Exhibit 10.24

 

CONFIDENTIAL           

 

EXECUTIVE SEVERANCE AND
MUTUAL RELEASE AGREEMENT

 

This Executive Severance and Mutual Release Agreement (“Agreement”) is entered
between Fay Chapman (“Executive”) and Washington Mutual, Inc. (“Employer”) and
is in consideration of the mutual undertakings set forth below.

 

Executive has decided to retire, and Executive and Employer mutually desire to
end Executive’s employment.  In order to assist Executive in her transition, and
acknowledge past contributions, Employer has decided to offer Executive the
benefits described below.  To clearly set forth the terms and conditions of
Executive’s departure, the parties agree as follows:

 

1.             The purpose of this Agreement is to set forth the mutual
understanding of the parties.  This Agreement shall not be construed as an
admission by Employer that it acted wrongfully with respect to Executive, nor
shall it be construed as an admission by Executive of any misconduct or
impropriety.

 

2.             Executive’s employment with Employer shall end for all purposes
on June 30, 2008 (“Separation Date”).  For the period from December 10, 2007 to
and including June 30, 2008, Executive shall be placed on paid administrative
leave.  Effective January 1, 2008, Executive’s annual salary shall be increased
to $1,062,000.00 for purposes of calculating payments of salary to be made by
Employer to Executive for the period from January 1, 2008 through the Separation
Date.  With respect to Executive’s 2007 bonus to be paid in 2008, Employer shall
pay her target bonus of $310,000.00.  On or before January 20, 2008, Employer
shall remove the performance conditions from the terms of Executive’s 2005 and
2007 Restricted Share Grants.  Following the Separation Date, Executive shall be
eligible to participate in Employer’s retiree health insurance plan.

 

3.             Executive understands that taxes that may become due and are owed
by Executive as a result of any payment or transaction contemplated by this
Agreement are Executive’s sole responsibility, and Executive agrees to hold
Employer harmless on account thereof.  In addition, Executive agrees that such
taxes which are due and are owed by Executive but are unpaid may be setoff
against any sums due under this Agreement to the maximum extent allowed by law.

 

4.             On or before the Separation Date, Employer shall enter into a
consulting agreement with Executive, the form of which is attached hereto as
Exhibit A (the “Consulting Agreement”), which shall be effective as of July 1,
2008.  Employer’s entry into the Consulting Agreement is expressly conditioned
upon Executive signing a release in substantially the form of paragraph 5 after
the Separation Date and not revoking same.  Executive acknowledges and agrees
that Employer’s entry into the Consulting Agreement with Executive and other
undertakings in this Agreement are not required by any Employer policy,
procedure or contract, nor by any applicable law, but are given solely in
consideration of this Agreement.

 

5.             In exchange for the benefits contained in this Agreement,
Executive releases and discharges Employer, all subsidiary, parent, and
affiliated entities, and any Employer-sponsored

 

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benefit plans in which Executive participates, and all of their respective
owners, officers, directors, trustees, shareholders, employees, agents,
attorneys, and insurers from any and all claims, actions, causes of action,
rights, benefits, compensation, or damages, including costs and attorneys’ fees,
of whatever nature, whether known or unknown, suspected or unsuspected, matured
or unmatured, now existing or arising in the future from any act, omission,
event, occurrence, or non-occurrence prior to the date Executive signs this
Agreement arising out of or in any way related to Executive’s employment with
Employer.  This release includes but is not limited to any claims under any
federal, state, or local laws prohibiting discrimination in employment,
including Title VII, the Age Discrimination in Employment Act, and the Americans
with Disabilities Act; based upon any employment agreement, severance plan,
compensation plan, or change in control agreement; based upon any alleged legal
restriction on Employer’s right to terminate its employees; or based upon
ERISA.  This Agreement shall not affect Executive’s entitlement to receive any
401(k), stock option, or pension plan benefits that shall have vested as of the
Separation Date.

 

6.             In exchange for the benefits contained in this Agreement,
Employer releases and discharges Executive from any and all claims, actions,
causes of action, rights, benefits, compensation, or damages, including costs
and attorneys’ fees, of whatever nature, whether known or unknown, suspected or
unsuspected, matured or unmatured, now existing or arising in the future from
any act, omission, event, occurrence, or non-occurrence prior to the date
Employer signs this Agreement arising out of or in any way related to
Executive’s employment with Employer.

 

7.             Employer agrees to indemnify Employee to the fullest extent
permitted by Employer’s Bylaws, which includes independent representation where
appropriate.  Nothing in this Agreement shall modify, or be interpreted to
modify, the application or applicability of any law, document, or authority
relating to indemnification.

 

8.             Executive agrees that she will not make any disparaging or
untruthful remarks about or concerning Employer, its officers, directors,
employees or agents, whether acting in their individual or representative
capacity.  Employer shall not make any disparaging or untruthful remarks
concerning Executive and shall use reasonable efforts to cause its officers,
directors, employees and agents, to not make any disparaging or untruthful
remarks concerning Executive.  Nothing in this Paragraph shall in any way limit
the ability of Executive or Employer or its officers, directors, employees or
agents to respond to or cooperate with any government inquiry or investigation
or to give truthful testimony as required by law.

 

9.             Executive agrees that, as a result of her employment by Employer,
she has been exposed to confidential information that is not generally known to
the public, all of which information is owned by Employer.  This includes
information developed by Executive, alone or with others, or entrusted to
Employer by customers or others.  Employer’s confidential information includes,
without limitation, information relating to its finances, business and strategic
plans, unannounced acquisition and/or investment prospects, trade secrets,
know-how, procedures, purchasing, accounting, marketing, sales, customers and
employees.  Executive agrees that, during her remaining employment by Employer
and for all time thereafter, as long as such information is not made public by
Employer, Executive shall hold such information in strict confidence and not
disclose or use it except as specifically authorized by Employer and for
Employer’s benefit.

 

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10.           Employer and Executive each agree that the consideration provided
to Executive under this Agreement and the Consulting Agreement is confidential
and that neither shall disclose said consideration to persons outside Employer,
except that Executive may show the Agreement and the Consulting Agreement to her
spouse, attorneys and tax consultants, who have agreed to be bound by these
provisions; provided, however, that nothing herein shall prohibit or restrict
Employer or Executive (or their respective attorneys) from making disclosures
related to this Agreement and the Consulting Agreement as required by law, from
responding to any inquiry, or providing testimony, about the fact or terms of
this Agreement or the Consulting Agreement, the consideration provided to the
Executive, or the facts and circumstances underlying this Agreement and the
Consulting Agreement before the United States Securities and Exchange Commission
or any other federal or state regulatory or law enforcement agency or as
required by law, or prohibit or restrict Employer or Executive from disclosing
the terms of this Agreement or the Consulting Agreement in any litigation
brought to enforce any obligations created by this Agreement or the Consulting
Agreement.

 

11.           Executive agrees to fully and reasonably cooperate with Employer
with respect to any and all business issues, claims, internal investigations
(including any internal investigation relating to any claims by Executive of
wrongdoing by Employer’s senior management), inquiries and/or investigations by
the Government or by a regulator, administrative charges, and litigation related
to Employer or its business interests.  This would include, but not be limited
to, responding to questions, providing information, attending meetings,
depositions, administrative proceedings, and court hearings, and assisting
Employer, its counsel and any expert witnesses.  Executive agrees not to
communicate with any party, its legal counsel, or others adverse to Employer in
any pending or threatened claims or litigation except with the prior consent of
the Employer.  Should Executive receive notice of a subpoena or other attempt to
communicate with or obtain information from Executive in any way relating to
Employer or its business interests, Executive agrees to notify counsel for
Employer and to provide a copy of any such subpoena or request within two
(2) calendar days of receipt of such notice. Nothing in this agreement restricts
the ability of the Employee to appropriately respond to a subpoena or other
request from the Government or regulators.

 

12.           Executive agrees that, as a condition of and before the Company
enters into the Consulting Agreement with the Executive, she will return to
Employer all of Employer’s property, including all physical property (personal
digital assistants, computer disks, access cards, etc.) as well as any and all
documents, data, plans, or other information, whether on paper or in electronic
form.

 

13.           Executive represents that she has not filed any claim against
Employer or any of the individuals or entities released in paragraph 5, and that
she will not do so at any time in the future concerning any of the claims
released in this Agreement.

 

14.           Executive and Employer shall cooperate to coordinate appropriate
internal and external communications concerning Executive’s separation and to
designate individuals to whom any questions shall be directed.  Employer shall
have final approval on all such communications.

 

15.           The confidentiality and non-disparagement provisions set forth in
Sections 8, 9

 

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and 10 of this Agreement are material terms, which if breached could cause the
parties to this Agreement to suffer irreparable harm for which damages would be
an inadequate remedy.  Therefore, upon any such breach or threat thereof, either
party to this Agreement shall be entitled to injunctions and other appropriate
equitable relief in addition to whatever remedies such party may have at law.

 

16.           Executive understands and acknowledges the significance and
consequences of this Agreement and agrees that it is voluntary, and that she is
not signing as a result of any coercion.  Executive has been encouraged to seek
the advice of an attorney and, to the extent desired, has availed herself of
that opportunity.  Executive acknowledges that she has been given at least
twenty-one (21) days after receipt of this Agreement during which to consider
it.

 

17.           Executive understands and acknowledges that she has seven (7) days
after signing this Agreement in which to revoke it.  This Agreement will become
effective after that period has expired.

 

18.           This Agreement is binding on and shall inure to the benefit of the
parties and to those individuals and entities released in paragraph 5, as well
as to all of their heirs, successors, and assigns.

 

19.           This Agreement shall be governed by the laws of the State of
Washington.

 

20.           If any of the provisions of the Agreement is held to be invalid or
unenforceable, the remaining provisions will nevertheless continue to be valid
and enforceable to the fullest extent permitted by law.

 

21.           In the event of any dispute concerning the validity,
interpretation, enforcement or breach of this Agreement or in any way related to
Executive’s employment by Employer or the termination of such employment, the
dispute shall be resolved by arbitration within King County, Washington, and the
parties waive their right to trial by jury.  Executive and Employer will submit
the dispute to a mutually acceptable arbitration service or arbitrator, or, if
they cannot agree to an arbitration service or arbitrator, the dispute will be
submitted to the JAMS.  The procedural rules of the selected arbitration service
shall apply, provided that during the time the arbitration proceedings are
ongoing, Employer will advance any required administrative and/or arbitration
fees.  The party who substantially prevails shall be entitled to recover
reasonable attorneys’ fees, costs, and disbursements from the other party.
Judgment upon any arbitration award may be entered and enforced by any state or
federal court having jurisdiction.

 

22.           This Agreement represents and contains the entire understanding
between the parties in connection with its subject matter, and supersedes any
prior written or oral agreements or understandings.  No modification or waiver
of any provision of this Agreement shall be valid unless in writing and signed
by Executive and an authorized representative of Employer.  Executive
acknowledges that in signing this Agreement she has not relied upon any
representation or statement not set forth in this Agreement made by Employer or
any of its representatives.

 

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Washington Mutual, Inc.

 

 

Executive

 

 

 

 

 

 

 

 

 

 

 

/S/ DARYL D. DAVID

 

 

/S/ FAY CHAPMAN

 

 

 

 

 

Its:

EVP HR

 

 

Date: 

December 10, 2007

 

 

 

 

 

 

 

 

 

 

Date:

December 10, 2007

 

 

 

 

 

 

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EXHIBIT A

 

CONSULTING AGREEMENT

 

This Consulting Agreement is entered between Fay Chapman (“Consultant”) and
Washington Mutual, Inc. (the “Company”) and is in consideration of the mutual
undertakings set forth below.

 

1.             SERVICES OF THE CONSULTANT

 

For the compensation and subject to the terms and conditions hereinafter set
forth, the Consultant shall supply expert consulting services to the Company.

 

2.             INDEPENDENT CONTRACTOR

 

The Consultant is an independent contractor and not an employee of the Company
and shall receive no other compensation or benefits for services herein beyond
those specified in the Consulting Agreement.  The Consultant is responsible for
the payment of all taxes arising from his performance of this contract.

 

3.             SPECIFIC DUTIES

 

Commencing July 1, 2008, the Consultant shall render consulting services to the
Company at such mutually agreeable times and places as may be required from time
to time by the Company’s Chief Executive Officer, or his designee, for a period
of two years.  The specific requirements for consulting services will from time
to time be jointly agreed to by the Company’s Chief Executive Officer, or his
designee, and the Consultant.  The parties agree that if the opportunity arises
for Consultant to perform other work during the term of the Consulting Agreement
that does not conflict with or impair the performance of consulting services,
and Consultant obtains consent from the Company, which shall not be unreasonably
withheld, Consultant may perform such other work.

 

4.             TERM

 

This Consulting Agreement shall commence for a term of two years on July 1,
2008.

 

5.             COMPENSATION

 

The Company shall pay the Consultant Two Million Six Hundred Fifty Thousand
Dollars ($2,650,000.00) as a retainer for her availability and in consideration
of the performance of the services described herein.  The retainer shall be paid
in two payments as follows: a) one payment in the amount of $1,325,000.00 will
be made on July 1, 2008, and b) one payment in the amount of $1,325,000.00 will
be made on January 1, 2009.  The parties’ expectation is that the services under
this Consulting Agreement would not exceed 1,000 hours per year.  In the event
time spent by Consultant on authorized projects exceeds 1,000 hours per year,
the additional time will be paid on an hourly basis mutually agreed by the
parties.  If Consultant dies during the term of the Consulting Agreement, the
Company shall pay the compensation which would otherwise be payable to
Consultant under the Consulting Agreement at the times specified in the
Consulting Agreement to the spouse of Consultant or, if she is not survived by
her spouse, then to

 

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Consultant’s heirs in equal shares or, if there are no such surviving heirs, to
the estate of Consultant.

 

6.             CONFIDENTIALITY

 

Executive agrees that, as a result of her performance of the consulting
services, she will be exposed to confidential information that is not generally
known to the public, all of which information is owned by the Company.  This
includes information developed by Consultant, alone or with others, or entrusted
to the Company by customers or others.  Company’s confidential information
includes, without limitation, information relating to its finances, business and
strategic plans, unannounced acquisition and/or investment prospects, trade
secrets, know-how, procedures, purchasing, accounting, marketing, sales,
customers and employees.  Consultant agrees that, during her consulting work for
the Company and for all time thereafter, as long as such information is not made
public by Company, Consultant shall hold such information in strict confidence
and not disclose or use it except as specifically authorized by Company and for
Company’s benefit.

 

7.             ENTIRE AGREEMENT

 

This Consulting Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof.  This Consulting Agreement
shall not be modified in any respect, except in writing executed by both
parties.

 

8.             GOVERNING LAW

 

This Consulting Agreement shall be governed by the laws of the State of
Washington.

 

9.             TERMINATION

 

Upon material breach of this Consulting Agreement, this Consulting Agreement may
be terminated by the nonbreaching party at any time upon fifteen days’ written
notice.  Notwithstanding the foregoing, the parties reserve all rights and
remedies available to them by law in the event of breach of this agreement by
the other party.

 

10.          ARBITRATION

 

In the event of any dispute concerning the validity, interpretation, enforcement
or breach of this Agreement or in any way related to the services performed
pursuant to this Consulting Agreement, the dispute shall be resolved by
arbitration within King County, Washington, and the parties waive their right to
trial by jury.  Consultant and Company will submit the dispute to a mutually
acceptable arbitration service or arbitrator, or, if they cannot agree to an
arbitration service or arbitrator, the dispute will be submitted to the JAMS. 
The procedural rules of the selected arbitration service shall apply, provided
that during the time the arbitration proceedings are ongoing.  Company and
Consultant shall split any required administrative and/or arbitration fees,
except that the party filing the demand for arbitration shall pay the initial
administrative fee for initiating the process.  The party who substantially
prevails shall be entitled to recover reasonable attorneys’ fees, costs, and
disbursements from the other party. Judgment upon any arbitration award may be
entered and enforced by any state or federal court having jurisdiction.

 

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11.          NOTICES

 

All notices or other communications required or permitted by this Consulting
Agreement, including invoices, shall be in writing and shall be sufficiently
given if sent by certified mail, postage prepaid, addressed as follows:

If to Consultant, to:

Ms. Fay Chapman
2003 E. Eaton Pl.
Seattle, WA  98112

If to Company:

Mr. Kerry Killinger
Chairman and Chief Executive Officer
Washington Mutual
1301 Second Ave.
Seattle, WA 98101

 

Any such notice or communication shall be deemed to have been given as of the
date mailed.  Any address may be changed by giving written notice of such change
in the manner provided herein for giving notice.

 

 

CONSULTANT

 

WASHINGTON MUTUAL, INC.

 

 

 

 

 

 

 

 

 

 

 

 

Date:

 

 

Date:

 

 

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