by a physical Warrant Certificate (such certificate and all
other certificates representing physical delivery of Warrants in definitive form
being called "Certificated Warrants").
(b) Global Warrant. The Warrants may be issued in the form of one or
--------------
more fully registered global certificates with the global securities legend set
forth in Exhibit A hereto (the "Global Warrant"), which shall be deposited on
behalf of beneficial owners of Warrants with the Warrant Agent, as custodian for
the Depository Trust Corporation ("DTC") (or with such other custodian as DTC
may direct), and registered in the name of DTC or a nominee of DTC, duly
executed by the Company and countersigned by the Warrant Agent as hereinafter
provided. The number of Warrants represented by Global Warrants may from time
to time be increased or decreased by adjustments made on the records of the
Warrant Agent and DTC or its nominee as hereinafter provided. Except as
provided in Section 2.5, owners of beneficial interests in a Global Warrant will
not be entitled to receive physical delivery of Certificated Warrants.
(c) Book-Entry Provisions. Members of, or participants in, DTC
---------------------
("Agent Members") shall have no rights under this Agreement with respect to any
Global Warrant held on their behalf by DTC or by the Warrant Agent as the
custodian of DTC or under such Global Warrant, and DTC may be treated by the
Company, the Warrant Agent and any agent of the Company or the Warrant Agent as
the absolute owner of such Global Warrant for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Warrant Agent or any agent of the Company or the Warrant Agent from giving
effect to any written certification, proxy or other authorization furnished by
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices of DTC governing the exercise of the rights of a holder of a
beneficial interest in any Global Warrant.
SECTION 2.3 Execution and Countersignature. (a) With respect to any
------------------------------
Global Warrant to be issued hereunder, one Officer shall sign, and the Company's
Secretary or any of its Assistant Secretaries shall attest, such Global Warrant.
The Warrant Agent, upon the written order of the Company signed by an Officer,
shall countersign any Global Warrant certificate by manual or facsimile
signature, and such Global Warrant shall be deposited in accordance with Section
2.2 hereof.
<PAGE>
7
(b) With respect to all other Warrants, an Officer shall sign, and
the Company's Secretary or any of its Assistant Secretaries shall attest, the
Warrant Certificates for the Company by manual or facsimile signature. If an
Officer whose signature is on a Warrant Certificate no longer holds that office
at the time the Warrant Agent countersigns the Warrant Certificate, the Warrant
shall be valid nevertheless. A Warrant shall not be valid until an authorized
signatory of the Warrant Agent manually countersigns the Warrant Certificate.
The signature shall be conclusive evidence that the Warrant Certificate has been
countersigned under this Agreement.
The Warrant Agent shall countersign and deliver the Warrants
Certificates for original issue, in each case upon a written order of the
Company signed by an Officer of the Company. Such order shall specify (in
addition to the number of Warrants) the date on which the original issue of
Warrants is to be countersigned.
(c) The Warrant Agent may appoint an agent reasonably acceptable to
the Company to countersign the Warrant Certificates. Unless limited by the
terms of such appointment, such agent may countersign Warrant Certificates
whenever the Warrant Agent may do so. Each reference in this Agreement to
countersignature by the Warrant Agent includes by such agent. Such agent will
have the same rights as the Warrant Agent for service of notices and demands.
SECTION 2.4 Certificate Register. The Warrant Agent shall keep a
--------------------
register ("Certificate Register") of the Warrant Certificates and of their
transfer and exchange. The Certificate Register shall show the names and
addresses of the respective Holders and the date and number of Warrants
evidenced on the face of each of the Warrant Certificates. The Company and the
Warrant Agent may deem and treat the Person in whose name a Warrant Certificate
is registered as the absolute owner of such Warrant Certificate for all purposes
whatsoever and neither the Company nor the Warrant Agent shall be affected by
notice to the contrary.
SECTION 2.5 Transfer and Exchange. (a) Transfer and Exchange of
---------------------
Certificated Warrants. When Certificated Warrants are presented to the Warrant
Agent with a request to register the transfer of such Certificated Warrants or
to exchange such Certificated Warrants for an equal number of Certificated
Warrants of other authorized denominations, the Warrant Agent shall register the
transfer or make the exchange as requested if its reasonable requirements for
such transaction are met; provided, however, that the Certificated Warrants
-------- -------
surrendered for transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the Company
and the Warrant Agent, duly executed by the Holder thereof or its attorney duly
authorized in writing.
(b) Restrictions on Transfer of Certificated Warrants for a
Beneficial Interest in a Global Warrant. Certificated Warrants may not be
exchanged for a beneficial interest in a Global Warrant except upon satisfaction
of the requirements set forth below. Upon receipt by the Warrant Agent of
Certificated Warrants, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Warrant Agent, together with written
<PAGE>
8
instructions directing the Warrant Agent to make, or to direct DTC to make, an
adjustment on its books and records with respect to such Global Warrants to
reflect an increase in the number of Warrants represented by the Global Warrant,
then the Warrant Agent shall cancel such Certificated Warrants and cause, or
direct DTC to cause, in accordance with the standing instructions and procedures
existing between DTC and the Warrant Agent, the number of Warrants represented
by the Global Warrant to be increased accordingly.
(c) Transfer and Exchange of Global Warrants. The transfer and
exchange of beneficial interests in a Global Warrant shall be effected through
DTC, in accordance with this Agreement and the procedures of DTC therefor.
(d) Restrictions on Transfer and Exchange of the Global Warrant.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in Section 2.5(g)), Global Warrants may not be transferred
as a whole except by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or by DTC or any such nominee to a successor depository
or a nominee of such successor depository.
(e) Authentication and Distribution of Certificated Warrants. If at
any time:
(i) DTC notifies the Company that DTC is unwilling or unable to
continue as depository for Global Warrants and a successor depository for
Global Warrants is not appointed by the Company within 90 calendar days
after delivery of such notice;
(ii) DTC ceases to be a clearing agency registered under the
Exchange Act; or
(iii) the Company, in its sole discretion, notifies the
Warrant Agent in writing that it elects to cause the issuance of
Certificated Warrants under this Agreement;
then, the Company will execute, and the Warrant Agent, upon receipt of a written
order of the Company signed by an Officer requesting the delivery of
Certificated Warrants to the holders of beneficial interests in the Global
Warrant, will countersign and deliver Certificated Warrants equal to the number
of Warrants represented by Global Warrants, in exchange for such Global
Warrants. Certificated Warrants issued in exchange for a beneficial interest in
a Global Warrant shall be registered in such names and in such authorized
denominations as DTC, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Warrant Agent. The Warrant Agent
shall deliver such Certificated Warrants to the Persons in whose names such
Warrants are so registered in accordance with the instructions of DTC.
(f) Cancellation or Adjustment of Global Warrants. At such time as
all beneficial interests in Global Warrants have either been exchanged for
Certificated Warrants, redeemed, repurchased or canceled, such Global Warrant
shall be returned to DTC for cancellation or retained and canceled by the
Warrant Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Warrant is exchanged for Certificated
<PAGE>
9
Warrants, redeemed, repurchased or canceled, the number of Warrants represented
by such Global Warrant shall be reduced and an adjustment shall be made on the
books and records of the Warrant Agent with respect to such Global Warrant, by
the Warrant Agent or DTC, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of Warrants.
(i) To permit registrations of transfers and exchanges, the Company shall
execute and the Warrant Agent shall countersign Certificated Warrants and Global
Warrants as required pursuant to the provisions of this Section 2.5.
(ii) All Certificated Warrants and Global Warrants issued upon any
registration of transfer or exchange of Certificated Warrants shall be the valid
obligations of the Company, entitled to the same benefits under this Agreement
as the Certificated Warrants or Global Warrants surrendered upon such
registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat the Person in
whose name any Warrant is registered as the absolute owner of such Warrant and
neither the Warrant Agent nor the Company shall be affected by notice to the
contrary.
(iv) No service charge shall be made to a Holder for any
registration of transfer or exchange upon surrender of any Warrant Certificate
at the office of the Warrant Agent maintained for that purpose. The Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Warrant Certificates.
SECTION 2.6 Replacement Certificates. If a mutilated Warrant
------------------------
Certificate is surrendered to the Warrant Agent or if the Holder of a Warrant
Certificate claims that the Warrant Certificate has been lost, destroyed or
wrongfully taken, the Company shall issue and the Warrant Agent shall
countersign a replacement Warrant Certificate if the reasonable requirements of
the Warrant Agent and of Section 8-405 of the Uniform Commercial Code as in
effect in the State of California are met. If required by the Warrant Agent or
the Company, such Holder shall furnish an indemnity bond or other instrument
sufficient in the judgment of the Company and the Warrant Agent to protect the
Company and the Warrant Agent from any loss which either of them may suffer if a
Warrant Certificate is replaced. The Company and the Warrant Agent may charge
the Holder for their expenses in replacing a Warrant Certificate. Every
replacement Warrant Certificate is an additional obligation of the Company.
SECTION 2.7 Temporary Certificates. Until definitive Warrant
----------------------
Certificates are ready for delivery, the Company may prepare and the Warrant
Agent shall countersign temporary Warrant Certificates. Temporary Warrant
Certificates shall be substantially in the form of definitive Warrant
Certificates but may have variations that the Company considers appropriate for
temporary Warrant Certificates. Without unreasonable delay, the Company shall
prepare and the Warrant Agent shall countersign definitive Warrant Certificates
and deliver them in exchange for temporary Warrant Certificates.
<PAGE>
10
SECTION 2.8 Cancellation. (a) In the event the Company shall
------------
purchase or otherwise acquire Certificated Warrants, the same shall thereupon be
delivered to the Warrant Agent for cancellation.
(b) The Warrant Agent and no one else shall cancel and destroy all
Warrant Certificates surrendered for transfer, exchange, replacement, exercise
or cancellation and deliver a certificate of such destruction to the Company
unless the Company directs the Warrant Agent to deliver canceled Warrant
Certificates to the Company. The Company may not issue new Warrant Certificates
to replace Warrant Certificates to the extent they evidence Warrants which have
been exercised or Warrants which the Company has purchased or otherwise
acquired.
ARTICLE 3.
Exercise Terms
--------------
SECTION 3.1 Number of Warrant Shares; Exercise Price. Each Warrant
----------------------------------------
shall, upon exercise thereof as provided herein, initially entitle the
registered Holder thereof to purchase the number of shares of Common Stock
having an Adjusted Market Value equal to the Adjusted Litigation Recovery
divided by [86,000,000] [the number of Warrants issued or reserved for issuance
on the Record Date] at an exercise price per Warrant equal to the number of
shares of Common Stock for which the Warrant is exercisable multiplied by $1.00
(the "Exercise Price").
SECTION 3.2 Exercise Period. (a) The Company will provide notice,
---------------
as described below (the "Exercise Notice"), of the occurrence of the Triggering
Event not more than 15 calendar days after the occurrence thereof. If the
Payment is payable by the United States Government in installments, the
Triggering Event will not be deemed to have occurred until the Bank receives the
last installment of the Payment. The Exercise Notice shall be dated the date it
is first sent to Holders and shall be provided by means of a press release to
the one or more national news services and by mailing such notice first class,
postage prepaid, to each Holder at such Holder's address as it appears on the
Certificate Register; provided, however, that no failure to give such notice by
mail nor any defect therein shall affect the validity of the Exercise Notice or
the expiration of all Warrants on the Close of Business on the last day of the
Warrant Exercise Period, except as to the Holder to whom the Company has failed
to give such notice by mail or except as to the Holder whose notice was
defective. The Exercise Notice shall state the following:
(i) that the Triggering Event has occurred,
(ii) the aggregate number of shares for which the Warrants
are exercisable,
(iii) the number of shares of Common Stock for which one
Warrant is exercisable,
<PAGE>
11
(iv) the Exercise Price per Warrant,
(v) the manner in which the Warrants are exercisable and
(vi) the date on which the Warrants will no longer be
exercisable.
(b) Subject to the terms and conditions set forth herein, each
Warrant shall be exercisable at any time or from time to time during the sixty-
day period commencing on the date on which the Exercise Notice is first sent to
Holders pursuant to Section 3.2(a) (the "Warrant Exercise Period").
(c) No Warrant shall be exercisable after the Close of Business on
the last day of the Warrant Exercise Period.
SECTION 3.3 Expiration. (a) A Warrant shall terminate and become
----------
void as of the earlier of (i) the Close of Business on the last day of the
Warrant Exercise Period, (ii) the Close of Business on the date the Litigation
has been disposed of in a manner such that no shares of Common Stock or other
securities or property will be issuable under the term of the Warrants (the
"Termination Date") or (iii) the time and date such Warrant is exercised. The
Company will provide notice, as described below (the "Termination Notice"), of
the occurrence of the Termination Date or the expiration of the Warrant Exercise
Period not more than 60 calendar days after the occurrence thereof. The
Termination Notice shall be dated the date it is first sent to Holders and shall
be provided by means of a press release to a national news service and by
mailing such notice first class, postage prepaid, to each Holder at such
Holder's address as it appears on the Certificate Register. The Termination
Notice shall state the following:
(i) that the Termination Date has occurred or the Warrant
Exercise Period has expired, as the case may be, and
(ii) that all outstanding Warrants have terminated and
become void.
The Warrants shall terminate and become void as provided herein notwithstanding
the Company's failure to give the Termination Notice.
SECTION 3.4 Manner of Exercise. Warrants may be exercised upon (i)
------------------
surrender to the Warrant Agent of the Warrant Certificates, together with the
form of election to purchase Common Stock on the reverse thereof properly
completed and validly executed by the Holder thereof and (ii) payment to the
Warrant Agent, for the account of the Company, of the Exercise Price. Such
payment shall be made by certified or official bank check or personal check
payable to the order of the Company. Subject to Section 3.2, the Warrants shall
be exercisable at the election of the Holders thereof either in full at any time
or from time to time in part and in the event that a Warrant Certificate is
surrendered for exercise in respect of less than all the Warrant Shares
purchasable on such exercise at any time prior to the Expiration Date a new
Warrant Certificate exercisable for the remaining Warrant Shares will be issued.
The Warrant Agent shall countersign and deliver the required
<PAGE>
12
new Warrant Certificates, and the Company, at the Warrant Agent's request, shall
supply the Warrant Agent with Warrant Certificates duly signed on behalf of the
Company for such purpose. The Warrant Agent shall account promptly to the
Company with respect to all Warrants exercised and concurrently pay to the
Company all moneys received by the Warrant Agent for the purchase of shares of
Common Stock through the exercise of such Warrants.
SECTION 3.5 Issuance of Warrant Shares. Subject to Section 3.6, upon
--------------------------
the surrender of Warrant Certificates and payment of the Exercise Price, as set
forth in Section 3.4, the Company shall issue and cause the Warrant Agent or, if
appointed, a transfer agent for the Common Stock ("Transfer Agent") to
countersign and deliver to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate or certificates for the
number of full Warrant Shares so purchased upon the exercise of such Warrants or
other securities or property to which it is entitled, registered or otherwise to
the Person or Persons entitled to receive the same, together with cash as
provided in Section 3.6 in respect of any fractional Warrant Shares otherwise
issuable upon such exercise. Such certificate or certificates shall be deemed
to have been issued and any Person so designated to be named therein shall be
deemed to have become a holder of record of such Warrant Shares as of the date
of the surrender of such Warrant Certificates and payment of the Exercise Price.
SECTION 3.6 Fractional Warrant Shares. The Company shall not be
-------------------------
required to issue fractional Warrant Shares on the exercise of Warrants. If
more than one Warrant shall be exercised in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of Warrant
Shares purchasable pursuant thereto. If any fraction of a Warrant Share would,
except for the provisions of this Section 3.6, be issuable on the exercise of
any Warrant (or specified portion thereof), the Company shall pay an amount in
cash equal to the sum of (i) the Adjusted Market Value for one Warrant Share and
(ii) $1.00, multiplied by such fraction, rounded upwards or downwards, as the
case may be, to the nearest whole cent.
SECTION 3.7 Reservation of Warrant Shares. (a) The Company shall
-----------------------------
use its best efforts to at all times keep reserved out of its authorized shares
of Common Stock or shares of Common Stock held in its treasury and unissued a
number of shares of Common Stock sufficient to provide for the exercise in full
of all Warrants then outstanding or reserved for issuance pursuant to Section
2.1. The registrar for the Common Stock (the "Registrar") shall at all times
until the Termination Date, or the time at which all Warrants have been
exercised or cancelled, reserve such number of authorized shares as shall be
required for such purpose. The Company will keep a copy of this Agreement on
file with the Transfer Agent. The Company will supply such Transfer Agent with
duly executed stock certificates for such purpose and will itself provide or
otherwise make available any cash which may be payable as provided in Section
3.6. The Company will furnish to such Transfer Agent a copy of all notices of
adjustments and certificates related thereto transmitted to each Holder.
(b) If, upon the Triggering Event, the number of shares of Common
Stock authorized but not issued plus the number of shares of Common Stock held
in the Company's
<PAGE>
13
treasury is less than the number of shares of Common Stock necessary to permit
the exercise in full of the Warrants then outstanding or reserved for issuance
pursuant to Section 2.1 (the number of shares of Common Stock comprising such
deficiency being the "Number of Shortfall Shares"), then the Company shall
either (i) to the extent permitted by applicable law and any material agreements
then in effect to which the Company is a party, commence a tender offer for the
aggregate number of shares of Common Stock at least equal to the Number of
Shortfall Shares or (ii) call a special meeting of the Common Stockholders for
the purpose of increasing the number of authorized shares of Common Stock in an
amount at least equal to the Number of Shortfall Shares. In such an event, the
Warrant Exercise Period shall be automatically extended to 60 calendar days
after the date on which either (a) the tender offer referred to in clause (i)
above is successfully completed or (b) the effective date of the increase in the
number of authorized shares of Common Stock referred to in clause (ii) above.
(c) The Company covenants that all shares of Common Stock which may
be issued upon exercise of Warrants will, upon issue, be fully paid,
nonassessable, free of preemptive rights, free from all taxes and free from all
liens, charges and security interests, created by or through the Company, with
respect to the issue thereof.
SECTION 3.8 Compliance with Law. (a) Notwithstanding anything in
-------------------
this Agreement to the contrary, in no event shall a Holder be entitled to
exercise a Warrant unless (i) a registration statement filed under the
Securities Act in respect of the issuance of the Warrant Shares is then
effective or (ii) an exemption from such registration requirements is available
to all Holders under the Securities Act at the time of such exercise.
(b) If any shares of Common Stock required to be reserved for
purposes of exercise of Warrants require, under any other Federal or state law
or applicable governing rule or regulation of any national securities exchange,
registration with or approval of any governmental authority, or listing on any
such national securities exchange before such shares may be issued upon
exercise, the Company will cause such shares to be duly registered or approved
by such governmental authority or listed on the relevant national securities
exchange.
SECTION 3.9 Cancellation of Warrants In the event the Company shall
------------------------
purchase or otherwise acquire Warrants, the same shall thereupon be delivered to
the Warrant Agent and be cancelled by it and retired. The Warrant Agent shall
cancel any Warrant surrendered for exchange, substitution, transfer or exercise
in whole or in part.
<PAGE>
14
ARTICLE 4.
Adjustments
-----------
SECTION 4.1 Reclassifications, Redesignations or Reorganizations of
-------------------------------------------------------
Common Stock. (a) In the event that at any time or from time to time after
- ------------
the date hereof the Company shall issue by reclassification, redesignation or
reorganization of the shares of its class of Common Stock any shares of capital
stock of the Company then, in any such event, the Holders shall have the right
to receive upon exercise of the Warrants the number of shares of such capital
stock of the Company equal to the Adjusted Litigation Recovery divided by
[86,000,000] [the number of Warrants issued or reserved for issuance on the
Record Date] divided by the aggregate Adjusted Market Value of the capital stock
of the Company that one share of Common Stock was exchanged for or converted
into as a result of such reclassification, redesignation or reorganization.
(b) The proportion and type of capital stock of the Company that the
Holders shall have the right to receive in the circumstance set forth in the
preceding sentence will be in the same proportion and type as one share of
Common Stock was exchanged for or converted into as a result of such
reclassification, redesignation or reorganization. Such adjustment shall become
effective immediately after the effective date of such reclassification,
redesignation or reorganization. In the event of the occurrence of more than
one of the foregoing, such adjustments shall be made successively.
SECTION 4.2 Combination. (a) Except as provided in Section 4.2(c),
-----------
in the event of a Combination, the Holders shall have the right to receive upon
exercise of the Warrants the number of shares of capital stock or other
securities or an amount of property equal to the Adjusted Litigation Recovery
divided by [86,000,000] [the number of Warrants issued or reserved for issuance
on the Record Date] divided by the aggregate Adjusted Market Value of the
capital stock, other securities or property that one share of Common Stock was
exchanged for or converted into as a result of such Combination.
(b) The proportion and type of capital stock, other securities or
property that the Holders shall have the right to receive in the circumstance
set forth in the preceding sentence will be in the same proportion and type as
one share of Common Stock was exchanged for or converted into as a result of
such Combination. The provisions of this Section 4.2 shall similarly apply to
successive Combinations involving any Successor Company.
(c) In the event of a Combination where consideration is payable to
holders of Common Stock in exchange for their shares solely in cash, each
Warrant will upon exercise thereof be entitled to receive cash in an amount
equal to the Adjusted Litigation Recovery divided by [86,000,000] [the number of
Warrants issued or reserved for issuance on the Record Date], less the Exercise
Price.
In case of any Combination described in this Section 4.2(c), the
surviving or acquiring Person shall promptly after the occurrence of the
Triggering Event deposit with the
<PAGE>
15
Warrant Agent the funds necessary to pay to the Holders of the Warrants the
amounts to which they are entitled as described above. After such funds and the
surrendered Warrant Certificates are received, the Warrant Agent shall make
payment to the Holders by delivering a check in such amount as is appropriate to
such Person or Persons as it may be directed in writing by the Holders
surrendering such Warrants.
(d) The Company shall provide that the surviving or acquiring Person
(the "Successor Company") in such Combination will enter into an agreement with
the Warrant Agent confirming the Holders' rights pursuant to this Section 4.2
and providing for adjustments, which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 4.
SECTION 4.3 Exercise Price Adjustment. In case of any
-------------------------
reclassification, redesignation or reorganization described in Section 4.1 or
any Combination descried in Section 4.2, the Exercise Price of one Warrant after
such reclassification, redesignation, reorganization or Combination will equal
(i) if the Warrants are exercisable into stock only, the per share par value of
such stock multiplied by the number of shares of stock into which one Warrant is
exercisable, (ii) if the Warrants are exercisable for cash or property only, an
amount equal to a fraction the numerator of which is the product of $1.00 and
the Fair Market Value of amount of cash or property into which one Warrant is
exercisable and the denominator of which is the amount of cash or property one
share of Common Stock was exchanged for in such Combination and (iii) if the
Warrants are exercisable for cash or property and stock, an amount equal to the
Exercise Price determined by clause (i) above with respect to the stock portion
and the Exercise Price determined by clause (ii) with respect to the cash or
property portion.
SECTION 4.4 Examples. (a) If the Company effects a reclassification,
--------
redesignation or reorganization such that one share of its class of Common Stock
was converted into a one share of class A common stock and two shares of class B
common stock, then, after giving effect to such event, the Holders shall have
the right to receive upon exercise of one Warrant shares of class A common stock
and class B common stock equal to the Adjusted Litigation Recovery divided by
[86,000,000] [the number of Warrants issued or reserved for issuance on the
Record Date] divided by the aggregate Adjusted Market Value of one share of
class A common stock and two shares of class B common stock. Accordingly,
pursuant to Section 4.1(b), if the Adjusted Litigation Recovery were $500
million and the Adjusted Market Value of one share of class A common stock and
two shares of class B common stock were $30, then one Warrant would be
exercisable for 0.0646 of a share of class A common stock and 0.1292 of a share
of class B common stock. The Exercise Price of one Warrant would be the par
value of the class A common stock multiplied by 0.0646, plus the par value of
the class B common stock multiplied by 0.1292.
(b) In the case of a Combination described in Section 4.2(a), if as a
result of such Combination one share of Common Stock is exchanged for one share
of Surviving Company common stock and $15, then, after giving effect to such
event, the Holders shall have the right to receive upon exercise of one Warrant
shares of Surviving Company common stock and cash equal to the Adjusted
Litigation Recovery divided by [86,000,000] [the
<PAGE>
16
number of Warrants issued or reserved for issuance on the Record Date] divided
by the sum of the Adjusted Market Value of one share of Surviving Company common
stock plus $15. Accordingly, pursuant to Section 4.2(b), if the Adjusted
Litigation Recovery were $500 million and the Adjusted Market Value of one share
of Surviving Company Common Stock were $15, then one Warrant would be
exercisable for 0.1938 of a share of Class A Common Stock and $2.907 ($15
multiplied by 0.1938). The Exercise Price of one Warrant would be the par value
of the Surviving Company Common Stock multiplied by .1292, plus $.1938.
(c) In the case of a Combination described in Section 4.2(c), if as a
result of such Combination one share of Common Stock is exchanged for $30, then,
after giving effect to such event, the Holders shall have the right to receive
upon exercise of one Warrant cash equal to the Adjusted Litigation Recovery
divided by [86,000,000] [the number of Warrants issued or reserved for issuance
on the Record Date], less the Exercise Price of the Warrant. Accordingly, if
the Adjusted Litigation Recovery were $500 million, then one Warrant would be
exercisable for $5.620. The Exercise Price of one Warrant would be $.1938.
SECTION 4.5 Other Events. If any event occurs as to which the
------------
foregoing provisions of this Article 4 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board, fairly
and adequately protect the purchase rights of the Warrants in accordance with
the essential intent and principles of such provisions, then such Board shall
make such adjustments to the terms of this Article 4, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of such Board, to protect such purchase rights as aforesaid.
SECTION 4.6 Notice of Certain Transactions. In the event that the
------------------------------
Company shall publicly announce a plan (a) to effect any reclassification,
redesignation or reorganization of its shares of its class of Common Stock, (b)
to effect any capital reorganization, consolidation or merger or (c) to effect
the voluntary or involuntary dissolution, liquidation or winding-up of the
Company, the Company shall within 5 calendar days after such public announcement
send to the Warrant Agent and the Warrant Agent shall within 5 calendar days
send the Holders a notice (in such form as shall be furnished to the Warrant
Agent by the Company) of such proposed action, such notice to be mailed by the
Warrant Agent to the Holders at their addresses as they appear in the
Certificate Register, which notice shall specify the expected date that such
issuance or event is to take place and the expected date of participation
therein by the holders of Common Stock and shall briefly indicate the effect of
such action on the Common Stock and on the number and kind of any other shares
of stock and on other securities or property, if any, and the number of shares
of Common Stock and other securities or property, if any, purchasable upon
exercise of each Warrant and the Exercise Price after giving effect to any
adjustment which will be required as a result of such action.
SECTION 4.7 Adjustment to Warrant Certificate. The form of Warrant
---------------------------------
Certificate need not be changed because of any adjustment made pursuant to this
Article 4, and Warrant Certificates issued after such adjustment may have the
same terms and conditions as are stated in any Warrant Certificates issued prior
to the adjustment. The Company, however, may at any time in its sole discretion
make any change in the form of
<PAGE>
17
Warrant Certificate that it may deem appropriate to give effect to such
adjustments and that does not affect the substance of the Warrant Certificate,
and any Warrant Certificate thereafter issued or countersigned, whether in
exchange or substitution for an outstanding Warrant Certificate or otherwise,
may be in the form as so changed.
ARTICLE 5.
Warrant Agent
-------------
Section 5.1 Nature of Duties and Responsibilities Assumed. The
---------------------------------------------
Company hereby appoints the Warrant Agent to act as agent of the Company as set
forth in this Agreement. The Warrant Agent hereby accepts the appointment as
agent of the Company and agrees to perform that agency upon the terms and
conditions herein set forth, by all of which the Company and the Warrant
Holders, by their acceptance thereof, shall be bound.
Whenever in the performance of its duties under this Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by an Officer and delivered to the Warrant
Agent; and such certificate shall be full authorization to the Warrant Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
The Warrant Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct. The Warrant Agent shall not be
liable for or by reason of any of the statements of fact or recitals contained
in this Agreement or in the Warrant Certificates (except its countersignature on
the Warrant Certificates and such statements or recitals as described the
Warrant Agent or action taken or to be taken by it) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only. The Warrant Agent shall not have any liability or
responsibility in respect of the legality, validity or enforceability of this
Agreement or the execution and delivery hereof (except the due execution hereof
by the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its countersignature thereof); nor shall it be responsible
or liable for any breach by the Company of any covenant or condition contained
in this Agreement or in any Warrant Certificate; nor shall it be responsible or
liable for the making of any change in the number of shares of Common Stock
required under the provisions of Article IV or responsible for the manner,
method or amount of any such change or the ascertaining of the existence of any
facts that would require any such adjustment or change; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Agreement or any Warrant Certificate or as to whether any shares of
Common Stock will, when issued, by validly issued, fully paid and nonassessable.
The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or take any other action likely to involve
expense unless the Company or
<PAGE>
18
one or more registered holders of Warrants shall furnish the Warrant Agent with
reasonable security and indemnity for any costs and expenses which may be
incurred. All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the possession of any of
the Warrants or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent and any recovery of judgment shall
be for the ratable benefit of the Holders of the Warrants, as their respective
rights or interests may appear. The Warrant Agent shall promptly notify the
Company in writing of any claim made or action, suit or proceeding instituted
against it arising out of or in connection with this Agreement.
The Warrant Agent is hereby authorized and directed to accept written
instructions with respect to the performance of its duties hereunder from an
Officer, and to apply to any such officer for advice or instructions in
connection with the Warrant Agent's duties, and it shall not be liable for any
action taken or suffered to be taken or omitted by it in good faith in
accordance with the instructions of any such officer.
The Warrant Agent will not be responsible or liable for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company. The Warrant Agent
will not incur any liability or responsibility to the Company or to any Warrant
Holder for any action taken, or any failure to take action, in reliance on any
notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument reasonably believed by the Warrant Agent to be genuine
and to have been signed, sent or presented by the proper party or parties.
The Warrant Agent may execute and exercise any of the rights and
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys, agents or employees, provided reasonable care has been
exercised in the selection and in the continued employment of any such attorney,
agent or employee.
The Company will perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Warrant Agent in
order to enable it to carry out or perform its duties under this Agreement.
The Warrant Agent will act hereunder solely as agent of the Company in
a ministerial capacity, and its duties will be determined solely by the
provisions hereof. The Warrant Agent will not be liable for anything which it
may do or refrain from so doing in connection with this Agreement except for its
own negligence, bad faith or willful conduct.
Section 5.2 Right to Consult Counsel. The Warrant Agent may at any
------------------------
time consult with legal counsel satisfactory to it (who may be legal counsel for
the Company) and the opinion of such counsel shall be full and complete
authorization and protection to the Warrant Agent as to any action taken,
suffered or omitted by it in good faith in accordance with such opinion;
provided, however, that the Warrant Agent shall have exercised reasonable care
- -------- -------
in the selection of such counsel.
<PAGE>
19
Section 5.3 Compensation and Reimbursement. The Company agrees to
------------------------------
pay to the Warrant Agent from time to time compensation for all services
rendered by it hereunder as the Company and the Warrant Agent may agree from
time to time, and to reimburse the Warrant Agent for reasonable expenses and
disbursements incurred in connection with the execution and administration of
this Agreement (including the reasonable compensation and the expenses of its
counsel), and further agrees to indemnify the Warrant Agent for, and to hold it
harmless against, any loss, liability or expenses incurred without negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
Section 5.4 Warrant Agent May Hold Company Securities. The Warrant
-----------------------------------------
Agent and any stockholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Warrants or other securities of the Company
or its affiliates or have a pecuniary interest in any transaction in which the
Company or its affiliates may be interested, or contract with or lend money to
the Company or its affiliates or otherwise act as fully and freely as though it
were not the Warrant Agent under this Agreement. Nothing herein shall preclude
the Warrant Agent from acting in any other capacity for the Company or for any
other legal entity.
Section 5.5 Change of Warrant Agent. The Warrant Agent may resign
-----------------------
and be discharged from its duties under this Agreement upon 90 calendar days'
prior notice in writing mailed, by registered or certified mail, to the Company.
The Company may remove the Warrant Agent or any successor warrant agent upon 60
calendar days' prior notice in writing, mailed to the Warrant Agent or successor
warrant agent, as the case may be, by registered or certified mail. If the
Warrant Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Warrant Agent and shall,
within 30 calendar days following such appointment, give notice thereof in
writing to each registered holder of the Warrant Certificates. If the Company
shall fail to make such appointment within a period of 30 calendar days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Warrant Agent, then
the Company agrees to perform the duties of the Warrant Agent hereunder until a
successor warrant agent is appointed. After appointment the successor warrant
agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor Warrant
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for this purpose. Failure
to give any notice provided for in this Section, however, or any defect therein
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be.
<PAGE>
20
ARTICLE 6.
Miscellaneous
-------------
SECTION 6.1 Information. As soon as any Warrant becomes outstanding,
-----------
the Company shall promptly deliver to the Warrant Agent and the Holders its
annual report to stockholders and such other information as is provided to any
holders of equity securities of the Company in their capacity as holders of such
securities.
SECTION 6.2 Persons Benefitting. Nothing in this Agreement is
-------------------
intended or shall be construed to confer upon any Person other than the Company,
the Warrant Agent and the Holders any right, remedy or claim under or by reason
of this agreement or any part hereof.
SECTION 6.3 Rights of Holders. (a) No Holder, as such, shall be
-----------------
entitled to vote or to receive dividends or shall otherwise be deemed to be the
holder of shares of Common Stock for any purpose, nor shall anything contained
herein or in any Warrant Certificate be construed to confer upon any Holder, as
such, any of the rights of a stockholder of the Company or any right to vote
upon or give or withhold consent to any action of the Company (whether upon any
reorganization, issuance of securities, reclassification or conversion of Common
Stock, consolidation, merger, sale, lease, conveyance or otherwise), receive
notice of meetings or other action affecting stockholders (except for notices
expressly provided for in this Agreement) or receive dividends or subscription
rights, unless and until such Warrant Certificate shall have been surrendered
for exercise as provided in this Agreement, payment in respect of such exercise
shall have been received by the Warrant Agent, and shares of Common Stock
thereunder shall have become issuable and such person shall have been deemed to
have become a holder of record of such shares. No Holder shall, upon the
exercise of Warrants, be entitled to any dividends if the record date with
respect to payment of such dividends shall be a date prior to the date such
shares of Common Stock became issuable upon the exercise of such Warrants.
(b) The Bank will retain sole and exclusive control of the Litigation
and will retain 100% of any recovery from the Litigation. The Holders will not
have any right to control or manage the course or disposition of the Litigation
or the proceeds of any recovery therefrom.
SECTION 6.4 Purchase of Warrants by the Company. The Company shall
-----------------------------------
have the right, except as limited by law or other agreement, to purchase or
otherwise acquire Warrants at such times, in such manner and for such
consideration as it may deem appropriate.
SECTION 6.5 Amendment. This Agreement may be amended by the parties
---------
hereto without the consent of any Holder for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or making any other provisions with respect to matters or
questions arising under this Agreement as the Company and the Warrant Agent may
deem necessary or desirable; provided, however, that
-------- -------
<PAGE>
21
such action shall not affect adversely the rights of the Holders. Any amendment
or supplement to this Agreement that has an adverse effect on the interests of
the Holders shall require the written consent of the Holders of a majority of
the then outstanding Warrants. The consent of each Holder affected shall be
required for any amendment pursuant to which the Exercise Price would be
increased or the number of Warrant Shares purchasable upon exercise of Warrants
would be decreased (other than pursuant to adjustments provided for herein). In
determining whether the Holders of the required number of Warrants have
concurred in any direction, waiver or consent, Warrants owned by the Company or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Warrant Agent shall be protected in relying on any such direction,
waiver or consent, only Warrants which the Warrant Agent knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Warrants
outstanding at the time shall be considered in any such determination.
SECTION 6.6 Notices. Any notice or communication shall be in writing
-------
and delivered in Person or mailed by first-class mail addressed as follows:
if to the Company: Golden State Bancorp Inc.
414 North Central Avenue
Glendale, CA 91203
Attention: Chief Financial Officer
Telecopy: (818) 409-3151
if to the Warrant Agent: ChaseMellon Shareholder Services L.L.C.
Reorganization Department
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention:
Telecopy:
The Company or the Warrant Agent by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder's address as it appears on the Certificate Register and
shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 6.7 Governing Law. This Agreement and the Warrant
-------------
Certificates shall be governed by, and construed and interpreted in accordance
with, the laws of the State of California.
<PAGE>
22
SECTION 6.8 Successors. All agreements of the Company in this
----------
Agreement and the Warrant Certificates shall bind its successors. All
agreements of the Warrant Agent in this Agreement shall bind its successors.
SECTION 6.9 Counterparts. The parties may sign any number of copies
------------
of this Agreement. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Agreement.
SECTION 6.10 Table of Contents. The table of contents and headings
-----------------
of the Articles and Sections of this Agreement have been inserted for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions hereof.
SECTION 6.11 Severability. The provisions of this Agreement are
------------
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
GOLDEN STATE BANCORP INC.
By:
-----------------------------------
Name:
Title:
CHASEMELLON SHAREHOLDER
SERVICES L.L.C., as Warrant
Agent,
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT A TO
WARRANT AGREEMENT
-----------------
[FORM OF FACE OF WARRANT CERTIFICATE]
[Unless and until it is exchanged in whole or in part for Warrants in
definitive form, this Warrant may not be transferred except as a whole by the
depository to a nominee of the depository or by a nominee of the depository to
the depository or another nominee of the depository or by the depository or any
such nominee to a successor depository or a nominee of such successor
depository. The Depository Trust Company ("DTC") (55 Water Street, New York,
New York) shall act as the depository until a successor shall be appointed by
the Company and the Warrant Agent. Unless this certificate is presented by an
authorized representative of DTC to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]/1/
No. __ Certificate for ___ Warrants
WARRANTS TO PURCHASE COMMON STOCK OF
GOLDEN STATE BANCORP INC.
THIS CERTIFIES THAT, ____________, or its registered assigns, is the
registered holder of the number of Warrants set forth above (the "Warrants").
Each Warrant entitles the holder thereof (the "Holder"), at its option and
subject to the provisions contained herein and in the Warrant Agreement referred
to below, to purchase from GOLDEN STATE BANCORP INC., a Delaware corporation
("the Company"), the number of shares of Common Stock, par value of $1.00 per
share, of the Company (the "Common Stock") having an Adjusted Market Value equal
to the Adjusted Litigation Recovery divided by [86,000,000] [the number of
Warrants issued or reserved for issuance on the Record Date] at an exercise
price per Warrant equal to the number of shares of Common Stock for which one
Warrant is exercisable multiplied by $1.00 (the "Exercise Price"). This Warrant
Certificate shall terminate and become void on the earliest of (i) the Close of
Business on the last day of the Warrant Exercise Period, (ii) the Close of
Business on the date the Litigation has been disposed of in a manner such that
no shares of Common Stock or other securities or property will be issuable under
the terms of the Warrants and (iii) the time and date such Warrant is exercised.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of _________ __, 1998 (the "Warrant Agreement"),
between the Company and ChaseMellon Shareholder Services L.L.C. (the "Warrant
Agent", which term includes any successor Warrant Agent under the Warrant
Agreement), and is subject to the terms and provisions contained in the Warrant
Agreement, to all of which terms and
- -------------
/1/ To be included only if the Warrant is in global form.
<PAGE>
2
provisions the Holder of this Warrant Certificate consents by acceptance hereof.
The Warrant Agreement is hereby incorporated herein by reference and made a part
hereof. Reference is hereby made to the Warrant Agreement for a full statement
of the respective rights, limitations of rights, duties and obligations of the
Company, the Warrant Agent and the Holders of the Warrants. Capitalized terms
used but not defined herein shall have the meanings ascribed thereto in the
Warrant Agreement. A copy of the Warrant Agreement may be obtained for
inspection by the Holder hereof upon written request to the Warrant Agent at
[______________________________].
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised in whole or in part by surrender of this Warrant Certificate with the
form of election to purchase Warrant Shares attached hereto duly executed and
with the simultaneous payment of the Exercise Price in cash (subject to
adjustment) to the Warrant Agent for the account of the Company at the office of
the Warrant Agent. Payment of the Exercise Price shall be made by certified or
official bank check or personal check payable to the order of the Company or by
wire transfer of funds to an account designated by the Company for such
purpose.
As provided in the Warrant Agreement and subject to the terms and
conditions therein set forth, each Warrant shall be exercisable at any time from
and from time to time during the Warrant Exercise Period only and shall not be
exercisable after the expiration of the Warrant Exercise Period.
In the event the Company enters into a Combination, the Holder hereof
will be entitled to receive upon exercise of the Warrants the shares of capital
stock or other securities or other property such that each Warrant may be
exercisable for a number of shares of capital stock or other securities or an
amount of property equal to the Adjusted Litigation Recovery divided by
[86,000,000] [the number of Warrants issued or reserved for issuance on the
Record Date] divided by the aggregate Adjusted Market Value of the capital
stock, other securities or property that one share of Common Stock was exchanged
for or converted into as a result of such Combination; provided, however, that
-------- -------
in the event that, in connection with such Combination, consideration to holders
of Common Stock in exchange for their shares is payable solely in cash, the
Holder hereof will be entitled to receive cash in an amount equal to the
Adjusted Litigation Recovery divided by [86,000,000] [the number of Warrants
issued or reserved for issuance on the Record Date], less the Exercise Price.
The amount and type of capital stock, other securities or property that the
Holders shall have the right to receive in the circumstance set forth in the
preceding sentence would be the same amount and type as one share of Common
Stock was exchanged for or converted into as a result of such Combination.
The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with the transfer or
exchange of the Warrant Certificates pursuant to Section 2.5 of the Warrant
Agreement but not for any exchange or original issuance (not involving a
transfer) with respect to temporary Warrant Certificates, the exercise of the
Warrants or the Warrant Shares.
<PAGE>
3
Upon any partial exercise of the Warrants, there shall be
countersigned and issued to the Holder hereof a new Warrant Certificate in
respect of the shares of Common Stock as to which the Warrants shall not have
been exercised. This Warrant Certificate may be exchanged at the office of the
Warrant Agent by presenting this Warrant Certificate properly endorsed with a
request to exchange this Warrant Certificate for other Warrant Certificates
evidencing an equal number of Warrants. No fractional Warrant Shares will be
issued upon the exercise of the Warrants, but the Company shall pay an amount in
cash equal to the Adjusted Market Value for one Warrant Share on the
Determination Date, multiplied by such fraction, computed to the nearest whole
cent.
All shares of Common Stock issuable by the Company upon the exercise
of the Warrants shall, upon such issue, be duly and validly issued and fully
paid and non-assessable.
The holder in whose name the Warrant Certificate is registered may be
deemed and treated by the Company and the Warrant Agent as the absolute owner of
the Warrant Certificate for all purposes whatsoever and neither the Company nor
the Warrant Agent shall be affected by notice to the contrary.
THE WARRANTS REPRESENT A CONTINGENT RIGHT TO PURCHASE SHARES OF COMMON
STOCK WITH AN AGGREGATE VALUE BASED ON A PORTION OF ANY PROCEEDS THAT MAY BE
RECEIVED BY THE BANK FROM THE LITIGATION. THE WARRANTS DO NOT PROVIDE TO THEIR
HOLDERS ANY RIGHTS IN THE LITIGATION INCLUDING ANY RIGHTS TO RECEIVE ANY CASH OR
PROPERTY RECEIVED BY THE BANK IN CONNECTION THEREWITH, OR TO CONTROL THE
LITIGATION. THERE CAN BE NO ASSURANCE AS TO WHEN THE LITIGATION WILL BE
RESOLVED OR THE AMOUNT OF PROCEEDS, IF ANY, THE BANK WILL RECEIVE THEREFROM.
THE BANK WILL RETAIN SOLE AND EXCLUSIVE CONTROL OF THE LITIGATION AND WILL
RETAIN 100% OF ANY RECOVERY FROM THE LITIGATION. THE HOLDERS WILL NOT HAVE ANY
RIGHT TO CONTROL OR MANAGE THE COURSE OR DISPOSITION OF THE LITIGATION OR THE
PROCEEDS OF ANY RECOVERY THEREFROM.
The Warrants do not entitle any holder hereof to any of the rights of
a shareholder of the Company.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
GOLDEN STATE BANCORP INC.
By ___________________________________
<PAGE>
4
[SEAL]
Attest: ___________________________
Secretary
DATED:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
as Warrant Agent,
by _________________________________
Authorized Signatory
<PAGE>
EXHIBIT B TO
WARRANT AGREEMENT
-----------------
FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
GOLDEN STATE BANCORP INC.
The undersigned hereby irrevocably elects to exercise [ ] Warrants
at an exercise price per Warrant of $[ ] to acquire [ ] shares of Common
Stock, par value $1.00 per share, of Golden State Bancorp Inc. (the "Company"),
on the terms and conditions specified in the within Warrant Certificate and the
Warrant Agreement therein referred to, surrenders this Warrant Certificate and
all right, title and interest therein to the Company, and directs that the
shares of Common Stock deliverable upon the exercise of such Warrants be
registered or placed in the name and at the address specified below and
delivered thereto.
Date: ________________, ____
_______________________________/1/
(Signature of Owner)
__________________________________
(Street Address)
__________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
__________________________________
- ---------------------
/1/ The signature must correspond with the name as written upon the face of the
within Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a national
bank or trust company or by a member firm of any national securities
exchange.
<PAGE>
2
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
Any unexercised Warrants evidenced by the within Warrant Certificate to be
issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
<PAGE>
EXHIBIT C TO
WARRANT AGREEMENT
The following exchanges of a part of this Global Warrant for definitive Warrants
have been made:
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Common Stock (the "Warrants") of Golden State Bancorp
Inc. (the "Company")
This Certificate relates to __________ Warrants held in definitive form by
_______________ (the "Transferor").
The Transferor has requested the Warrant Agent by written order to exchange
or register the transfer of a Warrant or Warrants. The Warrant Agent and the
Company are entitled to rely upon this Certificate and are irrevocably
authorized to produce this Certificate or a copy hereof to any interested party
in any administrative or legal proceedings or official inquiry with respect to
the matters covered hereby.
[INSERT NAME OF TRANSFEROR]
by ________________________
Date: ____________________
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF MAYER, BROWN & PLATT]
March 4, 1998
Golden State Bancorp Inc.
414 North Central Avenue
Glendale, CA 91203
Re: Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as your counsel in connection with the Registration Statement
on Form S-3 (the "Registration Statement") relating to the registration and
issuance of up to an aggregate of 14,636,000 shares of the common stock, par
value $1.00 per share, of Golden State Bancorp Inc. (the "Common Stock") upon
exercise from time to time of Litigation Tracking Warrants ("LTWs"). Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Registration Statement.
In rendering our opinions set forth below, we have examined the proceedings
heretofore taken, and are familiar with the proceedings proposed to be taken, by
Golden State Bancorp Inc. in connection with the authorization, issuance and
sale of the Common Stock. In addition, we have reviewed the Registration
Statement and have examined such other documents, certificates, corporate
records, public filings, opinions and instruments as we have deemed necessary or
appropriate for the purpose of rendering this opinion. In such examination we
have assumed the genuineness of all signatures on original documents and the due
authorization, execution and delivery of all documents where due execution and
delivery are requisite to the effectiveness thereof. We have also relied, as to
various matters of fact relevant to the opinions expressed herein, upon
certificates and statements of officers of the Company and upon certificates or
comparable documentation of public officials.
Subject to the proposed additional proceedings being taken as contemplated
in the Registration
MAYER, BROWN & PLATT
March 4, 1998
Page 2
Statement and as we have discussed with you as your counsel prior to the
issuance of the Common Stock, the effectiveness of the Registration Statement
under the Securities Act of 1933, as amended, and the due execution,
registration and delivery of the certificates evidencing the Common Stock, we
are of the opinion that the Common Stock to be issued upon exercise of LTWs
will, when issued and paid for in the manner contemplated in the Registration
Statement and the exhibits thereto, be legally issued, fully paid and non-
assessable.
You have informed us that you intend to issue the Common Stock from time to
time on a delayed or continuous basis. In this connection, we hereby inform you
that this opinion is limited solely to the application of the laws, rules and
regulations in effect, and our information as to the relevant facts, on the date
hereof. We undertake no obligation to provide any additional opinion in the
event of, or to inform you of, any changes in applicable laws, rules or
regulations or the effect, if any, on our opinions expressed herein of any new
facts of which we may become aware after our delivery of this opinion.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement, and we further consent to the use of our name under the
caption "Legal Matters" in the Prospectus forming a part of in the Registration
Statement reviewed by us.
Very truly yours,
Mayer, Brown & Platt
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Golden State Bancorp Inc.:
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of Golden State Bancorp Inc. (the Company) regarding the shares of the
common stock, par value $1.00, of the Company that may be issued from time to
time upon exercise of the Litigation Tracking Warrants(TM) of our report dated
July 23, 1997, except for Note 24 of notes to the consolidated financial
statements which is as of August 18, 1997, with respect to the consolidated
financial statements of Glendale Federal Bank, Federal Savings Bank
and subsidiaries as of June 30, 1997 and 1996, and the related consolidated
statements of operations, changes in stockholders' equity and cash flows for
each of the years in the three-year period ended June 30, 1997, which report
appears in the Form 8-K of Golden State Bancorp Inc. dated September 26, 1997,
and to the reference to our firm under the heading "Experts" in the Prospectus.
KPMG PEAT MARWICK LLP
Los Angeles, California
March 4, 1998
