Item 1.01 Entry Into a Material Definitive Agreement.
On September 27, 2017, Washington Federal, Inc. ("Washington Federal") and Anchor Bancorp ("Anchor") entered into Amendment No. 1 ("Amendment No. 1") to the Agreement and Plan of Merger (the "Merger Agreement") dated as of April 11, 2017 by and between Washington Federal and Anchor. Amendment No. 1 is attached as Exhibit 2.1 to this Report.
Some of the key provisions contained in Amendment No. 1 are as follows:
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Extends from December 31, 2017 to June 30, 2018 the date after which either party may elect to terminate the Merger Agreement if the merger transaction ("Merger") contemplated by the Merger Agreement has not yet been completed. Amendment No.1 also provides for up to three additional six month extensions beyond June 30, 2018.
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The value of the per share consideration to be received by Anchor shareholders will be determined based on 100.7% of Anchor's tangible common equity (adjusted to include the balance of the ESOP loan) as of the quarter ending immediately prior to the Closing Date and the average trading price of Washington Federal's common stock during a specified period prior to the Closing Date.
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Reduces the termination fee Anchor would be required to pay Washington Federal, under certain circumstances, from $2,236,500 to 1.5% of the aggregate merger consideration.
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Anchor is permitted to pay a dividend on its common stock or repurchase its common stock as long as it does not reduce its tangible common equity to assets ratio below 12%.
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Clarifies that a "burdensome condition" (i.e., a condition to regulatory approval of the merger that would be a basis for Washington Federal not to complete the Merger) does not include any condition imposed on Washington Federal, or its subsidiary Washington Federal, National Association, related to its Bank Secrecy Act ("BSA") program.
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Provides that the registration statement on Form S-4 will not go effective, and the special meeting of Anchor shareholders to vote on the Merger will not be called until the receipt of all regulatory approvals for the Merger;
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Washington Federal will provide information to Anchor on Washington Federal's progress in refiling the regulatory applications and obtaining regulatory approvals for the Merger, subject to the limitations contained in applicable law.
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In order for Anchor to have a greater flexibility in retaining employees through the closing of the Merger, Amendment No. 1 provides Anchor with the right to pay retention incentives and to hire replacements for terminated executive officers at increased salaries.
The foregoing description of Amendment No. 1 does not purport to be complete and is qualified in its entirety by reference to the full text of Amendment No. 1. Except as explicitly provided in Amendment No. 1, the Merger Agreement remains in full force and effect as originally
executed on April 11, 2017. The Merger Agreement as originally entered into is contained in Exhibit 2.1 to the Form 8-K that was filed by Anchor with the Securities and Exchange Commission ("SEC") on April 13, 2017.