SCHEDULE 14A INFORMATION
REVOCATION STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant {X}
Filed by a Party other than the Registrant {_}
Check the appropriate box:
{_} Preliminary Proxy Statement (Revocation of Consent Statement)
{_} Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
{_} Definitive Proxy Statement (Revocation of Consent Statement)
{X} Definitive Additional Materials
{X} Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GREAT WESTERN FINANCIAL CORPORATION
-----------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
{X} No fee required.
{_} Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): ___
(4) Proposed maximum aggregate value of transactions: _______________
(5) Total fee paid.
--------
{_} Fee paid previously with preliminary materials.
{_} Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: __________________________________________
(2) Form, Schedule or Registration Statement No.: ____________________
(3) Filing Party: ____________________________________________________
(4) Date Filed: ______________________________________________________
M E M O R A N D U M
April 2, 1997
TO: Peter Gleason, Senior Analyst
Institutional Shareholder Services
FROM: Great Western Financial Corporation
This memorandum is being submitted in response to your
invitation that Great Western Financial Corporation ("Great
Western") respond in writing to your draft analysis dated March
31, 1997 (the "Draft Analysis") in connection with the pending
solicitation of consents of Great Western stockholders by H.F.
Ahmanson & Company ("Ahmanson").
At the outset, we wish to express our strong
disagreement with the recommendations of Institutional
Shareholder Services ("ISS") with respect to Proposals 1, 3, 4
and 5. We do not intend to reiterate here the various issues we
have discussed with ISS during the past weeks. We do believe,
however, that it is essential to recognize that any ISS
recommendations in support of Ahmanson -- as well as any success
Ahmanson may have in its consent solicitation -- will be actively
and incorrectly portrayed by Ahmanson as an endorsement of
Ahmanson's merger proposal. We expect that this will be the case
regardless of how many times ISS may state that its
recommendations do not constitute a recommendation with respect
to either (1) the relative merits of the Great Western/Washington
Mutual, Inc. ("Washington Mutual") merger agreement and
Ahmanson's merger proposal or (2) how stockholders should vote in
connection with the election of directors at Great Western's
Annual Meeting.
The events of two days ago, March 31, 1997, are
illustrative.
Ahmanson has repeatedly stated that the consent
solicitation constitutes a referendum on the Washington Mutual
merger and the Ahmanson proposal. For example, during an analyst
presentation made on March 17, 1997, Ahmanson stated: "We have a
singular opportunity to demonstrate stockholder support of the
[Ahmanson proposal] over the course of the next two weeks: [the]
[c]onsent solicitation process provides [an] opportunity for an
early referendum on our offer..." Having so laid the foundation,
Ahmanson unleashed a carefully orchestrated and very misleading
assault on March 31, 1997 as described below.
That morning, Ahmanson ran an advertisement in The Wall
Street Journal in which Ahmanson misleadingly stated:
STOCKHOLDERS ARE STRONGLY SUPPORTING AHMANSON'S CONSENT PROPOSALS
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Our estimates show that more than 80 percent of
the voted Great Western common shares support the
Ahmanson consent solicitation, based on the returns to
date.
Nineteen of the twenty largest Great Western
stockholders have voted FOR or indicated a vote FOR
Ahmanson's consent proposals.
Also, on March 31, Ahmanson issued a press release and
sent to Great Western stockholders a mailgram, both of which
contained a similar message.
This was designed to mislead the market place, Great
Western stockholders and the financial press into believing that
an overwhelming majority of stockholders are supporting
Ahmanson's merger proposal. Not surprisingly, Ahmanson's tactic
was successful and the financial press immediately portrayed
Ahmanson's misleading assertions concerning its consent
solicitation as indicating that stockholders overwhelmingly
supported Ahmanson's merger proposal.
Bloomberg News wrote, in an article which was reprinted
in the April 1 issue of The New York Times:
AHMANSON SAYS GREAT WESTERN INVESTORS FAVOR ITS BID
---------------------------------------------------
H.F. Ahmanson & Company said yesterday that 80 percent
of the shares of Great Western Financial Corporation
voted so far in a referendum were in favor of its $6.18
billion hostile takeover bid. (Emphasis added)
The following is a quote from a CNBC anchorman:
"[Ahmanson] says that more than 80% devoted [sic] Great
Western shareholders support Ahmanson's $6.6 billion
hostile takeover bid . . . Just this morning, Ahmanson
said its offer is getting strong support and that 19 of
20 of the biggest Great Western shareholders like their
offer." (Emphasis added)
Great Western issued a press release on March 31 in
response to Ahmanson's mischaracterization of the results of the
consent solicitation. However, as the quotes above clearly show,
the financial press was not deterred from printing Ahmanson's
mischaracterization of the facts.
In light of these events, we again emphasize our
concern that Ahmanson will portray any recommendation by ISS, and
any favorable action by stockholders on the consent proposals, as
an endorsement of the Ahmanson merger proposal.
In contrast to Ahmanson's course of conduct, we would
reiterate that the Great Western Board of Directors (the "Board")
has at all times acted in an informed and reasonable manner in
furtherance of the best interests of Great Western's
stockholders. The Draft Analysis acknowledges that the Board's
actions to date have added significant value for stockholders.
There is no reason for ISS to question the Board's actions to
date, and the Board should continue to have maximum flexibility
in responding to events as they occur. For this reason and given
Ahmanson's anticipated portrayal of ISS's recommendations,
especially with respect to Proposals 1 and 3, as support for its
merger proposal, we would urge that ISS reconsider its
recommendations.
With respect to the Draft Analysis we have a number of
specific observations. On page 3 of the Draft Analysis, there
should be a footnote to 1996 Net Earnings and EPS (Primary) to
indicate that such amounts include extraordinary charges and
assessments.
In the second full paragraph on page 8 of the Draft
Analysis, we note that ISS has incorrectly characterized the
current pricing formula utilized by Ahmanson as having "unlimited
upside potential to the deal, but somewhat limited downside."
This statement is inaccurate because Ahmanson's pricing formula
is a floating exchange ratio with a symmetrical collar. If
Ahmanson's stock price is below $41.67 (as it is now and has been
since Ahmanson revised its proposal on March 17, 1997), the
exchange ratio will be fixed at 1.2 shares. In fact, given
Ahmanson's current stock price, it is more accurate to say that
Ahmanson's proposal has unlimited downside potential but somewhat
limited upside. To illustrate, since the announcement of the
Ahmanson revised proposal on March 17, Ahmanson's stock price has
decreased by $3.25 from $40.25 to $37 and the implied per share
deal value has decreased by $3.90 ($3.25 multiplied by 1.2).
Conversely, Ahmanson's stock price would have to increase by over
$8.00 from its current level in order for the lower end of the
collar (1.1 shares) to be applicable, and only in the event of
such a dramatic increase in Ahmanson's stock price would Great
Western stockholders have unlimited upside.
We also note that ISS states in the second full
paragraph of page 8 of the Draft Analysis that the revised
Ahmanson proposal was intended to target a $50.00 per share
value. However, on March 17, when Ahmanson announced its revised
proposal, its last reported stock price was $40.25 and the
implied per share value of its proposal was $48.30. Despite
having taken the unusual, if not unprecedented, step of
announcing a transaction with an "out-of the-money" collar,
Ahmanson was not in the least bit deterred from announcing that
its proposal was intended to provide $50.00 per Great Western
share and, indeed, the financial press reported Ahmanson's
proposal as having a $50 value. In reality, Ahmanson's proposal
was not a $50 proposal when made, and to date never has been a
$50 proposal. This is yet another example of Ahmanson's
carefully orchestrated effort to portray the facts as it deems
desirable and in its own best interests.
With respect to the discussion of record dates in the
third full paragraph of page 8 of the Draft Analysis, we note
that the March 13, 1997 record date is only applicable to
Proposals 3, 4 and 5, and that Ahmanson has not yet requested
that the Board establish a record date for Proposals 1 and 2.
With respect to the discussion of projected cost
savings on page 9 of the Draft Analysis, we make the following
observations. First, Washington Mutual's projected cost savings
are derived only in part from projected branch closings and, as a
consequence, an analysis limited to branch overlaps is
incomplete. In fact, only approximately 30% of Washington
Mutual's projected cost savings are expected to come from branch
closings. Washington Mutual expects to achieve additional cost
savings from the closing of Great Western's headquarters and from
the closing of 100 loan offices (where there is more overlap
between Great Western's and Washington Mutual's operations than
there is between those of Great Western and Ahmanson). Further,
Washington Mutual believes that it has an advantage over Ahmanson
as a result of its superior and more compatible technology.
Second, Great Western estimates that Ahmanson has overstated its
projected cost savings arising from branch closures by over $50
million. Third, Great Western and Washington Mutual believe it
is inaccurate to characterize their proposed merger as a market
extension. There are significant in-market elements to the
Washington Mutual merger as shown by the significant branch and
loan office overlap between the two institutions.
On page 11 of the Draft Analysis, the third sentence in
the first full paragraph is factually incorrect. The meetings
referred to in that sentence commenced after the February 24,
1997 Board meeting was held and not the week prior to the Board
meeting.
On page 13 of the Draft Analysis, in the first full
paragraph, it is stated that stockholders will have the
opportunity to vote when a merger agreement is finalized. We
note that a definitive merger agreement between Great Western and
Washington Mutual was finalized and executed in early March, and
that Great Western stockholders will have the opportunity to vote
on the merger after mailing of the Joint Proxy Statement/Prospectus.
Great Western Financial Corporation ("Great Western")
and certain other persons named below may be deemed to be
participants in the solicitation of proxies in connection with
the merger of Great Western and a wholly-owned subsidiary of
Washington Mutual, Inc. ("Washington Mutual") pursuant to which
each outstanding share of Great Western common stock would be
converted into 0.9 shares of Washington Mutual common stock (the
"Merger"). The participants in this solicitation may include the
directors of Great Western (James F. Montgomery, John F. Maher,
Dr. David Alexander, H. Frederick Christie, Stephen E. Frank,
John V. Giovenco, Firmin A. Gryp, Enrique Hernandez, Jr., Charles
D. Miller, Dr. Alberta E. Siegel and Willis B. Wood, Jr.); the
following executive officers of Great Western: J. Lance Erikson,
Carl F. Geuther, Michael M. Pappas, A. William Schenck III, Ray
W. Sims and Jaynie M. Studenmund; and the following other members
of management of Great Western: Stephen F. Adams, Bruce F.
Antenberg, Barry R. Barkley, Ian D. Campbell, Charles Coleman,
Allen D. Meadows and John A. Trotter (collectively, the "Great
Western Participants"). As of the date of this communication,
James F. Montgomery and John F. Maher beneficially owned 680,488
shares and 611,762 shares of Great Western common stock,
respectively (including shares subject to stock options
exercisable within 60 days). The remaining Great Western
Participants do not beneficially own, individually or in the
aggregate, in excess of 1% of Great Western's equity securities.
Great Western has retained Goldman, Sachs & Co.
("Goldman Sachs") and Merrill Lynch & Co. ("Merrill Lynch") to
act as its financial advisors in connection with the Merger, as
well as the merger proposal by H. F. Ahmanson & Company, for
which they received and may receive substantial fees, as well as
reimbursement of reasonable out-of-pocket expenses. In addition,
Great Western has agreed to indemnify Goldman Sachs and Merrill
Lynch and certain persons related to them against certain
liabilities, including certain liabilities under the federal
securities laws, arising out of their engagement. Each of
Goldman Sachs and Merrill Lynch is an investment banking firm
that provides a full range of financial services for
institutional and individual clients. Neither Goldman Sachs nor
Merrill Lynch admits that it or any of its directors, officers or
employees is a "participant" as defined in Schedule 14A
promulgated under the Securities Exchange Act of 1934, as
amended, in the solicitation, or that Schedule 14A requires the
disclosure of certain information concerning Goldman Sachs and
Merrill Lynch. In connection with Goldman Sachs's role as
financial advisor to Great Western, Goldman Sachs and the
following investment banking employees of Goldman Sachs may
communicate in person, by telephone or otherwise with a limited
number of institutions, brokers or other persons who are
stockholders of Great Western: Joe Wender, John Mahoney, Andy
Gordon, Todd Owens and Andrea Vittorelli. In connection with
Merrill Lynch's role as financial advisor to Great Western,
Merrill Lynch and the following investment banking employees of
Merrill Lynch may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other
persons who are stockholders of Great Western: Herb Lurie, Louis
S. Wolfe, Paul Wetzel, Frank V. McMahon, John Esposito, Alex Sun,
Christopher Del-Moral Niles and Kavita Gupta. In the normal
course of their respective businesses Goldman Sachs and Merrill
Lynch regularly buy and sell securities issued by Great Western
and its affiliates ("Great Western Securities") and Washington
Mutual and its affiliates ("Washington Mutual Securities") for
its own account and for the accounts of its customers, which
transactions may result from time to time in Goldman Sachs and
its associates and Merrill Lynch and its associates having a net
"long" or net "short" position in Great Western Securities,
Washington Mutual Securities, or option contracts with other
derivatives in or relating to Great Western Securities or
Washington Mutual Securities. As of March 31, 1997, Goldman
Sachs held positions in Great Western Securities and Washington
Mutual Securities as principal as follows: (i) net "long" 18,173
of Great Western's common shares; (ii) net "long" $1 million of
Great Western's deposit notes; and (iii) net "long" 1,098 of
Washington Mutual's common shares. As of March 31, 1997, Merrill
Lynch had positions in Great Western Securities and Washington
Mutual Securities as principal as follows: (i) net "long" 6,026
of Great Western's common shares; (ii) net "long" 150 shares of
Great Western's 8.30% preferred stock; and (iii) net "long" 1,526
of Washington Mutual's common shares.
Other participants in the solicitation include
Washington Mutual and may include the directors of Washington
Mutual (Douglas P. Beighle, David Bonderman, Herbert M. Bridge,
J. Taylor Crandall, Roger H. Eigsti, John W. Ellis, Daniel J.
Evans, Anne V. Farrell, William P. Gerberding, Kerry K.
Killinger, Samuel B. McKinney, Michael K. Murphy, Louis H.
Pepper, William G. Reed, Jr. and James H. Stever); the following
executive officers of Washington Mutual: Lee Lannoye, William A.
Longbrake, Deanna W. Oppenheimer, Craig E. Tall and S. Liane
Wilson; and the following other members of management of
Washington Mutual: Karen Christensen, JoAnn DeGrande, William
Ehrlich, James B. Fitzgerald, Marc Kittner and Douglas G. Wisdorf
(collectively, the "Washington Mutual Participants"). As of the
date of this communication, David Bonderman, J. Taylor Crandall
and Kerry K. Killinger beneficially owned 1,894,141 shares,
6,549,755 shares and 1,044,224 shares of Washington Mutual common
stock, respectively. The remaining Washington Mutual
Participants do not beneficially own, individually or in the
aggregate, in excess of 1% of Washington Mutual's equity
securities. The Washington Mutual Participants do not
beneficially own, individually or in the aggregate, in excess of
1% of Great Western's equity securities.
Washington Mutual has retained Lehman Brothers Inc.
("Lehman Brothers") to act as its financial advisor in connection
with the Merger for which it received and may receive substantial
fees as well as reimbursement of reasonable out-of-pocket
expenses. In addition, Washington Mutual has agreed to indemnify
Lehman Brothers and certain persons related to it against certain
liabilities, including certain liabilities under the federal
securities laws, arising out of its engagement. Lehman Brothers
is an investment banking firm that provides a full range of
financial services for institutional and individual clients.
Lehman Brothers does not admit that it or any of its directors,
officers or employees is a "participant" as defined in Schedule
14A promulgated under the Securities Exchange Act of 1934, as
amended, in the solicitation, or that Schedule 14A requires the
disclosure of certain information concerning Lehman Brothers. In
connection with Lehman Brothers' role as financial advisor to
Washington Mutual, Lehman Brothers and the following investment
banking employees of Lehman Brothers may communicate in person,
by telephone or otherwise with a limited number of institutions,
brokers or other persons who are stockholders of Washington
Mutual and Great Western: Steven B. Wolitzer, Philip R.
Erlanger, Sanjiv Sobti, David J. Kim, Craig P. Sweeney and Daniel
A. Trznadel. In the normal course of its business Lehman
Brothers regularly buys and sells Washington Mutual Securities
and Great Western Securities for its own account and for the
accounts of its customers, which transactions may result from
time to time in Lehman Brothers and its associates having a net
"long" or net "short" position in Washington Mutual Securities,
Great Western Securities or option contracts with other
derivatives in or relating to Washington Mutual Securities or
Great Western Securities. As of March 31, 1997, Lehman Brothers
had positions in Washington Mutual Securities and Great Western
Securities as principal as follows: (i) net "short" 224 of
Washington Mutual's common shares; (ii) net "long" 27,434 shares
of Washington Mutual's 9.12% preferred stock; (iii) net "long"
124,964 shares of Washington Mutual's 7.60% preferred stock; (iv)
net "long" 12,629 of Great Western's common shares; and (v) net
"long" 160,000 shares of Great Western's 8.30% preferred stock.
MERGER
BULLETIN
April 1, 1997 Vol. 1 Number 2
To All Employees
AHMANSON ANNOUNCEMENT AND ADVERTISEMENT CLARIFIED
Yesterday, H.F. Ahmanson issued a news release and advertisement
stating that "more than 80 percent of the voted Great Western
Financial common shares support the Ahmanson consent
solicitation, based on returns to date" and that "nineteen of the
twenty largest Great Western stockholders have voted for or have
indicated a vote for Ahmanson's consent proposals." As you may
recall, Ahmanson is seeking consents in favor of three By-law
amendments and two non-binding advisory resolutions, including a
resolution urging the Great Western Board of Directors to
negotiate with, and open its books to, Ahmanson.
In response, Great Western distributed its own news release
yesterday, stating that Ahmanson had mischaracterized the current
results of its consent solicitation. Great Western's response
emphasized the following points:
o Ahmanson's attempt to mischaracterize the results of its
pending consent solicitation is another example of
Ahmanson's efforts to draw attention away form its inferior
merger proposal.
o An overwhelming majority of Great Western stockholders have
not consented to Ahmanson's proposed resolutions and
amendments to Great Western's By-laws.
o Most stockholders who do not support the proposed
resolutions or By-law amendments simply do not vote. As a
result, Ahmanson's claim that a significant percentage of
the 'voted' shares have supported its consent is misleading.
o Great Western remains strongly committed to its strategic
merger agreement with Washington Mutual.
Great Western Financial Corporation ("Great Western") and
certain other persons named below may be deemed to be
participants in the solicitation of proxies in connection with
the merger of Great Western and a wholly-owned subsidiary of
Washington Mutual, Inc. ("Washington Mutual") pursuant to which
each outstanding share of Great Western common stock would be
converted into 0.9 shares of Washington Mutual common stock (the
"Merger"). The participants in this solicitation may include the
directors of Great Western (James F. Montgomery, John F. Maher,
Dr. David Alexander, H. Frederick Christie, Stephen E. Frank,
John V. Giovenco, Firmin A. Gryp, Enrique Hernandez, Jr., Charles
D. Miller, Dr. Alberta E. Siegel and Willis B. Wood, Jr.); the
following executive officers of Great Western: J. Lance Erikson,
Carl F. Geuther, Michael M. Pappas, A. William Schenck III, Ray
W. Sims and Jaynie M. Studenmund; and the following other members
of management of Great Western: Stephen F. Adams, Bruce F.
Antenberg, Barry R. Barkley, Ian D. Campbell, Charles Coleman,
Allen D. Meadows and John A. Trotter (collectively, the "Great
Western Participants"). As of the date of this communication,
James F. Montgomery and John F. Maher beneficially owned 680,488
shares and 611,762 shares of Great Western common stock,
respectively (including shares subject to stock options
exercisable within 60 days). The remaining Great Western
Participants do not beneficially own, individually or in the
aggregate, in excess of 1% of Great Western's equity securities.
Great Western has retained Goldman, Sachs & Co.
("Goldman Sachs") and Merrill Lynch & Co. ("Merrill Lynch") to
act as its financial advisors in connection with the Merger, as
well as the merger proposal by H. F. Ahmanson & Company, for
which they received and may receive substantial fees, as well as
reimbursement of reasonable out-of-pocket expenses. In addition,
Great Western has agreed to indemnify Goldman Sachs and Merrill
Lynch and certain persons related to them against certain
liabilities, including certain liabilities under the federal
securities laws, arising out of their engagement. Each of
Goldman Sachs and Merrill Lynch is an investment banking firm
that provides a full range of financial services for
institutional and individual clients. Neither Goldman Sachs nor
Merrill Lynch admits that it or any of its directors, officers or
employees is a "participant" as defined in Schedule 14A
promulgated under the Securities Exchange Act of 1934, as
amended, in the solicitation, or that Schedule 14A requires the
disclosure of certain information concerning Goldman Sachs and
Merrill Lynch. In connection with Goldman Sachs's role as
financial advisor to Great Western, Goldman Sachs and the
following investment banking employees of Goldman Sachs may
communicate in person, by telephone or otherwise with a limited
number of institutions, brokers or other persons who are
stockholders of Great Western: Joe Wender, John Mahoney, Andy
Gordon, Todd Owens and Andrea Vittorelli. In connection with
Merrill Lynch's role as financial advisor to Great Western,
Merrill Lynch and the following investment banking employees of
Merrill Lynch may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other
persons who are stockholders of Great Western: Herb Lurie, Louis
S. Wolfe, Paul Wetzel, Frank V. McMahon, John Esposito, Alex Sun,
Christopher Del-Moral Niles and Kavita Gupta. In the normal
course of their respective businesses Goldman Sachs and Merrill
Lynch regularly buy and sell securities issued by Great Western
and its affiliates ("Great Western Securities") and Washington
Mutual and its affiliates ("Washington Mutual Securities") for
its own account and for the accounts of its customers, which
transactions may result from time to time in Goldman Sachs and
its associates and Merrill Lynch and its associates having a net
"long" or net "short" position in Great Western Securities,
Washington Mutual Securities, or option contracts with other
derivatives in or relating to Great Western Securities or
Washington Mutual Securities. As of March 31, 1997, Goldman
Sachs held positions in Great Western Securities and Washington
Mutual Securities as principal as follows: (i) net "long" 18,173
of Great Western's common shares; (ii) net "long" $1 million of
Great Western's deposit notes; and (iii) net "long" 1,098 of
Washington Mutual's common shares. As of March 31, 1997, Merrill
Lynch had positions in Great Western Securities and Washington
Mutual Securities as principal as follows: (i) net "long" 6,026
of Great Western's common shares; (ii) net "long" 150 shares of
Great Western's 8.30% preferred stock; and (iii) net "long" 1,526
of Washington Mutual's common shares.
Other participants in the solicitation include
Washington Mutual and may include the directors of Washington
Mutual (Douglas P. Beighle, David Bonderman, Herbert M. Bridge,
J. Taylor Crandall, Roger H. Eigsti, John W. Ellis, Daniel J.
Evans, Anne V. Farrell, William P. Gerberding, Kerry K.
Killinger, Samuel B. McKinney, Michael K. Murphy, Louis H.
Pepper, William G. Reed, Jr. and James H. Stever); the following
executive officers of Washington Mutual: Lee Lannoye, William A.
Longbrake, Deanna W. Oppenheimer, Craig E. Tall and S. Liane
Wilson; and the following other members of management of
Washington Mutual: Karen Christensen, JoAnn DeGrande, William
Ehrlich, James B. Fitzgerald, Marc Kittner and Douglas G. Wisdorf
(collectively, the "Washington Mutual Participants"). As of the
date of this communication, David Bonderman, J. Taylor Crandall
and Kerry K. Killinger beneficially owned 1,894,141 shares,
6,549,755 shares and 1,044,224 shares of Washington Mutual common
stock, respectively. The remaining Washington Mutual
Participants do not beneficially own, individually or in the
aggregate, in excess of 1% of Washington Mutual's equity
securities. The Washington Mutual Participants do not
beneficially own, individually or in the aggregate, in excess of
1% of Great Western's equity securities.
Washington Mutual has retained Lehman Brothers Inc.
("Lehman Brothers") to act as its financial advisor in connection
with the Merger for which it received and may receive substantial
fees as well as reimbursement of reasonable out-of-pocket
expenses. In addition, Washington Mutual has agreed to indemnify
Lehman Brothers and certain persons related to it against certain
liabilities, including certain liabilities under the federal
securities laws, arising out of its engagement. Lehman Brothers
is an investment banking firm that provides a full range of
financial services for institutional and individual clients.
Lehman Brothers does not admit that it or any of its directors,
officers or employees is a "participant" as defined in Schedule
14A promulgated under the Securities Exchange Act of 1934, as
amended, in the solicitation, or that Schedule 14A requires the
disclosure of certain information concerning Lehman Brothers. In
connection with Lehman Brothers' role as financial advisor to
Washington Mutual, Lehman Brothers and the following investment
banking employees of Lehman Brothers may communicate in person,
by telephone or otherwise with a limited number of institutions,
brokers or other persons who are stockholders of Washington
Mutual and Great Western: Steven B. Wolitzer, Philip R.
Erlanger, Sanjiv Sobti, David J. Kim, Craig P. Sweeney and Daniel
A. Trznadel. In the normal course of its business Lehman
Brothers regularly buys and sells Washington Mutual Securities
and Great Western Securities for its own account and for the
accounts of its customers, which transactions may result from
time to time in Lehman Brothers and its associates having a net
"long" or net "short" position in Washington Mutual Securities,
Great Western Securities or option contracts with other
derivatives in or relating to Washington Mutual Securities or
Great Western Securities. As of March 31, 1997, Lehman Brothers
had positions in Washington Mutual Securities and Great Western
Securities as principal as follows: (i) net "short" 224 of
Washington Mutual's common shares; (ii) net "long" 27,434 shares
of Washington Mutual's 9.12% preferred stock; (iii) net "long"
124,964 shares of Washington Mutual's 7.60% preferred stock; (iv)
net "long" 12,629 of Great Western's common shares; and (v) net
"long" 160,000 shares of Great Western's 8.30% preferred stock.
