-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T46+ojpkmCssYGHNBkvnzAtSg8m1V/iRIsUsqSZQCF9F/cwhTck87h1UOrrmRvON 4r1rgDmKAyIJxShvaqNRzg== 0000891020-00-002201.txt : 20001225 0000891020-00-002201.hdr.sgml : 20001225 ACCESSION NUMBER: 0000891020-00-002201 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010124 FILED AS OF DATE: 20001222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WASHINGTON FEDERAL INC CENTRAL INDEX KEY: 0000936528 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 911661606 STATE OF INCORPORATION: WA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-25454 FILM NUMBER: 793765 BUSINESS ADDRESS: STREET 1: 425 PIKE STREET CITY: SEATTLE STATE: WA ZIP: 98101 BUSINESS PHONE: 2066247930 MAIL ADDRESS: STREET 1: 425 PIKE ST CITY: SEATTLE STATE: WA ZIP: 98101 DEF 14A 1 v67615def14a.txt DEFINITIVE PROXY STATEMENT 1 SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12 WASHINGTON FEDERAL, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: --------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: --------------------------------------------------------------------- (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): --------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: --------------------------------------------------------------------- (5) Total fee paid: --------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials. [ ] 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: --------------------------------------------------------------------- 2 Washington Federal, Inc. Logo 425 PIKE STREET SEATTLE, WASHINGTON 98101-2334 (206) 624-7930 December 22, 2000 Dear Stockholder: You are invited to attend our Annual Meeting of Stockholders to be held on Wednesday, January 24, 2001 at 2:00 p.m. at the Seattle Sheraton Hotel, 1400 Sixth Avenue, Seattle, Washington. We hope you can attend this meeting in person, but whether or not you plan to attend, it would be very helpful if you would sign the enclosed proxy card and return it in the envelope provided. Please do this immediately so that we can SAVE YOUR COMPANY THE TIME AND EXPENSE OF CONTACTING YOU AGAIN. Your vote is important regardless of the number of shares you own. Voting by proxy will not prevent you from voting in person if you attend the meeting, but will assure that your vote will be counted if you are unable to attend. If you have any questions, please do not hesitate to contact us. Sincerely, /s/ ROY M. WHITEHEAD Roy M. Whitehead President and Chief Executive Officer 3 Washington Federal, Inc. Logo 425 PIKE STREET SEATTLE, WASHINGTON 98101-2334 (206) 624-7930 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JANUARY 24, 2001 NOTICE IS HEREBY GIVEN that an annual meeting of stockholders of Washington Federal, Inc. ("Washington Federal") will be held at the Seattle Sheraton Hotel, 1400 Sixth Avenue, Seattle, Washington, on Wednesday, January 24, 2001, at 2:00 p.m., Pacific Time, for the following purposes: 1. To elect three directors for a three-year term and until their successors are elected and qualified; 2. To ratify the appointment of Deloitte & Touche LLP as Washington Federal's independent public accountants for fiscal 2001; and 3. To transact such other business as may properly come before the meeting or any adjournment thereof. The Board of Directors of Washington Federal has fixed December 1, 2000 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. Only those stockholders of record as of the close of business on that date will be entitled to vote at the Annual Meeting or at any such adjournment. By Order of the Board of Directors /s/ Charles R. Richmond Charles R. Richmond Secretary December 22, 2000 Seattle, Washington YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF. 4 WASHINGTON FEDERAL, INC. PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS JANUARY 24, 2001 This Proxy Statement is furnished to the holders of the common stock, $1.00 par value per share ("Common Stock"), of Washington Federal, Inc. ("Washington Federal" or the "Company"), the parent holding company for Washington Federal Savings, a federally-chartered savings association, in connection with the solicitation of proxies by the Board of Directors of the Company, to be used at the Annual Meeting of Stockholders to be held at the Seattle Sheraton Hotel, 1400 Sixth Avenue, Seattle, Washington, on Wednesday, January 24, 2001, at 2:00 p.m., and at any adjournment thereof (the "Annual Meeting"), for the purposes set forth in the Notice of Annual Meeting of Stockholders. This Proxy Statement is first being mailed to stockholders on or about December 22, 2000. The proxy solicited hereby, if properly signed and returned and not revoked prior to its use, will be voted in accordance with the instructions given thereon. If no instructions are so specified, then the proxy will be voted for the persons nominated to be directors by the Board of Directors, for the ratification of the appointment of Deloitte & Touche LLP as independent auditors for fiscal 2001 and, upon the transaction of such other business as may properly come before the Annual Meeting, in accordance with the best judgment of the persons appointed as proxies. Any stockholder giving a proxy has the power to revoke it at any time before it is exercised by (i) filing written notice thereof with the Secretary of Washington Federal (Charles R. Richmond, Washington Federal, Inc., 425 Pike Street, Seattle, Washington 98101); (ii) submitting a duly executed proxy bearing a later date; or (iii) appearing at the meeting and notifying the Secretary of his or her intention to vote in person. Proxies solicited hereby may be exercised only at the Annual Meeting and any adjournment thereof and will not be used for any other meeting. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF VOTING SECURITIES Only stockholders of record at the close of business on December 1, 2000 (the "Voting Record Date") will be entitled to vote at the Annual Meeting. On the Voting Record Date, 52,173,590 shares of Common Stock were issued and outstanding and 5 the Company had no other class of equity securities issued and outstanding. Each share of Common Stock is entitled to one vote at the Annual Meeting on matters other than the election of directors, in respect of which cumulative voting is permitted, as discussed below under "Information with Respect to Nominees for Director, Directors Whose Terms Continue and Executive Officers." VOTE REQUIRED The election of the Company's directors requires a plurality of the votes represented in person or by proxy at the Annual Meeting, and the other proposal described in the accompanying Notice to Stockholders and any other business that properly may come before the Annual Meeting require that the votes cast in favor exceed the votes cast against the proposal. EFFECT OF AN ABSTENTION AND BROKER NON-VOTES A stockholder who abstains from voting on any or all proposals will be included in the number of stockholders present at the Annual Meeting for the purpose of determining the presence of a quorum. Abstentions will not be counted either in favor of or against the election of the nominees or any other proposal. Under the rules of the National Association of Securities Dealers, brokers holding stock for the accounts of their clients who have not been given specific voting instructions as to a matter by their clients may vote their clients' proxies in their own discretion. PRINCIPAL HOLDERS OF VOTING SECURITIES The following table sets forth information as of October 1, 2000 with respect to (i) any person or entity known by Washington Federal to be the beneficial owner of more than 5% of the issued and outstanding Common Stock and (ii) ownership of the Common Stock by all directors and executive officers of Washington Federal as a group.
AMOUNT AND NATURE OF BENEFICIAL NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) PERCENT OF CLASS ------------------------------------ ----------------- ---------------- FMR Corp. .................................. 3,161,879(2) 6.07% 82 Devonshire Street Boston, Massachusetts 02109-3614 All directors and executive officers as a group (13 persons)........................ 1,877,924(3) 3.59%(4)
- ------------------------------ (1) Pursuant to rules promulgated by the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as amended ("Exchange 2 6 Act"), a person is considered to beneficially own shares of Common Stock if he or she has or shares: (1) voting power, which includes the power to vote, or direct the voting of the shares; or (2) investment power, which includes the power to dispose, or direct the disposition of the shares. (2) FMR Corp. through its wholly-owned subsidiaries, Fidelity Management & Research Company and Fidelity Management Trust Company, has sole power to dispose of 3,161,879 shares and sole voting power with respect to 1,630,521 shares. (3) Includes ownership of options to purchase Common Stock that may be exercised by all executive officers as a group prior to December 31, 2000 aggregating 259,587 shares. Also includes 340,707 shares held by the Washington Federal Savings Profit Sharing Retirement and Employee Stock Ownership Plan (the "Retirement Plan") for the benefit of executive officers of Washington Federal. Directors, unless current or former employees of Washington Federal, do not participate in the Retirement Plan. The Retirement Plan is a qualified, defined contribution profit sharing and employee stock ownership plan maintained for all eligible employees of Washington Federal that invests primarily in U.S. Government and federal agency securities, certificates of deposit and similar instruments issued by Washington Federal and other financial institutions. The shares of Common Stock of Washington Federal held by the Retirement Plan are voted by the trustees of such plan, but their disposition can be directed only by the employee to whose account the shares are allocated. The trustees of the Retirement Plan are Karen S. Carlson, Arline T. Fonda and Ronald L. Saper, all of whom are full or part-time employees of Washington Federal Savings. (4) The percentage of outstanding shares of Common Stock is based on the 52,120,932 shares of Common Stock issued and outstanding on October 1, 2000, plus options to purchase 259,587 shares of Common Stock that are exercisable by executive officers as a group prior to December 31, 2000. INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR, DIRECTORS WHOSE TERMS CONTINUE AND EXECUTIVE OFFICERS GENERAL The Restated Articles of Incorporation of Washington Federal provide that the Board of Directors shall be divided into three classes as nearly equal in number as possible, and that the members of each class shall be elected for terms of three years and until their successors are elected and qualified, with one of the three 3 7 classes of directors to be elected each year. The number of directors currently authorized by Washington Federal's Bylaws is nine. Pursuant to Washington Federal's Restated Articles of Incorporation, at each election of directors every stockholder entitled to vote has the right to vote, in person or by proxy, the number of shares owned by him or her for as many persons as there are directors to be elected, or to cumulate his or her votes by giving one candidate as many votes as the number of such directors to be elected multiplied by the number of his or her shares shall equal, or by distributing such votes on the same principle among any number of candidates. In the event that cumulative voting is in effect, it is the intention of the persons named in the accompanying proxy to vote cumulatively for the election as directors the nominees listed in the table below. The accompanying proxy cannot be voted for any person who is not a nominee of the Board of Directors. At the Annual Meeting, stockholders of Washington Federal will be asked to elect three directors of Washington Federal for a three-year term and until their successors are elected and qualified. The three nominees for election as directors to a three-year term are Kermit O. Hanson, W. Alden Harris and Guy C. Pinkerton. All nominees were selected by the Nominating Committee of the Board of Directors and currently serve as directors of Washington Federal. There are no arrangements or understandings between the persons named and any other person pursuant to which such person was selected as a nominee for election as a director at the Annual Meeting, and no director or nominee for director is related to any other director or executive officer of Washington Federal by blood, marriage or adoption. If any person named as nominee should be unable or unwilling to stand for election at the time of the Annual Meeting, the proxies will nominate and vote for any replacement nominee or nominees recommended by the Board of Directors of Washington Federal. Alternatively, under such circumstances the Board of Directors of Washington Federal may reduce the number of directors of Washington Federal. 4 8 INFORMATION WITH RESPECT TO NOMINEES FOR DIRECTOR AND CONTINUING DIRECTORS The following tables set forth information relating to the nominees of Washington Federal for election as directors and directors of Washington Federal whose terms continue. NOMINEES FOR THREE-YEAR TERM EXPIRING IN 2004
POSITIONS WITH COMMON STOCK OWNED WASHINGTON DIRECTLY OR INDIRECTLY AS OF FEDERAL AND PRINCIPAL OCTOBER 1, 2000(2)(3) OCCUPATION DURING DIRECTOR ----------------------------- NAME AGE PAST FIVE YEARS SINCE(1) NO. PERCENTAGE - --------------------- --- --------------------- -------- ---------- ---------- Kermit O. Hanson 84 Director; Dean 1966 16,455 .03% Emeritus Graduate School of Business Administration, University of Washington; Chairman Emeritus, Pacific Rim Bankers Program. W. Alden Harris 67 Director; former 1967 158,250 .30% Executive Vice President of Washington Federal Savings. Guy C. Pinkerton 66 Chairman; former 1991 817,448(4) 1.57% President and Chief Executive Officer of Washington Federal Savings.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE NOMINEES BE ELECTED AS DIRECTORS. 5 9 DIRECTORS WITH TERMS EXPIRING IN 2002
POSITIONS WITH COMMON STOCK OWNED WASHINGTON DIRECTLY OR INDIRECTLY AS OF FEDERAL AND PRINCIPAL OCTOBER 1, 2000(2)(3) OCCUPATION DURING DIRECTOR ----------------------------- NAME AGE PAST FIVE YEARS SINCE(1) NO. PERCENTAGE - --------------------- --- --------------------- -------- ---------- ------------- Anna C. Johnson 49 Director; Senior 1995 2,326 --% Partner, Scan East West Travel, Seattle, Washington. Richard C. Reed 79 Director; Management 1967 122,591 .24% Consultant, Altman Weil, Inc., Bellevue, Washington; former Chairman of the law firm of Reed, McClure, Moceri, Thonn and Moriarty, Seattle, Washington. Charles R. Richmond 61 Director; Executive 1995 392,723(4) .75% Vice President and Secretary of Washington Federal Savings.
6 10 DIRECTORS WITH TERMS EXPIRING IN 2003
POSITIONS WITH COMMON STOCK OWNED WASHINGTON DIRECTLY OR INDIRECTLY AS FEDERAL AND PRINCIPAL OF OCTOBER 1, 2000(2)(3) OCCUPATION DURING PAST DIRECTOR -------------------------- NAME AGE FIVE YEARS SINCE(1) NO. PERCENTAGE - --------------------- --- ---------------------------- -------- -------- ------------ John F. Clearman 63 Director; Chief Financial 1996 9,713 .02% Officer of Milliman & Robertson, Inc.; Director of Metropolitan Bancorp from July 1993 until its merger with and into the Company on November 29, 1996; former President and Chief Executive Officer of N.C. Machinery Co.; Director of Esterline Corporation. H. Dennis Halvorson 61 Director; Director of 1996 14,435 .03% Metropolitan Bancorp from September 1994 until its merger with and into the Company on November 29, 1996; former President and Chief Executive Officer of United Bank, a Savings Bank.
7 11
POSITIONS WITH COMMON STOCK OWNED WASHINGTON DIRECTLY OR INDIRECTLY AS FEDERAL AND PRINCIPAL OF OCTOBER 1, 2000(2)(3) OCCUPATION DURING PAST DIRECTOR -------------------------- NAME AGE FIVE YEARS SINCE(1) NO. PERCENTAGE - --------------------- --- ---------------------------- -------- -------- ------------ Roy M. Whitehead 48 Director; Chief Executive 1999 23,813(4) .05% Officer of Washington Federal since October 2000; President of Washington Federal since April 1999 and Executive Vice President from September 1998 to April 1999; Regional Vice President of Wells Fargo Bank, N.A., from June 1997 to September 1998; previously served as President of Wells Fargo Bank of Colorado and predecessor organization.
- ------------------------------ (1) Includes tenure as a director of Washington Federal Savings and its predecessors. (2) Pursuant to rules promulgated by the SEC under the Exchange Act, a person is considered to beneficially own shares of Common Stock if he or she has or shares: (1) voting power, which includes the power to vote, or direct the voting of the shares; or (2) investment power, which includes the power to dispose, or direct the disposition of the shares. (3) Based on information furnished by the respective directors. The percentage of outstanding shares of Common Stock is based on the 52,120,932 shares of Common Stock issued and outstanding on October 1, 2000, plus options to purchase shares of Common Stock that are exercisable by a director prior to December 31, 2000. (4) Includes in the case of Messrs. Pinkerton, Richmond and Whitehead, options to purchase 21,186 shares, 116,602 shares and 6,000 shares of Common Stock, respectively, which are exercisable prior to December 31, 2000, as well as 100,000 shares, 191,295 shares and 5,313 shares of Common Stock, respectively, which are held pursuant to the Retirement Plan. Also includes 7,500 8 12 shares of restricted stock which were granted to Mr. Whitehead on December 13, 1999, 1,500 shares of which vest on each anniversary of the grant. CERTAIN EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS The following table sets forth information concerning the current executive officers of Washington Federal who are not directors and who are listed in the Summary Compensation Table under "Executive Compensation" below.
COMMON STOCK POSITIONS WITH OWNED DIRECTLY WASHINGTON OR INDIRECTLY AS OF FEDERAL AND PRINCIPAL OCTOBER 1, 2000(1)(2) OCCUPATION DURING PAST --------------------- NAME AGE FIVE YEARS NO. PERCENTAGE - ------------------------------ --- ---------------------------- ------- ---------- William A. Cassels 59 Executive Vice President 139,388(3) .27% Ronald L. Saper 50 Executive Vice President and 86,681(3) .17% Chief Financial Officer
- --------------- (1) Pursuant to rules promulgated by the SEC under the Exchange Act, a person is considered to beneficially own shares of Common Stock if he or she has or shares: (1) voting power, which includes the power to vote, or direct the voting of the shares, or (2) investment power, which includes the power to dispose, or direct the disposition of the shares. (2) Based on information furnished by the respective officers. The percentage of outstanding shares of Common Stock is based upon the 52,120,932 shares of Common Stock issued and outstanding on October 1, 2000, plus options to purchase shares of Common Stock that are exercisable by an executive officer prior to December 31, 2000. (3) Includes in the case of Messrs. Cassels and Saper options to purchase 35,590 shares and 67,809 shares of Common Stock, respectively, which are exercisable prior to December 31, 2000, as well as 8,199 shares and 13,012 shares of Common Stock, respectively, which are held pursuant to the Retirement Plan. STOCKHOLDER NOMINATIONS Pursuant to Article IV, Section 4.15 of Washington Federal's Bylaws, stockholders of Washington Federal may name nominees for election to the Board of Directors by submitting such written nominations to the Secretary of Washington Federal at least ninety (90) days prior to the anniversary date of the mailing of proxy materials by Washington Federal in connection with the immediately preced- 9 13 ing annual meeting of stockholders of Washington Federal. Such stockholder's notice shall set forth (a) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the stockholder is a holder of record of stock of Washington Federal entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (d) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the SEC; and (e) the consent of each nominee to serve as director of Washington Federal if elected. If a nomination is made in accordance with applicable requirements, then ballots will be provided for use by stockholders at the stockholder meeting bearing the name of such nominee or nominees. No nominations for election as a director at the Annual Meeting were submitted to Washington Federal in accordance with the foregoing requirements. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Under Section 16(a) of the Exchange Act, Washington Federal's directors and executive officers and any persons holding more than 10% of the outstanding Common Stock must report their ownership of Washington Federal's securities and any changes in that ownership to the SEC by specific dates. Washington Federal believes that during the fiscal year ended September 30, 2000, all of these filing requirements were satisfied by its directors and executive officers. In making the foregoing statement, Washington Federal has relied in part on representations of its directors and executive officers and copies of the reports that they have filed with the SEC. THE BOARD OF DIRECTORS AND ITS COMMITTEES The Board of Directors of Washington Federal held a total of ten meetings during the last fiscal year. No incumbent director attended fewer than 75% of the aggregate of the total number of meetings of the Board of Directors held during his or her tenure in office during the last fiscal year or the total number of all meetings held by all committees of the Board of Directors on which he or she served during such year, except Mr. Reed who attended only seven of the ten monthly Board meetings held during the period. Washington Federal paid its directors a $1,000 monthly retainer plus $600 for each meeting attended. Messrs. Kean and Mersereau, former directors who currently serve as directors emeriti, also receive 10 14 the $1,000 monthly retainer. The Board of Directors has established Executive, Audit, Personnel and Stock Compensation and Nominating Committees. Directors were paid $375 (committee chairmen were paid $475) for each committee meeting attended, other than short meetings held in conjunction with regularly scheduled board meetings. The Board of Directors selects certain of its members to serve on its Executive Committee. The present Executive Committee consists of Messrs. Pinkerton (Chairman), Clearman, Hanson, Harris and Reed. The Executive Committee is authorized to exercise all the authority of the Board of Directors in the management of Washington Federal between board meetings unless otherwise provided by the Bylaws of Washington Federal. The Executive Committee did not meet during the last fiscal year. The Board of Directors has a standing Audit Committee. The Audit Committee consists of Mr. Clearman (Chairman), Ms. Johnson and Mr. Reed. The members are independent as defined in Rule 4200(a)(15) of the National Association of Securities Dealers, Inc. listing standards. The Audit Committee reviews and accepts the reports of Washington Federal's independent auditors and the federal examiners. The Audit Committee met twice during the last fiscal year. On May 22, 2000, the Board of Directors adopted an Audit Committee Charter in the form attached hereto as Appendix A. 11 15 REPORT OF THE AUDIT COMMITTEE The Audit Committee has reviewed and discussed the audited financial statements with management. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 "Communication with Audit Committees," as may be modified or supplemented. The Audit Committee has received the written disclosures and the letter from the independent accountants required by Independence Standards Board Standard No. 1, as may be modified or supplemented, and has discussed with the independent accountants, the independent accountants' independence. Based on the review and discussions referred to above in this report, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company's Annual Report on Form 10-K for the last fiscal year for filing with the SEC. AUDIT COMMITTEE John F. Clearman, Chairman Anna C. Johnson Richard C. Reed The Board of Directors has a standing Personnel and Stock Compensation Committee (the "Committee"). The Committee consists of Messrs. Harris (Chairman), Halvorson and Hanson. No member of the Committee has served as an officer or an employee of Washington Federal or Washington Federal Savings during the past five years. The Committee studies personnel and compensation recommendations made by the Chief Executive Officer and makes recommendations to the Board of Directors. Further, the Committee is authorized to act under Washington Federal's stock option plans to grant stock options, stock appreciation rights and performance shares. The Committee met three times during the last fiscal year. The Board of Directors has appointed three of its members to serve as a Nominating Committee in connection with the election of directors. For the present Annual Meeting, the Board of Directors appointed Mr. Clearman (Chairman), Mr. Halvorson and Ms. Johnson to serve on the Nominating Committee. The Nominating Committee met one time during the last fiscal year. 12 16 EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth a summary of certain information concerning the compensation awarded or paid by or on behalf of Washington Federal for services rendered in all capacities during the last three fiscal years to the Chief Executive Officer and the top four other executive officers of Washington Federal whose total compensation during the last fiscal year exceeded $100,000 (the "Named Executives").
LONG-TERM COMPENSATION -------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS -------------------------------------- ---------------------- ------- RESTRICTED NAME AND PRINCIPAL POSITION FISCAL OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER DURING FISCAL 2000 YEAR SALARY(1) BONUS(2) COMPENSATION(3) AWARD(S) SARS(#) PAYOUTS COMPENSATION(4) - --------------------------- ------ --------- -------- --------------- ---------- -------- ------- --------------- Guy C. Pinkerton(5) 2000 $351,950 $15,258 0 0 19,998 0 $38,544 Chairman and 1999 385,980 0 0 0 0 0 42,178 Chief Executive 1998 353,630 34,776 0 0 12,000 0 39,744 Officer Roy M. Whitehead(5) 2000 $260,750 $11,218 0 7,500(6) 30,000 0 $26,400 President 1999 222,000 0 0 0 0 0 18,096 1998 2,354 0 0 0 40,000 0 0 William A. Cassels 2000 $181,500 $ 8,280 0 0 13,332 0 $19,470 Executive Vice President 1999 165,600 0 0 0 0 0 17,965 1998 143,400 14,238 0 0 8,000 0 16,272 Charles R. Richmond 2000 $280,250 $12,195 0 0 6,666 0 $28,050 Executive Vice President 1999 243,900 0 0 0 0 0 26,617 and Secretary 1998 234,750 22,176 0 0 8,000 0 25,344 Ronald L. Saper 2000 $195,900 $ 9,371 0 0 15,000 0 $21,318 Executive Vice President 1999 187,410 0 0 0 0 0 20,389 and Chief Financial 165,510 16,632 Officer 1998 0 0 8,000 0 19,008
- ------------------------------ (1) Includes director's fees for Messrs. Pinkerton, Whitehead, and Richmond. Includes amounts deferred by Messrs. Whitehead, Cassels, and Saper pursuant to the Retirement Plan, which permits deferrals pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code"). During fiscal 2000, 1999 and 1998, Messrs. Pinkerton and Richmond did not defer amounts pursuant to the Retirement Plan. (2) Represents cash profit sharing bonus paid to all officers and employees in fiscal years 2000 and 1998 upon reaching certain financial goals for the Company. (3) Washington Federal owns automobiles for use by Messrs. Whitehead, Cassels, Richmond and Saper and certain other employees. Washington Federal also pays club dues and other miscellaneous benefits for certain executive officers. Washington Federal has concluded that the individual and aggregate amount of personal benefits provided, which are not reflected in the above table, did 13 17 not exceed the lesser of $50,000 or 10% of the cash compensation reported above for each of the Named Executives. (4) Consists of amounts allocated or paid by Washington Federal to the Named Executives pursuant to the Retirement Plan. (5) Mr. Whitehead joined the Company as Executive Vice President in September 1998 and assumed Mr. Pinkerton's duties as President in April 1999 and Chief Executive Officer in October 2000. Mr. Pinkerton remains Chairman of the Company. (6) Consists of shares of restricted stock which were granted to Mr. Whitehead on December 13, 1999. The September 30, 2000 aggregate value of such shares of restricted stock was $170,625. One thousand and five hundred (1,500) of such shares vest on each anniversary of the date of grant. OPTIONS/SARS GRANTED IN FISCAL 2000 The following table sets forth certain information with respect to stock options granted to the Named Executives during the year ended September 30, 2000.
POTENTIAL REALIZABLE INDIVIDUAL GRANTS VALUE AT ASSUMED ---------------------------------------------------------- RATES OF STOCK PRICE % OF TOTAL APPRECIATION FOR OPTIONS GRANTED EXERCISE OR OPTION TERM(3) OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION --------------------- NAME GRANTED(1) FISCAL YEAR (PER SHARE)(2) DATE 5% 10% - ---------------------- ---------- --------------- -------------- ---------- --------- --------- Guy C. Pinkerton 19,998 2.76% $18.875 12/13/09 $237,476 $601,640 Roy M. Whitehead 30,000 4.14% $18.875 12/13/09 $356,250 $902,550 William A. Cassels 13,332 1.84% $18.875 12/13/09 $158,318 $401,093 Charles R. Richmond 6,666 .92% $18.875 12/13/09 $ 79,159 $200,547 Ronald L. Saper 15,000 2.07% $18.875 12/13/09 $178,125 $451,275
- ------------------------------ (1) Options vest 20% to 100% annually, depending upon the Named Executive, beginning December 13, 2000. (2) The exercise price was based on the bid price of a share of Common Stock on the date of grant. (3) Assumes future stock prices of $30.75 and $48.96 at compounded rates of return of five percent and 10 percent, respectively. The valuations listed above are based on hypothetical rates of appreciation in the price of the Common Stock (five percent and 10 percent, compounded annually) and are included here in response to specific requirements of the SEC. Washington Federal makes no representation that its stock will perform similarly or show similar appreciation. 14 18 AGGREGATE OPTIONS/SARS EXERCISED IN FISCAL 2000 AND FISCAL YEAR END OPTION/ SAR VALUES The following table sets forth certain information with respect to the exercise of stock options during fiscal 2000 and outstanding stock options held by the Named Executives as of September 30, 2000.
VALUE OF UNEXERCISED NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS/SARS OPTIONS/SARS AT YEAR END AT SEPTEMBER 30, 2000(1) SHARES ACQUIRED VALUE --------------------------- --------------------------- NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - --------------------- --------------- -------- ----------- ------------- ----------- ------------- Guy C. Pinkerton 9,300 $72,005 21,187 13,332 $ 25,836 $ 51,662 Roy M. Whitehead 0 0 6,000 68,000 23,250 171,320 William A. Cassels 0 0 35,591 27,622 283,983 119,697 Charles R. Richmond 0 0 90,010 26,593 792,352 140,785 Ronald L. Saper 0 0 67,810 34,037 594,120 149,400
- ------------------------------ (1) The indicated value is based on the $22.75 per share market value of the Common Stock at September 30, 2000, minus the exercise price. REPORT OF THE PERSONNEL AND STOCK COMPENSATION COMMITTEE The Personnel and Stock Compensation Committee reviews and establishes management compensation and compensation policies and procedures. Following review and approval by the Committee, all issues pertaining to executive compensation are submitted to the full Board of Directors for its approval. The Committee also has responsibility for the grant of awards under Washington Federal's stock option plans. Executive officer compensation adjustments were based on Washington Federal's overall performance in the past year and an analysis of compensation levels necessary to attract and maintain quality personnel. In this way, Washington Federal is able to compete for and retain talented executives who are critical to Washington Federal's long-term success and aligns the interest of those with the long-term interests of Washington Federal's stockholders. Executive compensation consists of three components: cash compensation, including base salary and incentive bonus; long-term incentive compensation in the form of stock options and grants; and executive benefits. The components are intended to provide incentives to achieve short and long-range objectives of Washington Federal and to reward exceptional performance. Performance is evaluated not only with respect to Washington Federal's earnings but also with respect to comparable industry performance, the accomplishment of Washington Federal's business objectives and the individual's contribution to Washington Federal's core 15 19 earnings and stockholder value. The competitiveness of Washington Federal's compensation structure is determined by a thorough review of compensation survey data collected by the Committee. To motivate job performance and to encourage growth in stockholder value, stock options are granted under Washington Federal's stock option plan to all executives and other personnel in order to encourage substantial contributions toward the overall success of Washington Federal. The Committee believes that this focuses attention on managing Washington Federal from the perspective of an owner with an equity stake in the business. With respect to executive benefits, executive officers receive all normal employee fringe benefits. In determining the overall compensation package for the Chief Executive Officer, the Committee considered each of the factors enumerated in the preceding paragraphs regarding compensation for executive officers of Washington Federal, as well as the financial performance achieved by Washington Federal during the past fiscal year. In addition to a high level of earnings, Washington Federal continued at or near the top of the financial industry for such key financial performance measures as return on average assets, return on average equity, capital and efficiency ratios. Additionally, the Committee reviewed various compensation packages provided to executive officers of publicly-traded financial institutions. The results of such review showed the Chief Executive Officer's overall compensation package to be below the median for chief executive officers of publicly-traded financial institutions of comparable size and performance. THE PERSONNEL AND STOCK COMPENSATION COMMITTEE W. Alden Harris, Chairman H. Dennis Halvorson Kermit O. Hanson 16 20 PERFORMANCE GRAPHS The following graphs compare the cumulative total return to Washington Federal stockholders (stock price appreciation plus reinvested dividends) to the cumulative total return of the Nasdaq Stock Market Index (U.S. Companies) and the Nasdaq Financial Stocks Index for the five year period ended September 30, 2000 and since Washington Federal Savings first became a publicly traded company on November 17, 1982, respectively. The graphs assume that $100 was invested on September 29, 1995 and November 17, 1982, respectively, in Washington Federal Common Stock, the Nasdaq Stock Market Index and the Nasdaq Financial Stocks Index, and that all dividends were reinvested. Management of Washington Federal cautions that the stock price performance shown in the graphs below should not be considered indicative of potential future stock price performance. [PERFORMANCE GRAPH]
WASHINGTON NADAQ STOCK MARKET NASDAQ FINANCIAL FEDERAL, INC. (US COMPANIES) STOCKS ------------- ------------------ ---------------- 09/29/95 100 100 100 97.25 99.42 100.46 102.57 101.75 105.07 108.95 101.22 107.3 103.04 101.72 107.78 100.94 105.6 109.35 102.71 105.96 111.61 100.21 114.73 111.96 103.19 120 114.02 97.83 114.58 114.23 102.59 104.39 111.31 106.82 110.25 118.47 09/30/96 114.06 118.68 123.8 116.97 117.36 127.88 129.77 124.64 136.18 129.16 124.53 137.73 127.93 133.37 143.48 138.01 125.99 150.08 123.13 117.77 143.74 131.13 121.44 145.51 144.1 135.2 155.55 140.35 139.35 167.29 155.69 154.03 179.44 150.18 153.8 177.89 09/30/97 163.27 162.92 195.14 163.71 154.43 192.06 178.62 155.25 196.33 174.46 152.52 210.63 164.94 157.36 202.46 169.9 172.15 213.94 170.67 178.51 223.33 174.31 181.51 226.73 172.37 171.43 218.46 171.21 183.41 217.55 162.48 181.27 210.07 141.39 145.34 170.72 09/30/98 156.23 165.5 179.96 168.36 172.77 190.99 160.08 190.34 197.7 168.36 215.06 204.54 163.52 246.27 204.27 157.55 224.22 200.48 147.04 241.18 201.19 156.57 248.96 226.49 159.23 242.06 219.62 158.79 263.83 224.2 176.43 259.06 213.58 170.63 270 203.44 09/30/99 165.71 270.38 195.55 164.61 292.05 206.39 150.63 327.56 208.58 142.51 399.6 203.05 122.49 384.83 191.04 111.98 457.94 179.97 139.4 448.48 190.49 129.16 377.22 178.7 151.38 331.72 181.04 136.91 389.94 176.62 140.66 368.82 183.35 155.67 412.4 199.33 09/29/00 170.67 358.96 207.49 WASHINGTON FEDERAL, INC. Nadaq Stock Market (US Companies) Nasdaq Financial Stocks 11/09/82 100 100 100 120.155 101.164 100.36 116.667 101.161 100.184 139.535 108.369 102.687 148.062 113.96 106.553 156.589 118.652 113.471 191.018 128.263 125.52 207.391 135.806 128.426 189.607 140.315 130.03 196.659 134.032 131.246 181.38 128.652 130.577 199.938 130.409 136.809 186.557 121.068 133.43 194.428 126.155 137.436 193.693 123.176 138.902 196.869 118.907 140.613 169.085 112.139 136.157 161.94 111.499 138.293 156.413 110.144 138.022 146.788 103.744 131.455 163.632 107.065 135.257 168.938 102.782 133.836 189.6 114.072 144.188 221.2 112.833 147.793 237.704 111.595 151.086 264.66 109.803 154.157 291.616 112.213 159.195 287.921 126.414 171.893 285.205 129.151 175.638 325.948 127.13 179.298 332.279 127.63 188.209 355.525 132.199 196.871 408.17 135.11 206.231 394.088 137.287 207.626 412.658 136.054 210.215 09/30/85 404.405 128.373 203.258 435.917 134.457 218.433 462.902 144.441 233.736 489.888 149.616 239.701 583.429 154.329 249.591 620.18 165.662 274.319 606.398 172.91 284.888 577.421 177.05 290.521 586.66 185.297 307.388 676.738 187.487 318.938 692.191 171.755 301.675 747.938 176.971 308.857 668.964 162.118 284.478 691.392 166.995 282.714 658.691 166.581 277.64 668.034 161.624 271.844 715.108 181.481 292.395 832.724 196.704 311.007 832.724 198.931 312.687 731.167 193.269 300.406 702.773 192.956 292.568 787.957 196.859 305.857 893.621 201.786 306.516 865.026 211.185 324.139 842.149 206.795 313.483 647.807 151.136 248.717 611.818 142.305 241.543 756.404 154.345 250.118 843.681 161.54 270.484 880.047 172.219 282.68 871.621 175.776 284.537 807.056 178.143 282.127 847.409 175.015 279.219 879.692 186.984 295.686 839.543 184.198 294.92 831.392 179.844 294.159 09/30/88 954.308 185.694 302.655 962.535 183.081 303.088 880.267 177.963 296.436 939.769 183.2 295.694 973.035 193.271 305.87 956.402 192.911 307.992 934.108 196.874 315.07 1119.08 207.666 327.33 1202.32 217.338 334.263 1304.05 212.089 333.946 1427.16 220.777 346.481 1455.15 228.821 364.202 1732.93 230.862 365.35 1493.42 222.389 345.598 1446.46 223.039 339.108 1352.53 222.142 328.691 1344.96 202.909 305.512 1458.62 208.502 308.507 1591.22 214.532 305.151 1517.6 207.506 290.487 1682.25 227.069 297.202 1632.14 228.746 292.464 1624.34 217.259 277.907 1378.89 189.861 253.764 1313.91 171.873 224.291 1253.82 165.084 216.072 1363.17 180.815 233.424 1487.09 188.624 240.699 1561.81 209.475 254.26 1768.09 229.636 283.148 1856.49 244.943 297.527 1975.25 246.541 315.958 1960.4 257.807 329.16 1990.1 242.092 326.322 2111.43 256.358 348.193 2231.23 269.097 371.66 09/30/91 2201.28 270.037 364.942 2217.61 278.844 374.745 2142.18 269.502 364.692 2398.64 302.435 394.66 2492.51 320.063 414.403 2332.93 327.291 436.162 2325.32 311.863 442.491 2425.16 298.535 462.839 2229.77 302.46 483.725 2505.61 290.643 482.425 2455.6 300.93 494.609 2339.77 291.719 485.591 2428.73 302.536 497.434 2498.79 314.428 507.891 2638.91 339.45 540.978 2522.14 352.102 574.432 2519.06 362.103 596.75 2745.07 348.532 610.856 2848.65 358.67 635.69 2842.74 343.355 609.768 2581.94 363.794 597.437 2712.34 365.489 614.579 2866.04 365.966 636.542 2866.03 384.818 653.503 2993.3 396.297 671.819 2834.36 405.286 661.973 2595.96 393.112 635.445 2768.14 404.066 655.408 2674.24 416.406 666.176 2586.08 412.525 657.802 2542 387.189 647.481 2521.29 382.184 668.415 2654.77 383.122 698.892 2610.27 369.13 698.926 2575.58 376.71 708.619 2605.53 400.71 726.717 09/30/94 2465.97 399.692 706.646 2148.27 407.49 685.414 2155.83 393.983 656.805 2102.88 395.208 653.01 2250.36 397.286 674.938 2449.37 418.168 707.956 2449.37 430.592 714.942 2538.57 444.157 734.756 2824.93 455.64 757.272 2724.32 492.536 789.475 2721.36 528.693 826.662 2909.04 539.419 871.162 2971.6 551.847 891.27 2889.98 548.669 905.822 3047.91 561.522 952.405 3237.41 558.552 972.993 3061.81 561.35 975.263 2999.62 582.758 988.657 3052.25 584.708 1011.32 2977.87 633.152 1006.17 3066.5 662.188 1023.06 2906.97 632.329 1028.14 3048.64 576.045 1015.34 3174.17 608.412 1085.67 3389.37 654.936 1137.71 3475.99 647.655 1188.07 3856.18 687.805 1276.86 3838.07 687.223 1284.69 3801.45 735.984 1356.15 4101.18 695.249 1432.71 3658.9 649.91 1381.1 3896.56 670.172 1412.1 4282.16 746.073 1500.26 4170.54 769.011 1607.03 4626.57 850.03 1730.35 4462.8 848.76 1716.27 09/30/97 4851.76 899.058 1895.24 4864.65 852.22 1902.94 5307.82 856.726 1977.08 5184.15 841.701 2150.89 4901.28 868.357 2056.72 5048.73 949.975 2170.08 5071.58 985.086 2273.74 5179.79 1001.68 2302.14 5122.24 946.028 2223.1 5087.71 1012.13 2227.4 4828.21 1000.32 2160.72 4201.47 802.037 1759.65 4642.5 913.303 1880.06 5002.88 953.427 2016.23 4756.83 1050.35 2079.73 5002.88 1186.8 2135.32 4859.03 1359.01 2082.69 4681.69 1237.36 2065.12 4369.58 1330.95 2049.74 4652.77 1373.85 2200.59 4731.63 1335.79 2164.14 4718.48 1455.92 2199.66 5242.87 1429.63 2135.86 5070.32 1490 2055.54 4924.31 1492.07 2001.6 4891.59 1611.66 2161.16 4476.14 1807.62 2129.95 4234.92 2205.19 2052.41 3639.86 2123.69 1926.99 3327.48 2527.15 1736.73 4142.38 2474.94 1853.95 3838.08 2081.69 1803.23 4498.4 1830.58 1892.14 4068.42 2151.84 1804.44 4179.88 2035.34 1879.63 4625.74 2275.81 2017.39 09/29/00 5071.59 1980.89 2147.56
17 21 INDEBTEDNESS OF MANAGEMENT Washington Federal Savings will from time to time make mortgage loans to officers and employees on the security of their residences at prevailing contractual interest rates. Management believes that these loans do not involve more than the normal risks of collectibility or present other unfavorable features. Except for loan origination fees, which Washington Federal Savings waived prior to August 1989, these loans are made on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons. Such loans made to executive officers totaled $535,082 at September 30, 2000. Washington Federal Savings also makes loans secured by savings accounts to its non-executive officers and employees. These loans are made on the same terms as those prevailing for comparable loans to non-affiliated persons. RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS At the Annual Meeting, stockholders of Washington Federal will be asked to ratify the appointment of Deloitte & Touche LLP as Washington Federal's independent public accountants for the year ending September 30, 2001. This appointment was recommended by the Audit Committee of Washington Federal and approved by the Board of Directors of Washington Federal. If the stockholders of Washington Federal do not ratify the appointment of Deloitte & Touche LLP, then the Board of Directors of Washington Federal will reconsider the appointment. Deloitte & Touche LLP has advised Washington Federal that neither the firm nor any of its members has any direct or indirect financial interest in, or during the last three years, has had any other connection with Washington Federal other than the usual relationship which exists between independent public accountants and clients. The professional services rendered by Deloitte & Touche LLP during fiscal 2000 consisted of auditing Washington Federal's financial statements, services related to filings with the OTS and consultations on matters related to taxes, accounting and financial reporting. 18 22 A representative of Deloitte & Touche LLP will be present at the Annual Meeting and available to respond to appropriate questions and will be given an opportunity to make a statement if the representative chooses to do so. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE BY STOCKHOLDERS FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS WASHINGTON FEDERAL'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2001. OTHER MATTERS Management is not aware of any business to come before the Annual Meeting other than those matters described in this Proxy Statement. However, if any other matters should properly come before the Annual Meeting, it is intended that the proxies solicited hereby will be voted with respect to those other matters in accordance with the judgment of the persons voting the proxies. The cost of the solicitation of proxies will be borne by Washington Federal. Washington Federal 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 the Common Stock. In addition to solicitations by mail, directors, officers and employees of Washington Federal may solicit proxies personally or by telephone without additional compensation. STOCKHOLDER PROPOSALS Any proposal which a stockholder wishes to have included in the proxy solicitation materials to be used in connection with the next annual meeting of stockholders of Washington Federal must be received at the main office of Washington Federal no later than August 24, 2001. If such proposal is in compliance with all of the requirements of Rule 14a-8 under the Exchange Act, it will be included in the proxy statement and set forth on the form of proxy issued for the next annual meeting of stockholders. It is urged that any such proposals be sent by certified mail, return receipt requested. No stockholder proposals were submitted in connection with this Annual Meeting. Stockholder proposals that are not submitted for inclusion in Washington Federal's proxy materials pursuant to Rule 14a-8 under the Exchange Act may be brought before an annual meeting pursuant to Section 2.15 of Washington Federal's Bylaws, which provides that business at an annual meeting of stockholders must be 19 23 (a) properly brought before the meeting by or at the direction of the Board of Directors, or (b) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of Washington Federal. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive offices of Washington Federal not later than 90 days prior to the anniversary date of the mailing of proxy materials by Washington Federal in connection with the immediately preceding annual meeting of stockholders of Washington Federal, or not later than September 23, 2001 in connection with the annual meeting of stockholders for the year 2002 of Washington Federal. Such stockholder's notice is required to set forth certain information specified in Washington Federal's Bylaws. ANNUAL REPORTS Stockholders of Washington Federal as of the record date for the Annual Meeting are being forwarded a copy of Washington Federal's Annual Report to Stockholders for the year ended September 30, 2000 (the "Annual Report"). Included in the Annual Report are the consolidated statements of financial condition of Washington Federal as of September 30, 2000 and 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the three-year period ended September 30, 2000, prepared in accordance with generally accepted accounting principles, and the related report of Washington Federal's independent public accountants. The Annual Report is not a part of this Proxy Statement. UPON RECEIPT OF A WRITTEN REQUEST, WASHINGTON FEDERAL WILL FURNISH TO ANY STOCKHOLDER WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K FILED WITH THE SEC UNDER THE EXCHANGE ACT FOR THE YEAR ENDED SEPTEMBER 30, 2000. UPON WRITTEN REQUEST AND A PAYMENT OF A COPYING CHARGE OF $.10 PER PAGE, WASHINGTON FEDERAL WILL FURNISH TO ANY SUCH STOCKHOLDER A COPY OF THE EXHIBITS TO THE ANNUAL REPORT ON FORM 10-K. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO RONALD L. SAPER, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, WASHINGTON FEDERAL, INC., 425 PIKE STREET, SEATTLE, WASHINGTON 98101. THE ANNUAL REPORT ON FORM 10-K IS NOT A PART OF THIS PROXY STATEMENT. 20 24 APPENDIX A WASHINGTON FEDERAL SAVINGS AUDIT COMMITTEE CHARTER RESPONSIBILITIES The audit committee (Committee) shall: 1. Review with management, internal audit, and the independent public accountants, the basis for all external and management reports issued, changes in significant accounting policies, accounting estimates, and significant audit adjustments or findings. 2. Review with the independent public accountants their recommendations and management's responses, on the Association's internal control structure. 3. Review management's evaluation of independence of the independent public accountants and recommend to the Board of Directors the selection of the independent public accountants, subject to shareholder approval. 4. Discuss any significant disagreements between the independent public accountants and management. 5. Oversee the scope and timing of the internal audit program. The Internal Auditor shall report the results of internal audit activities to the Committee twice a year and to the full Board twice a year. MEMBERSHIP The Committee of at least three members will be made up entirely of outside directors who are independent of management. The Committee will include at least two members who have banking or related financial management expertise and at least one member who has past employment experience in finance or accounting which results in the individual's financial sophistication. The Board of Directors will appoint Committee members and will review the members' independence and experience at least annually. MEETINGS The Committee shall hold a minimum of two formal meetings annually and will hold informal meetings on an as needed basis. The Committee will have access to, at its own discretion, outside counsel, management, internal audit, and the independent public accountants. The Committee shall communicate to the Board of Directors such comments and recommendations as the Committee deems appropriate. A-1 25 REVOCABLE PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS WASHINGTON FEDERAL, INC. 425 PIKE STREET, SEATTLE, WASHINGTON 98101-2334 The undersigned hereby appoints the Board of Directors as Proxies, each with the power to appoint his substitute, and hereby authorizes them to represent the undersigned and to vote as designated below, all the shares of Common Stock of Washington Federal, Inc. ("Washington Federal") held of record by the undersigned on December 1, 2000, at the Annual Meeting of Stockholders to be held at the Seattle Sheraton Hotel, 1400 Sixth Avenue, Seattle, Washington, on January 24, 2001, or at any adjournment thereof (the "Annual Meeting"). This proxy may be revoked at any time before it is exercised. - -------------------------------------------------------------------------------- FOLD AND DETACH HERE [WASHINGTON FEDERAL LOGO] 26 Indicated in this example [ ] FOR WITHHOLD all nominees named AUTHORITY below (except as marked to vote for all to the contrary below) nominees named below [ ] [ ] ELECTION OF DIRECTORS: 2. Proposal to ratify the appointment of FOR AGAINST ABSTAIN Nominees for a three-year term: Deloitte & Touche LLP as the independent [ ] [ ] [ ] Kermit O. Hanson, W. Alden Harris and public accountants of Washington Federal Guy C. Pinkerton for fiscal year 2001. (Instruction: To withhold authority to vote for any In their discretion, the Proxies are authorized to vote upon such other individual nominee, write that nominee's name in business as may properly come before the Annual Meeting. the space provided below.) This proxy, when properly executed, will be voted in the manner directed - --------------------------------------------------- herein by the undersigned stockholder. If no direction is made, then this proxy will be voted for the nominees named under Proposal 1 below and for Proposal 2. In the discretion of the Proxies, shares may be voted cumulatively so as to elect the maximum number of nominees for director. The undersigned hereby acknowledges receipt of a Notice of Annual Meeting of Stockholders of Washington Federal called for the 24th day of January 2001 and a Proxy Statement for such Annual Meeting prior to the signing of this proxy. In view of the importance of the action to be taken and to save the cost of further proxy solicitation, we urge you to mark, sign, date and return the proxy card promptly using the enclosed envelope. Signature(s)_____________________________________________________________________________________________ Date _____________________ Please sign exactly as your name appears on the stock certificate. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please give title as such. If executed by a corporation, sign full corporate name by a duly authorized officer. - ------------------------------------------------------------------------------------------------------------------------------------ FOLD AND DETACH HERE [WASHINGTON FEDERAL LOGO] Annual Meeting of Stockholders Wednesday, January 24, 2001 2:00 p.m. PST Seattle Sheraton Hotel 1400 Sixth Avenue Seattle, Washington
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