Offer Letter - Washington Mutual Inc. and James Corcoran
April 3, 2006
Congratulations! On behalf of Washington Mutual, Inc. ("Washington Mutual" or "the Company"), I am pleased to offer you the position of President, Retail Banking, with a Corporate title of Executive Vice President, pending approval by the Board of Directors. We currently expect that you will start on or before May 15, 2006 in our Seattle office, subject to your release by your present employer. You will report directly to Steve Rotella. This letter outlines the terms of your new position. In addition to this letter, you will receive the Company’s standard change in control agreement (entitled “Employment Agreement”), which becomes effective only upon a change in control as that term is defined in the Employment Agreement. The terms of employment set forth in this letter are binding upon the Company notwithstanding Section 14(a) of the Employment Agreement. Except as expressly set forth below, however, in the event of any inconsistencies between this letter and the Employment Agreement, the Employment Agreement shall control.
You will initially have the title of President, Retail Banking, and will be responsible to perform all of the duties currently associated with that position. However, you may, from time to time, be required to perform such other duties as the Chairman, the President or the Board of Directors of the Company may direct, provided that either those additional duties are consistent with your background, skills and experience or you and the Company mutually agree upon those additional duties. The provisions of this paragraph modify the terms set forth in Section 2 of the Employment Agreement.
Your starting base salary will be $600,000.00.
At Washington Mutual we've made pay for performance the foundation of our compensation strategy. One of the ways that we reward top performers is through our bonus program. Your annualized bonus target will be 133.5% of your salary. You will be entitled to a full year’s bonus in respect of 2006. The bonus you actually receive will be based on the Company's performance. Of course, Washington Mutual reserves the right to change the bonus plan at any time.
In appreciation of your decision to join us, the Company will pay you a one-time signing bonus of $1,500,000.00. The bonus (minus all federal and state withholding) will be paid to you within 30 days of your start date, provided that you are employed by the Company on that date. If you voluntarily terminate employment within 24 months of your start date, you agree to repay a pro-rated share of the signing bonus.
WaMu Equity is an important part of your total rewards package. As a valued member of our leadership team, you will be eligible to participate in the relevant Washington Mutual equity incentive plans.
As part of your new hire package, you will be granted options to purchase 83,333 shares of Washington Mutual common stock. The grant date will be specified in the Option Agreement. These stock options vest over three years, 1/3 each year beginning on the one year anniversary of the grant date, subject to your continued employment by Washington Mutual. The price at which you may exercise your options will be the stock's fair market value at the close of market on the day before the grant date. Stock options are granted under the Washington Mutual, Inc. 2003 Equity Incentive Plan (the "Equity Incentive Plan") and are subject to the provisions of that plan. These terms and other relevant terms of options awarded to you will be set forth in your Option Agreement.
As part of your new hire package, you will also be awarded $750,000 worth of Washington Mutual restricted stock. You cannot sell or transfer the restricted stock until the restrictions lapse. The restrictions lapse ratably over three years (1/3 on each anniversary) after the date of the award, provided that you remain employed by Washington Mutual. The number of shares will be dependent upon the market value at the time of the award. These terms and other relevant terms of your award will be set forth in the Agreement. The restricted stock will be awarded under the Equity Incentive Plan, and pursuant to that plan, if your employment by Washington Mutual ends, you will forfeit all restricted stock on which the restrictions have not yet lapsed.
You will be eligible to be considered for equity awards each year during our performance review process in January. Future awards are not guaranteed; they are granted at the discretion of the Human Resource Committee of the Board and are based on your performance and anticipated future contributions to our company.
We currently offer both a 401(k) plan ("WaMu Savings") and a cash balance pension plan ("WaMu Pension"). WaMu Savings allows you to save for retirement by contributing up to 75 percent of your eligible compensation (subject to IRS limitations) to the Plan on a pretax basis. You are eligible to join WaMu Savings as of your date of hire. Washington Mutual matches your pretax contributions to WaMu Savings effective the first day of the month after you have completed twelve months of service. The matching contribution is currently 100% on the first 3% of your eligible compensation that you contribute plus 50% on the next 2% of your eligible compensation that you contribute. You are immediately vested in your contributions, rollover contributions into the Plan, and company matching contributions. You are also automatically eligible for benefit accruals under the WaMu Pension as of the first day of the quarter following your one year anniversary. Washington Mutual reserves the right to amend or terminate these Plans at any time. The Washington Mutual Flexible Benefit Program offers many choices, including medical and dental coverage, that allow you to create a benefits package tailored to your needs. Your flexible benefits are effective the first day of the month following your first 10 days of service with us. Notwithstanding the preceding, the Company agrees to provide health, medical and life insurance coverage for you when your benefits provided by your previous employer ends. If you have any questions you may contact the employee service center at (866) 492-6847.
Washington Mutual also offers a comprehensive relocation package. For a complete overview of the relocation benefits available to you please refer to the attached relocation document. If you voluntarily terminate employment within 24 months of your start date, you agree to repay the entire relocation benefit and relocation bonus.
Change in Control
You will receive Washington Mutual's standard agreement providing severance benefits in the event of termination in connection with a future change in control (as defined in the agreement). This agreement will provide payment of an amount equal to 3.00 times your annual compensation and accelerated vesting of your stock options upon a termination for any reason other than for cause or upon resignation for good cause (as those terms are defined in the agreement) within three years following such a change in control. Annual compensation will be defined in the agreement, but generally includes all items of compensation for the calendar year other than the value of grants of equity rights.
When you accept our offer, you will be employed at will, meaning that either you or the Company may terminate our relationship at any time for any reason, without cause or advance notice. No representations to the contrary are effective unless in writing and approved by the Board of Directors.
This offer of employment is contingent, in part, on the following conditions:
If you agree to the terms of this offer please indicate so by signing this letter. The signed original should be returned to Senior Recruiting Manager, Chelle Wingeleth at 1111 Third Avenue, EET1202, Seattle Washington 98101 no later than April 15, 2005.
We have enjoyed getting to know you through the interview process and look forward to the opportunity to have you on our team. We hope that you will accept this offer and we look forward to a great future together. If you have any questions please do not hesitate to contact me.
/s/ Daryl David
Executive Vice President, Human Resources
I accept employment with Washington Mutual according to the terms set forth in this letter.
I also agree that, if I voluntarily terminate my employment within 24 months of my start date, I will repay a pro-rated share of the signing bonus and the full amount of any relocation benefit and bonus, and, to the extent allowed by law, I authorize Washington Mutual to withhold any such amount from my final pay.
/s/ James Corcoran
April 4, 2006