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EMPLOYMENT AGREEMENT
AGREEMENT by and between Washington Mutual, Inc., a Washington
corporation (the "Company") and Anthony J. Nocella (the "Executive") dated as of
the 18th day of August, 2000.
The Company has determined that it is in the best interests of
the Company and its respective shareholders to assure that Bank United Corp., a
Delaware corporation ("Bank United") will have the continued dedication of the
Executive pending the merger of the Company and Bank United (the "Merger")
pursuant to the Agreement and Plan of Merger dated as of August 18, 2000 (the
"Merger Agreement") and to provide the surviving corporation with the
Executive's services during the transition after the Merger. Therefore, in order
to accomplish these objectives, the Company has caused the Company to enter into
this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EFFECTIVE DATE. If the "Effective Time of the Merger"
as defined in the Merger Agreement occurs, then the "Effective Date" shall mean
the "Effective Time of the Merger."
2. EMPLOYMENT PERIOD. The Company hereby agrees to
employ the Executive, and the Executive hereby agrees to continue in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the one year anniversary
thereof (the "Employment Period").
3. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES. (i)
During the Employment Period, the Executive shall provide transition services in
connection with the Merger and shall serve the Company in a senior executive
capacity, with the duties and responsibilities as may be assigned to him from
time to time by the Chief Executive Officer of the Company. During the
Employment Period, the Executive's services shall be performed in Houston,
Texas.
(ii) During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote substantially all of his attention and time during
normal business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the Executive
hereunder, to use the Executive's reasonable best efforts to perform faithfully
and efficiently such responsibilities.
(b) COMPENSATION. (i) INITIAL PAYMENT. On the Effective
Date, the Company shall make a lump sum cash payment to the Executive equal to
the payments to which the Executive would have been entitled to receive pursuant
to Section 6(a) of the Employment Agreement between Bank United and the
Executive dated as of August 1, 1996, as amended (the "Prior Agreement") had he
been terminated by the Company other than for "Cause" (as defined in the Prior
Agreement) immediately after the Effective Date, including, without limitation,
the amount provided in the Prior Agreement for outplacement services, with such
payments to be calculated without regard to Section 9 of the Prior Agreement. In
addition, the Executive's rights under
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Section 6(a)(ii) of the Prior Agreement shall vest and become exercisable
immediately upon the Effective Date. Commencing upon the expiration of the
Employment Period, or if earlier the termination of the Executive's
employment for any reason, the Company shall provide or cause to be provided
the welfare benefits provided under Section 6(a)(iii) and Section 4(b)(iv) of
the Prior Agreement for the number of years set forth in Section 6(a)(iii) of
the Prior Agreement reduced by the time elapsed between the Effective Date
and the date of termination of employment (the "Welfare Benefits").
(ii) SPECIAL RETENTION BONUS. In lieu of the lump
sum cash payment described in the first sentence of subsection 3(b)(i), the
Executive may elect to receive a grant of restricted shares of the Company's
stock (the "Special Retention Bonus") by notifying the Company of such election
at least 10 days prior to the Effective Date. The number of shares comprising
the Special Retention Bonus shall be calculated by dividing the amount of the
lump sum cash payment by the fair market value of one share of the Company's
stock on the Effective Date. The fair market value shall mean the arithmetic
average of the high and low prices at which the Company's stock traded on the
Effective Date. Restrictions on the sale of the shares shall lapse on the one
year anniversary of the Effective Date. The Executive may elect to forfeit the
shares in exchange for a deposit by the Company, at the time the restrictions
lapse, into the Executive's account in the Company's Senior Officers Deferred
Compensation Plan of an amount equal to the fair market value of the shares on
the day the restrictions lapse. The Executive will be required to notify the
Company of an election to forfeit the shares sufficiently far in advance of the
date on which the restrictions lapse to satisfy Internal Revenue Service
requirements.
(iii) BASE SALARY. During the Employment Period,
the Executive shall receive a base salary ("Base Salary") of $350,000 per year,
payable in equal installments in accordance with the Company's normal payroll
practices, but in no event less than monthly, and the Executive shall receive an
annual bonus calculated and paid according to the policy for target bonuses
generally applicable to Senior Vice Presidents of the Company but in no event
less than $650,000, the sum of such bonus and Base Salary hereinafter referred
to as the "Minimum Compensation."
(iv) EMPLOYEE BENEFITS. During the Employment
Period, except as otherwise expressly provided herein, the Executive shall be
entitled to participate in all employee benefit, retirement, welfare and other
plans, practices, policies and programs generally applicable to Senior Vice
Presidents of the Company on a basis no less favorable than that provided to
such Senior Vice Presidents. During the Employment Period, the Executive shall
be entitled to an office and secretarial and administrative assistance, in each
case on the same basis as provided to him immediately prior to the Effective
Date.
(v) FRINGE BENEFITS. During the Employment
Period, the Executive shall be entitled to receive fringe benefits, including an
automobile allowance, and financial planning on the same basis and the same
terms and conditions as such benefits are provided to other Senior Vice
Presidents of the Company. The Company shall also pay for the Executive's club
dues and expenses and annual physical on the same basis as those benefits were
provided to the Executive immediately prior to the Effective Time.
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(vi) ADDITIONAL RETIREMENT BENEFITS. Commencing
upon the expiration of the Employment Period (in the event that the Executive
does not enter into a new written employment agreement with the Company prior to
such expiration), or, if earlier, upon the Executive's termination of employment
for any reason, the Executive shall be paid an annual retirement benefit of
$150,000 for his life (the "Additional Retirement Benefit"). Upon the
Executive's death, his current spouse, should she survive the Executive, shall
be paid an annual benefit of 50% of the Retirement Benefit for her life. The
Additional Retirement Benefit shall be in addition to any retirement benefits
payable to the Executive under any retirement plan or program of or agreement
with Bank United or the Company. The Company may fulfill its obligation to
provide the Additional Retirement Benefit by purchasing for Executive from an
insurance company rated at least "A" by A.M. Best & Co. an annuity that provides
equivalent benefits
4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY.
The Executive's employment shall terminate automatically upon the Executive's
death during the Employment Period. If the Company determines in good faith that
the Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 11(b) of this Agreement of
its intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of the Executive
from the Executive's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
the Company or its insurers and reasonably acceptable to the Executive or the
Executive's legal representative.
(b) CAUSE. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the continued failure of the Executive to
perform the Executive's duties with the Company or one of its affiliates (other
than any such failure resulting from incapacity due to physical or mental
illness), after a written demand for performance is delivered to the Executive
by the Chief Executive Officer of the Company which specifically identifies the
manner in which the Chief Executive Officer believes that the Executive has not
performed the Executive's duties hereunder, or
(ii) the willful engaging by the Executive in
illegal conduct or gross misconduct which is materially and demonstrably
injurious to the Company, or
(iii) conviction of a felony or guilty or nolo
contendere plea by the Executive with respect thereto.
(c) GOOD REASON. The Executive's employment may be
terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean a breach by the Company of a material provision of this
Agreement after the Executive has given the Company notice of the breach and a
reasonable opportunity to cure
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(d) NOTICE OF TERMINATION. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 11(b)
of this Agreement. For purposes of this Agreement, a "Notice of Termination"
means a written notice which (i) indicates the specific termination provision in
this Agreement relied upon and (ii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than 30 days after the giving of
such notice).
(e) DATE OF TERMINATION. "Date of Termination" means (i)
if the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein within 30 days of such notice, as the case may
be, (ii) if the Executive's employment is terminated by the Company other than
for Cause or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability
Effective Date, as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) GOOD
REASON; OTHER THAN FOR CAUSE, DEATH OR DISABILITY. If, during the Employment
Period, the Company shall terminate the Executive's employment other than for
Cause or Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a
lump sum in cash within 30 days after the Date of Termination the aggregate of
the following amounts:
A. the sum of (1) the Executive's Base Salary
through the Date of Termination to the extent not theretofore
paid (2) a pro rata portion of the Executive's minimum bonus
described in Section 3(b)(iii) for the year in which the Date
of Termination occurs and (3) any compensation previously
deferred by the Executive (and any accrued interest or
earnings thereon) and any accrued vacation pay through the
Date of Termination, in each case to the extent not
theretofore paid (the sum of the amounts described in clauses
(1), (2) and (3) shall be hereinafter referred to as the
"Accrued Obligations"); and
B. the amount equal to the product of (1) the
number of months and portions thereof from the Date of
Termination until the end of the Employment Period, divided by
twelve and (2) the Executive's Minimum Compensation; and
(ii) the Additional Retirement Benefit shall
commence; and
(iii) the Welfare Benefits shall commence; and
(iv) If the Executive has elected to receive the
Special Retention Bonus, restrictions on sale of shares or otherwise comprising
the Special Retention Bonus shall lapse.
(b) DEATH. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this Agreement
shall terminate without further
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obligations to the Executive's legal representatives under this Agreement, other
than for payment of Accrued Obligations and the commencement of the Additional
Retirement Benefit to the Executive's current spouse. Accrued Obligations shall
be paid to the Executive's estate or beneficiary, as applicable, in a lump sum
in cash within 30 days of the Date of Termination.
(c) DISABILITY. If the Executive's employment is
terminated by reason of the Executive's Disability during the Employment Period,
this Agreement shall terminate without further obligations to the Executive,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the Executive
in a lump sum in cash within 30 days of the Date of Termination. With respect to
the provision of Other Benefits, the term Other Benefits as utilized in this
Section 5(c) shall include, and the Executive shall be entitled after the
Disability Effective Date to receive, disability and other benefits as in effect
on the Disability Effective Date generally with respect to Senior Vice
Presidents of the Company and the payment of the Welfare Benefits and the
Additional Retirement Benefit.
(d) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's
employment shall be terminated for Cause or the Executive terminates his
employment without Good Reason during the Employment Period, this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay or provide to the Executive (i) the Accrued Obligations, (ii)
the commencement of the Welfare Benefits and (iii) the commencement of the
Additional Retirement Benefit, in each case to the extent theretofore unpaid and
further, if the Executive has elected to receive the Special Retention Bonus,
all of the Executive's rights in the shares comprising the Special Incentive
Bonus shall be forfeited.
6. NON-EXCLUSIVITY OF RIGHTS. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or
any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement, except as explicitly modified by this Agreement.
7. FULL SETTLEMENT. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement); PROVIDED, HOWEVER, that the Executive shall be responsible for his
own legal fees in the event that he fails to prevail in at least one material
claim against the Company. In no event shall the Executive be required to pay
the legal fees of the Company. Interest on any delayed payment shall be payable
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at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended (the "Code").
8. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. (a)
Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment (other than a payment of Base Salary,
except for a payment of Base Salary made pursuant to Section 5 hereof) or
distribution by the Company or its affiliated companies to or for the benefit of
the Executive (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise but determined without regard to any
additional payments required under this Section 8) (the "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code, or any interest
or penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (the "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) Subject to the provisions of Section 8(c), all
determinations required to be made under this Section 8 of the amount of any
Gross-Up Payment and the assumptions to be utilized in arriving at such amount,
shall be made by KPMG LLP or such other certified public accounting firm as may
be designated by the Executive and reasonably approved by the Company (the
"Accounting Firm"). The Accounting Firm shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment (other
than a payment of Base Salary, except for a payment of Base Salary pursuant to
Section 5 hereof) or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the change of control, the Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 8, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made (the "Underpayment"), consistent with the calculations required to be made
hereunder. In the event the Company exhausts its remedies pursuant to Section
8(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive. In the event the Company has paid the
Executive Gross-Up Payments that exceed the amount of the Excise Tax (the
"Overpayment"), the Executive shall promptly repay the amount of the Overpayment
to the Company.
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(c) The Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than 10 business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that the Company desires to contest such claim,
the Executive shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest, and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 8(c), the Company shall control all proceedings taken in connection
with such contest, and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the
applicable taxing authority in respect of such claim and may, at its sole
option, either direct the Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that, if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and provided, further, that, to the extent possible
without limiting the Company's ability to contest the amount or the requirement
of payment of the Excise Tax, any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which the Gross-Up Payment would be payable
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hereunder, and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 8(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 8(c)) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 8(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
9. CONFIDENTIAL INFORMATION. The Executive shall hold in
a fiduciary capacity for the benefit of the Company all non-public information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those
designated by it, or use any such information, knowledge, or data other than for
the benefit of the Company.
10. SUCCESSORS. (a) This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. As used in this
Agreement, the term "affiliated companies" shall include any company controlled
by, controlling or under common control with the Company.
11. RESOLUTION OF DISPUTES. Any dispute arising out of or
relating to this Agreement or the Executive'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 the Executive or the Company.
12. MISCELLANEOUS. (a) This Agreement shall be governed
by and construed in accordance with the laws of the State of Washington, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
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(b) All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
IF TO THE EXECUTIVE: At the last address on file
with the Company.
IF TO THE COMPANY: 1201 Third Ave., WMT 1501
Seattle, WA 98101
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(d) From and after the Effective Date this Agreement
shall supersede any other employment, severance or change of control agreement
between the parties or between the Executive and Bank United with respect to the
subject matter hereof, including, without limitation, the Prior Agreement except
as expressly provided herein.
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IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of Directors,
the Company has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.
/s/ Anthony J. Nocella
-----------------------------------
ANTHONY J. NOCELLA
WASHINGTON MUTUAL, INC.
By /s/ James B. Fitzgerald
--------------------------------
Name: James B. Fitzgerald
Title: Senior Vice President
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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 18th day of August 2000. I, the Executive who is a party to
the Employment Agreement to which this Exhibit is attached, as well as the
Company, agree as follows:
1. Any and all disputes which involve or relate in any
way to my employment (or termination of employment) with the Company shall be
submitted to and resolved by final and binding arbitration.
2. The Company 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 the Company, 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 the Company, 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 the Company.
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 the Company, or where I was so employed
at the time of termination.
7. In order to initiate arbitration, the Company 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 the Company shall be sent to my last known residence address as
reflected in my personnel file at the Company. Notice of arbitration initiated
by me shall be sent to the Company's General Counsel. The General Counsel's
address is currently 1201 Third Avenue, WMT 1500, Seattle, Washington 98101.
8. Within thirty (30) days after receipt of notice of
arbitration, the Company and I will attempt to agree upon a mutually acceptable
arbitrator. If the Company and I are 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 the Company 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, the Company 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 and disclosure of such
documents and providing for return of documents produced after the arbitration
is concluded. 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.
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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. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to the Agreement); provided, however, that the Executive
shall be responsible for his own legal fees in the event that he fails to
prevail on at least one material claim against the Company. In no event shall
the Executive be required to pay the legal fees and expenses of the Company.
Interest on any delayed payment shall be payable at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").
14. At the conclusion of the arbitration, each party
agrees to promptly pay any arbitration award against it.
15. 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.
16. 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.
17. Because of the interstate nature of the Company's
business, this Binding Arbitration Agreement is governed by the Federal
Arbitration Act, 9 U.S.C. 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 the Company that generally apply to
commercial arbitration agreements, such as provisions granting status of 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.
18. 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.
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19. This Binding Arbitration Agreement shall remain in
full force and effect at all times during and subsequent to my employment with
the Company, or any successor in interest to the Company.
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