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EXHIBIT 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is between the Subsidiary of
Washington Mutual, Inc. by which the undersigned employee is currently employed
("Washington Mutual") and the undersigned employee of Washington Mutual
("Employee"). The parties agree as follows:
1. Employment. Washington Mutual hereby employs Employee, and Employee
hereby accepts employment, on the terms in this Agreement.
2. Duties. Employee shall perform such duties as Washington Mutual may
from time to time direct.
3. Compensation & Benefits. Employee's compensation and benefits shall
be as determined by Washington Mutual from time to time.
4. Performance of Duties. Employee agrees that during his or her
employment with Washington Mutual: (a) Employee will faithfully perform the
duties of such office or offices as he or she may occupy, which duties shall be
such as may be assigned to him or her by Washington Mutual; (b) Employee will
devote to the performance of his or her duties all such time and attention as
Washington Mutual shall reasonably require, taking, however, from time to time
such reasonable vacations as are consistent with his or her duties and
Washington Mutual policy; and (c) Employee will not, without Washington Mutual's
express consent, become actively associated with or engaged in any business or
activity during the term of this Agreement other than that of Washington Mutual
(excepting of course customary family and personal activities which may include
management of personal investments so long as it does not entail active
involvement in a business enterprise) and Employee will do nothing inconsistent
with his or her duties to Washington Mutual.
5. Termination.
(a) Either Washington Mutual or Employee may terminate Employee's
employment at any time in their sole discretion, with or without advance notice.
Except as expressly provided in this Agreement, upon termination of employment
Washington Mutual shall have no liability to pay any further compensation or any
other benefit or sum whatsoever to Employee.
(b) Upon termination of employment, Employee's rights under all
employee pension plans, employee welfare benefit plans, bonus plans and stock
option and restricted stock plans shall be determined under the terms of the
plans and grants themselves except as otherwise specifically provided in this
Agreement.
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(c) If (i) Employee's employment is terminated by Washington
Mutual for any reason upon or within two years after a Change in Control (as
defined below) or (ii) Employee resigns for "good cause" (as defined below) upon
or within two years after a Change in Control, then (but in no other
circumstances) Employee shall be entitled to receive, within five business days
after the effective date of such termination or resignation, from Washington
Mutual or its successor, an amount equal to two times Employee's annual
compensation. In addition, upon such an event:
1. all stock options held by Employee shall become
immediately vested and exercisable notwithstanding any provisions in the grant
of such options regarding vesting, and
2. the lapse of the restrictions on Employee's restricted
stock shall automatically be accelerated; provided that the provision in this
subsection (2) shall be effective only if the Compensation Committee has taken
action approving the acceleration; and provided further that the Compensation
Committee may exclude any particular grant(s) of restricted stock from the
acceleration provided for in this subsection (2), either at the time it approves
the acceleration or in connection with making any particular grant of restricted
stock.
(d) For purposes of Section 5(c), Employee's "annual
compensation" shall include all items of compensation provided by Washington
Mutual other than the value of stock options and/or restricted stock granted to
Employee. Employee's "annual compensation" shall include the greater of (i) the
total of Employee's salary and target bonus for the calendar year in which the
termination occurs (if established before the termination) or (ii) Employee's
salary and actual bonus for the prior calendar year (annualized if Employee was
not employed by Washington Mutual for the entire previous calendar year).
Employee's "annual compensation" shall also include the amount of the
contributions made or anticipated to have been made on Employee's behalf to
benefit plans for the calendar year in which the termination occurs, including
without limitation contributions to pension plans and plans qualified under
Section 125 of the Internal Revenue Code of 1986 (cafeteria plans).
(e) Notwithstanding the foregoing, if any payment described in
Section 5(c), together with any other payments or transfers of property, would
constitute a "parachute payment" under Section 280G of the Internal Revenue Code
of 1986, as amended, or any successor statute then in effect, the aggregate
payments by Washington Mutual or its successor pursuant to Section 5(c) shall be
reduced to an amount that, when combined with any other payments or transfers of
property taken into account under Section 280G, is one dollar less than the
smallest sum that would be considered to be a "parachute payment." The foregoing
notwithstanding, the reduction provided for in this paragraph shall be made only
if it increases the amount received by Employee net of federal income, FICA and
golden parachute excise taxes.
(f) For purposes of this Agreement, "Change in Control" shall
mean:
1. The acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934
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and the rules of the Securities and Exchange Commission thereunder as in effect
on the date of this Agreement), other than Washington Mutual, Inc., a Subsidiary
or any employee benefit plan of Washington Mutual, Inc. or its Subsidiaries, of
shares representing more than 25% of (i) the common stock of Washington Mutual,
Inc., (ii) the aggregate voting power of Washington Mutual, Inc.'s voting
securities or (iii) the total market value of Washington Mutual, Inc.'s voting
securities;
2. During any period of 25 consecutive calendar months, a
majority of the Board of Directors of Washington Mutual, Inc. (the "Board")
ceasing to be composed of individuals (i) who were members of the Board on the
first day of such period, (ii) whose election or nomination to the Board was
approved by individuals referred to in clause (i) above constituting at the time
of such election or nomination at least a majority of the Board or (iii) whose
election or nomination to the Board was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of the Board;
3. The good-faith determination by the Board that any
Person or group (other than a Subsidiary or any employee benefit plan of
Washington Mutual, Inc. or a Subsidiary) has acquired direct or indirect
possession of the power to direct or cause to direct the management or policies
of Washington Mutual, Inc., whether through the ability to exercise voting
power, by contract or otherwise;
4. The merger, consolidation, share exchange or similar
transaction between Washington Mutual, Inc. and another Person (other than a
Subsidiary) other than a merger in which Washington Mutual, Inc. is the
surviving corporation; or
5. The sale or transfer (in one transaction or a series of
related transactions) of all or substantially all of Washington Mutual, Inc.'s
assets to another Person (other than a Subsidiary) whether assisted or
unassisted, voluntary or involuntary.
(g) For purposes of this Agreement:
1. "Person" shall mean any individual, corporation,
company, voluntary association, partnership, limited liability company, joint
venture, trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof); and
2. "Subsidiary" shall mean a corporation that is wholly
owned by Washington Mutual, Inc., either directly or through one or more
corporations which are wholly owned by Washington Mutual, Inc.
(h) For purposes of this Agreement, "good cause" for Employee to
resign shall mean:
1. The assignment of duties to Employee which (a) are
materially different from Employee's duties immediately prior to the Change in
Control, or (b) result in
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Employee having significantly less authority and/or responsibility than he or
she had prior to the Change in Control, without his or her express written
consent;
2. The removal of Employee from the position held
immediately prior to the Change in Control, except where such removal is for
cause (as defined below) or by reason of Employee's disability;
3. A reduction of Employee's base salary as in effect on
the date of the Change in Control or as the same may be increased from time to
time thereafter;
4. A reduction in the overall level of Employee's total
compensation below the average total compensation paid by Washington Mutual to
Employee for the 24 months immediately preceding the Change in Control; or
5. Any change in Employee's duties which would require him
or her to relocate out of the greater metropolitan area of Employee's principal
place of employment as in effect on the date of the Change in Control, without
Employee's express written consent.
(i) For purposes of this Agreement, a removal of Employee from
his or her position will be considered to be for "cause" if, but only if, the
removal is because (i) Employee engages in abusive use of alcohol or other drugs
on a continuing or recurring basis, (ii) Employee is convicted of any felony or
of a misdemeanor involving moral turpitude (including forgery, fraud, theft or
embezzlement), or is convicted or enters into a pretrial diversion or similar
program in connection with the prosecution for an offense involving dishonesty,
breach of trust or money laundering, or (iii) Employee has engaged in
dishonesty, fraud, destruction or theft of property of Washington Mutual, Inc.
or a Subsidiary, physical attack on another employee, willful malfeasance or
gross negligence in the performance of his or her duties, or misconduct
materially injurious to Washington Mutual, Inc. or a Subsidiary.
6. Death or Disability. If Employee should die or become disabled at any
time during his or her employment hereunder this Agreement shall terminate and
neither Employee nor anyone claiming by, through or under him or her shall be
entitled to any further compensation or other sum under this Agreement (other
than payments made by insurers under policies of life and disability insurance
and any sums which may become available under any employee benefit plan).
7. Confidentiality. Employee agrees that information not generally known
to the public to which Employee has been or will be exposed as a result of
Employee's employment by Washington Mutual is confidential information that
belongs to Washington Mutual. This includes information developed by Employee,
alone or with others, or entrusted to Washington Mutual by its customers or
others. Washington Mutual's confidential information includes, without
limitation, information relating to Washington Mutual's trade secrets, know-how,
procedures, purchasing, accounting, marketing, sales, customers, clients,
employees, business strategies and acquisition strategies. Employee will hold
Washington Mutual's confidential information in strict confidence and will not
disclose or use it except as authorized by Washington Mutual and for Washington
Mutual's benefit.
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8. Possession of Materials. Employee agrees that upon conclusion of
employment or request by Washington Mutual, Employee shall turn over to
Washington Mutual all documents, files, office supplies and any other material
or work product in Employee's possession or control that were created pursuant
to or derived from Employee's services for Washington Mutual.
9. Resolution of Disputes. Any dispute arising out of or relating to
this Agreement or Employee's employment (or termination of employment) shall be
submitted to and resolved by final and binding arbitration as provided in the
Binding Arbitration Agreement attached as Exhibit A, whether the claimant is
Employee or Washington Mutual. In any dispute in arbitration or court arising
out of or relating to this Agreement, the losing party shall pay the prevailing
party's reasonable attorneys' fees, costs and expenses.
10. Miscellaneous.
(a) This Agreement is the entire agreement between the parties
and may not be modified or abrogated orally or by course of dealing, but only by
another instrument in writing duly executed by the parties. This Agreement
replaces and supersedes all prior agreements on these subjects that Employee may
have with Washington Mutual, Inc., or any Subsidiary of Washington Mutual, Inc.
Employee acknowledges that Employee shall be entitled to change in control
benefits, severance benefits or other employment separation benefits only as
specifically provided in this Agreement (or, to the extent applicable according
to its terms, as provided in the Washington Mutual Severance Plan as in effect
from time to time), notwithstanding the terms of any other representation,
policy, severance plan, benefit plan or agreement.
(b) This Agreement has been drafted in contemplation of and shall
be construed in accordance with and governed by the law of the state of
Employee's principal place of employment with Washington Mutual.
(c) Employee acknowledges that this Agreement has been drafted by
counsel for Washington Mutual, and that Employee has not relied upon such
counsel with respect to this Agreement.
(d) If a court or arbitrator of competent jurisdiction or
governmental authority declares any term or provision hereof invalid,
unenforceable or unacceptable, the remaining terms and provisions hereof shall
be unimpaired and the invalid, unenforceable or unacceptable term or provision
shall be replaced by a term or provision that is valid, enforceable and
acceptable and that comes closest to expressing the intention of the invalid,
unenforceable or unacceptable term or provision.
(e) Employee may not assign Employee's rights or delegate
Employee's duties under this Agreement.
(f) Washington Mutual may assign its rights and delegate its
duties under this Agreement to Washington Mutual, Inc. or any other Subsidiary
of Washington Mutual, Inc. or to
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any purchaser of all or substantially all of Washington Mutual's assets. The
transfer of Employee's employment from Washington Mutual to any other Subsidiary
of Washington Mutual, Inc. or to the purchaser of all or substantially all of
the assets of Washington Mutual shall not be considered a termination of
employment, but this Agreement shall run to the benefit of, and be binding upon,
the new employer. In the event of a Change in Control, as defined above, this
Agreement shall bind, and run to the benefit of, the successor to Washington
Mutual resulting from the Change in Control.
DATED effective as of the 1st day of January 1998.
WASHINGTON MUTUAL: WASHINGTON MUTUAL
By
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Xxxxx X. Xxxxxxxxx
Its Chairman and Chief Executive Officer
EMPLOYEE:
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EXHIBIT A
BINDING ARBITRATION AGREEMENT
This Binding Arbitration Agreement is a part of, and incorporated into,
that certain Employment Agreement between the parties dated effective as of the
1st day of January 1998. I, the employee who is a party to the Employment
Agreement to which this Exhibit is attached, as well as Washington Mutual, agree
as follows:
1. Any and all disputes which involve or relate in any way to my
employment (or termination of employment) with Washington Mutual shall be
submitted to and resolved by final and binding arbitration.
2. Washington Mutual and I understand that by entering into this Binding
Arbitration Agreement, we are each waiving any right we may have to file a
lawsuit or other civil action or proceeding relating to my employment with
Washington Mutual, and are waiving any right we may have to resolve employment
disputes through trial by jury. We agree that arbitration shall be in lieu of
any and all lawsuits or other civil legal proceedings relating to my employment.
3. This Binding Arbitration Agreement is intended to cover all civil
claims which involve or relate in any way to my employment (or termination of
employment) with Washington Mutual, including, but not limited to, claims of
employment discrimination or harassment on the basis of race, sex, age,
religion, color, national origin, sexual orientation, disability and veteran
status (including claims under Title VII of the Civil Rights Act of 1964, the
Age Discrimination in Employment Act, the Americans with Disabilities Act, the
Employee Retirement Income Security Act ("ERISA"), the Fair Labor Standards Act,
the Immigration Reform and Control Act and any other local, state or federal law
concerning employment or employment discrimination), claims based on violation
of public policy or statute, and claims against individuals or entities employed
by, acting on behalf of, or affiliated with Washington Mutual. However, ERISA
plan benefit issues and claims for workers compensation or for unemployment
compensation benefits are not covered by this Binding Arbitration Agreement. The
statutes of limitations otherwise applicable under law shall apply to all claims
made in the arbitration.
4. I understand and agree that despite anything in this Binding
Arbitration Agreement to the contrary, I am not waiving the right to file or
institute a complaint or charge with any government agency authorized to
investigate or resolve employment-related matters, including but not limited to
the United States Equal Employment Opportunity Commission, the Department of
Labor, the Occupational Safety and Health Commission, the National Labor
Relations Board, the Immigration and Naturalization Service, and any other
comparable local, state or federal agency. I also understand and agree that
despite anything in this Binding Arbitration Agreement to the contrary, either
party may request a court to issue such temporary or interim relief (including
temporary restraining orders and preliminary injunctions) as may be appropriate,
either before or after arbitration is commenced. The temporary or interim relief
may remain in effect pending the outcome of arbitration. No such request shall
be a waiver of the right to submit any dispute to arbitration.
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5. This Binding Arbitration Agreement does not constitute an employment
contract, require discharge only for cause, or require any particular corrective
action or discharge procedures.
6. Arbitration under this Binding Arbitration Agreement shall be
conducted before a single arbitrator and shall take place within the state where
I am currently employed by Washington Mutual, or where I was so employed at the
time of termination.
7. In order to initiate arbitration, Washington Mutual or I must so
notify the other party in writing of their decision to initiate arbitration,
either by personal delivery or certified mail. The notification should include
the following information about the employee: name, home address, work address,
work and home phone number, and the following information about the occurrence:
date, location, nature of the claims or dispute, facts upon which the claims are
made, and remedy requested. Any notice of arbitration initiated by Washington
Mutual shall be sent to my last known residence address as reflected in my
personnel file at Washington Mutual. Notice of arbitration initiated by me shall
be sent to Washington Mutual's General Counsel. The General Counsel's address is
currently Washington Mutual, 0000 Xxxxx Xxxxxx, XXX 0000, Xxxxxxx, Xxxxxxxxxx
00000.
8. Within thirty (30) days after receipt of notice of arbitration,
Washington Mutual and I will attempt to agree upon a mutually acceptable
arbitrator. If Washington Mutual and I are unable to agree upon an arbitrator,
we will submit the dispute to the American Arbitration Association ("AAA"). If
AAA is, for some reason, unable or unwilling to accept the matter, we will
submit the matter to a comparable arbitration service. The arbitration shall be
conducted in accordance with the laws of the state in which the arbitration is
conducted and the rules and requirements of the arbitration service being
utilized, to the extent that such rules and requirements do not conflict with
the terms of this Binding Arbitration Agreement.
9. At the request of either Washington Mutual or myself, the arbitrator
will schedule a pre-hearing conference to, among other things, agree on
procedural matters, obtain stipulations, and attempt to narrow the issues.
10. During the arbitration process, Washington Mutual and I may each
make a written demand on the other for a list of witnesses, including experts,
to be called and/or copies of documents to be introduced at the hearing. The
demand must be served at least thirty (30) days prior to the hearing. The list
and copies of documents must be delivered within twenty-five (25) days of
service of the demand.
11. Either party shall be entitled to conduct a limited amount of
discovery prior to the arbitration hearing. Either party may take a maximum of
two (2) depositions. Either party may apply to the arbitrator for further
discovery. Such further discovery may, in the discretion of the arbitrator, be
awarded upon a showing of sufficient cause. If any documents to be produced or
requested for production contain or refer to matters which are private,
proprietary and/or confidential, the arbitrator shall make an appropriate
protective order prohibiting or limiting use
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and disclosure of such documents and providing for return of documents produced
after the arbitration is concluded.
12. Either party may file a brief with the arbitrator. Each brief must
be served on the arbitrator and the other party at least five (5) working days
prior to the hearing, and if not timely served must be disregarded by the
arbitrator. The brief shall specify the facts the party intends to prove,
analyze the applicable law or policy, and specify the remedy sought. At the
close of the hearing, each party shall be given leave to file a post-hearing
brief. The time for filing the post-hearing brief shall be set by the
arbitrator.
13. I understand that, at my expense, I have the right to hire an
attorney to represent me in the arbitration, and Washington Mutual has that same
right. I also understand that all parties shall have the right to present
evidence at the arbitration, through testimony and documents, and to
cross-examine witnesses called by another party. Each party agrees to pay the
fees of any witnesses testifying at that party's request. Each party also agrees
to pay the cost of any stenographic record of the arbitration hearing should
that party request any such record. The requesting party must notify the other
of such arrangements at least two (2) working days in advance of the hearing.
14. Any postponement or cancellation fee imposed by the arbitration
service will be paid by the party requesting the postponement or cancellation.
During the time the arbitration proceedings are ongoing, Washington Mutual will
advance any required administrative or arbitrator's fees. Each party will pay
its own witness fees.
15. At the conclusion of the arbitration, each party agrees to promptly
pay any arbitration award against it.
16. We agree that the decision of the arbitrator shall be final and
binding on all parties and shall be the exclusive remedy of the parties. The
arbitrator shall issue a written and signed statement of the basis of his or her
decision, including findings of fact and conclusions of law. In making the
decision and award, if any, the arbitrator shall apply applicable substantive
law. The arbitrator may only award any remedy that would have been available in
court. The decision and award, if any, shall be consistent with the terms of
this Binding Arbitration Agreement and shall include an allocation of the costs
of the arbitration proceeding between the parties.
17. This Binding Arbitration Agreement may be enforced by a court of
competent jurisdiction through the filing of a petition to compel arbitration,
or otherwise. The decision and award of the arbitrator may also be judicially
enforced pursuant to applicable law.
18. Because of the interstate nature of Washington Mutual's business,
this Binding Arbitration Agreement is governed by the Federal Arbitration Act, 9
U.S.C. Section 1 et seq. (the "FAA"). The provisions of the FAA (and to the
extent not preempted by the FAA, the provisions of the law of the state of my
principal place of employment with Washington Mutual that generally apply to
commercial arbitration agreements, such as provisions granting stays of
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court actions pending arbitration) are incorporated into this Binding
Arbitration Agreement to the extent not inconsistent with the other terms of
this Binding Arbitration Agreement.
19. We agree that if any provision of this Binding Arbitration Agreement
is found to be unenforceable to any extent or in violation of any statute, rule,
regulation or common law, it will not affect the enforceability of the remaining
provisions and the court shall enforce the affected provision and all remaining
provisions to the fullest extent permitted by law.
20. This Binding Arbitration Agreement shall remain in full force and
effect at all times during and subsequent to my employment with Washington
Mutual, or any successor in interest to Washington Mutual.
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