AMENDMENT NO. 2
TO
RIGHTS AGREEMENT
Amendment No. 2 to Rights Agreement, dated October 5, 1998, to Rights
Agreement, dated as of November 1, 1996, as amended by Amendment No. 1 to Rights
Agreement, dated January 16, 1998 (as so amended, the "Rights Agreement")
between Arcadia Financial Ltd. (formerly Olympic Financial Ltd.), a Minnesota
corporation, and Norwest Bank Minnesota, N.A. (all terms not otherwise defined
herein shall have the meanings ascribed to them in the Rights Agreement).
WITNESSETH:
WHEREAS, the Company and the Rights Agent have previously entered into
the Rights Agreement specifying the terms of the Rights;
WHEREAS, Section 27 of the Rights Agreement provides that, prior to
the Distribution Date and subject to certain limitations contained in such
Section, the Company may by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a majority of the
Continuing Directors and only if the Continuing Directors constitute a majority
of the number of directors then in office) and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of the Rights Agreement
without the approval of any holders of certificates representing shares of
Common Stock;
WHEREAS, no Distribution Date has occurred;
WHEREAS, Continuing Directors constitute a majority of the number of
directors currently in office; and
WHEREAS, the Company's Board of Directors, with the concurrence of a
majority of the Continuing Directors, has duly approved amending the Rights
Agreement to contain the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereby agree as follows:
1. Amendment to Section 1(a). Section 1(a) of the Rights Agreement
is hereby amended in its entirety to read as follows:
(a) "'Acquiring Person' shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the shares of Common Stock
then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, (iv) any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan, or (v) any person holding
Common Stock issued to that person by the Company in a
transaction approved in advance by a majority of the Continuing
Directors of the Company to the extent and only to the extent so
approved (each of (i) through (v), an "EXEMPTED PERSON").
Notwithstanding the foregoing, (i) no Person shall become an
"Acquiring Person" as a result of an acquisition of Common Stock
by the Company which, by reducing the number of such shares then
outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the
outstanding Common Stock, except that if such Person, after such
share purchases by the Company, becomes the Beneficial Owner of
any additional shares of Common Stock, such Person shall be
deemed to be an "Acquiring Person," and (ii) if the Board of
Directors of the Company determines in good faith that a Person
who would otherwise be an "Acquiring Person" has become such
inadvertently, and such Person divests as promptly as practicable
a sufficient number of Common Stock so that such Person would no
longer be an Acquiring Person then such Person shall not be
deemed to be an "Acquiring Person." The term "OUTSTANDING," when
used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number
of such securities not then issued and outstanding which such
Person would be deemed to beneficially own hereunder."
2. OTHER PROVISIONS. The other provisions of the Rights Agreement
shall continue in full force and effect as set forth in the Rights Agreement and
are not affected in any way by this Amendment No. 2.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
2 to be duly executed on the day and year first set forth above.
ARCADIA FINANCIAL LTD.
By: /s/ Xxxxx X. Xxxxxxxx III
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Xxxxx X. Xxxxxxxx III
Senior Vice President
NORWEST BANK MINNESOTA, N.A.,
NORWEST SHAREOWNER SERVICES
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Account Manager
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