REGISTRATION STATEMENT NO. 333-_____
Filed August 26, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST SAVINGS BANK OF WASHINGTON BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 91-1691604
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10 S. First Avenue
Walla Walla, Washington 99362
(509) 527-3636
(Address of principal executive offices)
1996 Stock Option Plan
1996 Management Recognition and Development Plan
(Full title of the Plan)
Gary L. Sirmon Copies to:
President and Chief Eric S. Kracov, Esquire
Executive Officer Breyer & Aguggia
First Savings Bank of Washington 1300 I Street, N.W.
Bancorp, Inc. Suite 470 East
10 S. First Avenue Washington, D.C. 20005
Walla Walla, Washington 99362 (202) 737-7900
(509) 527-3636
Name, address and telephone
number of agent for service
Page 1 of 7 Pages
Index to Exhibits Appears on Page 4.
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Calculation of Registration Fee
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share(1) Price(1) Fee
- ---------- ---------- --------- -------- ------------
Common Stock,
$.01 par
value 1,527,488 $16.63(2) $25,402,125.44 $8,759.42
(1) Estimated solely for the purpose of calculating the amount of the
registration fee. Pursuant to Rule 457(c) under the Securities Act of
1933, as amended (the "Securities Act"), the price per share is estimated
to be $16.63, based upon the average of the high and low trading prices
of the common stock, $.01 par value per share (the "Common Stock"), of
First Savings Bank of Washington Bancorp, Inc. (the "Registrant"), as
reported on the Nasdaq National Market System on August 23, 1996.
(2) Of this number, 1,091,063 shares are being registered for issuance under
the 1996 Stock Option Plan and 436,425 shares are being registered for
issuance under the 1996 Management Recognition and Development Plan (the
foregoing plans are referred to collectively herein as the "Plans");
together with an indeterminate number of shares reserved for issuance
pursuant to the Plans as a result of any future stock split, stock
dividend or similar adjustment of the outstanding Common Stock.
This Registration Statement shall become effective automatically upon the
date of filing in accordance with Section 8(a) of the Securities Act of 1933,
as amended, and 17 C.F.R. Section 230.462.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed with the Commission are incorporated in
this Registration Statement by reference:
(1) the Company's Registration Statement on Form S-1 (File No.
33-93386), filed June 12, 1995;
(2) the description of the Common Stock set forth in the Company's
Registration Statement on Form 8-A registering the Company's Common Stock,
pursuant to Section 12(g) of the Securities Exchange Act of 1934, filed
August 8, 1995; and
(3) the Company's Annual Report on Form 10-K for the year ended March
31, 1996.
All other reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Exchange Act, after the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities covered hereby then
remaining unsold, shall also be deemed to be incorporated by reference in
this Registration Statement and to be a part hereof commencing on the
respective dates on which such documents are filed.
Any statement contained in this Registration Statement, or in a
document incorporated or deemed to be incorporated by reference herein, shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein, or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not Applicable
Item 5. Interests of Named Experts and Counsel
Not Applicable
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law sets forth
circumstances under which directors, officers, employees and agents may be
insured or indemnified against liability which they may incur in their
capacities.
Article XVII of the Registrant's Certificate of Incorporation provides
for indemnification of the directors, officers, employees and agents of the
Registrant for expenses actually and reasonably incurred in connection with
the defense or settlement of any threatened, pending or completed action or
suit.
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Item 7. Exemption From Registration Claimed
Not Applicable
Item 8. Exhibits
The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8:
No. Exhibit
5 Opinion of Breyer & Aguggia
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Niemi, Holland & Scott, LLP
23.3 Consent of Breyer & Aguggia (see Exhibit 5)
24 Power of attorney (see signature pages)
99.1 1996 Stock Option Plan
99.2 1996 Management Recognition and Development Plan
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act,
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration
Statement, and (iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement
or any material change in such information in the Registration Statement;
provided, however, that clauses (i) and (ii) do not apply if the information
required to be included in a post- effective amendment by those clauses is
contained in periodic reports filed by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement.
2. That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
4. That, for the purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and that
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against liabilities (other than the payment by the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the questions whether such
indemnification by it is against public policy expressed in the Securities
Act will and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, First
Savings Bank of Washington Bancorp, Inc. certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized, in the City of Walla
Walla, and State of Washington the 21st day of August, 1996.
FIRST SAVINGS BANK OF WASHINGTON BANCORP, INC.
By:/s/ Gary L. Sirmon
------------------
Gary L. Sirmon
President, Chief Executive Officer and
Director
(Principal Executive Officer)
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Gary L. Sirmon his true and
lawful attorney, with full power to sign for such person and in such
person's name and capacity indicated below, and with full power of
substitution any and all amendments to this Registration Statement, hereby
ratifying and confirming such person's signature as it may be signed by said
attorney to any and all amendments.
By:/s/ Gary L. Sirmon Date: August 21, 1996
------------------
Gary L. Sirmon
President, Chief Executive Officer and
Director
(Principal Executive Officer)
By:/s/ D. Allan Roth Date: August 21, 1996
-----------------
D. Allan Roth
Secretary and Treasurer
(Principal Financial and Accounting
Officer)
By:/s/ Dean W. Mitchell Date: August 21, 1996
--------------------
Dean W. Mitchell
Chairman of the Board of Directors
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By:/s/ Robert D. Adams Date: August 21, 1996
-------------------
Robert D. Adams
Director
By:/s/ David Casper Date: August 21, 1996
----------------
David Casper
Director
By:/s/ Morris Ganguet Date: August 21, 1996
------------------
Morris Ganguet
Director
By:/s/ Wilbur Pribilsky Date: August 21, 1996
--------------------
Wilbur Pribilsky
Director
By:/s/ R.R. "Pete" Reid Date: August 21, 1996
--------------------
R.R. "Pete" Reid
Director
By:/s/ Marvin Sundquist Date: August 21, 1996
--------------------
Marvin Sundquist
Director
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Exhibit 5
Opinion of Breyer & Aguggia
August 26, 1996
Board of Directors
First Savings Bank of Washington
Bancorp, Inc.
10 S. First Avenue
Walla Walla, Washington 99362
Gentlemen:
We have acted as special counsel to First Savings Bank of Washington
Bancorp, Inc., a Delaware corporation (the "Corporation"), in connection with
the preparation and filing with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, of a Registration
Statement on Form S-8 (the "Registration Statement"), relating to the
registration of up to 1,527,488 shares of Corporation common stock, $.01 par
value per share ("Common Stock"), to be issued pursuant to (i) the
Corporation's 1996 Stock Option Plan (the "Option Plan") upon the exercise of
stock options ("Option Rights") and (ii) the Corporation's 1996 Management
Recognition and Development Plan (the "MRDP"). The Registration Statement
also registers an indeterminate number of additional shares which may be
necessary under the Option Plan and the MRDP to adjust the number of shares
reserved for issuance as a result of a stock split, stock dividend or similar
adjustment of the outstanding Common Stock of the Corporation. We have been
requested by the Corporation to furnish an opinion to be included as an
exhibit to the Registration Statement.
We have reviewed the Registration Statement, the Articles of
Incorporation and Bylaws of the Corporation, the Plan, a specimen stock
certificate evidencing the Common Stock of the Corporation and such other
corporate records and documents as we have deemed appropriate for the purpose
of rendering this opinion. We are relying upon the originals, or copies
certified or otherwise identified to our satisfaction, of the corporate
records of the Corporation and such other instruments, certificates and
representations of public officials, officers and representatives of the
Corporation as we have deemed appropriate or relevant as a basis for the
opinion set forth below. In addition, we have assumed, without independent
verification, the genuineness of all signatures and the
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authenticity of all documents furnished to us and the conformity in all
respects of copies to originals.
For purposes of this opinion, we have also assumed that (i) the shares
of Common Stock issuable pursuant to Option Rights granted under the terms of
the Plan will continue to be validly authorized on the dates the Common Stock
is issued pursuant to the Option Rights; (ii) on the dates the Option Rights
are exercised, the Option Rights granted under the terms of the Plan will
constitute valid, legal and binding obligations of the Corporation and will
(subject to applicable bankruptcy, moratorium, insolvency, reorganization and
other laws and legal principles affecting the enforceability of creditors'
rights generally) be enforceable as to the Corporation in accordance with
their terms; (iii) no change occurs in applicable law or the pertinent facts;
and (iv) the provisions of "blue sky" and other securities laws as may be
applicable have been complied with to the extent required.
Based upon the foregoing, and subject to the qualifications and
assumptions set forth herein, we are of the opinion as of the date hereof
that the shares of Common Stock to be issued pursuant to the Option Plan and
the MRDP, when issued pursuant to and in accordance with the Registration
Statement, the Option Plan and the MRDP and, with respect to the Option Plan,
upon receipt of the consideration required thereby, will be legally issued,
fully paid and non-assessable shares of Common Stock of the Corporation.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ Breyer & Aguggia
--------------------
BREYER & AGUGGIA
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Exhibit 23.1
Consent of Deloitte & Touche LLP
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We consent to the incorporation by reference in this Registration Statement
of First Savings Bank of Washington Bancorp, Inc. on Form S-8 of our report
dated April 25, 1996, appearing in the Annual Report on Form 10-K of First
Savings Bank of Washington Bancorp, Inc. for the year ended March 31, 1996.
DELOITTE & TOUCHE LLP
Seattle, Washington
August 23, 1996
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Exhibit 23.2
Consent of Niemi, Holland & Scott, LLP
NIEMI, HOLLAND & SCOTT, LLP
- ---------------------------
Certified Public Accountants
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of First Savings Bancorp, Inc. on Form S-8 of our report dated May 31, 1994,
except for the effects of Note 21 which date is April 30, 1995, incorporated
by reference in the annual report on Form 10-K of First Savings Bank of
Washington Bancorp, Inc. and Subsidiaries for the year ended March 31, 1996.
NIEMI, HOLLAND & SCOTT, LLP
August 21, 1996 /s/Niemi, Holland & Scott, LLP
Tri-Cities, Washington ------------------------------
Certified Public Accountants
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Exhibit 23.3
Consent of Breyer & Aguggia (see Exhibit 5)
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Exhibit 24
Power of Attorney (see signature page)
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Exhibit 99.1
1996 Stock Option Plan
First Savings Bank of Washington Bancorp, Inc.
1996 Stock Option Plan
SECTION 1. Purpose. The purposes of the First Savings Bank of Washington
Bancorp, Inc. 1996 Stock Option Plan are to promote the interests of the
Company, its Affiliates, and its stockholders by (i) attracting and retaining
exceptional executive personnel and other key employees and directors of the
Company and its Affiliates; (ii) motivating such employees and directors by
means of performance-related incentives to achieve longer-range performance
goals; and (iii) enabling such employees and directors to participate in the
long-term growth and financial success of the Company and its Affiliates.
SECTION 2. Definitions. As used in the Plan, the following terms shall have
the meanings set forth below:
"Affiliate" shall mean the Bank or any present or future corporation
that would be a "parent" or "subsidiary" of the Company as defined in
Sections 424(f) and (g), respectively, of the Code.
"Affiliate Director" shall mean a member of the board of directors of
an Affiliate who is not a member of the Board and who is also not an
Employee.
"Award" shall mean any grant of Options or Director Options.
"Award Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Bank" shall mean First Savings Bank of Washington, a
Washington-chartered savings bank, together with any successor thereto.
"Board" shall mean the Board of Directors of the Company.
"Change in Control" shall mean an event deemed to occur if and when (a)
an offeror other than the Company purchases shares of the common stock of the
Company or the Bank pursuant to a tender or exchange offer for such shares,
(b) any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company or the Bank representing 20% or more of the
combined voting power of the Company's or the Bank's then outstanding
securities, (c) the membership of the board of directors of the Company or
the Bank changes as the result of a contested election, such that individuals
who were directors at the beginning of any twenty-four month period (whether
commencing before or after the date of adoption of this Plan) do not
constitute a majority of the Board at the end of such period, or (d)
shareholders of the Company or the Bank approve a merger, consolidation, sale
or disposition of all or substantially all of the Company's or the Bank's
assets, or a plan of partial or complete liquidation. If any of the events
enumerated in classes (a) - (d) occur, the Board shall determine the
effective date of the change in control resulting therefrom, for purposes of
the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Committee" shall mean the committee of the Board designated by the
Board to administer the Plan and composed of not less than the minimum number
of persons from time to time required by Rule 16b-3, each of whom, to the
extent necessary to comply with Rule 16b-3 only, is a "disinterested person"
within the meaning of Rule 16b-3.
"Company" shall mean First Savings Bank of Washington Bancorp, Inc., a
Delaware corporation, together with any successor thereto.
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"Director Option" shall mean a Non-Qualified Stock Option granted to
each Eligible Director pursuant to Section 6(e) without any action by the
Board or the Committee.
"Disability" shall have the meaning set forth in Section 22(e)(3) of
the Code. For purposes of the Plan, all determinations as to whether a
Participant has become disabled shall be made by a majority of the Board (or,
in the case of an Eligible Director, a majority of the remaining members of
the Board) upon the basis of such evidence as its deems necessary or
desirable, and shall be final and binding on all interested persons.
"Effective Date" shall mean the date specified in Section 9(a).
"Eligible Director" shall mean, on any date, a person who is serving as
a member of the Board but shall not include a person who is an Employee.
"Employee" shall mean an employee of the Company or any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall be determined as follows:
(a) If the Shares are traded or quoted on the Nasdaq Stock Market or
listed on a recognized securities exchange at the time of grant of the Award,
then the Fair Market Value shall be the average of the highest and lowest
selling price as obtained from Nasdaq or such recognized securities exchange
on the date such Award is granted or, if there were no sales on such date,
then on the next prior business day on which there was a sale.
(b) If the Shares are not traded or quoted on the Nasdaq stock market
or a recognized securities exchange, then the Fair Market Value shall be a
value determined by the Committee in good faith on such basis as it deems
appropriate.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to
meet the requirements of Section 422 of the Code or any successor provision
thereto.
"Non-Qualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not
intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option but shall not include a Director Option.
"Participant" shall mean any Employee or Affiliate Director selected by
the Committee to receive an Award under the Plan or any Eligible Director who
receives an Award of Director Options.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization,
government or political subdivision thereof or other entity.
"Plan" shall mean the First Savings Bank of Washington Bancorp, Inc.
1996 Stock Option Plan.
"Retirement" shall mean termination of service as an Employee at or
after age 65.
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"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by
the SEC under the Exchange Act, or any successor rule or regulation thereto
as in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the staff thereof.
"Shares" shall mean common shares of the Company, or such other
securities of the Company as may be designated by the Committee from time to
time.
"Ten Percent Stockholder" shall mean any stockholder who, at the time
an Incentive Stock Option is granted to such stockholder, owns (within the
meaning of Section 424(d) of the Code) more than ten percent of the voting
power of all classes of stock of the Company.
"Termination for Cause" shall mean termination because of a
Participant's personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule, or regulation (other than
traffic violations or similar offenses) or material breach of any provision
of any employment agreement between the Company or the Bank and a
Participant.
SECTION 3. Administration.
(a) The Plan shall be administered by the Committee. Subject to the
terms of the Plan and applicable law, and in addition to other express powers
and authorizations conferred on the Committee by the Plan, the Committee
shall have full power and authority to: (i) designate Participants; (ii)
determine the type or types of Awards to be granted to an eligible Employee;
(iii) determine the number of Shares to be covered by, or with respect to
which payments, rights, or other matters are to be calculated in connection
with, Awards; (iv) determine the terms and conditions of any Award; (v)
determine whether, to what extent, and under what circumstances Awards may be
settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or suspended; (vi) determine whether, to
what extent, and under what circumstances cash, Shares, other securities,
other Awards, other property, and other amounts payable with respect to an
Award shall be deferred either automatically or at the election of the holder
thereof or of the Committee; (vii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the
Plan; and (ix) make any other determination and take any other action that
the Committee deems necessary or desirable for the administration of the
Plan. Except as provided in Section 4(a), neither the Committee nor the
Board shall have any discretion regarding whether an Eligible Director shall
receive a Director Option pursuant to Section 6(e) or regarding the terms of
any Director Option, including without limitation, the number of Shares
subject to such Director Option, the timing of the grant or the
exercisability of such Director Option, or the exercise price per Share of
such Director Option.
(b) Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or
with respect to the Plan or any Award shall be within the sole discretion of
the Committee, may be made at any time and shall be final, conclusive, and
binding upon all Persons, including the Company, any Participant, any holder
or beneficiary of any Award, any shareholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section
4(b), the number of Shares with respect to which Options and Director Options
may be granted under the Plan shall
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be 1,091,063. If, after the Effective Date, any Shares covered by an Option
or Director Option granted under the Plan, or to which such an Option or
Director Option relates, are forfeited, or if an Option or Director Option
otherwise terminates or is canceled without the delivery of Shares, then the
Shares covered by such Option or Director Option, or to which such Option or
Director Option relates, or the number of Shares otherwise counted against
the aggregate number of Shares with respect to which Options and Director
Options may be granted, to the extent of any such settlement, forfeiture,
termination or cancellation, shall again be, or shall become, Shares with
respect to which Options and Director Options may be granted, to the extent
permissible under Rule 16b-3. In the event that any Option or Director
Option is exercised through the delivery of Shares, the number of Shares
available for Awards under the plan shall be increased by the number of
Shares surrendered, to the extent permissible under Rule 16b-3.
(b) Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Shares, other securities, or other
property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company,
issuance of warrants or other rights to purchase Shares or other securities
of the Company, or other similar corporate transaction or event affects the
Shares such that an adjustment is necessary in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan, then the Committee shall proportionately adjust any
or all (as necessary) of (i) the number of Shares or other securities of the
Company (or number and kind of other securities or property) with respect to
which Awards may be granted, including an Award pursuant to Section 6(e),
(ii) the number of Shares or other securities of the Company (or number and
kind of other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any Award; provided, in
each case, that with respect to an Award of Incentive Stock Options no such
adjustment shall be authorized to the extent that such authority would cause
the Plan to violate Section 422(b)(1) of the Code, as from time to time
amended.
(c) Sources of Shares. Any Shares delivered pursuant to an Option or
Director Option may consist, in whole or in part, of authorized and unissued
Shares or of treasury Shares.
SECTION 5. Eligibility. An Employee, including any officer or
employee-director of the Company who is not a member of the Committee, and an
Affiliate Director shall be eligible to be designated a Participant. Each
Eligible Director shall receive nondiscretionary Director Options in
accordance with, and only in accordance with, Section 6(e) hereof.
SECTION 6. Options and Director Options.
(a) Grant. Subject to the provisions of the Plan, the Committee
shall have sole and complete authority to determine the Employees and
Affiliate Directors to whom Options shall be granted, the number of Shares to
be covered by each Option, the option price therefor and the conditions and
limitations applicable to the exercise of the option. The Committee shall
have the authority to grant Incentive Stock Options, or to grant
Non-Qualified Stock Options, or to grant both types of options; provided,
however, that an Affiliate Director may only receive an Award of
Non-Qualified Stock Options. In the case of Incentive Stock Options, the
terms and conditions of such grants shall be subject to and comply with such
rules as may be prescribed by Section 422 of the Code, as from time to time
amended, and any regulations implementing such statute, including without
limitation, the requirements of Code Section 422(d), which limits the
aggregate fair market value of Shares of which Incentive Stock Options are
exercisable for the first time to $100,000 per calendar year. Each provision
of the Plan and of each written option agreement relating to an Option
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designated an Incentive Stock Option shall be construed so that such Option
qualifies as an Incentive Stock Option, and any provision that cannot be so
construed shall be disregarded.
(b) Exercise Price. The Committee shall establish the exercise price
at the time each Option is granted, which price shall not be less than 100%
of the per Share Fair Market Value on the date of grant. Notwithstanding any
provision contained herein, in the case of an Incentive Stock Option, the
exercise price at the time such Incentive Stock Option is granted to any
Employee who, at the time of such grant, is a Ten Percent Stockholder, shall
not be less than 110% of the per Share Fair Market Value on the date of
grant.
(c) Exercise. Each Option shall be exercisable at such time and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter;
provided, in the case of an Incentive Stock Option, a Participant may not
exercise such Option as an Incentive Stock Option after the earlier of (i)
the date which is ten years (five years in the case of a Participant who is a
Ten Percent Stockholder) after the date on which such Incentive Stock Option
is granted, or (ii) the date which is three months (twelve months in the case
of a Participant who becomes disabled, as defined in Section 22(e)(3) of the
Code, or who dies) after the date on which he ceases to be an employee of the
Company or an Affiliate; and provided, further, that, in the event of a
Participant's Termination for Cause, his Options shall be canceled on the
date he ceases to be an Employee or Affiliate Director. Each Option shall be
exercisable over a five (5) year period whereby twenty (20) percent of the
Award shall become exercisable on each of the first through the fifth
anniversaries of the date of grant; provided, however, that all outstanding
Options held by a Participant shall become one hundred (100) percent
exercisable upon the Participant's death, Disability or Retirement. The
Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of federal or
state securities laws, as it may deem necessary or advisable.
(d) Payment. No Shares shall be delivered pursuant to any exercise
of an Option or Director Option until payment in full of the option price
therefor is received by the Company. Such payment may be made in cash or its
equivalent, or, if and to the extent permitted by the Committee, by
exchanging Shares owned by the optionee (which are not the subject of any
pledge or other security interest), or by a combination of the foregoing,
provided that the combined value of all cash and cash equivalents and the
Fair Market Value of any such Shares so tendered to the Company as of the
date of such tender is at least equal to such option price.
(e) Director Options. Notwithstanding anything else contained herein
to the contrary, each Eligible Director shall receive on the Effective Date a
grant of Director Options to purchase 37,950 Shares at an exercise price per
Share equal to the Fair Market Value on the date of grant. Each Eligible
Director who first becomes a member of the Board after the Effective Date
shall receive, on the date that the Eligible Director is first elected to the
Board, a grant of Director Options to purchase 15,000 Shares at an exercise
price per Share equal to the Fair Market Value on the date of grant;
provided, however, that if, on any date on which Director Options are to be
granted to a new Eligible Director(s), the number of Shares remaining
available under the Plan is insufficient for the grant of Director Options to
purchase 15,000 Shares, then Director Options to purchase a proportionate
number of such Shares (rounded to the greatest number of whole Shares) shall
be granted to such new Eligible Director(s). Each Director Option shall be
exercisable over a five (5) year period whereby twenty (20) percent of the
Award shall become exercisable on each of the first through the fifth
anniversaries of the date of grant. Upon the termination of an Eligible
Director's service on the Board by reason of his death or Disability, all
outstanding Director options held by such individual shall become one hundred
percent (100%) vested and exercisable. A Director Option shall be
exercisable until the earlier to occur of the
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following two dates (i) the tenth anniversary of the date of grant of such
Director Option or (ii) one year (two years in the case of an Eligible
Director who becomes Disabled, or who dies) after the date the Eligible
Director ceases to be a member of the Board, except that if the Eligible
Director ceases to be a member of the Board, by reason of his Termination for
Cause, his Director Options shall be canceled on the date he ceases to be a
member of the Board. An Eligible Director may pay the exercise price of a
Director Option in the manner described in Section 6(d).
(f) Effect of a Change in Control. In the event of a Change in
Control, all then outstanding Options and Director Options, shall become one
hundred percent (100%) vested and exercisable as of the effective date of the
Change in Control. If, in connection with or as a consequence of a Change in
Control, the Company or the Bank is merged into or consolidated with another
corporation, or if the Company or the Bank sells or otherwise disposes of
substantially all of its assets to another corporation, then unless
provisions are made in connection with such transaction for the continuance
of the Plan and/or the assumption or substitution of then outstanding Options
and Director Options with new options covering the stock of the successor
corporation, or parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices, such Options or Director Options
shall be canceled as of the effective date of the merger, consolidation, or
sale and the Participant shall be paid in cash an amount equal to the
difference between the Fair Market Value of the Shares subject to the Options
or Director Options as of the effective date of the such corporate event and
the exercise price of the Options or Director Options, as appropriate.
SECTION 7. Amendment and Termination.
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without shareholder approval if such approval is
necessary to comply with any tax or regulatory requirement, including for
these purposes any approval requirement which is a prerequisite for exemptive
relief from Section 16(b) of the Exchange Act for which or with which the
Board deems it necessary or desirable to qualify or comply; and, provided
further that no amendment may be made to Section 6(e) or any other provision
of the Plan relating to Director Options within six months of the last date
on which any such provision was amended, other than to comport with changes
in the Code, the Employee Retirement Income Security Act of 1974, or the
rules thereunder.
(b) Amendments to Awards. Except as provided under Section 3, the
Committee may waive any conditions or rights under, amend any terms of, or
alter, suspend, discontinue, cancel or terminate, any Award theretofore
granted, prospectively or retroactively; provided that any such waiver,
amendment, alteration, suspension, discontinuance, cancellation or
termination that would impair the rights of any Participant or any holder or
beneficiary of any Award theretofore granted shall not to that extent be
effective without the consent of the affected Participant, holder or
beneficiary.
(c) Cancellation. Any provision of this Plan or any Award Agreement
to the contrary notwithstanding, the Committee may cause any Award of Options
granted hereunder to be canceled in consideration of the granting to the
holder of an alternative Award of Options having a Fair Market Value equal to
the Fair Market Value of such canceled Award.
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SECTION 8. General Provisions.
(a) Nontransferability.
(i) Each Award, and each right under any Award, shall be
exercisable only by the Participant's lifetime, or, if permissible under
applicable law, by the Participant's guardian or legal representative or a
transferee receiving such Award pursuant to a domestic relations order, as
determined by the Committee.
(ii) No Award may be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by a Participant otherwise than
by will or by the laws of descent and distribution or pursuant to a domestic
relations order, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company; provided that the designation of a beneficiary shall not
constitute an assignment, alienation, pledge, attachment, sale, transfer or
encumbrance.
(iii) The restrictions set forth in clause (ii) of this Section
8(a) shall not apply to any Non-Qualified Stock Option after the Board has
determined that such restrictions are not then required for grants under the
Plan to satisfy the requirements for exemption provided by Rule 16b-3 under
the Exchange Act (in the form then applicable to the Company) or for members
of the Committee to qualify as "disinterested persons" for purposes of such
Rule; provided, however, that (A) any transfer of a Non-Qualified Stock
Option is to be made for no consideration to any of the following permissible
transferees (1) any member of the Immediate Family of the Participant to
which such Non-Qualified Stock Option was granted, (2) any trust solely for
the benefit of the Participant's Immediate Family, or (3) any partnership
whose only partners are members of the Participant's Immediate Family and (B)
the transferee shall remain subject to all of the terms and conditions
applicable to such Non-Qualified Stock Option prior to such transfer. For
purposes of this clause (iii), "Immediate Family" shall mean, with respect to
a particular Participant, such Participant's spouse, children and
grandchildren.
(b) No Rights to Awards. No Employee, Affiliate Director,
Participant or other Person shall have any claim to be granted any Award, and
there is no obligation for uniformity of treatment of Employees,
Participants, or holders or beneficiaries of Awards. The terms and
conditions of Awards need not be the same with respect to each recipient.
(c) Share Certificates. All Shares or other securities of the
Company delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other restrictions
as the Committee may deem advisable under the Plan or the rules, regulations,
and other requirements of the SEC, any stock exchange or national securities
association upon which such Shares or other securities are then listed, and
any applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any certificates representing such Shares or other
securities to make appropriate reference to such restrictions.
(d) Delegation. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers or managers of the
Company, or to a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify or waive rights with respect to, or to
alter, discontinue, suspend, or terminate Awards held by, Employees who are
not officers or directors of the Company for purposes of Section 16 of the
Exchange Act, or any successor section thereto, or who are otherwise not
subject to such Section.
(e) Withholding. A Participant may be required to pay to the Company
and the Company shall have the right and is hereby authorized to withhold
from any Award, from any payment
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due or transfer made under any Award or from any compensation or other amount
owing to a Participant the amount of any applicable withholding taxes in
respect of an Award, its exercise, or any payment or transfer under an Award
and take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of such taxes. With respect to
Participants who are not subject to Section 16 of the Exchange Act, the
withholding may be in the form of cash, Shares, or other property as the
Committee may allow. With respect to Participants who are subject to Section
16 of the Exchange Act, the withholding shall be in cash or in any other
property permitted by Rule 16b-3 as the Committee may allow.
(f) Award Agreements. Each Award hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Award and any rules applicable thereto.
(g) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other compensation arrangements, which may, but need
not, provide for the grant of options, restricted stock, Shares and other
types of Awards provided for hereunder (subject to shareholder approval if
such approval is required), and such arrangements may be either generally
applicable or applicable only in specific cases.
(h) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of
the Company or an Affiliate. Further, the Company may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provide in the Plan or in any Award
Agreement.
(i) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he or she has become the holder of such Shares.
(j) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of
Washington, without giving effect to the choice of law principles thereof.
(k) Severability. If any provisions of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to the applicable laws, or if
it cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person or Award and the
remainder of the Plan and any such Award shall remain in full force and
effect.
(l) Other Laws. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or
such other consideration might violate any applicable law or regulation or
entitle the Company to recovery under Section 16(b) of the Exchange Act, and
any payment tendered to the Company by a Participant, other holder or
beneficiary in connection with the exercise of such Award shall be promptly
refunded to the relevant Participant, holder or beneficiary. Without
limiting the generality of the foregoing, no Award granted hereunder shall be
construed as an offer to sell securities of the Company, and no such offer
shall be outstanding, unless and until the Committee in its sole discretion
has determined that any such offer, if made, would be in compliance with all
applicable requirements of the U.S.
federal securities laws.
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(m) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments
from the Company pursuant to an Award, such rights shall be no greater than
the right of any unsecured general creditor of the Company.
(n) Rule 16b-3 Compliance. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are intended to
comply with all applicable terms and conditions of Rule 16b-3 and any
successor provisions. To the extent that any provision of the Plan or action
by the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
(o) Headings. Heading are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
(p) No Impact on Benefits. Unless specifically provided under any
other benefit plan of the Company or its Affiliates, Awards shall not be
treated as compensation for purposes of calculating an Employee's or Eligible
Director's rights under such benefit plans.
(q) Indemnification. Each person who is or shall have been a member
of the Committee or of the Board shall be indemnified and held harmless by
the Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him in connection with or resulting
from any claim, action, suit, or proceeding to which he may be made a party
or in which he may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by him in
settlement thereof, with the Company's approval, or paid by him in
satisfaction of any judgement in any such action, suit, or proceeding against
him, provided he shall give the Company an opportunity, at its own expense,
to handle and defend the same before he undertakes to handle and defend it on
his own behalf. The foregoing right of indemnification shall not be
exclusive and shall be independent of any other rights of indemnification to
which such persons may be entitled under the Company's articles of
incorporation or bylaws, by contract, as a matter of law, or otherwise.
SECTION 9. Term of the Plan.
(a) Effective Date. The Plan shall become effective only upon
approval by a majority of the Company's stockholders at a special or annual
meeting of stockholders of the Company held not less than six (6) months
after the date of closing of the Bank's mutual-to-stock conversion nor more
than twelve (12) months after the date of adoption of the Plan by the Board.
(b) Expiration Date. The Plan shall terminate on, and no Award shall
be granted under the Plan after, the tenth anniversary of the Effective Date.
Unless otherwise expressly provided in the Plan or in an applicable Award
Agreement, any Award granted hereunder may, and the authority of the Board or
the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award shall,
continue after the tenth anniversary of the Effective Date.
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Exhibit 99.2
1996 Management Recognition and Development Plan
First Savings Bank of Washington Bancorp, Inc.
1996 Management Recognition and Development Plan
1. Purpose; Definitions.
The purpose of the Plan is to increase the proprietary and vested
interest of key Employees of the Company and its Affiliates and Eligible
Directors in the growth, development and financial success of the Company and
its Affiliates by granting them awards of Restricted Shares.
Whenever the following terms are used in the Plan, they shall have the
meaning specified below unless the context clearly indicated to the contrary.
"Affiliate" shall mean the Bank or any present or future corporation
that would be a "parent" or "subsidiary" of the Company as defined in
Sections 424(f) and (g) of the Code.
"Affiliate Director" shall mean a member of the board of directors of
an Affiliate who is not a member of the Board and who is also not an
employee.
"Award" shall mean an award of Restricted Shares under the Plan.
"Bank" shall mean First Savings Bank of Washington, a
Washington-chartered savings bank, together with any successor thereto.
"Board" shall mean the Board of Directors of the Company.
"Change in Control" shall have the meaning set forth in Section 5.2
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the committee of the Board designated by the
Board to administer the Plan and composed of not less than the minimum number
of persons from time to time required by Rule 16b-3, each of whom, to the
extent necessary to comply with Rule 16b-3 only, is a "disinterested person"
within the
meaning of Rule 16b-3.
"Company" shall mean First Savings Bank of Washington Bancorp, Inc., a
Delaware corporation, together with any successors thereto.
"Designated Beneficiary" shall have the meaning set forth in Section
2.2 hereof.
"Disability" shall have the meaning set forth in Section 22(e)(3) of
the Code. For purposes of the Plan, all determinations as to whether a
Participant has become disabled shall be made by a majority of the Board (or,
in the case of an Eligible Director, a majority of the remaining members of
the Board) upon the basis of such evidence as its deems necessary or
desirable, and shall be final and binding on all interested persons.
"Effective Date" shall have the meaning set forth in Section 6.1
hereof.
"Eligible Director" shall mean a director of the Company who is not
also an Employee. "Eligible Director" shall also include any director
emeritus of the Bank who is not also a director of the Company.
"Employee" shall mean any person who is currently employed by the
Company or an Affiliate, including officers and officers who are members of
the Board or the board of directors of an Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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"Participant" shall mean an Eligible Director, Affiliate Director or
Employee to whom an award of Restricted Shares is granted pursuant to the
Plan.
"Plan" shall mean this First Savings Bank of Washington Bancorp, Inc.
1996 Management Recognition and Development Plan, as hereinafter amended from
time to time.
"Restricted Shares" shall mean Shares which are awarded to an Eligible
Director or Employee that are subject to the transfer and forfeitability
restrictions described in Section 4.2.
"Retirement" shall mean termination of service as an Employee at or
after age 65.
"Share" shall mean a share of the Company's common stock, par value
$0.01 per share.
2. Administration.
2.1 Administration
The Plan shall be administered by the Committee, which shall have the
power to interpret the Plan and to adopt such rules for the administration,
interpretation and application of the Plan as are consistent with its terms
and provisions and to interpret, amend or revoke any such rules; provided,
however, that except as provided in paragraph 3.2 hereof, with respect to an
Award to an Eligible Director, the Committee shall have no discretion with
respect to the selection of directors to receive Restricted Shares under the
Plan, the number of Restricted Shares to be awarded, the consideration to be
paid in respect of Restricted Shares, the timing of such awards, or the
restrictions imposed thereon. All actions taken and all interpretations and
determinations made by the Committee shall be binding upon all persons,
including the Company, stockholders, directors, Participants and Designated
Beneficiaries. The Secretary of the Company shall be authorized to implement
the Plan in accordance with its terms, and to take such actions of a
ministerial nature as shall be necessary to effectuate the intent and
purposes thereof. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect
to the Plan or the awards hereunder, and all members of the Board shall be
fully protected by the Company in respect to any such action, determination
or interpretation.
2.2 Designated Beneficiaries
If a Participant dies prior to receiving any payment due under the
Plan, such payment shall be made to his Designated Beneficiary. A
Participant's Designated Beneficiary shall be the beneficiary specifically
designated by a Participant in writing to receive amounts due the Participant
in the event of the Participant's death. In the absence of an effective
designation by the Participant, Designated Beneficiary shall mean the
Participant's surviving spouse or, if none, his estate.
3. Shares Subject To The Plan.
3.1 Shares Subject to the Plan
The maximum number of Shares that may be the subject of Awards under
this Plan shall be 436,425. The Company shall reserve such number of Shares
for the purposes of the Plan, out of its authorized but unissued Shares or
out of Shares held in the Company's treasury, or partly out of each. In the
event that a trust is established in connection with the Plan pursuant to
Section 6.4, the Company may authorize the trustees of the trust to purchase
Shares in the open market with funds contributed by the Company or the Bank
and such shares shall be
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included in the number of shares that may be the subject of Awards. In the
event that Restricted Shares are forfeited for any reason, such Shares shall
thereafter again be available for award pursuant to the Plan.
3.2 Changes in the Company's Shares
In the event that the Committee shall determine that any
recapitalization, reorganization, merger, consolidation, stock split,
spin-off, combination, or exchange of Shares, or other similar corporate
event affects the Shares such that an adjustment is required in order to
preserve the benefits or potential benefits intended under this Plan, the
Committee shall, in such manner as it may deem equitable, adjust any or all
of the number and kind of Shares which thereafter may be awarded under the
Plan, or the number and kind of Shares subject to outstanding awards;
provided, however, that the number of Shares subject to any award shall
always be a whole number.
4. Restricted Shares
4.1 Eligibility; Awards Under the Plan
(a) Employees; Affiliate Directors. Employees and Affiliate
Directors shall be eligible to participate in the Plan upon designation by
the Committee. To the extent that Shares are available for grant under the
Plan, the Committee may determine which of the Employees and Affiliate
Directors shall be granted an Award and the number of Restricted Shares
covered by each Award. In selecting those Employees to whom Awards will be
granted and the number of Shares covered by such Awards, the Committee shall
consider the position and responsibilities of the eligible Employees, the
length and value of their services to the Company and its Affiliates, the
compensation paid to the Employees and any other factors the Committee may
deem relevant, and the Committee may request the written recommendation of
the chief executive officer and other senior executive officers of the
Company and its Affiliates.
(b) Eligible Directors. Eligible Directors shall be eligible to
receive Awards only as provided in this Section 4.1(b). Upon the Effective
Date, each Eligible Director who, as of to the Effective Date, has served on
the Board or the board of directors of the Bank for five (5) or more years
shall receive an Award of 17,077 Restricted Shares, each Eligible Director
with less than five (5) years of service on the Board or the board of
directors of the Bank as of the Effective Date shall receive 11,385
Restricted Shares and each Eligible Director who is a director emeritus of
the Bank shall receive 3,795 Restricted Shares. Each Eligible Director who
first becomes a member of the Board after the Effective Date shall receive,
on the date that the Eligible Director is first elected to the Board, a grant
of 2,500 Restricted Shares; provided, however, that if, on any date on which
an Award is to be granted to a new Eligible Director(s), the number of Shares
remaining available under the Plan is insufficient for the grant of 2,500
Restricted Shares, then a proportionate number of Restricted Shares (rounded
to the greatest number of whole Shares) shall be granted to such new Eligible
Director(s).
(c) Fractions of Shares. Whenever under the terms of the Plan a
fractional share would be required to be issued, the fractional share shall
be rounded up to the next full share.
4.2 Terms of Awards
The Restricted Shares awarded hereunder shall be awarded only pursuant
to a written agreement, which shall be executed by the Participant and a duly
authorized officer of the Company and which shall contain the following terms
and conditions:
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(a) Acceptance of Award. An award of Restricted Shares must be
accepted by the Participant within a period of sixty (60) days (or such other
period as the Board may specify at grant) after the award date by the
execution of a Restricted Share award agreement in the form provided by the
Company.
(b) Restrictions and Conditions. The Restricted Shares awarded to a
Participant pursuant to this Section 4 shall be subject to the following
restrictions and conditions:
(i) A Participant shall not be permitted to sell, transfer,
pledge, assign or otherwise encumber Restricted Shares awarded under the Plan
prior to the date on which such shares vest in accordance with clause, (iii),
except in accordance with the laws of descent and distribution.
(ii) Except as provided in clause (i) and this clause (ii), a
Participant shall have, with respect to the Restricted Shares, all of the
rights of a stockholder of the Company, including the right to vote the
Shares and to receive any cash dividends declared thereon. Stock dividends,
if any, issued with respect to Restricted Shares shall be treated as
additional Restricted Shares that are subject to the same restrictions and
other terms and conditions that apply with respect to the Restricted Shares
with respect to which such dividends are paid.
(iii) Subject to the applicable provisions of the Restricted
Share award agreement and this Section, a Participant's interest in Shares
shall immediately become fully vested and nonforfeitable, and the
restrictions set forth in this Section 4.2 shall lapse no more rapidly than
the earlier to occur of the following: (x) ratably over a five (5) year
period whereby twenty (20) percent of the Award shall vest on each of the
first through the fifth anniversaries of the date of grant, (y) upon the
Participant's Retirement, death or Disability, or (z) upon the effective date
of a Change in Control.
4.3 Stock Certificates
A stock certificate registered in the name of each Participant
receiving a Restricted Share award (or in the name of a trustee for the
benefit of each Participant) shall be issued in respect of such shares. Such
certificate shall bear whatever appropriate legend referring to the terms,
conditions, and restrictions applicable to such award as the Board shall
determine. The Board may, in its sole discretion, require that the stock
certificates evidencing Restricted Shares be held in custody by the Company
(or in trust by a trustee) until the restrictions thereon shall have lapsed.
5. Change in Control Provisions.
5.1 Impact of Event
Upon a Change in Control, the transferability and forfeiture
restrictions placed on any Restricted Shares by Section 4.2(b) shall lapse
immediately prior to the effective date of the Change in Control and such
Shares shall be deemed fully vested and owned by the Participant as of such
date.
5.2 Definition of Change in Control
"Change in Control" shall mean an event deemed to occur if and when (a)
an offeror other than the Company purchases shares of the common stock of the
Company or the Bank pursuant to a tender or exchange offer for such shares,
(b) any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company or the Bank representing 20% or more of the
combined voting power of the Company's or the Bank's then outstanding
securities, (c) the membership of the board of directors of the Company or
the Bank changes as the result of a
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contested election, such that individuals who were directors at the beginning
of any twenty-four month period (whether commencing before or after the date
of adoption of this Plan) do not constitute a majority of the Board at the
end of such period, or (d) shareholders of the Company or the Bank approve a
merger, consolidation, sale or disposition of all or substantially all of the
Company's or the Bank's assets or a plan of partial or complete liquidation.
If any of the events enumerated in classes (a) - (d) occur, the Board shall
determine the effective date of the change in control resulting therefrom.
6. Miscellaneous.
6.1 Effective Date; Shareholder Approval; Term
The Plan shall become effective only upon approval by a majority of the
Company's stockholders at a special or annual meeting of stockholders of the
Company held not less than six (6) months after the date of closing of the
Bank's mutual-to-stock conversion nor more than twelve (12) months after the
date of adoption of the Plan by the Board and shall continue in effect until
the tenth anniversary of the Effective Date.
6.2 Amendment, Suspension or Termination of the Plan
The Plan may be wholly or partially amended or otherwise modified,
suspends or terminated at any time or from time to time by the Board;
provided, however, that amendments to the Plan shall not be effective unless
approved by the affirmative vote of the stockholders of the Company owning a
majority of the outstanding shares of the Company at a meeting of
stockholders of the Company held within twelve (12) months of the date of
adoption of such amendment, where such amendment will:
(a) increase the total number of Shares reserved for the purposes of
the Plan;
(b) change in any respect the class of persons who are eligible to be
Participants;
(c) extend the maximum period for granting awards as provided herein;
or
(d) otherwise materially increase the benefits accruing to
Participants under the Plan.
Notwithstanding the foregoing, Section 4.1(b) may not be amended more
than once in any six-month period other than to conform with changes in the
Code or the Employee Retirement Security Act of 1974, as amended.
From and after the Effective Date, neither the amendment, suspension
nor termination of the Plan shall, without the consent of the Participant,
alter or impair any rights or obligations under any award theretofore
granted. No awards may be granted during any period of suspension nor after
termination or expiration of the Plan.
6.3 Regulations and Other Approvals
(a) The obligation of the Company to deliver Shares with respect to
any award granted under the Plan shall be subject to all applicable laws,
rules and regulations, including all applicable federal and state securities
laws, and the obtaining of all such approvals by governmental agencies as may
be deemed necessary or appropriate by the Board.
(b) The Board may make such changes as may be necessary or
appropriate to comply with the rules or requirements of any governmental
authority.
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(c) Each award of Shares is subject to the requirement that, if at
any time the Board determines, in its sole discretion, that the listing,
registration or qualification of Shares issuable pursuant to the Plan is
required by any securities exchange or under any United States, state or
federal law, or the consent or approval of any governmental regulatory body
is necessary or desirable as a condition of, or in connection with, issuance
of Shares, no Shares shall be issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or
obtained free of any conditions as acceptable to the Board.
(d) In the event that the disposition of Shares acquired pursuant to
the Plan is not covered by a then current registration statement under the
Securities Act of 1933, and is not otherwise exempt from such registration,
such Shares shall be restricted against transfer to the extent required by
the Securities Act of 1933 or regulations thereunder, and the Board may
require any individual receiving Shares pursuant to the Plan, as a condition
precedent to receipt of such Shares, to represent to the Company in writing
that the Shares acquired by such individual are acquired for investment only
and not with a view to distribution. The certificate for any Shares acquired
pursuant to the Plan shall include any legend that the Board deems
appropriate to reflect any restrictions on transfer.
6.4 Trust Arrangement
All benefits under the Plan represent an unsecured promise to pay
by the Company. The Plan shall be unfunded and the benefits hereunder shall
be paid only from the general assets of the Company resulting in the
Participants having no greater rights that the Company's general creditors;
provided, however, that nothing herein shall prevent or prohibit the Company
from establishing a trust or other arrangement for the purpose of providing
for the payment of the benefits payable under the Plan.
6.5 Governing Law
The Plan and the rights of all persons claiming hereunder shall
be construed and determined in accordance with the laws of the State of
Washington without giving effect to the choice of law principles thereof.
6.6 Titles; Construction
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan. The
masculine pronoun shall include the feminine and neuter and the singular
shall include the plural, when the context so indicates.
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