Verbatim: Great Western Cross-Examined on Meeting Date

Almost from the beginning, the tug-of-war over Great Western Financial Corp.'s annual meeting has been a focal point in the duel between hostile bidder H.F. Ahmanson and Great Western.

Ahmanson has pushed to schedule the annual meeting well before a vote is taken on Great Western's agreement to sell to white knight Washington Mutual Inc. That could enable Ahmanson to elect three members to Great Western's board and leave time for the new members to make a case for Ahmanson's hostile offer.

Last week, Great Western's hopes of merging with Washington Mutual soared when the Securities and Exchange Commission cleared the thrifts to mail out proxy materials that will enable a vote on the Washington Mutual bid just hours before the annual meeting June 13.

Ahmanson was left to appeal for a six-week delay in the merger vote-and to hope that a recent deposition would help convince the Delaware chancery court to rule in its favor.

Ahmanson wants to prove to the court that Great Western's board set the meeting schedule in an attempt to railroad through its merger agreement with Washington Mutual and that the board did not have the shareholders' interests in mind.

The questioning centered on Great Western's April 6 board meeting, at which the June 13 date was set. J. Lance Erikson, Great Western's senior vice president of public policy, testified that June 13 was suggested by the thrift's lead lawyer, Fred White of Skadden Arps. He said the timing factored in the 20-day notice, as required by the SEC, to set a record date and a customary period of five weeks after the record date to allow shareholders to study the proxies.

But Ahmanson's lawyer, John L. Hardiman of Sullivan & Cromwell, tried to show that the main reason Great Western set its annual meeting for June 13 was to stall.

And he appeared to score some points by referring to notes taken at the meeting by Josh Fox, a Skadden Arps attorney who attended the meeting, as well as some of Mr. Erikson's own notes.

Excerpts of the deposition follow.

JOHN L. HARDIMAN (for Ahmanson): O.K. Was there any sort of discussion of when a meeting maybe could be held with respect to the WAMU merger?

J. LANCE ERIKSON (for Great Western): Yes.

HARDIMAN: What was said?

ERIKSON: Generally, in that context, it was discussed that if the SEC came back with its comments relatively soon and they could be turned around relatively soon, a special meeting might be held just before June 13-maybe on June 13 or sometime after June 13-right about the middle of the month.

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HARDIMAN: O.K. It was the board's preference that the meeting be held before June 13 if possible?

ERIKSON: No, no one ex-pressed a preference.

HARDIMAN: Why was he talking about when the meeting could be held in relation to June 13?

ERIKSON: I think someone asked if it was possible-or desirable, possible, I believe-to have both meetings on the same day, and the response was "yes, it's possible."

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HARDIMAN: How much of that time, of that 15 minutes to a half an hour (spent discussing the WAMU proxy) was devoted to the question of whether the WAMU merger meeting could be before June 13 or whether it would be after or the same date, that topic?

ERIKSON: It was a very short part of the overall meeting.

HARDIMAN: O.K.

ERIKSON: I would say it was no more than three or four minutes, five minutes, perhaps.

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HARDIMAN: Have you seen these notes before?

ERIKSON: Yes.

HARDIMAN: O.K., and you understand these were taken by Josh Fox of Skadden Arps?

ERIKSON: I understand that.

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HARDIMAN: And the next line, doesn't that say, "Want merger vote before the annual meeting?"

ERIKSON: That's what it says.

HARDIMAN: O.K. Does that refresh your recollection that it was expressed at the meeting that the desire of GWF was to have the merger vote before the annual meeting?

ERIKSON: No, it doesn't.

HARDIMAN: You just don't remember that one way or the other?

ERIKSON: I don't remember that being said at all.

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HARDIMAN: Well, do you have any reason to believe Mr. Fox would put that in for any reason other than the fact that it was said at the meeting?

ERIKSON: You have to ask Mr. Fox.

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HARDIMAN: O.K. Now, it appears from these notes that at this point, after there's been some discussion by Mr. White of the meeting date issue and also the proxy issues that (Great Western chief executive officer John) Maher spoke again, said he was disappointed it would take a certain period of weeks?

ERIKSON: Yes.

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HARDIMAN: Next line seems to read, "votes will be very similar if occur close in time."

ERIKSON: Yes.

HARDIMAN: Do you remember there being a discussion that if the WAMU merger and annual meeting was close in time the votes would be similar?

ERIKSON: Yes.

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HARDIMAN: Now read the next sentence for me.

ERIKSON: It says, "We think merger vote will be approximately one week before annual meeting."

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HARDIMAN: That's consistent with the top of your notes, the upper right- hand corner of Exhibit 2, which have your notes relating to the meetings.

ERIKSON: It's not really consistent.

One says we think the merger vote will be.

HARDIMAN: Right.

ERIKSON: And the other one says merger vote could be.

HARDIMAN: And then it says one week before?

ERIKSON: "Could be one week before."

HARDIMAN: O.K., and the notes of Mr. Fox was that the merger vote will be approximately one week before?

ERIKSON: I don't recollect it that way.

HARDIMAN: O.K. Again, do you have any reason to believe Mr. Fox was not doing his best to put down what was said?

ERIKSON: I think he's wrong.

HARDIMAN: But you don't remember anybody, anybody from Skadden saying that the merger vote would be or, would be a week ... (before) the June 13 date?

ERIKSON: Everything was in terms of "could."