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GREAT WESTERN FINANCIAL CORPORATION
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[Talking Points used in a Presentation made to
Institutional Shareholder Services]
May 22, 1997
GREAT WESTERN FINANCIAL CORPORATION
Summary of Issues Relating to Solicitation by
H.F. Ahmanson & Company For Three Seats on
Great Western's Board of Directors and in
Support of Five Separate By-law Amendments
1. Election of Directors
* Ahmanson repeatedly asserts that its three nominees "are
not committed to any particular proposal" and "will in no
way be controlled by or acting at the direction of
Ahmanson." This is not credible. Despite the fact that,
if elected, Ahmanson's nominees will have fiduciary
duties to all Great Western shareholders, they can be
expected to serve Ahmanson's interests.
- On April 21, 1997, the press reported a statement by
Charles Rinehart that electing three directors to
Great Western's Board was key to Ahmanson's plan to
take over Great Western.
- In Ahmanson's lawsuit relating to the date of the
Annual Meeting, the Delaware Chancery Court, in a
slip opinion, stated: "Ahmanson was pressing the
Court to ... serve primarily Ahmanson's individual
strategic interests as a bidder, as distinguished
from the interests of Great Western shareholders
generally."
* Throughout the past 3 months, the Great Western Board has
done exactly what a Board of Directors should do in
responding to a bid for a company. It has always acted
in the best interests of shareholders. There is no issue
of attempted entrenchment. The Washington Mutual merger,
based on comparative market prices of Ahmanson and
Washington Mutual on March 6 (the day of announcement),
delivered almost $700 million of additional value to
Great Western stockholders.
- Without the Washington Mutual merger, Great Western
shareholders today would have an Ahmanson proposal
for 1.05 shares, which currently would be worth
about $830 million less than the Washington Mutual
merger.
* Great Western's Board is overwhelmingly comprised of
independent directors. The Board has acted reasonably,
rationally, and in the best interests of its
shareholders, in determining that:
- Washington Mutual is the superior merger partner,
and
- The Washington Mutual merger will provide superior
value to shareholders
Even the current indicated values of the Ahmanson
proposal and the Washington Mutual merger are roughly
equivalent.
* In order to induce Washington Mutual to enter into the
merger agreement, Great Western agreed to a standard "no
shop" clause. This enables the Board to act in
accordance with its fiduciary duties, but does not permit
Great Western to enter into discussions with third
parties, including Ahmanson, except in accordance with
its fiduciary obligations. The Great Western Board's
decision not to enter into discussions with Ahmanson is
both reasonable and rational, and consistent with Great
Western's obligations under the Washington Mutual merger
agreement.
* In the event that Great Western shareholders do not
approve the Washington Mutual merger -- which the Board
believes is unlikely -- the Board will examine all
available options. This should be done by Great
Western's independent Board which will serve the
interests of all shareholders, without the three
designees of a potential acquiror (Ahmanson) seeking to
influence the Board's decisions.
* There is no reason to question the motives or decisions
of Great Western's Board, nor is there anything about
Ahmanson's proposal that should cast any doubt on whether
the Board has reasonably acted in the shareholders' best
interests.
2. Proposed By-law Amendments
* Ahmanson's five proposed By-law amendments are:
1. Calling of Special Meetings of Shareholders by the
holders of 10% of Great Western's stock.
2. Prohibiting persons previously defeated in an
election from being appointed to fill vacancies on
the Board.
3. Requiring an Ahmanson nominee, if elected, to serve
on any executive or comparable committee of the
Board.
4. Specifying that certain information be included in
notices of Board meetings.
5. Providing that only shareholders may amend or repeal
any By-laws adopted at the 1997 Annual Meeting.
* These proposed By-laws should be viewed in their totality
as a further effort by Ahmanson to restrict the Great
Western Board's ability and flexibility in responding to
the Ahmanson proposal and protecting the interests of
shareholders.
* Ahmanson seeks to portray itself as an advocate of good
governance. This is empty rhetoric. These proposals are
in Ahmanson's interests; not the interests of Great
Western's shareholders. Not one of these proposed
amendments is included in Ahmanson's own By-laws.
- For example, Ahmanson already has proposed ten
separate By-law amendments or advisory resolutions
in the consent solicitation and at the Annual
Meeting. Ahmanson is engaging in three separate
contested solicitations (the consent solicitation;
the Annual Meeting; and the merger vote). The
proposed By-law relating to Special Meetings of
Shareholders could enable Ahmanson to align itself
with the holders of a small minority of shares and
repeatedly compel additional Special Meetings at
which Ahmanson could present additional resolutions
and proposed By-law amendments.
* If Great Western's shareholders approve the Washington
Mutual merger, these proposed By-law amendments will have
no relevance. If the merger is not approved, Ahmanson
should not be permitted to dictate or influence the
Board's further responses.
3. The "Tone" of the Contest
* Ahmanson is unfairly seeking to blame Great Western for
the "tone" of the contest. Great Western is simply
pursuing a strategic merger its Board believes is in the
best interests of its shareholders. Ahmanson has
attacked the Washington Mutual merger on every front, and
has attacked Great Western, its directors, its advisors
and Washington Mutual.
* While the "tone" is irrelevant to the outcome and the
interests of Great Western's shareholders, a few points
should be made.
* Any confusion that may exist in connection with
Ahmanson's consent solicitation results from Ahmanson's
own actions.
- Ahmanson, in fact, insisted at first that the 5.2
million double voted shares be counted twice. It
was only after Great Western brought a lawsuit that
Ahmanson changed its position.
- Ahmanson intentionally refused to cause a record
date to be set for two of its five consent
resolutions. It could easily have done so.
* Ahmanson says Great Western did not want its shareholders
to vote. This is false. The Annual Meeting was delayed
until the situation stabilized and shareholders could
make informed decisions. It is Ahmanson which is seeking
to delay the merger vote for several months (six weeks
after certification of the vote at the Annual Meeting;
the certification itself could take approximately one
month as was the case in the consent solicitation). If
Ahmanson were truly confident it had the superior
proposal, it would welcome a vote by our shareholders on
the Washington Mutual merger.
