Document:

EXHIBIT
10.1

 

EMPLOYMENT
AGREEMENT

 

This Employment Agreement (the "Agreement") is between
WASHINGTON MUTUAL, INC., a Washington corporation ("Washington Mutual") and Stephen J. Rotella ("Employee").

Employee has many years of experience in the financial
services business.  Because of Employee's importance to Washington Mutual and the value to be derived from Employee's
continued employment, it is the desire of Washington Mutual and Employee to set forth certain terms and conditions relating to
Employee's employment as an inducement for Employee continuing his employment for so long as Washington Mutual desires to employ
Employee.

Therefore, the parties agree as follows:

1.  Employment - Term – Washington
Mutual agrees to, and does hereby, employ Employee, and Employee agrees to, and does hereby, accept such employment, subject the
terms in this agreement and to an offer letter, dated December 17, 2004, which is incorporated herein by reference.
 Employee's employment and this Agreement both shall remain in effect until Employee's employment and this Agreement are
simultaneously terminated in accordance with the terms hereof.

2.  Duties – Employee shall perform
such duties as the Board of Directors of Washington Mutual (the "Board") may from time to time reasonably direct consistent with
this paragraph.  (As used herein "Board" shall include the board of directors or other successor body performing their
function in the event of a Change in Control as defined below.)  Employee shall have the title of President and Chief
Operating Officer. Employee's titles may be changed from time to time as the Board may determine, provided that Employee shall at
all times retain the title of either President or Chief Operating Officer unless he agrees otherwise and any such change shall not
diminish, reduce, or impair Employee’s authority, responsibilities, or duties.  Employee shall report to the Chairman
and Chief Executive Officer.  Employee's duties shall include responsibility, in cooperation with the Chief Executive Officer,
for the operating strategies of Washington Mutual and other duties customarily performed by a person in the role of president and
chief operating officer in a corporation of the size and nature of Washington Mutual.

3.  Compensation – During Employee's
employment under this Agreement, Employee shall receive base salary compensation in the amount determined by the Human Resources
Committee of the Board of Directors (the "HR Committee"), payable semi-monthly or in such manner as is consistent with Washington
Mutual's policy relating to salaried employees.  In addition, Employee is entitled to participate in Washington Mutual's
Leadership Bonus Plan or such successor plan as may be adopted by the HR Committee, under which Employee may receive, subject to
the terms of the Plan, a bonus based on Washington Mutual's achievement of specified financial goals.  Employee may also be
awarded stock options, restricted stock, and/or performance shares as determined by the HR Committee.  Employee's compensation
shall be reviewed by the HR Committee annually and, if in their discretion it appears appropriate, such compensation shall be
adjusted provided that: (a) there may be no reduction in base salary, level of bonus, stock options, restricted stock, and
performance shares available to Employee without Employee's consent and (b) Washington Mutual has no implied obligation to raise
Employee's compensation.

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4.  Other Benefits – Subject to the
respective eligibility requirements and other terms and provisions of the applicable benefit or insurance plans (including relevant
waiting periods), Employee shall be enrolled as a participant in all employee benefit plans (including retirement and insurance
plans) available to other officers of Washington Mutual, as the same may from time to time be adopted or amended.  Employee
shall also be entitled to receive such other perquisites as the Board or the HR Committee may from time to time deem
appropriate.

5.  Performance of Duties –
 Employee agrees that during his employment with Washington Mutual: (a) Employee will faithfully perform the duties of such
office or offices as he may occupy, which duties shall be such as may be assigned to him by the Board; (b) Employee will devote to
the performance of his duties all such time and attention as the Board shall reasonably require, taking, however, from time to time
such reasonable vacations as are consistent with his duties and Washington Mutual policy; and (c) Employee will not, without the
express consent of the Board, become actively associated with or engaged in any business or activity during the term of this
Agreement other than that of Washington Mutual (excepting of course customary family and personal activities which may include
management of personal investments so long as it does not entail active involvement in a business enterprise) and Employee will do
nothing inconsistent with his duties to Washington Mutual.  Subject to the provisions of Washington Mutual’s policy and
the approval of its Chief Executive Officer and General Counsel, Employee shall be allowed to serve as a member of one other board
of directors provided that such service does not unreasonably interfere with his duties hereunder.

6.  Termination – (a) The Board may
terminate Employee's employment at any time in its sole discretion, and Employee may terminate Employee's employment in his sole
discretion.  Except as expressly provided in this Agreement, upon termination of employment Washington Mutual shall have no
liability to pay any further compensation or any other benefit or sum whatsoever to Employee.

(b)  Upon termination of
employment, Employee's rights under all employee pension plans, employee welfare benefit plans, bonus plans and stock option and
restricted stock plans shall be determined under the terms of the plans and grants themselves except as otherwise specifically
provided in this Agreement.

(c)  If Employee's employment
is terminated by Washington Mutual for any reason upon or within three years after a Change in Control (as defined below) or
Employee resigns for "good cause" (as defined below) upon or within three years after a Change in Control, Employee shall be
entitled to receive, within five business days after the effective date of such termination or resignation, from Washington Mutual
or its successor, an amount equal to three times Employee's annual compensation.  In addition, upon such an event:

(1)  all stock options held by
Employee shall become immediately vested and exercisable and shall continue to be exercisable until the earlier of (i) the two-year
anniversary of the effective date of Employee’s termination or resignation or (ii) the expiration of the respective terms of
the options (unless earlier paid out under Section 15.3.1 of the Washington Mutual Inc. 2003 Equity Incentive Plan),
notwithstanding any provisions in the grant of such options regarding vesting,

 

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(2)  the lapse of the
restrictions on Employee's restricted stock shall automatically be accelerated; provided that the HR Committee may exclude any
particular grant(s) of restricted stock made after March 1, 2005, from the acceleration provided for in this subsection (2),
and

(3)  all performance share
awards shall vest and shall be payable to Employee following the completion of their respective performance periods in accordance
with their terms, unless such awards shall be payable earlier under the terms of the grant or related plan.

(d)  For purposes of Section
6(c), Employee's "annual compensation" shall include all items of compensation provided by Washington Mutual other than the value
of stock options and/or restricted stock granted to Employee.  Employee's "annual compensation" shall include the greater of
(i) the total of Employee's salary and target bonus for the calendar year in which the termination occurs (if established before
the termination) or (ii) Employee's salary and actual bonus for the prior calendar year (annualized if Employee was not employed by
Washington Mutual for the entire previous calendar year). Employee's "annual compensation" shall also include the amount of the
contributions made or anticipated to have been made on Employee's behalf to Washington Mutual's benefit plans for the calendar year
in which the termination occurs, including without limitation contributions to pension plans and plans qualified under Section 125
of the Internal Revenue Code of 1986 (cafeteria plans).

(e)  If Employee becomes
entitled to the payments and equity acceleration described in Section 6(c) (collectively the "Severance Payments"), and if any of
the Severance Payments constitute a "parachute payment" under Section 280G of the Internal Revenue Code of 1986 (the "Code"), as
amended, or any successor statute then in effect, then Washington Mutual shall pay an additional amount (the "Gross-Up Payment") to
Employee at the time specified in the following paragraph.  The Gross-Up Payment shall be equal to the amount necessary so
that the net amount retained by Employee, after subtracting the parachute excise tax imposed by Section 4999 of the Code, as
amended, or any successor statute then in effect (the "Excise Tax"), and after also subtracting all federal, state or local income
tax, FICA tax and Excise Tax on the Gross-Up Payment, shall be equal to the net amount Employee would have retained if no Excise
Tax had been imposed and no Gross-Up Payment had been paid.  The amount of the Gross-Up Payment shall be determined in good
faith by independent accountants or tax counsel selected by Washington Mutual and acceptable to Employee, who shall apply the
following assumptions: (i) Employee shall be treated as paying federal income taxes at the highest marginal rate in the calendar
year in which the Gross-Up Payment is made, and (ii) Employee shall be treated as paying state and local income taxes at the
highest marginal rate(s) in the calendar year in which the Gross-Up Payment is made in the locality of Employee's residence as of
the effective date of Employee's termination or resignation, net of the maximum reduction in federal income taxes that could be
obtained from deducting those state and local taxes.

(f)  The Gross-Up Payment shall
be made within five business days after the effective date of Employee's termination or resignation, provided that if the Gross-Up
Payment cannot be determined within that time, Washington Mutual shall pay Employee within that time an estimate, determined in
good faith by Washington Mutual, of the minimum amount of the Gross-Up Payment and shall pay the remainder (plus interest at the
rate provided in Section 1274(d)(1)(A) of the Code) as soon as the amount can be determined but in no event later than the 30th day
after the effective date of Employee's termination or resignation. If the estimated payment is more than the amount later
determined to have been due, the excess (plus interest at the rate provided in Section 1274(d)(1)(A) of the Code) shall be repaid
by Employee within five business days after written demand.

 

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(g)  If the actual Excise Tax
imposed is less than the amount that was taken into account in determining the amount of the Gross-Up Payment, Employee shall repay
at the time that the amount of the reduced Excise Tax is finally determined the portion of the Gross-Up Payment attributable to
that reduction (plus the portion of the Gross-Up Payment attributable to the Excise Tax, FICA tax and federal, state and local
income tax imposed on the portion of the Gross-Up Payment being repaid by Employee, to the extent the repayment results in a
reduction in or refund of Excise Tax, FICA tax or federal, state or local income tax), plus interest on the amount of the repayment
at the rate provided in Section 1274(d)(1)(A) of the Code. If the actual Excise Tax imposed is more than the amount that was taken
into account in determining the amount of the Gross-Up Payment, Washington Mutual shall make an additional gross-up payment in
respect of such excess (plus interest at the rate provided in Section 1274(d)(1)(A) of the Code) at the time that the amount of the
excess is finally determined.

(h)  If Employee’s
employment is terminated by Washington Mutual at any time other than upon or within three years after a Change in Control for any
reason other than for cause (as defined below) and Employee executes a Separation Agreement in the form attached hereto as Exhibit
B, Employee shall be entitled to receive, from Washington Mutual or its successor, within five business days after Employee
executes and returns the Separation Agreement, an amount equal to two times Employee's annual compensation, as defined in Section
6(d).  In addition, upon such an event

(1)  all stock options held by
Employee shall become immediately vested and exercisable and shall continue to be exercisable until the earlier of (i) the two-year
anniversary of the effective date of Employee’s termination or resignation or (ii) the expiration of the respective terms of
the options (unless earlier paid out under Section 15.3.1 of the Washington Mutual Inc. 2003 Equity Incentive Plan),
notwithstanding any provisions in the grant of such options regarding vesting,

(2)  the lapse of the
restrictions on Employee's restricted stock shall automatically be accelerated; provided that the HR Committee may exclude any
particular grant(s) of restricted stock made after March 1, 2005 from the acceleration provided for in this subsection (2),
and

(3)  all performance share
awards shall vest and shall be payable to Employee following the completion of their respective performance periods in accordance
with their terms, unless such awards shall be payable earlier under the terms of the grant or related plan.

(i)  Termination of Employee's
employment hereunder for "cause" shall mean termination because (i) Employee engages in abusive use of alcohol or other drugs on a
continuing or recurring basis, (ii) Employee is convicted of any felony or of a misdemeanor involving moral turpitude (including
forgery, fraud, theft, or embezzlement), or is convicted or enters into a pretrial diversion or similar program in connection with
the criminal prosecution for an offense involving dishonesty, breach of trust or money laundering, or (iii) Employee engages in
dishonesty, fraud, willful destruction or theft of property of Washington Mutual or a Subsidiary, physical attack on another
employee, or engages in (x) willful malfeasance, willful gross neglect in the performance of his duties, or (z) willful misconduct
which, in any circumstance described in (x), (y), or (z), is materially injurious to Washington Mutual or a Subsidiary.  For
purposes of this Agreement, no act, or failure to act, shall be deemed “willful” unless done by Employee without a good
faith belief that it was in, or not contrary to, the best interests of Washington Mutual or any Subsidiary.  In addition, on
and after Employee’s 65th birthday, and provided the termination is not done upon or within three years after a
Change in Control, "cause" shall include a reasonable, good-faith determination by the Board that Employee has failed to properly
perform or fulfill the duties of his office.  Notwithstanding anything to the contrary set forth herein, Employee shall not be
terminated for “cause” under clause (iii) of this paragraph unless after receiving written notice stating the basis for
termination, Employee is given fifteen (15) days to cure the neglect or conduct.

 

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7.  Continuation of Medical Insurance
– If Employee's employment by Washington Mutual terminates for any reason (including early retirement) other than gross
misconduct, Employee shall be entitled to continue to participate in Washington Mutual's self-funded group medical plan, at
Employee's expense, to the extent provided in the plan and under the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA).

8.  Death or Disability – If
Employee should die or become disabled at any time during his employment hereunder, Employee’s employment under this
Agreement shall terminate and neither Employee nor anyone claiming by, through or under him shall be entitled to any further
compensation or other sum under this Agreement (other than payments made by insurers under policies of life and disability
insurance and any sums which may become available under any employee benefit plan), except that upon such an event

(1)  all stock options held by
Employee shall become immediately vested and exercisable and shall continue to be exercisable until the earlier of (i) the two-year
anniversary of the effective date of Employee’s termination or resignation or (ii) the expiration of the respective terms of
the options (unless earlier paid out under Section 15.3.1 of the Washington Mutual Inc. 2003 Equity Incentive Plan),
notwithstanding any provisions in the grant of such options regarding vesting,

(2)  the lapse of the
restrictions on Employee's restricted stock shall automatically be accelerated; provided that the HR Committee may exclude any
particular grant(s) of restricted stock made after March 1, 2005 from the acceleration provided for in this subsection (2),
and

(3)  all performance share
awards shall vest and shall be payable to Employee following the completion of their respective performance periods in accordance
with their terms, unless such awards shall be payable earlier under the terms of the grant or related plan.

For purposes of this Agreement, Employee shall be
considered disabled if, and only if, Employee has been unable to perform the essential functions of his job for a continuous period
of 180 days, provided that (i) Washington Mutual shall deliver 30 days prior written notice of its determination that Employee is
disabled and (ii) after the 180 day period Washington Mutual shall grant additional unpaid leave, without terminating this
Agreement or Employee's employment, to the extent required by law.

 

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9.  Confidentiality – Employee
agrees that information not generally known to the public to which Employee has been or will be exposed as a result of Employee's
employment by Washington Mutual is confidential information that belongs to Washington Mutual. This includes information developed
by Employee, alone or with others, or entrusted to Washington Mutual by its customers or others.  Washington Mutual's
confidential information includes, without limitation, information relating to Washington Mutual's trade secrets, know-how,
procedures, purchasing, accounting, marketing, sales, customers, clients, employees, business strategies and acquisition
strategies.  Employee will hold Washington Mutual's confidential information in strict confidence and will not disclose or use
it except as authorized by Washington Mutual. or (i) in the ordinary course of Employee’s employment, (ii) when disclosure is
required by law or by any court, arbitrator, or administrative or legislative body (including any committee thereof) with apparent
jurisdiction to require such disclosure, (iii) with respect to any litigation, arbitration, or mediation involving this Agreement
or Employee’s employment with Washington Mutual, provided that such confidential information not become part of any public
record and will be used only in a way that will preserve its confidentiality and (iv) if such information becomes generally known
to the public other than due to Employee’s violation of this Section 9.

10.  Possession of Materials –
Employee agrees that upon conclusion of employment or request by Washington Mutual, Employee shall turn over to Washington Mutual
all documents, files, office supplies and any other material or work product in Employee's possession or control that were created
pursuant to or derived from Employee's services for Washington Mutual, provided that Employee may retain personal calendars,
personal correspondence and rolodexes, such materials as Employee reasonably believes that are required for tax purposes and copies
of plans, programs, and agreements related to his employment.

11.  Change in Control – For
purposes of this Agreement, "Change in Control" shall mean:

(a)  The acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date of this Agreement), other
than Washington Mutual, a Subsidiary or any employee benefit plan of Washington Mutual or its Subsidiaries, of shares representing
more than 25% of (i) the common stock of Washington Mutual, (ii) the aggregate voting power of Washington Mutual's voting
securities or (iii) the total market value of Washington Mutual's voting securities;

(b)  During any period of 25
consecutive calendar months, a majority of the Board of Directors of Washington Mutual (the "Board") ceasing to be composed of
individuals (i) who were members of the Board on the first day of such period, (ii) whose election or nomination to the Board was
approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority
of the Board, or (iii) whose election or nomination to the Board was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a majority of the Board;

 

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(c)  The good-faith
determination by the Board that any Person or group (other than a Subsidiary or any employee benefit plan of Washington Mutual or a
Subsidiary) has acquired direct or indirect possession of the power to direct or cause to direct the management or policies of
Washington Mutual, whether through the ability to exercise voting power, by contract or otherwise; 

(d)  The merger, consolidation,
share exchange or similar transaction between Washington Mutual and another Person (other than a Subsidiary) other than a merger in
which Washington Mutual is the surviving corporation; or

(e)  The sale or transfer (in
one transaction or a series of related transactions) of all or substantially all of Washington Mutual's assets to another Person
(other than a Subsidiary) whether assisted or unassisted, voluntary or involuntary.

12.  Good Cause – For purposes of
this Agreement, "good cause" for Employee to resign shall mean:

(a)  The assignment of duties
to Employee which (i) are materially different from Employee's duties immediately prior to the Change in Control, or (ii) result in
Employee having significantly less authority and/or responsibility than he had prior to the Change in Control, without his express
written consent;

(b)  The removal of Employee
from the position held immediately prior to the Change in Control, except where such removal is for cause (as defined above) or by
reason of Employee's disability;

(c)  A reduction of Employee's
base salary as in effect on the date of the Change in Control or as the same may be increased from time to time thereafter, or a
failure by Washington Mutual to increase such base salary each year after such Change in Control by an amount which at least
equals, on a percentage basis, the percentage increase, if any, in the cost of living as set forth in the Consumer Price Index
(United States City Average for All Urban Consumers) - All Items (Reference Base 1982 = 100) over the preceding year;

(d)  A reduction in the overall
level of Employee's total compensation below the average total compensation for the 24 months immediately preceding the Change in
Control;

(e)  Any change in Employee's
duties, without Employee’s express written consent, (i) which would require him to relocate out of the Seattle area or (ii)
result in his principal office being no longer at Washington Mutual’s
headquarter offices.

(f)  The failure of any
successor or assignee, as described in Section 15(g), of Washington Mutual to assume, by law or contract, all of Washington
Mutual’s obligations under this Agreement and any related employment arrangements, or

(g)  The material breach of
this Agreement by Washington Mutual or any successor or assignee thereof.

 

 

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13.  Other definitions – For
purposes of this Agreement:

(a)  "Person" shall mean any
individual, corporation, company, voluntary association, partnership, limited liability company, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or political subdivision thereof); and

(b)  "Subsidiary" shall mean a
corporation that is wholly owned by Washington Mutual, either directly or through one or more corporations which are wholly owned
by Washington Mutual.

14.  Resolution of Disputes – Any
dispute arising out of or relating to this Agreement or Employee's employment (or termination of employment) shall be submitted to
and resolved by final and binding arbitration as provided in the Binding Arbitration Agreement attached as Exhibit A, whether the
claimant is Employee or Washington Mutual.  In any dispute in arbitration or court arising out of or relating to this
Agreement, each party shall bear his or its own attorney’s fees and expenses.

15.  Miscellaneous – (a)  This
Agreement is the entire agreement between the parties and may not be modified or abrogated orally or by course of dealing, but only
by another instrument in writing duly executed by the parties.  The provisions of this Agreement, to the extent more favorable
to Employee, shall supersede any provision to the contrary in any plan, policy, agreement, or other arrangement of Washington
Mutual or any Subsidiary, whether such arrangement was entered into before, following, or concurrently with this Agreement.
 Employee acknowledges that Employee shall be entitled to change in control benefits, severance benefits or other employment
separation benefits only as specifically provided in this Agreement (or, to the extent applicable according to its terms, as
provided in the Washington Mutual Severance Plan as in effect from time to time), notwithstanding the terms of any other
representation, policy, severance plan, benefit plan or agreement.

(b)  This Agreement has been
drafted in contemplation of and shall be construed in accordance with and governed by Washington law.  Jurisdiction and venue
of any court action in connection with this Agreement shall be had exclusively in the Superior Court for King County, Washington or
the U.S. District Court in Seattle.

(c)  Employee acknowledges that
this Agreement has been drafted by counsel for Washington Mutual, and that Employee has not relied upon such counsel with respect
to this Agreement.

(d)  If a court or arbitrator
of competent jurisdiction or governmental authority declares any term or provision hereof invalid, unenforceable or unacceptable,
the remaining terms and provisions hereof shall be unimpaired and the invalid, unenforceable or unacceptable term or provision
shall be replaced by a term or provision that is valid, enforceable and acceptable and that comes closest to expressing the
intention of the invalid, unenforceable or unacceptable term or provision.

(e)  Employee may not assign
Employee's rights or delegate Employee's duties under this Agreement.

 

 

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(f)  Anything to the contrary
herein notwithstanding, the respective rights and obligations of the parties hereto shall survive the termination of this Agreement
to the extent necessary to carry out the intentions of the parties as embodied in such rights and obligations.

(g)  Washington Mutual may
assign its rights and delegate its duties under this Agreement to any purchaser of all or substantially all of Washington Mutual's
assets, provided that such purchases shall assume all of Washington Mutual’s obligations under this Agreement and any related
employment arrangements with Employee.  The transfer of Employee's employment from Washington Mutual to the purchaser of all
or substantially all of the assets of Washington Mutual shall not be considered a termination of employment, but this Agreement
shall run to the benefit of, and be binding upon, the new employer.  In the event of a Change in Control, as defined above,
this Agreement shall bind, and run to the benefit of, the successor to Washington Mutual resulting from the Change in
Control.

16.  Washington Mutual hereby agrees to indemnify
and hold Employee and his heirs and representatives harmless, to the maximum extent permitted by the provisions of Title 12, Code
of Federal Regulations, Section 545.121, or any subsequently promulgated regulation which replaces or supersedes Section
545.121.

DATED
effective as of the 10th day of January 2005.

 

WASHINGTON MUTUAL: WASHINGTON MUTUAL, INC.

By /s/ Kerry K. Killinger  

Kerry K. Killinger

Its Chairman and Chief Executive Officer

EMPLOYEE

/s/ Stephen J. Rotella

Stephen J. Rotella

 

 

 

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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 10th
day of January, 2005. I, the employee who is a party to the Employment Agreement to which this Exhibit is attached, as well as
Washington Mutual, agree as follows:

1.
        Any and all disputes which involve or relate in any way to my employment (or termination
of employment) with Washington Mutual shall be submitted to and resolved by final and binding arbitration.

2.
        Washington Mutual and I understand that by entering into this Binding Arbitration
Agreement, we are each waiving any right we may have to file a lawsuit or other civil action or proceeding relating to my
employment with Washington Mutual, and are waiving any right we may have to resolve employment disputes through trial by jury. We
agree that arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings relating to my
employment.

3.
        This Binding Arbitration Agreement is intended to cover all civil claims which involve
or relate in any way to my employment (or termination of employment) with Washington Mutual, including, but not limited to, claims
of employment discrimination or harassment on the basis of race, sex, age, religion, color, national origin, sexual orientation,
disability and veteran status (including claims under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Employee Retirement Income Security Act ( the Fair Labor Standards Act,
the Immigration Reform and Control Act and any other local, state or federal law concerning employment or employment
discrimination), claims based on violation of public policy or statute, and claims against individuals or entities employed by,
acting on behalf of, or affiliated with Washington Mutual. However, ER1SA plan benefit issues and claims for workers compensation
or for unemployment compensation benefits are not covered by this Binding Arbitration Agreement. The statutes of limitations
otherwise applicable under law shall apply to all claims made in the arbitration.

4.
        I understand and agree that despite anything in this Binding Arbitration Agreement to
the contrary, I am not waiving the right to file or institute a complaint or charge with any government agency authorized to
investigate or resolve employment-related matters, including but not limited to the United States Equal Employment Opportunity
Commission, the Department of Labor, the Occupational Safety and Health Commission, the National Labor Relations Board, the
Immigration and Naturalization Service, and any other comparable local, state or federal agency. I also understand and agree that
despite anything in this Binding Arbitration Agreement to the contrary, either party may request a court to issue such temporary or
interim relief (including temporary restraining orders and preliminary injunctions) as may be appropriate, either before or after
arbitration is commenced. The temporary or interim relief may remain in effect pending the outcome of arbitration. No such request
shall be a waiver of the right to submit any dispute to arbitration.

 

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5.
        This Binding Arbitration Agreement does not constitute an employment contract, require
discharge only for cause, or require any particular corrective action or discharge procedures.

6.
        Arbitration under this Binding Arbitration Agreement shall be conducted before a single
arbitrator and shall take place within the state where I am currently employed by Washington Mutual, or where I was so employed at
the time of termination.

7.
        In order to initiate arbitration, Washington Mutual or I must so notify the other party
in writing of their decision to initiate arbitration, either by personal delivery or certified mail. The notification should
include the following information about the employee: name, home address, work address, work and home phone number, and the
following information about the occurrence: date, location, nature of the claims or dispute, facts upon which the claims are made,
and remedy requested. Any notice of arbitration initiated by Washington Mutual shall be sent to my last known residence address as
reflected in my personnel file at Washington Mutual. Notice of arbitration initiated by me shall be sent to Washington
Mutual’s General Counsel. The General Counsel’s address is currently Washington Mutual, 1201 Third Avenue, WMT 1500,
Seattle, Washington 98101. Provided that if! am filling the position of Washington Mutual’s General Counsel, notice of
arbitration initiated by me shall be sent to Washington Mutual’s Legal Services Department, attention Deputy General
Counsel.

8.
        Within thirty (30) days after receipt of notice of arbitration, Washington Mutual and I
will attempt to agree upon a mutually acceptable arbitrator. If Washington Mutual and I are unable to agree upon an arbitrator, we
will submit the dispute to the American Arbitration Association (U AAA”). If AAA is, for some reason, unable or unwilling to
accept the matter, we will submit the matter to a comparable arbitration service. The arbitration shall be conducted in accordance
with the laws of the state in which the arbitration is conducted and the rules and requirements of the arbitration service being
utilized, to the extent that such rules and requirements do not conflict with the terms of this Binding Arbitration
Agreement.

9.
        At the request of either Washington Mutual or myself, the arbitrator will schedule a
pre-hearing conference to, among other things, agree on procedural matters, obtain stipulations, and attempt to narrow the
issues.

10.
      During the arbitration process, Washington Mutual and I may each make a written demand on the other
for a list of witnesses, including experts, to be called and/or copies of documents to be introduced at the hearing. The demand
must be served at least thirty (30) days prior to the hearing. The list and copies of documents must be delivered within
twenty-five (25) days of service of the demand.

11.
      Either party shall be entitled to conduct a limited amount of discovery prior to the arbitration
hearing. Either party may take a maximum of two (2) depositions. Either party may apply to the arbitrator for further discovery.
Such further discovery may, in the discretion of the arbitrator, be awarded upon a showing of sufficient cause. If any documents to
be produced or requested for production contain or refer to matters which are private, proprietary and/or confidential, the
arbitrator shall make an appropriate protective order prohibiting or limiting use and disclosure of such documents and providing
for return of documents produced after the arbitration is concluded.

 

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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.
      I understand that, at my expense, I have the right to hire an attorney to represent me in the
arbitration, and Washington Mutual has that same right. I also understand that all parties shall have the right to present evidence
at the arbitration, through testimony and documents, and to cross-examine witnesses called by another party. Each party agrees to
pay the fees of any witnesses testifying at that party’s request. Each party also agrees to pay the cost of any stenographic
record of the arbitration hearing should that party request any such record. The requesting party must notify the other of such
arrangements at least two (2) working days in advance of the hearing.

14.
      Any postponement or cancellation fee imposed by the arbitration service will be paid by the party
requesting the postponement or cancellation. During the time the arbitration proceedings are ongoing, Washington Mutual will
advance any required administrative or arbitrator’s fees. Each party will pay its own witness fees.

15.
      At the conclusion of the arbitration, each party agrees to promptly pay any arbitration award
against it.

16.
      We agree that the decision of the arbitrator shall be final and binding on all parties and shall be
the exclusive remedy of the parties. The arbitrator shall issue a written and signed statement of the basis of his or her decision,
including findings of fact and conclusions of law. In making the decision and award, if any, the arbitrator shall apply applicable
substantive law. The arbitrator may only award any remedy that would have been available in court. The decision and award, if any,
shall be consistent with the terms of this Binding Arbitration Agreement and shall include an allocation of the costs of the
arbitration proceeding between the parties.

17.
      This Binding Arbitration Agreement may be enforced by a court of competent jurisdiction through the
filing of a petition to compel arbitration, or otherwise. The decision and award of the arbitrator may also be judicially enforced
pursuant to applicable law.

18.
      Because of the interstate nature of Washington Mutual’s business, this Binding Arbitration
Agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the “FAA”). The provisions of the FAA
(and to the extent not preempted by the FAA, the provisions of the law of the state of my principal place of employment with
Washington Mutual that generally apply to commercial arbitration agreements, such as provisions granting stays of court actions
pending arbitration) are incorporated into this Binding Arbitration Agreement to the extent not inconsistent with the other terms
of this Binding Arbitration Agreement.

19.
      We agree that if any provision of this Binding Arbitration Agreement is found to be unenforceable to
any extent or in violation of any statute, rule, regulation or common law, it will not affect the enforceability of the remaining
provisions and the court shall enforce the affected provision and all remaining provisions to the fullest extent permitted by
law.

 

Page 12 of 17

 

 

 

20.
      This Binding Arbitration Agreement shall remain in full force and effect at all times during and
subsequent to my employment with Washington Mutual, or any successor in interest to Washington Mutual.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 13 of 17

 

 

EXHIBIT B

SEPARATION
AGREEMENT

 

 

This Confidential Executive Separation and Release Agreement
(“Agreement”) is entered between __________________________ (“Employee”) and Washington Mutual, Inc. or
its successor (“Employer”) and is in consideration of the mutual undertakings set forth below, the parties hereby
agree as follows:

 

1.       Employee’s employment with Employer was
terminated on _______________ (“Separation Date”). 

 

2.       Employer will provide to Employee the compensation
and other benefits set forth in Paragraph 6(h) of that certain Employment Agreement between Employer and Employee dated effective
as of December 18, 2004.  In addition, Employee’s stock options, restricted stock, and performance shares will
immediately vest as provided therein.

 

3.       In exchange for the benefits contained in this
Agreement, Employee releases and discharges Employer, all subsidiary, parent, and affiliated entities, and any Employer-sponsored
benefit plans in which Employee 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
Employee signs this Agreement arising out of or in any way related to Employee’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; and based upon any obligations under WARN or ERISA.  This Agreement shall
not affect Employee’s entitlement to receive any 401(k), stock option, or pension benefits that have vested as of the
Separation Date.  Anything to the contrary notwithstanding in this Agreement or the Employment Agreement, nothing herein shall
release Employer from any claim or damages based on any right Employee may have to enforce this Agreement or the Employment
Agreement.

 

4.       Employee agrees that for a period of twenty-four
(24) months from the Separation Date he will refrain from working for or consulting in any way for any of Employer’s
competitors in the retail banking or mortgage-lending industry.

 

5.       Employee agrees that information not generally
known to the public to which Employee has been or will be exposed as a result of Employee's employment by Washington Mutual is
confidential information that belongs to Washington Mutual. This includes information developed by Employee, alone or with others,
or entrusted to Washington Mutual by its customers or others.  Washington Mutual's confidential information includes, without
limitation, information relating to Washington Mutual's trade secrets, know-how, procedures, purchasing, accounting, marketing,
sales, customers, clients, employees, business strategies and acquisition strategies.  Employee will hold Washington Mutual's
confidential information in strict confidence and will not disclose or use it except as authorized by Washington Mutual. or (i) in
the ordinary course of Employee’s employment, (ii) when disclosure is required by law or by any court, arbitrator, or
administrative or legislative body (including any committee thereof) with apparent jurisdiction to require such disclosure, (iii)
with respect to any litigation, arbitration, or mediation involving this Agreement or Employee’s employment with Washington
Mutual, provided that such confidential information not become part of any public record and will be used only in a way that will
preserve its confidentiality and (iv) if such information becomes generally known to the public other than due to Employee’s
violation of this paragraph.

 

 

Page 14 of 17

 

 

6.       Employee agrees that for twenty-four (24) months
after the Separation Date, Employee will not directly or indirectly be knowingly involved in (a) soliciting any employee or
contractor to leave his or her employment or terminate his or her contract relationship with Employer, or (b) hiring any employee
or contractor who, at the time of hiring or during the three month period before the hiring, was an employee of Employer.  In
addition, Employee will not (a) disclose to any third party the names, backgrounds or qualifications of any of Employer’s
employees or contractors, or otherwise identify them as potential candidates for employment except as authorized by Employer or as
required by law, or (b) personally or through any other person approach, recruit, interview or otherwise solicit employees or
contractors of Employer to work for any other employer or to reduce their relationship with Employer.  Notwithstanding the
foregoing, Employee shall not be prohibited from soliciting employment of, or hiring, any such employee or contractor if such
employee’s employment or contractor’s relationship was previously terminated by Employer.

 

7.       Employee, upon reasonable notice and with due
consideration for his other business and personal commitments, agrees to fully and reasonably cooperate with Employer with respect
to business issues, claims, administrative charges, and litigation related to matters concerning Employer about which Employee had
knowledge (or should have had knowledge).  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.  In connection therewith, Employee will be compensated at the rate of $300 per hour for such
services and Employer will reimburse any actual and reasonable expenses necessarily incurred by Employee in complying with this
obligation.  Unless otherwise required by law or by an order of a judicial, legislative, or administrative entity with
apparent jurisdiction, Employee agrees not to communicate with any party, its legal counsel, or others adverse to Employer in any
pending or threatened claims, charges, or litigation except through legal counsel designated by Employer, provided, however, that
Employee shall be entitled to communicate with his own counsel with respect to any such matter. 

 

8.       Should Employee receive notice of a subpoena or
other attempt to communicate with or obtain information from Employee in any way relating to Employer or its business interests,
Employee agrees to notify Employer’s Senior Vice President and Associate General Counsel, Litigation, and to provide a copy
of any such subpoena or request within two (2) business days of receipt of such notice, and not to provide any such information
except through counsel designated by Employer unless compelled to do so by court order after Employer has had an opportunity to
raise and resolve any objections.

 

 

Page 15 of 17

 

 

9.         Employee agrees that, as a condition of
and before receiving the separation pay and other benefits described in this Agreement, he will return to Employer all of
Employer’s property, including all physical property (laptop computers, cellular phones, 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, provided that Employee may retain personal calendars, personal correspondence and rolodexes, such materials as
Employee reasonably believes are required for tax purposes and copies of plans, programs, and agreements related to his
employment.

 

10.     Employee represents that he has not filed any claim against
Employer or any of the individuals or entities released in paragraph 3, and agrees that he will not do so at any time in the future
concerning any of the claims released in this Agreement.

 

11.     Employee agrees and covenants that he will not directly or
indirectly, publicly or privately disparage Employer or any of its subsidiaries, affiliates, employees, officers, directors,
business partners, methods, services, or products, and Employer agrees to direct up to ten employees designated by Employee not to
publicly or privately disparage Employee.  Notwithstanding the foregoing, nothing in this paragraph shall prevent Employee
from making any truthful statement to the extent (i) necessary with respect to any litigation, arbitration, or mediation involving
this Agreement or (ii) required by law or by any court, arbitrator, mediator, or administrative or legislative body (including any
committee thereof) with apparent jurisdiction to order such person to disclose such information.

 

12.     Employee and Employer shall cooperate to coordinate appropriate
internal and external communications concerning Employee’s separation from employment and to designate individuals to whom
reference requests shall be directed.  Employer shall have final approval on all communications issued by Employer with
respect to Employee’s separation from Employer.

 

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

 

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

 

15.     This Agreement is binding on and shall inure to the benefit of
the parties and to those individuals and entities released in paragraph 4, as well as to all of their heirs, successors, and
assigns.

 

16.     The interpretation of this Agreement shall be governed by the
laws of the State of Washington.  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. 

 

 

Page 16 of 17

 

 

17.     In the event of any dispute concerning the validity,
interpretation, enforcement or breach of this Agreement or in any way related to Employee’s employment by Employer or the
Separation of such employment, the dispute shall be resolved by arbitration within King County, Washington, and the parties waive
their right to trial by jury.  Employee and Employer will submit the dispute to a mutually acceptable arbitration service, or,
if they cannot agree to an arbitration service, the dispute will be submitted to the American Arbitration Association.  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.  Each party shall bear his or its own
attorney’s fees, costs, and expenses.  Judgment upon any arbitration award may be entered and enforced by any state or
federal court having jurisdiction.

 

18.     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
Employee and an Executive Vice President of Employer.  Employee acknowledges that in signing this Agreement he has not relied
upon any representation or statement not set forth in this Agreement made by Employer or any of its representatives.

 

 

 

  	Washington Mutual, Inc.	Employee
	 	 
	By__________________________

 	______________________________

      [Name]
	 	 
	Its__________________________	 
	 	 
	 	 
	Date________________________	Date________________________

 

 

 

 

 

Page 17 of 17

 

 

 

December 20, 2004

Steve Rotella

7 Independence Court

Madison, NJ  07940-2366

 Dear Steve,

Congratulations! On behalf of Washington Mutual, I am pleased to offer you the position of President and Chief Operating Officer.
We expect that you will start on or before January 10, 2005 in our Seattle offices. This letter outlines the terms of your new
position.

Compensation

Your starting salary will be $900,000.00.

At Washington Mutual we've made pay for performance the foundation of our compensation strategy. One of the ways that we reward top
performers is through our bonus program. Your annualized bonus target for 2005 will be $2,500,000.00. The bonus you actually
receive will be based on Company's performance on certain key performance measures. Your 2005 bonus will be paid during the first
quarter of 2006 and is guaranteed to be not less than $2,000,000.00. Beginning in 2006, your target bonus will be determined
pursuant to the terms of the Company’s Leadership Bonus plan. Of course, Washington Mutual reserves the right to change the
bonus plan at any time.

Special Signing Bonus

Upon starting with the company, you will be paid a one time cash payment
of $2,600,000.00 on the first regular pay cycle following your first day of employment.

Special Equity

Effective upon your start date, you will receive a one-time award of
220,000 restricted shares of Washington Mutual, Inc. common stock under the Equity Incentive Plan.  The restrictions against
selling or transferring these shares will lapse as outlined below.

 

40% of the shares vest on 7/31/05

35% of the shares vest on 1/31/06

25% of the shares vest on 1/31/10

 

 

Page 1 of 4

WaMu Equity

WaMu Equity is an important part of your total rewards package. As a valued member of our leadership team, you will participate in
the January 2005 equity grant cycle with an award of stock options, restricted stock and performance shares at a level commensurate
with your position in the organization.  You will also participate, at a level commensurate with your position, in any new
incentive stock or incentive compensation plan that Washington Mutual may adopt.

 

Benefits

We currently offer both a 401(k) plan (“WaMu Savings”) and a cash balance pension plan (“WaMu Pension”).
WaMu Savings allows you to save for retirement by contributing a percentage of your salary to the plan on a pretax basis. You are
eligible to join WaMu Savings on the first day of the month following your date of hire. Washington Mutual matches your pretax
contributions to WaMu Savings effective the first day of the month after you have completed twelve months of service. The matching
contribution is currently 100% on the first 3% of your pretax contributions of your eligible compensation, and 50% on the next 2%
of your pretax contributions of your eligible compensation. You will be immediately vested in any matching contributions. You are
eligible for benefit accruals under the WaMu Pension on the first day of the quarter following your one year anniversary.
Washington Mutual reserves the right to amend or terminate these plans at any time.

You will also be enrolled in the Supplemental Executive Retirement Plan
and Executive Targeted Replacement Income Plan as well as eligible for participation in the Deferred Compensation Plan. 
Detailed explanations of these plans will be provided under separate cover.

You will be eligible for perquisites that are available to senior
executives of Washington Mutual.

The Washington Mutual Flexible Benefit Program offers many choices, including medical and dental coverage, that allow you to create
a benefits package tailored to your needs. Your flexible benefits are effective the first day of the month following your first 10
days of service with us. Within 30 days after your start date, you should receive a Flexible Benefits enrollment packet with
instructions. If you have any questions in the meantime, we have an employee benefits helpdesk to assist you at (866) 492-6847.

Relocation

Washington Mutual offers a comprehensive relocation package. A complete overview of the relocation benefits will be provided under
separate cover.  If you voluntarily terminate employment within 12 months of your start date, you agree to repay the entire
relocation benefit.

 

 

Page 2 of 4

 

 

Employment Agreement

Concurrently herewith, we are entering into an employment agreement.

Additional Provisions

When you accept our offer, you will be employed at will, meaning that either you or the Company may terminate our relationship at
any time for any reason, without cause or advance notice but subject to your rights under the employment agreement. No
representations to the contrary are effective unless in writing and approved by the Board of Directors.

This offer of employment is contingent, in part, on the following conditions:

	The results of your background check and reference check
	Acceptance for bonding
	Confirmation of your employment and education history
	Proof of your legal right to work in the United States
	Completion of Washington Mutual's Binding Arbitration Agreement
(enclosed) and your agreement to resolve eligible job related concerns through Washington Mutual's Dispute Resolution Process
(DRP).

If you agree to the terms of this offer please indicate so by signing this letter. The signed original should be returned to me at
1201 3rd Ave, WMT1601, Seattle, WA 98101.

We have enjoyed getting to know you through the interview process and look forward to your joining Washington Mutual. I look
forward to a great future for you and the company. If you have any questions please do not hesitate to contact me at
206.490.1507.

 

Sincerely,

 

/s/ Daryl D. David

Daryl D. David

Executive Vice President

Human Resources

 

Page 3 of 4

 

 

 

 

Acceptance

I accept employment with Washington Mutual according to the terms set forth in the employment agreement and this offer letter.

I also agree that, if I voluntarily terminate my employment within 12 months of my start date, I will repay the full amount of any
relocation benefit, and, to the extent allowed by law, I authorize Washington Mutual to withhold any such amount from my final
pay.

/s/ Stephen J. Rotella

Signature

12/20/04

Date

 

 

Page 4 of 4EXHIBIT 10.1

 

EXECUTIVE MANAGEMENT AGREEMENT

 

This Executive Management Agreement
(“Agreement”) is entered into by and between Craig J. Chapman (“Executive”) and Washington Mutual, Inc.
(“Employer”).

Employer recognizes the valuable
contributions Executive has made to Employer’s business in the past and expects Executive to make additional valuable
contributions in the future.

In consideration of the mutual promises
contained herein, Executive and Employer hereby agree as follows:

1.  The term of this Agreement is from January 1, 2005 (“Inception Date”) through December 31, 2007
(“Expiration Date”).

2.  During the term of this Agreement, and as long as Executive shall remain employed by Employer following the end of the
term, Executive’s employment with Employer shall be “at will,” meaning that it can be terminated by either
Executive or Employer at any time with or without notice.

3.  During the term of this Agreement, if Executive’s employment is terminated by Employer without cause, as defined
herein, or if Employer requires Executive to relocate outside the Seattle metropolitan area and Executive declines to relocate,
Employer shall provide to Executive these separation benefits (“Benefits”) subsequent to the date on which
Executive’s employment is terminated (“Separation Date”):

 

	A lump sum equivalent to the product of (i) $100,000.00
times (ii) the number of full calendar months between the Separation Date and the Expiration Date will be paid to Executive within
ten days of Executive’s execution and return of a Confidential Executive Separation Agreement.
	Executive’s unvested stock options, which were
granted prior to January 1, 2005, will vest effective on the Separation Date, and all vested options will then remain exercisable
by Executive until the earlier of the one-year anniversary of the Separation Date or the expiration of their ten-year term. 
If Executive dies prior to the exercise of such options and prior to their expiration, the right to exercise all vested options
through the one-year anniversary of the Separation Date will pass to his estate.
	Lapse of restrictions on Executive’s shares of
restricted stock, which were granted prior to January 1, 2005, will be accelerated.
	The restrictions on any performance shares awarded to
Executive prior to January 1, 2005, will continue to lapse according to the schedule for payment of the Performance Share awards
established at the time the awards were made.

 

Page 1 of 6

 

4.  Termination of Executive's employment for "cause" shall mean termination because (i) Executive engages in abusive use
of alcohol or other drugs on a continuing or recurring basis, (ii) Executive is convicted of any felony or of a misdemeanor
involving moral turpitude (including forgery, fraud, theft or embezzlement), or is convicted or enters into a pretrial diversion or
similar program in connection with the prosecution for an offense involving dishonesty, breach of trust or money laundering, or
(iii) Executive has engaged in dishonesty, fraud, destruction or theft of property of Employer or a Subsidiary, physical attack on
another employee, willful malfeasance or gross negligence in the performance of his duties, or misconduct materially injurious to
Employer or a Subsidiary

5.  In order to receive the Benefits, Executive agrees to sign, on or after the Separation Date, a Confidential Executive
Separation Agreement in the form attached hereto as Attachment A and incorporated herein by this reference.

6.  This Agreement shall not be effective if Executive’s employment is terminated for any reason upon or within two
years after a “Change in Control,” as that term is defined in the Employment Agreement between Employer and
Executive.

 

Dated effective as of December 22, 2004.

  	Executive	 	Employer
	 	 	 
	 	 	Washington Mutual, Inc.
	 	 	 
	/s/ Craig J. Chapman	 	By:  /s/ Kerry K.
      Killinger
	Craig J. Chapman	 	Its:  Chairman and CEO

 

 

Page 2 of 6

 

 

ATTACHMENT A

 

Confidential Executive Separation Agreement

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

Employer and Executive have mutually agreed to end Executive’s
employment.  In order to assist Executive in his transition to new employment and acknowledge past contributions, Employer
will provide 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 is ended
effective _______________ (“Separation Date”). 

3.      Employer shall provide to Executive the Benefits described
in Paragraph 3 of the Executive Management Agreement between Executive and Employer dated effective as of ________________,
2004.

4.      In exchange for the benefits contained in this Agreement,
Executive releases and discharges Employer, all subsidiary, parent, and affiliated entities, and any Employer-sponsored 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; and based upon any obligations under WARN or ERISA.  This Agreement shall
not affect Executive’s entitlement to receive any 401(k), stock option, or pension benefits that have vested as of the
Separation Date.

 

 

Page 3 of 6

 

5.      Executive agrees that, as a result of his employment by
Employer, he 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 (including customer lists).  Executive agrees that, during his 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.

6.      Executive recognizes that Employer’s workforce and
contracting relationships are a vital part of its business.  Therefore, Executive agrees that for twenty-four (24) months
after the Separation Date, Executive will not directly or indirectly be involved in (a) soliciting any employee or contractor to
leave his or her employment or contract relationship with Employer, or (b) hiring any employee or contractor who, at the time of
hiring or during the three month period before the hiring, was an employee of Employer.  This includes that Executive will not
(a) disclose to any third party the names, backgrounds or qualifications of any of Employer’s employees or contractors, or
otherwise identify them as potential candidates for employment, or (b) personally or through any other person approach, recruit,
interview or otherwise solicit employees or contractors of Employer to work for any other employer or to reduce their relationship
with Employer.

7.        Executive agrees to fully and reasonably
cooperate with Employer with respect to business issues, claims, 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.  Employer will reimburse any actual and reasonable expenses necessarily incurred by Executive in complying with
this obligation.  Executive agrees not to communicate with any party, its legal counsel, or others adverse to Employer in any
pending or threatened claims, charges, or litigation except through legal counsel designated by Employer. 

8.        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 Employer’s Senior Vice President and Associate General Counsel, Litigation, and to provide a copy
of any such subpoena or request within two (2) business days of receipt of such notice, and not to provide any such information
except through counsel designated by Employer unless compelled to do so by court order after Employer has had an opportunity to
raise and resolve any objections.

 

Page 4 of 6

Because Employer does not offer such benefits to all
departing employees, it is important to Employer that this Agreement be maintained confidential.  Executive agrees not to
disclose the fact or terms of this Agreement to anyone, or to tell anyone that he received any special consideration from
Employer.  Executive may disclose the terms of this Agreement only to his spouse, his attorney, and his accountant or similar
advisor, on the condition that he shall direct each such person, and they agree, to maintain the confidentiality of this
Agreement.  

9.        Executive agrees that, as a condition of and
before receiving the separation pay and other benefits described in this Agreement, he will return to Employer all of
Employer’s property, including all physical property (laptop computers, cellular phones, 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.

10.   Executive represents that he has not filed any claim against Employer or any of
the individuals or entities released in paragraph 4, and that he will not do so at any time in the future concerning any of the
claims released in this Agreement.

11.   Executive agrees and covenants that he will not directly or indirectly,
publicly or privately disparage Employer or any of its subsidiaries, affiliates, employees, officers, directors, business partners,
methods, services, or products.

12.   Executive and Employer shall cooperate to coordinate appropriate internal and
external communications concerning Executive’s separation from employment and to designate individuals to whom reference
requests shall be directed.  Employer shall have final approval on all communications.

13.   Executive understands and acknowledges the significance and consequences of
this Agreement and agrees that it is voluntary, and that he 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 himself of that opportunity.  Executive
acknowledges that he has been given at least twenty-one (21) days after receipt of this Agreement during which to consider
it.

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

15.   This Agreement is binding on and shall inure to the benefit of the parties and
to those individuals and entities released in paragraph 4, as well as to all of their heirs, successors, and assigns.

16.   The interpretation of this Agreement shall be governed by the laws of the State
of Washington.  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. 

 

Page 5 of 6

 

17.   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 Separation 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, if they cannot
agree to an arbitration service, the dispute will be submitted to the American Arbitration Association.  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.

18.   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 Executive
Vice President of Employer.  Executive acknowledges that in signing this Agreement he has not relied upon any representation
or statement not set forth in this Agreement made by Employer or any of its representatives.

 

  	Washington Mutual, Inc.	Executive
	 	 
	By__________________________

 	______________________________

      Craig J. Chapman
	 	 
	Its__________________________	 
	 	 
	 	 
	Date________________________	Date________________________

 

 

Page 6 of 6

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