The answer to this question differs depending on whether shares are sold on the Nasdaq Global Market
or directly between a buyer and seller other than on the Nasdaq Global Market.
Shares sold on Nasdaq Global Market:
Any trade of FSBW stock on the Nasdaq Global Market executed prior to the ex-dividend date includes
the right to the additional shares. A record holder that sells his or her stock will not be entitled to the
receipt of the additional shares. In order for a record holder to receive the additional shares, the record
holder must hold the shares through the distribution date, July 14, 2021. Buyers of FSBW are
rightful claimants to the additional shares if purchased prior to the ex-dividend date; they need
not be a holder of record. Trades of FSBW stock on the Nasdaq Global Market that settle between
the record date and the distribution date will be considered "trades with distribution", those that
ultimately entitle the buyer to the split shares even though the buyer did not own the shares on the
record date. These trades will have a "due bill" attached to them. A "due bill" is an IOU from the
seller indicating that the buyer, not the seller who was holding the stock on the record date, is
entitled to the split shares upon their issuance. If you buy shares of FSBW stock on the Nasdaq
Global Market between the record date and July 14, 2021, you will be entitled to split shares based
on your purchases, but you will not receive them on the distribution date. You will receive the
split shares when the due bills settle.
If you sell shares of FSBW stock on the Nasdaq Global Market between the record date and July 14,
2021, the trade will have a due bill attached to it and you will receive no split shares even though you
may have been the record holder on the record date. The split shares on sold FSBW stock will be held
and used to settle the due bills.
Shares NOT sold on the Nasdaq Global Market:
The Company will issue FSBW stock to the holder of record as of the close of business on the record
date. For purchase and sale transactions not effected over the Nasdaq Global Market, those
transactions will not have the benefit of the rules and conventions adopted by Nasdaq which provide
that buyers between the record date and distribution date will ultimately receive the split shares.
Consequently, buyers of FSBW stock in transactions not effected through Nasdaq during the period
between the record date and distribution date will need to make arrangements with the seller for
delivery of the split shares by the seller after the distribution date. The obligation of the seller to
transfer the split shares to a buyer will be a matter between the seller and buyer. FS Bancorp, Inc. will
issue the split shares to the holder of record as of the close of business on the record date and will not
be responsible for ensuring buyers of FSBW stock between the record date and distribution date
receive the split shares.
Shares of FSBW stock not traded on the Nasdaq Global Market but effected using a broker may be subject
to conventions or rules similar to or different from Nasdaq. Shareholders who trade between the record
date and distribution date should check with their broker as to the treatment and delivery of the split shares
in connection with such trade.