Exhibit 10.2
WASHINGTON MUTUAL
EQUITY INCENTIVE PLAN
As Amended and Restated as of January 16, 2001
TABLE OF CONTENTS
Page
ARTICLE 1. PURPOSE OF THE PLAN
ARTICLE 2. DEFINITIONS
2.1 Affiliate.......................................................................................1
2.2 Agreement.......................................................................................1
2.3 Award...........................................................................................1
2.4 Board...........................................................................................1
2.5 Code............................................................................................2
2.6 Committee.......................................................................................2
2.7 Company.........................................................................................2
2.8 Exchange Act....................................................................................2
2.9 Grant Date......................................................................................2
2.10 Participant.....................................................................................2
2.11 Plan............................................................................................2
2.12 Restricted Stock................................................................................2
2.13 Stock...........................................................................................2
2.14 Stock Units.....................................................................................2
2.15 Unrestricted Stock..............................................................................2
ARTICLE 3. ADMINISTRATION
3.1 Administration of Plan..........................................................................2
3.2 Authority to Grant Awards.......................................................................2
3.3 Participants' Accounts..........................................................................3
3.4 Transfer of Unrestricted Stock..................................................................3
3.5 Discretionary Authority of Committee............................................................4
3.6 Persons Subject to Section 162(m)...............................................................5
3.7 Shareholder Rights..............................................................................5
ARTICLE 4. ELIGIBILITY AND LIMITATIONS ON GRANTS
4.1 Participation...................................................................................5
4.2 Limitations on Grants...........................................................................5
ARTICLE 5. STOCK SUBJECT TO PLAN
5.1 Maximum Number of Shares........................................................................5
ARTICLE 6. RESTRICTIONS AND FORFEITURES
6.1 General Restrictions............................................................................6
6.2 Termination of Employment.......................................................................6
6.3 Retirement......................................................................................6
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6.4 Lapse of Restrictions - General.................................................................6
6.5 Employee Status.................................................................................7
6.6 Performance-Based Grants........................................................................7
6.7 Surrender of Restricted Stock...................................................................9
ARTICLE 7. ADJUSTMENT UPON CORPORATE CHANGES
7.1 Adjustments to Shares..........................................................................10
7.2 Substitution of Awards on Merger or Acquisition................................................10
7.3 Effect of Certain Transactions.................................................................10
7.4 No Preemptive Rights...........................................................................11
ARTICLE 8. COMPLIANCE WITH LAW AND APPROVAL
OF REGULATORY BODIES
8.1 General........................................................................................11
8.2 Representations by Participants................................................................11
ARTICLE 9. TAXES
9.1 Immediate Taxation.............................................................................11
9.2 Deferred Taxation..............................................................................12
ARTICLE 10. GENERAL PROVISIONS
10.1 Effect on Employment...........................................................................12
10.2 Unfunded Plan..................................................................................12
10.3 Rules of Construction..........................................................................12
10.4 Governing Law..................................................................................12
10.5 Compliance With Section 16 of the Exchange Act.................................................12
10.6 Amendment......................................................................................13
10.7 Effective Date of Plan.........................................................................13
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WASHINGTON MUTUAL EQUITY INCENTIVE PLAN
As Amended and Restated as of January 16, 2001
ARTICLE 1. PURPOSE OF THE PLAN
The purpose of the Plan is to advance the interests of the Company, to
provide a performance incentive and to align the interests of the Participants
with the interests of the Company, its Affiliates and its shareholders through
increased stock ownership by the Participants. It is intended that Participants
may acquire or increase their proprietary interests in the Company and that
Participant employees will be encouraged to remain in the employ of the Company
or of its Affiliates.
The Plan was established January 1, 1986 as the WM Financial, Inc.
Restricted Stock Plan. Washington Mutual Savings Bank, the prior Plan sponsor,
amended the Plan by a First Amendment, effective as of July 1, 1987, a Second
Amendment, effective as of March 31, 1988, a Third Amendment, effective as of
June 30, 1991, a Fourth Amendment, effective as of June 18, 1991, and a Fifth
Amendment, effective as of October 20, 1992.
By action of the respective boards of directors of Washington Mutual
Savings Bank and the Company, the Company became the sponsor of the Plan,
effective November 29, 1994, after which the Company adopted an amendment and
restatement of the Plan, effective November 29, 1994, that incorporated all
material provisions of the Plan prior to such date and amended the Plan in
certain respects.
The Company amended and restated the Plan, effective February 18, 1997,
and amended the Amended and Restated Plan twice in 1999. The Company amended and
restated the Plan effective January 18, 2000. Finally, the Plan was amended by
action of the Board of Directors on January 16, 2001, subject to approval by the
shareholders of the Company.
The Board approved this restatement of the Plan to incorporate all such
amendments.
ARTICLE 2. DEFINITIONS
2.1 Affiliate. A "parent corporation," as defined in section 424(e) of the
Code, or "subsidiary corporation," as defined in section 424(f) of the Code, of
the Company.
2.2 Agreement. A written agreement (including any amendment or supplement
thereto) between the Company or an Affiliate and a Participant specifying the
terms and conditions of an Award granted to such Participant.
2.3 Award. An award under the Plan that is expressed as a stated number of
whole shares of Restricted Stock or denominated in Stock Units. An Award shall
be subject to the terms of an Agreement.
2.4 Board. The board of directors of the Company.
2.5 Code. The Internal Revenue Code of 1986, as amended.
2.6 Committee. A committee composed of two or more members of the Board who
are not officers or employees of the Company or an Affiliate, who are otherwise
qualified as Non-Employee Directors as defined under Rule 16b-3(b)(3)(i) of the
Exchange Act, and who qualify as outside directors as defined in Section 162(m)
of the Code.
2.7 Company. Washington Mutual, Inc., successor to Washington Mutual
Savings Bank as Plan sponsor, and its successors.
2.8 Exchange Act. The Securities Exchange Act of 1934, as amended.
2.9 Grant Date. The date that an Award is granted to a Participant
hereunder.
2.10 Participant. A person who is granted an Award hereunder. Members of
the Board, and employees, consultants and advisors of the Company or of an
Affiliate, are the only persons who are eligible to be Participants.
2.11 Plan. The Washington Mutual Equity Incentive Plan, as embodied herein
and as amended from time to time, and including all predecessor versions of the
Plan.
2.12 Restricted Stock. Stock that is awarded subject to restrictions
hereunder and has not become Unrestricted Stock in accordancewith Article 6.
2.13 Stock. The common stock of the Company.
2.14 Stock Units. An Award denominated in units of Stock that have not
vested in accordance with the terms of the Award.
2.15 Unrestricted Stock. Shares of Stock granted under the Plan that are
no longer subject to restrictions that constitute a substantial risk of for
feiture, in accordance with Article 6, or shares of Stock paid in respect of
the vesting of an Award of Stock Units.
ARTICLE 3. ADMINISTRATION
3.1 Administration of Plan. The Plan shall be administered by the
Committee. The express grant in the Plan of any specific power to the Committee
shall not be construed as limiting any power or authority of the Committee. Any
decision made or action taken by the Committee to administer the Plan shall be
final and conclusive. No member of the Committee shall be liable for any act
done in good faith with respect to the Plan or any Agreement or Award. The
Company shall bear all expenses of Plan administration.
3.2 Authority to Grant Awards. The Committee shall have authority to grant
Awards upon such terms as the Committee deems appropriate and that are not
inconsistent with the provisions of Articles 4 and 5 of the Plan. Such terms may
include restrictions on the transfer of all or any portion of the Stock or Stock
Units granted under an Award.
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3.3 Participants' Accounts. The Committee shall establish and maintain
adequate records to disclose the names of the Participants and their respective
Awards, the restrictions thereon, the stock certificates related thereto, any
dividends or distributions payable or paid thereon, any votes taken with respect
thereto, and such other matters as may be relevant to the proper administration
of the Plan.
(a) Dividends and Distributions. All cash dividends and other
cash distributions paid in respect of an Award shall be credited to the
account of the Participant and invested in Stock or Stock Units
pursuant to the terms of the Company's general dividend reinvestment
program for shareholders of the Company. All such amounts and their
proceeds shall be subject to the same restrictions on the same basis as
the underlying Restricted Stock or Stock Units and shall be treated as
Restricted Stock or Stock Units for all purposes under the Plan.
(b) Forfeitures. Upon the occurrence of a forfeiture
hereunder, all shares of Restricted Stock or Stock Units subject to an
Award (including any Restricted Stock or Stock Units purchased with
dividends paid on the underlying Restricted Stock or Stock Units) shall
be retained by the Company or cancelled, as appropriate.
3.4 Transfer of Unrestricted Stock. The Company shall generally transfer
Unrestricted Stock to the Participant at an administratively feasible time after
the lapse of restrictions hereunder on an Award of Restricted Stock or the
vesting of an Award of Stock Units. Any fractional shares of Unrestricted Stock
shall be paid to the Participant in cash.
(a) Termination of Employment. Upon the termination of
employment for any reason of a Participant who is an employee of the
Company or an Affiliate (including upon the Participant's death), or
upon such a Participant's retirement or permanent and total disability,
the Company shall deliver to the Participant (or his personal
representative) all Unrestricted Stock held for his account.
(b) Death of Participant. Each Participant shall have the
right, at any time, to designate any person or persons as his
beneficiary or beneficiaries (both principal as well as contingent) to
whom all amounts that are otherwise due hereunder after termination of
employment shall be paid upon his death. Each beneficiary designation
shall become effective only when filed in writing with the Committee
during the Participant's lifetime on a form acceptable to the
Committee.
(1) If the Participant is married as of the date of
filing a beneficiary designation and names a principal
beneficiary other than his spouse, such designation shall not
be effective unless the spouse consents to the beneficiary
designation in writing, witnessed by a notary public.
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(2) The filing of a new beneficiary designation form
as provided herein shall cancel all beneficiary designations
previously filed. Any finalized divorce or marriage (other
than a common law marriage) of a Participant subsequent to the
date of filing a beneficiary designation form, which divorce
or marriage is communicated to the Committee in writing, shall
revoke any prior designation. As used herein "divorce"
includes a dissolution of a marriage or an annulment of a
marriage.
(3) If all designated beneficiaries predecease a
Participant or die prior to complete distribution, the
Committee shall make distributions to the Participant's
personal representative or executor. If a Participant fails to
designate a beneficiary as provided above, the Committee shall
make distributions to the Participant's personal
representative or executor.
3.5 Discretionary Authority of Committee. The Committee shall have full
discretionary power, subject to, and within the limits of, Articles 4 and 5 of
the Plan:
(a) To determine from time to time who of the eligible persons shall be
granted Awards, and the time or times when, and the number of shares of
Restricted Stock or Stock Units for which, an Award or Awards shall be granted
to such persons.
(b) To prescribe the other terms and provisions (which need not be
identical) of each Award granted under the Plan to eligible persons.
(c) To modify or amend any term or provision of any Award granted under the
Plan (including without limitation in the ways described in Sections 3.5 (f),
(g) and (h) below), provided that the consent of the holder thereof must be
obtained for any modification or amendment that reduces the benefits to the
holder of the Award.
(d) To construe and interpret the Plan and Awards granted hereunder, and to
establish, amend, and revoke rules and regulations for administration. The
Committee, in the exercise of this power, may correct any defect or supply any
omission, or reconcile any inconsistency in the Plan, or in any Award or
Agreement, in the manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective. In exercising this power the Committee may
retain counsel at the expense of the Company. All decisions and determinations
by the Committee in exercising this power shall be final and binding upon the
Company and the Participants.
(e) To determine the duration and purposes of leaves of absence which may
be granted to a Participant without constituting a termination of his or her
employment for purposes of the Plan or an Agreement.
(f) To accelerate the time at which the restrictions on Restricted Stock
granted under an Award will lapse, or the time at which Stock Units will vest,
or otherwise modify the restrictions on Awards in a manner favorable to the
Participant.
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(g) To determine, for any group or class of Participants, that restrictions
on Awards shall lapse upon specified events occurring upon or after a change in
control of the Company or an Affiliate, subject to such terms and limitations as
the Committee may determine.
(h) To waive or modify the application of Section 6.2 (forfeiture of
Restricted Stock or Stock Units upon termination of employment) as to any Award,
in whole or in part.
(i) To authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Award previously granted
hereunder.
(j) To interpret the Plan and make any determinations that are necessary or
desirable in the administration of the Plan.
(k) To exercise such powers and to make all other determinations deemed
necessary or expedient to promote the best interests of the Company with respect
to the Plan.
3.6 Persons Subject to Section 162(m). Notwithstanding anything in the Plan
to the contrary, the Committee, in its absolute discretion, may bifurcate the
Plan so as to restrict, limit or condition the use of certain provisions of the
Plan by Participants who are officers subject to Section 162(m) of the Code,
without so restricting, limiting or conditioning the Plan with respect to other
Participants.
3.7 Shareholder Rights. Except as provided in Section 6.1, each Participant
shall have, with respect to Restricted Stock, all the rights of a shareholder of
Stock including the right to vote the shares.
ARTICLE 4. ELIGIBILITY AND LIMITATIONS ON GRANTS
4.1 Participation. The Committee may from time to time designate persons to
whom Awards are to be granted from among those who are eligible to become
Participants. Such designation shall specify the number of shares of Restricted
Stock or Stock Units subject to each Award. All Awards granted under the Plan
shall be evidenced by Agreements which shall be subject to applicable provisions
of the Plan or such other provisions as the Committee may adopt that are not
inconsistent with the Plan.
4.2 Limitations on Grants. Awards may be granted only to persons who are
eligible to be Participants. The maximum aggregate number of shares of Stock
with respect to which Awards may be granted to any Participant in any calendar
year under the Plan is 225,000. The maximum aggregate number of shares of
Restricted Stock subject to restrictions based solely on continuous employment
that may be issued under the Plan is 6,000,000.
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ARTICLE 5. STOCK SUBJECT TO PLAN
5.1 Maximum Number of Shares. The maximum aggregate number of shares of
Stock that may be issued pursuant to Awards under the Plan (including all
predecessors of the Plan) is 12,075,122 shares, subject to adjustments as
provided in Article 7 made after January 16, 2001.
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ARTICLE 6. RESTRICTIONS AND FORFEITURES
6.1 General Restrictions. A Participant shall not be permitted (i) to sell,
transfer, pledge (as collateral for a loan or as security for the performance of
an obligation or for any other purpose) or assign shares of Restricted Stock or
Stock Units awarded (or purchased through dividend or distribution reinvestment)
under the Plan, (ii) to receive payment of any dividends or distributions made
in respect of Awards, or (iii) to receive a stock certificate representing
Awards, until, in each case, the restrictions stated in the Participant's
Agreement lapse.
6.2 Termination of Employment. Unless otherwise provided in the Agreement,
upon the termination of employment for any reason of a Participant who is an
employee of the Company or an Affiliate before the Participant has attained age
60 (including termination because of the death or permanent disability of the
Participant), all Restricted Stock or Stock Units shall be forfeited without
compensation to the Participant, unless otherwise determined by the Committee.
6.3 Retirement. In the event of a Participant's retirement from the Company
and its Affiliates or a Participant's death or permanent disability after the
Participant has attained age 60, all remaining restrictions on such
Participant's Restricted Stock that relate solely to the Participant's length of
service with the Company or an Affiliate shall automatically be waived.
Restrictions not related solely to the Participant's length of service with the
Company or an Affiliate (such as restrictions tied to the performance of the
Company) shall remain in effect unless otherwise determined by the Committee.
6.4 Lapse of Restrictions - General. Each Award of Restricted Stock granted
to a Participant shall become Unrestricted Stock according to the terms
established by the Committee and specified in the Participant's Agreement. The
Committee is authorized but not required to subject an Award to the restrictions
described in Schedule A or Schedule B below by setting forth this determination
in the Participant's Agreement.
Schedule A
Years of Continued Employment Percentage Unrestricted
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
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Schedule B
Years of Continued Employment Percentage Unrestricted
Less than 3 0%
3 but less than 4 33.33%
4 but less than 5 66.67%
5 or more 100%
For purposes of Schedules A and B, unless otherwise determined by the
Committee and stated in the relevant Agreement, a Year of Continued Employment
shall be credited to a Participant with respect to each Award on each March 31,
beginning in the calendar year that follows the Grant Date of an Award, provided
that the Participant has been continuously employed by the Company or one of its
Affiliates since the Grant Date of the Award.
The lapse of restrictions on Restricted Stock (including, if
applicable, the number of Years of Continued Employment) shall be calculated
separately with respect to each Award granted to a Participant.
6.5 Employee Status. As provided in Section 3.5(e), the Committee shall
determine the extent to which a leave of absence for military or government
service, illness, temporary disability, or other reasons shall be treated as
termination or interruption of employment for purposes of determining questions
of forfeiture and Years of Continued Employment for purposes of the lapse of
restrictions on Restricted Stock.
6.6 Performance-Based Grants. The Committee may provide in any Award for
the restrictions on Restricted Stock to lapse or the Stock Units to vest upon
the Company's attainment of performance-based goals established by the
Committee. Any such Award may, but need not be, granted under and pursuant to
the terms of this Section 6.6. In addition, the Committee may determine that any
performance-based Award granted by the Committee before the adoption of the Plan
shall be treated as if granted under this Section 6.6, provided that the Award
is modified so as to comply with the terms of this Section 6.6.
(a) Intent to Qualify Under Section 162(m). This Section 6.6
is intended to qualify the Awards granted under it as performance-based
compensation under Section 162(m) of the Code. All Awards granted
pursuant to this Section 6.6 shall be construed in a manner consistent
with that intent.
(b) Shareholder Approval. As to Awards granted under this
Section 6.6, no restrictions on Awards may lapse or Awards vest until
after the material terms of the performance goals set out below are
disclosed to and approved by the Company's shareholders. To the extent
necessary for Awards under this Section 6.6 to qualify as
performance-based compensation under Section 162(m) of the Code under
then applicable law, the material terms of the performance goals shall
be disclosed to and reapproved by the shareholders no later than the
first shareholder meeting that occurs in the fifth year following the
year in which shareholders previously approved the performance goals.
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(c) Business Criteria on Which Performance Goals Shall be
Based. The lapse of restrictions on or vesting of Awards granted under
this Section 6.6 shall be based on the Company's attainment of
performance goals based on one or more of the following business
criteria, where such goals may be stated in absolute terms or relative
to comparison companies, as the Committee shall determine, in its sole
discretion:
Return on average common shareholders' equity.
Return on average equity.
Total shareholder return.
Stock price appreciation.
Efficiency ratio (other expense as a percentage of other
income plus net interest income), either before or after
amortization of intangible assets (goodwill).
Net operating expense (other income less other expense),
either before or after amortization of intangible assets
(goodwill).
Earnings per diluted share of common stock.
Operating earnings (earnings before transaction-related
expense) per diluted share of common stock, either before or
after amortization of intangible assets (goodwill).
Net operating earnings (earnings before transaction-related
expense) per diluted share of common stock, either before or
after amortization of intangible assets (goodwill).
Return on average assets.
Ratio of nonperforming to performing assets.
Return on an investment in an affiliate.
Net interest income.
Net interest margin.
Ratio of common equity to total assets.
These business criteria shall be construed consistent with the use of
the same terms in the Company's published financial statements. All
business criteria other than earnings per diluted share of common stock
shall exclude transaction-related expense unless otherwise determined
by the Committee in selecting the business criteria for a particular
Award pursuant to Section 6.6(d) below. In selecting any business
criteria other than earnings per diluted share of common stock, the
Committee may elect, pursuant to Section 6.6(d) below, to exclude
amortization of intangible assets (goodwill), or to exclude
depreciation and amortization.
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(d) Establishing Performance Goals. The Committee shall
establish, for each Award granted under this Section 6.6: (i) the
measurement period(s) to which the performance goals will be applied;
(ii) the specific business criterion or criteria, or combination
thereof, that will be used; (iii) the specific performance targets that
will be used for the selected business criterion or criteria; (iv) any
special adjustments that will be applied in calculating whether the
performance targets have been met to factor out extraordinary items;
and (v) the formula for calculating the lapse of restrictions in
relation to the performance targets. These determinations shall be set
out in the Agreement for each Award. Except as otherwise permitted
under Section 162(m) of the Code, each Award under this Section 6.6
shall be granted no later than 90 days after the start of any
applicable measurement period, on or before the date that 25 percent of
each applicable measurement period has elapsed, and while the outcome
is substantially uncertain.
(e) Determination of Attainment of Performance Goals. The
Committee shall determine, pursuant to the performance goals and other
elements established pursuant to Section 6.6(d) above, whether the
criteria for the lapse of restrictions or vesting have been satisfied.
The Committee's determinations shall be final and binding on all
Participants. These determinations must be certified in writing before
Stock is transferred to the Participant. This requirement may be
satisfied by a writing that sets out the determinations made by the
Committee that is signed on behalf of the Committee by the Committee's
secretary.
(f) Lapse of Restrictions Upon Death, Disability or Change of
Ownership or Control. Notwithstanding the other terms of this Section
6.6, the performance-related criteria for the lapse of restrictions on
an Award made under this Section 6.6: (i) may lapse (A) as provided in
Section 7.3, or (B) upon a Participant's disability or upon a change of
ownership or control, to the extent so provided in any Agreement,
employment agreement or action of the Committee, and (ii) shall lapse
upon the Participant's death.
(g) Other Restrictions. In addition to the performance goals
described above, the Committee may determine to subject any Award
granted under this Section 6.6 to other, additional restrictions,
including restrictions requiring the Participant to remain in the
employ of the Company or an Affiliate for specified lengths of time.
6.7 Surrender of Restricted Stock. A Participant who also is a participant
in the Washington Mutual Deferred Compensation Plan for Directors and Certain
Highly Compensated Employees (the "DCP") may surrender to the Company all or a
portion of an Award pursuant to the terms and provisions of the DCP relating to
surrender of restricted stock in return for a contribution credit under the DCP.
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ARTICLE 7. ADJUSTMENT UPON CORPORATE CHANGES
7.1 Adjustments to Shares. The maximum number and kind of shares of Stock
with respect to which Awards hereunder may be granted and which are the subject
of outstanding Awards shall be adjusted by way of increase or decrease as the
Committee determines (in its sole discretion) to be appropriate, in the event
that:
(a) the Company effects one or more stock dividends, stock splits, reverse
stock splits, subdivisions, consolidations or other similar events;
(b) the Company or an Affiliate engages in a transaction to which Section
424 of the Code applies; or
(c) there occurs any other event which in the judgment of the Committee
necessitates such action.
Provided, however, that if an event described in paragraph (a) or (b) above
occurs, the Committee shall make adjustments to the limits on Awards specified
in Section 4.2 and in the limitation on aggregate Awards under Section 5.1 that
are proportionate to the modifications of the Stock that are on account of such
corporate changes.
7.2 Substitution of Awards on Merger or Acquisition. The Committee may
grant Awards in substitution for stock awards, stock options, stock appreciation
rights or similar awards held by an individual who becomes an employee of the
Company or an Affiliate in connection with a transaction to which Section 424(a)
of the Code applies. The terms of such substituted Awards shall be determined by
the Committee in its sole discretion, subject only to the limitations of Article
5.
7.3 Effect of Certain Transactions. Upon a merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation of
the Company, as a result of which the shareholders of the Company receive cash,
stock or other property in exchange for their shares of Stock (an "Event"),
restrictions on any Award of Restricted Stock granted hereunder shall lapse and
any Award of Stock Units shall vest, whether or not the requirements for lapse
of restrictions or vesting set forth in any Agreement have been satisfied,
unless otherwise specifically stated in the Agreement. The foregoing
notwithstanding, an Event shall not cause restrictions on Restricted Stock
related solely to the Participant's length of service with the Company or any
Affiliate to lapse on any Awards that the Committee elects, before the Event, to
convert into restricted stock of an acquiring corporation. If the Committee so
elects to convert the Awards, the number of shares of such converted restricted
stock shall be determined by adjusting the amount and price of the Awards
granted hereunder in the same proportion as used for determining the number of
shares of stock of the acquiring corporation the holders of the Stock receive in
such merger, consolidation, acquisition of property or stock, separation or
reorganization, and the schedule for lapse of restrictions set forth in the
Agreement shall continue to apply to the converted restricted stock. Nothing in
this Section 7.3 or elsewhere in the Plan shall authorize the Committee to take
any action contrary to any provision regarding lapse of restrictions that is
contained in any Agreement or employment agreement if the action would reduce
the benefits to the Participant, unless the Participant consents to the action.
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7.4 No Preemptive Rights. The issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, for cash
or property, or for labor or services rendered, either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, outstanding Awards.
ARTICLE 8. COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES
8.1 General. No Award shall be granted, no Stock shall be issued, and no
certificates for shares of Stock shall be delivered under the Plan except in
compliance with all federal and state laws and regulations (including, without
limitation, withholding tax requirements), federal and state securities laws and
regulations and the rules of all national securities exchanges or
self-regulatory organizations on which the Company's shares may be listed. The
Company shall have the right to rely on an opinion of its counsel as to such
compliance. Any certificate issued to evidence shares of Stock awarded hereunder
may bear such legends and statements as the Committee upon advice of counsel may
deem advisable to assure compliance with federal and state laws and regulations.
No Award shall be granted, no Stock shall be issued, and no certificate for
shares shall be delivered under the Plan until the Company has obtained such
consent or approval as the Committee may deem advisable from any regulatory
bodies having jurisdiction over such matters.
8.2 Representations by Participants. As a condition to receiving an Award,
the Company may require a Participant to represent and warrant at the time of
any such award that the shares are being held only for investment and without
any present intention to sell or distribute such shares, if, in the opinion of
counsel for the Company, such representation is required by any relevant
provision of the laws referred to in Section 8.1. At the option of the Company,
a stop transfer order against any shares of Stock may be placed on the official
stock books and records of the Company, and a legend indicating that the Stock
may not be pledged, sold or otherwise transferred unless an opinion of counsel
is provided (concurred in by counsel for the Company) and stating that such
transfer is not in violation of any applicable law or regulation may be stamped
on the stock certificate in order to assure exemption from registration. The
Committee may also require such other action or agreement by the Participants as
may from time to time be necessary to comply with the federal and state
securities laws. This provision shall not obligate the Company or any Affiliate
to undertake registration of Stock hereunder.
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ARTICLE 9. TAXES
9.1 Immediate Taxation. If an employee elects, pursuant to Section 83(b) of
the Code, to include in gross income for federal income tax purposes an amount
equal to the fair market value of Restricted Stock subject to an Award, the
employee shall make arrangements satisfactory to the Company to pay to the
Company or its Affiliate any federal, state or local taxes required to be
withheld with respect to such Stock. If an employee who makes such an election
fails to pay the necessary amounts to the Company or its Affiliate, the Company
or its Affiliate shall, to the extent permitted by law, have the right to deduct
from any payment of any kind otherwise due to the employee any taxes of any kind
required by law to be withheld with respect to the Stock covered by the Award.
9.2 Deferred Taxation. If an election under Section 83(b) of the Code has
not been made, then at the time Restricted Stock becomes Unrestricted Stock or
an Award otherwise becomes taxable, the Participant shall, upon notification of
the amount due and prior to or concurrently with the delivery of the
certificates representing the shares of Stock to which the Participant is
entitled hereunder, pay to the Company or its Affiliate amounts necessary to
satisfy applicable federal, state and local withholding tax requirements or
shall otherwise make arrangements satisfactory to the Company for such
requirements. The Company or its Affiliate shall, to the extent permitted by
law, have the right to deduct from any payment of any kind otherwise due to the
employee any federal, state or local taxes of any kind required by law to be
withheld with respect to the Restricted Stock becoming Unrestricted Stock or an
Award otherwise becoming taxable.
ARTICLE 10. GENERAL PROVISIONS
10.1 Effect on Employment. Neither the adoption of the Plan, its operation,
nor any documents describing or referring to the Plan (or any part thereof)
shall confer upon any employee any right to continue in the employ of the
Company or an Affiliate or in any way affect any right and power of the Company
or an Affiliate to terminate the employment of any employee at any time with or
without assigning a reason therefor.
10.2 Unfunded Plan. The Plan shall be unfunded, and the Company shall not
be required to segregate any assets that may at any time be represented by
grants under the Plan. Any liability of the Company to any person with respect
to any grant under the Plan shall be based solely upon contractual obligations
that may be created hereunder. No such obligation of the Company shall be deemed
to be secured by any pledge of, or other encumbrance on, any property of the
Company.
10.3 Rules of Construction. Headings are given to the articles and sections
of the Plan solely as a convenience to facilitate reference. The masculine
gender when used herein refers to both masculine and feminine. The reference to
any statute, regulation or other provision of law shall be construed to refer to
any amendment to or successor of such provision of law.
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10.4 Governing Law. The laws of the State of Washington shall apply to all
matters arising under the Plan, to the extent that federal law does not apply.
10.5 Compliance With Section 16 of the Exchange Act. With respect to
persons subject to Section 16 of the Exchange Act, transactions under the Plan
are intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act. To the extent any provision of the Plan or
action by the Committee fails to so comply, it shall be deemed null and void to
the extent permitted by law and deemed advisable by the Committee.
10.6 Amendment. The Committee may amend or terminate the Plan at any time;
provided, however, an amendment that would have a material adverse effect on the
rights of a Participant under an outstanding Award is not valid with respect to
such Award without the Participant's consent. Provided further that the
shareholders of the Company must approve any amendment that changes the number
of shares in the aggregate which may be issued pursuant to Awards granted under
the Plan, the maximum number of shares with respect to which any Participant may
be granted Awards in any calendar year, or the maximum number of shares that may
be granted as Awards of Restricted Stock that are subject to restrictions based
solely on continuous employment, except pursuant to Article 7.
10.7 Effective Date of Plan. No Award under the terms of the Plan as
amended and restated as of January 16, 2001, will be effective unless and until
the amendments approved by the Board on January 16, 2001, are approved by
shareholders holding a majority of the Company's outstanding voting stock
present or represented by proxy and entitled to vote at the Company's next
annual shareholders' meeting, which is duly held, that occurs after January 16,
2001, the date that the Board authorized the Company to adopt the amendments to
the Plan which are being submitted to the shareholders in such annual
shareholders meeting. If such amendments are not so approved by the shareholders
of the Company, then the Plan as amended and restated as of January 16, 2001
shall be of no force or effect and the Plan as amended and restated as of
January 18, 2000 shall continue to govern.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed on
this the __ day of ___, 2001, but to be effective on January 16, 2001.
WASHINGTON MUTUAL, INC.
By:
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Its: --------------------------------
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