1
STOCK BUY AND SELL AGREEMENT
THIS AGREEMENT is entered into and executed by and between each of the
undersigned Shareholders of Whidbey Island Bank, a Washington banking
corporation (the "Bank"). The parties to this Agreement are individually and
collectively referred to in this Agreement as the "Shareholders".
RECITALS
1. The Bank currently has authorized capitalization of 100,000 shares
of Common Stock, with a par value of $20.00 (the "Stock").
2. Each of the Shareholders holds of record and beneficially the
number of shares of the Stock shown below opposite his name and signature.
3. The Shareholders agree that the continued success of the Bank is
dependent in part upon the continued active interest and participation of the
Shareholders, and that it is in the best interests of the Bank and the
Shareholders to encourage the retention of ownership of a substantial portion
of the Stock by the Shareholders.
AGREEMENT
In consideration of the mutual promises set forth in this Agreement, the
Shareholders agree as follows:
1. RESTRICTION ON SALE OF STOCK
No Shareholder shall sell, assign, transfer, bequeath, encumber, pledge
or otherwise hypothecate or dispose of any shares of Stock now held or
hereafter acquired except as provided in this Agreement. Any shares of Stock
acquired after the date of this Agreement shall be delivered promptly to the
Bank for endorsement as provided in Section 5(c) of this Agreement.
2. PERMISSIBLE ASSIGNMENT OR PLEDGE
Shares of Stock (i) shall be freely assignable by any Shareholder to
such Shareholder's spouse, children or other lineal descendants, or to any
trust for the benefit of any of the foregoing family members, either by gift or
sale during lifetime or by bequest or gift at time of death, and (ii) may be
pledged to collateralize any borrowing from a financial institution; provided,
however, that any such transferee shall take such shares subject to all of the
terms and conditions of this Agreement.
- 1 -
2
3. RIGHT OF FIRST REFUSAL
a. NOTICE OF OFFER TO PURCHASE. If any Shareholder wishes to
accept a bona fide offer (the "Offer") to purchase any or all of his shares of
Stock, he shall first deliver to all of the other Shareholders ("Remaining
Shareholders") a written notice (the "Notice"), stating (i) that the
Shareholder has received a written Offer for his Stock from a prospective
purchaser (a copy of such written Offer, which must set forth the specific
terms of the Offer, shall be enclosed), (ii) the name and address of the
prospective purchaser, (iii) the number of shares of Stock to be purchased, and
(iv) the price, terms and conditions of the Offer, and offering to sell the
shares of Stock covered by the Offer to the Remaining Shareholders at the same
price per share and on the same terms and conditions as proposed in the Offer;
except that if the Offer consists, in whole or in part, of securities to be
issued by the proposed purchaser, then the Remaining Shareholders may acquire
the Stock for cash in an amount equivalent to the then fair market value ("Fair
Market Value") of such securities. Fair Market Value for purposes of this
Agreement shall mean the average of the mean between the high and low closing
prices of the securities as reported in the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") for the twenty consecutive
trading days immediately preceding the date of the Offer, or if the securities
are not reported on NASDAQ, as determined by a qualified independent appraiser
to be selected by the Board of Directors of the Bank. The valuation determined
by the appraiser shall be conclusive.
b. SHAREHOLDER'S RIGHT TO PURCHASE. The Remaining Shareholders
shall have the right to purchase the shares of Stock subject to the Notice on a
pro rata basis based upon the number of Remaining Shareholders who elect to
purchase. The Stock may be purchased at the price per share and on the terms
and conditions stated in the Notice (or the cash equivalent described above) or
on such other terms as shall be agreeable to the offering Shareholder and the
Remaining Shareholders electing to to purchase.
c. EXERCISE OF RIGHT TO PURCHASE. Acceptance by any Shareholder
of the Offer described in the Notice must be by written notice of acceptance
delivered to the offering Shareholder within 30 days of the date on which the
Notice is first sent to the accepting Shareholder, accompanied by the Remaining
Shareholder's good and sufficient check for the full amount of the purchase
price.
d. SALE BY SHAREHOLDER. If the Remaining Shareholders elect to
acquire the Stock covered by the Notice, they must acquire all of such Stock.
If all of the Stock covered by the Notice is not acquired by the Remaining
Shareholders in accordance with the preceding paragraphs, then the offering
Shareholder shall have the
- 2 -
3
right for a period of 60 days from the date that the Notice is first sent to
the other Shareholders to transfer all of the Stock covered by the Notice to
the purchaser named in the Notice at the price and on the terms and conditions
stated in the Notice.
4. Involuntary Assignment
In the event of the involuntary assignment or transfer of any
Shareholder's Stock, the Remaining Shareholders shall have the option to
purchase all of the Stock involuntarily assigned, on the following terms and
conditions:
a. The Remaining Shareholders shall have the right and option to
purchase any of the shares of Stock involuntarily assigned, on a pro rata basis
as provided in Section 3(b) of this Agreement, by delivery to the assignee of
written notice of exercise within 90 days after the date of actual notice to
the Shareholders of the involuntary assignment.
b. The option price shall be the Fair Market Value of the Stock
involuntarily assigned.
5. Successors and Assigns
a. This Agreement shall be binding upon, and inure to the benefit
of, all of the Shareholders, all other shareholders, if any, who become parties
to this Agreement pursuant to the provisions of Section 10 of this Agreement,
and all other parties who acquire any interest in any Stock from any of
the Shareholders, including without limitation, all beneficiaries, personal
representatives, heirs, successors and assigns. The term "Shareholder" shall
include any person who becomes subject to this Agreement pursuant to this
Section 5.
b. All parties to this Agreement shall, as a condition of any
transfer of shares of Stock subject to this Agreement, require the transferee to
consent and agree in writing to all of the terms and conditions of this
Agreement.
c. All certificates representing Stock held by the Shareholders
shall be immediately delivered to the Bank for purposes of endorsement, and
shall be endorsed as follows, and each new certificate hereafter issued to any
Shareholder, regardless of the circumstances of such issuance, shall be
similarly endorsed:
Any sale, assignment, transfer, pledge or other disposition of the
shares of stock represented by this certificate is restricted by, and subject
to the terms and provisions of, an Agreement dated the ___ day of ____________,
199_, and by acceptance of this
-3-
4
certificate, the holder of this certificate agrees to be bound by the
terms of such Agreement.
d. A copy of this Agreement shall be filed with the Secretary of the
Bank.
6. Termination
a. This Agreement shall automatically terminate in the event of the
sale, receivership, or dissolution of the Bank.
b. This Agreement may be amended or terminated at any time by the
written agreement of two-thirds of more of the Shareholders when subject to
this Agreement.
c. This Agreement shall automatically terminate ten (10) years
from the date of this Agreement, unless otherwise extended by the affirmative
action of two-thirds or more of the Shareholders then subject to this
Agreement.
7. Notices
Any notice provided for in this Agreement to be given to any party shall
be in writing and shall be deemed effectively delivered if delivered personally
or if deposited in the United States mail, postage prepaid, addressed to the
person to be notified at his most recent post office address according to the
records of the Bank.
8. Securities Laws
Nothing contained in this Agreement shall relieve any selling Shareholder
from the obligation to comply with all applicable federal and state securities
laws. The parties to this Agreement covenant and agree that the Bank may
require, as a condition of the acceptance of any transfer of record of Stock,
that the Bank be furnished with an opinion of counsel satisfactory to the Bank
that such sale or transfer is not in violation of applicable federal and state
securities laws.
9. Miscellaneous
a. Severability. If any term of this Agreement shall be invalid,
illegal or unenforceable, in whole or in part, the validity of any of the other
terms of the Agreement shall not in any way be affected thereby.
b. Time of the Essence. Time is of the essence in the
performance of this Agreement.
- 4 -
5
c. Remedies. Each party to this Agreement, including those who
shall subsequently become Shareholders, shall have the right to require specific
performance of the covenants in this Agreement, and shall be entitled to a
judgment or decree to such effect from any court of competent jurisdiction.
d. Governing Law/Venue. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Washington,
and any action brought to constrain or enforce the terms of this Agreement shall
be in _______________County, Washington.
e. Counterparts. This Agreement may be executed in several
counterparts, and all counterparts so executed shall constitute one instrument,
binding on all of the executing parties.
10. Additional Shareholders
In the event that an additional party who owns shares of Stock desires to
become a party to this Agreement, then upon the execution and delivery of a
completed counterpart of this document to the other Shareholders and acceptance
of such additional party by a majority of the Shareholders then subject to this
Agreement, such party shall become a party to this Agreement, and such party and
his/her heirs, successors and assigns shall be bound by all of the terms and
conditions of the Agreement in this same manner as all other Shareholders.
EXECUTED this 10th day of March, 1993.
SHAREHOLDERS
Shareholder No. of Shares
----------- -------------
/s/ XXXXXX X. XXXX 24
----------------------------------
Xxxxxx X. Xxxx
/s/ XXXXX XXXX
----------------------------------
Xxxxx Xxxx
/s/ F. XXXXXXX XXXX
---------------------------------- 20 plus option on 600 shares
F. Xxxxxxx Xxxx
-5-
6
Shareholder No. of Shares
----------- -------------
/s/ XXXX C, XXXXX
-----------------------------
Xxxx X. Xxxxx
/s/ XXX X. XXXX 160
-----------------------------
Xxx X. Xxxx
/s/ XXXXXX X. XXXXXX 250
-----------------------------
Xxxxxx X. Xxxxxx
/s/ XXXXXX XXXXX 23
-----------------------------
Xxxxxx Xxxxx
/s/ XXXXX X. XXXXXXX
-----------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxx
/s/ XXXXXXX X. XXXXXXX
-----------------------------
Xxxxxxx X. Xxxxxxx
/s/ XXXXXXX X. XXXXXXX
-----------------------------
Xxxxxxx X. Xxxxxxx
- 6 -
7
SHAREHOLDER NO. OF SHARES
----------- -------------
The undersigned, being the spouses of the persons named above, hereby
consent and agree to all terms and conditions of the foregoing Agreement, in
each case on his or her own behalf and on behalf of his or her marital
community.
/s/ Xxxxxxx Xxxx Date: March 10, 1993
----------------------------- ------------------------
/s/ Xxxxx X. Xxxxx Date: March 11, 1993
----------------------------- ------------------------
/s/ Xxxxxxx Xxxx Date: March 22, 1993
----------------------------- ------------------------
/s/ Xxxxx X. Xxxx Date: March 23, 1993
----------------------------- ------------------------
/s/ Xxxxxxx X. Xxxx Date: March 26, 1993
----------------------------- ------------------------
/s/ Xxxx X. Xxxxxxx Date: March 29, 1993
----------------------------- ------------------------
/s/ Waleda Xxx Xxxxxxxx Date: April 7, 1993
----------------------------- ------------------------
/s/ Xxxxxxx Xxxxx Date: April 16, 1993
----------------------------- ------------------------
/s/ Xxxxxx X. Xxxxxxx Date: March 19, 1993
----------------------------- ------------------------
Date:
----------------------------- ------------------------
- 7 -
8
FIRST AMENDMENT TO STOCK BUY AND SELL AGREEMENT
DATED AS OF APRIL 30, 1996
RECITALS
A. The parties to this First Amendment, in their capacity as shareholders
of Whidbey Island Bank, a Washington banking corporation (the "Bank"),
have previously entered into and executed a Stock Buy and Sell Agreement
dated as of March 10, 1993 (the "Agreement") relating to their shares of
Bank Common Stock.
B. On January 18, 1996, the Board of Directors of the Bank (of which
certain of the parties also is a member) approved a Plan and Agreement
of Reorganization ("Plan"), whereby the Bank would reorganize into a
bank holding company under the name Washington Banking Corporation
("WBC"), subject to shareholder and regulatory approval, and each share
of Bank common stock would be exchanged for one share of WBC common
stock.
C. The Agreement restricts the transfer of Bank stock by the parties except
as provided in the Agreement.
D. The parties to the Agreement wish to have their shares of Bank stock
exchanged for shares of WBC stock upon consummation of the
Reorganization pursuant to the Plan and accordingly agree to enter into
this First Amendment.
AMENDMENT
1. All references in the Agreement to the Bank are hereby amended to refer
to Washington Banking Corporation, a Washington business corporation.
2. Except as expressly amended herein or where the context otherwise
requires, all other terms of the Agreement shall remain in full force
and effect.
3. For any purpose, the Agreement as amended hereby may be set forth in a
composite form giving effect to the amendments made hereby.
4. This Amendment shall take effect on the Exchange Date
specified in the Plan and all shares of WBC common stock
issued to the parties to the Agreement shall bear the legend
specified in Section 5c of the Agreement. This Amendment
shall be binding on all parties upon execution, unless the
Plan should be abandoned for any reason, in which event this
Amendment shall be void and have no effect on the existing
Agreement.
- 1 -
9
This Agreement has been executed and delivered by the parties hereto as
of the date first hereinabove written.
SHAREHOLDERS
SHAREHOLDER NO. OF SHARES
----------- -------------
/s/ XXXXXX X. XXXX 33
-----------------------------------
Xxxxxx X. Xxxx
/s/ XXXXX XXXX 97
-----------------------------------
Xxxxx Xxxx
/s/ F. XXXXXXX XXXX 280
-----------------------------------
F. Xxxxxxx Xxxx
/s/ XXXXXXX X. XXXXXXX 48
-----------------------------------
Xxxxxxx X. Xxxxxxx
401
-----------------------------------
Xxxxxxx X. Xxxxxxx
/s/ XXXX X. XXXXX 147
-----------------------------------
Xxxx X. Xxxxx
/s/ XXX X. XXXX 193
-----------------------------------
Xxx X. Xxxx
/s/ XXXXXX X. XXXXXX 260
-----------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXXXX XXXXX 249
-----------------------------------
Xxxxxx Xxxxx
91
-----------------------------------
Xxxx Xxxxxxx
/s/ XXXXXX X. XXXXXXXX 240
-----------------------------------
Xxxxxx X. Xxxxxxxx
- 2 -
10
The undersigned, being the spouses of parties to the foregoing
Amendment, hereby consent and agree to all terms and conditions of the foregoing
Amendment, in each case on his or her own behalf and on behalf of his or her
marital community.
/s/ XXXXX X. XXXX
-----------------------------------
Xxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx Xxxx
-----------------------------------
Xxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxx
-----------------------------------
Xxxxx X. Xxxxx
/s/ WALEDA XXX XXXXXXXX
-----------------------------------
Waleda Xxx Xxxxxxxx
- 3 -
