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INDEMNIFICATION AGREEMENT
This
Indemnification Agreement, dated as of July ___, 2007, is made
by and between Washington Mutual, Inc., a Washington
corporation (the “Corporation”) and ____________
(the “Indemnitee”).
RECITALS
A. The
Corporation recognizes that competent and experienced persons
are increasingly reluctant to serve or to continue to serve as
directors of corporations unless they are protected by
comprehensive liability insurance or indemnification, or both,
due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to
the fact that the exposure frequently bears no reasonable
relationship to the compensation of such
directors;
B. The
statutes and judicial decisions regarding the duties of
directors are often difficult to apply, ambiguous, or
conflicting, and therefore fail to provide such directors with
adequate, reliable knowledge of legal risks to which they are
exposed or information regarding the proper course of action
to take;
C. The
Corporation and Indemnitee recognize that plaintiffs often
seek damages in such large amounts and the costs of litigation
may be so enormous (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is often
beyond the personal resources of directors;
D. The
Corporation believes that it is unfair for its directors to
assume the risk of huge judgments and other expenses which may
occur in cases in which the director received no personal
profit or benefit to which he or she was not entitled, did not
improperly vote for or assent to a distribution and was not
culpable of intentional misconduct or a knowing violation of
law;
E. The
Corporation believes that the interests of the Corporation and
its shareholders would best be served by a combination of
liability insurance and the indemnification by the Corporation
of the directors of the Corporation;
F. The
Corporation’s articles of incorporation (the
“Articles”) and bylaws (the “Bylaws”)
require the Corporation to indemnify its directors to the
fullest extent permitted by the Washington Business
Corporation Act (the “WBCA”). The Bylaws expressly
provide that the indemnification provisions set forth therein
are not exclusive, and contemplate that agreements may be
entered into between the Corporation and its directors with
respect to indemnification;
G. The
WBCA, under which the Corporation is organized, empowers the
Corporation to indemnify its directors by agreement and to
indemnify persons who serve, at the request of the
Corporation, as the directors, officers, employees or agents
of other corporations or enterprises, and expressly provides
that the indemnification provided by the WBCA is not
exclusive;
H. Section 8.32
of the WBCA allows a corporation to include in its Articles a
provision limiting or eliminating the personal liability of a
director for monetary damages to the Corporation or its
shareholders except in certain enumerated circumstances, and
the Corporation has provided in its Articles that each
director shall be exculpated from such liability to the
maximum extent permitted by law;
I. The
Board of Directors has determined that contractual
indemnification as set forth herein is not only reasonable and
prudent but also promotes the best interests of the
Corporation and its shareholders;
J. The
Corporation desires Indemnitee to serve or continue to serve
as a director of the Corporation free from undue concern for
unwarranted claims for damages arising out of or related to
such services to the Corporation; and
K. Indemnitee
is willing to serve, continue to serve or to provide
additional service for or on behalf of the Corporation on the
condition that he or she is furnished the indemnity provided
for herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements set forth below, and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
Section
1.
Generally.
To
the fullest extent permitted by the laws of the State of
Washington:
(a) The
Corporation shall indemnify and hold harmless Indemnitee if
Indemnitee was or is a party or is threatened to be made a
party to or is involved in (including, without limitation, as
a witness) any actual, pending or threatened action, suit or
proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Indemnitee is or
was, or has agreed to serve as, a director of the Corporation,
or being or having been a director of the Corporation, is or
was serving or has agreed to serve at the request of the
Corporation as a director, officer, employee or agent (which,
for purposes hereof, shall include a trustee, partner or
manager or similar capacity) of the Corporation or another
corporation or of a partnership, joint venture,
trust, other enterprise including service with respect to
employee benefit plans, whether the basis of such proceeding
is alleged action in an official capacity or in any other
capacity while serving in an official capacity. For
the avoidance of doubt, the foregoing indemnification
obligation includes, without limitation, claims for monetary
damages against Indemnitee in respect of an alleged breach of
fiduciary duties, to the fullest extent permitted under the
WBCA.
(b) The
indemnification provided by this Section 1 shall be from and
against all expenses, liabilities and losses (including
attorneys’ fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement), actually and
reasonably incurred by Indemnitee or on Indemnitee’s
behalf in connection with such action, suit or proceeding and
any appeal therefrom.
(c) Notwithstanding
the foregoing provisions of this Section 1, the
Corporation shall not indemnify any person from or on account
of any acts or omissions of such person finally adjudged to be
intentional misconduct or knowing violation of the law by such
person, from conduct of the person in violation of
Section 8.31 of the WBCA or from or on account of any
transaction with respect to which it is finally adjudged that
such person personally received a benefit in money, property
or services to which such person was not legally entitled
(collectively, the “indemnification
standards”). In addition, except as provided
in Section 8 hereof with respect to proceedings seeking
indemnification, the Corporation shall not indemnify any
person with respect to an action, suit or proceeding initiated
by that person unless such action, claim or proceeding was
authorized by the Board of Directors of the
Corporation.
(d) Without
limiting the situations in which a person shall be considered
to be serving at the request of the Corporation, a director
who serves as a director, officer, employee or agent of the
Corporation or another corporation or other enterprise that is
a subsidiary of the Corporation shall be deemed to be serving
at the request of the Corporation, where
“subsidiary” means (i) a corporation or other
enterprise in which a majority of the voting stock or other
voting power is owned or controlled by the Corporation
directly or though one or more subsidiaries or (ii) a
corporation or other enterprise which is consolidated on the
Corporation’s financial statements or is reported using
the equity method.
(e) The
termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not satisfy the
indemnification standards.
Section
2.
Successful Defense; Partial Indemnification.
If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Corporation for some
or a portion of the expenses, liabilities or losses (including
attorneys’ fees, judgments, fines or amounts paid in
settlement) actually and reasonably incurred by Indemnitee or
on Indemnitee’s behalf in connection with any action,
suit, proceeding or investigation, or in defense of any claim,
issue or matter therein, and any appeal therefrom but not,
however, for the total amount thereof, the Corporation shall
nevertheless indemnify Indemnitee for the portion of such
expenses, liabilities or losses (including attorneys’
fees, judgments, fines or amounts paid in settlement) to which
Indemnitee is entitled.
Section
3.
Determination That Indemnification Is Proper;
Authorization.
(a) If
and to the extent that under applicable law or otherwise the
Corporation is required to make a determination that the
Indemnitee has met the indemnification standards, any such
determination may be made (i) by a majority vote of the
directors who are not parties to the action, suit or
proceeding in question (“disinterested
directors”), (ii) by a majority vote of a committee
consisting solely of two or more disinterested directors
designated by the Board of Directors, in which designation
directors who are parties may participate, (iii) by special
legal counsel or other persons (A) selected by the Board of
Directors or its committee in the manner described in clauses
(i) or (ii) of this sentence or (B) if a quorum of the Board
of Directors cannot be attained under clause (i) and a
committee cannot be designated under clause (ii), selected by
majority vote of the full Board of Directors, in which
selection directors who are parties may participate, (iv) by
the shareholders, but shares owned by or voted under the
control of directors who are at the time not disinterested
directors may not be voted on the determination, or (v) by a
court of competent jurisdiction.
(b) Authorization
of indemnification and evaluation as to reasonableness of
expenses and costs, if and to the extent required by
applicable law or otherwise, may be made in the same manner as
the determination that indemnification is proper under
Section 1(c), except that if the determination is made by
special legal counsel, authorizations of indemnification and
evaluation as to reasonableness of expenses and costs may be
made by those entitled under clause (iii) of Section 3(a)
to select counsel.
Section
4.
Advance Payment of Expenses; Notification and Defense of
Claim.
(a) Expenses
(including attorneys’ fees) incurred by Indemnitee in
defending a threatened or pending civil, criminal,
administrative or investigative action, suit or proceeding, or
in connection with an enforcement action pursuant to
Section 5(b), shall be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding
within twenty (20) days after receipt by the Corporation of
(i) a statement or statements from Indemnitee requesting such
advance or advances from time to time, and (ii) an undertaking
by or on behalf of Indemnitee to repay such amount or amounts,
only if, and to the extent that, it shall ultimately be
determined that Indemnitee is not entitled to be indemnified
by the Corporation as authorized by this Agreement or
otherwise. Such undertaking shall be accepted
without reference to the financial ability of Indemnitee to
make such repayment. Advances shall be unsecured and
interest-free.
(b) Promptly
after receipt by Indemnitee of notice of the commencement of
any action, suit or proceeding, Indemnitee shall, if a claim
thereof is to be made against the Corporation hereunder,
notify the Corporation of the commencement
thereof. The failure to promptly notify the
Corporation of the commencement of the action, suit or
proceeding, or Indemnitee’s request for indemnification,
will not relieve the Corporation from any liability that it
may have to Indemnitee hereunder, except to the extent the
Corporation is prejudiced in its defense of such action, suit
or proceeding as a result of such failure.
(c) In
the event the Corporation shall be obligated to pay the
expenses of Indemnitee with respect to an action, suit or
proceeding, as provided in this Agreement, the Corporation, if
appropriate, shall be entitled to assume the defense of such
action, suit or proceeding, with counsel reasonably acceptable
to Indemnitee, upon the delivery to Indemnitee of written
notice of its election to do so. After delivery of
such notice, approval of such counsel by Indemnitee and the
retention of such counsel by the Corporation, the Corporation
will not be liable to Indemnitee under this Agreement for any
fees of counsel subsequently incurred by Indemnitee with
respect to the same action, suit or proceeding, provided that
(1) Indemnitee shall have the right to employ
Indemnitee’s own counsel in such action, suit or
proceeding at Indemnitee’s expense and (2) if (i) the
employment of counsel by Indemnitee has been previously
authorized in writing by the Corporation, (ii) counsel to the
Corporation or Indemnitee shall have reasonably concluded that
there may be a conflict of interest or position, or reasonably
believes that a conflict is likely to arise, on any
significant issue between the Corporation and Indemnitee in
the conduct of any such defense, (iii) the Corporation shall
not, in fact, have employed counsel to assume the defense of
such action, suit or proceeding, or (iv) the Corporation is
not financially or legally able to pay or otherwise perform
its indemnification obligations, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the
Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled,
without the consent of Indemnitee, to assume the defense of
any claim brought by or in the right of the Corporation or as
to which counsel for the Corporation or Indemnitee shall have
reasonably made the conclusion provided for in clause (ii)
above.
(d) Notwithstanding
any other provision of this Agreement to the contrary, to the
extent that Indemnitee is, by reason of Indemnitee’s
corporate status with respect to the Corporation or any
corporation, partnership, joint venture, trust, employee
benefit plan or other ente
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