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): June 29, 2005
WASHINGTON MUTUAL, INC.
(Exact name of Registrant as specified in its charter)
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Washington |
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1-14667 |
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91-1653725 |
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(State or other
jurisdiction
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(Commission File Number) |
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(I.R.S. Employer
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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
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(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.
Washington Mutual, Inc. (the “ Company ”) named David C. Schneider its new President, Home Loans and Executive Vice President, effective July 18, 2005, pursuant to an employment offer letter from the Company accepted by Mr. Schneider on June 29, 2005 (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.
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Duties . Mr. Schneider will have the title of Executive Vice President and President, Home Loans. He will report directly to the Company’s President and Chief Operating Officer. |
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Compensation . Mr. Schneider’s starting base salary will be $600,000, and his Leadership Bonus Plan annualized bonus target will be 150% of his base salary. During 2005, Mr. Schneider’s bonus will be pro-rated based upon his start date. The Company will pay Mr. Schneider a one-time signing bonus of $500,000 and a one-time relocation bonus of $500,000. Both amounts must be repaid by Mr. Schneider, in whole or in part, if he voluntarily terminates his employment within 24 months. |
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Washington Mutual Equity . As part of his new hire package and after he begins his employment, Mr. Schneider will receive the following awards pursuant to the Company’s 2003 Equity Incentive Plan: |
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An option to purchase 31,780 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. Schneider’s 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. |
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Shares of Company restricted stock with a value of $375,000, 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. Schneider’s employment by the Company ends prior to complete vesting. |
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Shares of Company restricted stock with a value of $1,000,000, 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 on December 31, 2009, provided that the Company satisfies performance criteria to be specified in the award agreement. |
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Employment Term . Mr. Schneider 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. |
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Change in Control . Mr. Schneider will receive the Company's standard executive officer employment (change in control) agreement providing for payment of an amount equal to three times Mr. Schneider's annual compensation and accelerated vesting of stock options in the event of a termination of employment within 36 months 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. |
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Other Benefits . Mr. Schneider will be eligible to participate in other benefit arrangements available to the Company's executive officers, including the Company's pension, 401(k) and medcal benefit plans. |
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SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and Exhibits.
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(c) |
Exhibits |
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10.1 |
Employment Offer Letter, accepted by David Schneider on June 29, 2005.
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99.1 |
Press Release, dated June 30, 2005, announcing the appointment of David C. Schneider as Executive Vice President and President, Home Loans. |
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.
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Date: July 6, 2005 |
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WASHINGTON MUTUAL, INC. |
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Fay L. Chapman
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Exhibit 10.1
June 22, 2005
David C. Schneider
6475 Wydown Boulevard
St. Louis, Missouri 63105
Dear David,
Congratulations! On behalf of Washington Mutual ("Washington Mutual" or "the Company"), I am pleased to offer you the position of
President, Home Loans, with a Corporate title of Executive Vice President, pending approval by the Board of Directors. We expect
that you will start on July 18, 2005 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 $600,000.00.
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 will be 150% of your salary. The bonus you actually receive
will be based on a combination of your individual performance and the Company's performance. During your first year with us, your
bonus will be pro-rated based on your start date. 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 24
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 31,780 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 $375,000
worth Washington Mutual restricted stock. You cannot sell or transfer the restricted stock for three years from the date of
the award. After three years, the restrictions against sale or transfer will lapse, provided that you remain employed by Washington
Mutual at the end of that period. 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 December. 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.
Special Equity
In consideration of your joining us, you will receive a one-time award
of $1,000,000.00 worth of Washington Mutual restricted stock under the 2003 Equity Incentive Plan. The restrictions against
selling or transferring these shares will lapse on December 31, 2009, provided that the performance criteria set forth in the
Agreement have been satisfied.
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.
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 $500,000. 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 24 months of your start date, you agree to repay
the entire relocation benefit and relocation bonus.
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 3.00 times your
annual compensation and accelerated vesting of your stock options 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 eighteen months 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:
· 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
· Execution of Washington Mutual's Binding Arbitration Agreement (copy for your records enclosed) and your agreement to resolve eligible job related concerns through Washington Mutual's Dispute Resolution Process (DRP). Your manager will present you with your original Binding Arbitration Agreement for signature on your first day of work.
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 June 30, 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 206-377-8302.
Sincerely,
/s/ Steve Rotella
Steve Rotella
President & Chief Operating 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 24 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 relocation bonus, and, to the extent allowed by law, I authorize Washington Mutual to withhold any such amount from my final pay.
/s/ David Schneider
June 29, 2005
_____________________________ _______________
Signature
Date
Exhibit 99.1
June 30, 2005
FOR IMMEDIATE RELEASE
Washington Mutual Announces
New President of its Home Loans Division
SEATTLE – Washington Mutual, Inc. (NYSE:WM) today announced that it has hired David C. Schneider to be president of its Home Loans Division. Effective August 8, he will oversee all aspects of the company’s home loans business, including its industry leading sales production team and $730 billion mortgage servicing portfolio, reporting to Washington Mutual President and Chief Operating Officer Steve Rotella. He will also become a member of Washington Mutual’s Executive Committee.
Schneider assumes the reins of the Home Loans Division from Rotella who has served as acting head of the business since March. The company announced its search for a permanent head of the Home Loans Division at that time.
Schneider previously served as president and chief operating officer of St. Louis-based CitiMortgage, Inc. He brings to Washington Mutual a wealth of experience in mortgage lending, consumer lending, retail banking and corporate finance.
“David Schneider has a proven track record of success in leading and growing a national home lending business, as well as solid experience with cross selling home loans across a retail banking network and other distribution channels,” said Rotella. “This powerful combination makes him an excellent addition to the Washington Mutual senior management team.”
Schneider is the most senior new-hire to join Washington Mutual’s Home Loans business over the past six months, resulting in what Rotella calls “one of the most experienced and talented teams in the industry.”
While at CitiMortgage, Schneider led the organic growth of the company and the successful integration of two acquired mortgage companies, First Nationwide and Principal Residential. He also engineered several successful growth and operational efficiency initiatives that resulted in notable improvements in loan processing times, deeper mortgage product penetration among retail bank and brokerage customers, and a significant increase in home loan market share.
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“We’re confident that David Schneider’s broad financial services experience and proven ability to create synergies between home loans and other retail businesses fits well with our plans to grow within and across all our businesses,” Rotella added.
Prior to joining CitiMortgage in April 2001, Schneider, 39, served as executive vice president of Retail Banking for Old Kent Financial Corporation, a Michigan-based commercial bank holding company that was acquired by Fifth Third Bancorp in 2001. He joined Old Kent in June 1992 and served as chief financial officer of Old Kent Mortgage until 1997. He left the company for one year to serve as a managing partner of Stratmor Group, a consulting and investment banking firm specializing in the mortgage banking industry, but later returned to Old Kent to head up its retail banking unit with responsibility for the company’s consumer deposits, consumer lending, business banking, and leasing operations. He also oversaw the branch network and its direct banking unit -- telephone banking, internet banking, debit cards and ATM network.
Schneider currently is president of the Consumer Mortgage Coalition and is a member of the Housing Policy Council’s Executive Committee.
Schneider holds a BSBA in accounting from Babson College in Wellesley, Massachusetts, and an MBA from Indiana University. He is also a licensed CPA.
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 March 31, 2005, Washington Mutual and its subsidiaries had assets of $319.70 billion. Washington Mutual currently operates more than 2,400 retail banking, mortgage lending, commercial banking and financial services offices throughout the nation. Washington Mutual’s press releases are available at www.wamunewsroom.com .
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Media Contacts:
Adrian Rodriguez
(206) 377-3268
Adrian.rodriguez@wamu.net
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Sheri Pollock
(206) 377-2138
sheri.pollock@wamu.net
Investor Relations Contact:
Alan Magleby
(206) 490-5182 or (212)326-6019
alan.magleby@wamu.net
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