SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant X
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Filed by a Party other than the Registrant
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Check the appropriate box:
Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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X Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
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WASHINGTON BANCORP
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(Name of Registrant as Specified In Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
$125 per Exchange Act Rules (6-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2) or
X Item 22(a)(2) of Schedule 14A.
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$500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction: $
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5) Total fee paid: $
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act
- --- Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
WASHINGTON BANCORP
September 12, 1996
Dear Fellow Stockholder:
On behalf of the Board of Directors and management of Washington Bancorp,
I cordially invite you to attend the first Annual Meeting of Stockholders.
The meeting will be held at 4:00 p.m. on October 15, 1996 at the Company's
office located at 102 East Main Street, Washington, Iowa.
An important aspect of the meeting process is the stockholder vote on
corporate business items. I urge you to exercise your rights as a stockholder
to vote and participate in this process. In addition to the election of two
directors and the ratification of the appointment of independent auditors,
stockholders are being asked to consider and vote upon the proposals to ratify
the adoption of the 1996 Stock Option and Incentive Plan and the Recognition
and Retention Plan. The Board has carefully considered each of these
proposals and believes that their approval will enhance the ability of the
Company to recruit and retain quality management. Accordingly, your
Board of Directors unanimously recommends that you vote for each of the
proposals.
I encourage you to attend the meeting in person. Whether or not you
attend the meeting, I hope that you will read the enclosed Proxy Statement and
then complete, sign and date the enclosed proxy card and return it in the
postage prepaid envelope provided. This will save Washington Bancorp
additional expense in soliciting proxies and will ensure that your shares are
represented. Please note that you may vote in person at the meeting even if
you have previously returned the proxy.
Thank you for your attention to this important matter.
Sincerely,
STAN CARLSON
President and Chief Executive Officer
WASHINGTON BANCORP
102 East Main Street
Washington, Iowa 52353
(319) 653-7256
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on October 15, 1996
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of Washington Bancorp (the "Company") will be held at the Company's
office located at 102 East Main Street, Washington, Iowa at 4:00 p.m.,
Washington, Iowa time, on October 15, 1996.
A Proxy Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of two directors of the Company;
2. The ratification of the adoption of the 1996 Stock Option and
Incentive Plan;
3. The ratification of the adoption of the Recognition and Retention
Plan;
4. The ratification of the appointment of McGladrey & Pullen, LLP as
the auditors of the Company for the fiscal year ending June 30,
1997; and such other matters as may properly come before the
Meeting, or any adjournments thereof. The Board of Directors is
not aware of any other business to come before the Meeting.
Any action may be taken on the foregoing proposals at the Meeting on the
date specified above, or on any date or dates to which the Meeting may be
adjourned. Stockholders of record at the close of business on August 26, 1996
are the stockholders entitled to vote at the Meeting and any adjournments
thereof.
You are requested to complete and sign the enclosed form of proxy, which
is solicited on behalf of the Board of Directors, and to mail it promptly in
the enclosed envelope. The proxy will not be used if you attend and
vote at the Meeting in person.
BY ORDER OF THE BOARD OF DIRECTORS
Stan Carlson
President and Chief Executive Officer
Washington, Iowa
September 12, 1996
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE
OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS
REQUIRED IF MAILED WITHIN THE UNITED STATES.
PROXY STATEMENT
WASHINGTON BANCORP
102 East Main Street
Washington, Iowa 52353
(319) 653-7256
ANNUAL MEETING OF STOCKHOLDERS
October 15, 1996
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Washington Bancorp (the "Company"), the
parent company of Washington Federal Savings Bank ("Washington Federal" or the
"Bank"), of proxies to be used at the Annual Meeting of Stockholders of the
Company (the "Meeting") which will be held at the Company's office located at
102 East Main Street, Washington, Iowa on October 15, 1996, at 4:00 p.m.,
Washington, Iowa time, and all adjournments of the Meeting. The accompanying
Notice of Annual Meeting and this Proxy Statement are first being mailed to
stockholders on or about September 12, 1996.
At the Meeting, stockholders of the Company are being asked to consider
and vote upon the election of two directors, proposals to ratify the adoption
of the 1996 Stock Option and Incentive Plan ("Stock Option Plan") and the
Recognition and Retention Plan ("RRP"), and the appointment of McGladrey &
Pullen, LLP as auditors for the Company.
Vote Required and Proxy Information
All shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), represented at the Meeting by properly executed proxies
received prior to or at the Meeting, and not revoked, will be voted at
the Meeting in accordance with the instructions thereon. If no instructions
are indicated, properly executed proxies will be voted for the director
nominees and the proposals set forth in this Proxy Statement. The Company
does not know of any matters, other than as described in the Notice of Annual
Meeting, that are to come before the Meeting. If any other matters are
properly presented at the Meeting for action, the persons named in the
enclosed form of proxy and acting thereunder will have the discretion to vote
on such matters in accordance with their best judgment.
Election of directors and the appointment of McGladrey & Pullen, LLP as
auditors require the affirmative vote of a majority of the votes present in
person or represented by proxy at the Meeting and entitled to vote on the
matter. The proposals to ratify the adoption of the Stock Option Plan and the
RRP require the affirmative vote of a majority of shares eligible to be cast
in person or by proxy at the Meeting. Proxies marked to abstain and broker
non-votes have no effect on the vote. One-third of the shares of the Common
Stock, present in person or represented by proxy, shall constitute a quorum
for purposes of the Meeting. Abstentions and broker non-votes are counted for
purposes of determining a quorum.
A proxy given pursuant to the solicitation may be revoked at any time
before it is voted. Proxies may be revoked by: (i) filing with the Secretary
of the Company at or before the Meeting a written notice of revocation
bearing a later date than the proxy, (ii) duly executing a subsequent proxy
relating to the same shares and delivering it to the Secretary of the Company
at or before the Meeting, or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be
delivered to Secretary, Washington Bancorp, 102 East Main Street, Washington,
Iowa 52353.
Voting Securities and Certain Holders Thereof
Stockholders of record as of the close of business on August 26, 1996
will be entitled to one vote for each share of Common Stock then held. As of
that date, the Company had 657,519 shares of Common Stock issued and
outstanding. The following table sets forth information regarding share
ownership of those persons or entities known by management to beneficially own
more than five percent of the Common Stock and all directors and executive
officers of the Company and the Bank as a group.
Shares
Beneficially Percent
Beneficial Owner Owned of Class
- ------------------------------------------------ ------------ --------
Washington Bancorp Employee Stock Ownership Plan
102 East Main Street
Washington, Iowa 52353 52,601(1) 8.00
Jerome H. and Susan B. Davis
11 Baldwin Farms North
Greenwich, Connecticut 06831 44,700(2) 6.80
Directors and executive officers of the Company
and the Bank, as a group (11 persons) 93,095(3) 14.16
______________________
<FN>
(1) The amount reported represents shares held by the Employee Stock
Ownership Plan ("ESOP"), none of which have been allocated to accounts
of participants. First Bankers Trust Company, N.A., Quincy, Illinois,
the trustee of the ESOP, may be deemed to beneficially own the shares
held by the ESOP which have not been allocated to accounts of
participants. Participants in the ESOP are entitled to instruct the
trustee as to the voting of shares allocated to their accounts under the
ESOP. Unallocated shares held in the ESOP's suspense account or
allocated shares for which no voting instructions are received are voted
by the trustee in the same proportion as allocated shares voted by
participants.
(2) As reported by Mr. and Mrs. Davis in a statement dated June 25, 1996 on
Schedule 13D under the Securities Exchange Act of 1934. Mr. Davis
reported sole voting and investment power as to 24,000 of the reported
shares and shared voting and investment power as to 20,700 of the
reported shares. Mrs. Davis reported shared voting and investment power
as to all of the reported shares.
(3) Includes shares held directly, as well as in retirement accounts, held
by certain members of the named individuals' families, or held by trusts
of which the named individual is a trustee or substantial beneficiary,
with respect to which the named individuals may be deemed to have sole
voting and investment power.
PROPOSAL I - ELECTION OF DIRECTORS
The Company's Board of Directors is presently composed of eight members,
each of whom is also a director of the Bank. Directors of the Company are
generally elected to serve for a three-year term or until their respective
successors shall have been elected and shall qualify. Approximately one-third
of the directors are elected annually.
The following table sets forth certain information regarding the
Company's Board of Directors, including their terms of office and nominees for
election as directors. It is intended that the proxies solicited on behalf of
the Board of Directors (other than proxies in which the vote is withheld as to
one or more nominees) will be voted at the Meeting for the election of the
nominees identified in the following table. If any nominee is unable to
serve, the shares represented by all such proxies will be voted for the
election of such substitute as the Board of Directors may recommend. At this
time, the Board of Directors knows of no reason why any of the nominees might
be unable to serve, if elected. There are no arrangements or understandings
between any director or nominee and any other person pursuant to which such
director or nominee was selected.
Shares of Common
Term Stock Beneficially Percent
Director to Owned at of
Name Age Position(s) Held Since(1) Expire August 26, 1996(2) Class
- ----------------- --- ---------------- -------- ------ ------------------ -------
NOMINEES
Richard L. Weeks 74 Director 1978 1999 17,000 2.59
J. Richard Wiley 60 Director 1978 1999 2,000 .30
DIRECTORS CONTINUING IN OFFICE
Myron L. Graber 48 Director 1992 1997 6,995 1.06
Rick R. Hofer 48 Chairman of the Board 1988 1997 8,000 1.22
Stan Carlson 39 President, Chief
Executive Officer 1993 1997 20,000 3.04
and Director
James D. Gorham 58 Director 1991 1998 500 .08
Charles C. Hotle 81 Director 1976 1998 10,000 1.52
Mary Levy 42 Director 1993 1998 6,000 .91
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<FN>
(1) Includes service as a director of the Bank.
(2) Includes shares held directly, as well as, in retirement accounts, held
by certain members of the named individuals' families, or held by trusts
of which the named individual is a trustee or substantial beneficiary,
with respect to which the named individuals may be deemed to have sole
voting and investment power.
The business experience of each director and director nominee is set
forth below. All directors have held their present positions for at least the
past five years, except as otherwise indicated.
Richard L. Weeks is President and Owner of Sitler Electric Supply, Inc.,
an electrical wholesaler and operator of two lighting showrooms in Washington
and Marion, Iowa. Mr. Weeks is also a member of Noon Kiwanis, Methodist
Church, Country Club, YMCA, Masonic Lodge, Shriners, Washington County
I-Club, and the Athletic Club of Iowa City.
J. Richard Wiley is currently the manager of Apex Computer Systems in
Iowa City, Iowa, the owner of Wiley's Mere Farm, a family farm corporation and
Iowa Computer Solutions, Inc., a computer retailer in Washington, Iowa. Mr.
Wiley is also a member of United Presbyterian Church, Farm Bureau, and Marion
Chamber of Commerce. Mr. Wiley and Mr. Hotle are first cousins by marriage.
Myron L. Graber is President of Graber Home Improvement, Inc., a building
materials supply company in Washington, Iowa. Mr. Graber is also a member of
Habitat for Humanity, Washington Concert Association, Optimist Club and
Washington Mennonite Church.
Rick R. Hofer has been the personnel and credit manager of Sitler
Electric Supply in Washington, Iowa since 1993. Prior to that time, he was
the manager of Spurgeon's Department Store for 20 years. Mr. Hofer is
also a member of Noon Kiwanis and St. James Church.
Stan Carlson is the President and Chief Executive Officer of Washington
and the Bank. He was elected President and Chief Executive Officer of the
Bank in 1993 and of the Company upon its formation in 1995. Prior
to 1993, he was a Vice President of Northwoods State Bank. Mr. Carlson is
also a member of Optimists Club, a past president of Washington Athletic
Booster Club, President of the Rotary Club and a member of Immanuel
Lutheran Church.
James D. Gorham is a District Agent for Northwestern Mutual Life
Insurance Co. in Washington, Iowa. Mr. Gorham is also a member of Rotary,
Sierra Club, Nature Conservatory and Washington County Historical
Society.
Charles C. Hotle is retired, but Mr. Hotle conducts real estate
appraisals on a part time basis. He is a past president of the Chamber of
Commerce. Until 1982 he was the owner of Hotle Feed and Grain, Inc. and
participates as a member of the Washington County Historical Society and the
local Optimists Club. Mr. Hotle and Mr. Wiley are first cousins by marriage.
Mary Levy is treasurer and co-owner of Mose Levy Co., Inc., a steel
distributor in Washington, Iowa. Mrs. Levy is also a member of Washington
County Historical Society, American Cancer Society, Iowa Natural
Heritage Foundation, and YWCA/YMCA.
Board of Directors' Meetings and Committees
Board and Committee Meetings of the Company. Meetings of the Company's
Board of Directors are generally held on a quarterly basis. The Board of
Directors of the Company held two meetings during the year ended June 30,
1996. No incumbent director attended fewer than 75% of the total number of
meetings held by the Board of Directors and by all committees of the Board of
Directors on which he or she served during the year.
The Board of Directors of the Company has the same standing committees as
the Bank. None of the Company-level committees met during fiscal year 1996.
Board and Committee Meetings of the Bank. Meetings of the Bank's Board
of Directors are held on a monthly basis. The Board of Directors met 13 times
during the fiscal year ended June 30, 1996. During fiscal 1996, no incumbent
director of the Bank attended fewer than 75% of the aggregate of the total
number of Board meetings or the total number of meetings held by the
committees of the Board of Directors on which he served.
The principal committees of the Board of Directors of the Bank are Audit,
Compensation, Planning, Investment and Loan Committees.
The Audit Committee is comprised of Directors Wiley, Graber and Levy.
The Audit Committee is responsible for selecting the independent accountants
and meeting with the independent accountants to outline the scope and review
the results of the annual audit. The Audit Committee met two times during
fiscal year 1996. The Audit Committee also performs periodic cash audits, in
addition to reviewing loan files and appraisers for the Bank.
The Compensation Committee is comprised of Directors Gorham and Levy.
The Compensation Committee is responsible for continual review of the
performance of the management group consisting of the President/Chief
Executive Officer, the Vice Presidents and the Controller. It also sets
levels of compensation for all employees. The Compensation Committee met
three times in fiscal year 1996.
The Planning Committee is comprised of Directors Wiley and Weeks. The
Planning Committee approves the budget and strategic plan. The Planning
Committee met three times in fiscal year 1996.
The Investment Committee is comprised of Directors Weeks, Graber and
Hotle. The investment committee functions as the asset/liability committee
and monitors the Bank's interest rate spread and interest rate risk. The
investment committee also makes recommendations on purchases and sales, and
sets the interest rates to be paid on deposits. The Investment Committee met
49 times in fiscal 1996.
The Loan Committee is comprised of Directors Hotle, Gorham, Levy, Hofer,
and Wiley. The Loan Committee approves all real estate loans and ratifies all
consumer and commercial loans as well as home equity and home improvement
loans. They also set the interest rates charged on loans. The Loan Committee
met 49 times in fiscal year 1996.
The Boards of Directors of the Company and the Bank have no standing
nominating committees. The full Boards of Directors act as nominating
committees. While the Boards will consider nominees recommended by
others, the Boards have not actively solicited nominations nor established any
procedures for this purpose.
Director Compensation
Cash Compensation of the Company. During fiscal 1996, the Board of
Directors of the Company were not paid for their service in such capacity.
Cash Compensation of the Bank. Each member of the Board of Directors
of the Bank receive $500 for each monthly and one annual meeting of the Board
attended. There are no fees paid for service on any Board committee.
Stock Benefit Plans. Subject to stockholder approval of the stock
benefit plans at this Meeting, each non-employee member of the Board of
Directors of the Company will be granted a one time award of an option to
purchase 2,818 shares pursuant to the Stock Option Plan and a restricted stock
award of 1,127 shares under the RRP. See "Proposal II - Ratification of the
1996 Stock Option and Incentive Plan" and "Proposal III - Ratification
of the Recognition and Retention Plan."
Executive Compensation
The Company has not paid any compensation to its executive officers since
its formation. The Company does not presently anticipate paying any
compensation to such persons.
The following table sets forth the compensation paid or accrued by
Washington Federal for services rendered by the Chief Executive Officer. No
executive officer of the Bank made in excess of $100,000 during fiscal 1996.
SUMMARY COMPENSATION TABLE(1)
Long-Term
Compensation
---------------------
Annual Compensation Awards
- ------------------------------------------------------- ---------------------
Restricted
Stock Options/ All Other
Name and Principal Position Year Salary(2) Bonus Award(s)(3) SARs(4) Compensation
($) ($) ($) (#) ($)
- --------------------------- ---- --------- ----- ----------- -------- ------------
Stan Carlson, President, Chief 1996 $60,000 $8,121 --- --- ---
Executive Officer and Director 1995 $59,543 $6,000 --- --- $2,865(5)
<FN>
(1) Compensation information for the fiscal year ended June 30, 1994 has
been excluded since the Company was not a public company at such time.
(2) Includes director fees.
(3) No awards of restricted stock have been made. See "Proposal III -
Ratification of the Recognition and Retention Plan" for a description of
proposed restricted stock awards to be made following stockholder
approval of such plan.
(4) No options or SARs have been awarded. See "Proposal II - Ratification
of the 1996 Stock Option and Incentive Plan" for options proposed to be
awarded following stockholder approval of such plan.
(5) Includes the Company's contribution to its profit-sharing plan on behalf
of Mr. Carlson.
No options or stock appreciation rights were granted or exercised during
fiscal 1996. See "Proposal II - Ratification of the 1996 Stock Option and
Incentive Plan" for information regarding awards intended to be made
in fiscal 1996, subject to stockholder ratification of the Stock Option Plan
at the Meeting.
Employment Agreement. During 1995, Washington Federal entered into an
employment agreement with President Stan Carlson. The agreement is for a term
of three years and has a base salary of $60,000. The agreement is terminable
by Washington Federal for just cause, defined in the agreement as personal
dishonesty, incompetence, willful misconduct, any 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 final cease and desist order, or material
breach of any provision of the employment agreement. Any request by a
Washington Federal bank regulator that President Stan Carlson be removed shall
also be deemed just cause. If the agreement is terminated for just cause, the
employee only receives his salary up to the date of termination. If
Washington Federal terminates the agreement without just cause, the employee
is entitled to a continuation of salary from the date of termination through
the remaining term of the agreement.
The agreement provides that in the event of involuntary termination of
employment in connection with, or within one year after, any change in control
of the Company or Washington Federal, the employee will be paid a
lump sum equal to approximately three times the employee's annual "base"
salary. If a lump sum payment had been made as of June 30, 1996, Mr. Carlson
would have received a payment of approximately $180,000. The agreement
may be renewed annually if the Board of Directors determines that the
executive has met its requirements and standards.
Benefit Plans
Employee Stock Ownership Plan. Washington has established an employee
stock ownership plan (the "ESOP") for the exclusive benefit of participating
employees. Participating employees are employees who have completed one year
of service with Washington or its subsidiaries and have attained the age of
21.
The ESOP is funded by contributions made by Washington in cash or its
common stock. Benefits may be paid either in shares of common stock or in
cash. Washington Federal anticipates contributing approximately $45,600
annually to the ESOP to meet principal obligations under the ESOP loan, as
proposed, and an additional amount for accrued interest on the loan. It is
anticipated that all such contributions shall be tax-deductible.
Contributions to the ESOP and shares released from the suspense account
will be allocated among participants on the basis of total compensation,
excluding bonuses. All participants must be employed at least 1,000
hours in a plan year and be employed on the last day of the plan year in order
to receive an allocation. Participant benefits become 100% vested after seven
years of service. Employment prior to the adoption of the ESOP shall
count toward vesting. Vesting will be accelerated upon retirement, death,
disability, change of control of the Holding Company, or termination of the
ESOP. Forfeitures will be reallocated to participants on the same basis
as other contributions in the plan year. Benefits may be payable in the form
of a lump sum upon retirement, death, disability or separation from service.
Washington's contributions to the ESOP are discretionary and may cause a
reduction in other forms of compensation. Therefore, benefits payable under
the ESOP cannot be estimated.
The Board of Directors has appointed Directors Gorham and Levy to the
Compensation Committee to administer the ESOP. The Board of Directors or the
Compensation Committee may instruct the ESOP Trustee regarding investments of
funds contributed to the ESOP. The ESOP Trustee must vote all allocated
shares held in the ESOP in accordance with the instructions of the
participating employees. Unallocated shares and allocated shares for which no
timely direction is received will be voted by the ESOP Trustee, subject to the
Trustee's fiduciary duties.
Stock Option and Incentive Plan. The Stock Option Plan was adopted by the
Board of Directors, subject to the approval of stockholders at the Meeting.
See "Proposal II - Ratification of the 1996 Stock Option and Incentive Plan."
Recognition and Retention Plan. The Board has adopted the RRP subject to
ratification by stockholders at the Meeting. See "Proposal III - Ratification
of the Recognition and Retention Plan."
Certain Transactions
Washington, like many financial institutions, has followed a policy of
granting various types of loans to officers, directors and employees. Such
loans (1) have been made in the ordinary course of business, (2) were made
on substantially the same terms and conditions, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
Washington's other customers, and (3) do not involve more than the normal risk
of collectibility or present other unfavorable features. All loans by
Washington to its directors and executive officers are subject to OTS
regulations restricting loans and other transactions with affiliated persons
of Washington. Loans to officers and directors of Washington and their
affiliates, amounted to approximately $899,500 or 8.53% of Washington's
stockholders' equity at June 30, 1996.
PROPOSAL II - RATIFICATION OF THE 1996 STOCK OPTION AND INCENTIVE PLAN
General
Establishment and implementation of the Stock Option Plan is subject to
approval by stockholders, non-objection by the OTS and the satisfaction of
certain other conditions. The OTS has in no way endorsed or approved
the Stock Option Plan; and no written or oral representation to the contrary
is made hereby.
The 1996 Stock Option and Incentive Plan (the "Stock Option Plan") has
been adopted by the Board of Directors of the Company, subject to ratification
by stockholders at the Meeting. Pursuant to the Stock Option Plan,
65,751 shares of the Company's Common Stock are reserved for issuance by the
Company under the Stock Option Plan. Since stockholders do not have
preemptive rights, to the extent the Company issues all shares reserved for
issuance under the Stock Option Plan, the interests of current stockholders
will be diluted by approximately 9.1%.
The Board of Directors believes that it is appropriate for the Company to
adopt a flexible and comprehensive stock option and incentive plan which
permits the granting of a variety of long-term incentive awards to directors,
officers and employees as a means of enhancing and encouraging the recruitment
and retention of those individuals on whom the continued success of the
Company most depends. However, because the awards are granted only to persons
affiliated with the Company, the adoption of the Stock Option Plan could make
it more difficult for a third party to acquire control of the Company and
therefore could discourage offers for the Company's stock that may be viewed
by the Company's stockholders to be in their best interest. In addition,
certain provisions included in the Company's Certificate of Incorporation and
Bylaws may discourage potential takeover attempts, particularly those that
have not been negotiated directly with the Board of Directors of the Company.
Included in the Certificate of Incorporation and Bylaws are provisions (i)
limiting the voting power of shares held by persons owning 10% or more of the
Common Stock, (ii) requiring a supermajority vote of shareholders for approval
of certain business combinations, (iii) establishing a staggered Board of
Directors, (iv) permitting special meetings of shareholders to be called only
by the Board of Directors and (v) authorizing a class of preferred stock with
terms to be established by the Board of Directors. These provisions could
prevent the sale or merger of the Company even where a majority of the
stockholders approve of such transaction.
In addition, federal regulations prohibit the beneficial ownership of more
than 10% of the stock of a converted savings institution or its holding
company without prior approval of the OTS. Federal law and regulations also
require OTS approval prior to the acquisition of "control" (as defined in the
OTS regulations) of an insured institution, including a holding company
thereof. These regulations could have the effect of discouraging
takeover attempts of the Company.
Attached as Exhibit A to this Proxy Statement is the complete text of the
Stock Option Plan. The principal features of the Stock Option Plan are
summarized below.
Principal Features of the Stock Option Plan
The Stock Option Plan provides for awards of stock options. Each award
shall be on such terms and conditions, consistent with the Plan and applicable
OTS regulations, as the committee administering the Plan may determine.
Shares may be either authorized but unissued shares or reacquired shares
held by the Company in its treasury. Any shares subject to an award which
expires or is terminated unexercised will again be available for issuance
under the Stock Option Plan or any other plan of the Company or its
subsidiaries.
The Stock Option Plan is administered by the compensation committee of the
Board of Directors of the Company (the "Compensation Committee"), which is
comprised of non-employee directors of the Company. Directors Gorham and Levy
have been appointed as the present members of the Compensation Committee.
Pursuant to the terms of the Stock Option Plan, any director or employee of
the Company or its affiliates is eligible to participate in the Stock Option
Plan. In granting awards under the Stock Option Plan, the Compensation
Committee considers, among other things, position and years of service, value
of the participant's services to the Company and the Bank and the added
responsibilities of such individuals as employees, directors and officers of a
public company.
Stock Options
The term of stock options will not exceed ten years from the date of
grant. The Compensation Committee may grant either "Incentive Stock Options"
as defined under Section 422 of the Code or stock options not intended
to qualify as such ("non-qualified stock options").
In general, stock options will not be exercisable after the expiration of
their terms. Unless otherwise determined by the Compensation Committee, in
the event that a participant ceases to maintain continuous service
(as defined in the Stock Option Plan) to the Company, or one of its
affiliates, for any reason other than death, disability or termination for
cause, an exercisable stock option will continue to be exercisable for three
months but in no event after the expiration date of the option, unless
otherwise provided by the Compensation Committee, if a participant ceases to
maintain continuous service due to death or disability, any option granted but
not fully exercisable shall become exercisable in full upon the happening of
such event and remain exercisable (i) in the event of death for the period
described below and (ii) in the event of disability for a period of three
months. In the event of the death of a participant during such service or
within the three-month period described above following termination, an
exercisable option will continue to be exercisable for one year, to the extent
exercisable by the participant upon his death, but in no event later than ten
years after grant. Following the death of any participant, the Compensation
Committee may, as an alternative means of settlement of an option, elect to
pay to the holder an amount of cash equal to the amount by which the market
value of the shares covered by the option on the date of exercise exceeds the
exercise price. A stock option will automatically terminate and will no
longer be exercisable as of the date a participant is terminated for cause.
The exercise price for the purchase of shares subject to a stock option at
the date of grant may not be less than 100% of the market value of the shares
covered by the option on that date. The exercise price must be paid
in full in cash or shares of Common Stock, or a combination of both.
All options may have a term of up to ten years, are generally not
transferable and vest at the rate of 20% per year and shall not vest earlier
than the one-year anniversary of the date of stockholder ratification of the
Stock Option Plan (subject to certain exceptions set forth in the Stock Option
Plan). The exercise price per share of all options granted under the Stock
Option Plan shall be equal to the fair market value of the Common Stock on the
date of grant.
The Stock Option Plan provides for the grant of a non-qualified stock
option to purchase 2,818 shares of Common Stock to each director who is not a
full-time employee of the Company as of the date of stockholder ratification
of the adoption of the Stock Option Plan, or with respect to future directors
as of the date he or she is elected and has qualified.
Effect of Merger and Other Adjustments
Shares as to which awards may be granted under the Stock Option Plan, and
shares then subject to awards, will be adjusted by the Committee in the event
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure of the Company.
In the case of any merger, consolidation or combination of the Company
with or into another thrift holding company or other entity, whereby either
the Company is not the continuing thrift holding company or its outstanding
shares are converted into or exchanged for securities, cash or property, or
any combination thereof, any participant to whom a stock option has been
granted at least six months prior to such event will have the right (subject
to the provisions of the Stock Option Plan) and any applicable vesting period
upon exercise of the option to an amount equal to the excess of fair market
value on the date of exercise of the consideration receivable in the merger,
consolidation or combination with respect to the shares covered or represented
by the stock option over the exercise price of the option multiplied by the
number of shares with respect to which the option has been exercised.
Amendment and Termination
The Board of Directors of the Company may at any time, subject to
compliance with OTS regulations, amend, suspend or terminate the Stock Option
Plan or any portion thereof but may not, without the prior approval
of the stockholders, make any amendment (except as set forth in Section 9 of
the Stock Option Plan) which shall (i) increase the aggregate number of shares
with respect to which awards may be made under the Plan; (ii)
materially increase the benefits accruing to participants; (iii) materially
change the requirements as to eligibility for participation in the Stock
Option Plan; or (iv) change the class of persons eligible to participate in
the Plan, provided, however, that no such amendment, suspension or termination
shall impair the rights of any Participant, without his consent, in any award
therefore made pursuant to the Plan. Unless previously terminated, the Stock
Option Plan shall continue in effect for a term of ten years from the date of
adoption by the Board of Directors of the Company, after which no further
awards may be granted under the Stock Option Plan.
Federal Income Tax Consequences
Under present federal income tax laws, awards under the Stock Option Plan
will have the following consequences:
(1) The grant of an award will neither, by itself, result in the recognition
of taxable income to the participant nor entitle the Company to a
deduction at the time of such grant.
(2) In order to qualify as an "Incentive Stock Option," a stock option
awarded under the Stock Option Plan must meet the conditions contained
in Section 422 of the Code, including the requirement that the shares
acquired upon the exercise of the stock option be held for one year
after the date of exercise and two years after the date of grant of the
option. The exercise of an Incentive Stock Option generally will not,
by itself, result in the recognition of taxable income to the
participant nor entitle the Company to a deduction at the time of such
exercise. However, the difference between the exercise price and the
fair market value of the option shares on the date of exercise is an
item of tax preference which may, in certain situations, trigger the
alternative minimum tax. The alternative minimum tax is incurred only
when it exceeds the regular income tax. (The alternative minimum tax
will be payable at the rate of 26% on the first $175,000 of "minimum
taxable income" above the exemption amount ($33,750 for a single person
and $45,000 for married persons filing jointly) and 28% on minimum
taxable income more than $175,000 above the exemption amounts. If a
taxpayer has alternative minimum taxable income in excess of $150,000
(married persons filing jointly) or $112,500 (single person), the
$45,000 or $33,750 exemptions are reduced by an amount equal to 25% of
the amount by which the alternative minimum taxable income of the
taxpayer exceeds $150,000 or $112,500, respectively.) Provided the
applicable holding periods described above are satisfied, the
participant will recognize long-term capital gain or loss upon resale of
the shares received upon such exercise.
(3) The exercise of a stock option which is not an Incentive Stock Option
will result in the recognition of ordinary income by the participant on
the date of exercise in an amount equal to the difference between the
exercise price and the fair market value on the date of exercise of the
shares acquired pursuant to the stock option.
(4) The Company will be allowed a deduction at the time, and in the amount
of, any ordinary income recognized by the participant under the various
circumstances described above, provided that the Company meets its
federal withholding tax obligations.
Awards Under the Stock Option Plan
The following table presents information at June 30, 1996, with respect
to the number of awards of options which are intended to be granted under the
Stock Option Plan, subject to stockholder approval of the Stock Option
Plan and non-objection to such Plan by the OTS. All options will be granted
at the fair market value on the date of grant.
STOCK OPTION PLAN
Dollar
Name and Position value(1) Number of Units
- --------------------------------- -------- ---------------
Stan Carlson, President and Chief
Executive Officer $ --- 16,437
Executive Group (4 persons) --- 32,874
Director Nominees:
- -----------------
Richard L. Weeks --- 2,818
J. Richard Wiley --- 2,818
Non-Executive Director Group
(7 persons) --- 19,726
- ------------------
<FN>
(1) Any value realized will be the difference between the exercise price and
the market value upon exercise. Since the options have not been granted,
there is no current value.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE ADOPTION OF THE 1996 STOCK OPTION AND INCENTIVE PLAN.
PROPOSAL III - RATIFICATION OF THE RECOGNITION AND RETENTION PLAN
General
Establishment and implementation of the RRP is subject to approval by
stockholders, non-objection by the OTS and the satisfaction of certain other
conditions. The OTS has in no way endorsed or approved the RRP; and
no written or oral representation to the contrary is made hereby.
Subject to ratification by stockholders, the Board of Directors of the
Company has adopted the RRP as a method of providing key officers and
directors with a proprietary interest in the Company in a manner designed to
encourage such individuals to remain with the Company. Pursuant to the RRP,
restricted stock awards covering 26,300 shares have been reserved for issuance
under the RRP.
Attached as Exhibit B to this Proxy Statement is the complete text of the
form of the RRP. The principal features of the RRP are summarized below.
Principle Features of the RRP
The RRP provides for the award of shares of Common Stock ("RRP Shares")
subject to the restrictions described below. Each award under the RRP will be
made on such terms and conditions, consistent with the RRP, as the committee
administering the RRP shall determine.
The RRP is administered by the Company's Compensation Committee. The
Compensation Committee, currently consisting of certain outside directors,
will select the recipients and terms of awards pursuant to the RRP.
See "Proposal II - Ratification of the 1996 Stock Option and Incentive Plan."
In determining to whom and in what amount to grant awards, the Compensation
Committee considers the position and responsibilities of eligible
employees, the value of their services to the Company and the Bank and other
factors it deems relevant. Pursuant to the terms of the RRP, any director or
employee of the Company or its affiliates may be selected by the Compensation
Committee to participate in the RRP.
The RRP provides that RRP Shares used to fund awards under such plan may
be either authorized but unissued shares or shares acquired by the Company in
the open market and held as treasury shares. Since stockholders do not have
pre-emptive rights, to the extent the Company utilizes authorized but unissued
shares to fund the RRP, the interests of current stockholders will be diluted
by approximately 3.85%.
Subject to compliance with OTS regulations, award recipients earn (i.e.,
become vested in) awards, over a period of time as determined by the
Compensation Committee, at the time of grant. Pursuant to the terms of such
plan, RRP Shares to be awarded under the RRP to directors, officers and
employees (including executive officers) will vest in five equal annual
installments, with the first installment vesting on the first anniversary of
the date of grant and shall not vest earlier than the one-year anniversary of
the stockholder ratification of the RRP, in each case subject to the
conditions described below. RRP Shares are subject to forfeiture if the
recipient fails to remain in the continuous service (as defined in the RRP) as
an employee, officer or director (including advisory directors and
directors emeriti) of the Company or the Bank for a stipulated period (the
"restricted period"). In addition, the vesting of RRP Shares is subject to
the Bank meeting its fully phased-in capital requirements. RRP Shares which
do not vest on a particular vesting date because the Bank does not meet its
fully phased-in capital requirements will be deferred and eligible for vesting
on the next vesting date thereafter, subject to the recipient's continuous
service and the Bank's satisfaction of its fully phased-in capital
requirements. Vested shares are distributed to recipients as soon as
practicable following the date on which they are earned.
In the event a recipient ceases to maintain continuous service with the
Company or the Bank by reason of death, total or partial disability, or normal
or early retirement, RRP Shares still subject to restrictions will be free
of these restrictions in proportion to the portion of the restricted period
which shall have lapsed at the time of such termination of continuous service
and shall not be forfeited. In the event of termination for any other reason,
all shares will be forfeited and returned to the Company.
The holders of RRP Shares will have all of the rights of a shareholder,
including the right to receive dividends upon vesting of the shares. The
holders may not, however, vote, sell, assign, transfer, pledge or otherwise
encumber any of the RRP Shares during the restricted period. During the
restricted period, RRP Shares will be voted by an independent third party in
his or her sole discretion.
Effect of Changes in Capitalization and Other Adjustments
Restricted stock awarded under the RRP will be adjusted by the
Compensation Committee in the event of a reorganization, recapitalization,
stock split, stock dividend, combination or exchange of shares, merger,
consolidation or any change in corporate structure or shares of the Company.
Amendment and Termination
Subject to the compliance with the OTS regulations, the Board of
Directors of the Company may at any time amend, suspend or terminate the RRP
or any portion thereof, provided, however, that no such amendment, suspension
or termination shall impair the rights of any award recipient, without his
consent, in any award therefore made pursuant to the RRP. Unless previously
terminated, the RRP will continue in effect for a term of ten years from the
date of ratification by stockholders after which no further awards may be made
under such plan.
Federal Income Tax Consequences
Holders of RRP Shares will recognize ordinary income on the date that the
shares of RRP Shares are no longer subject to a substantial risk of
forfeiture, in an amount equal to the fair market value of the shares on that
date. In certain circumstances, a holder may elect to recognize ordinary
income and determine such fair market value on the date of the grant of the
restricted stock. Holders of restricted stock will also recognize ordinary
income equal to their dividend or dividend equivalent payments when such
payments are received. Generally, the amount of income recognized by
participants will be a deductible expense for tax purposes by the Bank.
Awards Under the RRP
The following table presents information at June 30, 1996 with respect to
the number of awards of RRP Shares which are intended to be granted under the
RRP, subject to stockholder approval of the RRP and non-objection to such plan
by the OTS.
RECOGNITION AND RETENTION PLAN
Dollar Shares of
Name and Position value(1) Restricted Stock
- --------------------------------- -------- ----------------
Stan Carlson, President and Chief
Executive Officer $ 69,870 6,576
Executive Group (4 persons) 139,740 13,152
Director Nominees:
- -----------------
Richard L. Weeks 11,974 1,127
J. Richard Wiley 11,974 1,127
Non-Executive Director Group
(7 persons) 83,821 7,889
- ----------------
(1) Assumes an aggregate market value of the RRP Shares awarded based on
$10.625, the last trade sales price of the Company's Common Stock as
reported on the National Daily Quotation Service or the "pink sheets" by
the National Quotation Bureau on August 27, 1996.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE ADOPTION OF THE RRP.
PROPOSAL IV - RATIFICATION OF APPOINTMENT OF AUDITORS
At the Annual Meeting of Stockholders, the stockholders will consider and
vote on the ratification of the appointment of McGladrey & Pullen, LLP ("M&P")
as the Company's independent auditors for the Company's fiscal year ending
June 30, 1997.
The Board of Directors of the Company has heretofore renewed the
Company's arrangement for M&P to be the Company's auditors for the fiscal year
ending June 30, 1997, subject to ratification by the Company's stockholders.
Representatives of M&P are expected to attend the Meeting to respond to
appropriate questions and to make a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF M&P AS THE COMPANY'S AUDITORS FOR THE
FISCAL YEAR ENDING JUNE 30, 1997.
STOCKHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy materials
for the next annual meeting of stockholders, any stockholder proposal to take
action at such meeting must be received at the Company's office located at 102
East Main Street, Washington, Iowa 52353, no later than May 15, 1997. Any
such proposal shall be subject to the requirements of the proxy rules adopted
under the Exchange Act.
OTHER MATTERS
The Board of Directors is not aware of any business to come before the
Meeting other than those matters described above in this Proxy Statement.
However, if any other matter should properly come before the Meeting,
it is intended that holders of the proxies will act in accordance with their
best judgment.
The cost of solicitation of proxies will be borne by the Company. The
Company will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy
materials to the beneficial owners of Common Stock. The Company has retained
Regan & Associates, Inc. to assist in the solicitation of proxies for a fee
estimated to be $2,500, plus expenses. In addition to solicitation by mail,
directors, officers and regular employees of the Company and/or the Bank may
solicit proxies personally or by telegraph or telephone without additional
compensation.
Washington, Iowa
September 12, 1996
EXHIBIT A
WASHINGTON BANCORP
1996 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Corporation and its stockholders by providing a means for
attracting and retaining directors, advisory directors, directors emeriti,
officers and employees of the Corporation and its Affiliates. It is intended
that designated Options granted pursuant to the provisions of this Plan
to persons employed by the Corporation or its Affiliates will qualify as
Incentive Stock Options. Options granted to persons who are not employees will
be Non-Qualified Stock Options.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" - means any "parent corporation" or "subsidiary corporation"
of the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"Award" - means the grant of an Incentive Stock Option or a Non-Qualified
Stock Option as provided in the Plan.
"Board of Directors" - means the board of directors of Washington Bancorp
existing on the day of the Bank's conversion from a mutual to a stock form,
excluding all directors then classified as advisory or emeritus.
"Bank" - means Washington Federal Savings Bank and any successor entity.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Compensation Committee" - means the Committee referred to in Section 3
hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, advisory director, director emeritus,
officer or employee of the Corporation or an Affiliate, except that when used
with respect to persons granted an Incentive Options means the absence of any
interruption or termination of service as an employee of the Corporation or an
Affiliate. Service shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the
Corporation or in the case of transfers between payroll locations of the
Corporation or between the Corporation, its parent, its subsidiaries or
its successor. With respect to any advisory director or director emeritus,
continuous service shall mean availability to perform such functions as may be
required of such persons.
"Corporation" - means Washington Bancorp, an Iowa corporation
"Disinterested Person" - means any member of the Board of Directors of
the Corporation who (A) is an outside director as defined under Section 162(m)
of the Code and the regulations thereunder and (B) a person who within the
prior year has not been, and is not being, granted any awards related to the
Shares under this Plan or any other plan of the Corporation or any of
its Affiliates except for awards which (i) are calculated in accordance with a
formula as contemplated in paragraph (c)(2)(ii) of the Rule b-3 ("Rule b-3")
under the Securities Exchange Act of 1934; (ii) result from participation in
an ongoing securities acquisition plan meeting the conditions of paragraph
(d)(2) of Rule b-3; or (iii) arise from an election by a director to receive
all or part of his board fees in securities. No recipient of an Award granted
pursuant to Section 17 hereof shall be deemed not to be a Disinterested Person
solely by reason of such grant.
"Employee" - means any person, including an officer or director, who is
employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"Exercise Price" - means the price per Share at which the Shares subject
to such Option may be purchased upon exercise of such Option.
"Incentive Stock Option" - means an option to purchase Shares granted by
the Compensation Committee pursuant to Section 6 hereof which is subject to
the limitations and restrictions of Section 8 hereof and is intended to
qualify under Section 422(b) of the Code.
"Market Value" - means the mean between the closing high bid and low
asked quotations with respect to a Share on the date in question on the NASDAQ
System, or any similar system then in use, or, if no such quotations are
available, the fair market value on such date of a Share as the Compensation
Committee shall determine.
"Non-Qualified Stock Option" - means an option to purchase Shares granted
by the Compensation Committee pursuant to Section 6 hereof, which option is
not intended to qualify under Section 422(b) of the Code.
"Option" - means an Incentive Stock Option or a Non-Qualified Stock
Option.
"Participant" - means any director, advisory director, director emeritus,
officer or employee of the Corporation or any Affiliate who is selected by the
Compensation Committee to receive an Award or who is granted an Award pursuant
to Section 17 hereof.
"Plan" - means the 1996 Stock Option and Incentive Plan of the
Corporation.
"Shares" - means the shares of common stock of the Corporation.
"Ten Percent Beneficial Owner" - means the beneficial owner of more than
ten percent of any class of the Corporation's equity securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934.
3. Administration. The Plan shall be administered by a Compensation
Committee consisting of two or more members, each of whom shall be a
Disinterested Person. The members of the Compensation Committee shall be
appointed by the Board of Directors of the Corporation. Except as limited by
the express provisions of the Plan, the Compensation Committee shall have sole
and complete authority and discretion, subject to the Office of Thrift
Supervision Regulations, to (i) select Participants and grant Awards; (ii)
determine the number of Shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (iii) determine the terms
and conditions upon which Awards shall be granted under the Plan; (iv)
prescribe the form and terms of instruments evidencing such grants; and (v)
establish from time to time regulations for the administration of the Plan,
interpret the Plan, and make all determinations deemed necessary or advisable
for the administration of the Plan.
A majority of the Compensation Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by a majority of the Compensation
Committee without a meeting, shall be acts of the Compensation Committee.
4. Participation in Compensation Committee Awards. The Compensation
Committee may select from time to time Participants in the Plan from those
directors (including advisory directors and directors emeriti), officers and
employees (other than Disinterested Persons), of the Corporation or its
Affiliates who, in the opinion of the Compensation Committee, have the
capacity for contributing to the successful performance of the Corporation or
its Affiliates.
5. Shares Subject to Plan. Subject to adjustment by the operations of
Section 9 hereof, the maximum number of Shares with respect to which Awards
may be made under the Plan is 10% of the total Shares issued in the Bank's
conversion to the capital stock form. The Shares with respect to which Awards
may be made under the Plan may be either authorized and unissued shares or
issued shares heretofore or hereafter reacquired and held as treasury shares.
An Award shall not be considered to have been made under the Plan with respect
to any Option which terminates and new Awards may be granted under the Plan
with respect to the number of Shares as to which such termination has
occurred. Any award made pursuant to this Plan, which Award is subject to the
requirements of Office of Thrift Supervision Regulations, shall vest (become
exercisable) in five equal annual installments with the first installment
vesting on the one-year anniversary of the date of grant, except in the event
of death, or disability.
6. General Terms and Conditions of Options. The Compensation Committee
shall have full and complete authority and discretion, subject to Office of
Thrift Supervision Regulations and except as expressly limited by the Plan, to
grant Options and to provide the terms and conditions (which need not be
identical among Participants) thereof. In particular, the Compensation
Committee shall prescribe the following terms and conditions: (i) the Exercise
Price of any Option, which shall not be less than the Market Value per Share
at the date of grant of such Option, (ii) the number of Shares subject to, and
the expiration date of, any Option, which expiration date shall not exceed ten
years from the date of grant, (iii) the manner, time and rate (cumulative or
otherwise) of exercise of such Option, and (iv) the restrictions, if any,
to be placed upon such Option or upon Shares which may be issued upon exercise
of such Option. The Compensation Committee may, as a condition of granting
any Option, require that a Participant agree not to thereafter exercise one or
more Options previously granted to such Participant. Notwithstanding the
foregoing and subject to compliance with applicable Office of Thrift
Supervision Regulations, no individual shall be granted Awards in any calendar
year with respect to more than 25% of the total shares subject to the Plan.
Furthermore, at the time of any Award, the Participant shall enter into
an agreement with the Corporation in a form specified by the Compensation
Committee, agreeing to the terms and conditions of the Award and such other
matters as the Compensation Committee, in its sole discretion, shall determine
(the "Option Agreement").
7. Exercise of Options.
(a) Except as provided herein, an Option granted under the Plan shall be
exercisable during the lifetime of the Participant to whom such Option
was granted only by such Participant and, except as provided in
paragraphs (c) and (d) of this Section 7, no such Option may be
exercised unless at the time such Participant exercises such Options,
such Participant has maintained Continuous Service since the date of
grant of such Option.
(b) To exercise an Option under the Plan, the Participant to whom such
Option was granted shall give written notice to the Corporation in form
of satisfactory to the Compensation Committee (and, if partial exercises
have been permitted by the Compensation Committee, by specifying the
number of Shares with respect to which such Participant elects to
exercise such Option) together with full payment of the Exercise Price,
if any and to the extent required. The date of exercise shall be the
date on which such notice is received by the Corporation. Payment, if
any is required, shall be made either (i) in cash (including check,
bank draft or money order) or (ii) if permitted by the Compensation
Committee, by delivering (A) Shares already owned by the Participant and
having a fair market value equal to the applicable exercise price, such
fair market value to be determined in such appropriate manner as may be
provided by the Compensation Committee or as may be required in order to
comply with or to conform to requirements of any applicable laws or
regulations, or (B) a combination of cash and such Shares.
(c) If a Participant to whom an Option was granted shall cease to maintain
Continuous Service for any reason (excluding death or disability and
termination of employment by the Corporation or any Affiliate for
cause), such Participant may, but only within the period of three months
immediately succeeding such cessation of Continuous Service and in no
event after the expiration date of such Option, exercise such Option to
the extent that such Participant was entitled to exercise such Option at
the date of such cessation, provided, however, that such right of
exercise after cessation of Continuous Service shall not be available to
a Participant if the Compensation Committee otherwise determines and so
provides in the applicable instrument or instruments evidencing the
grant of such Option. If a Participant to whom an Option was granted
shall cease to maintain Continuous Service by reason of death or
disability then, unless the Compensation Committee shall have otherwise
provided in the instrument evidencing the grant of an Option, all
Options granted and not fully exercisable shall become exercisable in
full upon the happening of such event and shall remain so exercisable
(i) in the event of death for the period described in paragraph (d) of
this Section 7 and (ii) in the event of disability for a period of three
months following such date. If the Continuous Service of a Participant
to whom an Option was granted by the Corporation is terminated for
cause, all rights under any Option of such Participant shall expire
immediately upon the effective date of such termination.
(d) In the event of the death of a Participant while in the Continuous
Service of the Corporation or an Affiliate or within the three-month
period referred to in paragraph (c) of this Section 7, the person to
whom any Option held by the Participant at the time of his death is
transferred by will or the laws of descent and distribution, or in the
case of an Award other than an Incentive Stock Option, pursuant to a
qualified domestic relations order, as defined in the Code or Title I of
ERISA or the rules thereunder may, but only to the extent such
Participant was entitled to exercise such Option immediately prior to
his death, exercise such Option at any time within a period of one year
succeeding the date of death of such Participant, but in no event later
than ten years from the date of grant of such Option. Following the
death of any Participant to whom an Option was granted under the Plan,
the Compensation Committee may, as an alternative means of settlement of
such Option, elect to pay to the person to whom such Option is
transferred by will or by the laws of descent and distribution, or in
the case of an Option other than an Incentive Stock Option, pursuant to
a qualified domestic relations order, as defined in the Code or Title I
of ERISA or the rules thereunder, the amount by which the Market Value
per Share on the date of exercise of such Option shall exceed the
Exercise Price of such Option, multiplied by the number of Shares with
respect to which such Option is properly exercised. Any such settlement
of an Option shall be considered an exercise of such Option for all
purposes of the Plan.
(e) Notwithstanding the provisions of subparagraphs (c) and (d) above, the
Compensation Committee may, in its sole discretion, establish different
terms and conditions pertaining to the effect of termination to the
extent permitted by applicable federal and state law.
8. Incentive Stock Options. Incentive Stock Options may be granted
only to Participants who are Employees. Any provision of the Plan to the
contrary notwithstanding, (i) no Incentive Stock Option shall be granted more
than ten years from the date the Plan is adopted by the Board of Directors of
the Corporation and no Incentive Stock Option shall be exercisable more than
ten years from the date such Incentive Stock Option is granted, (ii) the
Exercise Price of any Incentive Stock Option shall not be less than the Market
Value per Share on the date such Incentive Stock Option is granted, (iii) any
Incentive Stock Option shall not be transferable by the Participant to whom
such Incentive Stock Option is granted other than by will or the laws
of descent and distribution, and shall be exercisable during such
Participant's lifetime only by such Participant, (iv) no Incentive Stock
Option shall be granted to any individual who, at the time such Incentive
Stock Option is granted, owns stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Corporation or any
Affiliate unless the Exercise Price of such Incentive Stock Option is at least
110 percent of the Market Value per Share at the date of grant such Incentive
Stock Option is not exercisable after the expiration of five years from the
date such Incentive Stock Option is granted, and (v) the aggregate Market
Value (determined as of the time any Incentive Stock Option is granted) of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by a Participant in any calendar year shall not exceed $100,000.
9. Adjustments Upon Changes in Capitalization. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan
by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or Shares of the Corporation, the
maximum aggregate number and class of shares as to which Awards may be granted
under the Plan and the number, class and exercise price of shares with respect
to which Awards theretofore have been granted under the Plan shall be
appropriately adjusted by the Compensation Committee, whose determination
shall be conclusive.
10. Effect of Merger. In the event of any merger, consolidation or
combination of the Corporation (other than a merger, consolidation or
combination in which the Corporation is the continuing entity and which does
not result in the outstanding Shares being converted into or exchange for
different securities, cash or other property, or any combination thereof)
pursuant to a plan or agreement the terms of which are binding upon all
stockholders of the Corporation (except to the extent that dissenting
stockholders may be entitled, under statutory provisions or provisions
contained in the certificate or articles of incorporation, to receive the
appraised or fair value of their holdings), any Participant to whom an Option
has been granted at least six months prior to such event shall have the right
(subject to the provisions of the Plan and any limitation or vesting period
applicable to such Option), thereafter and during the term of each such
Option, to receive upon exercise of any such Option in an amount equal to the
excess of the fair market value on the date of such exercise of the
securities, cash or other property, or combination thereof, receivable upon
such merger, consolidation or combination in respect of a Share over
the Exercise Price of such Option, multiplied by the number of Shares with
respect to which such Option shall have been exercised. Such amount may be
payable in fully in cash, fully in one or more of the kind or kinds of
property payable in such merger, consolidation or combination, or partly in
cash and partly in one or more of such kind or kinds of property, all
in the discretion of the Compensation Committee.
11. Assignments and Transfers. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the
Plan may be assigned, encumbered or transferred except, in the event of the
death of a Participant, by will or the laws of descent and distribution or in
the case of Awards other than Incentive Stock Options pursuant to a qualified
domestic relations order, as defined in the Code or Title I of ERISA or the
rules thereunder.
12. Employee Rights Under the Plan. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so
selected, to be selected again as a Participant and no director, officer,
employee or other person shall have any claim or right to be granted an Award
under the Plan or under any other incentive or similar plan of the Corporation
or any Affiliate. Neither the Plan nor any action taken thereunder shall be
construed as giving any employee any right to be retained in the employ of the
Corporation or any Affiliate.
13. Delivery and Registration Statement. The Corporation's obligation
to deliver Shares with respect to an Award shall, if the Compensation
Committee so requests, be conditioned upon the receipt of a representation as
to the investment intention of the Participant to whom such Shares are to be
delivered, in such form as the Compensation Committee shall determine to be
necessary or advisable to comply with the provisions of the Securities Act of
1933 or any other Federal, state or local securities legislation or
regulation. It may be provided that any representation requirement shall
become inoperative upon a registration of the Shares or other action
eliminating the necessity of such representation under such Securities Act or
other securities legislation. The Corporation shall not be required to
deliver any Shares under the Plan prior to (i) the admission of such shares to
listing on any stock exchange or other system on which Shares may then be
listed, and (ii) the completion of such registration or other qualification of
such Shares under any state or Federal law, rule or regulation, as the
Compensation Committee shall determine to be necessary or advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with
said Rule shall, to the extent of such inconsistency, be inoperative and shall
not affect the validity of the remaining provisions of the Plan.
14. Withholding Tax. Where a Participant or other person is entitled to
receive Shares pursuant to the exercise of an Option pursuant to the Plan, the
Corporation shall have the right to require the Participant or such other
person to pay the Corporation the amount of any taxes which the Corporation is
required to withhold with respect to such Shares, and may, in its sole
discretion, withhold sufficient Shares to cover the amount of taxes which the
Corporation is required to withhold.
15. Amendment or Termination. The Board of Directors (or then current
board of directors) of the Corporation may amend, suspend or terminate the
Plan or any other portion thereof at any time, subject to Office of Thrift
Supervision Regulations, but (except as provided in Section 9 hereof) no
amendment shall be made without approval of the stockholders of the
Corporation which shall, (i) increase the aggregate number of Shares with
respect to which Awards may be made under the Plan (except pursuant to Section
9), (ii) materially increase the benefits accruing to Participants, (iii)
materially change the requirements as to eligibility for participation in the
Plan or (iv) change the class of persons eligible to participate in the Plan;
provided, however, that no such amendment, suspension or termination shall
impair the rights of any Participant, without his consent, in any Award
theretofore made pursuant to the Plan.
16. Effective Date and Term of Plan. The Plan shall become effective
upon its ratification by stockholders of the Corporation. It shall continue
in effect for a term of ten years unless sooner terminated under Section 15
hereof.
17. Initial Grant. By, and simultaneously with, the ratification of
this Plan by the stockholders of the Corporation, each member of the Board of
Directors of the Corporation at the time of the Bank's conversion to stock
form, who is not a full-time employee, is hereby granted a ten-year,
Non-Qualified Stock Option to purchase .375% of the shares issued in the
mutual to stock conversion of the Bank at an Exercise Price per share equal to
the Market Value per share of the Shares on the date of grant. Each such
Option shall be evidenced by a Non-Qualified Stock Option Agreement in a form
approved by the Board of Directors and shall be subject in all respects to the
terms and conditions of this Plan, which are controlling. All Options granted
pursuant to this Section 17 shall vest in five equal annual installments with
the first installment vesting on the first anniversary of the date of grant,
subject to the Director maintaining Continuous Service with the Corporation or
its Affiliates since the date of grant. All Options granted pursuant to this
Section 17 shall be rounded down to the nearest whole share to the extent
necessary to ensure that no Options to purchase stock representing fractional
shares are granted.
18. Notwithstanding anything else in this Plan to the contrary, to the
extent that the Plan provides for formula awards, as defined in Rule
16b-3(c)(2)(ii) under the Securities Exchange Act of 1934, such provisions may
not be amended more than once every six months, other than to comport with
changes in the Code, ERISA or the rules thereunder.
ADOPTED BY the affirmative vote of a majority of the stockholders of the
Corporation on _______________, 1996.
Secretary
EXHIBIT B
WASHINGTON BANCORP
RECOGNITION AND RETENTION PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interest of the Corporation and its stockholders by providing a means for
attracting and retaining directors,
executive officers and employees of the Corporation and its affiliates.
2. Definitions. The following definitions are applicable to the Plan:
"Award" - means the grant by the Compensation Committee of
Restricted Stock, as provided in the Plan.
"Affiliate" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section 424(e)
and (f), respectively, of the Code.
"Bank" - means Washington Federal Savings Bank, a savings
institution and its successors.
"Board of Directors" - means the board of directors of Washington
Bancorp existing on the day of the Bank's conversion from a mutual to a stock
form, excluding all directors then classified as advisory or emeritus.
"Code" - means the Internal Revenue Code of 1986, as amended.
"Compensation Committee" - means the committee referred to in
Section 7 hereof.
"Continuous Service" - means the absence of any interruption or
termination of service as a director, advisory director, director emeritus,
executive officer or employee of the Corporation or any Affiliate. Service
shall not be considered interrupted in the case of sick leave, military leave
or any other leave of absence approved by the Corporation or any Affiliate or
in the case of transfers between payroll locations of the Corporation or
between the Corporation, its subsidiaries or its successor.
"Corporation" - means Washington Bancorp, an Iowa corporation.
"Disinterested Person" - means any member of the Board of Directors
of the Corporation who within the prior year has not been, and is not being,
granted any awards related to the shares under this Plan or any other plan of
the Corporation or any of its Affiliates except for awards which (i) are
calculated in accordance with a formula as contemplated in paragraph
(c)(2)(ii) of Rule 16b-3 ("Rule 16b-3") under the Securities Exchange Act of
1934, as amended; (ii) result from participation in an ongoing securities
acquisition plan meeting the conditions of paragraph (d)(2) of Rule 16b-3; or
(iii) arise from an election by a director to receive all or part of his board
fees in securities.
"ERISA" - means the Employee Retirement Income Security Act of 1974,
as amended.
"Participant" - means any director, advisory director, executive
officer or employee of the Corporation or any Affiliate who is selected by the
Compensation Committee to receive an Award.
"Plan" - means this Recognition and Retention Plan of the
Corporation.
"Restricted Period" - means the period of time selected by the
Compensation Committee for the purpose of determining when restrictions are
in effect under Section 3 hereof with respect to Restricted Stock awarded
under the Plan.
"Restricted Stock" - means Shares which have been contingently
awarded to a Participant by the Compensation Committee subject to the
restrictions referred to in Section 3 hereof, so long as such restrictions are
in effect.
"Shares" - means the common stock, par value $.01 per share, of the
Corporation.
3. Terms and Conditions of Restricted Stock. The Compensation
Committee shall have full and complete authority, subject to the limitations
of the Plan, to grant Awards and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 3, to provide such
other terms and conditions (which need not be identical among Participants) in
respect of such Awards, and the vesting thereof, as the Compensation Committee
shall determine.
(a) At the time of an Award, the Compensation Committee shall establish
for each Participant a Restricted Period, during which or at the expiration of
which, as the Compensation Committee shall determine and provide in the
agreement referred to in paragraph (d) of this Section 3, the Shares awarded
as Restricted Stock shall vest, and subject to any such other terms
and conditions as the Compensation Committee shall provide, Shares of
Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered by the Participant, except as hereinafter provided, during the
Restricted Period. The Compensation Committee, and not the Participant, shall
have the right to vote Restricted Stock during the Restricted Period. The
Compensation Committee shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall lapse with
respect thereto, or to remove any or all of such restrictions, whenever it may
determine that such action is appropriate by reason of changes in applicable
tax or other changes in circumstances occurring after the commencement of such
Restricted Period.
(b) If a Participant ceases to maintain Continuous Service for any
reason (other than death, total or partial disability or normal or early
retirement), unless the Compensation Committee shall otherwise determine, all
Shares of Restricted Stock theretofore awarded to such Participant and which
at the time of such termination of Continuous Service are subject to the
restrictions imposed by paragraph (a) of this Section 3 shall upon such
termination of Continuous Service be forfeited and returned to the
Corporation. If a Participant ceases to maintain Continuous Service by reason
of death, total or partial disability or normal or early retirement,
unless the Compensation Committee shall otherwise determine, Restricted Stock
then still subject to restrictions imposed by paragraph (a) of this Section 3
will be free of those restrictions in proportion to the portion of the
Restricted Period which shall have elapsed at the time of such termination of
Continuous Service.
(c) Each certificate in respect of Shares of Restricted Stock awarded
under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in blank,
with the Corporation and shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and conditions
(including forfeiture) contained in the Recognition and Retention
Plan of Washington Bancorp. Copies of such Plan are on file in
the offices of the Secretary of Washington Bancorp, 103 East Main
Street, Washington, Iowa 52353."
(d) At the time of any Award, the Participant shall enter into an
Agreement with the Corporation in a form specified by the Compensation
Committee, agreeing to the terms and conditions of the Award and such other
matters as the Compensation Committee, in its sole discretion, shall determine
(the "Restricted Stock Agreement").
(e) At the time of an Award, the payment to the Participant of dividends
declared or paid on Restricted Stock by the Corporation shall be deferred
until the earlier to occur of (i) the lapsing of the restrictions imposed
under paragraph (a) of this Section 3 or (ii) the forfeiture of such shares
under paragraph (b) of this Section 3, and shall be held by the corporation
for the account of the Participant until such time. In the event of such
deferral, there shall be credited at the end of each year (or portion
thereof), interest on the amount of the account at the beginning of the year
at a rate per annum as the Compensation Committee, in its discretion, may
determine. Payment of deferred dividends, together with interest accrued
thereon, shall be made upon the earlier to occur of the events specified in
(i) and (ii) of the immediately preceding sentence.
(f) At the expiration of the restrictions imposed by paragraph (a) of
this Section 3, the Corporation shall redeliver to the Participant (or where
the relevant provision of paragraph (b) of this Section 3 applies in the case
of a deceased participant, to his legal representative, beneficiary of heir)
the certificate(s) and stock power deposited with it pursuant to paragraph (c)
of this Section 3 and the Shares represented by such certificate(s) shall be
free of the restrictions referred to in paragraph (a) of this Section 3.
4. Adjustments upon Changes in Capitalization. In the event of any
change in the outstanding Shares subsequent to the effective date of the Plan
by reason of any reorganization, recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation or any
change in the corporate structure or Shares of the Corporation, the maximum
aggregate number and class of shares as to which Awards may be granted under
the Plan and the number and class of shares with respect to which Awards
theretofore have been granted under the Plan shall be appropriately adjusted
by the Compensation Committee, whose determination shall be conclusive. Any
shares of stock or other securities received, as a result of any of the
foregoing, by a Participant with respect to Restricted Stock shall be subject
to the same restrictions and the certificate(s) or other instruments
representing or evidencing such shares or securities shall be legended and
deposited with the Corporation in the manner provided in Section 3 hereof.
5. Assignments and Transfers. No Award nor any right or interest of a
Participant under the Plan in any instrument evidencing any Award under the
Plan may be assigned, encumbered or transferred except, in the event of the
death of a Participant, by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined in the Code of
Title I of ERISA or the rules thereunder.
6. Administration. The Plan shall be administered by a Compensation
Committee consisting of two or more members, each of whom shall be a
Disinterested Person. The members of the Compensation Committee shall be
appointed by the Board of Directors of the Corporation. Except as limited by
the express provisions of the Plan, the Compensation Committee shall have sole
and complete authority and discretion to (i) select Participants and grant
Awards; (ii) determine the number of Shares to be subject to types of Awards
generally, as well as to individual Awards granted under the Plan; (iv)
prescribe the forms and terms of instruments evidencing such grants; and (v)
establish from time to time regulations for the administration of the Plan,
interpret the Plan, and make all determinations deemed necessary or advisable
for the administration of the Plan. The Compensation Committee may maintain,
and update from time to time as appropriate, a list designating selected
directors as Disinterested Persons. The purpose of such list shall be to
evidence the status of such individuals as Disinterested Persons, and the
Board of Directors may appoint to the Compensation Committee any individual
actually qualifying as a Disinterested Persons, regardless of whether
identified as such on said list.
A majority of the Compensation Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a quorum
is present, or acts approved in writing by a majority of the Compensation
Committee without a meeting, shall be acts of the Compensation Committee.
7. Shares Subject to Plan. Subject to adjustment by the operation of
Section 4 hereof, the maximum number of shares with respect to which Awards
may be made under the Plan is 4% of the total Shares issued in the Bank's
conversion to stock form. The Shares with respect to which Awards may be made
under the Plan may be either authorized and unissued shares or issued Shares
heretofore or hereafter reacquired and held as treasury Shares. An Award
shall not be considered to have been made under the Plan with respect to
Restricted Stock which is forfeited and new Awards may be granted under the
Plan with respect to the number of Shares as to which such forfeiture has
occurred.
8. Employee Rights Under the Plan. No director, officer or employee
shall have a right to be selected as a Participant nor, having been so
selected, to be selected again as a Participant and no director, officer,
employee or other person shall have any claim or right to be granted an Award
under the Plan or under any other incentive or similar plan of the Corporation
or any Affiliate. Neither the Plan or any action taken thereunder shall be
construed as giving any officer or employee any right to be retained in the
employ of the Corporation, the Bank or any Affiliate.
9. Withholding Tax. Upon the termination of the Restricted Period with
respect to any shares of Restricted Stock (or at any such earlier time, if
any, that an election is made by the Participant under Section 83(b) of the
Code, or any successor provision thereto, to include the value of such shares
in taxable income), the Corporation shall withhold from any payment or
distribution made under this Plan sufficient Shares to cover any applicable
withholding and employment taxes. The Corporation shall have the right to
deduct from all dividends paid with respect to shares of Restricted Stock the
amount of any taxes which the Corporation is required to withhold with respect
to such dividend payments. No discretion or choice shall be conferred
upon any Participant with respect tot he form, timing or method of any such
tax withholding.
10. Amendment or Termination. The Board of Directors, or any future
board of directors of the Corporation, may amend, suspend or terminate the
Plan or any portion thereof at any time; provided, however, that no such
amendment, suspension or termination shall impair the rights of any
Participant, without his consent, in any Award theretofore made pursuant to
the Plan.
Notwithstanding anything in this Plan to the contrary, to the extent that
the Plan provides for formula awards, as defined in Rule 16b-3(c)(2)(ii) under
the Securities Exchange Act of 1934, as amended, such provisions may not be
amended more than once every six months, other than to comport with changes in
the Code, ERISA, or the rules thereunder.
11. Term of Plan. The Plan shall become effective upon its adoption by
the Board of Directors of the Corporation, subject to the Bank's completion of
the conversion to stock form. It shall continue in effect for a term of ten
years unless sooner terminated under Section 10 hereof.
12. Initial Grants. By, and simultaneously with, the ratification of
this Plan by the stockholders of the Corporation, each member of the Board of
Directors of the Corporation at the time of the Bank's conversion to stock
form, who is not a full-time employee, is hereby granted an Award equal to
.15% of the shares issued in the mutual to stock conversion of the Bank. Each
such Award shall be evidenced by a Restricted Stock Agreement in a form
approved by the Board of Directors and shall by subject in all respects to the
terms and conditions of this Plan, which are controlling. All Awards granted
pursuant to this Section 12 shall be rounded down to the nearest whole share
to the extent necessary to ensure that no shares of Restricted Stock
representing fractional shares are issued. One-fifth of each Award granted
hereunder shall become vested and nonforfeitable on the anniversary date of
the adoption of this Plan by the shareholders of the Corporation, as long as
the director maintains Continuous Service with the Bank after the Conversion.
The Compensation Committee shall have no discretion to alter or accelerate
said vesting requirements. Unless otherwise inapplicable or inconsistent with
the provision of this Section, the Awards granted in this Section 12 shall be
subject to all other provision of this Plan.
ADOPTED BY the affirmative vote of a majority of the stockholders of the
Corporation on __________________, 1996.
________________________________
Secretary
REVOCABLE PROXY
WASHINGTON BANCORP
FIRST ANNUAL MEETING OF STOCKHOLDERS
October 15, 1996
The undersigned hereby appoints the Board of Directors of Washington
Bancorp (the "Company"), and its survivor, with full power of substitution, to
act as attorneys and proxies for the undersigned to vote all shares of common
stock of the Company which the undersigned is entitled to vote at the First
Annual Meeting of Stockholders (the "Meeting"), to be held on Tuesday, October
15, 1996 at the Company's main office, located at 102 East Main Street,
Washington, Iowa, at 4:00 P.M. local time, and at any and all adjournments
thereof, as follows:
I. The election of the following
directors for the terms specified:
FOR WITHHELD
RICHARD L. WEEKS (3-year term) --- ---
J. RICHARD WILEY (3-year term) --- ---
FOR AGAINST ABSTAIN
II. The ratification of the
adoption of the 1996 Stock --- --- ---
Option and Incentive Plan.
III. The ratification of the
adoption of the Recognition --- --- ---
and Retention Plan.
IV. The ratification of the
appointment of McGladrey & --- --- ---
Pullen, LLP, independent
auditors for the Company
for the fiscal year ending
June 30, 1997
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment thereof.
The Board of Directors recommends a vote "FOR" the listed proposals.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This proxy may be revoked at any time before it is voted by: (i) filing
with the Secretary of the Company at or before the Meeting a written notice of
revocation bearing a later date than the proxy; (ii) duly executing a
subsequent proxy relating to the same shares and delivering it to the
Secretary of the Company at or before the Meeting; or (iii) attending the
Meeting and voting in person (although attendance at the Meeting will not in
and of itself constitute revocation of a proxy). If this proxy is properly
revoked as described above, then the power of such attorneys and proxies
shall be deemed terminated and of no further force and effect.
The undersigned acknowledges receipt from the Company, prior to the
execution of this Proxy, of Notice of the First Annual Meeting, a Proxy
Statement and the Company's Annual Report to Shareholders for the fiscal year
ended June 30, 1996.
Dated:
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PRINT NAME OF STOCKHOLDER PRINT NAME OF STOCKHOLDER
------------------------- -------------------------
SIGNATURE OF STOCKHOLDER SIGNATURE OF STOCKHOLDER
Please sign exactly as your name appears above on this
card. When signing as attorney, executor,
administrator, trustee or guardian, please give your
full title. If shares are held jointly, each holder
should sign.
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PLEASE PROMPTLY COMPLETE, DATE, SIGN AND MAIL THIS
PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
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