SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 21, 2005

WASHINGTON MUTUAL, INC.
(Exact name of Registrant as specified in its charter)

 

Washington

 

1-14667

 

91-1653725

(State or other jurisdiction
of incorporation)

 

(Commission File Number)

 

(I.R.S. Employer
Identification No.)

1201 THIRD AVENUE, WMT 1601
SEATTLE, WASHINGTON 98101
(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code: (206) 461-2000

(Former name or former address, if changed since last report)

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

      o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

      o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

      o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

      o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS

Item 1.01 Entry into a Material Definitive Agreement.

        On October 21, 2005, Washington Mutual, Inc. (the “ Company ”) named John Woods its new Controller and Senior Vice President and Principal Accounting Officer, pursuant to an employment offer letter from the Company to Mr. Woods (the “ Letter ”).  The key terms of the Letter are briefly summarized below.  The following summary description is qualified in its entirety by reference to the Letter, which is attached to this Form 8-K as Exhibit 10.1, and is incorporated herein by reference.

- Duties .  Mr. Woods will be the Company’s Controller and have the corporate title of Senior Vice President and Principal Accounting Officer.  He will report directly to the Company’s Chief Financial Officer, and his employment with the Company will start on or before January 2, 2006. 
   
- Compensation .  Mr. Woods’ starting base salary will be $400,000, and his Leadership Bonus Plan annualized bonus target for 2006 will be 75% of his base salary.  The Company will pay Mr. Woods a one-time signing bonus of $500,000 and a one-time relocation bonus of $100,000.  Both amounts must be repaid by Mr. Woods, in whole or in part, if he voluntarily terminates his employment within 18 months. 
   
- Washington Mutual Equity .  As part of his new hire package, Mr. Woods will receive the following awards pursuant to the Company’s 2003 Equity Incentive Plan:
   
  - An option to purchase 27,273 shares of Company common stock.  The option will vest in three equal annual installments, beginning on the first anniversary of the grant date, subject to Mr. Woods’ continued employment by the Company.  The option will have an exercise price equal to the market closing price of one share of the Company’s common stock on the day before the grant date. 
     
  - Shares of Company restricted stock with a value of $700,000, as determined based upon the market value of one share of Company common stock as of the date of issuance.  The sale and transfer restrictions on these shares of restricted stock will lapse in three equal annual installments starting on the first anniversary of the date of issuance.  Shares still subject to the restrictions will be forfeited if Mr. Woods’ employment by the Company ends prior to complete vesting.
   
- Employment Term .  Mr. Woods will be an at-will employee of the Company, meaning that either he or the Company may terminate employment at any time, for any reason, and without cause or advance notice. 
   
- Change in Control .  Mr. Woods will receive the Company's standard executive officer employment (change in control) agreement providing for payment of an amount equal to two times Mr. Woods’ annual compensation and accelerated vesting of stock options and restricted stock in the event of certain terminations of employment within two years after a change in control of the Company.  A form of the agreement is filed as Exhibit 10.12 to the Company's Form 10-K filed on March 18, 1998.
   
- Other Benefits .  Mr. Woods will be eligible to participate in other benefit arrangements available to the Company's executive officers, including the Company's pension, 401(k) and medical benefit plans.
   

 

 

SECTION 5 – CORPORATE GOVERNANCE AND MANAGEMENT

Item 5.02  Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. 

        On October 21, 2005, the Company named John Woods its new Controller and Senior Vice President and Principal Accounting Officer.  Mr. Woods will assume his new position with the Company on or before January 2, 2006, and will report to Thomas Casey, the Company’s Chief Financial Officer.  The Company will employ Mr. Woods pursuant to the terms of the Employment Offer Letter attached to this Form 8-K as Exhibit 10.1, and as described in this Form 8-K above under Item 1.01.  Mr. Woods, age 40, served as the Corporate Controller and Senior Vice President and Chief Accounting Officer of Freddie Mac since February 2005.  Mr. Woods joined Freddie Mac in April 2002 as Senior Vice President, Accounting and Control in Funding & Investments.  In October 2003 he was named Senior Vice President, Principal Accounting Officer of Freddie Mac.  Before joining Freddie Mac, Mr. Woods was a consulting partner at Arthur Andersen, where he specialized in risk management issues facing financial institutions.

SECTION 7 – REGULATION FD

Item 7.01  Regulation FD Disclosure

        As disclosed under Items 1.01 and 5.02, on October 21, 2005, the Company named John Woods its new Controller and Senior Vice President and Principal Accounting Officer.  The Company’s press release announcing the hiring of John Woods is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01  Financial Statements and Exhibits.

(c)

Exhibits

 

 

 

 

 

10.1

Employment Offer Letter, accepted by John Woods on October 21, 2005.

 

99.1

Press Release, dated October 27, 2005, announcing the appointment of John Woods as Controller and Senior Vice President and Principal Accounting Officer.

 

 

SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 27, 2005

 

 

 

WASHINGTON MUTUAL, INC.

 


 


By:


 


/s/ Fay L. Chapman

Fay L. Chapman
Senior Executive Vice President  

 


Exhibit Index  
 

Exhibit No.

 

 

Description

       

10.1

 

 

Employment Offer Letter, accepted by John Woods on October 21, 2005.

99.1

 

 

Press Release, dated October 27, 2005, announcing the appointment of John Woods as Controller and Senior Vice President and Principal Accounting Officer.

 

Exhibit 10.1


October 17, 2005


John Woods

[address]
 

Dear John,

Congratulations! On behalf of Washington Mutual ("Washington Mutual" or "the Company"), I am pleased to offer you the position of Controller, with a corporate title of Senior Vice President and Principal Accounting Officer, pending approval by the Board of Directors. We expect that you will start on or before January 2, 2006 in our Seattle office. You will report directly to me. This letter outlines the terms of your new position.
 

Compensation
Your starting base salary will be $400,000.00.

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 2006 will be 75% of your salary. The bonus you actually receive will be based on a combination of your individual performance and the Company's performance. Of course, Washington Mutual reserves the right to change the bonus plan at any time.

Signing Bonus
In appreciation of your decision to join us, the Company will pay you a one-time signing bonus of $500,000.00. It will be paid in your first normally scheduled paycheck (minus all federal and state withholding). If you voluntarily terminate employment within 18 months of your start date, you agree to repay a pro-rated share of the signing bonus. 

WaMu Equity
WaMu Equity is an important part of your total rewards package. As a valued member of our leadership team, you will be eligible to participate in the relevant Washington Mutual equity incentive plans.

As part of your new hire package, you will be granted options to purchase 27,273 shares of Washington Mutual common stock. The grant date will be specified in the Option Agreement. These stock options vest over three years, 1/3 each year beginning on the one year anniversary of the grant date, subject to your continued employment by Washington Mutual.

The price at which you may exercise your options will be the stock's fair market value at the close of market on the day before the grant date. Stock options are granted under the Washington Mutual, Inc. 2003 Equity Incentive Plan (the "Equity Incentive Plan") and are subject to the provisions of that plan. These terms and other relevant terms of options awarded to you will be set forth in your Option Agreement.

As part of your new hire package, you will also be awarded $700,000 worth Washington Mutual restricted stock.  You cannot sell or transfer the restricted stock until the restrictions lapse.  The restrictions lapse ratably over three years (1/3 on each anniversary) after the date of the award, provided that you remain employed by Washington Mutual. The number of shares will be dependent upon the market value at the time of the award. These terms and other relevant terms of your award will be set forth in the Agreement.  The restricted stock will be awarded under the Equity Incentive Plan". Pursuant to the Equity Incentive Plan, if your employment by Washington Mutual ends, you will forfeit all restricted stock on which the restrictions have not yet lapsed.

You will be eligible for consideration for equity awards each year during our performance review process in January. Future awards are not guaranteed; they are granted at the discretion of the Human Resource Committee of the Board and are based on your performance and anticipated future contributions to our company.

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 up to 75 percent of your salary (subject to IRS limitations) to the Plan on a pretax basis. You are eligible to join WaMu Savings as of your date of hire. Washington Mutual matches your pretax contributions to WaMu Savings effective the first day of the month after you have completed twelve months of service. The matching contribution is currently 100% on the first 3% of your eligible compensation that you contribute plus 50% on the next 2% of your eligible compensation that you contribute. You are immediately vested in your contributions, rollover contributions into the Plan, and company matching contributions made on or after January 1, 2004. You are also automatically eligible for benefit accruals under the WaMu Pension as of the first day of the quarter following your one year anniversary. Washington Mutual reserves the right to amend or terminate these Plans at any time.

The Washington Mutual Flexible Benefit Program offers many choices, including medical and dental coverage, that allow you to create a benefits package tailored to your needs. Your flexible benefits are effective the first day of the month following your first 10 days of service with us. If you have any questions you may contact the employee service center at (866) 492-6847.

Relocation
As part of your new hire package, Washington Mutual will pay you a one time relocation bonus of $100,000.00 through our relocation vendor, Americorp.  Washington Mutual also offers a comprehensive relocation package. For a complete overview of the relocation benefits available to you please refer to the attached relocation document. If you voluntarily terminate employment within 18 months of your start date, you agree to repay the entire relocation benefit.

 

Change in Control
You will receive Washington Mutual's standard agreement providing severance benefits in the event of termination in connection with a future change in control (as defined in the agreement). This agreement will provide payment of an amount equal to 2.00 times your annual compensation and accelerated vesting of your stock options and restricted stock upon a termination for any reason other than for cause or upon resignation for good cause (as those terms are defined in the agreement) within two years following such a change in control. Annual compensation will be defined in the agreement, but generally includes all items of compensation for the calendar year other than the value of grants of equity rights.

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. No representations to the contrary are effective unless in writing and approved by the Board of Directors.

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

If you agree to the terms of this offer please indicate so by signing this letter. The signed original should be returned to Senior Recruiting Manager, Chelle Wingeleth at 1111 Third Avenue, EET1202, Seattle Washington 98101 no later than October 21, 2005.

We have enjoyed getting to know you through the interview process and look forward to the opportunity to have you on our team. We hope that you will accept this offer and we look forward to a great future together. If you have any questions please do not hesitate to contact me at 206-490-3866.

Sincerely,


/s/ Thomas Casey
Tom Casey
Chief Financial Officer

 


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

I also agree that, if I voluntarily terminate my employment within 18 months of my start date, I will repay a pro-rated share of the signing bonus and the full amount of any relocation benefit and bonus, and, to the extent allowed by law, I authorize Washington Mutual to withhold any such amount from my final pay.



/s/ John Woods                            October 21, 2005
Signature                                        Date

Exhibit 99.1  

October 27, 2005

FOR IMMEDIATE RELEASE  

Washington Mutual Names John F. Woods Controller

SEATTLE, Wash -- Washington Mutual, Inc (NYSE: WM) announced today that it has hired John F. Woods to be its new corporate Controller, effective December 1.

In addition to assuming responsibility for the controllership function, he will manage Washington Mutual’s Corporate Accounting and Financial Reporting divisions.  He will also serve as the company’s principal accounting officer and will become the primary interface with the Washington Mutual, Inc. Audit Committee.  Woods will report to company Chief Financial Officer Tom Casey. 

“We’re really pleased to have someone with John’s depth of experience in corporate accounting, auditing and financial reporting as our new controller,” said Casey.  “He is an outstanding addition to our Finance team."

  Woods joins Washington Mutual from Freddie Mac where he served as senior vice president, corporate controller and principal accounting officer.  He joined Freddie Mac in 2002 as senior vice president of Accounting and Controls in the Funding and Investments Division.  He was named Principal Accounting Officer in 2003 and Corporate Controller in 2005.    Prior to his experience at Freddie Mac, Woods worked for Arthur Anderson for 16 years in its financial services audit and consulting practices.

Woods holds a bachelor’s degree from the University of Virginia and is a certified public accountant.

About Washington Mutual
With a history dating back to 1889, Washington Mutual is a retailer of financial services that provides a diversified line of products and services to consumers and commercial clients. At September 30, 2005, Washington Mutual and its subsidiaries had assets of $333.62 billion. Washington Mutual currently operates more than 2,500 retail banking, mortgage lending, commercial banking and financial services offices throughout the nation. Washington Mutual’s press releases are available at www.wamunewsroom.com .

# # #

 

Media Contact:

 

AlanGulick

 

Investor Contact:

 

Alan Magleby

 

 

(206) 377-3637

 

 

 

(212) 326-6019