As filed with the Securities and Exchange Commission on December 22, 1998.
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WASHINGTON MUTUAL, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1653725
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1201 Third Avenue
Seattle, Washington 98101
(Address of principal executive officers) (Zip Code)
WASHINGTON MUTUAL AMENDED AND RESTATED 1994 STOCK OPTION PLAN
WASHINGTON MUTUAL RESTRICTED STOCK PLAN
WASHINGTON MUTUAL EMPLOYEES' STOCK PURCHASE PROGRAM
WASHINGTON MUTUAL, INC. RETIREMENT SAVINGS AND INVESTMENT PLAN
WASHINGTON MUTUAL, INC. WAMU SHARES
JANUARY 1999 WAMU SHARES
(Full title of the Plans)
Marc R. Kittner
Deputy General Counsel
Washington Mutual, Inc.
1201 Third Avenue
Seattle, Washington 98101
(206) 461-2000
(Name, address and telephone number, including area code, of agent for service)
Copy to:
David R. Wilson
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- --------------------------------- --------------------- --------------------- ------------------- ---------------------
TITLE OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED (1) REGISTERED (2)(3) PER SHARE (4) PRICE(4) FEE
- --------------------------------- --------------------- --------------------- ------------------- ---------------------
- --------------------------------- --------------------- --------------------- ------------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 20,737,855 $33.8890(4) $702,785,553 $195,374.39
- --------------------------------- --------------------- --------------------- ------------------- ---------------------
</TABLE>
(1) Includes associated Rights to purchase shares of the Common Stock of
Washington Mutual, Inc. ("Washington Mutual" or the "Registrant"), which Rights
are neither currently separable from the shares of Common Stock nor currently
exercisable.
The Exhibit Index appears after the Signature Page of this Registration
Statement.
<PAGE>
(2) Represents (i) 12,000,000 shares issuable under the Washington Mutual
Amended and Restated 1994 Stock Option Plan (the "Stock Option Plan"), as
amended and restated as of February 17, 1998; (ii) 1,050,000 shares issuable
under the Washington Mutual, Stock Plan, as amended and restated as of February
18, 1997 (the "Restricted Stock Plan"); (iii) 7,855 shares issuable under the
Washington Mutual Employees' Stock Purchase Program (the "ESPP"); (iv) 1,080,000
shares issuable under the Washington Mutual, Inc. Retirement Savings and
Investment Plan (the "RSIP"); (v) 3,300,000 shares issuable under Washington
Mutual, Inc. WAMU Shares ("WAMU Shares"); and (vi) 3,300,000 shares issuable
under January 1999 WAMU Shares ("1999 WAMU Shares"). The figure in (iv)
represents a good faith estimate of the aggregate number of shares to be sold
pursuant to the RSIP. Does not include 6,421,554 shares issued or issuable
pursuant to the Stock Option Plan, the Restricted Stock Plan, the ESPP and the
RSIP and any shares issued or issuable in respect of such shares as a result of
a 3-for-2 stock split of the Common Stock effective June 1, 1998, all of which
shares the Company previously registered pursuant to Registration Statement No.
33-86840, as amended.
(3) There is also registered pursuant to Rule 416(a) under the Securities
Act of 1933, as amended (the "Securities Act") an undetermined number of
additional shares of Common Stock that may be sold in accordance with the
provisions of the plans named in footnote (1) to prevent dilution as a result of
stock splits, stock dividends or similar transactions. There is also registered
pursuant to Rule 416(c) under the Securities Act an undetermined number of
interests to be offered or sold pursuant to the RSIP.
(4) Estimated pursuant to Rules 457(c) and (h) of the Securities Act solely
for purposes of calculating the amount of the registration fee. The proposed
maximum offering price per share of Common Stock is based upon (i) an exercise
price per share of $39.9167 as to 3,300,000 shares issuable pursuant to
outstanding and unexercised options under WAMU Shares; (ii) an exercise price
per share of $32.8750 as to 3,300,000 shares issuable pursuant to outstanding
and unexercised options under 1999 WAMU Shares; and (iii) as to 14,137,855
shares not subject to options, the average of the high price and low price of
the Common Stock as reported by the New York Stock Exchange on December 15,
1998.
Unless otherwise indicated, all share amounts in this Registration
Statement are as adjusted for a 3-for-2 stock split of the Common Stock
effective June 1, 1998.
INCORPORATION BY REFERENCE
Pursuant to General Instruction E to Form S-8, the contents of the
Registration Statement filed by Washington Mutual, Inc. ("Washington Mutual" or
the "Registrant") under Registration No. 33-86840, as amended, with respect to
securities offered pursuant to the Stock Option Plan, the Restricted Stock Plan,
the ESPP and the RSIP, are incorporated by reference herein.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
In accordance with Rule 428 under the Securities Act and the instructional
Note to Part I of Form S-8, the information specified in Part I of Form S-8 has
been omitted from this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Washington Mutual and the Washington Mutual, Inc. Retirement Savings and
Investment Plan (the "RSIP") hereby incorporate by reference into this
Registration Statement the documents listed below. In addition, all documents
subsequently filed pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference into this Registration Statement and
to be a part hereof from the date of filing of such documents:
(a) Washington Mutual's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, as amended by Forms 10-K/A dated April 1 and June 30,
1998, file no. 0-25188;
(b) The RSIP's Annual Report on Form 11-K for the fiscal year ended
December 31, 1997, file no. 0-25188;
(c) All other reports filed by Washington Mutual pursuant to Section 13(a)
or 15(d) of the Exchange Act since the end of the fiscal year covered by the
Annual Report to which paragraph (a) of this item refers; and
(e) The description of Washington Mutual's Common Stock, no par value, and
its Common Stock Purchase Rights contained in Item 1 of Registrant's
Registration Statements on Form 8-A filed December 3, 1998, file no. 1-14667.
Item 4. Description of Securities.
Not applicable.
<PAGE>
Item 5. Interests of Named Experts and Counsel.
The validity of the shares offered hereby will be passed upon for
Washington Mutual by Foster Pepper & Shefelman PLLC, 1111 Third Avenue, Suite
3400, Seattle, Washington 98101-3299. Members of Foster Pepper & Shefelman PLLC
and other attorneys employed by the firm that have provided advice with respect
to this matter in the aggregate owned 29,666 shares of Common Stock as of
December 15, 1998.
Item 6. Indemnification of Directors and Officers. . Section 23B.08.320 of
the Washington Business Corporation Act (the "Corporation Act") provides that
the personal liability of directors to a corporation imposed by Section
23B.08.310 of the Corporation Act may be eliminated by the articles of
incorporation of the corporation, except in the case of acts or omissions
involving certain types of conduct. At Article XIII of its Restated Articles of
Incorporation, Washington Mutual has elected to eliminate the liability of
directors to Washington Mutual to the extent permitted by law. Thus, a director
of Washington Mutual is not personally liable to Washington Mutual or its
shareholders for monetary damages for conduct as a director, except for
liability of the director (i) for acts or omissions that involve intentional
misconduct by the director or a knowing violation of law by the director, (ii)
for conduct violating Section 23B.08.310 of the Corporation Act, or (iii) for
any transaction from which the director will personally receive a benefit in
money, property or services to which the director is not legally entitled. If
Washington law is amended to authorize corporate action that further eliminates
or limits the liability of directors, then the liability of Washington Mutual
directors will be eliminated or limited to the fullest extent permitted by
Washington law, as so amended.
Section 23B.08.560 of the Corporation Act provides that if authorized by
(i) the articles of incorporation, (ii) a bylaw adopted or ratified by the
shareholders, or (iii) a resolution adopted or ratified, before or after the
event, by the shareholders, a corporation will have the power to indemnify
directors made party to a proceeding, or to obligate itself to advance or
reimburse expenses incurred in a proceeding, without regard to the limitations
on indemnification contained in Sections 23B.08.510 through 23B.08.550 of the
Corporation Act, provided that no such indemnity shall indemnify any director
(i) for acts or omissions that involve intentional misconduct by the director or
a knowing violation of law by the director, (ii) for conduct violating Section
23B.08.310 of the Corporation Act, or (iii) for any transaction from which the
director will personally receive a benefit in money, property or services to
which the director is not legally entitled.
Pursuant to Article X of Washington Mutual's Restated Articles of
Incorporation and Article VIII of Washington Mutual's Bylaws, Washington Mutual
must, subject to certain exceptions, indemnify and defend its directors against
any expense, liability or loss arising from or in connection with any actual or
threatened action, suit or proceeding relating to service for or at the request
of Washington Mutual, including without limitation, liability under the
Securities Act. Washington Mutual is not permitted to indemnify a director from
or on account of acts or omissions of such director which are finally adjudged
to be intentional misconduct, or from or on account of conduct in violation of
RCW 23B.08.310, or a knowing violation of the law from or on account of any
transaction with respect to which it is finally adjudged that such director
received a benefit in money, property or services to which he or she was not
entitled. If Washington law is amended to authorize further indemnification of
directors, then Washington Mutual directors shall be indemnified to the fullest
extent permitted by Washington law, as so amended. Also, pursuant to Article X
of Washington Mutual's Restated Articles of Incorporation and Article VIII of
Washington Mutual's Bylaws, Washington Mutual may, by action of the Washington
Mutual Board, provide indemnification and pay expenses to officers, employees
and agents of Washington Mutual or another corporation, partnership, joint
venture, trust or other enterprise with the same scope and effect as above
described in relation to directors. Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors, officers or
persons controlling Washington Mutual pursuant to the provisions described
above, Washington Mutual has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
(a) The Exhibits to this registration statement are listed in the Index to
Exhibits after the signature page of this Registration Statement.
(b) Registrant has submitted the RSIP and will submit any amendment thereto
to the Internal Revenue Service ("IRS") in a timely manner and will make all
changes required by the IRS in order to qualify the RSIP under the Internal
Revenue Code of 1986, as amended.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of Securities
Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Seattle, State of Washington on this 15th day of
December, 1998.
WASHINGTON MUTUAL, INC.
By: /s/ Kerry K. Killinger
Kerry K. Killinger
President and Chief Executive Officer
Power of Attorney
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Kerry K. Killinger and Fay L. Chapman, or
either of them, his true and lawful attorneys-in-fact and agents, each acting
alone, with full powers of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, each acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirement of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
/s/ Kerry K. Killinger December 15, 1998
- --------------------------------------------
Kerry K. Killinger
Chairman of the Board of Directors,
Chief Executive Officer and President
(Principal Executive Officer)
/s/ William A. Longbrake December 15, 1998
- --------------------------------------------
William A. Longbrake
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
/s/ Richard M. Levy December 15, 1998
- --------------------------------------------
Richard M. Levy
Senior Vice President and Controller
(Principal Accounting Officer)
/s/ Douglas P. Beighle December 15, 1998
- --------------------------------------------
Douglas P. Beighle
Director
- --------------------------------------------
David Bonderman
Director
- --------------------------------------------
J. Taylor Crandall
Director
/s/ Roger H. Eigsti December 15, 1998
- --------------------------------------------
Roger H. Eigsti
Director
- --------------------------------------------
John W. Ellis
Director
/s/ Anne V. Farrell December 15, 1998
- --------------------------------------------
Anne V. Farrell
Director
/s/ Stephen E. Frank December 15, 1998
- --------------------------------------------
Stephen E. Frank
Director
/s/ William P. Gerberding December 15, 1998
- --------------------------------------------
William P. Gerberding
Director
<PAGE>
- --------------------------------------------
Enrique Hernandez, Jr.
Director
/s/ Phillip D. Matthews December 15, 1998
- --------------------------------------------
Phillip D. Matthews
Director
/s/ Samuel B. McKinney December 15, 1998
- --------------------------------------------
Dr. Samuel B. McKinney
Director
/s/ Michael K. Murphy December 15, 1998
- --------------------------------------------
Michael K. Murphy
Director
/s/ William G. Reed, Jr. December 15, 1998
- --------------------------------------------
William G. Reed, Jr.
Director
/s/ Elizabeth A. Sanders December 15, 1998
- --------------------------------------------
Elizabeth A. Sanders
Director
/s/ William D. Schulte December 15, 1998
- --------------------------------------------
William D. Schulte
Director
/s/ James H. Stever December 15, 1998
- --------------------------------------------
James H. Stever
Director
/s/ Willis B. Wood, Jr. December 15, 1998
- --------------------------------------------
Willis B. Wood, Jr.
Director
<PAGE>
The Retirement Savings and Investment Plan. Pursuant to the requirements of
the Securities Act, the trustees of the RSIP have duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Seattle, State of Washington, on December 15, 1998.
WASHINGTON MUTUAL, INC. RETIREMENT
SAVINGS AND INVESTMENT PLAN
By: /s/ Kerry K. Killinger
Kerry K. Killinger
Member, RSIP Administrative Committee
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Exhibit Description Page
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4.1* Rights Agreement, dated October 16, 1990.
4.2* Amendment No. 1 to the Rights Agreement, dated October 31,
1994.
4.3* Supplement to the Rights Agreement, dated November 29, 1994.
4.4 The Registrant agrees to furnish the Securities and Exchange
Commission, upon request, with copies of all instruments
defining rights of holders of long-term debt of the
Registrant and its consolidated subsidiaries.
4.5 Washington Mutual Amended and Restated 1994 Stock Option
Plan. (Incorporated by reference to the Registrant's
Definitive Proxy Statement on Schedule 14A filed on
March 18, 1998, File No. 0-25188.)
4.6 Washington Mutual Restricted Stock Plan. (Incorporated by
reference to Registrant's Definitive Proxy Statement on
Schedule 14A filed March 12, 1997, File No. 0-25188).
4.7* Washington Mutual Employees' Stock Purchase Program.
4.8** Fourth Amendment to the Washington Mutual Employees' Stock
Purchase Program.
4.9** Washington Mutual, Inc. Retirement Savings and Investment Plan.
4.10 Washington Mutual, Inc. WAMU Shares.
4.11 January 1999 WAMU Shares.
5.1 Opinion of Foster Pepper & Shefelman PLLC.
- ------------------
* Incorporated by reference to the Registrant's Current Report on Form 8-K
dated November 29, 1994, File No. 0-25188.
** Incorporated by reference to the Registrant's Current Report on Form 8-K
dated December 22, 1998, File No. 1-14667.
<PAGE>
23.1 Consent of Foster Pepper & Shefelman PLLC. (Included as
part of their Opinion listed as Exhibit 5.1.)
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of PricewaterhouseCoopers LLP.
23.4 Consent of KPMG Peat Marwick LLP.
24 Power of Attorney. (Included on the signature page hereof).
</TABLE>
Exhibit 4.10
WASHINGTON MUTUAL, INC.
WAMU SHARES
<PAGE>
WASHINGTON MUTUAL, INC.
WAMU SHARES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE 1. DEFINITIONS
<S> <C>
1.1 Affiliate..................................................................................... 1
1.2 Board......................................................................................... 1
1.3 Company....................................................................................... 1
1.4 Code.......................................................................................... 1
1.5 Committee..................................................................................... 1
1.6 Date of Exercise.............................................................................. 1
1.7 Disability.................................................................................... 1
1.8 Employee...................................................................................... 1
1.9 Employed...................................................................................... 1
1.10 Employment.................................................................................... 1
1.11 Exchange Act.................................................................................. 1
1.12 Fair Market Value............................................................................. 1
1.13 Full-Time Employee............................................................................ 2
1.14 Option........................................................................................ 2
1.15 Part-Time Employee. ......................................................................... 2
1.16 Participant................................................................................... 2
1.17 Plan.......................................................................................... 2
1.18 Stock......................................................................................... 2
ARTICLE 2. PURPOSE OF PLAN......................................................... 2
ARTICLE 3. ADMINISTRATION......................................................... 2
3.1 Administration of Plan........................................................................ 2
3.2 Discretionary Authority of Committee.......................................................... 3
ARTICLE 4. AUTOMATIC GRANTS TO EMPLOYEES
4.1 Participation................................................................................. 3
4.2 Grant......................................................................................... 4
4.3 Vesting of Options............................................................................ 4
4.4 Expiration of Options......................................................................... 4
4.5 No Agreements................................................................................. 4
ARTICLE 5. STOCK SUBJECT TO PLAN
5.1 Source of Shares.............................................................................. 4
5.2 Maximum Number of Shares...................................................................... 5
5.3 Forfeitures................................................................................... 5
ARTICLE 6. EXERCISE OF OPTIONS
6.1 Exercise Price................................................................................ 5
<PAGE>
6.2 Right to Exercise............................................................................. 5
6.3 Maximum Exercise Period....................................................................... 5
6.4 Nontransferability............................................................................ 5
6.5 Minimum Exercise.............................................................................. 5
ARTICLE 7. METHOD OF EXERCISE
7.1 Exercise...................................................................................... 5
7.2 Payment....................................................................................... 5
7.3 Federal Withholding Tax Requirements.......................................................... 5
7.4 Shareholder Rights............................................................................ 6
ARTICLE 8. ADJUSTMENT UPON CORPORATE CHANGES
8.1 Adjustments to Shares......................................................................... 6
8.2 Substitution of Options on Merger or Acquisition.............................................. 6
8.3 Effect of Certain Transactions................................................................ 6
8.4 No Preemptive Rights.......................................................................... 7
8.5 Fractional Shares............................................................................. 7
ARTICLE 9. COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES
9.1 General....................................................................................... 7
9.2 Representations by Participants............................................................... 7
ARTICLE 10. GENERAL PROVISIONS
10.1 Effect on Employment.......................................................................... 8
10.2 Unfunded Plan................................................................................. 8
10.3 Rules of Construction......................................................................... 8
10.4 Governing Law................................................................................. 8
10.5 Amendment..................................................................................... 8
10.6 Effective Date of Plan........................................................................ 8
</TABLE>
<PAGE>
WASHINGTON MUTUAL, INC.
WAMU SHARES
ARTICLE 1. DEFINITIONS
1.1 Affiliate. A "parent corporation," as defined in section 424(e) of the
Code, or "subsidiary corporation," as defined in section 424(f) of the Code, of
the Company.
1.2 Board. The board of directors of the Company.
1.3 Company. Washington Mutual, Inc. and its successors.
1.4 Code. The Internal Revenue Code of 1986, as amended.
1.5 Committee. A committee to which the Board has delegated the authority
to administer the Plan.
1.6 Date of Exercise1. The date that the Option exercise price is received
by the Company or the person which the Company has designated as its agent for
administering the exercise of Options under the Plan.
1.7 Disability. Eligibility for long-term disability benefits under a
long-term disability program sponsored by the Company or, in the case of an
Employee not eligible for such a program because of insufficient hours of
Employment, a condition which the Committee or its designee determines is
equivalent to a disability under such a program.
1.8 Employee. An individual employed by the Company or an Affiliate, except
that the term "Employee" shall not include any of the following officers: the
Chairman of the Board, the President, the Chief Executive Officer, or any
Executive Vice President, Senior Vice President or First Vice President of the
Company or an affiliate.
1.9 Employed. Performing services for compensation for the Company or an
Affiliate as an Employee of the Company or an Affiliate.
1.10 Employment. Performance of services for compensation for the Company
or an Affiliate as an employee of the Company or an Affiliate.
1.11 Exchange Act. The Securities Exchange Act of 1934, as amended.
1.12 Fair Market Value. On any given date, the applicable description
below:
(a) The closing price of the Stock as traded on the National Association of
Securities Dealers National Market System, as published in The New York Times or
The Wall Street Journal, on the business day immediately preceding the date as
of which Fair Market Value is being determined.
<PAGE>
(b) If the Stock is not traded as described in subparagraph (a), Fair
Market Value shall be the value determined in good faith by the Committee or the
Board.
1.13 Full-Time Employee. An Employee who regularly is scheduled to work at
least 40 hours per week.
1.14 Option. The right that is granted hereunder to a Participant to
purchase from the Company a stated number of shares of Stock at the price set
forth in an Agreement. An Option includes only options which are not qualified
as "incentive stock options" within the meaning of section 422 of the Code.
1.15 Part-Time Employee. An Employee other than a Full-Time Employee.
1.16 Participant. An Employee of the Company or of an Affiliate who
satisfies the requirements of Article 4 for an automatic grant.
1.17 Plan. The Washington Mutual, Inc. WAMU Shares program set forth
herein.
1.18 Stock. The common stock of the Company.
ARTICLE 2. PURPOSE OF PLAN
The purpose of the Plan is to provide a performance incentive and to
encourage stock ownership by employees of the Company and its Affiliates, and to
align the interests of such individuals with those of the Company, its
Affiliates and its shareholders. It is intended that Participants may acquire or
increase their proprietary interests in the Company and be encouraged to remain
in the employ of the Company or of its Affiliates. The proceeds received by the
Company from the sale of Stock pursuant to this Plan may be used for general
corporate purposes.
ARTICLE 3. ADMINISTRATION
3.1 Administration of Plan. The Plan shall be administered by the
Committee. The Committee shall have complete authority to (i) interpret all
provisions of this Plan; (ii) determine in its sole discretion eligibility for
participation in the Plan; (iii) adopt, amend, and rescind rules for Plan
administration; and (iv) make all determinations it deems advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Committee shall not be construed as limiting any power or authority of
the Committee. Any decision made or action taken by the Committee to administer
the Plan shall be final and conclusive. No member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any Agreement
or Option. The Company shall bear all expenses of Plan administration.
<PAGE>
3.2 Discretionary Authority of Committee. Except to the extent provided
otherwise, the Committee shall have full discretionary power, subject to, and
within the limits of, the express provisions of the Plan:
(a) To construe and interpret the Plan and Options granted hereunder, and
to establish, amend, and revoke rules and regulations for administration. The
Committee, in the exercise of this power, may correct any defect or supply any
omission, or reconcile any inconsistency in the Plan, or in any grant of an
Option, in the manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective. In exercising this power the Committee may retain
counsel at the expense of the Company. All decisions and determinations by the
Committee in exercising this power shall be final and binding upon the Company
and the Participants.
(b) To accelerate the time at which an Option may be exercised.
(c) Notwithstanding the maximum exercise period provided in Article 4 and
Section 6.3, the Committee may extend the exercise period of an Option if the
Committee determines that a Participant will be unable to exercise such Option
within its stated exercise period on account of an unforeseeable hardship.
(d) To authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted
hereunder.
(e) To interpret the Plan and make any determinations that are necessary or
desirable in the administration of the Plan.
(f) To determine, in its sole discretion, eligibility for participation in
the Plan in a manner consistent with the purposes of the Plan.
(g) To exercise such powers and to make all other determinations deemed
necessary or expedient to promote the best interests of the Company with respect
to the Plan.
ARTICLE 4. AUTOMATIC GRANTS TO EMPLOYEES
4.1 Participation. Effective October 1, 1997, the following Employees shall
receive a stock option grant described in Section 4.2:
(a) Full-Time Employees. An Employee who is a Full-Time Employee as of
September 1, 1997; or
(b) Part-Time Employees. An Employee who is a Part-Time Employee as of
September 1, 1997 and who worked at least one hour for the Company between
January 1, 1997 and August 31, 1997, inclusive.
<PAGE>
4.2. Grant. Effective September 1, 1997, any Employee described in Section
4.1(a) shall be granted an Option to purchase 100 shares of Stock. Effective
September 1, 1997, every Employee described in Section 4.1(b) shall be granted
an Option to purchase 50 shares of Stock. However, if any Employee is on
approved leave status as of September 1, 1997, the grant of the Option which
otherwise would be made hereunder shall not be effective until the date such
Employee returns to active Employment.
4.3 Vesting of Options. Options granted under this Article 4 shall be
vested and fully exercisable as of September 1, 1999, providing such Option has
not expired prior to the time of exercise. In addition, Options shall be vested
and fully exercisable upon termination of Employment because of Disability,
death or retirement within the meaning of Sections 4.4(b), (c) and (d)
respectively.
4.4 Expiration of Options. Options granted to an Employee under this
Article 4 shall expire as of the earliest to occur of the following:
(a) 5:30 p.m. (Pacific Daylight Time) on September 2, 2002; provided,
however, that (i) if the Employee is on approved leave status as of September 2,
2002, then the Employee's Options shall expire at 5:30 p.m. (Pacific Daylight
Time) on the date on which the Employee returns to active Employment, and (ii)
if the Employee's Employment terminates for one of the reasons set forth in
Section 4.4(b) or 4.4(c) below, then the Employee's Options shall expire at the
end of the twelve-month period specified in Section 4.4(b) or 4.4(c), as
appropriate;
(b) Twelve months after the termination of the Employee's Employment by
reason of the Employee's Disability;
(c) Twelve months after the termination of the Employee's Employment by
reason of the death of the Employee;
(d) Twelve months after the termination of the Employee's Employment by
reason of the Employee's retirement from Employment with the Company or its
Affiliates without reemployment by the Company or one of its Affiliates and
after attaining age 65; or
(e) Thirty days after the date of the termination of the Employee's
Employment for any reason not described in Section 4.4(b), (c) or (d),
regardless of whether the Employee returns to Employment subsequent to such
termination.
4.5 No Agreements. No agreements shall be issued with respect to options
issued under this Article 4.
ARTICLE 5. STOCK SUBJECT TO PLAN
5.1 Source of Shares. Upon the exercise of an Option, the Company shall
deliver to the Participant authorized but unissued Stock.
<PAGE>
5.2 Maximum Number of Shares. The maximum aggregate number of shares of
Stock that may be issued pursuant to the exercise of Options is 2,200,000 shares
of stock, subject to increases and adjustments as provided in Article 8.
5.3 Forfeitures. If any Option granted hereunder expires or terminates for
any reason without having been exercised in full, the unpurchased shares subject
thereto shall be available for issuance under this Plan in connection with
another Option.
ARTICLE 6. EXERCISE OF OPTIONS
6.1 Exercise Price. The exercise price of an Option shall be $59.875, which
is 100% of the Fair Market Value of a share of Stock on September 1, 1997.
6.2 Right to Exercise. An Option granted under this Plan shall be
exercisable as set forth in Article 4.
6.3 Maximum Exercise Period. Except as provided in Sections 3.2(c) and
4.4(a), no Option shall be exercisable after the expiration of five years from
the date it was granted.
6.4 Nontransferability. Any Option granted under this Plan shall not be
transferable except by will or by the laws of descent and distribution. Only the
Participant to whom an Option is granted may exercise such Option, unless he is
deceased. No right or interest of a Participant in any Option shall be liable
for, or subject to, any lien, obligation or liability of such Participant.
6.5 Minimum Exercise. An Option may be exercised in whole or in part, but
the number of shares as to which the Option is exercised must be a multiple of
25.
ARTICLE 7. METHOD OF EXERCISE
7.1 Exercise. An Option granted hereunder shall be deemed to have been
exercised on the Date of Exercise. Subject to the provisions of Articles 4, 6,
7, 8 and 9, an Option may be exercised in whole or in part at such times and in
compliance with such requirements as the Committee shall determine.
7.2 Payment. Unless otherwise provided by the Agreement or by rules or
procedures adopted by the Committee, payment of the Option price shall be
effected by payment in cash or by any other method approved by the Committee and
communicated to Participants from time to time.
7.3 Federal Withholding Tax Requirements. Upon exercise of an Option by a
Participant who is an employee of the Company or an Affiliate, the Participant
shall, upon notification of the amount due and prior to or concurrently with the
delivery of the certificates representing the shares, pay to the Company or its
designee amounts necessary to satisfy
<PAGE>
applicable federal, state and local withholding tax requirements or shall
otherwise make arrangements satisfactory to the Company for such requirements.
7.4 Shareholder Rights. No Participant shall have any rights as a
stockholder with respect to shares subject to his Option prior to the Date of
Exercise of such Option.
ARTICLE 8. ADJUSTMENT UPON CORPORATE CHANGES
8.1 Adjustments to Shares. The maximum number and kind of shares of stock
with respect to which Options hereunder may be granted and which are the subject
of outstanding Options shall be adjusted by way of increase or decrease as the
Committee determines (in its sole discretion) to be appropriate, in the event
that:
(a) the Company or an Affiliate effects one or more stock dividends, stock
splits, reverse stock splits, subdivisions, consolidations or other similar
events;
(b) the Company or an Affiliate engages in a transaction to which section
424 of the Code applies; or
(c) there occurs any other event which in the judgment of the Committee
necessitates such action.
Provided, however, that if an event described in paragraph (a) or (b) occurs,
the Committee shall make adjustments to the limits specified in Section 4.2 that
are proportionate to the modifications of the Stock that are on account of such
corporate changes.
8.2 Substitution of Options on Merger or Acquisition. The Committee may
grant Options in substitution for stock awards, stock options, stock
appreciation rights or similar awards held by an individual who becomes an
employee of the Company or an Affiliate in connection with a transaction to
which section 424(a) of the Code applies. The terms of such substituted Options
shall be determined by the Committee in its sole discretion, subject only to the
limitations of Articles 4, 5 and 6.
8.3 Effect of Certain Transactions. Upon a merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation of
the Company, as a result of which the shareholders of the Company receive cash,
stock or other property in exchange for their shares of Stock, any Option
granted hereunder shall terminate, unless the Committee elects to convert all
Options hereunder into options to purchase stock of an acquiring corporation. If
the Committee so elects to convert the Options, the amount and price of such
converted options shall be determined by adjusting the amount and price of the
Options granted hereunder in the same proportion as used for determining the
number of shares of stock of the acquiring corporation the holders of the Stock
receive in such merger, consolidation, acquisition of property or stock,
separation or reorganization, and the vesting schedule set forth in the
Agreement shall continue to apply to the converted options. In addition, the
Committee, in its sole discretion, may grant Participants the right, immediately
prior to any such merger, consolidation, acquisition of
<PAGE>
property or stock, separation, reorganization or liquidation to exercise their
Options in whole or in part whether or not the vesting requirements otherwise
specified in this Plan have been satisfied.
8.4 No Preemptive Rights. The issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for cash
or property, or for labor or services rendered, either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, outstanding Options.
8.5 Fractional Shares. Only whole shares of Stock may be acquired through
the exercise of an Option. The Company will return to the Participant any amount
tendered in the exercise of an Option remaining after the maximum number of
whole shares have been purchased.
ARTICLE 9. COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
9.1 General. No Option shall be exercisable, no Stock shall be issued, no
certificates for shares of Stock shall be delivered, and no payment shall be
made under this Plan except in compliance with all federal and state laws and
regulations (including, without limitation, withholding tax requirements),
federal and state securities laws and regulations and the rules of all national
securities exchanges or self-regulatory organizations on which the Company's
shares may be listed. The Company shall have the right to rely on an opinion of
its counsel as to such compliance. Any certificate issued to evidence shares of
Stock for which an Option is exercised may bear such legends and statements as
the Committee upon advice of counsel may deem advisable to assure compliance
with federal and state laws and regulations. No Option shall be exercisable, no
Stock shall be issued, no certificate for shares shall be delivered and no
payment shall be made under this Plan until the Company has obtained such
consent or approval as the Committee may deem advisable from any regulatory
bodies having jurisdiction over such matters.
9.2 Representations by Participants. As a condition to the exercise of an
Option, the Company may require a Participant to represent and warrant at the
time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares,
if, in the opinion of counsel for the Company, such representation is required
by any relevant provision of the laws referred to in Section 9.1. At the option
of the Company, a stop transfer order against any shares of stock may be placed
on the official stock books and records of the Company, and a legend indicating
that the stock may not be pledged, sold or otherwise transferred unless an
opinion of counsel was provided (concurred in by counsel for the Company) and
stating that such transfer is not in violation of any applicable law or
regulation may be stamped on the stock certificate in order to assure exemption
from registration. The Committee may also require such other action or agreement
by the Participants as may from time to time be necessary to comply with the
federal and state securities laws. This
<PAGE>
provision shall not obligate the Company or any Affiliate to undertake
registration of options or stock hereunder.
ARTICLE 10. GENERAL PROVISIONS
10.1 Effect on Employment. Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or an Affiliate or in any way affect any right and power of the
Company or an Affiliate to terminate the employment of any employee at any time
with or without assigning a reason therefor.
10.2 Unfunded Plan. The Plan, insofar as it provides for grants, shall be
unfunded, and the Company shall not be required to segregate any assets that may
at any time be represented by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon contractual obligations that may be created hereunder. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.
10.3 Rules of Construction. Headings are given to the articles and sections
of this Plan solely as a convenience to facilitate reference. The masculine
gender when used herein refers to both masculine and feminine. The reference to
any statute, regulation or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
10.4 Governing Law. The laws of the State of Washington shall apply to all
matters arising under this Plan, to the extent that federal law does not apply.
10.5 Amendment. The Board may amend or terminate this Plan at any time;
provided, however, an amendment that would have a material adverse effect on the
rights of a Participant under an outstanding Option is not valid with respect to
such Option without the Participant's consent. Provided further that the
shareholders of the Company must approve any amendment:
10.6 Effective Date of Plan. This Plan is effective as of September 1,
1997.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed on this
the 15th day of October, 1997, but to be effective on September 1, 1997.
WASHINGTON MUTUAL, INC.
By: /s/ M. Lynn Ryder
Its: Senior Vice President
Exhibit 4.11
JANUARY 1999 WAMU SHARES
<PAGE>
JANUARY 1999 WAMU SHARES
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE 1. DEFINITIONS............................................................................................3
1.1 AFFILIATE................................................................................................3
1.2 BOARD....................................................................................................3
1.3 COMPANY..................................................................................................3
1.4 CODE.....................................................................................................3
1.5 COMMITTEE................................................................................................3
1.6 DATE OF EXERCISE.........................................................................................3
1.7 DISABILITY...............................................................................................3
1.8 EMPLOYEE.................................................................................................3
1.9 EMPLOYED.................................................................................................3
1.10 EMPLOYMENT...............................................................................................3
1.11 EXCHANGE ACT.............................................................................................4
1.12 FULL-TIME EMPLOYEE.......................................................................................4
1.13 OPTION...................................................................................................4
1.14 PART-TIME EMPLOYEE.......................................................................................4
1.15 PARTICIPANT..............................................................................................4
1.16 PLAN.....................................................................................................4
1.17 STOCK....................................................................................................4
ARTICLE 2. PURPOSE OF PLAN........................................................................................4
ARTICLE 3. ADMINISTRATION.........................................................................................4
3.1 ADMINISTRATION OF PLAN...................................................................................4
3.2 DISCRETIONARY AUTHORITY OF COMMITTEE.....................................................................5
ARTICLE 4. AUTOMATIC GRANTS TO EMPLOYEES..........................................................................5
4.1 PARTICIPATION............................................................................................5
4.2 GRANT....................................................................................................6
4.3 VESTING OF OPTIONS.......................................................................................6
4.4 EXPIRATION OF OPTIONS....................................................................................6
4.5 NO AGREEMENTS............................................................................................7
4.6 ADDITIONAL GRANTS........................................................................................7
ARTICLE 5. STOCK SUBJECT TO PLAN..................................................................................7
5.1 SOURCE OF SHARES.........................................................................................7
5.2 MAXIMUM NUMBER OF SHARES.................................................................................7
5.3 FORFEITURES..............................................................................................7
ARTICLE 6. EXERCISE OF OPTIONS....................................................................................7
6.1 EXERCISE PRICE...........................................................................................7
6.2 RIGHT TO EXERCISE........................................................................................7
6.3 MAXIMUM EXERCISE PERIOD..................................................................................7
6.4 NONTRANSFERABILITY.......................................................................................7
6.5 MINIMUM EXERCISE.........................................................................................8
ARTICLE 7. METHOD OF EXERCISE.....................................................................................8
7.1 EXERCISE.................................................................................................8
7.2 PAYMENT..................................................................................................8
7.3 FEDERAL WITHHOLDING TAX REQUIREMENTS.....................................................................8
7.4 SHAREHOLDER RIGHTS.......................................................................................8
ARTICLE 8. ADJUSTMENT UPON CORPORATE CHANGES......................................................................8
8.1 ADJUSTMENTS TO SHARES....................................................................................8
8.2 SUBSTITUTION OF OPTIONS ON MERGER OR ACQUISITION.........................................................9
8.3 EFFECT OF CERTAIN TRANSACTIONS...........................................................................9
8.4 NO PREEMPTIVE RIGHTS.....................................................................................9
8.5 FRACTIONAL SHARES........................................................................................9
ARTICLE 9. COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES..................................................9
9.1 GENERAL..................................................................................................9
9.2 REPRESENTATIONS BY PARTICIPANTS.........................................................................10
ARTICLE 10. GENERAL PROVISIONS...................................................................................10
10.1 EFFECT ON EMPLOYMENT.................................................................................10
10.2 UNFUNDED PLAN........................................................................................10
10.3 RULES OF CONSTRUCTION................................................................................11
10.4 GOVERNING LAW........................................................................................11
10.5 AMENDMENT............................................................................................11
10.6 EFFECTIVE DATE OF PLAN...............................................................................11
<PAGE>
JANUARY 1999 WAMU SHARES
DEFINITIONS
1.1 Affiliate. A "parent corporation," as defined in Section 424(e) of the
Code, or "subsidiary corporation," as defined in Section 424(f) of the Code, of
the Company.
1.2 Board. The board of directors of the Company.
1.3 Company. Washington Mutual, Inc. and its successors.
1.4 Code. The Internal Revenue Code of 1986, as amended.
1.5 Committee. The Compensation and Stock Option Committee of the Board, or
such other committee to which the Board has delegated the authority to
administer the Plan.
1.6 Date of Exercise. The date that the Option exercise price is received
by the Company or the person which the Company has designated as its agent for
administering the exercise of Options under the Plan.
1.7 Disability. Eligibility for long-term disability benefits under a
long-term disability program sponsored by the Company or, in the case of an
Employee not eligible for such a program because of insufficient hours of
Employment, a condition which the Committee or its designee determines is
equivalent to a disability under such a program.
1.8 Employee. An individual Employed by the Company or an Affiliate and
paid on the payroll of the Company of an Affiliate, except that the term
"Employee" shall not include any of the following officers: the Chairman of the
Board, the President, the Chief Executive Officer, or any Executive Vice
President, Senior Vice President or First Vice President of the Company or an
affiliate.
1.9 Employed. Performing services for compensation for the Company or an
Affiliate as an Employee of the Company or an Affiliate.
1.10 Employment. Performance of services for compensation for the Company
or an Affiliate as an Employee of the Company or an Affiliate.
1.11 Exchange Act. The Securities Exchange Act of 1934, as amended.
1.12 Full-Time Employee. An Employee who regularly is scheduled to work at
least 40 hours per week.
1.13 Option. The right that is granted hereunder to a Participant to
purchase from the Company a stated number of shares of Stock at the price set
forth in the Plan. An Option includes only options which are not qualified as
"incentive stock options" within the meaning of Section 422 of the Code.
1.14 Part-Time Employee. An Employee other than a Full-Time Employee.
1.15 Participant. An Employee of the Company or of an Affiliate who
satisfies the requirements of Article 4 for an automatic grant.
<PAGE>
1.16 Plan. January 1999 WAMU Shares program set forth herein.
1.17 Stock. The common stock of the Company.
PURPOSE OF PLAN
The purpose of the Plan is to provide a performance incentive and to
encourage stock ownership by employees of the Company and its Affiliates, and to
align the interests of such individuals with those of the Company, its
Affiliates and its shareholders. It is intended that Participants may acquire or
increase their proprietary interests in the Company and be encouraged to remain
in the employ of the Company or of its Affiliates. The proceeds received by the
Company from the sale of Stock pursuant to this Plan may be used for general
corporate purposes.
ADMINISTRATION
3.1 Administration of Plan. The Plan shall be administered by the
Committee. The Committee shall have complete authority to (i) interpret all
provisions of this Plan; (ii) determine in its sole discretion eligibility for
participation in the Plan; (iii) adopt, amend, and rescind rules for Plan
administration; and (iv) make all determinations it deems advisable for the
administration of this Plan. The express grant in the Plan of any specific power
to the Committee shall not be construed as limiting any power or authority of
the Committee. Any decision made or action taken by the Committee to administer
the Plan shall be final and conclusive. No member of the Committee shall be
liable for any act done in good faith with respect to this Plan or any Option.
The Company shall bear all expenses of Plan administration.
3.2 Discretionary Authority of Committee. Except to the extent provided
otherwise, the Committee shall have full discretionary power, subject to, and
within the limits of, the express provisions of the Plan:
(a) To construe and interpret the Plan and Options granted hereunder, and
to establish, amend, and revoke rules and regulations for administration. The
Committee, in the exercise of this power, may correct any defect or supply any
omission, or reconcile any inconsistency in the Plan, or in any grant of an
Option, in the manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective. In exercising this power the Committee may retain
counsel at the expense of the Company. All decisions and determinations by the
Committee in exercising this power shall be final and binding upon the Company
and the Participants.
(b) To accelerate the time at which an Option may be exercised.
(c) Notwithstanding the maximum exercise period provided in Article 4 and
Section 6.3, the Committee may extend the exercise period of an Option if the
Committee determines that a Participant will be unable to exercise such Option
within its stated exercise period on account of an unforeseeable hardship.
<PAGE>
(d) To authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option previously granted
hereunder.
(e) To interpret the Plan and make any determinations that are necessary or
desirable in the administration of the Plan.
(f) To determine, in its sole discretion, eligibility for participation in
the Plan in a manner consistent with the purposes of the Plan.
(g) To exercise such powers and to make all other determinations deemed
necessary or expedient to promote the best interests of the Company with respect
to the Plan.
AUTOMATIC GRANTS TO EMPLOYEES
4.1 Participation. Effective January 4, 1999, the following Employees shall
receive a stock option grant described in Section 4.2:
(a) Full-Time Employees. An Employee who is a Full-Time Employee as of
January 4, 1999; or
(b) Part-Time Employees. An Employee who is a Part-Time Employee as of
January 4, 1999, and who worked at least one hour for the Company between
January 1, 1998, and January 4, 1999, inclusive.
4.2 Grant. Effective January 4, 1999, any Employee described in Section
4.1(a) shall be granted an Option to purchase 100 shares of Stock. Effective
January 4, 1999, every Employee described in Section 4.1(b) shall be granted an
Option to purchase 50 shares of Stock. However, if any Employee is on approved
leave status as of January 4, 1999, the grant of the Option which otherwise
would be made hereunder shall not be effective until the date such Employee
returns to active Employment.
4.3 Vesting of Options. Options granted under this Article 4 shall be
vested and fully exercisable as of January 4, 2001, providing such Option has
not expired prior to the time of exercise. In addition, Options shall be vested
and fully exercisable upon termination of Employment because of Disability,
death or retirement within the meaning of Sections 4.4(b), (c) and (d)
respectively.
4.4 Expiration of Options. Options granted to an Employee under this
Article 4 shall expire as of the earliest to occur of the following:
(a) 5:30 p.m. (Pacific Daylight Time) on January 5, 2004; provided,
however, that (i) if the Employee is on approved leave status as of January 5,
2004, then the Employee's Options shall expire at 5:30 p.m. (Pacific Daylight
Time) on the date on which the Employee returns to active Employment, and (ii)
if the Employee's Employment terminates for one of the reasons set forth in
Section 4.4(b) or 4.4(c) below, then the Employee's Options shall expire at the
end of the twelve-month period specified in Section 4.4(b) or 4.4(c), as
appropriate;
<PAGE>
(b) Twelve months after the termination of the Employee's Employment by
reason of the Employee's Disability;
(c) Twelve months after the termination of the Employee's Employment by
reason of the death of the Employee;
(d) Twelve months after the termination of the Employee's Employment by
reason of the Employee's retirement from Employment with the Company or its
Affiliates without reemployment by the Company or one of its Affiliates and
after attaining age 65; or
(e) Thirty days after the date of the termination of the Employee's
Employment for any reason not described in Section 4.4(b), (c) or (d),
regardless of whether the Employee returns to Employment subsequent to such
termination.
4.5 No Agreements. No agreements shall be issued with respect to options
issued under this Article 4.
4.6 Additional Grants. The Board may grant additional options by written
authorization containing the date for determining the eligible employees, the
exercise price, and the dates on which options vest and expire. All other terms
of this Plan shall apply to grants under this Section 4.6.
STOCK SUBJECT TO PLAN
5.1 Source of Shares. Upon the exercise of an Option, the Company shall
deliver to the Participant authorized but unissued Stock.
5.2 Maximum Number of Shares. The maximum aggregate number of shares of
Stock that may be issued pursuant to the exercise of Options is 3,300,000 shares
of stock, subject to increases and adjustments as provided in Article 8.
5.3 Forfeitures. If any Option granted hereunder expires or terminates for
any reason without having been exercised in full, the unpurchased shares subject
thereto shall be available for issuance under this Plan in connection with
another Option.
EXERCISE OF OPTIONS
6.1 Exercise Price. The exercise price of an Option shall be $32.875.
6.2 Right to Exercise. An Option granted under this Plan shall be
exercisable as set forth in Article 4.
6.3 Maximum Exercise Period. Except as provided in Sections 3.2(c) and
4.4(a), no Option shall be exercisable after the expiration of five years from
the date it was granted.
6.4 Nontransferability. Any Option granted under this Plan shall not be
transferable except by will or by the laws of descent and distribution. Only the
Participant to whom an Option is granted may exercise such Option, unless he is
deceased. No right or interest of a Participant in any Option shall be liable
for, or subject to, any lien, obligation or liability of such Participant.
<PAGE>
6.5 Minimum Exercise. An Option may be exercised in whole or in part, but
the number of shares as to which the Option is exercised must be a multiple of
25.
METHOD OF EXERCISE
7.1 Exercise. An Option granted hereunder shall be deemed to have been
exercised on the Date of Exercise. Subject to the provisions of Articles 4, 6,
7, 8 and 9, an Option may be exercised in whole or in part at such times and in
compliance with such requirements as the Committee shall determine.
7.2 Payment. Unless otherwise provided by the Plan or by rules or
procedures adopted by the Committee, payment of the Option price shall be
effected by payment in cash or by any other method approved by the Committee and
communicated to Participants from time to time.
7.3 Federal Withholding Tax Requirements. Upon exercise of an Option by a
Participant who is an employee of the Company or an Affiliate, the Participant
shall, upon notification of the amount due and prior to or concurrently with the
delivery of the certificates representing the shares, pay to the Company or its
designee amounts necessary to satisfy applicable federal, state and local
withholding tax requirements or shall otherwise make arrangements satisfactory
to the Company for such requirements.
7.4 Shareholder Rights. No Participant shall have any rights as a
stockholder with respect to shares subject to his Option prior to the Date of
Exercise of such Option.
ADJUSTMENT UPON CORPORATE CHANGES
8.1 Adjustments to Shares. The maximum number and kind of shares of stock
with respect to which Options hereunder may be granted and which are the subject
of outstanding Options shall be adjusted by way of increase or decrease as the
Committee determines (in its sole discretion) to be appropriate, in the event
that:
(a) the Company or an Affiliate effects one or more stock dividends, stock
splits, reverse stock splits, subdivisions, consolidations or other similar
events;
(b) the Company or an Affiliate engages in a transaction to which Section
424 of the Code applies; or
(c) there occurs any other event which in the judgment of the Committee
necessitates such action.
Provided, however, that if an event described in paragraph (a) or (b) occurs,
the Committee shall make adjustments to the limits specified in Section 4.2 that
are proportionate to the modifications of the Stock that are on account of such
corporate changes.
<PAGE>
8.2 Substitution of Options on Merger or Acquisition. The Committee may
grant Options in substitution for stock awards, stock options, stock
appreciation rights or similar awards held by an individual who becomes an
employee of the Company or an Affiliate in connection with a transaction to
which Section 424(a) of the Code applies. The terms of such substituted Options
shall be determined by the Committee in its sole discretion, subject only to the
limitations of Articles 4, 5 and 6.
8.3 Effect of Certain Transactions. Upon a merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation of
the Company, as a result of which the shareholders of the Company receive cash,
stock or other property in exchange for their shares of Stock, any Option
granted hereunder shall terminate, unless the Committee elects to convert all
Options hereunder into options to purchase stock of an acquiring corporation. If
the Committee so elects to convert the Options, the amount and price of such
converted options shall be determined by adjusting the amount and price of the
Options granted hereunder in the same proportion as used for determining the
number of shares of stock of the acquiring corporation the holders of the Stock
receive in such merger, consolidation, acquisition of property or stock,
separation or reorganization, and the vesting schedule set forth in the Plan
shall continue to apply to the converted options. In addition, the Committee, in
its sole discretion, may grant Participants the right, immediately prior to any
such merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to exercise their Options in whole or in part
whether or not the vesting requirements otherwise specified in this Plan have
been satisfied.
8.4 No Preemptive Rights. The issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for cash
or property, or for labor or services rendered, either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, outstanding Options.
8.5 Fractional Shares. Only whole shares of Stock may be acquired through
the exercise of an Option. The Company will return to the Participant any amount
tendered in the exercise of an Option remaining after the maximum number of
whole shares have been purchased.
COMPLIANCE WITH LAW AND
APPROVAL OF REGULATORY BODIES
9.1 General. No Option shall be exercisable, no Stock shall be issued, no
certificates for shares of Stock shall be delivered, and no payment shall be
made under this Plan except in compliance with all federal and state laws and
regulations (including, without limitation, withholding tax requirements),
federal and state securities laws and regulations and the rules of all national
securities exchanges or self-regulatory organizations on which the Company's
shares may be listed. The Company shall have the right to rely on an opinion of
its counsel as to such
<PAGE>
compliance. Any certificate issued to evidence shares of Stock for which an
Option is exercised may bear such legends and statements as the Committee upon
advice of counsel may deem advisable to assure compliance with federal and state
laws and regulations. No Option shall be exercisable, no Stock shall be issued,
no certificate for shares shall be delivered and no payment shall be made under
this Plan until the Company has obtained such consent or approval as the
Committee may deem advisable from any regulatory bodies having jurisdiction over
such matters.
9.2 Representations by Participants. As a condition to the exercise of an
Option, the Company may require a Participant to represent and warrant at the
time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares,
if, in the opinion of counsel for the Company, such representation is required
by any relevant provision of the laws referred to in Section 9.1. At the option
of the Company, a stop transfer order against any shares of stock may be placed
on the official stock books and records of the Company, and a legend indicating
that the stock may not be pledged, sold or otherwise transferred unless an
opinion of counsel was provided (concurred in by counsel for the Company) and
stating that such transfer is not in violation of any applicable law or
regulation may be stamped on the stock certificate in order to assure exemption
from registration. The Committee may also require such other action or agreement
by the Participants as may from time to time be necessary to comply with the
federal and state securities laws. This provision shall not obligate the Company
or any Affiliate to undertake registration of options or stock hereunder.
GENERAL PROVISIONS
10.1 Effect on Employment. Neither the adoption of this Plan, its
operation, nor any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the employ of
the Company or an Affiliate or in any way affect any right and power of the
Company or an Affiliate to terminate the employment of any employee at any time
with or without assigning a reason therefor.
10.2 Unfunded Plan. The Plan, insofar as it provides for grants, shall be
unfunded, and the Company shall not be required to segregate any assets that may
at any time be represented by grants under this Plan. Any liability of the
Company to any person with respect to any grant under this Plan shall be based
solely upon contractual obligations that may be created hereunder. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.
10.3 Rules of Construction. Headings are given to the articles and sections
of this Plan solely as a convenience to facilitate reference. The masculine
gender when used herein refers to both masculine and feminine. The reference to
any statute, regulation or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
10.4 Governing Law. The laws of the State of Washington shall apply to all
matters arising under this Plan, to the extent that federal law does not apply.
<PAGE>
10.5 Amendment. The Board may amend or terminate this Plan at any time;
provided, however, an amendment that would have a material adverse effect on the
rights of a Participant under an outstanding Option is not valid with respect to
such Option without the Participant's consent.
10.6 Effective Date of Plan. This Plan is effective as of January 4, 1999.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed on this
the 22nd day of December, 1998, but to be effective on January 4, 1999.
WASHINGTON MUTUAL, INC.
By: /s/ M. Lynn Ryder
Its: Senior Vice President
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[Letterhead of
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, WA 98101-3299]
December 22, 1998
Board of Directors
Washington Mutual, Inc.
1201 Third Avenue
Seattle, Washington 98101
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by Washington Mutual, Inc., a Washington corporation
(the "Company"), with the Securities and Exchange Commission in connection with
the registration under the Securities Act of 1933, as amended, of an aggregate
of 20,737,855 (the "Shares") of the Company's common stock, no par value (the
"Common Stock") issuable pursuant to employee benefit plans of the Company
(collectively, the "Plans"), and other securities as follows: (i) 12,000,000
shares of the Company's common stock, no par value (the "Common Stock") reserved
for issuance pursuant to the Washington Mutual Amended and Restated 1994 Stock
Option Plan; (ii) 1,050,000 shares of Common Stock reserved for issuance
pursuant to the Washington Mutual Restricted Stock Plan; (iii) 7,855 shares of
Common Stock reserved for issuance pursuant to, the Washington Mutual Employees'
Stock Purchase Program; (iv) 3,300,000 shares of Common Stock reserved for
issuance pursuant to Washington Mutual, Inc. WAMU Shares; (v) 3,300,000 shares
of Common Stock reserved for issuance pursuant to January 1999 WAMU Shares; (vi)
1,080,000 shares of Common Stock reserved for issuance pursuant to the
Washington Mutual, Inc. Retirement Savings and Investment Plan (the "RSIP"); and
(vii) an indeterminate number of interests in the RSIP. We have examined the
Registration Statement and such documents and records as we deem necessary for
the purpose of this opinion.
Based on the foregoing, we are of the opinion that the Shares when issued
in conformance with the terms and conditions of the Plans, will be legally
issued, fully paid and nonassessable under the Washington Business Corporations
Act.
<PAGE>
Board of Directors
Washington Mutual, Inc.
December 22, 1998
Page 2
We hereby consent to the filing of this Opinion as an Exhibit to the
Registration Statement and to the reference to our firm in the Registration
Statement under the caption entitled "Interests of Named Experts and Counsel."
Very truly yours,
/s/ Foster Pepper & Shefelman PLLC
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Washington Mutual, Inc. on Form S-8 of our report dated February 20, 1998
appearing in the Annual Report on Form 10-K, as amended by Forms 10-K/A dated
April 1, 1998 and June 30, 1998, of Washington Mutual, Inc. for the year ended
December 31, 1997 and our report dated June 12, 1998 appearing in the Annual
Report on Form 11-K of the Washington Mutual, Inc. Retirement Savings and
Investment Plan for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
Seattle, Washington
December 16, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of Washington Mutual, Inc. of our report dated January 22,
1997, except as to Note 28, which is as of March 7, 1997, relating to the
consolidated financial statements of Great Western Financial Corporation, which
appears on page 62 of the Washington Mutual, Inc. Annual Report on Form 10-K for
the year ended December 31, 1997.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Los Angeles, California
December 16, 1998
Independent Auditors' Consent
The Board of Directors
Washington Mutual, Inc.,
as successor to
Keystone Holdings, Inc.:
We consent to the incorporation by reference in the registration statement on
Form S-8 of Washington Mutual, Inc., relating to the registration of 20,737,855
shares of common stock, no par value, of our report dated January 26, 1996,
except as to Note 27 to the consolidated financial statements, which is as of
February 8, 1996, with respect to the consolidated statements of earnings,
stockholder's equity, and cash flows of Keystone Holdings, Inc. and subsidiaries
for the year ended December 31, 1995, which report appears in the 1997 Annual
Report on Form 10-K/A of Washington Mutual, Inc.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Los Angeles, California
December 16, 1998