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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
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OLYMPUS CAPITAL CORPORATION
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
68163E-10-9
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(CUSIP Number)
(206) 447-4400
Fay L. Chapman, Foster Pepper & Shefelman, 1111 3rd Ave, Ste 3400, Seattle,WA,
98101
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
July 22, 1994
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with this statement /X/. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class
of securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following page(s))
Page 1 of 5 Pages
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SCHEDULE 13D
CUSIP NO. 68163E-10-9 PAGE 2 OF 5 PAGES
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(1) NAMES OF REPORTING PERSONS. S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS
Washington Mutual Savings Bank
91-0461640
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER (a) / /
OF A GROUP* (b) / /
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS*
N/A
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(5) CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) / /
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Washington
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NUMBER OF SHARES (7) Sole Voting
BENEFICIALLY OWNED Power 306,864
BY EACH REPORTING --------------------------------------------------
PERSON WITH (8) Shared Voting
Power 0
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(9) Sole Dispositive
Power 306,864
--------------------------------------------------
(10) Shared Dispositive
Power 0
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
306,864
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(12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.9%
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(14) TYPE OF REPORTING PERSON*
BK
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*SEE INSTRUCTION BEFORE FILLING OUT!
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ITEM 1. SECURITY AND ISSUER
Title of class of equity securities: Common Stock of Olympus Capital
Corporation ("Common Stock")
Names and addresses of principal executive officers:
A. Blaine Huntsman Director, Chairman of the Board and Chief
Executive Officer
R. Gibb Marsh President and Chief Operating Officer
K. John Jones Senior Vice President, Chief Financial
Officer, Secretary and Treasurer
Gary L. Matern Senior Vice President
Kathy K. Hale Senior Vice President
ITEM 2. IDENTITY AND BACKGROUND
Name of person filing: Washington Mutual Savings Bank ("WMSB")
State of its organization: Washington
Principal business: The principal business of WMSB is attracting savings
deposits from the general public and making residential, consumer and commercial
real estate loans.
Address of principal business: 1201 Third Avenue, Suite 1500
Seattle, Washington 98101
Address of principal office: 1201 Third Avenue, Suite 1500
Seattle, Washington 98101
Conviction of a criminal proceeding: No
Party in a Civil Proceeding and as a result was or is subject to a
judgment, decree or final order enjoining future violations of or prohibiting
activities subject to federal or state securities laws: No
The name and present principal occupation of each executive officer and
director of WMSB are set forth in SCHEDULE 1 attached hereto, which is
incorporated herein by reference. The business address of every executive
officer and director of WMSB is 1201 Third Avenue, Suite 1500, Seattle,
Washington 98101. Every executive officer and director of WMSB is a citizen of
the United States of America. During the last five years no officer or director
of WMSB has been convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding is or was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violations with respect to such laws.
No persons other than the officers and directors of WMSB are persons
controlling WMSB, and no executive officer or director of any corporation or
other person is ultimately in control of WMSB.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS
Consideration for grant of option to WMSB to purchase shares of Common
Stock of the Issuer: the covenants and agreements set forth in (i) the Stock
Option Agreement between the Issuer and WMSB, dated July 22, 1994 (the "Option
Agreement"), attached hereto as EXHIBIT A and incorporated herein by reference,
and (ii) the Agreement for Merger between WMSB, Washington Mutual Federal
Savings Bank, the Issuer and Olympus Bank, dated July 22, 1994 (the "Merger
Agreement"), attached hereto as EXHIBIT B and incorporated herein by reference.
Page 3 of 5
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ITEM 4. PURPOSE OF TRANSACTION
The Issuer and WMSB have executed the Merger Agreement with the intent to
merge (i) WMSB and the Issuer, and (ii) Olympus Savings Bank and Washington
Mutual Federal Savings Bank. As a condition of the execution of the Merger
Agreement, WMSB has requested the delivery by the Issuer of an option to
purchase shares of Common Stock of the Issuer (the "Option"), as set forth in
the Option Agreement attached hereto as EXHIBIT A. The purpose of WMSB's
acquisition of the Option is to encourage and facilitate the closing of the
Merger Agreement.
The Option permits WMSB to acquire a significant equity position in the
Issuer. The Option becomes exercisable by WMSB upon the occurrence of certain
events which would jeopardize the closing of the Merger Agreement. Such events
are described in detail in Section 2 of the Option Agreement.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Aggregate number of shares of Common Stock of the Issuer
beneficially owned by WMSB: 306,864
Percentage of Common Stock of the Issuer beneficially
owned by WMSB: 9.9%
(b) Sole Voting Power: 306,864
Sole Dispositive Power: 306,864
Shared Voting Power: -0-
Shared Dispositive Power: -0-
(c) During the past sixty days, the following transaction in Common Stock
of the Issuer was effected by WMSB: an acquisition on July 22, 1994 of an
option to purchase 306,864 shares of Common Stock of the Issuer, at a price of
$13.6125 per share, pursuant to the Option Agreement.
(d) Not applicable
(e) Not applicable
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
WMSB owns the option to purchase the shares of Common Stock of the Issuer
described herein pursuant to the Option Agreement between WMSB and the Issuer.
Except as set forth above, neither WMSB nor, to the best knowledge of WMSB,
any of the executive officers and directors of WMSB, has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of the Issuer, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following are filed as exhibits hereto:
EXHIBIT A Stock Option Agreement between Olympus Capital Corporation
and Washington Mutual Savings Bank, dated July 22, 1994
EXHIBIT B Agreement for Merger among Washington Mutual Savings Bank,
Washington Mutual Federal Savings Bank, Olympus Capital
Corporation and Olympus Bank, dated July 22, 1994
Page 4 of 5
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
August 5, 1994 WASHINGTON MUTUAL SAVINGS BANK
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Date
By: /s/ William A. Longbrake
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Signature
William A. Longbrake
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SENIOR EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Name/Title
Page 5 of 5
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SCHEDULE 1
Directors of WMSB
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Name Present Principal Occupation
---- ----------------------------
Sally S. Behnke Trustee, Skinner Foundation
Douglas P. Beighle Senior Vice President, The Boeing Company
Herbert M. Bridge Co-chairman and Co-owner, Ben Bridge Jeweler, Inc.
Roger H. Eigsti Chairman, President and Chief Executive Officer,
SAFECO Corporation
John W. Ellis Chairman and Chief Executive Officer of Baseball
of Seattle, Inc.
Daniel J. Evans Chairman, Daniel J. Evans Associates, consultants
on environmental issues
William P. Gerberding President, University of Washington
Kerry K. Killinger Chairman, President and Chief Executive Officer,
Washington Mutual Savings Bank
Samuel B. McKinney Sr. Pastor, Mount Zion Baptist Church
Michael K. Murphy Chairman and President, CPM Development Corp.
Louis H. Pepper Retired Chairman, President, and Chief Executive
Officer, Washington Mutual Savings Bank
William G. Reed, Jr. Chairman, Simpson Investment Company
Janet H. Skadan Director, Composite Group of Funds
James H. Stever Executive Vice President-Public Policy, U S WEST,
Inc.
Executive Officers of WMSB
- --------------------------
Name Position with WMSB
---- ------------------
Kerry K. Killinger Chairman, President and Chief Executive Officer
William A. Longbrake Senior Executive Vice President and Chief
Financial Officer
Craig E. Tall Executive Vice President
S. Liane Wilson Executive Vice President
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Exhibit A
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement"), dated as of July 22, 1994,
is made by and between Olympus Capital Corporation, a savings and loan holding
company organized under the laws of Utah ("Olympus"), and Washington Mutual
Savings Bank, a Washington stock savings bank ("WMSB").
Concurrently with the execution hereof, Olympus, Olympus Savings Bank, a
Federal Savings Bank ("Olympus Bank"), WMSB and Washington Mutual Federal
Savings Bank, a federal savings association ("NFSB") have executed a certain
Agreement for Merger (the "Merger Agreement") which would result in the merger
of Olympus with and into WMSB (the "Merger") and the subsequent merger of
Olympus Bank with and into NFSB (the "Bank Merger").
It is understood and acknowledged that by negotiating and executing the
Merger Agreement and by taking actions necessary or appropriate to effect the
transactions contemplated by the Merger Agreement, WMSB and NFSB have incurred
and will incur substantial direct and indirect costs (including without
limitation the costs of management and employee time) and will forgo the pursuit
of certain alternative investments and transactions.
THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Merger Agreement, the parties hereto agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Olympus hereby irrevocably grants an option (the "Option") to WMSB to
purchase an aggregate of 306,864 authorized but unissued shares of Olympus'
Common Stock, $1.00 par value (the "Common Stock") (which represents 9.9% of
total stock issued and outstanding), at a per share price of $13.6125 (the
"Option Price"), which was the average closing sales price for the 10 trading
days up to and including July 21, 1994 for the Common Stock on the
NASDAQ/National Market System.
2. EXERCISE OF OPTION. Subject to the provisions of this Section 2
and of Section 14(a) of this Agreement, this Option may be exercised by WMSB or
any transferee as set forth in Section 5 of this Agreement, in whole or in part,
at any time, or from time to time in any of the following circumstances:
(a) Olympus, Olympus Bank or either of their respective boards of
directors enter into an agreement or recommends to their respective shareholders
an agreement (other than the Merger Agreement) pursuant to which any entity,
person or group, within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (any of the foregoing
hereinafter in this Section 2, a "Person") would: (i) merge or
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consolidate with, acquire 51 percent (51%) or more of the assets or liabilities
of, or enter into any similar transaction with Olympus or Olympus Bank, or (ii)
purchase or otherwise acquire (including by merger, consolidation, share
exchange or any similar transaction) securities representing ten percent (10%)
or more of the voting shares of Olympus or Olympus Bank;
(b) any Person (other than NFSB or WMSB and other than any Person
owning as of the date hereof ten percent or more of the voting shares of
Olympus) acquires the beneficial ownership or the right to acquire beneficial
ownership of securities representing ten percent (10%) or more of the voting
shares of Olympus (the term "beneficial ownership" for purposes of this
Agreement shall have the meaning set forth in Section 13(d) of the Exchange Act,
and the regulations promulgated thereunder); PROVIDED, HOWEVER,
notwithstanding the foregoing, the Option shall not be exercisable in the
circumstances described above in this subsection (b) if (x) a Person acquires
the beneficial ownership of securities representing ten percent (10%) or more
but less than 25 percent (25%) of the voting shares of Olympus, (y) such Person
files a complete submission in accordance with 12 C.F.R. Section 574.4(e)(1)
acquiring beneficial ownership of securities representing ten percent (10%) or
more of the voting shares of Olympus, and (z) such submission is accepted or
prior to deemed accepted by the Office of Thrift Supervision in accordance with
12 C.F.R. Section 574.4(e)(3), before such Person acquires beneficial ownership
of securities representing ten percent (10%) or more of the voting shares of
Olympus, that such ownership will not result in control; or
(c) failure of the board of directors of Olympus to recommend, or
withdrawal by the board of directors of a prior recommendation of, the Merger to
the shareholders, or failure of the shareholders to approve the Merger by the
required affirmative vote at a meeting of the shareholders, after any Person
(other than WMSB or NFSB) announces publicly or communicates, in writing, to
Olympus a proposal to (i) acquire Olympus or Olympus Bank (by merger,
consolidation, the purchase of 51 percent (51%) or more of its assets or
liabilities or any other similar transaction), (ii) purchase or otherwise
acquire securities representing 25 percent (25%) or more of the voting shares of
Olympus or (iii) change the composition of the board of directors of Olympus.
It is understood and agreed that the Option shall become exercisable upon
the occurrence of any of the above-described circumstances even though the
circumstance occurred as a result, in part or in whole, of the boards of Olympus
or Olympus Bank complying with their fiduciary duties.
NOTWITHSTANDING THE FOREGOING, the Option may not be exercised if either
(A) any applicable and required governmental approvals have not been obtained
with respect to such exercise or if such exercise would violate any applicable
regulatory restrictions, or (B) at the time of exercise WMSB or NFSB is failing
in any material respect to perform or observe its covenants or conditions under
the
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Merger Agreement unless the reason for such failure is that Olympus is failing
to perform or observe its covenants or conditions under the Merger Agreement.
3. NOTICE, TIME AND PLACE OF EXERCISE. Each time that WMSB or any
transferee wishes to exercise any portion of the Option, WMSB or such transferee
shall give written notice of its intention to exercise the Option specifying the
number of shares as to which the Option is being exercised ("Option Shares") and
the place and date for the closing of the exercise (which date shall be not
later than ten (10) business days from the date such notice is mailed). If any
law, regulation or other restriction will not permit such exercise to be
consummated during such ten-day period, the date for the closing of such
exercise shall be within five (5) days following the cessation of such
restriction on consummation.
4. PAYMENT AND DELIVERY OF CERTIFICATE(S). At any closing for an
exercise of the Option or any portion thereof, (a) WMSB and Olympus will each
deliver to the other certificates of their respective chief executive officers
as to the accuracy, as of the closing date, of their respective representations
and warranties hereunder, (b) WMSB or the transferees will pay the aggregate
purchase price for the shares of Common Stock to be purchased by delivery of a
certified or bank cashier's check in immediately available funds payable to the
order of Olympus, and (c) Olympus will deliver to WMSB or the transferees a
certificate or certificates representing the shares so purchased.
5. TRANSFERABILITY OF THE OPTION AND OPTION SHARES. Prior to the
time the Option, or a portion thereof, becomes exercisable pursuant to the
provisions of Section 2 of this Agreement, neither the Option nor any portion
thereof shall be transferable. Upon the occurrence of any of the events or
circumstances set forth in Sections 2(a) through (c) above, the Option or any
portion thereof or any of the Option Shares may be freely transferred by WMSB,
subject to applicable federal and state securities laws.
For purposes of this Agreement, a merger or consolidation of WMSB (whether
or not WMSB is the surviving entity) or an acquisition of WMSB shall not be
deemed a transfer.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF OLYMPUS. Olympus
hereby represents, warrants, and covenants to WMSB as follows:
(a) DUE AUTHORIZATION. This Agreement has been duly authorized
by all necessary corporate action on the part of Olympus,has been duly executed
by a duly authorized officer of Olympus and, subject to any necessary amendments
to Olympus' articles of incorporation, constitutes a valid and binding
obligation of Olympus. No shareholder approval by Olympus shareholders is
required by applicable law or otherwise prior to the exercise of the Option in
whole or in part.
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(b) OPTION SHARES. Except for any necessary amendments to its
articles of incorporation, Olympus has taken all necessary corporate and other
action to authorize and reserve and to permit it to issue, and at all times from
the date hereof to such time as the obligation to deliver shares hereunder
terminates will have reserved for issuance, at the closing(s) upon exercise of
the Option, or any portion thereof, the Option Shares (subject to adjustment, as
provided in Section 9 below), all of which, upon issuance pursuant hereto and
after any necessary amendments to Olympus' articles of incorporation, shall be
duly and validly issued, fully paid and nonassessable, and shall be delivered
free and clear of all claims, liens, encumbrances and security interests,
including any preemptive right of any of the shareholders of Olympus.
(c) NO CONFLICTS. Subject to any necessary amendments to
Olympus' articles of incorporation, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
violate or result in any violation of or be in conflict with or constitute a
default under any term of the articles of incorporation or bylaws of Olympus or
any agreement, instrument, judgment, decree, law, rule or order applicable to
Olympus or any subsidiary of Olympus or to which Olympus or any such subsidiary
is a party.
(d) NOTIFICATION OF RECORD DATE. At any time from and after the
date of this Agreement until such time as the Option is no longer exercisable,
Olympus shall give WMSB or any transferee thirty (30) days prior written notice
before setting the record date for determining the holders of record of the
Common Stock entitled to vote on any matter, to receive any dividend or
distribution or to participate in any rights offering or other matters, or to
receive any other benefit or right, with respect to the Common Stock.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF WMSB. WMSB hereby
represents, warrants and covenants to Olympus as follows:
(a) DUE AUTHORIZATION. This Agreement has been duly authorized
by all necessary corporate action on the part of WMSB, has been duly executed by
a duly authorized officer of WMSB and constitutes a valid and binding obligation
of WMSB.
(b) TRANSFERS OF COMMON STOCK. No shares of Common Stock
acquired upon exercise of the Option will be transferred except in a transaction
registered or exempt from registration under any applicable securities laws.
(c) NO CONFLICTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
violate or result in any violation of or be in conflict with or constitute a
default under any term of the charter documents or bylaws of WMSB or any
agreement, instrument, judgment, decree, law, rule or order applicable to WMSB
or any
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subsidiary of WMSB or to which WMSB or any such subsidiary is a party.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of any
change in the Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, exchanges of shares or the like, the number and
kind of shares or securities subject to the Option and the purchase price per
share of Common Stock shall be appropriately adjusted. If prior to the
termination or exercise of the Option Olympus shall be acquired by another
party, consolidate with or merge into another corporation or liquidate, WMSB or
any transferee shall thereafter receive upon exercise of the Option the
securities or properties to which a holder of the number of shares of Common
Stock then deliverable upon the exercise thereof would have been entitled upon
such acquisition, consolidation, merger or liquidation, and Olympus shall take
such steps in connection with such acquisition, consolidation, merger or
liquidation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be practicable, in
relation to any securities or property thereafter deliverable upon exercise of
the Option.
9. REGISTRATION UNDER APPLICABLE SECURITIES LAWS. Upon the written
request of WMSB or any transferee, Olympus agrees (i) to use all reasonable
efforts to effect a registration for WMSB and any transferees under the
Securities Act of 1933 (the "Securities Act"), if applicable, any other
applicable federal law or regulation and any applicable state securities laws
covering any part or all of the Option Shares owned by WMSB or any transferee,
no later than one hundred twenty (120) days after WMSB or any transferee
requests such registration and (ii) to include any part or all of the Option
Shares in any registration filed by Olympus under the Securities Act and any
other applicable federal law or regulation and in any related applicable state
securities laws, registrations or applications in which such inclusion is
appropriate under applicable rules and regulations of the Securities and
Exchange Commission, unless, in the written opinion of securities law counsel to
Olympus, addressed to WMSB or any transferee, (a) WMSB would be able to dispose
of all of the Option Shares owned by it pursuant to Rule 144 or Rule 144A under
the Securities Act within three (3) months of such opinion, or (b) registration
is not otherwise required for the sale and distribution of such Option Shares.
The registration effected under this Section 9 shall be effected at Olympus'
expense except for any underwriting commissions, fees and disbursements of
WMSB's counsel and other experts and filing fees attributable to Option Shares
provided that such fees and expenses to be paid by Olympus shall not exceed
$100,000. In connection with registration under this Section 9, the parties
agree to indemnify each other in the customary manner, and, in the case of an
organized secondary or primary underwritten offering, Olympus agrees to
indemnify WMSB or any transferee and the underwriters, and WMSB or any
transferee agrees to indemnify Olympus and the underwriters, in the manner and
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to such extent as is customary in such secondary or primary underwritten
offering. In the event of any demand for registration pursuant to clause (i)
above, Olympus may delay the filing of such registration statement for a period
of up to ninety (90) days if, in the good faith judgment of Olympus' Board of
Directors, such delay is necessary in order to avoid interference with a
planned material transaction involving Olympus. With respect to any
registration pursuant to clause (ii) above, if such registration relates to a
firm commitment underwriting of securities to be sold by Olympus, Olympus may
decline to include all or any portion of the Option Shares owned by WMSB or any
transferee if the inclusion of such shares would, in the judgment of the
managing underwriter in such underwriting, materially interfere therewith.
Olympus may also decline to include any portion of the Option Shares owned by
WMSB or any transferee with respect to any registration pursuant to clauses (i)
and (ii) above to the extent necessary to comply with the requirements for
required or incidental registration pursuant to Registration Rights Agreements
among Olympus and certain investors dated November 10, 1992.
10. NONASSIGNABILITY. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and the successors of each of the
undersigned. This Agreement and any right hereunder shall not be assignable by
either party except that WMSB may transfer the Option, the Option Shares or any
portion thereof in accordance with Section 5. A merger or consolidation of WMSB
(whether or not WMSB is the surviving entity) or an acquisition of WMSB shall
not be deemed an assignment or transfer.
11. REGULATORY RESTRICTIONS. Olympus shall use its best efforts to
obtain or to cooperate with WMSB or any transferee in obtaining all necessary
regulatory consents, approvals, waivers or other action (whether regulatory,
corporate or other) to permit the acquisition of any or all Option Shares by
WMSB or any transferee.
12. REMEDIES. Olympus agrees that if for any reason WMSB or any
transferee shall have exercised its rights under this Agreement and Olympus
shall have failed to issue the Option Shares to be issued upon such exercise or
to perform its other obligations under this Agreement, unless such action would
violate any applicable law or regulation by which Olympus is bound, then WMSB or
any transferee shall be entitled to specific performance and injunctive and
other equitable relief. WMSB agrees that if it shall fail to perform any of its
obligations under this Agreement, then Olympus shall be entitled to specific
performance and injunctive and other equitable relief. This provision is
without prejudice to any other rights that Olympus or WMSB or any transferee may
have against the other party for any failure to perform its obligations under
this Agreement.
13. NO RIGHTS AS STOCKHOLDER. This Option, prior to the exercise
thereof, shall not entitle the holder hereof to any rights as a stockholder of
Olympus at law or in equity; specifically this Option shall not entitle the
holder to vote on any matter presented
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to the stockholders of Olympus or to any notice of any meetings of stockholders
or any other proceedings of Olympus.
14. MISCELLANEOUS.
(a) TERMINATION. This Agreement and the Option, to the extent
not previously exercised, shall terminate upon the earliest of (i) June 30,
1995; (ii) the mutual agreement of the parties hereto; (iii) thirty-one (31)
days after the date on which any application for regulatory approval for the
Merger shall have been denied; PROVIDED, HOWEVER, that if prior to the
expiration of such 31-day period, Olympus, WMSB or NFSB is engaged in litigation
or an appeal procedure relating to an attempt to obtain approval of the Merger
or the Bank Merger, this Agreement will not terminate until the earlier of (a)
June 30, 1995, or (b) thirty-one (31) days after the completion of such
litigation and appeal procedure; (iv) the thirtieth (30th) day following the
termination of the Merger Agreement for any reason other than a material
noncompliance or default by WMSB with respect to its obligations thereunder; or
(v) the date of termination of the Merger Agreement if such termination is due
to a material noncompliance or default by WMSB with respect to its obligations
thereunder; PROVIDED, HOWEVER, that if the Option has been exercised, in
whole or in part, prior to the termination of this Agreement, then such exercise
shall close pursuant to Section 4 hereof even though such closing date is after
the termination of this Agreement; and PROVIDED, FURTHER, that if the Option
is sold prior to the termination of this Agreement, such Option may be exercised
by the transferee at any time within thirty-one (31) days after the date of
termination even though such exercise and/or the closing of such exercise occurs
after the termination of this Agreement.
(b) AMENDMENTS. This Agreement may not be modified, amended,
altered or supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
(c) SEVERABILITY OF TERMS. Any provision of this Agreement that
is invalid, illegal, or unenforceable shall be ineffective only to the extent of
such invalidity, illegality, or unenforceability without affecting in any way
the remaining provisions hereof or rendering any other provisions of this
Agreement invalid, illegal or unenforceable. Without limiting the generality of
the foregoing, if the right of WMSB or any transferee to exercise the Option in
full for the total number of shares of Common Stock or other securities or
property issuable upon the exercise of the Option is limited by applicable law,
or otherwise, WMSB or any transferee may, nevertheless, exercise the Option to
the fullest extent permissible.
(d) NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by delivery, by cable,
telecopies, or telex, or by registered or
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certified mail, postage prepaid, return receipt requested, to the respective
parties as follows:
If to Olympus:
Olympus Capital Corporation
115 South Main Street
Salt Lake City, Utah 84111
Attention: A. Blaine Huntsman
With copies to:
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue N.W.
Suite 800
Washington, D. C. 20007-2505
Attention: Thomas P. Vartanian
If to WMSB:
Washington Mutual Savings Bank
1201 Third Avenue, Suite 1500
Seattle, Washington 98101
Attention: Craig E. Tall
With copies to:
Foster Pepper & Shefelman
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
Attention: Fay L. Chapman
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
(e) GOVERNING LAW. This Agreement and the Option, in all
respects, including all matters of construction, validity and performance, are
governed by the internal laws of the State of Washington by citizens of such
state to be performed wholly within such state without giving effect to the
principles of conflicts of law thereof. This Agreement is being delivered in
Seattle, Washington.
(f) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
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<PAGE>
(g) EFFECTS OF HEADINGS. The section headings herein are for
convenience only and shall not affect the construction hereof.
DATED as of the day first written above.
OLYMPUS CAPITAL CORPORATION
Dated: July 27,1994 By: A. Blaine Huntsman
---------------------------
Its Chairman & CEO
------------------------
WASHINGTON MUTUAL SAVINGS BANK
Dated: July 27,1994 By: Craig E. Tall
---------------------------
Its Executive Vice President
-------------------------
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<PAGE>
AGREEMENT FOR MERGER
AMONG
WASHINGTON MUTUAL SAVINGS BANK,
WASHINGTON MUTUAL FEDERAL SAVINGS BANK
AND
OLYMPUS CAPITAL CORPORATION
OLYMPUS BANK, A
FEDERAL SAVINGS BANK
DATED AS OF
JULY 22, 1994
<PAGE>
TABLE OF CONTENTS
PAGE
1. MERGER.............................................................-1-
2. EFFECTIVE TIME; CLOSING............................................-6-
3. OPTION TO PURCHASE CERTAIN SHARES..................................-6-
4. REPRESENTATIONS AND WARRANTIES OF OLYMPUS AND OLYMPUS BANK.........-7-
4.1 ORGANIZATION, POWER, GOOD STANDING, ETC......................-7-
4.2 CAPITALIZATION...............................................-8-
4.3 LOAN PORTFOLIO...............................................-9-
4.4 REPORTS.....................................................-10-
4.5 AUTHORITY...................................................-11-
4.6 NO VIOLATION................................................-11-
4.7 CONSENTS AND APPROVALS......................................-12-
4.8 FINANCIAL STATEMENTS........................................-12-
4.9 BROKERAGE...................................................-13-
4.10 ABSENCE OF CERTAIN CHANGES OR EVENTS........................-13-
4.11 LITIGATION, ETC.............................................-13-
4.12 TAXES AND TAX RETURNS.......................................-14-
4.13 EMPLOYEES; EMPLOYEE BENEFIT PLANS...........................-14-
4.14 OLYMPUS AND OLYMPUS BANK INFORMATION........................-18-
4.15 COMPLIANCE WITH APPLICABLE LAW..............................-18-
4.16 CONTRACTS AND AGREEMENTS....................................-19-
4.17 AFFILIATE TRANSACTIONS......................................-19-
4.18 DISCLOSURE..................................................-20-
4.19 TITLE TO PROPERTY...........................................-21-
4.20 INSURANCE...................................................-22-
4.21 POWERS OF ATTORNEY..........................................-22-
4.22 EMPLOYEE STOCK BONUS PLAN...................................-22-
4.23 COMMUNITY REINVESTMENT ACT COMPLIANCE.......................-22-
4.24 AGREEMENTS WITH BANK REGULATORS.............................-23-
5. REPRESENTATIONS AND WARRANTIES OF WMSB............................-23-
5.1 CORPORATE ORGANIZATION......................................-23-
5.2 AUTHORITY...................................................-24-
5.3 NO VIOLATION................................................-24-
5.4 CONSENTS AND APPROVALS......................................-25-
5.5 WMSB INFORMATION............................................-25-
5.6 SUFFICIENT RESOURCES........................................-25-
5.7 CAPITALIZATION, INVESTMENTS.................................-25-
5.8 FINANCIAL STATEMENTS........................................-26-
5.9 ABSENCE OF MATERIAL ADVERSE CHANGE..........................-27-
5.10 LITIGATION..................................................-27-
5.11 BROKERAGE...................................................-27-
5.12 REPORTS.....................................................-28-
5.13 DISCLOSURE..................................................-28-
5.14 CRA COMPLIANCE..............................................-28-
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5.15 AGREEMENTS WITH BANK REGULATORS.............................-28-
5.16 COMPLIANCE WITH APPLICABLE LAW..............................-29-
6. COVENANTS OF THE PARTIES..........................................-29-
6.1 CONDUCT OF THE BUSINESS OF OLYMPUS..........................-29-
6.2 NO SOLICITATION.............................................-32-
6.3 CURRENT INFORMATION.........................................-32-
6.4 ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY...........-33-
6.5 REPORTS.....................................................-34-
6.6 REGULATORY MATTERS..........................................-34-
6.7 APPROVAL OF OLYMPUS STOCKHOLDERS............................-35-
6.8 FURTHER ASSURANCES..........................................-35-
6.9 DISCLOSURE SUPPLEMENTS......................................-35-
6.10 PUBLIC ANNOUNCEMENTS........................................-36-
6.11 FAILURE TO FULFILL CONDITIONS...............................-36-
6.12 ASSIGNMENT OF CONTRACT RIGHTS...............................-36-
6.13 EMPLOYEES; EMPLOYEE BENEFIT PLANS...........................-36-
6.14 INDEMNIFICATION OF OLYMPUS DIRECTORS AND OFFICERS...........-39-
6.15 STOCK OPTION PLANS..........................................-40-
6.16 POST-CLOSING FINANCIAL STATEMENTS...........................-40-
6.17 CONSULTING AND NONCOMPETITION AGREEMENT.....................-40-
6.18 POST-MERGER ACTIONS.........................................-41-
7. CLOSING CONDITIONS................................................-41-
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS UNDER THIS AGREEMENT.-41-
7.2 CONDITIONS TO THE OBLIGATIONS OF WMSB UNDER THIS AGREEMENT..-43-
7.3 CONDITIONS TO THE OBLIGATIONS OF OLYMPUS UNDER THIS
AGREEMENT...................................................-45-
8. TERMINATION, AMENDMENT AND WAIVER.................................-46-
8.1 TERMINATION.................................................-46-
8.2 BREAK-UP FEE................................................-47-
8.3 EFFECT OF TERMINATION.......................................-49-
8.4 AMENDMENT, EXTENSION AND WAIVER.............................-49-
9. MISCELLANEOUS.....................................................-50-
9.1 EXPENSES....................................................-50-
9.2 SURVIVAL....................................................-50-
9.3 NOTICES.....................................................-50-
9.4 PARTIES IN INTEREST.........................................-51-
9.5 ENTIRE AGREEMENT............................................-51-
9.6 COUNTERPARTS................................................-51-
9.7 GOVERNING LAW...............................................-51-
9.8 HEADINGS....................................................-52-
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<PAGE>
EXHIBITS
Exhibit A-1 Plan of Merger
Exhibit A-2 Plan of Merger
(Stock and Cash Transaction)
Exhibit B-1 "Affiliates" List
Exhibit B-2 Form of "Affiliate" Letter
Exhibit C Stock Option Agreement
Exhibit D Consulting and Noncompetition Agreement
Exhibit E Kimball, Parr, Waddoups, Brown &
Gee Opinion
Exhibit F Foster Pepper & Shefelman Opinion
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<PAGE>
SCHEDULES
Disclosure Schedule 4.1(b) (Subsidiaries & Investment
Entities)
Disclosure Schedule 4.1(d) (Equity Securities Owned)
Disclosure Schedule 4.2 (Outstanding Stock Options)
Disclosure Schedule 4.3(a) (Defenses to Loans)
Disclosure Schedule 4.3(b) (Loans in Excess of $250,000)
Disclosure Schedule 4.3(c) (Delinquent Loans)
Disclosure Schedule 4.3(f) (Loan Participation Information)
Disclosure Schedule 4.6 (Agreements Requiring Third Party Consent
to Transfer)
Disclosure Schedule 4.10 (Changes From the March 1994 Financial
Statements)
Disclosure Schedule 4.11 (Litigation Report)
Disclosure Schedule 4.13(a)(i) (Employment Contracts)
Disclosure Schedule 4.13(a)(ii) (Benefit Plans Containing Change
of Control Provisions)
Disclosure Schedule 4.13(b) (Employees Receiving Compensation
in Excess of $50,000)
Disclosure Schedule 4.13(c) (Claims Regarding Employment
Practices)
Disclosure Schedule 4.13(e)(i) (Benefit Plans)
Disclosure Schedule 4.13(e)(ii) (Audits and Investigations of
Benefit Plans)
Disclosure Schedule 4.13(e)(iii) (Plan Qualification)
Disclosure Schedule 4.13(e)(viii) (Post-Retirement Benefit Plans)
Disclosure Schedule 4.13(e)(ix)(A) (Severance Pay Plans)
Disclosure Schedule 4.13(e)(ix)(B) (Termination Payments)
Disclosure Schedule 4.15(b) (Olympus Compliance With Applicable Laws)
Disclosure Schedule 4.16(b) (Material Contracts)
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<PAGE>
Disclosure Schedule 4.17 (Affiliated Party Transactions)
Disclosure Schedule 4.19(a) (Title to and Leases of Real Property)
Disclosure Schedule 4.19(b) (Environmental Disclosure)
Disclosure Schedule 4.19(c) (Personal Property)
Disclosure Schedule 4.20 (Insurance Policies)
Disclosure Schedule 5.9 (WMSB Changes Since March 31, 1994)
Disclosure Schedule 5.10 (WMSB Litigation Report)
Disclosure Schedule 5.16(b) (WMSB Compliance With Applicable Laws)
Disclosure Schedule 6.13(b) (List of Officers)
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<PAGE>
EXHIBIT B
AGREEMENT FOR MERGER
This Agreement for Merger (the "Agreement") is made and entered into this
22nd day of July, 1994 by and among Washington Mutual Savings Bank, a Washington
stock savings bank ("WMSB"), Washington Mutual Federal Savings Bank, a federal
savings association ("NFSB"), OLYMPUS CAPITAL CORPORATION, a Utah corporation
("Olympus") and OLYMPUS BANK, A FEDERAL SAVINGS BANK, a federal savings bank
("Olympus Bank").
The parties desire for Olympus to be acquired by WMSB on the basis of a
merger (the "Merger") of Olympus with and into WMSB, which shall be the
resulting institution; and
Therefore, in consideration of the mutual covenants, representations,
warranties and agreements herein contained, the parties hereto agree as follows:
1. MERGER. Subject to the terms and conditions of this Agreement,
the Merger is to be accomplished in the manner described herein.
(a) MERGER OF OLYMPUS AND WMSB. Olympus shall be merged with
and into WMSB in accordance with the Plan of Merger by and between WMSB and
Olympus, substantially in the form attached hereto as Exhibit A-1 (the "Plan of
Merger"), at the Effective Time (as defined in Section 2). The Plan of Merger
provides for the terms of the Merger and the manner of carrying it into effect.
The terms and conditions of the Plan of Merger are incorporated herein and made
a part hereof.
(b) SUBSEQUENT MERGER OF OLYMPUS BANK AND NFSB. The parties
understand that WMSB and NFSB intend, after the Effective Time, to merge Olympus
Bank with and into NFSB, with NFSB as the resulting institution (the "Bank
Merger"). The Bank Merger shall be pursuant to the terms of a plan of merger to
be agreed upon and entered into by Olympus Bank and NFSB and their respective
post-closing directors and shareholders. Olympus and Olympus Bank agree to take
such actions prior to the Effective Time as may be reasonably requested by WMSB
and NFSB in order to be able to effect the Bank Merger following the Effective
Time.
(c) CONVERSION OF OLYMPUS COMMON STOCK. Subject to the
provisions below and in the Plan of Merger, at the Effective Time, all of the
outstanding shares of common stock, par value $1.00 per share, of Olympus
("Olympus Common Stock") shall be converted into the right to receive shares of
common stock, par value $1.00 per share, of WMSB ("WMSB Common Stock"), as
described below and in the Plan of Merger.
(i) Subject to the other provisions of this Section 1(c) and
Section 1(h), holders of all outstanding shares of Olympus Common Stock will
receive per share consideration
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<PAGE>
equal to $15.50 per share of Olympus Common Stock subject to adjustment as
provided in Section 1(c)(v) below (the "Merger Consideration"), such
consideration to be paid in newly issued shares of WMSB Common Stock, subject to
the conditions set forth in this Agreement and in the Plan of Merger. The per
share value of WMSB Common Stock for the purpose of paying the Merger
Consideration shall be the arithmetic average of the National Market System
Closing Price of WMSB Common Stock for the ten trading days immediately
preceding the third trading day before the Effective Date (the "Average Price").
The term "National Market System Closing Price" means the price per share of the
last sale of WMSB Common Stock reported on the National Market System at the
close of the trading day by the National Association of Securities Dealers, Inc.
The exchange ratio for determining the number of shares of WMSB Common Stock to
be issued for each share of Olympus Common Stock (the "Exchange Ratio") shall be
the Merger Consideration divided by the Average Price. Computations of the
Average Price and of the Exchange Ratio shall be carried to five decimals and
then rounded to three decimals, rounding down if the fourth decimal is four or
less or up if it is five or more. Cash will be paid in lieu of fractional
shares as set forth in the Plan of Merger.
(ii) If between the date of this Agreement and the Effective
Time, the shares of WMSB Common Stock shall be changed into a different number
or class of shares by reason of any reclassification, recapitalization,
split-up, combination or exchange of shares, or if a stock dividend thereon
shall be declared with a record date within such period, the Average Price
specified in Section 1(c)(i) shall be adjusted accordingly.
(iii) In the event that the Average Price for the ten trading
days immediately prior to the third trading day before the Effective Date is
less than $18.00 (such amount to be adjusted accordingly if any of the events
described in (ii) above occur), then at WMSB's sole option, WMSB may elect to
pay up to 49% of the Merger Consideration in the form of cash. If WMSB makes
such an election, then the Plan of Merger shall be substantially in the form of
Exhibit A-2 attached hereto, and the Exchange Ratio shall be the product of (A)
the portion of the Merger Consideration paid in the form of WMSB Common Stock,
and (B) a fraction, the numerator of which is the Merger Consideration and the
denominator of which is the Average Price. In the event that WMSB makes such
an election, each shareholder of Olympus shall have the opportunity to indicate
such shareholder's preference as to the form of the Merger Consideration to be
paid to such shareholder, such preference to be indicated in the manner and
subject to the limitations set forth in Section 5(a)(i) of Exhibit A-2.
(iv) If Foster Pepper & Shefelman is unwilling to provide the
tax opinion referred to in Section 7.1(d) due solely to the fact that the
appropriate officers of Olympus are unable to make the representation set forth
in paragraph 2 of Section
-2-
<PAGE>
7.01 of REV. PROC. 86-42, 86-2 C.B. 722, then WMSB shall, to the extent
necessary to enable such representation to be rendered, reduce the percentage of
the Merger Consideration to be paid in cash below 49% PROVIDED THAT in no
event shall WMSB be required to reduce such percentage below 35%.
(v) In the event that the Merger is not consummated on or
before April 30, 1995 (the "Yield Date"), then the Merger Consideration shall be
equal to $15.50 plus the product determined by multiplying (i) $15.50 by (ii)
the Extra Consideration Rate (as hereinafter defined) by (iii) a fraction the
numerator of which equals the number of days elapsed between the Yield Date and
the Effective Date and the denominator of which equals 365. For purposes
hereof, the Extra Consideration Rate shall be 5% per annum.
(d) STOCK OPTIONS.
(i) Disclosure Schedule 4.2 attached hereto sets forth
the holders of valid, outstanding options to purchase Olympus Common Stock under
the Olympus Nonqualified Stock Option Plan and the Olympus Incentive Stock
Option Plan (the "Stock Option Plans") and the exercise price of each such
option. It is understood that if any holder exercises his or her options, that
exercise and any subsequent sale, transfer, pledge or other disposition of the
shares shall be in compliance with any applicable requirements of the Securities
and Exchange Commission's ASR 135 and Section 1(h).
(ii) The Stock Option Plans currently provide that,
upon the execution of this Agreement, all outstanding options shall become
immediately exercisable and that as of the Effective Time any such options then
unexercised shall terminate. Olympus intends to present for shareholder
approval an amendment to the Stock Option Plans which shall state that if and
only if WMSB elects, pursuant to Section 1(c)(iii) of this Agreement, pay a
portion of the Merger Consideration in cash, the Stock Option Plans shall be
amended to delete section 7.02 thereof and substitute for it, a provision
providing that the outstanding options shall not terminate as of the Effective
Time but shall instead be converted into fully vested options to acquire WMSB
Common Stock. Each option to acquire Olympus Common Stock shall become an
option to acquire the number of shares of WMSB Common Stock determined by
multiplying (i) the number of shares of Olympus Common Stock covered by such
option by (ii) the Exchange Ratio. The price at which each option to acquire a
share of WMSB Common Stock shall be exercisable shall be determined by dividing
(x) the exercise price of the option to acquire Olympus Common Stock by (y) the
Exchange Ratio. Calculation of the number of shares and the exercise price
shall each be carried out to four decimals and then rounded to two decimals,
rounding down if the third decimal is four or less or up if it is five or more.
(So that, by way of example, if the Exchange Ratio is .50 and a person has an
option to acquire 1,000 shares of Olympus Common
-3-
<PAGE>
Stock at $7.00 per share, then at the Effective Time, the option will be
converted into an option to acquire 500 shares of WMSB Common Stock at $14.00.)
In the event that such amendment is approved and WMSB elects to pay a
portion of the Merger Consideration in cash pursuant to Section 1(c)(iii), at
the Effective Time, the Stock Option Plans shall become separate plans of WMSB,
the options to acquire Olympus Common Stock shall nonetheless convert solely
into options to acquire WMSB Common Stock and, for purposes of this Section
1(d)(ii), the Exchange Ratio shall not be adjusted as provided by the last
sentence of Section 1(c)(iii) and shall remain to be calculated by dividing the
Merger Consideration by the Average Price.
(e) OLYMPUS STOCKHOLDERS' MEETING. Subject to Section 6.7,
Olympus shall, as soon as practicable, hold a meeting of its stockholders (the
"Olympus Stockholders' Meeting") to submit for stockholder approval (the
"Olympus Stockholder Approval") this Agreement and the Parent Plan of Merger.
(f) CHANGE IN STRUCTURE. At the option of WMSB, the transaction
may be restructured in any manner requested by WMSB provided that no such
restructuring shall modify the amount or the form of the Merger Consideration or
the tax consequences of the transaction to shareholders of Olympus from those
contemplated by this Agreement as described in Section 7.1(d). The parties
specifically acknowledge that they are aware that WMSB may, prior to the
Effective Time, restructure its own corporate structure and that a holding
company may be established ("WMSB Holding Company") that will hold all of the
issued and outstanding shares of WMSB and that the holders of WMSB stock will
exchange their shares in WMSB for an equal number of WMSB Holding Company shares
of stock. If this restructuring takes place, it is contemplated that Olympus
would merge with and into WMSB Holding Company, with WMSB Holding Company as the
resulting institution. In addition, without limiting the generality of the
first sentence of this Section 1(f), WMSB may elect to have the Bank Merger
occur by merging Olympus Bank with Washington Mutual, a Federal Savings Bank
("WMFSB") so long as the conditions set forth in the first sentence of this
Section 1(f) are complied with and so long as, at the time of the Bank Merger,
WMFSB is wholly owned by WMSB or WMSB Holding Company. If the transaction is
restructured and WMSB Holding Company is formed, WMSB Holding Company shall (i)
prepare and file with the SEC a registration statement on Form S-4 (together
with amendments thereto, the "Registration Statement") in connection with the
registration under the Securities Act of the WMSB Holding Company Stock to be
issued in connection with the Merger, (ii) use all reasonable efforts to have or
cause the Registration Statement to become effective as promptly as practicable,
and (iii) take any other action required to be taken under any applicable
federal or state securities laws in connection with the issuance of WMSB Holding
Company Common Stock in the Merger.
-4-
<PAGE>
(g) OFFERING CIRCULAR/PROXY STATEMENT.
(i) The parties hereto will cooperate in the preparation of
an appropriate offering circular/proxy statement satisfying all applicable
requirements of the Securities Exchange Commission ("SEC") and the Federal
Deposit Insurance Corporation ("FDIC") promulgated under the Securities Exchange
Act of 1934, as amended (the "Securities Exchange Act"), and the rules and
regulations thereunder and applicable state law (such offering circular/proxy
statement in the form mailed by Olympus to Olympus stockholders, together with
any and all amendments or supplements thereto, being herein referred to as the
"Offering Circular/Proxy Statement").
(ii) WMSB will furnish such information concerning WMSB and its
subsidiaries as is necessary in order to cause the Offering Circular/Proxy
Statement, insofar as it relates to such corporations, to comply with Section
1(g)(i). WMSB agrees promptly to advise Olympus if at any time prior to the
Olympus Stockholders' Meeting any information provided by WMSB for inclusion in
the Offering Circular/Proxy Statement becomes incorrect or incomplete in any
material respect and to provide the information needed to correct such
inaccuracy or omission. WMSB will continue to furnish Olympus with such
supplemental information as may be necessary in order to cause such Offering
Circular/Proxy Statement, insofar as it relates to WMSB and its subsidiaries, to
comply with Section 1(g)(i) after the mailing thereof to Olympus stockholders.
(iii) WMSB and Olympus will, as promptly as practicable, file
the Offering Circular/Proxy Statement, as required by law, with the SEC, the
Office of Thrift Supervision (the "OTS"), the FDIC and applicable state
securities agencies and will use all reasonable efforts to cause the Offering
Circular/Proxy Statement to become effective under any applicable securities
laws at the earliest practicable date. WMSB will advise Olympus promptly when
the Offering Circular/Proxy Statement has been approved for use in all necessary
states.
(h) ACCOUNTING TREATMENT.
(i) The parties hereto intend for the Merger to be treated as
a pooling of interests for accounting purposes. From and after the date hereof
and until the Effective Time, neither WMSB nor Olympus nor any of their
respective subsidiaries or other affiliates shall (i) knowingly take any action,
or knowingly fail to take any action, that would jeopardize the treatment of the
Merger as a "pooling of interests" for accounting purposes; or (ii) enter into
any contract, agreement, commitment or arrangement with respect to the
foregoing. The persons specified on Exhibit B-1 hereto may be deemed to be
"affiliates" of Olympus for purposes of the Securities and Exchange Commission's
ASR 135. WMSB has received from each person so identified, a written agreement
in the form of Exhibit
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<PAGE>
B-2 hereof. Prior to the Effective Time, Olympus shall use all reasonable
efforts to cause any additional person who becomes or is identified as an
"affiliate" to execute such an agreement.
(ii) WMSB shall have the right to place a restrictive legend on
all shares of WMSB Common Stock to be received by an "affiliate" so as to
preclude their transfer or disposition in violation of such letters, to instruct
its transfer agent not to permit the transfer of any such shares and/or to take
any other steps reasonably necessary to ensure compliance with ASR 135. Prior
to 30 days before the Effective Time, stock certificates evidencing ownership of
all Olympus Common Stock by Olympus "affiliates" shall be delivered to Olympus
and Olympus shall retain such certificates or certificates of WMSB Common Stock
into which they are exchanged until such time as financial results covering at
least 30 days of combined operations of the merged party shall have been
published, at which time such certificates shall be released.
(iii) Notwithstanding the above, WMSB, in its sole discretion,
may elect at any time not to proceed with qualifying the Merger to be treated as
a pooling of interests for accounting purposes in which case the restrictions in
this Section 1(h) shall no longer be applicable.
2. EFFECTIVE TIME; CLOSING. The Merger shall become effective at the
time (not earlier than January 1, 1995) of the occurrence of both (a)
endorsement of the articles of merger by the Director of Financial Institutions
of the State of Washington (the "Director") and the filing of the same with the
Secretary of State of the State of Washington (the "Secretary") and (b) delivery
to the Division of Corporations and Commercial Code of the State of Utah (the
"Division") of the articles of merger, or at such later time after such filing
and delivery as is provided in the articles of merger. As used herein, the term
"Effective Time" shall mean the date and time when the Merger becomes effective.
As used herein, the term "Effective Date" shall mean the day on which the
Effective Time occurs. The parties intend that the Effective Time shall occur
after the close of business on the first Friday which is at least ten business
days following the satisfaction of the conditions set out in Section 7.1(a) and
(b) below. A closing (the "Closing") shall take place prior to the Effective
Time at the offices of Foster Pepper & Shefelman, 1111 Third Avenue, Suite 3400,
Seattle, Washington, or at such other place as the parties hereto may mutually
agree upon for the Closing to take place.
3. OPTION TO PURCHASE CERTAIN SHARES. As a condition of the
execution of this Agreement, WMSB has required the delivery by Olympus of an
option (the "Option"), substantially in the form attached hereto as Exhibit C,
entitling WMSB to purchase shares of Olympus Common Stock at a price per share
stated therein.
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<PAGE>
4. REPRESENTATIONS AND WARRANTIES OF OLYMPUS AND OLYMPUS BANK. The
"Olympus Disclosure Schedules" shall mean all of the disclosure schedules
required by this Agreement, dated as of the date hereof, which have been
delivered to WMSB and NFSB. Olympus and Olympus Bank hereby jointly and
severally represent and warrant to WMSB as follows:
4.1 ORGANIZATION, POWER, GOOD STANDING, ETC.
(a) Olympus is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah. Olympus Bank
is a federally chartered savings bank duly organized and validly existing under
the laws of the United States, the charter of which is in full force and effect
and for which no conservator or receiver has been appointed. Each of Olympus
and Olympus Bank has all the requisite corporate power and authority to own,
lease and operate all of its properties and assets and to carry on its business
as currently conducted. Each of Olympus and Olympus Bank is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
the nature of the business conducted by it makes such licensing or qualification
necessary and where the failure to be so qualified would, individually or in the
aggregate, have a Material Adverse Effect (as defined below) on Olympus.
Olympus Bank accounts are insured by the Savings Association Insurance Fund (the
"SAIF") administered by the FDIC in accordance with the Federal Insurance
Deposit Act. Olympus Bank is a member in good standing of the Federal Home Loan
Bank of Seattle. Olympus is a savings and loan holding company duly registered
with the OTS. Olympus Bank is a qualified thrift lender pursuant to Section
10(m) of the Home Owners' Loan Act ("HOLA"). Each of Olympus and Olympus Bank
has heretofore delivered or made available to WMSB true and correct copies of
its Articles of Incorporation or Charter, as the case may be, (together, the
"Articles") and its bylaws as in effect on the date hereof. As used in this
Agreement, the term "Material Adverse Effect" with respect to a party shall mean
any change or effect that is reasonably likely to be materially adverse to the
business, operations, properties, condition (financial or otherwise), assets or
liabilities of such party and such party's subsidiaries taken as a whole.
(b) Disclosure Schedule 4.1(b) correctly sets forth a list
of each firm, corporation, partnership, joint venture or similar organization
which is consolidated with Olympus for financial reporting purposes and each
corporation a majority of the outstanding capital stock of which is owned by
Olympus, including Olympus Bank and any subsidiary thereof, (each, including
Olympus Bank and any subsidiaries thereof, a "Olympus Subsidiary"). Disclosure
Schedule 4.1(b) also sets forth as to each Subsidiary, the jurisdiction of its
incorporation and the percentage of capital stock owned by Olympus or Olympus
Bank, as the case may be. Except as set forth on Disclosure Schedule 4.1(b),
each Olympus Subsidiary has the corporate power and authority to own, lease and
operate all of
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its properties and assets and to carry on its business as currently conducted,
if any, and is duly licensed or qualified to do business and is in good standing
in each jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned, leased or operated by
it make such qualification necessary and where the failure to be so licensed or
qualified would individually or in the aggregate, have a Material Adverse Effect
on Olympus. Disclosure Schedule 4.1(b) also correctly sets forth a list of each
firm, corporation, partnership, joint venture or similar organization (other
than any entity which is a Olympus Subsidiary) in which Olympus or any Olympus
Subsidiary has a direct or indirect controlling, or 10 percent or greater,
equity interest (an "Investment Entity").
(c) The minute books of Olympus and Olympus Bank contain
materially complete and accurate records of all meetings held and other
corporate action taken, since December 31, 1990, by each company's
stockholders and Board of Directors.
(d) Except as set forth on Disclosure Schedule 4.1(d),
Olympus does not own (beneficially or otherwise) any capital stock or other
equity interest in any corporation or other entity which is not a Subsidiary or
Investment Entity.
(e) Each of Olympus and Olympus Bank has each previously
delivered to, or made available for inspection by, WMSB true and complete copies
of all agreements to which it is a party or by which it or any of its assets may
be bound, other than loans, credit facility agreements or accounts in the
ordinary course, (i) which relate to any ownership interest by Olympus or
Olympus Bank of an equity interest in any partnership, joint venture, or similar
enterprise, (ii) pursuant to which either Olympus or Olympus Bank may be
required to transfer funds in respect of an equity interest to, make an
investment in, or guarantee or assume any debt, dividend or other obligation of,
any person or entity, partnership, joint venture or similar enterprise, or (iii)
pursuant to which they are or may become an equity investor in a real estate
project.
(f) Olympus owns all of the issued and outstanding shares of
stock of Olympus Bank.
4.2 CAPITALIZATION. The authorized capital stock of Olympus
consists of 10,000,000 shares of common stock, par value $1.00 per share
("Olympus Common Stock"). As of the date hereof, 3,099,639 shares of Olympus
Common Stock are issued and outstanding. No shares of stock are held in
Olympus's treasury. All of the issued and outstanding shares of Olympus Common
Stock have been duly authorized, validly issued, and are fully paid and
non-assessable, with no personal liability attaching to the ownership thereof.
There are 455,500 shares of Olympus Common Stock reserved for issuance upon the
exercise of outstanding employee and director stock options but not for any
other reason.
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Disclosure Schedule 4.2 sets forth a list of all individuals who hold stock
options, the number of shares for which options have been granted to such
individuals and the exercise price for each option. Except as set forth in
Disclosure Schedule 4.2, neither Olympus nor any Olympus Subsidiary is bound by
any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the transfer, purchase, or issuance of
any shares of its capital stock or any securities representing the right to
purchase or otherwise receive any shares of its capital stock or any securities
convertible into or representing the right to purchase or subscribe for any such
shares, and there are no agreements or understandings to which Olympus or any
Olympus Subsidiary is a party with respect to voting any such shares. Except as
otherwise set forth on Disclosure Schedule 4.1(b), all of Olympus's
Subsidiaries' capital stock, which is issued and outstanding, is owned by
Olympus.
4.3 LOAN PORTFOLIO.
(a) All evidences of indebtedness in current principal
amount in excess of $150,000 reflected as assets in Olympus's March 1994
Financial Statements (as hereinafter defined) were, as of March 31, 1994, in all
respects binding obligations of the respective obligors named therein and no
such indebtedness is subject to any defenses which have been asserted on or
prior to the date of this Agreement, or, to the best knowledge of Olympus, may
be asserted, except as set forth on Disclosure Schedule 4.3(a), and except for
defenses arising from applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity. To
the knowledge of Olympus, except for a loan to LifeCare Centers of America with
a principal balance of $556,454, a loan to Jolene Company, Inc. with a principal
balance of $660,219 and a loan to Eugene Barrango in the principal balance of
$649,738, in each case as of June 30, 1994, all such indebtedness in a current
principal amount in excess of $25,000 that is primarily secured by an interest
in real property is secured by a valid and perfected first lien (other than
consumer loans, which include home equity and second mortgage loans).
(b) All loans with a balance in excess of $250,000 as of June
30, 1994 which are secured by property other than 1-4 family residences are
listed on Disclosure Schedule 4.3(b), which indicates, for each such loan, the
loan number, the borrower's name and the unpaid balance as of June 30, 1994.
(c) Except as disclosed on Disclosure Schedule 4.3(c), no
loan, all or any part of which is an asset of Olympus Bank was, as of June 30,
1994, more than 30 days delinquent.
(d) To the knowledge of Olympus, the documentation for each
loan (the "Loan File") is correct and complete to the extent that all Loan Files
contain those
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documents necessary for Olympus Bank to enforce the loans and realize upon the
security, if any, therefor, including but not limited to properly executed notes
or credit agreements and security documents. In addition, the Loan Files for
all loans secured primarily by real property also contain evidence of property
casualty insurance (or are covered by a mortgage protection policy) and, where
required by the OTS or other governmental regulators, appraisals, policies of
title insurance (or, in the case of loans closed within the past three months,
commitments therefor) and policies of flood insurance.
(e) With isolated minor exceptions, each outstanding loan
or commitment to extend credit was solicited and originated and is administered
in accordance with the relevant loan documents and in material compliance with
all requirements of federal, state and local laws and regulations applicable at
the time the loan was originated or modified.
(f) Disclosure Schedule 4.3(f) sets forth as of July 15,
1994, as to each loan in which Olympus Bank has sold participation interests,
the total loan balance, the percentage of interest sold, the identity of the
purchaser and an indication of whether or not there are any buy-back or
guarantee obligations and whether the percentage of interest retained by Olympus
Bank is subordinated to the percentage of interest sold; provided, however, as
to 1-4 family residential loans such information is provided by loan package
sold instead of individual loans. The same sets forth, as of June 30, 1994, as
to each participation purchased, the total loan balance, the percentage of
interest purchased, the identity of the seller and an indication of whether or
not there are any put-back rights or indemnifications and whether the percentage
of interest purchased by Olympus Bank is superior to the percentage of interest
retained by the seller.
(g) There are no employee, officer, director or other
affiliate loans on which the borrower is paying a rate other than that reflected
on the note or the relevant credit agreement.
4.4 REPORTS.
(a) Olympus and Olympus Bank have duly filed with the SEC, the FDIC
and the OTS, in correct form in all material respects, the monthly, quarterly,
semiannual and annual reports required to be filed by them under applicable
regulations for all periods subsequent to December 31, 1990. Olympus and
Olympus Bank have previously delivered or made available to WMSB accurate and
complete copies of such reports.
(b) Olympus and Olympus Bank have previously delivered or made
available to WMSB an accurate and complete copy of each (a) final registration
statement, prospectus, report and definitive proxy statement filed by Olympus
since January 1, 1991 with the SEC, and (b) communication (other than general
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advertising materials) mailed by Olympus or Olympus Bank to its stockholders
since January 1, 1991 and no such registration statement, prospectus, report,
proxy statement or communication, as of its date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.5 AUTHORITY.
(a) Olympus has requisite corporate power and authority to
execute and deliver this Agreement, the Plan of Merger and the Option and,
subject to the Olympus Stockholder Approval and applicable regulatory approvals,
to consummate the transactions contemplated hereby and thereby. The execution
and delivery of this Agreement, the Plan of Merger, and the Option and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly approved by the Board of Directors of Olympus. This Agreement and
the Option have been duly and validly executed and delivered by Olympus and,
assuming the due authorization, execution and delivery thereof by the other
parties hereto and thereto, constitute valid and binding obligations of Olympus,
enforceable against it in accordance with their respective terms.
(b) Olympus Bank has requisite corporate power and authority
to execute and deliver this Agreement and, subject to applicable regulatory
approvals, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly approved by the Board of
Directors of Olympus Bank. This Agreement has been duly and validly executed
and delivered by Olympus Bank and, assuming the due authorization, execution and
delivery thereof by the other parties hereto, constitutes a valid and binding
obligation of Olympus Bank, enforceable against it in accordance with its terms.
4.6 NO VIOLATION. Neither the execution and delivery of this
Agreement, the Plan of Merger or the Option nor the consummation by Olympus or
Olympus Bank of the transactions contemplated hereby and thereby, nor compliance
by Olympus or Olympus Bank with any of the terms or provisions hereof or
thereof, will (i) assuming Olympus Stockholder Approval, violate any provision
of the Articles or bylaws of Olympus, or the Charter or bylaws of Olympus Bank,
(ii) assuming the consents and approvals referred to in Section 7.1 hereof are
duly obtained, violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to Olympus or any Olympus
Subsidiary, or any of its respective properties or assets, or (iii) except as
set forth on Disclosure Schedule 4.6, violate, conflict with, result in a breach
of any provisions of, constitute a default (or an event which, with notice or
lapse of
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time, or both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any lien,
security interest, charge or other encumbrance upon any of the properties or
assets of Olympus or any Olympus Subsidiary, under any of the terms, conditions
or provisions of any note, bond, mortgage indenture, deed of trust, license,
lease, agreement or other instrument or obligation to which Olympus or any
Olympus Subsidiary is a party, or by which it or any of its properties or assets
may be bound or affected, except with respect to (iii) above, for such
violations, conflicts, breaches, defaults, terminations, accelerations and
encumbrances which would not in the aggregate have a Material Adverse Effect on
Olympus.
4.7 CONSENTS AND APPROVALS. Except for (i) consents and
approvals of or filings, deliveries or registrations with the SEC, the OTS, the
FDIC, the Director, the Secretary, the Division, the United States Department of
Justice (the "Justice Department"), the Federal Reserve Board or other
applicable governmental authorities, (ii) the approval of the stockholders of
Olympus and (iii) the consents, approvals, filings or registrations set forth on
Disclosure Schedule 4.6, no consents or approvals of or filings or registrations
with any third party or public body or authority, except for consents,
approvals, filings or registrations where the failure to obtain such consents or
approvals or to make such filings or registrations would not prevent or delay
the Merger and would not in the aggregate have a Material Adverse Effect on
Olympus, are necessary in connection with the execution and delivery by Olympus
or Olympus Bank of this Agreement and the consummation of the transactions
contemplated hereby.
4.8 FINANCIAL STATEMENTS.
(a) Olympus has previously delivered or made available to
WMSB copies of (i) the consolidated statements of financial condition of Olympus
and the Olympus Subsidiaries as of December 31, in each of the three fiscal
years 1991, 1992 and 1993, and the related consolidated statements of income,
statements of stockholders' equity and statements of cash flows for each of the
three year periods ending, respectively, on December 31, 1991, 1992 and 1993, as
reported in Olympus's Annual Reports filed with the SEC under the Securities
Exchange Act, in each case accompanied by the Olympus audit reports of Deloitte
& Touche, independent public accountants, with respect to Olympus (the "Olympus
1991, 1992 and 1993 Financial Statements," respectively), and (ii) the unaudited
consolidated balance sheet of Olympus as of March 31, 1994 and the related
unaudited consolidated statements of income and statements of cash flows for the
three-month period then ended as reported in Olympus's Quarterly Reports on Form
10-Q filed with the SEC under the Securities Exchange Act (the "Olympus March
1994 Financial Statements"). The consolidated statements of condition of
Olympus referred to herein (including the related notes) fairly
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present the consolidated financial position of Olympus as of the respective
dates set forth therein, and the other financial statements referred to herein
(including the related notes) fairly present the results of the consolidated
operations and changes in stockholders' equity and cash flows of Olympus for the
respective fiscal periods or as of the respective dates set forth therein,
except that interim unaudited financial statements are subject to normal
year-end adjustments.
(b) Each of the financial statements referred to in Section
4.8(a) (including the related notes) has been prepared in accordance with
generally accepted accounting principles consistently applied during the periods
involved (except as indicated in the notes thereto). The books and records of
Olympus have been, and are being, maintained in accordance with applicable legal
and accounting requirements and reflect only actual transactions.
4.9 BROKERAGE. Except for amounts owed to Goldman, Sachs &
Co., there are no claims for investment banking fees, brokerage commissions,
finder's fees or similar compensation arising out of or due to any act of
Olympus or of any Olympus Subsidiary in connection with the transactions
contemplated by this Agreement.
4.10 ABSENCE OF CERTAIN CHANGES OR EVENTS. As of the date of
this Agreement, except as disclosed in Disclosure Schedule 4.10, there has not
been any material adverse change in the business, operations, properties, assets
or financial condition of Olympus and the Olympus Subsidiaries, taken as a
whole, from that described in the 1993 Annual Report or the Olympus March 1994
Financial Statements (except for changes resulting from market and economic
conditions which generally affect the savings industry as a whole, including,
without limitation changes in law or regulation, and changes in generally
accepted accounting principles or interpretations thereof) and, to the best of
Olympus's knowledge, no fact or condition exists as of the date hereof that
Olympus has reason to believe may cause such a material adverse change in the
future.
4.11 LITIGATION, ETC. As of the date of this Agreement, except
as disclosed on Disclosure Schedule 4.11, there are no actions, suits, claims,
inquiries, proceedings or, to the knowledge of Olympus, investigations before
any court, commission, bureau, regulatory, administrative or governmental
agency, arbitrator, body or authority pending or, to the knowledge of Olympus,
threatened against Olympus or any Olympus Subsidiary which would reasonably be
expected to result in any liabilities, including defense costs, in excess of
$250,000 in the aggregate. Except as disclosed on Disclosure Schedule 4.11,
neither Olympus nor any Olympus Subsidiary is subject to any order, judgment or
decree and neither Olympus nor any Olympus Subsidiary is in default with respect
to any such order, judgment or decree.
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4.12 TAXES AND TAX RETURNS.
(a) The amounts set up as provisions for taxes on the
Olympus March 1994 Financial Statements are sufficient for all material accrued
and unpaid federal, state, county and local taxes, interest and penalties of
Olympus and all Olympus Subsidiaries, whether or not disputed, for the period
ended March 31, 1994 and for all fiscal periods prior thereto. Only the federal
income tax returns of Olympus and Olympus Bank for the fiscal years ending in
1990, 1991, 1992 and 1993 are subject to audit or adjustment by the Internal
Revenue Service or the applicable taxing authorities. Complete and correct
copies of the income tax returns of Olympus and each Olympus Subsidiary for the
five fiscal years ending December 31, 1993, as filed with the Internal Revenue
Service and all state and local taxing authorities, together with all related
correspondence and notices, have previously been delivered or made available to
WMSB.
(b) Each of Olympus and each Olympus Subsidiary has timely
and correctly filed all federal, state, county and local tax and other returns
and reports (collectively, "Returns") required by applicable law to be filed
(including, without limitation, estimated tax returns, income tax returns,
excise tax returns, sales tax returns, use tax returns, property tax returns,
franchise tax returns, information returns and withholding, employment and
payroll tax returns), except to the extent that the failure to timely or
correctly file such returns does not result in aggregate penalties or
assessments of more than $25,000 or a reduction in federal income tax net
operating loss carryforward deductions of more than $75,000, and have paid all
taxes, levies, license and registration fees, charges or withholdings of any
nature whatsoever shown by such Returns to be owed, or which are otherwise due
and payable (hereinafter called "Taxes"), and to the extent any material
liabilities for Taxes have not been fully discharged, full and complete reserves
have been established on the Olympus 1993 Financial Statements. Neither Olympus
nor any Olympus Subsidiary is in default in the payment of any Taxes due or
payable or any assessments received in respect thereof except for Taxes which
are being contested in good faith. No additional assessments of Taxes are known
to Olympus or any Olympus Subsidiary to be proposed, pending or threatened,
other than Taxes for periods for which returns are not yet filed.
(c) Olympus has not filed a consent to the application of
Section 341(f) of the Internal Revenue Code of 1986, as amended.
4.13 EMPLOYEES; EMPLOYEE BENEFIT PLANS.
(a) As of the date of this Agreement, except as set forth in
Disclosure Schedule 4.13(a)(i) neither Olympus nor any Olympus Subsidiary is a
party to or bound by any contract,
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arrangement or understanding (whether written or oral) with respect to the
employment or compensation of any officers, employees or consultants and except
as provided herein, and under those Benefit Plans (as defined below) set forth
in Disclosure Schedule 4.13(a)(ii), consummation of the transactions
contemplated by this Agreement will not (either alone or upon the occurrence of
any additional acts or events) result in any payment (whether of severance pay
or otherwise) becoming due from Olympus or any Olympus Subsidiary to any officer
or employee thereof. Olympus has previously delivered or made available to WMSB
true and complete copies of all employment, consulting and deferred compensation
agreements that are in writing, to which Olympus or any Olympus Subsidiary is a
party.
(b) Except as set forth on Disclosure Schedule 4.13(b), as
of the date of this Agreement, no officer or employee of Olympus or any Olympus
Subsidiary is receiving aggregate remuneration (bonus, salary and commissions)
at a rate which, if annualized, would exceed $50,000 in 1994.
(c) Except as disclosed on Disclosure Schedule 4.13(c), as
of the date of this Agreement, there are not, and have not been at any time in
the past three years, any actions, suits, claims or proceedings before any court
(which have been served on Olympus or Olympus Bank), commission, bureau,
regulatory, administrative or governmental agency, arbitrator, body or authority
pending or, to the best of Olympus's knowledge, threatened by any employees,
former employees or other persons relating to the employment practices or
activities of Olympus or any Olympus Subsidiary (except for threatened actions
which have subsequently been resolved). Neither Olympus nor any Olympus
Subsidiary is a party to any collective bargaining agreement, and no union
organization efforts are pending or, to the best of Olympus's knowledge,
threatened nor have any occurred during the last three years.
(d) Olympus and Olympus Bank have made available to WMSB
true and complete copies of all personnel codes, practices, procedures,
policies, manuals, affirmative action programs and similar materials.
(e) With respect to all employee benefit plans, Olympus and
Olympus Bank represent and warrant as follows:
(i) All employee benefit plans, as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and any other pension, bonus, deferred compensation, stock bonus,
stock purchase, post-retirement medical, hospitalization, health and other
employee benefit plan, program or arrangement, whether formal or informal, under
which Olympus or any Olympus Subsidiary has any obligation or liability, or
under which any employee or former employee has any rights to benefits (the
"Benefit Plans") are set forth on Disclosure Schedule 4.13(e)(i). All Benefit
Plans
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that are subject to the funding requirements in Title I, Subtitle B, Part 3 of
ERISA or SECTION 412 of the Internal Revenue Code of 1986, as amended (the
"Code"), are in compliance with such funding standards, and no waiver or
variance from such funding requirements has been obtained or applied for under
Section 412(d) of the Code. None of the Benefit Plans is subject to Title IV of
ERISA or is a "multiemployer plan," as such term is defined in Section 3(37) and
4001(a)(3) of ERISA and Section 414(f) of the Code.
(ii) In all material respects, the terms of the Benefit
Plans are, and the Benefit Plans have been administered, in accordance with the
requirements of ERISA, the Code, applicable law and the respective plan
documents. Except as disclosed on Disclosure Schedule 4.13(e)(ii), none of the
Benefit Plans is under audit or is the subject of an investigation by the
Internal Revenue Service, the U.S. Department of Labor or any other federal or
state governmental agency. Except as disclosed on Disclosure Schedule
4.13(e)(ii), all material reports and information required to be filed with, or
provided to, the United States Department of Labor, Internal Revenue Service,
the Pension Benefit Guaranty Corporation (the "PBGC") and plan participants and
beneficiaries with respect to each Benefit Plan have been timely filed or
provided. With respect to each Benefit Plan for which an annual report has been
filed, no material change has occurred with respect to the matters covered by
the most recent annual report since the date thereof.
(iii) Except as disclosed on Disclosure Schedule
4.13(e)(iii) neither Olympus nor Olympus Bank is aware of any facts regarding
any Benefit Plan which is an "employee pension benefit plan" as defined in
Section 3(2) of ERISA (collectively, the "Employee Pension Benefit Plans") that
would present a significant risk that any Employee Pension Benefit Plan would
not be determined by the appropriate District Director of the Internal Revenue
Service to be "qualified" within the meaning of Section 401(a) of the Code, or
with respect to which any trust maintained pursuant thereto is not exempt from
federal income taxation pursuant to Section 501 of the Code, or with respect to
which a favorable determination letter could not be issued by the Internal
Revenue Service with respect to each such Employee Pension Benefit Plan.
(iv) Prior to the Closing, Olympus and Olympus Bank
shall deliver or make available to WMSB complete and correct copies (if any) of
(w) the most recent Internal Revenue Service determination letter relating to
each Employee Pension Benefit Plan intended to be tax qualified under Section
401(a) and 501(a) of the Code, (x) the most recent annual report (Form 5500
Series) and accompanying schedules of each Benefit Plan, filed with the Internal
Revenue Service or an explanation of why such annual report is not required, (y)
the most current summary
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plan description for each Benefit Plan, and (z) the most recent audited
financial statements of each Benefit Plan.
(v) With respect to each Benefit Plan, all
contributions, premiums or other payments due or required to be made to such
plans as of the Effective Time have been or will be made or accrued prior to the
Effective Time.
(vi) To the best of Olympus's and Olympus Bank's
knowledge, there are not now, nor have there been, any "prohibited
transactions", as such term is defined in Section 4975 of the Code or Section
406 of ERISA, involving Olympus, Olympus Bank, or any officer, director or
employee of Olympus or Olympus Bank, with respect to the Benefit Plans that
could subject Olympus or Olympus Bank or any other party-in-interest to the
penalty or tax imposed under Section 502(i) of ERISA and Section 4975 of the
Code.
(vii) As of the date of this Agreement, no claim,
lawsuit, arbitration or other action has been instituted, asserted (and no such
lawsuit has been served on Olympus or Olympus Bank) or, to the best of Olympus
and Olympus Bank's knowledge, threatened by or on behalf of such Benefit Plan or
by any employee alleging a breach or breaches of fiduciary duty or violations of
other applicable state or federal law with respect to such Benefit Plans, which
could result in liability on the part of Olympus or any Olympus Subsidiary or a
Benefit Plan under ERISA or any other law, nor is there any known basis for
successful prosecution of such a claim, and WMSB will be notified promptly in
writing of any such threatened or pending claim arising between the date hereof
and the Closing.
(viii) Except as set forth on Disclosure Schedule
4.13(e)(viii) (such disclosure being made in accordance with the principles of
Financial Accounting Standard No. 106 of the Financial Accounting Standards
Board) or as may be required by the Consolidated Omnibus Budget and
Reconciliation Act of 1985, as amended ("COBRA"), no Benefit Plan which is an
employee welfare benefit plan (within the meaning of Section 3(1) of ERISA)
provides for continuing benefits or coverage for any participant or beneficiary
of a participant after such participant's termination of employment nor does
Olympus or any Olympus Subsidiary have any current or projected liability under
any such plans.
(ix) Except as set forth on Disclosure Schedule
4.13(e)(ix)(A), Olympus and the Olympus Subsidiaries have not maintained or
contributed to, and do not currently maintain or contribute to, any severance
pay plan. All payments (other than regular wages and vacation pay) made to
employees of Olympus or the Olympus Subsidiaries coincident with or in
connection with termination of employment since January 1, 1993 are disclosed on
Disclosure Schedule 4.13(e)(ix)(B).
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(x) Except as provided in Sections 6.13 and 6.14, and
under Disclosure Schedule 4.13(a)(ii) no individual will accrue or receive any
additional benefits, service, or accelerated rights to payment or vesting of
benefits under any Benefit Plan as a result of the transactions contemplated by
this Agreement.
(xi) Olympus and each Olympus Subsidiary has complied
in all material respects with all of the requirements of COBRA.
(xii) All amendments required to bring all Benefit Plans
into conformity with any of the applicable provisions of ERISA and the Code have
been duly adopted or will be duly adopted as of the Effective Date, subject to
further revisions that may be required by the Internal Revenue Service.
(xiii) Except as set forth on Disclosure Schedule
4.13(a)(ii), there are no Benefit Plans or other arrangements of Olympus or the
Olympus Subsidiaries under which any individual can or will receive an "excess
parachute payment" as defined in Section 280G(b)(1) of the Code.
4.14 OLYMPUS AND OLYMPUS BANK INFORMATION. The information
relating to Olympus to be contained in the Offering Circular/Proxy Statement
contemplated by Section 1(g) hereof will not, at the time it is filed with the
applicable governmental authorities, as of the date thereof, or at the dates
stockholder actions are taken with respect to the transactions contemplated
therein, contain any untrue statement of a material fact or omit to state a
material fact necessary to make such statements, in light of the circumstances
under which such statements were made, not misleading.
4.15 COMPLIANCE WITH APPLICABLE LAW.
(a) Olympus and each Olympus Subsidiary holds all licenses,
certificates, franchises, permits and other governmental authorizations
("Permits") necessary for the lawful conduct of their respective businesses and
such Permits are in full force and effect, and Olympus and each Olympus
Subsidiary are in all respects complying therewith, except where the failure to
possess or comply with such Permits would not have a Material Adverse Effect on
Olympus.
(b) Except as set forth on Disclosure Schedule 4.15(b), each
of Olympus and each Olympus Subsidiary is and for the past three years has been
in compliance with all foreign, federal, state and local laws, statutes,
ordinances, rules, regulations and orders applicable to the operation, conduct
or ownership of its business or properties except for any noncompliance which is
not reasonably likely to have in the aggregate a Material Adverse Effect on
Olympus.
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4.16 CONTRACTS AND AGREEMENTS.
(a) Olympus and Olympus Bank have previously delivered to,
or made available for inspection by, WMSB each insurance policy to which Olympus
or any Olympus Subsidiary is a party (other than insurance policies under which
Olympus or Olympus Bank is named as a loss payee or additional insured as a
result of its position as a secured lender).
(b) As of the date of this Agreement, except as disclosed in
Disclosure Schedule 4.16(b), (i) except with respect to deposits or other
borrowings in the ordinary course, neither Olympus nor any Olympus Subsidiary is
a party to or bound by any commitment, contract, agreement or other instrument
which involves or could involve aggregate future payments by Olympus or any
Olympus Subsidiary of more than $25,000, (ii) neither Olympus nor any Olympus
Subsidiary is a party to nor is it bound by any commitment, contract, agreement
or other instrument which is material to the business, operations, properties,
assets or financial condition of Olympus and the Olympus Subsidiaries taken as a
whole and (iii) no commitment, contract, agreement or other instrument other
than Olympus or Olympus Bank's charter documents, to which Olympus or any
Olympus Subsidiary is a party or by which it is bound, limits the freedom of
Olympus or any Olympus Subsidiary to compete in any line of business or with any
person.
4.17 AFFILIATE TRANSACTIONS.
(a) Except as disclosed in Disclosure Schedule 4.17 or in
Olympus's proxy statements relating to its annual meetings of shareholders, and
except as specifically contemplated by this Agreement, since January 1, 1990,
neither Olympus nor Olympus Bank has engaged in, or is currently obligated to
engage in (whether in writing or orally), any transaction with any Affiliated
Person (as defined below) involving aggregate payments by or to Olympus or
Olympus Bank of $60,000 or more during any consecutive 12 month period other
than transactions between or among Olympus or any Olympus Subsidiary which are
not in violation of Sections 23A and 23B of the Federal Reserve Act.
(b) For purposes of this Section 4.17, Affiliated Person
means:
(i) a director, executive officer or Controlling
Person (as defined below) of either Olympus or Olympus Bank;
(ii) a spouse of a director, executive officer or
Controlling Person of either Olympus or Olympus Bank;
(iii) a member of the immediate family of a director,
executive officer, or Controlling Person of either Olympus or Olympus Bank who
has the same home as such person;
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(iv) any corporation or organization (other than
Olympus or a Olympus Subsidiary) of which a director, executive officer or
Controlling Person of Olympus or Olympus Bank (w) is a chief executive officer,
chief financial officer, or a person performing similar functions; (x) is a
general partner; (y) is a limited partner who, directly or indirectly, either
alone or with his spouse and the members of his immediate family who are also
Affiliated Persons, owns an interest of five percent or more in the partnership
(based on the value of his contribution) or who, directly or indirectly through
other directors, executive officers and Controlling Persons of Olympus or
Olympus Bank and their spouses and their immediate family members who are also
Affiliated Persons, owns an interest in 25 percent or more of the partnership;
or (z) directly or indirectly either alone or with his spouse and the members of
his immediate family who are also Affiliated Persons, owns or controls ten
percent or more of any class of equity securities, or owns or controls, with
other directors, executive officers, and Controlling Persons of Olympus or
Olympus Bank and their spouses and their immediate family members who are also
Affiliated Persons, 25 percent or more of any class of equity securities;
(v) any trust or estate in which a director, executive
officer, or Controlling Person of Olympus or Olympus Bank or the spouse of such
person has a substantial beneficial interest or as to which such person or his
spouse serves as trustee or in a similar fiduciary capacity.
(c) For purposes of this Section 4.17 a Controlling Person
is any person or entity which, either directly or indirectly, or acting in
concert with one or more other persons or entities owns, controls or holds with
power to vote, or holds proxies representing ten percent or more of the
outstanding Olympus Common Stock.
(d) For purposes of this Section 4.17, the term "director"
means any director, trustee, or other person performing similar functions with
respect to any organization whether incorporated or unincorporated.
(e) For purposes of this Section 4.17, the term "executive
officer" means the president, any executive vice president, any senior vice
president, the secretary, the treasurer, the comptroller, and any other person
performing similar functions with respect to any organization whether
incorporated or unincorporated.
4.18 DISCLOSURE. To the knowledge of Olympus, no representation
or warranty of Olympus or Olympus Bank contained in this Agreement, and no
statement contained in the Disclosure Schedules delivered by Olympus or Olympus
Bank hereunder, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make a statement
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herein or therein, in light of the circumstances under which it was made, not
misleading.
4.19 TITLE TO PROPERTY.
(a) REAL PROPERTY. Disclosure Schedule 4.19(a) contains
a description of all interests in real property (other than real property
security interests received in the ordinary course of business), whether owned,
leased or otherwise claimed, including a list of all leases of real property, in
which Olympus and any Olympus Subsidiary has or claims an interest as of the
date of this Agreement and any guarantees of any such leases by any of such
parties. True and complete copies of such leases have previously been delivered
or made available to WMSB, together with all amendments, modifications,
agreements or other writings related thereto. Except as disclosed on Disclosure
Schedule 4.19(a), each such lease is legal, valid and binding as between
Olympus, or a Olympus Subsidiary and the other party or parties thereto, and the
occupant is a tenant or possessor in good standing thereunder, free of any
default or breach whatsoever and quietly enjoys the premises provided for
therein. Except as disclosed on Disclosure Schedule 4.19(a), Olympus and each
Olympus Subsidiary have good, valid and marketable title to all real property
owned by them on the date of this Agreement, free and clear of all mortgages,
liens, pledges, charges or encumbrances of any nature whatsoever, except liens
for current taxes not yet due and payable, and such encumbrances and
imperfections of title, if any, as do not materially detract from the value of
the properties and do not materially interfere with the present or proposed use
of such properties or otherwise materially impair such operations. All real
property and fixtures material to the business, operations or financial
condition of Olympus and each Olympus Subsidiary are in substantially good
condition and repair.
(b) ENVIRONMENTAL MATTERS. Except as set forth on
Disclosure Schedule 4.19(b), to the knowledge of Olympus, the real property
owned or leased by any of Olympus or any Olympus Subsidiary on the date of this
Agreement does not contain any underground storage tanks, asbestos,
ureaformaldehyde, uncontained polychlorinated biphenyls, or, except for
materials which are ordinarily used in office buildings and office equipment
such as janitorial supplies and do not give rise to financial liability therefor
under the hereafter defined Environmental Laws, releases of hazardous substances
as such terms may be defined by all applicable federal, state or local
environmental protection laws and regulations ("Environmental Laws"). As of the
date of this Agreement (i) no part of any such real property has been listed, or
to the knowledge of Olympus, proposed for listing on the National Priorities
List pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") or on a registry or inventory of inactive hazardous
waste sites maintained by any state, and, (ii) except as set forth on Disclosure
Schedule 4.19(b), no notices
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have been received alleging that Olympus or any Olympus Subsidiary is a
potentially responsible person under CERCLA or any similar statute, rule or
regulation. Neither Olympus nor any Olympus Subsidiary knows of any violation
of law, regulation, ordinance (including, without limitation, laws, regulations
and ordinances with respect to hazardous waste, zoning, environmental, city
planning or other similar matters) relating to its respective properties, which
violations could have in the aggregate a Materially Adverse Effect on Olympus.
(c) TANGIBLE PERSONAL PROPERTY. Disclosure Schedule
4.19(c) contains (i) a list of each item of machinery, equipment, or furniture,
including without limitation computers and vehicles, of Olympus or any Olympus
Subsidiary, included on the consolidated financial statements on March 31, 1994
at a carrying value of, or, if acquired after March 31, 1994, for a purchase
price of, more than $25,000, (ii) a list of each lease or other agreement under
which any such item of personal property is leased, rented, held or operated and
(iii) a list of all trademarks, trade names or service marks currently used,
owned, or registered for use by Olympus or any Olympus Subsidiary.
4.20 INSURANCE. Disclosure Schedule 4.20 contains a true and
complete list and a brief description (including name of insurer, agent,
coverage and expiration date) of all insurance policies currently in force with
respect to the business and assets of Olympus and each Olympus Subsidiary (other
than insurance policies under which Olympus or Olympus Bank is named as a loss
payee or additional insured as a result of its position as a secured lender).
Olympus and each Olympus Subsidiary are in compliance with all of the material
provisions of its insurance policies and are not in default under any of the
terms thereof. Each such policy is outstanding and in full force and effect
and, except as set forth on Disclosure Schedule 4.20, Olympus is the sole
beneficiary of such policies. All premiums and other payments due under any
such policy have been paid.
4.21 POWERS OF ATTORNEY. Neither Olympus nor any Olympus
Subsidiary has any powers of attorney outstanding other than those issued
pursuant to the requirements of regulatory authority or in the ordinary course
of business with respect to routine matters.
4.22 EMPLOYEE STOCK BONUS PLAN. Olympus does not issue or
contribute new shares of Olympus Common Stock to the Employee Stock Bonus Plan,
all shares of Olympus Common Stock owned by the Employee Stock Bonus Plan are
purchased in the open market or through private transactions with third parties,
and the Plan has an independent trustee.
4.23 COMMUNITY REINVESTMENT ACT COMPLIANCE. Olympus Bank is in
substantial compliance with the applicable provisions of the Community
Reinvestment Act of 1977 and the regulations promulgated thereunder
(collectively, "CRA"). Neither Olympus
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nor Olympus Bank has been advised of the existence of any fact or circumstance
or set of facts or circumstances which, if true, would cause Olympus Bank to
fail to be in substantial compliance with such provisions or to have its current
rating lowered. Any change in the current rating which would prohibit the
Merger from being consummated shall be a material adverse change in the business
of Olympus and Olympus Bank.
4.24 AGREEMENTS WITH BANK REGULATORS. Neither Olympus nor
Olympus Bank is a party to or is subject to any written order, decree, agreement
or memorandum of understanding with, or a party to any commitment letter or
similar undertaking to, or is a recipient of any currently applicable
extraordinary supervisory letter from, any federal or state governmental agency
or authority charged with the supervision or regulation of depository
institutions or the insurance of deposits therein which is outside the ordinary
course of business or not generally applicable to entities engaged in the same
business. Neither Olympus nor Olympus Bank has been advised within the last 18
months by any such regulatory authority that such authority is contemplating
issuing, requiring or requesting (or is considering the appropriateness of
issuing, requiring or requesting) any such order, decree, agreement, memorandum
of understanding, commitment letter or submission.
5. REPRESENTATIONS AND WARRANTIES OF WMSB. WMSB and NFSB hereby
jointly and severally represent and warrant to Olympus and Olympus Bank as
follows:
5.1 CORPORATE ORGANIZATION.
(a) WMSB is a state-chartered stock savings bank duly organized,
validly existing and in good standing under the laws of the state of Washington.
WMSB has all the requisite power and authority to own, lease and operate all of
its properties and assets and to carry on its business as it is currently
conducted, and is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which the nature of the business conducted by
it makes such licensing or qualification necessary and where failure to be so
qualified would, individually or in the aggregate, have a Material Adverse
Effect on WMSB. WMSB accounts are insured by the Bank Insurance Fund and the
SAIF, both administered by the FDIC to the fullest extent permitted by law.
WMSB is a savings and loan holding company duly registered and in good standing
with the OTS. WMSB is a qualified thrift lender pursuant to Section 10(m) of
HOLA.
(b) NFSB is a federally chartered savings association. NFSB has
the corporate power and authority to own, lease and operate all of its
properties and assets and to carry on its business as it is currently conducted,
and is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of the business conducted by it makes such
licensing or qualification necessary and where failure
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to be so qualified would, individually or in the aggregate, materially adversely
affect the financial ability of NFSB to consummate the Merger. NFSB accounts
are insured by the SAIF administered by the FDIC. NFSB is a member in good
standing of the Federal Home Loan Bank of Seattle. NFSB is a qualified thrift
lender pursuant to Section 10(m) of HOLA.
(c) Each of WMSB and NFSB has heretofore delivered to Olympus true
and correct copies of its Charter and its bylaws as in effect on the date
hereof.
5.2 AUTHORITY.
(a) WMSB has full corporate power and authority to execute
and deliver this Agreement, the Plan of Merger and the Option, and, subject to
applicable regulatory approvals, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement, the Plan of Merger, and
the Option and the consummation of the transactions contemplated hereby have
been duly and validly approved by the Board of Directors of WMSB. This
Agreement and the Option have been duly and validly executed and delivered by
WMSB and, assuming the due authorization, execution and delivery thereof by the
other parties thereto, constitute valid and binding obligations of WMSB,
enforceable against it in accordance with their respective terms.
(b) NFSB has full corporate power and authority to execute
and deliver this Agreement and, subject to applicable regulatory approvals, at
the Effective Time to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly approved by the
board of directors of NFSB (excepting only the Bank Merger). This Agreement has
been duly and validly executed and delivered by NFSB and, assuming the due
authorization, execution and delivery thereof by Olympus and Olympus Bank,
constitutes a valid and binding obligation of NFSB, enforceable against it in
accordance with its terms.
5.3 NO VIOLATION. Neither the execution and delivery of this
Agreement, the Option and the Plan of Merger by WMSB and NFSB nor the
consummation by WMSB and NFSB of the transactions contemplated hereby and
thereby, nor compliance by WMSB and NFSB with any of the terms hereof or
thereof, will (i) violate any provision of the Articles of Incorporation or
charter or bylaws of WMSB or NFSB, or (ii) assuming that the consents and
approvals referred to in Section 7.1 are duly obtained, violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction
applicable to WMSB or NFSB or any of their respective properties or assets, or
(iii) violate, conflict with, result in the breach of any provisions of,
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, result in the
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termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or other encumbrance upon any of
the respective properties or assets of WMSB or NFSB under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which WMSB or
NFSB is a party, or by which they or any of their respective properties or
assets may be bound or affected, except with respect to (iii) above, for such
violations, conflicts, breaches, defaults, terminations, accelerations or
encumbrances which in the aggregate will not prevent or delay the consummation
of the transactions contemplated hereby.
5.4 CONSENTS AND APPROVALS. Except for consents and approvals
of or filings or registrations with the OTS, the FDIC, the Director, the
Secretary, the Division, the Justice Department and other applicable
governmental authorities, no consents or approvals of or filings or
registrations with any third party or any public body or authority are necessary
in connection with the execution and delivery by WMSB of this Agreement and the
Plans of Merger.
5.5 WMSB INFORMATION. The information relating to WMSB and its
subsidiaries supplied by WMSB for inclusion in the Offering Circular/Proxy
Statement contemplated by Section 1(g) hereof will not, at the time the Offering
Circular/Proxy Statement is filed with the applicable governmental authorities,
as of the date of such Offering Circular/Proxy Statement or at the date
stockholder action is taken with respect to the transactions contemplated
therein, contain any untrue statement of a material fact or omit to state a
material fact necessary to make such statements, in light of the circumstances
under which they were made, not misleading.
5.6 SUFFICIENT RESOURCES. WMSB has and will have available at
the Effective Time authorized but unissued shares of WMSB Common Stock, and
sufficient funds if WMSB elects to pay cash pursuant to Section 1(c)(iii), to
enable it lawfully to satisfy its payment obligations pursuant to this
Agreement. WMSB has and will have sufficient management and financial resources
to obtain the required regulatory approvals for the Merger and the Bank Merger.
On the date of this Agreement, there is no pending or, to the knowledge of WMSB,
threatened legal or governmental proceeding against WMSB or any subsidiary or
affiliate thereof which would affect WMSB's ability to obtain any of the
required regulatory approvals or satisfy any of the other conditions required to
be satisfied in order to consummate the transactions contemplated by this
Agreement. WMSB will promptly notify Olympus if any of the representations
contained in this Section 5.6 ceases to be true and correct.
5.7 CAPITALIZATION, INVESTMENTS. The authorized capital stock
of WMSB consists of 100,000,000 shares of common stock, par value $1.00 per
share, of which 60,331,840 shares
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were, as of June 30, 1994, duly issued and outstanding, fully paid and
non-assessable, and 10,000,000 shares of preferred stock, of which 6,200,000
shares were, as of June 30, 1994, issued and outstanding. As used herein, "WMSB
Subsidiaries" shall mean Washington Mutual, a Federal Savings Bank, Washington
Mutual Federal Savings Bank, WM Financial, Inc., Murphey Favre, Inc., Composite
Research & Management Co., WM Life Insurance Co., Washington Mutual Insurance
Services, Inc. and Mutual Travel, Inc. Substantially all of the business of
WMSB and its subsidiaries is done through WMSB and the WMSB Subsidiaries. All
of the WMSB Subsidiaries' Capital Stock, which is issued and outstanding, is
owned by WMSB directly or indirectly through wholly-owned subsidiaries. There
are outstanding no options, convertible securities, warrants or other rights to
purchase or acquire Capital Stock from any of the WMSB Subsidiaries, there is no
commitment of any of the WMSB Subsidiaries to issue any of the same and, other
than by operation of law, there are no outstanding agreements, restrictions,
contracts, commitments or demands of any character of which either WMSB or any
of the WMSB Subsidiaries is aware which relate to the transfer or restrict the
transfer of any shares of the WMSB Subsidiaries' Capital Stock owned by WMSB or
by any of the WMSB Subsidiaries. The common stock of WMSB to be issued in the
Merger will have been duly authorized and, when issued in accordance with the
Plan of Merger, (i) will be validly authorized and issued and fully paid and
nonassessable and no shareholder of WMSB will have any preemptive rights thereto
and (ii) will be registered (or exempt from registration) under the Securities
Act of 1933 and listed for trading on a national securities exchange or the
NASDAQ National Market System.
5.8 FINANCIAL STATEMENTS. WMSB has made available to Olympus
audited consolidated statements of financial condition for WMSB and its
subsidiaries as of the end of WMSB's last three fiscal years, and audited
consolidated statements of (i) operations, (ii) stockholders' equity, and (iii)
cash flows for each of the last three fiscal years, including the notes to such
audited consolidated financial statements, together with the reports of WMSB's
independent certified public accountants, pertaining to such audited
consolidated financial statements. WMSB has also furnished Olympus with WMSB's
unaudited consolidated statements of financial condition for WMSB and its
subsidiaries as of March 31, 1994, and unaudited consolidated statements of (i)
operations and (ii) cash flows for the interim periods ended March 31, 1993 and
1994, including the notes to such unaudited condensed consolidated financial
statements. For purposes of this Agreement, the "WMSB Statement" shall mean the
unaudited condensed consolidated statement of financial condition for WMSB and
its subsidiaries as of March 31, 1994 (including the notes thereto). The
aforesaid audited consolidated statements of financial condition and the WMSB
Statement present fairly the financial condition of the companies indicated on a
consolidated basis at the dates thereof, using generally accepted accounting
principles consistently applied. Such audited and unaudited
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consolidated statements of (i) operations, (ii) stockholders' equity, (iii) cash
flows, and (iv) financial position present fairly the results of the operations
of the companies indicated on a consolidated basis for the periods or at the
dates indicated, using generally accepted accounting principles consistently
applied. Except as and to the extent reflected or reserved against in the WMSB
Statement, or as otherwise disclosed pursuant to this Agreement, neither WMSB
nor any of its subsidiaries had, at the date thereof, any material liabilities
or obligations, or any other liabilities or obligations which in the aggregate
would be material, secured or unsecured (whether accrued, absolute, contingent
or otherwise), including, without limitation, any tax liabilities, which should
be reflected in the WMSB Statement in accordance with generally accepted
accounting principles consistently applied. The books and records of WMSB and
its subsidiaries are maintained in accordance with generally accepted accounting
principles consistently applied.
5.9 ABSENCE OF MATERIAL ADVERSE CHANGE. Since March 31, 1994,
except as set forth on Disclosure Schedule 5.9 hereto, there has been (i) no
material adverse change in the financial condition, business or results of
operations of WMSB and its subsidiaries taken as a whole (except for changes
resulting from market and economic conditions which generally affect the savings
industry as a whole), (ii) no loss, destruction or damage to the properties of
WMSB or any of its subsidiaries, which loss, destruction, or damage is material
to WMSB and its subsidiaries taken as a whole and is not adequately covered by
insurance; and (iii) no change in any of the accounting methods or practices or
revaluation of any of the assets of WMSB or its subsidiaries which is material
to WMSB and its subsidiaries taken as a whole. Since such date, WMSB and its
subsidiaries taken as a whole, have conducted their businesses, in all material
respects, in compliance with applicable federal, state and local laws, statutes,
ordinances and regulations.
5.10 LITIGATION. Except as set forth on Disclosure Schedule 5.10
hereto, no action, suit, counterclaim or other litigation, investigation or
proceeding to which WMSB or any of its subsidiaries is a party is pending, or is
known by the executive officers of WMSB or any of its subsidiaries to be
threatened, against WMSB or any of its subsidiaries before any court or
governmental or administrative agency, domestic or foreign which would be
reasonably expected to result in any liabilities which would, in the aggregate,
have a Material Adverse Effect on WMSB. Neither WMSB nor any of its
subsidiaries is subject to any order, judgment or decree nor is it a party to
any supervisory agreement or arrangement, consensual or otherwise, with any
regulatory authority. Neither WMSB nor any of its subsidiaries is in default
with respect to any such order, judgment, decree, agreement or arrangement.
5.11 BROKERAGE. There are no claims for investment banking fees,
brokerage commissions, finder's fees or similar
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compensation arising out of or due to any act of WMSB or any of its subsidiaries
in connection with the transactions contemplated by this Agreement.
5.12 REPORTS. WMSB and NFSB have duly filed with the Director
(or his predecessor), the FDIC and the OTS, in correct form, the monthly,
quarterly, semi-annual and annual reports required to be filed by them under
applicable regulations for all periods subsequent to December 31, 1991. WMSB
and NFSB have previously delivered or made available to Olympus accurate and
complete copies of such reports. WMSB has timely filed all reports required to
be filed by it pursuant to the Securities Exchange Act and the rules and
regulations promulgated by the FDIC thereunder. WMSB and NFSB have previously
delivered or made available to Olympus an accurate and complete copy of each (i)
offering circular, definitive proxy statement filed by WMSB since January 1,
1991 with the FDIC, and (ii) communication (other than general advertising
materials) mailed by WMSB to its stockholders since January 1, 1991 and no such
offering circular, proxy statement or communication, as of its date, contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
5.13 DISCLOSURE. To the knowledge of WMSB, no representation or
warranty of WMSB or NFSB contained in this Agreement, and no statement contained
in the Disclosure Schedules delivered by WMSB or NFSB, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make a statement herein or therein, in light of the circumstances under
which it was made, not misleading.
5.14 CRA COMPLIANCE. Each of WMSB and NFSB is in substantial
compliance with the applicable provisions of CRA. Neither WMSB nor NFSB has not
been advised of the existence of any fact or circumstance or set of
circumstances which, if true, would cause WMSB to fail to be in substantial
compliance with such provisions or to have its current rating lowered.
5.15 AGREEMENTS WITH BANK REGULATORS. Neither WMSB nor NFSB is a
party to or is subject to any written order, decree, agreement or memorandum of
understanding with, or any commitment letter or similar undertaking to, or is a
recipient of any extraordinary supervisory letter from, any federal or state
governmental agency or authority charged with the supervision or regulation of
depository institutions or the insurance of deposits therein which is outside
the ordinary course of business or not generally applicable to entities engaged
in the same business. Neither WMSB or NFSB has been advised by any such
regulatory authority that such authority is contemplating issuing, requiring or
requesting (or is considering the appropriateness of issuing, requiring or
requesting) any such
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order, decree, agreement, memorandum of understanding, commitment letter or
submission.
5.16 COMPLIANCE WITH APPLICABLE LAW.
(a) WMSB and each WMSB Subsidiary holds all Permits necessary for
the lawful conduct of their respective businesses and such Permits are in full
force and effect, and WMSB and each WMSB Subsidiary are in all material respects
complying therewith, except where the failure to possess or comply with such
Permits would not have a Material Adverse Effect on WMSB.
(b) Except as set forth on Disclosure Schedule 5.16(b), each of
WMSB and each WMSB Subsidiary is and since June 30, 1991 has been in compliance
with all foreign, federal, state and local laws, statutes, ordinances, rules,
regulations and orders applicable to the operation, conduct or ownership of its
business or properties except for any noncompliance which has not and will not
have in the aggregate a Material Adverse Effect on WMSB.
6. COVENANTS OF THE PARTIES.
6.1 CONDUCT OF THE BUSINESS OF OLYMPUS. During the period from
the date of this Agreement to the Effective Time, Olympus will conduct the
business of Olympus and any Olympus Subsidiary and engage in transactions only
in the ordinary course and consistent with past practice and with prudent
banking practice, except with the written consent of WMSB (which will not be
unreasonably withheld, delayed or conditioned). Olympus and Olympus Bank will
use their best efforts to (x) preserve the business organizations of Olympus and
each Olympus Subsidiary intact, (y) keep available to them and to WMSB the
present services of the employees of Olympus and each Olympus Subsidiary, and
(z) preserve for themselves and for WMSB the goodwill of the customers of
Olympus and Olympus Bank and others with whom business relationships exist. In
addition, without limiting the generality of the foregoing, Olympus agrees that
from the date hereof to the Effective Time, except as otherwise consented to or
approved by WMSB in writing (which consent or approval shall not be unreasonably
withheld, delayed or conditioned) or as permitted or required by this Agreement
or as required by law (in which case Olympus or Olympus Bank shall notify WMSB
in writing), Olympus will not, and will not cause or permit any Olympus
Subsidiary to:
(a) change any provisions of its Articles or bylaws or any similar
governing documents of Olympus or any Olympus Subsidiary;
(b) change the number of shares of its authorized or issued
capital stock (other than issuance of stock as a result of the exercise of
options issued as of the date hereof and described on Disclosure Schedule
4.2 or
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as a result of the exercise of options pursuant to the Option) or issue,
grant or amend any option, warrant, call, commitment, subscription, right
to purchase or agreement of any character relating to the authorized or
issued capital stock of Olympus or any Olympus Subsidiary, or any
securities convertible into shares of such stock, or split, combine or
reclassify any shares of its capital stock, or declare, set aside or pay
any dividend, or other distributions (whether in cash, stock or property
or any combination thereof) in respect of the capital stock of Olympus or
any Olympus Subsidiary, or redeem or otherwise acquire any shares of such
capital stock, it being understood that the restrictions in this Section
6.1(b) shall not apply to the amendment to Olympus's stock option plan
contemplated by Section 1(d)(ii) and to any transaction solely between
Olympus and a Olympus Subsidiary;
(c) except pursuant to agreements disclosed on Disclosure Schedule
4.13(a)(i), grant any severance or termination pay to or enter into or
amend any employment agreement with, or increase the amount of payments or
fees to, any of its employees, officers or directors;
(d) make any capital expenditures in excess of (i) $40,000 per
project or related series of projects or (ii) $200,000 in the aggregate,
other than pursuant to binding commitments existing on the date hereof,
expenditures necessary to maintain existing assets in good repair and the
expenditures necessary to furnish and equip the two in-store branches
referred to in subsection (e) below herein;
(e) make application for the opening of any, or open any, new
branches except for the two in-store branches Olympus Bank currently
intends to open in Dan's grocery stores located in Park City and in the
general vicinity of 39th So. and Wasatch Boulevard in Salt Lake City (the
"Proposed Branches");
(f) make application for the relocation or closing of any, or
relocate or close any, branches;
(g) change in any material manner its lending or pricing policies
or approval policies for making loans, its investment policies, its
asset/liability management policies or any other material banking
policies;
(h) make any loan or issue a commitment for any loan except for
loans and commitments that are made in the ordinary course of business
consistent with past practice at rates not less than prevailing market
rates or issue or agree to issue any letters of credit or
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otherwise guarantee the obligations of any other persons;
(i) acquire assets other than those necessary in the conduct of
its business in the ordinary course (except in connection with the
Proposed Branches);
(j) sell, transfer, assign, encumber or otherwise dispose of
assets other than has been customary in its ordinary course of business;
(k) enter into or amend or terminate any long-term (one-year or
more) contracts (including real property leases) (except in connection
with the Proposed Branches, except for contracts of deposit at Olympus
Bank not otherwise restricted under this Agreement which are in the
ordinary course of business consistent with past practice and not in
excess of prevailing market rates and except for agreements for Olympus
Bank to lend money not otherwise restricted under this Agreement which are
in the ordinary course of business consistent with past practice and
provide for not less than prevailing market rates of interest);
(l) enter into or amend any contract (other than contracts for
deposits at Olympus Bank or agreements for Olympus Bank to lend money not
otherwise restricted under this Agreement) that calls for the payment by
Olympus of $25,000 or more after the date of this Agreement (a "Material
Contract") that cannot be terminated on not more than 30 days' notice
without cause and without payment or loss of any material amount as a
penalty, bonus, premium or other compensation for termination except in
connection with the Proposed Branches;
(m) engage or participate in any material transaction or incur or
sustain any material obligation except for transactions otherwise
permitted under this Section 6.1 which are in the ordinary course of
business consistent with past practices and which are of similar kinds and
involve similar amounts;
(n) make any contributions to the Employee Stock Bonus Plan or any
other Benefit Plans except in such amounts and at such times as consistent
with past practice;
(o) increase the number of full time equivalent employees of
Olympus from June 30, 1994, except for reasonable staffing for the
Proposed Branches;
(p) except after having followed reasonable procedures with
respect to the investigation of potential environmental
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problems, which procedures have been approved in writing by
WMSB (which approval shall not be unreasonably withheld, delayed or
conditioned), foreclose upon or otherwise acquire (whether by deed in lieu
of foreclosure or otherwise) any real property (other than 1-to-4 family
residential properties in the ordinary course of business); or
(q) agree to do any of the foregoing.
6.2 NO SOLICITATION. Neither Olympus, Olympus Bank nor any of
their directors, officers, representatives, agents or other persons controlled
by any of them, shall, directly or indirectly encourage or solicit, or (except
to the extent that the directors of Olympus in their good faith judgment after
receipt of advice of counsel determine that such response is reasonably required
in order to discharge their fiduciary duties) hold discussions or negotiations
with, or provide any information to, any person, entity or group other than WMSB
concerning any merger, sale of substantial assets not in the ordinary course of
business, sale of shares of capital stock or similar transactions involving
Olympus, any division or any Olympus Subsidiary. Olympus and Olympus Bank will
promptly communicate to WMSB the terms of any proposal that it may receive in
respect of any such transaction. Notwithstanding the foregoing two sentences,
if the board of directors of Olympus receives an unsolicited offer or inquiry
with respect to such a transaction, the board may respond to such offer if the
board determines in its good faith judgment (after receiving advice of counsel)
that such response is reasonably required in order to discharge its fiduciary
duties.
6.3 CURRENT INFORMATION.
(a) No later than ten (10) business days from the date of
this Agreement, Olympus and WMSB will each designate an individual acceptable to
the other party (a "Designated Representative" and, together, the "Designated
Representatives") to be the primary point of contact between the parties.
During the period from the date of their designation to the Effective Time, the
Designated Representatives shall confer on a regular basis so that WMSB is kept
advised as to the general status of the ongoing operations of Olympus and
Olympus Bank. Without limiting the foregoing, Olympus and Olympus Bank agree to
confer with the WMSB Designated Representative regarding any proposed
significant changes to Olympus Bank's asset/liability management policies and
objectives. Olympus and Olympus Bank will promptly notify the WMSB Designated
Representative of any material change in the normal course of business or in the
operation of the properties of Olympus or Olympus Bank or of any governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated) or the institution or the threat of any litigation
involving Olympus or Olympus Bank, and will keep the WMSB Designated
Representative fully informed of such events and the progress of any already
existing litigation. Olympus and Olympus Bank agree not to settle the
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class action lawsuit captioned RICHARD MADSEN VS. PRUDENTIAL FEDERAL SAVINGS
AND LOAN ASSOCIATION, Third Judicial District Court of Salt Lake County, State
of Utah, Civil No. 226073, filed February 1975 without the approval of WMSB
(which approval will not be unreasonably withheld, delayed or conditioned).
(b) WMSB shall immediately notify the Olympus Designated
Representative if it appears that there has occurred any change in its financial
or other condition or any other event that will or may affect WMSB's ability to
complete the Merger or have a Material Adverse Effect on WMSB.
6.4 ACCESS TO PROPERTIES AND RECORDS; CONFIDENTIALITY.
(a) Each of Olympus and Olympus Bank shall permit WMSB
reasonable access to its properties, and shall disclose and make available to
WMSB all books, papers and records relating to the assets, stock, ownership,
properties, obligations, operations and liabilities of Olympus and any Olympus
Subsidiary, including but not limited to, all books of account (including the
general ledger), tax records, minute books of directors and stockholders
meetings, organizational documents, bylaws, material contracts and agreements,
filings with any regulatory authority, accountants work papers, litigation
files, plans affecting employees, and any other business activities or prospects
in which WMSB may have a reasonable interest, including without limitation, all
commercial and commercial real estate loan files in each case during normal
business hours and upon reasonable notice, Olympus and Olympus Bank shall not be
required to provide access to or disclose information where such access or
disclosure would jeopardize the attorney-client privilege of Olympus or any
Olympus Subsidiary or would contravene any law, rule, regulation, order,
judgment, decree or binding agreement entered into prior to the date hereof.
The parties will use all reasonable efforts to make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(b) All information furnished by Olympus or any Olympus
Subsidiary to WMSB or its representatives or affiliates pursuant to, or in any
negotiation in connection with, this Agreement shall be treated as the sole
property of Olympus or any Olympus Subsidiary until consummation of the Merger
and, if the Merger shall not occur, WMSB and its agents and advisers shall
return to Olympus or any Olympus Subsidiary, as appropriate, all documents or
other materials containing, reflecting, referring to such information, and shall
keep confidential all such information and shall not disclose or use such
information for competitive purposes. The obligation to keep such information
confidential shall not apply to (i) any information which (w) WMSB can establish
by convincing evidence was already in its possession (subject to no obligations
of confidentiality) prior to the disclosure thereof by Olympus or such Olympus
Subsidiary; (x) was then generally known to the public; (y) becomes known to
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the public other than as a result of actions by WMSB or by its directors,
officers or employees or agents; or (z) was disclosed to WMSB, or to its
directors, officers or employees, solely by a third party not bound by any
obligation of confidentiality; or (ii) disclosure in accordance with the federal
securities laws, federal banking laws, or pursuant to an order of a court of
competent jurisdiction.
6.5 REPORTS.
(a) As soon as reasonably available, but in no event more
than 45 days after the end of each fiscal quarter ending after the date of this
Agreement (other than the last quarter of any fiscal year), Olympus will deliver
to WMSB its quarterly report on Form 10-Q, as filed under the Securities
Exchange Act. As soon as reasonably available but in no event more than 120
days after the end of each fiscal year ending after the date of this Agreement,
Olympus will deliver to WMSB its annual report on Form 10-K, as filed under the
Securities Exchange Act.
(b) As soon as reasonably available, but in no event more
than 45 days after the end of each fiscal quarter ending after the date of this
Agreement (other than the last quarter of any fiscal year), WMSB will deliver to
Olympus its quarterly report on Form F-4 as filed with the FDIC. As soon as
reasonably available, but in no event more than 120 days after the end of each
fiscal year ending after the date of this Agreement, WMSB will deliver to
Olympus its annual report on Form F-2 as filed with the FDIC.
6.6 REGULATORY MATTERS.
(a) The parties hereto will cooperate with each other and
use all reasonable efforts to prepare all necessary documentation, to effect all
necessary filings and to obtain all necessary permits, consents, approvals and
authorizations of all third parties and governmental bodies necessary to
consummate the transactions contemplated by this Agreement including, without
limitation, those that may be required from the SEC, the FDIC, the OTS, the
Justice Department, other regulatory authorities, or the holders of capital
stock. WMSB and Olympus shall each have the right to review reasonably in
advance all information relating to WMSB or Olympus, as the case may be, and any
of their respective subsidiaries, together with any other information reasonably
requested, which appears in any filing made with or written material submitted
to any governmental body in connection with the transactions contemplated by
this Agreement.
(b) WMSB and Olympus shall furnish each other with all
reasonable information concerning themselves, their subsidiaries, directors,
officers and stockholders and such other matters as may be necessary or
advisable in connection with the Offering Circular/Proxy Statement, or any other
statement or
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application made by or on behalf of WMSB or Olympus, or any of their respective
subsidiaries to any governmental body in connection with the Merger and the
other transactions, applications or filings contemplated by this Agreement.
(c) WMSB and Olympus will promptly furnish each other with
copies of written communications received by WMSB or Olympus or any of their
respective subsidiaries from, or delivered by any of the foregoing to, any
governmental body in respect of the transactions contemplated hereby.
6.7 APPROVAL OF OLYMPUS STOCKHOLDERS. Olympus will (a) take all
steps necessary duly to call, give notice of, convene and hold a meeting of its
stockholders as soon as practicable for the purpose of voting on this Agreement
and the transactions contemplated hereby and with the consent of WMSB (which
consent shall not be unreasonably withheld, delayed or conditioned), for such
other purposes as may be necessary or desirable, (b) include in the Proxy
Statement the recommendation of Olympus's Board of Directors that the
stockholders approve this Agreement and the other transactions contemplated
hereby and such other matters as may be submitted to its stockholders in
connection with this Agreement, (c) cooperate and consult with WMSB with respect
to each of the foregoing matters, and (d) use all reasonable efforts to obtain,
as promptly as practicable, the necessary approvals by Olympus stockholders of
this Agreement and the transactions contemplated hereby, except, in each case,
where the directors of Olympus determine in their good faith judgment (after
receiving advice of counsel) that they are required to do otherwise in order to
discharge their fiduciary duties.
6.8 FURTHER ASSURANCES. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In case of any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall take all necessary action,
subject to the terms and conditions of this Agreement.
6.9 DISCLOSURE SUPPLEMENTS.
(a) As soon as practicable after the end of each calendar
quarter, at such other times as WMSB may reasonably request and at least five
business days prior to Closing, Olympus and Olympus Bank will promptly
supplement or amend the Disclosure Schedules delivered in connection herewith
with respect to any matter hereafter arising which, if existing, occurring or
known at the date of this Agreement would have been required to be set forth or
described in such Schedules or which is necessary to correct any information in
such Schedules which has been rendered
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inaccurate thereby. Notwithstanding this provision, NO SUPPLEMENT OR AMENDMENT
TO SUCH SCHEDULES SHALL HAVE ANY EFFECT FOR THE PURPOSE OF DETERMINING
SATISFACTION OF THE CONDITIONS HEREINAFTER SET FORTH IN SECTION 7.2 or the
compliance by Olympus or Olympus Bank with the covenants set forth in
Section 6 hereof.
(b) As soon as practicable after the end of each calendar
quarter, at such other times as Olympus may reasonably request and at least five
business days prior to Closing, WMSB and NFSB will promptly supplement or amend
the Disclosure Schedules delivered in connection herewith with respect to any
matter hereafter arising which, if existing, occurring or known at the date of
this Agreement would have been required to be set forth or described in such
Schedules or which is necessary to correct any information in such Schedules
which has been rendered inaccurate thereby. Notwithstanding this provision, NO
SUPPLEMENT OR AMENDMENT TO SUCH SCHEDULES SHALL HAVE ANY EFFECT FOR THE PURPOSE
OF DETERMINING SATISFACTION OF THE CONDITIONS HEREINAFTER SET FORTH IN SECTION
7.3 or the compliance by WMSB or NFSB with the covenants set forth in Section 6
hereof.
6.10 PUBLIC ANNOUNCEMENTS. The parties will cooperate and
consult with each other in the development and distribution of all news releases
and other public information disclosures with respect to this Agreement or any
of the transactions contemplated hereby, except as may be otherwise required by
law.
6.11 FAILURE TO FULFILL CONDITIONS. In the event that WMSB or
Olympus determines that a condition to its obligation to consummate the
transactions contemplated hereby cannot be, or is not likely to be, fulfilled on
or prior to June 30, 1995 and that it will not waive that condition, it will
promptly notify the other party.
6.12 ASSIGNMENT OF CONTRACT RIGHTS. Olympus and Olympus Bank
shall obtain any consents, waivers or revisions necessary to allow WMSB to
accede to all of the rights of Olympus, or Olympus Bank as the case may be,
under all existing real property and personal property leases, licenses and
other contracts, including without limitation loan servicing contracts, which
WMSB wishes to have continue in effect after the Effective Time without
incurring substantial costs in connection therewith. WMSB will offer its
reasonable cooperation with Olympus and Olympus Bank in obtaining such consents,
waivers and revisions, it being understood that the obligation to obtain such
consents, waivers and revisions shall nevertheless be the obligation of Olympus
and Olympus Bank.
6.13 EMPLOYEES; EMPLOYEE BENEFIT PLANS.
(a) Except as otherwise provided herein, all employees of
Olympus and any Olympus Subsidiary as of the Effective Time will at least
temporarily continue as employees of NFSB after the Effective Time.
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(b) WMSB or NFSB will provide severance payments to
employees of Olympus and any Olympus Subsidiary whose employment is terminated
without cause by WMSB or NFSB within one year after the Effective Date in the
amount set forth below. Such payments shall be paid on the first regular pay
date following the date that any termination is effective. Such severance
payments shall be computed as follows:
Non-officer: 1/2 month per year of service; maximum 3 months total
pay.
Officer (as set out on Disclosure Schedule 6.13(b)): two weeks per
year of service; maximum 6 months total pay.
As used above in this Section 6.13(b), the term "year of service" shall
mean a full year of service, except that any person having at least six months
of service shall be deemed to have one full year of service (it being
understood, for example, that a person with eighteen months shall be treated as
only having one year). In computing such severance payments for regular
part-time employees, their per month compensation shall be based on one-twelfth
of the actual number of hours worked by any such employee in 1994. Olympus or
Olympus Subsidiary employees who are terminated "for cause" shall receive no
severance payments.
As used in this Section 6.13(b) "termination" shall occur when WMSB or
NFSB gives an employee a notice of termination.
As used in this Section 6.13(b), termination "for cause" shall mean
termination because (i) the employee engages in abusive use of alcohol or other
drugs on a continuing or recurring basis, (ii) the employee is convicted of a
crime (other than a traffic violation), or (iii) WMSB or NFSB determines in good
faith that the employee has engaged in dishonesty, fraud, destruction or theft
of WMSB or NFSB property, physical attack resulting in injury to a fellow
employee, willful malfeasance or gross negligence in the performance of his or
her duties, or misconduct materially injurious to WMSB or NFSB. WMSB shall
interpret and administer the term "for cause" consistently with its application
for similarly situated WMSB employees under the WMSB severance plan.
(c) All employees of Olympus or the Olympus Subsidiaries who
continue as employees of WMSB or NFSB shall receive service credit for
employment at Olympus and any Olympus Subsidiary for purpose of meeting all
eligibility and vesting requirements for vesting in all WMSB retirement plans;
provided that such persons are continually employed by WMSB or NFSB on a date
that is no later than 12 months and one day after the Effective Time. Employees
who receive such service credit shall be considered for eligibility under the
WMSB retirement plans effective as of the Effective Time. Prior to enrollment
in the
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WMSB retirement plans, employees of Olympus shall either (i) be covered by the
existing Olympus retirement plans or (ii) in the event of termination of
employment with WMSB or WMSB Subsidiaries prior to enrollment in the WMSB
retirement plans, then such employees shall receive an additional after tax
payment substantially equivalent to the benefits that would have been accrued
under the Olympus retirement plans (as reasonably determined by WMSB), without
regard to the service requirements for active participation, and based on
compensation earned from the Effective Time until termination of employment.
(d) With the consultation and approval of WMSB, Olympus
shall take all necessary and appropriate action to amend the Olympus stock Bonus
Plan to (i) eliminate new participant loans, or any extension or renewal of
existing loans, and (ii) eliminate salary deferral elections after the Effective
Time. Olympus shall not amend the Olympus Stock Bonus Plan or otherwise
authorize any action to terminate such plan or to provide distributions
therefrom that are not permitted or required under the terms thereof on July 15,
1994.
(e) To the extent permissible under the Code and ERISA, and
with the consultation and approval of WMSB, Olympus shall take all necessary and
appropriate action to amend the Olympus money purchase pension plan, effective
as of the Effective Time, and provide the notices required under Section
204(h) of ERISA, so that participants do not accrue benefits thereunder after
the Effective Time. Notwithstanding the foregoing, if any portion of the money
purchase pension plan is invested in the common stock of Olympus, Olympus shall
not terminate the plan.
(f) Prior to the Effective Time, Olympus and the Olympus
Subsidiaries shall take all necessary and appropriate action to amend or
terminate any Benefit Plan or other arrangement of Olympus or the Olympus
Subsidiaries so that no individual can or will receive an "excess parachute
payment," as defined in Section 280G(b)(1) of the Code, as a result of the
Closing or any change described in Section 280G(b)(2)(A)(i) of the Code.
(g) Prior to the Effective Time, Olympus and the Olympus
Subsidiaries shall amend or terminate, as appropriate, any Benefit Plan which is
an employee welfare benefit plan (within the meaning of Section 3(1) of ERISA)
so that no participant, beneficiary or dependent is entitled to benefits or
continuing coverage thereunder after such participant's termination of
employment, except for (i) continuing coverage required under COBRA; (ii) the
retired life reserve arrangement disclosed on Disclosure Schedule 4.13(e)(viii);
and (iii) medical coverage currently in place for John Adams, Brent Shaw and
Joan Wagner.
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(h) Effective as of the Effective Time, all employees of
Olympus or the Olympus Subsidiaries shall, at the option of WMSB, either
continue to participate in the Benefit Plans that are employee welfare benefit
plans (within the meaning of Section 3(1) of ERISA) or "cafeteria plans" (within
the meaning of Section 125 of the Code) and are in effect immediately prior to
the Effective Time or become participants in similar WMSB employee benefit
plans, practices and policies (the "WMSB Welfare Benefit Plans") on the same
terms and conditions as similarly situated WMSB employees. If any of the
employees of Olympus or the Olympus Subsidiaries shall become eligible to
participate in any WMSB Welfare Benefit Plans that provide medical,
hospitalization or dental benefits, WMSB shall waive any pre-existing condition
exclusions and actively at work requirements (but shall not waive general
requirements of formal employment with WMSB).
(i) All vacation accrued and not used by employees of
Olympus and the Olympus Subsidiaries prior to the Effective Time shall be
maintained by WMSB after the Effective Time; PROVIDED, HOWEVER, that such
vacation shall accrue at the same rate as for similarly situated WMSB employees
(counting service credit earned prior to the Effective Time.) Up to 5 days of
sick leave or short-term disability accrued by employees of Olympus and the
Olympus Subsidiaries prior to the Effective Time shall be maintained by WMSB
after the Effective Time.
6.14 INDEMNIFICATION OF OLYMPUS DIRECTORS AND OFFICERS.
(a) WMSB and NFSB will use all reasonable efforts, in
cooperation with Olympus and Olympus Bank to arrange for insurance coverage
(with at least as much dollar coverage as Olympus' and Olympus Bank's directors
and officers have under their current policy) for prior acts for all current and
former directors and officers of Olympus and Olympus Bank, provided that such
coverage must be available from normal carriers at a reasonable cost in light of
the cost of similar policies under similar circumstances. Subject to the
foregoing, it is contemplated that Olympus and Olympus Bank will purchase "tail"
coverage to cover the first 6 months following the Effective Date, and WMSB and
NFSB will purchase "prior acts" coverage for subsequent periods. WMSB and NFSB
shall not cancel such prior acts coverage for 3 years after the Effective Date.
(b) From and after the Effective Time, WMSB will, to the
extent permitted by then applicable law, indemnify current and former directors
and officers of Olympus (each an "Indemnified Party") as though they had been
directors and/or officers of WMSB, for acts or omissions occurring prior to, and
including, the Effective Time.
Any Indemnified Party wishing to claim indemnification under this
provision shall, upon learning of any claim, action, suit, proceeding or
investigation (hereinafter a "Claim"), promptly
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notify WMSB thereof. WMSB shall have the right to assume the defense of any
such Claim and upon so doing shall not thereafter be liable to such Indemnified
Party for any expenses, of other counsel or otherwise, subsequently incurred by
such Indemnified Party in connection with such Claim. If WMSB elects not to
assume such defense, or counsel for the Indemnified Party advises that there are
issues which raise conflicts of interest between WMSB and the Indemnified Party,
the Indemnified Party may retain counsel satisfactory to him and WMSB will pay
all reasonable fees and expenses of such counsel incurred in defending the
Claim; PROVIDED, HOWEVER, that (i) in the event that more than one
Indemnified Party is involved in the same Claim, WMSB shall not be obligated to
pay for more than one firm of counsel for all Indemnified Parties in any one
jurisdiction (unless counsel for the Indemnified Parties advises that there are
issues which raise conflicts of interest between the Indemnified Parties), (ii)
the Indemnified Parties will cooperate in the defense of the Claim, and (iii)
WMSB shall not be liable for any settlement effected without its prior written
consent. If, upon the conclusion of the proceedings in any Claim, it is
determined by WMSB that the Indemnified Party was not entitled to such
indemnification, such party shall be required to reimburse WMSB for all cost
expended in defending such Indemnified Party.
(c) This Section 6.14 is intended to be for the benefit of,
and shall be enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on WMSB and its successors and assigns.
6.15 STOCK OPTION PLANS. Olympus shall cause the Stock Option
Plan committee to NOT allow any Optionee to receive cash, property or other
consideration (other than shares received upon exercise of an option) in
exchange for the surrender of any options. Nothing in this Section 6.15 shall
prevent an Option holder from exercising his options prior to Closing, provided
that any exercise and any subsequent sale, transfer, pledge or other disposition
of the shares shall be in compliance with applicable requirements of the
Securities and Exchange Commission's ASR 135 and Section 1(h) hereof.
6.16 POST-CLOSING FINANCIAL STATEMENTS. WMSB agrees to use all
reasonable efforts to file an F-3 with the FDIC within 20 calendar days after
the end of the first full calendar month deemed by Deloitte & Touche to satisfy
the requirement of ASR 135 with respect to the time period required for
post-Merger financial results following the Effective Time (except if such month
is the last month of a calendar quarter), which F-3 shall include financial
results covering at least 30 days of post-merger combined operations of WMSB and
Olympus in accordance with ASR 135.
6.17 CONSULTING AND NONCOMPETITION AGREEMENT. At or prior to
Closing, WMSB shall enter into a consulting agreement with Blaine Huntsman
substantially in the form of Exhibit D
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hereto which agreement shall provide that Mr. Huntsman will be a consultant to
WMSB for a period of 18 months from and after the Effective Time, that Mr.
Huntsman will receive $225,000 over such period (payments to be monthly), that
he shall advise WMSB generally in regard to its Utah operations and shall
perform such other functions as reasonably requested by the President and CEO of
WMSB, that during the term of the consulting agreement, he shall not work for or
serve any other financial institution as an employee, officer, director,
consultant or advisor, that he shall have reasonable access to office space and
secretarial support and that he shall be entitled to no employee benefits.
6.18 POST-MERGER ACTIONS. Following the Merger, neither WMSB nor
any of its affiliates shall take any action which will adversely affect the tax
treatment of the transaction to the shareholders of Olympus including, without
limitation failing to continue at least one significant historic business line
of Olympus Bank or to use at least a significant portion of Olympus Bank's
historic assets in a business, in each case within the meaning of Treas. Reg.
1.368-1(d).
7. CLOSING CONDITIONS.
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS UNDER THIS AGREEMENT.
The respective obligations of each party under this Agreement to consummate the
Merger shall be subject to the fulfillment at or prior to the Effective Time of
the following conditions:
(a) This Agreement and the transactions contemplated hereby
shall have been approved by the requisite vote of the stockholders of Olympus.
(b) All necessary regulatory or governmental approvals and
consents required to consummate the transactions contemplated hereby shall have
been obtained and shall remain in full force and effect and all statutory or
regulatory waiting periods in respect thereof shall have expired.
(c) No party hereto shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Merger.
(d) TAX RULING OR OPINION. An opinion shall be obtained
from Foster Pepper & Shefelman in a form reasonably satisfactory to WMSB and
Olympus with respect to federal income tax laws substantially to the effect
that:
(i) The Merger will qualify as a "reorganization"
under Section 368(a) of the Code.
(ii) No gain or loss will be recognized by Olympus or
WMSB by reason of the Merger.
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(iii) No gain or loss will be recognized by a
stockholder of Olympus who, pursuant to the Agreement, exchanges shares of
Olympus Common Stock solely for shares of WMSB Common Stock.
(iv) Subject to the provisions of Section 302 of the
Code, gain or loss will be recognized with respect to each shareholder of
Olympus who holds shares of Olympus Common Stock and who, pursuant to the
exercise of dissenter rights, exchanges such shares solely for cash.
(v) The payment of cash to a Olympus shareholder in
lieu of a fractional share of WMSB Common Stock will be treated as a
distribution in redemption of the fractional share interest, such shareholder
will be taxed on the cash received in accordance with the provisions and
limitations of Section 302 of the Code and, in general, such distribution in
redemption will be treated as a payment in exchange for such fractional share
interest.
(vi) The aggregate basis of the WMSB Common Stock
received by a Olympus stockholder who exchanges Olympus Common Stock for WMSB
Common Stock will be the same as the aggregate basis of the Olympus Common stock
surrendered in exchange therefor (reduced by the basis allocable to any
fractional share for which cash is received).
(vii) The holding period of the WMSB Common Stock
received by a Olympus stockholder will include the period during which the
Olympus Common Stock surrendered in exchange therefore was held (if such Olympus
Common Stock was held by such Olympus stockholder as a capital asset at the
Effective Time).
(viii) Gain or loss recognized in exchange for a
fractional share or by Olympus Shareholders if Olympus Common Stock is converted
into cash by exercise of dissenter rights generally will be capital gain or loss
if the shares of Olympus Common Stock were held by the Olympus Shareholder as a
capital asset. For such shareholders, if the shares had been held for more than
one year, the gain or loss will be long-term capital gain or loss. Whether or
not the character of any taxable gain or loss is material to a Olympus
Shareholder depends upon the particular circumstances of the shareholder.
Appropriate modifications to the opinion shall be made in the event that
WMSB elects to pay a portion of the Merger Consideration in cash pursuant to
Section 1(c)(iii); provided that no such modification shall affect the opinion
under (i) or (ii) above or under (iii) above to the extent a stockholder
receives WMSB Common Stock pursuant to the Merger.
(e) ANTITRUST LAW. Any applicable pre-merger notification
provisions of Section 7A of the Clayton Act shall have been complied with by the
parties hereto, and no other
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statutory or regulatory requirements with respect to the Clayton Act shall be
applicable other than Section 18(c) of the Federal Deposit Insurance Act and
rules and regulations in connection therewith. There shall be no pending or
threatened proceedings under any applicable antitrust law of the State of
Washington.
(f) SECURITIES LAWS. The shares of WMSB Common Stock to
be issued to the stockholders of Olympus in exchange for their shares shall be
exempt or shall have been qualified or registered for offering and sale under
the federal securities law and the state securities or Blue Sky laws of each
jurisdiction in which stockholders of Olympus reside, and no order suspending
the sale of such shares of WMSB Common Stock in any such jurisdiction shall have
been issued prior to the Effective Time and no proceedings for that purpose
shall have been instituted or shall be contemplated; provided, that WMSB shall
not have been obligated to execute or file any general consent to service of
process or to qualify as a foreign corporation in any jurisdiction in which it
is not qualified. As soon as reasonably practicable, Olympus shall advise WMSB
of each jurisdiction in which stockholders of Olympus reside.
7.2 CONDITIONS TO THE OBLIGATIONS OF WMSB UNDER THIS AGREEMENT.
The obligations of WMSB under this Agreement shall be further subject to the
satisfaction, at or prior to the Effective Time, of the following conditions,
any one or more of which may be waived by WMSB.
(a) Each of the obligations or covenants of Olympus and the
Olympus Subsidiaries required to be performed by them at or prior to the Closing
pursuant to the terms of this Agreement shall have been duly performed and
complied with and each of the representations and warranties of Olympus and the
Olympus Subsidiaries contained in this Agreement shall be true and correct as of
the date of this Agreement and as of the Effective Time as though made at and as
of the Effective Time (except as to any representation or warranty that
specifically relates to an earlier date, which shall be true and correct as of
such earlier date), except where the failure of such representations to be true
and correct or the failure of Olympus or any Olympus Subsidiary to have
performed the obligations and covenants as required by Section 6 hereof,
PROVIDED, HOWEVER, that the covenants contained in Sections 6.1(a), 6.1(b)
and 6.2 shall not be subject to the foregoing materiality exception and must be
fully complied with, shall not in the aggregate have had a negative economic
effect of $500,000 or more on Olympus and the Olympus Subsidiaries or will, when
adjusted to their present value, have such an effect on WMSB.
(b) Any consents, waivers, clearances, approvals and
authorizations of regulatory or governmental bodies that are necessary in
connection with the consummation of the transactions contemplated hereby shall
have been obtained, and none of such consents, waivers, clearances, approvals or
authorizations shall
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contain any term or condition that (i) is a term or condition that has not
heretofore been normally imposed in such transactions and which would have a
Material Adverse Effect on Olympus or WMSB, or (ii) would require WMSB to raise
additional capital other than to increase its leverage capital (as defined in
Appendix B to 12 C.F.R. Part 325 as proposed or adopted by the FDIC) to a level
no higher than 5.0 percent (as adjusted to account for the Merger). It is
hereby agreed that any term or condition contained in any previous approval
granted to WMSB for a merger or acquisition transaction shall be deemed a
"normal" condition for purposes of this Section 7.2(b). For purposes of Section
8 hereof, any "approval" which contains any of the foregoing unacceptable terms
or conditions shall be deemed to be a regulatory "denial."
(c) WMSB shall have received an opinion, dated the date of
the Closing, from Kimball, Parr, Waddoups, Brown & Gee, counsel to Olympus,
substantially to the effect set forth in Exhibit E hereto (appropriately
modified in the event the structure of the transactions contemplated hereby is
modified as permitted by Section 1 hereof).
(d) Since the date of this Agreement there shall have been
no material adverse change in the overall financial condition, businesses or
results of operations of Olympus and the Olympus Subsidiaries taken as a whole
(except for changes resulting from market and economic conditions which
generally affect the savings industry as a whole including, without limitation,
changes in law or regulation or changes in generally accepted accounting
principles or interpretations thereof); PROVIDED, HOWEVER, that the
following expenses and adjustments shall be excluded in determining whether a
material adverse change has occurred: (i) fees and expenses relating to the
consummation of the transactions contemplated hereby, (ii) charges for severance
and other payments to officers and employees made or expected to be made in
connection with the transactions contemplated hereby, and (iii) costs and
expenses related to any transactions of the type set forth in Section 6.1
undertaken by Olympus with the prior written consent of WMSB (including without
limitation, the opening of the Proposed Branches).
(e) Olympus shall have obtained at or prior to the Effective
Time consents to the assignment of the real property leases for the One Utah
Center and Woodlands branches to the successor by merger to Olympus Bank.
(f) Except as otherwise requested, the directors of Olympus
and each Olympus Subsidiary shall have resigned effective on or prior to the
Effective Time.
(g) Unless WMSB elects to pay a portion of the Merger
Consideration in the form of cash pursuant to Section 1(c)(iii) hereof, WMSB
shall have received an opinion in
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form reasonably satisfactory to it from Deloitte & Touche that the Merger shall
qualify for pooling of interests accounting treatment or, in the event it does
not so qualify, that neither Olympus, nor its shareholders, directors or
officers shall have taken any action that would disqualify the Merger from being
treated as a pooling of interests for accounting purposes.
(h) Olympus shall have furnished WMSB with such certificates
of its officers and such other documents to evidence fulfillment of the
conditions set forth in this Section 7.2 as WMSB may reasonably request.
(i) Dissenters' rights shall not have been preserved by
stockholders of Olympus with respect to more than 5 percent of the outstanding
shares of Olympus Commons Stock, each affiliate of Olympus has delivered to
Olympus certificates evidencing all shares of Olympus Common Stock owned by such
affiliate as provided in Section 1(h) hereof, and that such affiliate has not
voted against the Merger, together with any other assurances, requested by WMSB
that such affiliates will not have dissenter's rights.
(j) Olympus shall have delivered to WMSB amendments of all
indemnification agreements entered into by Olympus (other than the agreement
with persons who were directors at Olympus but are no longer directors as of the
date of this Agreement) which amendment shall provide that the agreement shall
commit WMSB to indemnify only to the extent permitted under the laws of the
State of Washington.
7.3 CONDITIONS TO THE OBLIGATIONS OF OLYMPUS UNDER THIS
AGREEMENT. The obligations of Olympus and Olympus Bank under this Agreement
shall be further subject to the satisfaction, at or prior to the Effective Time,
of the following conditions, any one or more of which may be waived by Olympus:
(a) Each of the obligations of WMSB and NFSB required to be
performed by it at or prior to the Closing pursuant to the terms of this
Agreement shall have been duly performed and complied with in all material
respects.
(b) Each of the representations and warranties of WMSB and
NFSB contained in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Effective Time as though
made at and as of the Effective Time except as to any representation or warranty
which specifically relates to an earlier date, which shall be true and correct
as of such earlier date, except in the case of such representations and
warranties, where the failure to be true would not have a Material Adverse
Effect on WMSB.
(c) Olympus shall have received an opinion, dated the date
of the Closing, from Foster Pepper & Shefelman, counsel to WMSB, substantially
to the effect set forth in Exhibit F
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hereto (appropriately modified in the event the structure of the transactions
contemplated hereby is modified as permitted by Section 1 hereof).
(d) Since the date of this Agreement, there shall have been
no material adverse change in the overall financial condition, businesses or
results of operations of WMSB and its Subsidiaries taken as a whole.
(e) WMSB shall have furnished Olympus with such
certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Section 7.3 as Olympus may
reasonably request.
(f) Olympus shall have received an opinion reasonably
satisfactory to it from Goldman, Sachs & Co., a financial advisory firm, dated
as of the date of the Offering Circular/Proxy Statement, as to the fairness,
from a financial point of view, of the consideration to be received by the
stockholders of Olympus pursuant to this Agreement.
(g) WMSB shall have instructed its transfer agent with
respect to the issuance of WMSB Common Stock to the Olympus stockholders at
least two days prior to Closing.
8. TERMINATION, AMENDMENT AND WAIVER.
8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of the Merger by
the Olympus stockholders:
(a) by mutual written consent of all the parties hereto;
(b) by any party hereto (i) if the Effective Time shall not
have occurred on or prior to June 30, 1995 unless the failure of such occurrence
shall be due to the failure of the party seeking to terminate this Agreement to
perform or observe its agreements and conditions set forth herein to be
performed or observed by such party at or before the Effective Time; or (ii) 31
days after the date on which any application for regulatory approval
prerequisite to the consummation of the transactions contemplated hereby shall
have been denied or withdrawn at the request of the applicable regulatory
authority; provided, that, if prior to the expiration of such 31-day period WMSB
is engaged in litigation or an appeal procedure relating to an attempt to obtain
such approval, Olympus may not terminate this Agreement until the earlier of (A)
June 30, 1995 and (B) 31 days after the completion of such litigation and appeal
procedures, and of any further regulatory or judicial action pursuant thereto,
including any further action by a government agency as a result of any judicial
remand, order or directive or otherwise; or (iii) 10 days after written
certification of the vote of the Olympus's stockholders is delivered to WMSB
indicating that such stockholders failed to adopt
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the resolution to approve this Agreement and the transactions contemplated
hereby at the stockholders' meeting (or any adjournment thereof) contemplated by
Section 1(e) hereof;
(c) by WMSB (i) if at the time of such termination there
shall have been a material adverse change in the consolidated financial
condition of Olympus from that set forth in Olympus's Quarterly Report on Form
10-Q for the three-month period ended March 31, 1994 (except for changes
resulting from market and economic conditions which generally affect the savings
industry as a whole, including changes in regulation), it being understood that
any of the matters set forth in Olympus's Disclosure Schedules as of the date of
this Agreement or any of the matters described in clauses (i), (ii) or (iii) of
Section 7.2(d) are not deemed to be a material adverse change for purposes of
this paragraph (c); (ii) if there shall have been any material breach of any
covenant of Olympus hereunder and such breach shall not have been remedied
within 45 days after receipt by Olympus of notice in writing from WMSB
specifying the nature of such breach and requesting that it be remedied; or
(iii) any of the events or circumstances described in Section 2(a) or 2(c) of
the Option occurs;
(d) by Olympus (i) if at the time of such termination there
shall have been a material adverse change in the consolidated financial
condition of WMSB from that set forth in WMSB's Quarterly Report on Form F-4 for
the three-month period ended March 31, 1994 (except for changes resulting from
market and economic conditions which generally affect the savings industry as a
whole), it being understood that any of the matters set forth in WMSB's
Disclosure Schedules as of the date of this Agreement are not deemed to be a
material adverse change for purposes of this paragraph (d); or (ii) if there
shall have been any material breach of any covenant of WMSB hereunder and such
breach shall have not been remedied within 45 days after receipt by WMSB of
notice in writing from Olympus specifying the nature of such breach and
requesting that it be remedied or (iii) if the directors of Olympus, after
receiving advice of counsel, determines in their good faith judgment that they
are required to do so in order to discharge their fiduciary duties, shall
withdraw or modify or resolve to withdraw or modify its recommendation that
shareholders vote in favor of the transactions contemplated hereby.
8.2 BREAK-UP FEE.
(a) The parties hereby acknowledge that, in negotiating and
executing this Agreement and the Option and in taking the steps necessary or
appropriate to effect the transactions contemplated hereby, Olympus has incurred
and will incur direct and indirect monetary and other costs (including without
limitation attorneys' fees and costs, costs of Olympus management and employee
time and potential damage to Olympus's business and franchises as a result of
the announcement of the pending Merger), will forego discussions with other
potential acquirors and will forego various business activities which it
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would have otherwise undertaken if it remained an independent institution. To
compensate Olympus for such costs and to induce it to forego initiating
discussions with other potential acquirors, (i) if this Agreement terminates
because WMSB does not use all reasonable efforts to consummate the transactions
contemplated by this Agreement in accordance with the terms of this Agreement
(unless a condition set forth in Section 7.3 is not satisfied and such
nonsatisfaction has not been the result of the failure of WMSB or NFSB to use
all reasonable efforts to consummate this Agreement in accordance with the terms
of this Agreement), (ii) if WMSB terminates this Agreement for any reason other
than the grounds for termination set out in Sections 8.1(a), 8.1(b) or 8.1(c) or
(iii) if Olympus terminates this Agreement pursuant to Section 8.1(d)(ii), then
WMSB shall pay to Olympus on demand (and in no event more than three days after
such demand) in immediately available funds, Two Hundred Fifty Thousand and
No/100 Dollars ($250,000.00).
(b) The parties hereby acknowledge that, in negotiating and
executing this Agreement and the Option and in taking the steps necessary or
appropriate to effect the transaction contemplated hereby, WMSB has incurred and
will incur direct and indirect monetary and other costs (including without
limitation attorneys' fees and costs and costs of WMSB employee and management
time) and will forego discussions with respect to other potential acquisitions.
To compensate WMSB for such costs and to induce it to forego initiating
discussions regarding other acquisitions, if (i) this Agreement terminates
because Olympus does not use all reasonable efforts to consummate the
transactions contemplated by this Agreement in accordance with the terms of this
Agreement (unless a condition set forth in Section 7.3 is not satisfied and such
nonsatisfaction has not been the result of the failure of Olympus or Olympus
Bank to use all reasonable efforts to consummate this Agreement in accordance
with the terms of this Agreement) or any of the events or circumstances
described in Section 2(a) or 2(c) of the Option occurs; (ii) Olympus terminates
this Agreement for any reason other than the grounds for termination set out in
Sections 8.1(a), 8.1(b) or 8.1(d); or (iii) WMSB terminates this Agreement
pursuant to Section 8.1(c)(iii), then Olympus shall be obligated to pay WMSB on
demand (and in no event more than three days after such demand) in immediately
available funds Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00), and
in addition WMSB shall be entitled to receive any benefits under the Option. It
is understood and agreed that this Section 8.2(b) does not limit or restrict in
any way the events or circumstances upon which WMSB may exercise its options
under the Option.
If (a) each of the conditions set forth in Section 7.1 has been satisfied,
(b) WMSB has delivered to Olympus a written waiver of the conditions set forth
in Section 7.2 hereof, and (c) Olympus has not yet published its financial
statements for the year ended December 31, 1994, then, upon the written request
of WMSB, Olympus and/or Olympus Bank shall, to the extent (i) permissible under
generally accepted accounting principles (in the judgment of
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Olympus' accountants) and (ii) permissible under applicable federal regulations
and not objectionable to Olympus' regulators, reflect the following changes or
adjustments on its income statement for the year ended December 31, 1994:
(i) adjustments to reflect a reduction of the market
value of the real property located at 115 South Main Street, Salt Lake City,
Utah 84111 below book value;
(ii) costs and expenses incurred or expected to be
incurred in connection with the transactions contemplated hereby; and
(iii) charges for severance and other payments to
officers and employees made or expected to be made in connection with the
transactions contemplated hereby.
8.3 EFFECT OF TERMINATION. In the event of termination of this
Agreement by any party, this Agreement shall forthwith become void (other than
Section 6.4(b) hereof, which shall remain in full force and effect) and, except
as and to the extent provided in Section 8.2, there shall be no further
liability on the part of any party or its officers or directors except for the
liability of WMSB and NFSB under Section 6.4(b), it being understood and agreed
that termination of this Agreement shall not affect the rights of WMSB under the
Option except as and to the extent expressly provided in the Option.
8.4 AMENDMENT, EXTENSION AND WAIVER. Subject to applicable law,
at any time prior to the consummation of the Merger, whether before or after
approval thereof by the stockholders of Olympus, the parties may (a) amend this
Agreement (including the Plans of Merger incorporated herein), (b) extend the
time for the performance of any of the obligations or other acts of any other
party hereto, (c) waive any inaccuracies in the representations and warranties
of any other party contained herein or in any document delivered pursuant
hereto, or (d) waive compliance with any of the agreements or conditions
contained herein; PROVIDED, HOWEVER, that after any approval of the Merger
by the Olympus stockholders, there may not be, without further approval of such
stockholders, any amendment or waiver of this Agreement (or the Plans of Merger)
that changes the amount or changes the form of consideration to be delivered to
the Olympus stockholders (it being understood that any election by WMSB pursuant
to Section 1(c)(iii) does not constitute an amendment or waiver). This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto. Any agreement on the part of a party hereto to
any extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party, but such waiver or failure to insist on
strict compliance with such obligation, covenant, agreement or condition shall
not operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
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9. MISCELLANEOUS.
9.1 EXPENSES. All legal and other costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
borne by the party incurring such costs and expenses unless otherwise specified
in this Agreement.
9.2 SURVIVAL. Except for the covenants of Sections 6.4(b),
6.13, 6.14, 6.16, 6.17 and 6.18 the respective representations and warranties,
covenants and agreements set forth in this Agreement and all Disclosure
Schedules shall not survive the Effective Time.
9.3 NOTICES. All notices, requests, claims, demands or other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by delivery, by registered or
certified mail (return receipt requested) or by cable, telecopier, or telex to
the respective parties as follows:
(a) If to WMSB, to:
Washington Mutual Savings Bank
1201 Third Avenue, Suite 1500
Seattle, Washington 98101
Attn: Craig E. Tall, Executive Vice President
With a copy to:
Foster Pepper & Shefelman
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
Attn: Fay L. Chapman
(b) If to Olympus or Olympus Bank, to:
Olympus Capital Corporation
115 South Main Street
Salt Lake City, Utah 84111
Attn: A. Blaine Huntsman
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue N.W.
Suite 800
Washington, D. C. 20004-2505
Attn: Thomas P. Vartanian
or such other address as shall be furnished in writing by any party to the
others in accordance herewith, except that notices of change of address shall
only be effective upon receipt.
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9.4 PARTIES IN INTEREST. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
party hereto without the prior written consent of the other parties. Nothing in
this Agreement is intended to confer, expressly or by implication, upon any
other person any rights or remedies under or by reason of this Agreement (except
for Sections 1, 6.13, 6.14, 6.16, 6.17 and 6.18, which are intended to benefit
third party beneficiaries).
9.5 ENTIRE AGREEMENT. This Agreement, including the documents
and other writings referred to herein or delivered pursuant hereto, contains the
entire agreement and understanding of the parties with respect to its subject
matter. There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties other than those expressly set forth herein
or therein. This Agreement supersedes all prior agreements and understandings
between the parties, both written and oral, with respect to its subject matter.
9.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts all of which shall be considered one and the same agreement and
each of which shall be deemed an original.
9.7 GOVERNING LAW. This Agreement, in all respects, including
all matters of construction, validity and performance, is governed by the
internal laws of the state of Washington as applicable to contracts executed and
delivered in Washington by citizens of such state to be performed wholly within
such state without giving effect to the principles of conflicts of laws thereof.
This Agreement is being delivered in Seattle, Washington.
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9.8 HEADINGS. The Section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
WASHINGTON MUTUAL SAVINGS BANK
Dated: July 27, 1994 By: Craig E. Tall
-----------------------------------
Its Executive Vice President
---------------------------------
WASHINGTON MUTUAL FEDERAL
SAVINGS BANK
Dated: July 27, 1994 By: Craig E. Tall
-----------------------------------
Its Executive Vice President
--------------------------------
OLYMPUS CAPITAL CORPORATION
Dated: July 27, 1994 By: A. Blaine Huntsman
----------------------------------
Its Chairman & CEO
-------------------------------
OLYMPUS BANK
Dated: July 27, 1994 By: A. Blaine Huntsman
----------------------------------
Its Chairman & CEO
------------------------------
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