REGISTRATION STATEMENT NO. 333-_____
Filed April 2, 1998
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.
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(Exact name of registrant as specified in its charter)
Delaware 91-1691604
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(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
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(Address of principal executive offices)
Towne Bank of Woodinville 1992 Stock Option Plan
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(Full title of the Plan)
Gary L. Sirmon Copies to:
President and Chief Executive Officer Eric S. Kracov, Esquire
First Savings Bank of Washington Breyer & Aguggia
Bancorp, Inc. 1300 I Street, N.W.
10 S. First Avenue Suite 470 East
Walla Walla, Washington 99362 Washington, D.C. 20005
(509) 527-3636 (202) 737-7900
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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
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Title of
Securities Amount Proposed Maximum Proposed Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
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Common Stock,
$.01 par
value 111,933 $25.94(2) $2,903,542 $857
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(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 $25.94, 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 on April 1, 1997, the last day
the stock traded.
(2) 111,933 shares are being registered for issuance under the Towne Bank of
Woodinville 1992 Stock Option Plan (the foregoing plan is referred to
collectively herein as the "Plan"), which Plan was assumed by the
Registrant in connection with its acquisition of Towne Bancorp, Inc.;
together with an indeterminate number of shares reserved for issuance
pursuant to the Plan as a result of any future stock split, stock
dividend or similar adjustment of the
outstanding Common Stock.
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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
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The following documents filed with the Commission are incorporated in
this Registration Statement by reference:
(1) the Company's Registration Statement on Form S-4 (File No.
333-43749), filed January 5, 1998 (including the description of the Common
Stock contained therein); and
(2) the Company's Annual Report on Form 10-K for the year ended March
31, 1997.
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
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Not Applicable
Item 5. Interests of Named Experts and Counsel
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Not Applicable
Item 6. Indemnification of Directors and Officers
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Article XVII of the Registrant's Certificate of Incorporation provides
for indemnification of directors and officers of the Registrant against any
and all liabilities, judgments, fines and reasonable settlements, costs,
expenses and attorneys' fees incurred in any actual, threatened or potential
proceeding, except to the extent that such indemnification is limited by
Delaware law and such law cannot be varied by contract or bylaw. Article XVII
also provides for the authority to purchase insurance with respect thereto.
Section 145 of the General Corporation Law of the State of Delaware
authorizes a corporation's board of directors to grant indemnity under certain
circumstances to directors and officers, when made, or threatened to be made,
parties to certain proceedings by reason of such status with the corporation,
against judgments, fines, settlements and expenses, including attorneys' fees.
In addition, under certain circumstances such persons may be indemnified
against expenses actually and reasonably incurred in defense of a proceeding
by or on behalf of the corporation. Similarly, the corporation, under certain
circumstances, is authorized to indemnify directors and officers of other
corporations or enterprises who are serving as such at the request of the
corporation, when such
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persons are made, or threatened to be made, parties to certain proceedings by
reason of such status, against judgments, fines, settlements and expenses,
including attorneys' fees; and under certain circumstances, such persons may
be indemnified against expenses actually and reasonably incurred in connection
with the defense or settlement of a proceeding by or in the right of such
other corporation or enterprise. Indemnification is permitted where such
person (i) was acting in good faith, (ii) was acting in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation or
other corporation or enterprise, as appropriate, (iii) with respect to
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful, and (iv) was not adjudged to be liable to the corporation or other
corporation or enterprise (unless the court where the proceeding was brought
determines that such person is fairly and reasonably entitled to indemnity).
Unless ordered by a court, indemnification may be made only following a
determination that such indemnification is permissible because the person
being indemnified has met the requisite standard of conduct. Such
determination may be made (i) by the corporation's board of directors by a
majority vote of a quorum consisting of directors not at the time parties to
such proceeding; or (ii) if such a quorum cannot be obtained or the quorum so
directs, then by independent legal counsel in a written opinion; or (iii) by
the stockholders.
Section 145 also permits expenses incurred by directors and officers in
defending a proceeding to be paid by the corporation in advance of the final
disposition of such proceedings upon the receipt of an undertaking by the
director or officer to repay such amount if it is ultimately determined that
he is not entitled to be indemnified by the corporation against such expenses.
Item 7. Exemption From Registration Claimed
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Not Applicable
Item 8. Exhibits
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The following exhibits are filed with or incorporated by reference into
this Registration Statement on Form S-8:
No. Exhibit
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5 Opinion of Breyer & Aguggia
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Breyer & Aguggia (see Exhibit 5)
24 Power of attorney (see signature pages)
99.1 Towne Bank of Woodinville 1992 Stock Option Plan
Item 9. Undertakings
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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
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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.
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 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 2nd day of April 1998.
FIRST SAVINGS BANK OF WASHINGTON BANCORP, INC.
By: /s/ Gary Sirmon
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Gary 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 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 Sirmon Date: April 2, 1998
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Gary Sirmon
President, Chief Executive Officer
and Director
(Principal Executive Officer)
By:/s/ D. Allan Roth Date: April 2, 1998
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D. Allan Roth
Executive Vice President and
Chief Financial Officer (Principal
Financial and Accounting Officer)
By:/s/ Wilber Pribilisky Date: April 2, 1998
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Wilber Pribilisky
Director
By:/s/ Robert D. Adams Date: April 2, 1998
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Robert D. Adams
Director
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By:/s/ David Casper Date: April 2, 1998
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David Casper
Director
By:/s/ Morris Ganguet Date: April 2, 1998
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Morris Ganguet
Director
By:/s/ Dean W. Mitchell Date: April 2, 1998
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Dean W. Mitchell
Director
By:/s/ R. R. Reid Date: April 2, 1998
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R. R. "Pete" Reid
Director
By:/s/ Marvin Sundquist Date: April 2, 1998
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Marvin Sundquist
Director
By:/s/ Jesse G. Foster Date: April 2, 1998
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Jesse G. Foster
Director
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Exhibit 5
Opinion of Breyer & Aguggia
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1300 I Street, N.W.
Suite 470 East
Washington, D.C. 20005
Telephone (202) 737-7900
Breyer & Aguggia Facsimile (202) 737-7900
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ATTORNEYS AT LAW
April 2, 1998
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 "Company"), in connection with the
preparation of the Registration Statement on Form S-8 filed with the
Securities and Exchange Commission ("Registration Statement") under the
Securities Act of 1933, as amended, relating to shares of common stock, par
value $.01 per share (the "Common Stock") of the Company which may be issued
pursuant to the terms of the Towne Bank of Woodinville 1992 Stock Option Plan
and the 1997 Management Recognition and Development Plan (the "Plans"), all as
more fully described in the Registration Statement. You have requested the
opinion of this firm with respect to certain legal aspects of the proposed
offering.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock when issued pursuant to and in accordance with
the terms of the Plans will be duly and validly issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8.
Sincerely,
/s/ Breyer & Aguggia
BREYER & AGUGGIA
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Exhibit 23.1
Consent of Independent Auditors
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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
May 9, 1997, appearing in the Annual Report on Form 10-K of First Savings Bank
of Washington Bancorp, Inc. for the year ended March 31, 1997.
/s/ Deloitte & Touche
DELOITTE & TOUCHE LLP
Seattle, Washington
March 31, 1998
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Exhibit 23.2
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
Towne Bank of Woodinville
1992 Stock Option Plan
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TOWNE BANK OF WOODINVILLE
1992 STOCK OPTION PLAN
1. Purpose. The purpose of this Towne Bank of Woodinville Stock Option
Plan (the "Plan") is to provide a means whereby certain employees of Towne
Bank of Woodinville (the "Bank") or a related corporation (as defined in
Section 5) may be granted incentive stock options qualified under Internal
Revenue Code ("IRC") Section 422 and/or nonqualified stock options and thereby
be given an opportunity to purchase Common Stock of the Bank; and whereby
certain officers, directors and independent contractors may be granted
nonqualified stock options and thereby be given an opportunity to purchase
Common Stock of the Bank. The Plan is intended to advance the interests of
the Bank by enabling the Bank to secure and retain the services of highly
qualified persons, by encouraging stock ownership on the part of certain
employees, and by providing such employees with an additional incentive to
make every effort to enhance the success of the Bank.
2. Stock Subject to Plan. The stock subject to the Plan shall be the
Bank's Common Stock (the "Common Stock") presently authorized but unissued or
subsequently acquired by the Bank. Subject to adjustment as provided in
Section 4(1), the aggregate number of shares of Common Stock which may be
issued upon the exercise of all options granted under this Plan shall not
exceed 15,000 shares of Common Stock (as such stock was constituted on the
effective date of this Plan). If any option granted under this plan shall
expire or terminate for any reason without having been exercised in full, the
unpurchased shares subject to such option shall again become available for
purposes of this Plan.
3. Eligibility. A person shall be eligible to be granted an incentive
stock option under this Plan only if at the time of the grant such person is a
full-time employee of the Bank or a related corporation. A person shall be
eligible to be granted a nonqualified option under this Plan only if at the
time of the grant such person is an officer, director, independent contractor
or full-time employee of the Bank or a related corporation.
4. Grant of Options; Terms and Conditions. The Personnel Committee or
other committee designates by the Bank shall make recommendations periodically
to the Board of Directors with respect to the selection of persons to be
granted options under the Plan and the terms of such options. The Board of
Directors shall make all determinations as to selection of persons to be
granted options under this Plan and, in accordance with this Section 4, the
terms and conditions of such options. Each option granted under this Plan
shall be evidenced by a written agreement in such form and with such terms,
conditions, limitations and restrictions, not inconsistent with this Plan, as
the Board of Directors shall determine for such option, subject to the
following:
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(a) Option Price: Each written option agreement governing an option
granted under this Plan shall specify the option price per share, which shall
in no case be less than the par value per share (determined at the time the
option is granted). Furthermore, subject to Section 4(d), the option price
per share under incentive stock options granted under this Plan shall not be
less than the fair market value per share at the time the option is granted,
which shall be determined in good faith by the Board of Directors. For
purposes of the Plan, fair market value shall be determined without regard to
any restriction (other than a restriction which, by its terms, will never
lapse). The option price specified in the option agreement shall be subject
to adjustment as provided in Section 4(1).
(b) Number of Share Subject to Option: Each written option agreement
governing an option granted under this Plan shall specify the maximum number
of shares which may be purchased pursuant to the exercise of such option.
Such number of shares shall be subject to adjustment as provided in Section
4(1). The aggregate fair market value of shares with respect to which
incentive stock options are exercisable for the first time by any optionee
during any calendar year (under all incentive stock option plans of the Bank
or other employer and its related corporation) shall not exceed $100,000. For
this purpose, the fair market value of the shares shall be determined when the
option for those shares is granted. Options granted in violation of this
limit (determined by taking options into account in the order in which they
were granted) shall be treated as nonqualified options notwithstanding their
designation as incentive stock options.
(c) Term of Option: Subject to Section 4(d), each option granted under
this Plan shall be exercisable for a term not exceeding ten (10) years from
the date the option is granted. No option granted under this Plan shall be
exercisable prior to the date on which the optionee completes one (1) year of
continuous employment, or other relationship as officer, director or
independent contractor, with the Bank or a related corporation.
(d) Greater than Ten Percent Shareholders:
(A) If an incentive stock option is granted under this Plan to an
employee who owns more than ten percent (10%) of the Bank, other employer
or related corporation: (i) the term of such option shall not exceed five
(5) years from the date of grant of the option; and (ii) the option price
per share shall not be less than one hundred and ten percent (110%) of
fair market value per share at the time the option is granted. This
provision shall control notwithstanding any contrary terms contained in
this Plan, the option agreement or any other document.
(B) For purposes of determining stock ownership: (i) an employee
shall be deemed to own the stock owned, directly or indirectly, by or for
his or her brother, sisters, spouse, ancestors and lineal descendants;
(ii) stock owned directly or indirectly, by or for a corporation,
partnership, estate or trust shall be deemed to be owned proportionately
by or for its shareholders, partners or beneficiaries; and (iii) stock
owned by an employee or the person shall be determined by including all
stock actually issued
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and outstanding immediately before the grant of the incentive stock
option to the employee.
(e) Nontransferability of Option: Options granted under this Plan and
the rights and privileges conferred thereby may not be transferred, assigned,
pledged, or hypothecated in any manner (whether by operation of law or
otherwise) other than by will or by the applicable law of descent and
distribution, and shall not be subject to execution, attachment, or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of any option under this Plan or of any right or privilege
conferred thereby, contrary to the provisions hereof, or upon the sale or levy
or any attachment or similar process upon the rights and privileges conferred
thereby, such option shall thereupon terminate and become null and void.
(f) Designation of Type of Option: Each written option agreement
governing an option granted under this Plan shall designate whether the option
is an incentive stock option under IRC Section 422 or a nonqualified stock
option.
(g) Exercise of Option: To the extent that the right to purchase shares
under an option granted under this Plan is then exercisable, the option may be
exercised in whole or in part; provided, however, that no fewer than twenty
(20) shares (or the remaining shares then purchasable under the option, if
less than twenty (20) shares ) may be purchased upon any single exercise of
the option and that only whole shares may be purchased pursuant to an exercise
of the option. During an optionee's lifetime, each option granted under this
Plan is personal to the optionee and shall be exercisable solely by such
optionee or in case of his or her legal incapacity, by his or her legal
representative. An option shall be exercisable by delivery to the officer of
the Bank designated in the option agreement of both: (i) written notice of the
number of shares with respect to which the option is being exercised; and (ii)
payment in full of the option price, in cash or by personal (if permitted by
the terms of the options agreement), bank certified or cashier's check for the
shares being purchased. As a condition to the exercise of an option, the
optionee shall make such arrangements as may be required by the Bank
concerning satisfaction of any withholding tax obligation that may arise in
connection with such exercise. Delivery of shares purchased shall be made at
the principal office of the Bank, or such other place as shall be mutually
acceptable to the Bank and the optionee, within a reasonable time period
following the Bank's receipt of the written notice of exercise and payment of
the option price.
(h) Termination of Employment or Other Applicable Relationship with
Bank:
(A) If an optionee terminates his or her employment or other
applicable relationship with the Bank or a related corporation for any
reason other than death or total disability, each of the optionee's
options granted under this Plan shall terminate at the end of the three
(3) months period following termination of such employment or
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relationship (unless by its terms it sooner terminate and expires) as to
all shares for which such option has not been previously exercised.
(B) If an optionee's employment or other applicable relationship
with the Bank or related corporation terminates because of total
disability, each of the optionee's options granted under this Plan shall
terminate at the end of the twelve (12) month period following
termination of such employment or relationship (unless by its terms it
sooner terminates and expires) as to all shares for which such option has
not been previously exercised. As used in this Plan, the term "total
disability" refers to a mental or physical impairment of the optionee
which is expected to result in death or which has lasted or expected to
last for a continuous period of twelve (12) months or more and which
causes the optionee to be unable, in the opinion of the Committee, to
perform his or her duties in the course of his or her employment or other
applicable relationship with the Bank or related corporation and to be
engaged in any substantial gainful activity. Total disability shall be
deemed to have occurred on the first day after the Committee has reached
its determination of total disability.
(C) For purposes of the Section 4(h), transfer of employment
between or among the Bank and/or any related corporation shall not be
deemed to constitute a termination of employment or other applicable
relationship with the Bank or any of its related corporations. For
purposes of this Section 4(h), a person's employment or other applicable
relationship shall be deemed to continue while the optionee is on
military, sick leave or other bona fide leave of absence (as determined
by the Committee). The foregoing notwithstanding, employment or other
applicable relationship shall not be deemed to continue beyond the first
ninety (90) days of such leave, unless the optionee's right to reemploy-
ment or reinstatement of other applicable relationship is guaranteed by
statute or contract.
(D) For purposes of Section 4(h) and 4(i), references to "other
applicable relationship" shall apply only to nonqualified options and
shall mean the relationship of officer, director or independent
contractor.
(i) Death of Optionee: If any optionee dies during his or her employment
or other applicable relationship with the Bank or a related corporation or
within the three (3) month period (or twelve (12) month period in the case of
a totally disabled optionee) following termination of such employment or
relationship, the personal representative of the optionee's estate (or any
person to whom the optionee's rights under the option pass by will or by the
applicable laws of descent and distribution) may exercise an option held by
the optionee, in accordance with such option's terms, within one year after
the optionee's death (unless by its terms, such option sooner terminates and
expires).
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(j) Status of Shareholder: Neither the optionee nor any person or
persons to whom the optionee's rights and privileges under an option may pass
shall be, or have any of the rights or privileges of, a shareholder of the
Bank with respect to any of the shares issuable upon the exercise of any
option granted under this Plan unless and until such option has been exercised
and a stock certificate issued for such shares. Except as provided in Section
4(l), no adjustments shall be made for dividends or other rights for which the
record date is prior to the date of issuance of such stock certificate.
(k) Continuation of Employment or Other Relationship: Nothing in this
Plan or in any option granted under this Plan shall confer upon any employee,
officer, director, independent contractor or optionee any right to continue in
the employ of, or other relationship with, the Bank or a related corporation,
or to interfere in any way with the right of the Bank or any related
corporation to terminate such person's employment or other relationship with
the Bank or related corporation at any time.
(l) Changes in Capitalization; Reorganization:
(A) The existence of this Plan and options granted hereunder
shall not affect in any way the right or power of the Bank or its
shareholder to make or authorize any or all adjustments, stock dividends,
recapitalization, reorganizations or other changes in the Bank's capital
structure or its business, or any merger or consolidation of the Bank, or
any issuance of bonds, debentures, or preferred stock by the Bank, or the
dissolution or liquidation of the Bank, or any sale or transfer of all or
any part of the Bank's assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
(B) The aggregate number and class of shares for which options
may be granted under this Plan, the number and class of shares covered by
each outstanding option, and the option price per share of shares
covered by each outstanding option shall all be proportionately adjusted
for any increase or decrease in the number of issued shares of Common
Stock of the Bank resulting from a split-up or consolidation of shares,
recapitalization, merger, consolidation, reorganization, any similar
occurrence or payment of any stock dividend; provided, that the option
price per share shall not be reduced below par value per share
(determined at the time the option is exercised); and provided further,
that any fractional shares resulting from such adjustment to an
outstanding option shall be disregarded so that each such option covers
on the number of whole shares resulting from the adjustment. Unless an
optionee agrees otherwise, any adjustment to an incentive stock option
shall be made in such a manner so as not to constitute a "modification"
as defined in IRC Section 425(j) as so as not to cause such incentive
stock option to fail to continue to qualify as an incentive stock option
as defined in IRC Section 422. All adjustments under this Section 4(l)
shall be determined and made by the Board of Directors.
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(C) Notwithstanding paragraphs (A) and (B) of this Section 4(l),
all options, including unmatured options, granted under this Plan may be
canceled by the Bank, upon determination of the Board of Directors in its
sole discretion, as of the effective date of any reorganization, merger
or consolidation pursuant to which the Bank is not the surviving or
resulting entity by giving notice to each holder thereof, or to such
holder's legal representative, of the Bank's intention to do so and by
permitting the exercise of matured options during the twenty (20) day
period next preceding such effective date. In such case, unmatured
options may be accelerated, upon determination of the Board of
Directors, in its sole discretion, and if so accelerated, may be
exercised in whole or part during such twenty (20) day period
notwithstanding any other provision in this Plan.
(D) Upon dissolution or liquidation of the Bank (other than a
part of a reorganization, merger or consolidation) all options, including
unmatured options, granted under this Plan shall terminate, but optionees
shall be given at least twenty (20) days advance notice of such
dissolution or liquidation and the opportunity during such twenty (20)
day period to exercise matured options. In such case, unmatured options
may be accelerated, upon determination of the Board of Directors in its
sole discretion, and if so accelerated, may be exercised in whole or in
part during such twenty (20) day period notwithstanding any other
provision in this Plan.
(E) Except as otherwise specifically provided in this Plan, the
issue by the Bank of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash, property, or
services (whether by direct sale or transfer or upon the exercise of
rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Bank convertible into such shares or other securities)
shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to
options granted under this Plan.
5. Related Corporation. When referring to a subsidiary corporation,
the term "related corporation" shall mean any corporation (other than the
Bank) in an unbroken chain of corporations beginning with the Bank if, at the
time of the granting of the options, each of the corporations other than the
last corporation in such chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. When referring to a parent corporation, the
term "related corporation" shall mean any corporation (other than the Bank) in
an unbroken chain of corporations ending with the Bank if, at the time of the
granting of the option, each of the corporations other than the Bank owns
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
For purposes of Section 4(b) and 4(d), te employer of the optionee shall be
substituted for the Bank in applying this Section 5 to determine "related
corporations" with respect to such employer.
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6. Administrative. Except for determinations to be made by the Board
of Directors of the Bank (the "Board of Directors") as specifically provided
in this Plan, this Plan shall be administered by a committee appointed by the
Board of Directors to consist of members of the Board of Directors who are not
active officer's of the Bank or a related corporation (the "Committee"). The
Committee, and wherever applicable, the Board of Directors, shall have full
discretion to determine all matters relating to this Plan and options granted
under this Plan. The interpretation and construction by the Committee, and
wherever applicable, the Board of Directors, of any provision of the Plan or
any option granted under the Plan and any determination by the Committee, and
wherever applicable, the Board of Directors, pursuant to any provision of the
Plan or any such option shall be final and conclusive. No member of the Board
of Directors or of the Committee shall be liable for any action or
determination made hereunder. Options granted to a member of the Committee or
the Board of Directors may be granted only in accordance with RCW 30.12.115 or
other applicable law.
7. Term of Plan. Subject to approval by the Supervisor of Banking of
the State of Washington and approval of the Plan by holders of a majority of
the outstanding shares of Common Stock at a duly called meeting of the
shareholders within one year of the Plan's adoption by the Board of Directors,
the Plan becomes effective upon approval by the Board of Directors. Unless
sooner terminated by the Board of Directors, this Plan shall terminate ten
years from the earlier of: (a) the date on which the Board of Directors adopts
the Plan; or (b) the date on which shareholder approval of this Plan, as
previously described, is obtained. No option may be granted under this Plan
after the Plan's termination. However, termination of this Plan shall not
alter or impair any rights of an optionee under any option granted prior to
termination of the plan unless the optionee consents to such alteration or
impairment.
8. Amendments. The Board of Directors may from time to time alter,
amend, suspend or discontinue this Plan or alter or amend any and all option
agreements granted thereunder; provided however, that no such action of the
Board of Directors may, without the approval of the Supervisor of Banking and
of the shareholders by the vote of shareholders representing a majority of the
voting capital stock of the Bank, alter the provisions of this Plan so as to
(a) change the maximum number of shares available for granting options under
the plan; (b) change the minimum option price or maximum option term under
this Plan; (c) change, directly or indirectly, by cancellation and
substitution of options or otherwise, the option price or option term
applicable under any outstanding option granted under this Plan, provided,
however, that the provisions of this clause (d) shall not prevent the granting
to any person holding an option under this Plan, of an additional option under
this Plan ; or (e) change the class of employees eligible for options granted
under this Plan. No outstanding option granted under this Plan may be amended
or otherwise altered to the detriment of an optionee without the optionee's
consent. Furthermore, unless the optionee agrees otherwise, any change or
adjustment made to an outstanding incentive stock option granted under this
Plan shall be made in such a manner so as not to constitute a "modification"
as defined in IRC Section 425(h) and so as not to cause such incentive stock
option to fail to continue to qualify as an incentive stock option under IRC
Section 422.
9. Use of Proceeds. The proceeds from the sale of Common Stock pursuant
to the exercise of options will be used for the Bank's general corporate
purposes, appropriately allocated to Capital and Surplus Accounts.
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